Commonwealth v. McCormick

• Decision Date: 30 October 1917
• Citation: 197 S.W. 977,177 Ky. 474
• Parties: COMMONWEALTH EX REL. LOGAN, ATTY. GEN., v. MCCORMICK.
• Court: Kentucky Court of Appeals

197 S.W. 977

177 Ky. 474

COMMONWEALTH EX REL. LOGAN, ATTY. GEN., v. MCCORMICK.

Court of Appeals of Kentucky.

October 30, 1917

Appeal from Circuit Court, Franklin County.

Action by the Commonwealth, on the relation of the Attorney General against J. N. McCormick. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

M. M Logan, Atty. Gen., and John C. Duffy, of Frankfort, for appellant.

C. U McElroy, of Bowling Green, Kohn, Bingham, Sloss & Spindl, of Louisville, and Guy Briggs, of Frankfort, for appellee.

CLARKE J.

On November 13, 1914, this action was instituted in the Franklin circuit court by the commonwealth of Kentucky, on relation of the Attorney General, seeking to recover of J. N. McCormick a total of about $18,000 alleged to have been, in part, paid out by him as secretary of the state board of health in a illegal manner and, in part, to have been wrongfully and illegally appropriated to his own use. An amended petition was filed separating into paragraphs the several items involved; and one of these paragraphs was further amended. Demurrers to the petition as amended and to each paragraph were sustained. Plaintiff declining to plead further, the petition was dismissed, and from that judgment this appeal is prosecuted.

The several paragraphs of the petition, as finally amended, may be roughly classified as follows:

(a) In the first paragraph it is alleged that the state board of health, established by an act of the Legislature approved March 16, 1878, had received from the commonwealth annual appropriations of $2,500 from 1883 to 1889, inclusive, $5,000 from 1900 to 1910, and $30,000 from 1911 to 1914, inclusive; that it had also received fees for issuing licenses to physicians for the practice of medicine at the rate of $2 for each certificate issued from 1893 to 1904, and at the rate of $10 for each certificate after March, 1904; that all of the appropriations by the state were drawn from the state treasury in an improper and illegal manner, and, with the fees collected, placed in bank to the credit of the state board of health, and were paid out, or allowed to be paid out, by the order, direction, and checks of the defendant, in violation of his trust as an officer of the commonwealth, and of the state board of health, in violation of law and without warrant therefor; and that the aggregate so paid was $18,379.48.

(b) In the second and sixth paragraphs of the petition, alleging payments to others than himself, it is alleged in the second paragraph that the defendant had paid out of said fund of the state board of health to certain lawyers for legal services certain specified sums aggregating $5,740.60, in violation of his trust as an officer of the commonwealth and of the state board of health, and in violation of law and without warrant therefor; and in the sixth paragraph that he had paid, or allowed to be paid, out of the funds arising from registration fees collected by the state board of health from applicants for licenses to practice medicine to the members of the board the sum of $100 each, aggregating $800, in violation of his trust as an officer of the commonwealth and of the state board of health, and in violation of law.

(c) In the third and fourth paragraphs of the petition it is alleged that the defendant, in violation of his trust as an officer and in violation of law, unlawfully and wrongfully appropriated and applied to his own use and benefit funds of the commonwealth and the state board of health arising from the registration fees for issuing certificates to physicians: On February 28, 1896, $2,406.88; and from January 1, 1895, to June 1, 1906, $8,932.

(d) In the fifth paragraph of the petition it is alleged that on or about May 25, 1906, the defendant, in violation of his trust as an officer and in violation of law, unlawfully appropriated to his own use and benefit the sum of $5,000 of the funds of the state of Kentucky.

(e) In the seventh paragraph it is alleged that the defendant and the members of the state board of health entered into an illegal and wrongful agreement, whereby they were to apply to their own use and benefit the funds of the state of Kentucky and the state board of health derived from license fees collected from physicians, after the expenses of administering the law had been paid, upon the basis of 10 per centum of such surplus to each member of the board and 30 per centum to defendant; that these parties wrongfully and unlawfully received such sums, and defendant, in violation of his trust and wrongfully and unlawfully, paid such amounts to the members of the board and to himself; and that plaintiff was unable to state the amounts received by the parties under this agreement, but that the defendant knew and should be required to answer the amount each so wrongfully and unlawfully received.

