Gipson v. Crawfis

• Decision Date: 30 January 1956
• Docket Number: No. 5-822,5-822
• Citation: 286 S.W.2d 336,225 Ark. 903
• Parties: J. A. GIPSON, Appellant, v. Dr. E. H. CRAWFIS et al., Appellees. J. A. GIPSON, Appellant, v. K. W. NEWMAN and W. E. Lester, Appellees.
• Court: Arkansas Supreme Court

Page 336

286 S.W.2d 336

225 Ark. 903

J. A. GIPSON, Appellant, v. Dr. E. H. CRAWFIS et al., Appellees.

J. A. GIPSON, Appellant, v. K. W. NEWMAN and W. E. Lester, Appellees.

No. 5-822.

Supreme Court of Arkansas.

Jan. 30, 1956.

Kenneth C. Coffelt, Little Rock, for appellant.

Bailey, Warren & Bullion, Little Rock, for appellees and intervenors.

WARD, Justice.

On May 2, 1955, appellant, for the benefit of himself as a taxpayer and for all taxpayers of Arkansas, instituted in the Chancery Court of Pulaski County Suit No. 102404 against Dr. E. H. Crawfis, Superintendent of the Arkansas State Hospital, K. W. Newman and W. E. Lester, as disbursing officers of the Hospital, and the Standard Accident Insurance Company, as surety for Newman and Lester. The charges against the appellees, as gathered from the pleadings and the admitted facts, may be stated as set out below. Crawfis, as Superintendent of the Hospital, unlawfully drew, and Newman and Lester unlawfully paid to him, money out of the cash funds of the Hospital and the State Treasury in excess of his salary as prescribed by the Legislature. The prayer was that the defendants [appellees] be required to return the excess payments to the source from which it came and that they be restrained from similar activities in the future.

The excessive payments complained of are of three different kinds, viz.:

1. The sum of $1,522.48 paid out of cash funds for moving Dr. Crawfis' household belongings from California to Little Rock; 2. The sum of $1,947.30 paid out of cash funds for furniture and carpet for the house assigned to Dr. Crawfis by the Hospital [The complaint alleges that Dr. Crawfis has converted said furniture to his own use, but it conclusively appears that he has not and that it belongs to the State.], and; 3. The sum of $1,447.67 being the amount paid out of money appropriated by the Legislature for the service of a maid assigned to Dr. Crawfis' home.

For answer to the above charges, the defendants [appellees] admit the above expenditures, but claim they were lawfully made under the provisions of Act 501 of 1953.

The Chairman and Members of the Hospital Board filed an intervention, adopting the defendants' answer, and stating that all said expenditures had been by them first duly considered and then approved.

We will for convenience hereafter refer to the above suit as the 'First Case'.

On April 18, 1955 a similar suit, No. 102296, had been filed in like manner by appellant against the same Mr. Newman and Mr. Lester. This suit, which we will hereafter refer to as the 'Second Case', was by the trial court consolidated and heard with the First Case. The charges in the Second Case, as taken from the pleadings and admitted facts, are hereinafter set out.

1. In 1953 Newman held the position of Assistant Hospital Administrator which the 1953 Legislature created and fixed the salary at $6,500. Later the Hospital Board abolished this office and created a new position, designated as Director of Administration, and fixed the salary at $8,500. Newman entered upon the duties of the new position in February 1954 and held it until some time in October 1954 at the salary of $8,500--an excess of $1,250 over the salary fixed by the Legislature as stated above. This excess of $1,250 was paid out of the cash funds of the Hospital. The prayer was for judgment against Newman for $1,250, and that he be restrained from drawing further excess salary.

2. Lester began working for the Hospital in January of 1954 as Chief Accountant at a salary of $4,500 as provided by the 1953 Legislature. On June 29, 1953 the Hospital Board created the office of Procurement and Disbursing Officer, and fixed the salary at $5,700. Lester drew this salary as Procurement and Disbursing Officer for one year prior to the filing of this suit, and has therefore drawn an excess in salary of $1,200. This excess was also paid out of the Hospital cash fund. The prayer was the same as in the Newman case.

By way of answer to the charges against him Newman admits drawing the salary of $8,500 for the time alleged but states; the office of Director of Administration was created by specific resolution of the Hospital Board, fixing the salary; that said office contained new and separate duties from any office or position theretofore existing, and; that it was all authorized by Act 127 of 1939. Lester admits drawing the salary of $5,700 as Procurement and Disbursing Officer for the alleged time, but states that the new position and salary were authorized by the Board, all of which was regular and proper.

