City of Fargo v. Cass Cnty.

• Decision Date: 02 December 1916
• Citation: 160 N.W. 76,35 N.D. 372
• Parties: CITY OF FARGO v. CASS COUNTY.
• Court: North Dakota Supreme Court

35 N.D. 372

160 N.W. 76

CITY OF FARGO

v.CASS COUNTY.

Supreme Court of North Dakota.

Nov. 11, 1916.

Rehearing Denied Dec. 2, 1916.

Syllabus by the Court.

Various county treasurers from 1901 until 1910 retained for themselves 1 per cent. of all Fargo city special assessments as a fee for collection. This action is to recover of the county this 1 per cent., amounting to $3,847. The county never received this money as it was never placed in any fund of the county treasury. But the city claims that the county treasurer collected as the agent of the county, and which in turn was the collecting agent for the city under the law whereunder the county treasurer collected city special assessments and turned the same over to the city. There is no statute expressly making the county liable to the city for misapplication of such funds by the county treasurer.

Held, the county treasurer, in making such collections, acted under the law designating him as the official to collect, and no liability of the county to the city arises unless the county actually receives the money of the city; and until the county treasurer turns money so collected over to the county and credits a county fund therewith, the county has not had and received city money.

That any liability of the county in such a case must arise from receiving city funds with no doctrine of agency involved, as the county is not an agent of the city in making such a collection; nor does its treasurer, in collecting for the city, act as an agent of the county or city, but instead acts only as a person designated by law to collect for the city, and for whose shortages or defalcations the county is not responsible to the city unless it has received funds so misappropriated.

No liability on the part of the county can be inferred because by statute the bonds of the county treasurer are subject to the approval and action of the administration board of the county, leaving the treasurer without control or supervision by the city. The county officials involved are merely the official machinery designated by law for use in the raising and accounting for revenue for state, county, city, and other purposes.

The county treasurer is not entitled to withhold 1 per cent. of city special assessments; and it is immaterial that the official services of that official rendered to the city in collecting city assessments was of a reasonable value of 1 per cent. thereof. There is no necessary relation in law between the salary allowed and the work required in office, and there can be no implied authorization to retain a fee on such grounds, where the statute does not grant one.

Appeal from District Court, Cass County; Pollock, Judge.

Action by the City of Fargo against Cass County. From a judgment for defendant, plaintiff appeals. Affirmed.Emerson H. Smith, City Atty., of Fargo (Spalding & Shure, of Fargo, of counsel), for appellant. A. W. Fowler, State's Atty., and Wm. C. Green, Asst. State's Atty., both of Fargo, for respondent.

GOSS, J.

The action for money had and received is brought by the city of Fargo against Cass county for $3,847, and interest. The city has appealed from a judgment of dismissal. The facts are undisputed. Various county treasurers of Cass county from July, 1901, until November, 1910, retained 1 per cent. of all city special assessments as fees for collection. This action is brought to recover the aggregate of such deductions.

[1] The county contends that this 1 per cent. was misappropriated by said officials, and that it has not had or received the use or benefit of any part of said so-called commissions; and under the uncontroverted proof and findings such is the fact. These amounts were taken without authority of law, and none of the deductions ever reached the coffers of the county, unless it can be said that the payment to the county treasurer was a payment to the county. But, as no part of this amount was ever credited to or placed in any county fund, then as between these two municipalities the county has not received it. The county treasurers simply have failed to turn over this amount to either the county or the city, retaining it themselves. Hence any liability of the county to the city must be predicated upon the premise that the county is the agent of the city in the collection of city special assessments, and therefore that the action of the county treasurer in receiving payment bound the county as a collecting agent for the city to make good to the latter any defalcation or shortage of the county treasurer. This in turn depends upon whether a county treasurer is in a legal sense an agent of the county in the collection of such taxes, and whether as between municipalities the doctrine of respondeat superior applies to hold the county liable for misappropriation of city funds by its county treasurer, where no statute creates such a liability.

