State ex rel. Ridge v. Shoemaker
| Decision Date | 16 May 1919 |
| Citation | 212 S.W. 1,278 Mo. 138 |
| Parties | THE STATE ex rel. THOMAS S. RIDGE, Appellant, v. JAMES B. SHOEMAKER and GLOBE INSURANCE COMPANY |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit court. -- Hon. Daniel E. Bird, Judge.
Affirmed.
Johnson & Lucas for appellants.
(1) Anyone who holds something for the benefit of another, and is charged with some fiduciary duties in relation thereto, is a trustee, and the defendant Shoemaker, as clerk, was a trustee for the beneficiary of the fund. Perry on Trusts (6 Ed.) secs. 454, 470, 471; Bent v. Priest, 86 Mo. 482; Landis v. Saxton, 89 Mo. 382; Jones v Byrne, 149 F. 463; McKeigue v. C. & Mo Railroad, 11 L.R.A. (N.S.) 151. (2) The money was paid to the defendant Shoemaker as clerk, for the use and benefit of relator Ridge, and even though Ridge then declined to accept it, he was entitled to interest thereon, from the clerk, when he finally took it, according to the decision of the Supreme Court, if the clerk, pending litigation, converted it to his own use, by deriving benefits from it. Snyder v. Cowan, 120 Mo. 389; St. L., K. & N.W. Railway v. Clark, 121 Mo. 187; St. L., O. H. & C. Railway v. Fowler, 142 Mo. 687; Bassett v. Kinney, 24 Conn. 267. (3) As the defendant Shoemaker, as clerk, was forbidden by law to get any benefit from the money paid over to him in his official capacity, he is chargeable, in favor of the beneficiary, with the highest legal rate of interest, compounded, because he used the money in such a way as to get a benefit from the use. R. S. 1909, secs. 2685, 4557, 4559; Webb on Usury, sec. 87; Williams, Admr., v. Pettigrew, 62 Mo. 472; Cruce v. Cruce, 81 Mo. 676; In re Murdock, 129 Mo. 499; Smelting Co. v. Reed, 23 Colo. 533. (4) The surety is liable for the action of the clerk in the premises. 2 Brandt on Suretyship and Guaranty (3 Ed.), sec. 633; In re Finks, 41 F. 386; Howard v. United States, 102 F. 77; Howard v. United States, 184 U.S. 676; Fidelity Co. v. Rankin, 33 Okla. 7. And the surety is also liable for interest on the fund, as the clerk obtained a benefit for himself by allowing the trust company to use it. McPhillips v. McGrath, 117 Ala. 568; Van Sant v. State, 53 A. 711. (5) The trust company was compelled by law to pay interest on this trust fund. R. S. 1909, sec. 1124; State ex rel. v. Lincoln Trust Co., 144 Mo. 562; Denny v. Jefferson Co., 272 Mo. 446. (6) The fact that defendant Shoemaker, as clerk, received the fund from his predecessor in office, and deposited, and kept it deposited, in his own name as clerk, showed that he received it and held it virtute officii, and that whatever he did in relation to it was virtute officii. Heppe v. Johnson, 73 Cal. 265; Billings v. Teeling, 40 Iowa 607.
Elijah Robinson for respondent J. B. Shoemaker.
(1) The law allows interest only upon the ground of a contract, express or implied, for its payment, or as damages for the detention of money, or for the breach of some contract, or the violation of some duty. 22 Cyc. 1474A; Healy v. Fallon, 69 Conn. 228; Jones v. Mallory, 22 Conn. 386; Selleck v. French, 1 Conn. 32; Black v. Reynolds, 3 Harr. 528; Milton v. Blackshear, 8 Fla. 161; Dodge v. Perkins, 9 Pick. 368; Rensselear G. F. Co. v. Reid, 5 Cow. 587; Schoolbred v. Elliott, 1 Brev. 423; Wolf v. Lacy, 30 Tex. 349; Hope v. Barker, 112 Mo. 342. (2) If defendant had been obligated to pay interest, it would have accrued to Tebeau and not to plaintiff. (3) There being no express contract for the payment of interest, and the principal having been paid and accepted by plaintiff, he cannot now maintain an action for interest. Stone v. Bennett, 8 Mo. 43; Arnold v. Bank, 100 Mo.App. 474; Fake v. Eddy, 15 Wend 76. "Interest follows the principal as the shadow does the substance." Hatcher v. Lewis, 4 Rank. (Va.) 152; McVeigh v. Howard, 87 Va. 599; Jones v. Williams, 2 Call. (Va.) 102; Hollingsworth v. Hammond, 30 Ala. 668; Valentine v. Donoho Banking Co., 133 Cal. 191; Chandler v. Peoples Savings Bank, 61 Cal. 401; Canfield v. New-Milford School Dist., 19 Conn 529; Vider v. Chicago, 60 Ill.App. 595; Robbins v. Cheek, 32 Ind. 328; Jamison v. Burlington Ry. Co., 78 Iowa 562; Ward v. Everett, 1 Dana, 429; Jett v. Cockrill, 85 Ky. 348; Amer. Bible Society v. Wells, 68 Me. 572; Robbins Cordage Co. v. Bremer, 48 Me. 481; Milliken v. Southgate, 26 Me. 424; Howe v. Bradley, 19 Me. 31; Talbot v. Bay City, 71 Mich. 118; Somerset Co. v. Veghte, 7 N. J. L. 145; Maloy v. Bernallio County, 10 N.M. 638; Hamilton v. Van Rennselear, 43 N.Y. 244; Brady v. New York, 43 N.Y.S. 452; Roberts v. Brandies, 44 Hun, 468; Maddaugh v. Elmira, 23 Hun, 79; King v. Phillips, 95 N.C. 245; Moore v. Fuller, 47 N.C. 205; Waller v. Kingston Coal Co., 191 Pa. St. 193; Childs v. Millville Ins. Co., 56 Vt. 609; Abbott v. Wilmot, 22 Vt. 437; Ryan Drug Co. v. Hvambsahl, 92 Wis. 62; Stewart v. Barnes, 153 U.S. 456; Graves v. Saline Co., 104 F. 61; Southern Railroad Co. v. Dunlop Mills, 76 F. 505.