The Hospital Board intervened in behalf of Newman and Lester, adopting their answers and exhibiting resolutions creating the two new positions or offices and fixing the salaries.

After hearing the testimony the chancellor dismissed appellant's complaint in both cases, and this appeal follows.

There is no material conflict in the testimony introduced in either of the cases, so instead of summarizing it separately we shall refer to it hereafter in the discussion that follows.

First Case. Appellant's argument for a reversal may be stated as follows: When the Legislature creates an office or position in any state institution, just as Act 501 of 1953 designated the office of Superintendent of the State Hospital and fixed the salary at $12,000, the governing body of that institution has no power to pay or authorize the payment of a larger salary, and; The payments mentioned heretofore for the benefit of Dr. Crawfis amounted to an increase in his salary. In support of this argument appellant relies on Article 16 Section 4 of the Constitution and on the pronouncements in Gipson v. Ingram, 215 Ark. 812, 223 S.W.2d 595. It is unnecessary to discuss the authorities above mentioned because we agree with appellant that when the Legislature designated the office or position of Superintendent of the State Hospital and fixed the salary, the Hospital Board had no right to increase his salary. We do not however agree that the three items complained of above amounted to an increase in Dr. Crawfis' salary. This being true it makes no difference therefore whether some of the items were paid for out of cash funds belonging to the Hospital. The status of an institution's cash fund was clearly stated in the Ingram case, supra, which held that such funds need not be paid into the State Treasury and thereafter appropriated by the Legislature before they can be expended.

After careful consideration we have concluded that the Hospital Board had the right under the Appropriation Act 501 of 1953 to make the expenditure in each of the three items complained of. Section 2(3) of said Act appropriated $1,143,000 per year for maintenance. Section 3 of the Act states that 'maintenance' is limited to include food and housing for the superintendent [along with numerous other employees]. We think the word 'housing' must be interpreted to include household furniture and that the word 'food' must be interpreted to include prepared food and not merely groceries. Therefore it clearly appears to us that the Board had authority to buy the furniture and carpet for Dr. Crawfis' house which was furnished to him. It is not quite so clear that this could include paying for moving Dr. Crawfis' household effects from California to Little Rock. It seems to follow however that if this had not been done then the Board would have been faced with the necessity of buying additional furnishings for the house. The mere fact that the Legislature entrusted to the Board the responsibility of spending over a million dollars for maintenance compels the conclusion that it was the intention of the Legislature that the Board would have the right and duty of exercising wide discretion. The record leaves no doubt that the Board wisely exercised said discretion in employing Dr. Crawfis and we think they had considerable discretion in doing what they thought necessary to secure his services. Said Act 501 of 1953 provided for 74 waitresses and fixed the salary of each. The Act did not provide for any 'maids'. This seems to be the title which appellant has assigned to Ova Young who, it is admitted, was assigned to Dr. Crawfis' home. Undoubtedly she was one of the waitresses provided by the Legislature. Again, we think the Board did not abuse its discretion in assigning Ova Young to Dr. Crawfis' home, since he and his family were entitled to have their food prepared and served. It would be unreasonable to hold that the Legislature, in such instances, has the sole right to specify the exact duties to be performed by each of the numerous employees. That this assignment of Ova Young was not merely a subterfuge to increase Dr. Crawfis' salary is conclusively shown by the fact that she had previously served other superintendents in the same capacity.

Having concluded as we do that the Board was justified, in the exercise of its discretion, in classifying the first two items mentioned above as items of maintenance there can be no question but that the Board could have paid for these items out of the maintenance appropriation. Instead of doing this however they paid said items out of cash funds belonging to the Hospital, and it is contended that they had no right to do so. Support for this contention is sought to be found in the Ingram case, supra. We are unable however to find in the Ingram case any inhibition against such use of cash funds. The one definite holding in that case, as above stated, was that cash funds could not be used to pay an increase in salaries fixed by the Legislature, and, as heretofore stated, we are in thorough agreement with that holding. Except for this one limitation on the use of cash funds, the Ingram case placed no other limitation on the use of such funds. On the other hand the language in that opinion indicates that the cash fund of any institution may be used for almost unlimited purposes aside from increasing salaries. On page 814 of...