Nixon v. State ex rel. Lamb

• Decision Date: 27 March 1884
• Docket Number: 11,331
• Citation: 96 Ind. 111
• Parties: Nixon v. The State, ex rel. Lamb, Auditor, et al
• Court: Indiana Supreme Court

96 Ind. 111

Nixon v. The State, ex rel. Lamb, Auditor, et al

No. 11,331

Supreme Court of Indiana

March 27, 1884

Rehearing Date: June 4, 1884

Reported at: 96 Ind. 111 at 117.

From the Fountain Circuit Court.

Judgment affirmed.

T. F Davidson, for appellant.

L. Nebeker and H. H. Dochterman, for appellees.

OPINION

Elliott, J.

The complaint of the relator alleges that on the 16th day of June, 1873, the board of commissioners of Fountain county, issued bonds of the county for the purpose of building a jail, and that to pay interest on these bonds, and to create a sinking fund for the payment of the principal, taxes were duly levied; that the taxes levied exceeded the interest in the sum of $ 60,000, and that sum was placed in the hands of Isaac Haupt, then the treasurer of the county; that on the 10th day of June, 1879, the board of commissioners, at the request of Haupt, made the following order: "It is ordered by the board that the county treasurer be and he is hereby authorized to invest in United States bonds on the best terms obtainable, from time to time, such amounts of county funds as may accumulate in the county treasury, over and above the amounts necessary to defray current expenses of the county, and the county treasurer shall hold said bonds in the treasury for the payment of the county bonds issued for the payment of the cost of the construction of the county jail, when the same become due." It further alleged, that pursuant to this order Haupt, as treasurer and agent of the county, purchased government bonds to the amount, in all, of $ 50,000, and that such bonds were registered as owned by "Isaac Haupt, treasurer of Fountain county, Indiana;" that the purchase of the bonds was reported by Haupt to, and his action fully confirmed by, the board of commissioners; that when he made his settlements in June, 1880, and in June, 1881, the bonds were treated as the property of the county, and as such accounted for; that Isaac Haupt's term of office expired on the 15th day of August, 1881, and on that day the appellant, as his successor, took possession of the office; that the latter received the bonds with other property, for and in behalf of the county, and executed the following receipt:

"$ 59,541.58. Covington, Ind., Aug. 14, 1881.

"Received of Isaac Haupt, ex-treasurer of Fountain county, Indiana, the sum of fifty-nine thousand five hundred and forty-one 58/100 dollars, being the balance due said county on account of county funds held by said Haupt at the close of his term of office as county treasurer, as per exhibit this day made, said amount consists of the following items:

Five per cent. United States bonds at par value

$ 25,000 00

Four per cent. United States bonds at par value

25,000 00

"Currency

9,541 58

"Total

$ 59,541 58

"Henry P. Nixon,

"Treasurer of Fountain County, Indiana."

It is also alleged in the complaint, that Nixon made report, as treasurer, to the board of commissioners, but the board refused to approve it, because it did not account for the bonds received of his predecessor in office; that he was afterwards ordered to sell the bonds, and did sell them, but refuses to account for the premium received thereon.

We do not deem it necessary to inquire whether the county had or had not authority to direct the then treasurer, Haupt, to buy the bonds of the United States, for we are satisfied that Nixon has no right to contest his principal's ownership of the bonds. He received them as the property of the county from his predecessor in office, and he must account for them as the property of the county. It is not for him to dispute the authority of the county to acquire and hold property; he is charged with no such duties, and invested with no such functions. His duty was to care for the property entrusted to his custody, and not to dispute the right of the county to entrust him with it. In many cases the principle which rules the case at bar has been declared and enforced. It was said, in Wilson v. Town of Monticello, 85 Ind. 10, that "It is a familiar doctrine that an agent who receives money on account of his principal can not escape an accounting upon the ground that his principal had no right to engage in the transaction which yielded the money." And in the earlier case of City of Indianapolis v. Skeen, 17 Ind. 628, this doctrine was applied to a case where the agent attempted to evade accounting for bonds converted by him on the ground that the city had no authority to issue them. The cases of Daniels v. Barney, 22 Ind. 207, United States Ex. Co. v. Lucas, 36 Ind. 361, and Reed v. Dougan, 54 Ind. 306, assert, very emphatically, the doctrine that where an agent receives money or property for his principal, he is estopped to deny the principal's right to it. A treasurer, or other officer, who receives property for a public corporation and as its agent, has no right to inquire into the authority of the corporation to acquire the property, but is bound, when called upon, to render a due account. Ross v. Curtiss, 31 N.Y. 606; People, ex rel., v. Brown, 55 N.Y. 180. Many cases might be cited in support of the general principles we have stated, but we deem it necessary to cite only a few of them: State v. Tumey, 81 Ind. 559, vide opinion, p. 564; Boehmer v. County, 46 Pa. 452; Wylie v. Gallagher, 46 Pa. 205; McLean v. State, 8 Heisk. 22, vide opinion, p. 255; Miller v. Moore, 3 Humph. 188; McGuire v. Bry, 3 Rob. (La.) 196; Mississippi Co. v. Jackson, 51 Mo. 23.

It is a familiar rule that profits accruing from the property of a principal belong to him, and not to the agent. This principle runs through all cases where there is a relation of trust, and it is everywhere held that the profits belong to the owner of the property, and not to the mere custodian. A forcible illustration of the application of the rule is furnished by the case of Hadley v. State, ex rel., 66 Ind. 271, wherein it was held that the treasurer of a school corporation is bound to account for interest accrued on warrants issued to him by the city officers. The case cited is identical in principle with the present, and controls it.

The question between Nixon and the relator is entirely different from what would have been the question had his predecessor refused to buy the bonds and insisted upon his right to retain the money, for, when Nixon came into office, the property had been acquired, and he received the bonds as property, and not as money. As said in a similar case: "It does not lie in his mouth to repudiate his solemn official acts for his individual benefit." Ham v. Silvernail, 7 Hun 33. The plainest principles of the law of estoppel, as well as of justice, require that he should not be permitted to reap a profit by denying what he had solemnly affirmed.

County commissioners have extensive, although by no means unlimited powers over county finances, and when they accept the settlement of county officers and take property, their acts will generally be sustained. In the present case, they had authorized Haupt to buy these bonds, had approved his current and final reports showing the purchase and possession of them, and Nixon had treated them as the property of the county. Under these circumstances, he can not be heard to aver that the board of commissioners transcended its powers. The case is not at all like that of county officers doing a thing made illegal by statute, nor is it like that of officers going entirely outside of the line of their duties. A review of the adjudged cases will show that the purchase of the government bonds was not prohibited by statute, nor, indeed, entirely beyond the authority of the commissioners. In Halstead v. Board, etc., 56 Ind. 363, it was held that the board of commissioners had authority to lend county funds, and that they might under this authority buy and take an assignment of a mortgage, although the transaction was not technically a loan. It was said in Board, etc., v. Saunders, 17 Ind. 437, that "We are of opinion that under these and various other statutes that might be referred to, the board of county commissioners have a supervisory control over the finances of the county, and consequently have the power to settle in reference to the same, and to bind the corporation by such settlement." In Vanarsdall v. State, ex rel., 65...