Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1892-09-16

the great suits against the eX-State
treasurers, E. G. AIcFeuidge and II. b.
BarshaW, We're argued in the supreme
court. A decision is expected within
tho next six weeks. These two suits
are test cases, but similar ones are
pending against three other eX-treaSr-
ers. The whole sums, principle ;lnd i'll
forest, involved are:
darSnd". ............. 9l-?,ooo.oo
! McFet11dge. ............... 2OI ,6o2.66
! Guenther. ........... 1SS,OOO.OO
kuehn. 1C3,9OO.OO
BaetZ. ...... ...,.... 9o,foo.oO
| Total ........ $124.171 So
The arguments for the state We're
made by Attorney General O'Connor,
Il. NJ. Bashford and Senator Villas; for
; he eX-treaslrers by G. w. Eell>er,
Joshua Stark, u. S. OrdWay and j. V.
Quarles. Mr.. Felker's argument dis
closes the theory of the defense. He
! was particularly the attorney for
HarshaW. He said the contention
of the state with which the trial court
concu1red, is that under the peculiar
of the treasurer to keep the public
funds always in the vaults OF the treas
ury. This is the construction put upon
r. S., section $50, that the deposit of
the moneys made by HarShaW amount
ed to loans or deposits for hire. From
these two propositions the deductions
flow inevitably, as the state contends,
that such dealings with the public fund
amounted to a crime. Section 1919,
cited by the state for the same purpose
would seem to put the matter Of GRIM
inality beyond doubt if the premises
assumed by the state are sound. Under
these propositions the court concludes
that the state is entitled to recover the
gains which have accrued from such
unlawful traffic with the public funds.
The court bridges over the chasm by a
resort to the plausible and captivating
Theory that because the moneys hand
led belonged to the state, therefore the
gain was an increment and became a
part of the fund. This is an ingenious
way of escaping the logical process
which leads inevitably to a different
result. If we stop to analyZe the posi-
ton of the court we find that it rests
upon the familiar proposition that where
a bailee managing funds for his princi-
pal, has made q contract beyond the
scope Of his authority, the principal has
an option to ratify the unauthorized act
and claim the fruits of the transaction
A recurrence to elementary principles
will convince any lawyer that the case
in nand is not controlled by the prin-
cipal applied by the court. Here the
treasurer, whom, for the purpose of the
argument we will call the bailee of the
state, makes a contract to loan the pub
lie funds without the concurrence Of
the secretary of state, contract which
it is conceded for sake Of argument is
against the policy and the letter of the
statute.
But in addition to that he makes the
contract to loan the public funds for
his own individual gain and profit,
which, under the section before cited,
amounts to crime. Now the question is,
can the state officers SO ratify the I'M
lawful act of it's bailee as to entitle it
to the benefit of the contract and the
fruits thereof? 1t will be remembered
that the legislature has passed no act
authorizing this suit or recognizing any
right of the state to this interest money.
Can the acts of state officers confer
such authority? The presence of the
state as a party makes no change in
this application of legal principle
1t is fundamental that he who could
not authorize an act in the first in
stance cannot ratify it afterwards.
1t must be conceded that the gov
ernor and the attorney general could
by no act OF edict, have authorized the
making of the contract i'll question, if it
was clearly contrary to law Not being
able to authorize in the first instance
they were powelless to give validity to
the contract by ratification Their
adoption of the contract, and their eff
fort by suit to make it valid, are as in
effectlIal for every purpose as would be
a direction to the treasurer to make the
loan in the first place Nothing short
of an act of the legislature could confer
the power in the first instance, and if
is well settled that where certain forms
and fornalities are essential to the
making of the contract originally, the
act of ratification must be of the same
dignity and be accompanied by the
same SOlemni1eS
Continuing he said that if the state
can validate the contract by q so-called
ratification, then the interest money
would become portion of the fund by
virtue of the contract. and not other
wise. The interest moneys We're not in
this case comningled with the funds
of the state, but as the court has
found, they We're purposely kept sepa-
rate in the hands of the defendant,
Schneider for the use and benefit of
Harshaw, so that unless the state re-
sorts to the contract, there is no legal
connection shown between the state
funds and the funds deposited in Osh-
kosh in the name of IS. NJ. Hay, tr,ls-
tee" The burden is upon the state to
show that the money in the hands of
the treasurer is 1.-The money belonging
to his Office The claim of the state
is bottomed on and traced through the
forbidden contract.
Suppose that instead of depositing
this money of the state in a national
bank, the defendant had made a de
post We proprietor of faro bank,
and the pl.- sought to be recovered
had accrued as the result of such I'M
lawful business. No one would claim
ON that account that q corlrt of e0,Iity