City of Fargo v. Cass County

• Decision Date: 11 November 1916
• Citation: City of Fargo v. Cass County, 35 N.D. 372, 160 N.W. 76 (N.D. 1916)
• Court: North Dakota Supreme Court

160 N.W. 76

35 N.D. 372

CITY OF FARGO, a Municipal Corporation, v. CASS COUNTY, a Municipal Corporation

Supreme Court of North Dakota

November 11, 1916

Rehearing denied December 1, 1916.

Appeal from the District Court of Cass County, Pollock, J.

Affirmed.

Emerson H. Smith, City Attorney, and Spaulding & Shure, for appellant.

Where a county treasurer in his official capacity has money in his hands belonging to another, the remedy is by action against the county as for money had and received. In legal contemplation the county holds the money, hence the county should be sued. State ex rel. Worcester v. Nelson, 105 Wis. 111, 80 N.W. 1105.

Money wrongfully paid out by the county treasurer in a settlement between the county and township must be accounted for by the county. Cumming Twp. v. Ogemaw County, 100 Mich 567, 59 N.W. 240.

"The duties of the county treasurer are imposed by law, and in performing these duties he acts as an officer of the county and not as the agent of the school district." Mineral School Dist. v. Pennington County, 19 S.D 602, 104 N.W. 270.

The city had no contract on their part with the treasurer, and the knowledge of its officers that the county treasurer was retaining 1 per cent for collecting its special assessments is immaterial, and the city is not estopped to claim its rights. Zottman v. San Francisco, 20 Cal. 96, 81 Am. Dec. 96; Leavenworth v. Rankin, 2 Kan. 357; Baltimore v. Reynolds, 20 Md. 1, 83 Am. Dec. 535.

"A municipal corporation cannot be made liable for an act of its agent by ratifying it after it is done, where the corporation had no power to authorize such act." Boom v. Utica, 2 Barb. 104; Arnott v. Spokane, 6 Wash. 442, 33 P. 1063; Gallup v. Liberty County, 57 Tex. Civ. App. 175, 122 S.W. 291; Smith v. Philadelphia, 227 Pa. 423, 76 A. 221.

A. W. Fowler, State's Attorney, and Wm. C. Green, Assistant State's Attorney, for respondent.

In the absence of statute, there is no liability resting upon the county for the action of its treasurer in defaulting upon the collection and paying over of taxes, and the treasurer, and not the county, is the collector of taxes. Hart Twp. v. Oceana County, 44 Mich. 417, 6 N.W. 863; Vigo Twp. v. Knox County, 111 Ind. 170, 12 N.E. 305; White Sulphur Springs v. Pierce, 21 Mont. 130, 53 P. 103; Atlantic County v. Weymouth Twp. 68 N.J.L. 652, 54 A. 458; Wood v. Monroe County, 50 Hun, 1, 2 N.Y.S. 369; First Nat. Bank v. Saratoga County, 106 N.Y. 488, 13 N.E. 441; People ex rel. Martin v. Brown, 55 N.Y. 187; Westboro v. Taylor County, 90 Wis. 355, 63 N.W. 287; School Dist. v. Saline County, 9 Neb. 403, 2 N.W. 877; Lancaster County v. State, 74 Neb. 211, 104 N.W. 187, 107 N.W. 388; Aplin v. Van Tassel, 73 Mich. 28, 40 N.W. 847; Crandon v. Forest County, 91 Wis. 239, 64 N.W. 847.

Our system of taxation was taken from Minnesota. St. Paul & S. C. R. Co. v. Robinson, 40 Minn. 360, 42 N.W. 82; St. Paul v. Colter, 12 Minn. 51, Gil. 16, 90 Am. Dec. 278; Guilder v. Dayton, 22 Minn. 371; Logan County v. Carnahan, 66 Neb. 685, 92 N.W. 984, 95 N.W. 812.

"In dealing with taxes certified by city authorities to the county clerk, neither the county clerk nor the county treasurer acts as agent of the county." Kelley v. Gage County, 67 Neb. 6, 93 N.W. 194, 99 N.W. 524.

"A county is not liable in damages for the negligent acts of its officers, unless made so by statute." Hopper v. Douglas County, 75 Neb. 329, 106 N.W. 330; Gray v. Tompkins County, 93 N.Y. 603; State ex rel. Atty. Gen. v. Leavenworth County, 2 Kan. 61; Crandon v. Forest County, 91 Wis. 239, 64 N.W. 848; Cedar Rapids, I. F. & N.W. R. Co. v. Cowan, 77 Iowa 535, 42 N.W. 436; Mineral School Dist. v. Pennington County, 19 S.D. 602, 104 N.W. 270; Vinton v. Cattaraugus County, 89 Hun, 582, 35 N.Y.S. 285; Newbold v. Douglass, 123 Wis. 28, 100 N.W. 1040; Crowninshield v. Cayuga County, 124 N.Y. 583, 27 N.E. 242; Bridges v. Sullivan County, 92 N.Y. 572; Cumming Twp. v. Ogemaw County, 100 Mich. 567, 59 N.W. 240.

The county treasurer, and not the county, is the agent of the city in collecting its taxes. Pol. Code, chap. 42, art. 13, Comp. Laws 1913, §§ 3341, 3342, et seq. 3682, Laws 1905, chap. 62.

Assuming that this 1 per cent does not belong to the county treasurer, and that the county is liable for it, it clearly would not belong to the city. It would belong to the individual taxpayer, and the city could not recover. Westboro v. Taylor County, 90 Wis. 355, 63 N.W. 287; Dickey County v. Hicks, 14 N.D. 73, 103 N.W. 423; Krump v. First State Bank, 8 N.D. 75, 76 N.W. 995.

The collection of delinquent taxes is analogous to an open account, and the defendant would not be liable for interest from the date of collection, but only from the date of demand. Spooner v. Washburn County, 124 Wis. 24, 102 N.W. 325.

It is well settled that although a bond of a public official may run to the county or state, a recovery may be had thereon by any corporation aggrieved in an action in its name. Hollister v. Hubbard, 11 S.D. 461, 78 N.W. 949; Guernsey v. Tuthill, 12 S.D. 582, 82 N.W. 190; Stewart v. Carter, 4 Neb. 564; Rogers v. Gosnell, 51 Mo. 466; Taaffe v. Rosenthal, 7 Cal. 515; People v. Holmes, 5 Wend. 191; Kollock v. Parcher, 52 Wis. 393, 9 N.W. 67; Pioneer Fire-Proof & Constr. Co. v. McClay, 54 Neb. 663, 74 N.W. 1063; 3 Enc. Pl. & Pr. 640; Lee v. Charmley, 20 N.D. 570, 33 L.R.A.(N.S.) 275, 129 N.W. 448.

OPINION

GOSS, J.

This 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.

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 of 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 at 360-377, 96 N.W. 357; State ex rel. Viking Twp. v. Mikkelson, 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," § 2183, Comp. Laws 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. Tompkins County, 93 N.Y. 603. "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 other manner, than the law has declared." First Nat. Bank v. Saratoga County, 106 N.Y. 488 at 488-495, 13 N.E. 439. The state sought to recover from a county for state taxes collected and embezzled by a county treasurer where no statute similar to § 2193, Comp. Laws 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 Monroe, 11 N.Y. 392, 62 Am. Dec. 120, holding that "a town is not responsible for any mistake or misfeasance of the...