State v. Cox

• Decision Date: 03 July 1922
• Docket Number: 105
• Citation: 243 S.W. 651,154 Ark. 493
• Parties: STATE v. COX
• Court: Arkansas Supreme Court

243 S.W. 651

154 Ark. 493

STATE v. COX

No. 105

Supreme Court of Arkansas

July 3, 1922

Appeal from Pulaski Chancery Court; John E. Mar-tineau, Chancellor affirmed.

Decree reversed, and complaint dismissed.

J S. Utley, Attorney General, Elbert Godwin and Wm. T. Hammock, Assistants; George Vaughan, special counsel.

1. Plaintiff is the owner, and entitled to the immediate possession of the property in controversy. Congress by express enactment (§ 7 of postoffice appropriation act of February 28, 1919) authorized the Secretary of War in his discretion to transfer to the Secretary of Agriculture "all available war material and supplies * * * * suitable for use in the improvement of highways * * * * of the several States to be used on roads constructed in whole or in part by Federal aid." 40 Stat. L 1201.

The Wadsworth-Kahn act of Congress, approved March 15, 1920 expressly provided a restriction in keeping with the policy of the first act to the effect that "no more * * * * material, equipment and supplies * * * * shall be transferred * * * than said Department of Agriculture shall certify can be efficiently used for such purposes within a reasonable time after such transfer." Express authority was contained in section 2 for the transfer of certain specific units to which the item now in dispute belong. Section 4 provided for reimbursement of the War Departmernt by the department to which the property is transferred, of freight charges and expense of loading, and further provided that "any State receiving any of said property for use in the improvement of public highways" shall pay 20 per cent. of its estimated value, against which the State may set off the freight charges paid by it on the shipment. Section 5 fixes the title of such allotment in the State, for use in the improvement of public highways, etc.

The record affirmatively shows a request for the items now in suit by the State Highway Commissioner to the bureau of public roads, war materials division, Department of Agriculture, and specific shipping instructions issued by the chief of the bureau of public roads covering these items.

There is therefore no question but that the disputed units of material and equipment became the lawful property of the State. It is not material in this inquiry whether the property was impressed with a trust, or whether the right of disposal was absolute or qualified. Special ownership is sufficient to support the action of replevin. C. & M. Digest § 8640; 37 Ark. 64; 67 Id. 135; 53 S.W. 678; 34Cyc. 1390; Id. 1468; 23 R. C. L. 864, § 14.

2. The attempted transfer by the highway commissioner was unauthorized and unlawful, and vested no title, either legal or equitable, in the defendants. By the limitations placed upon the use to which the materials should be put, and the condition under which it might be alienated, Congress may well be said to have created a trust estate in, the beneficial allottees. 39 Cyc. 17; 12 N.Y.S. 815. The subject-matter of trusts is not limited to real property. 31 Ark. 119; 25 R. C. L. "States," 389, § 22; 1 Perry on Trusts, 6th Ed., § 67; 37 Cyc. 36; Id. 51; 26 R. C. L. 1171, § 6; Perry on Trusts, § 41.

Although there is no affirmative acceptance of a trust, yet acceptance may be implied. 3 Pomeroy, Equity, §§ 1007, 1060. The language of the Acts of Congress and that of the certificate of the Highway Commissioner that the property would be used for the purpose intended, together with the acceptance of the con-signor and consignee, are sufficient to create a trust. 26 R. C. L. 1179-1180. That authority to enforce a Federal statute or a national policy, of the nature involved here, may be conferred upon State officers as such, and that such officers may execute the same unless prohibited by the Constitution or statutes of the State, is no longer open to question. 16 Pet. 539, 622; 10 L.Ed. 1060; 197 U.S. 169, 174; 25 S.C. 422; 49 L.Ed. 709.

Only the Legislature may authorize the sale or transfer of public property. 36 Cyc. 870; 25 R. C. L. "States", 392-3. §§ 25, 26.

The State Highway Department is not one operated for gain. It is a creature, and within the exclusive control, of the Legislature, eharged with the performance of a definite assignment of the manifold functions of State government. In view of the Federal aid laws, this department operates as an indispensable cog in coordination with the National Government in promoting the cause of good roads. 151 Cal. 797; 91 P. 740; 154 Cal. 119; 97 P. 144, 148.

The State may hold title to property in two distinct capacities--one as proprietary, and the other in a sovereign or governmental role. 157 P. 1097-8.

Not only must express authority exist for disposing of public property, but statutory procedure must be strictly pursued. 24 Minn. 332; 76 Ark. 167, 88 S.W. 888.

The State is liable only to the extent of the powers actually given to its officers, and not to the extent of their apparent authority. All who deal with a public agent must at their peril inquire into his real power to bind his principal. 39 Ark. 508-3; 42 Id. 118; 66 Id. 48, 52; 51 S.W. 68; 70 Ark. 568, 578; 69 S.W. 559; Throop, Public Officers, p. 523 § 551; 44 Ark. 437; 47 Id. 205; 7 Wall. (U. S.) 666; 25 Ark. 261; Id. 273.

