Title: Williams v. State

State: arizona

Issuer: Arizona Supreme Court

Document:

83 Ariz. 34 (1957) 315 P.2d 981 Orlando C. WILLIAMS and National Surety Corporation, a corporation, Appellants, v. STATE of Arizona ex rel. Robert MORRISON, The Attorney General of Arizona, Appellee. No. 6225. Supreme Court of Arizona. September 30, 1957. *35 Whitney & LaPrade, Phoenix, for appellants. Robert Morrison, Atty. Gen., Jack G. Marks, Sp. Asst. to Atty. Gen., for appellee. WINDES, Justice. The state of Arizona filed suit against Orlando C. Williams and the National Surety Corporation, his bondsman, for recovery of profits which the state claimed the defendant Williams made by acquiring title to certain Federal lands during the time he was state land commissioner. The trial court rendered summary judgment against the defendants on the question of liability and tried the question as to the extent of liability and thereafter rendered judgment against Williams for $21,842 and against the surety company for $10,000 with judgment over in its favor against Williams for the latter amount. Defendants appeal. The undisputed facts as they appear from the record are that during the time of the transactions herein related defendant Williams was state land commissioner of Arizona; that there was brought to his attention a tract of Federal land in Maricopa county; that he examined this land and through the efforts of some land attorneys he personally acquired title to some land in Mohave county and through application to the proper Federal agencies succeeded in exchanging his Mohave county land for *36 the Maricopa county land. He thereafter sold the Maricopa property for $22,162 realizing a net profit of $21,842. The defendant National Surety Corporation issued its bond in the sum of $10,000 to the effect that Williams would "well, truly and faithfully execute and perform all official duties now required of him by law." The state's theory of its right to recover is that under the provisions of the Enabling Act the state is entitled to make indemnity selections of Federal land and the state land commissioner is the public official whose duty it is to examine public land for the purpose of making such selection and initiate the necessary proceedings for its accomplishment. So far as applicable the statutes then and now provide (A.R.S. § 37-201; section 11-201, A.C.A. 1939): A.R.S. § 37-202 (section 11-202, A.C.A. 1939) creates a selection board composed of the governor, state land commissioner and the attorney general and provides that this board shall do everything necessary to comply with United States and state law in securing title "to the lands granted to the state in quantity or as indemnity by the enabling act." This section also provides that the board "shall file upon and select, and cause to be withdrawn and surveyed for selection, lands the commissioner from time to time recommends for selection * * *." From the foregoing provisions of the statute it is clear that the state has designated the land commissioner as the public officer who shall act as its agent to secure indemnity lands from the Federal government. They can only be acquired upon the examination and recommendation of this official. It is upon his discretionary "say-so" whether the necessary request and application is initiated that might ultimately result in the acquisition by the state of valuable property rights. When the land commissioner took steps to acquire this Federal land for himself, he created a situation whereby his private interests became antagonistic to that of the state. One who accepts this office assumes the responsibility of performing the duties given and imposed with complete fidelity and must act only for the best interest of the state. In order that he act only for and on behalf of the state's interest, it is imperative that he have no personal interest that might clash or conflict with that of the state. The relationship *37 between a state official and the state is that of principal and agent and trustee and cestui que trust. He has no right to neglect his official duty or fail to exercise a discretion given and thereby gain a personal profit. Neither has he a right to exercise such discretion in a manner that will result in profit to himself. Public policy requires that personal interests not exist as a possible factor influencing a public official in the performance of his duties. United States v. Carter, 217 U.S. 286, 30 S. Ct. 515, 520, 54 L. Ed. 769. In that case the common law principles heretofore announced are more clearly stated in the following language: On the basis of these principles, the trial court rendered the judgment. Defendants say the common law cannot be invoked for this purpose because of subsection C, section 37-132, A.R.S. (section 11-106, A.C.A. 1939), which reads as follows: The argument is that since this provision only prohibits the commissioner from owning or acquiring state lands, it operates to abrogate or limit the common law on this subject and consequently, he violated no law since what Williams acquired was Federal land. We are not impressed with this argument. Unquestionably, section 37-132, subsection C, supra, is partially declaratory of the common law but the fact that a statute partially codifies the common law does not necessarily abolish the remainder of the common law rule. 50 Am. Jur., Statutes, section 346, page 339; Bay v. Davidson, 133 Iowa 688, 111 N.W. 25, 27. In that case a contract of a municipal official was attacked as being void under the common law because of the personal interest of the official. The statute prohibited certain kinds of contracts by such officials but did not include the one involved. By way of answer to the contention that the statute limited the common law, the court said: The state entrusted the land commissioner with the power to secure for it indemnity selections of Federal land. Such power must be exercised free of any conflicting personal interests. It is well said in Bay v. Davidson, supra, quoting Dillon on Municipal Corporations, section 444: It will not do to say that if the state had applied, it might not have been successful and the state lost nothing. It lost the opportunity to apply for and possibly obtain the land. It lost the opportunity of getting the benefit of an impartial exercise of a discretion uninfluenced by the personal interest of its agent. If the land was worth $21,000 profit to the agent, the state was entitled to a fair judgment as to whether it should attempt to secure the same. This it did not get because of the operation of the antagonistic interests of the commissioner. The commissioner did not fairly *39 and impartially perform his official duty and he cannot profit thereby. Defendants offered a trial amendment to their answers to the effect that the amended complaint was a collateral attack upon the decision of the commissioner of the General land office. The court's denial of the application to amend is claimed error. The validity of the title to the land acquired is in no way disturbed. The decision of the commissioner is in no way weakened or disturbed. There is no merit to this assignment of error. At the hearing for the purpose of determining the extent of Williams' Liability, the following transpired: The court sustained the objection and complaint is now made that the court should have permitted Williams to show that the particular land was not open to selection. We could hardly consider this ruling reversible error when counsel agreed with the court's suggestion as to the method of proof and no such method was pursued or attempted. In any event no attempt was made to discover whether the land could be selected. Defendant National Surety Corporation urges that the acts committed by Williams were not within the terms of the bond because not official acts of Williams as state land commissioner. Among the conditions of the bond is that Williams would truly and faithfully perform all his official duties. Among the official duties of the commissioner are to examine public lands for the purpose of selecting the same for the state as indemnity and to protect the right of the state therein. He examined the land but instead of taking any steps to protect the interests of the state therein, he used the information obtained from such examination for his personal profit. By this conduct he did not truly and faithfully perform all of his official duties and consequently breached the conditions of his bond, and the surety is liable. The wrongful failure to perform his official duties is as *40 much a breach of this bond as would be a wrongful performance of an official duty. Judgment affirmed. UDALL, C.J., and PHELPS, STRUCKMEYER, Jr. and JOHNSON, JJ., concurring.