(f) The eighth paragraph simply summed up the other paragraphs, and alleged that plaintiff was entitled to recover the aggregate of the sums claimed.

Before taking up these several paragraphs, we shall dispose of a number of propositions of general application.

(1) It is insisted for the defendant that the petition shows, upon its face, that all of the items asserted, except a very small portion thereof amounting to less than $500, are barred by limitation, and for that reason the demurrer, except as to the items not barred, should have been sustained. There was formerly some confusion in this state upon this question, and the rule relied upon by appellee has been frequently followed and was seemingly recognized, though not applied, in one rather recent case (Graziani v. Ernst, 169 Ky. 751, 185 S.W. 99); but, with this single exception, it has uniformly been held, in recent years, that "the statute is no bar to the merits, but is only a privilege extended to the litigant, whereby he may, if he chooses, close the door of the courts on his tardy adversary," and that he can take advantage of the statute only by pleading it. That the statutes of limitations are available upon demurrer has been expressly repudiated in the following cases, in which attention is called to the fact that in some earlier decisions such a rule had been recognized: Swinebroad v. Wood, 123 Ky. 664, 97 S.W. 25, 29 Ky. Law Rep. 1202; Childers v. Bales, 124 S.W. 295; Jolly v. Miller, 124 Ky. 100, 98 S.W. 326, 30 Ky. Law Rep. 341; Yager v. Bank of Kentucky, 125 Ky. 177, 100 S.W. 848, 30 Ky. Law Rep. 1287; Green County v. Howard, 127 Ky. 379, 105 S.W. 897, 32 Ky. Law Rep. 243; Baker v. Begley, 155 Ky. 234, 159 S.W. 691; Hackett v. State Bank & Trust Co., 155 Ky. 392, 159 S.W. 952; Davie v. City of Louisville, 159 Ky. 252, 166 S.W. 969; Merritt v. Cravens, 168 Ky. 155, 181 S.W. 970; Taulbee v. Hargis, 173 Ky. 433, 191 S.W. 320. The last of these cases is the most recent utterance of this court upon the question; and it is apparent that, whatever may have been the practice formerly, the rule is now firmly established in this state that the question of limitation cannot be raised by demurrer, but must be pleaded.

(2) With the last amended petition plaintiff attempted to file, as an exhibit, a report of the state inspector and examiner to the Governor on the affairs and accounts of the state board of health. Counsel for both plaintiff and defendant attempt to rely upon portions of that report in support of their respective contentions; but it is clearly unavailable to either for any purpose. While it is filed with the petition and referred to as an exhibit, it is, in no sense, an exhibit, as the term is applied to a paper that must or may be filed with and made a part of a pleading. Such an exhibit must be the basis of, or support as evidence, the cause of action or defense, and have some binding effect upon the adverse party. Section 120, Civil Code, requires that a note, bond, bill, or other writing, evidencing indebtedness, must be filed as a part of the pleading, if in the power of the party to produce it, and if not filed, the reason for the failure must be stated in the pleading. Section 128, Civil Code, provides that a party may file with his pleading any writing upon which he may intend to rely as evidence. This report of the state inspector and examiner is, in no sense, either a written evidence of indebtedness, required to be filed, or a writing that could be relied upon as evidence and permitted to be filed. It was not even sworn to, and has no evidential value whatever. It was therefore not an exhibit that could be filed with a pleading, and cannot, of course, either aid or injure the pleading. We shall therefore eliminate it from our consideration.

(3) The funds derived by the state board of health from annual appropriations are admittedly the property of the commonwealth, but the fees, arising from the issuance by the board to physicians of licenses to practice medicine, are claimed by appellee to have been the private property of the members of the board allowed to them under the law for their services in making the examination and issuing the certificates; while it is claimed by the plaintiff that these fees belong to the state, or at least to the state board of health as a department of the state to be administered by the board for public purposes and as a trust.

In 1874 (Laws 1873-74, c. 452) a law was enacted requiring all physicians desiring...