The language of section 5 of the Wadsworth-Kahn Act excludes the possibility of alienation except in two contingencies, viz: if unserviceable, sale may be made to any "individual, company or corporation"; otherwise by rental to a "State agency or municipal corporation" at not less than the cost of upkeep, but this use must be "for the purpose of consructing or maintaining public highways." If the language of the Acts of Congress, which are the source of the State's title, are to be strictly construed, then due import must be given to the word "serviceable" therein employed. Georgia courts have construed the term. 25 S.E. 428; 132 Ga. 445, 64 S.E. 475; 91 S.E. 771.

3. The defendants are not entitled to ally relief on their cross-complaint, as against the State. Const. art. 5, § 20; C. & M. Dig., § 9294; Id. § 9303; 19 Ark. 559, 562.

Defendants' pleadings nowhere ask relief against the State. A suit to compel the State to perform its contract cannot be maintained. 108 Ark. 60, 67; 156 S.W. 839 45 L. R. A. (N. S.) 731; note 68 Am. St. Rep. 753; 6 Pomeroy, Eq. Jur. § 759. See also 106 Ark. 174; 121 Id. 489. Our statute expressly forbids the allowance of any debt or claim by way of set-off in a suit on behalf of the State. C. & M. Dig., § 9303. It has been held that no principle of direct set-off or recoupment will authorize the allowance of a claim of a defendant for damages, liquidated or unliquidated, against a claim of the State. 18 Md. 193; 59 Hun. 299; 12 N.Y.S. 936; 128 N.Y. 640, 29 N.E. 147; 51 N.Y.S. 747; 156 N.Y. 693; 51 N.E. 1093; 56 Cal. 401; 65 N.C. 406; 14 S.C. 135; 16 S.C. 533; 87 Tenn. 725; 11 S.W. 935; 10 Am. St. Rep. 712; 2 Tex. 616; 31 Md. 344; 46 La.Ann. 431; 15 So. 174. See also 33 L. R. A. (N. S.) 378; 91 Ark. 527; 98 Id. 525; 35 Id. 565; 161 U.S. 10; 40 L.Ed. 599; 202 U.S. 473; 50 L. ed. 1113; 123 U.S. 443; 31 L. ed. 216; 263 F. 410; 117 U.S. 52; 140 U.S. 1; 172 U.S. 516; 105 F. 459; 107 U.S. 711; 33 L. R. A. (N. S.) 376, Note; Id. p. 379, note.

Equity follows the law in matters of set-off. 34 Cyc. 635. Defendant cannot avail himself of a set-off, because the demand is uncertain in its nature, and it is no justification of a tortious act that the plaintiff is indebted to the defendant. Waterman on Set-Off, Recoupments and Counterclaim, 2nd Ed. 169, § 42; Cobbey on Replevin, 2nd ed., §§ 791, 792; Shinn on Replevin, § 589; Morris on Replevin, 165; Wells on Replevin, § 630.

Mehaffy, Donham & Mehaffy, for appellees.

1. The State is not the owner of the property and not entitled to possession. Appellees are not bound by the provisions of the Wadsworth-Kahn act, since this property may be some of the equipment acquired under the postoffice appropriation act of February 28, 1919. If it was so acquired, it was an absolute gift on the same basis as money given to the State under the Federal aid road act of July 11, 1916, and Commissioner of State Lands, Highways, etc., was the proper person to receive and dispose of the same and apply the funds obtained to work of his department in road building.

If the property came to the State under the act of February 28, 1919, plaintiff is not entitled to relief under the provisions of the Wadsworth-Kahn act, and the burden is on the State to show that the property came to it under the later act.

The term "serviceable condition" in section 5 of the Wadsworth-Kahn act must be given its ordinary and commonly accepted meaning. Under no rule of construction could it be made to mean "new" or "unused." The three Georgia cases cited by appellant sustain appellee's contention on this point.

If it be true that the property came to the State under the later act which provided that no equipment in serviceable condition could be sold, then the donation of this equipment was a grant in praesenti, and when it came into possession of the State it became a gift absolute. 31 Ark. 119; Id. 833; 54 Id. 251; 24 Id. 431.

The State, through its Legislature, had designated the Commissioner of State Lands, Highways and Improvements as the proper person to receive payments from the United States Government. C. & M. Digest, § 5199. There is no question but that he had full authority under the above section to receive this property, sell the same, and apply the proceeds to the building of highways. And it is clear that there is no necessity for money so derived to go into the State Treasury.

Since by virtue of the foregoing legislative enactment, the commissioner was the proper person to receive and dispose of the...