James E. Goodrich for respondent Globe Surety Company.
(1) The uncontradicted testimony clearly shows that the deposit by respondent Shoemaker of the funds in the two banks was not pursuant to any agreement or understanding that such banks were to pay premiums on his bonds, and also that such payment was voluntarily made on the initiative of the banks and not made in response to any agreement or understanding with, or even at the suggestion of Shoemaker. Consequently, the action of the court was correct, irrespective of what may be the rule of law in this State applicable to benefits received from official funds. (2) Relator's action is based on two alleged breaches of respondent Shoemaker's bond, and unless the evidence establishes liability on the bond there can be no recovery in this action brought in the name of the State of Missouri, even though there might be a liability if an appropriate action had been brought by relator in his individual capacity. Renfroe v. Colquitt, 74 Ga. 618; State ex rel. v. Harrison, 99 Mo.App. 64. (3) Relator wholly failed to make any showing that there had been a breach of the conditions of respondent Shoemaker's bond. (4) It would have been a felony for respondent Shoemaker to have handled or loaned the fund in the manner in which relator claims it should have been handled under the allegations in connection with alleged "second breach." Had he made the arrangements proposed, his agreement would have become null and void under express statutory provisions. R. S. 1909, secs. 4557, 4558, 4559. (5) It was not the duty of respondent Shoemaker to invest the fund, or deposit the same at interest. On the contrary, he would have committed a felony had he done so. Snyder v. Cowan, 120 Mo. 396; R. S. 1909, secs. 4557, 4558, 4559. (6) Even if we concede for the sake of argument (which we emphatically deny) that Shoemaker received an illegal benefit from the Trust Company, neither Shoemaker nor his surety are liable on his official bond, since he did not receive it by virtue of his office. Secs. 2675, 4557, 4558, 4559, R. S. 1909; State ex rel. v. Harrison, 99 Mo.App. 57; State ex rel Howard, Admr., v. Rollins, 29 Mo. 267; State ex rel. Chase v. Davis, 88 Mo. 585; State v. McDonough, 9 Mo.App. 63; Renfroe et al. v. Colquitt, 74 Ga. 618; Wilkesbarre v. Rockefeller, 171 Pa. St. 187; Feller v. Gates, 91 Am. St. 512; Wilson v. State, 67 Kan. 44; State ex rel. v. Charles Moeller, 48 Mo. 331; Schuster v. Weissman, 63 Mo. 561.
OPINION
In Banc
Respondent James B. Shoemaker was elected Circuit Clerk of Jackson County, Missouri, at the general election in November, 1910, and took charge of that office on January 3, 1911, having, on December 19, 1910, given an official bond, with his co-respondent, the Globe Surety Company, as surety, in the sum of $ 40,000, conditioned as required by law. This action was brought by relator against said respondents on the above bond, and is based on alleged breaches thereof as follows, to-wit: 1st. That respondent Shoemaker had the beneficial use of a certain deposit, hereafter mentioned, from January 6, 1911, to December 23, 1914, on which relator was entitled to recover interest by reason of the fact that respondent Shoemaker, by agreeing to deposit, and depositing this fund in the Commerce Trust Company and another financial institution, obtained a benefit in the sum of $ 560, being the aggregate of the premiums paid to his co-respondent for becoming and remaining a surety on his official bond, and also obtained free exchange and protest fees. Relator likewise claims, on account of said alleged breach, interest on said $ 560 for the time aforesaid at the rate of six per cent per annum, compounding annually. 2nd. That respondent Shoemaker failed and refused to accumulate interest on this fund "for the benefit of relator under the offered arrangements aforesaid with said First National Bank, but permitted the same to remain in the said Commerce Trust Company for nearly four years without any benefit accruing to said fund, or to any one except himself and the said Trust Company."
The alleged arrangements aforesaid with the First National Bank are set out in paragraph three of the second amended petition, which alleges in substance that this fund had previously been deposited by Oscar Hochland, Shoemaker's predecessor in office, with said First National Bank, and that before this money was turned over to Shoemaker, as successor of said Hochland, the attorney for Tebeau had made arrangements with said First National Bank, by which the latter would pay three per cent per annum on said fund, for the benefit of the fund, if said Shoemaker would permit said arrangement, and that said Shoemaker refused to accede to said arrangements, and deposited the same on an...
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