Without tracing in this opinion the history of the statute, it is sufficient to state that statutes have authorized these county treasurers to collect said special assessments and turn the full amount collected, without any deduction whatever, over to the city. Special assessments levied by the city are trust funds, and collectable by the county treasurer for the city, to be applied and disbursed by it for particular purposes. Pine Tree Lumber Co. v. Fargo, 12 N. D. 360-377, 96 N. W. 357;State ex rel. v. Mikkelson, County Treas., 24 N. D. 175, 139 N. W. 525. While the county is responsible to the state “for the full amount of taxes levied for state purposes” (section 2183, C. L. 1913), there is no corresponding statutory liability of the county to the city. Consequently the county cannot be held by the city for diversion of city funds collected by the county treasurer unless the county actually received the funds so diverted. Then and only then can the county be held as for moneys had and received by it. And such liability is not predicated upon any doctrine of agency. Under no circumstances can the county be held by the city for a shortage of the county treasurer in city money collected where the county has not received either the money diverted or a resulting benefit therefrom. While the county treasurer made these collections under authority of law, nevertheless he “was the custodian of the money, selected not by the county, but by the law.” Gray v. Board of Supervisors, 93 N. Y. 603.

[2] “We are of opinion that the moneys due the state were payable by the treasurer of the county, not as its officer or agent, but as an individual designated by his official name for the performance of specific duties, and that the county is not responsible for his omissions or defaults in respect thereto, nor at all concerned with them any further, nor in any manner than the law has declared.” Bank v. Board of Supervisors, 106 N. Y. 488-495, 13 N. E. 439, 441. The state sought to recover from a county for state taxes collected and embezzled by a county treasurer where no statute similar to section 2183, C. L. 1913, declared the county liable to the state therefor. It is precedent on the facts in this instant case and announces the law applicable. This is but another application of the rule early announced in the leading case of Lorillard v. Town of Monroe, 11 N. Y. 392, 62 Am. Dec. 120, holding that:

“A town is not responsible for any mistake or misfeasance of the assessors and collectors, in the performance of their official duties; they are not its agents.”

The court says:

“The imposition and collection of the public burdens is an essential and important part of the political government of the state, and it is committed in part to the agency of officers appointed by the local divisions called towns, and in part to the officers of the counties, upon reasons of economy and convenience; and the official machinery which is organized within the towns and counties is public in the same sense as is that part of the same system which is managed by the state officers residing at the seat of government, and whose operations embrace the whole state. * * * The assessors and collectors of taxes are independent public officers, whose duties are prescribed by law, and that they are not in any legal sense the servants or agents of the towns, and that the towns as corporations are not responsible for any default or malfeasance in the performance of their duties. * * * In Martin v. Mayor of Brooklyn, 1 Hill (N. Y.) 545, the rule was laid down by the late Justice Cowen that even a municipal corporation was not liable for the misfeasance or nonperformance of one of its officers in respect to a duty imposed by the statute upon such officer, though it was conceded that, if the duty had been imposed [by the statute] upon the corporation, as in the case of streets and sewers, which the corporate body was bound to repair, the rule would have been otherwise. * * * A fortiori, where the duty which has been violated was imposed by a public law of the state, the corporation, though it had the appointment of the officer, would not be liable.”

And this has been followed and these principles applied in a case in all material particulars identical with the case at bar and under almost identical statutes in Indiana, in Vigo Township v. Board of Commissioners of Knox County, 111 Ind. 170, 12 N. E. 305, the syllabus reading:

“A county treasurer is in no such sense the agent of the county as that the maxim respondeat superior can be invoked to hold the county liable for his misappropriation of public funds, in the absence of a statute creating such liability.”

In the opinion it is said:

“Counties, in a very important sense, occupy a double relation. In one relation, a county is a municipal corporation, charged with corporate functions and duties, and invested with corporate powers. These are exercised for the benefit of the municipality, and in respect to these the county is responsible. A county is also a territorial and political division of the...