Case Name: The State, Respondent, vs. Harshaw, imp., Appellant; The State, Respondent, vs. Sawyer and others, imp., Appellants
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1893-04-11
Citations: 84 Wis. 532
Docket Number: 
Parties: The State, Respondent, vs. Harshaw, imp., Appellant. The State, Respondent, vs. Sawyer and others, imp., Appellants.
Judges: PiNNey, J., took no part.
Reporter: Wisconsin Reports
Volume: 84
Pages: 532–536

Head Matter:
The State, Respondent, vs. Harshaw, imp., Appellant. The State, Respondent, vs. Sawyer and others, imp., Appellants.
September 12, 1892
April 11, 1893.
State treasurer: Ownership of public funds: Liability for interest received on deposits in bank: Official bond.
1. The state treasurer and the sureties on his official bond ai'e liable to the state for interest received by him from banks on state funds deposited therein in his name as treasurer, with interest thereon from the close of his official term. State v. MeFeiridge, ante, p. 473, followed.
3. Where such interest was received by a person other than the treas-urex-, and deposited in a bank in the name of its president as trustee, the latter being a surety on the treasurer’s bond, the state may recover the amount so received and deposited.
APPEALS from the Circuit Court for Dane County.
The opinion states the facts.
Chas. W. Fellcer, attorney, and J. V. Qucvrles, of counsel, for the appellants,
contended, inter alia, that the finding and judgment cannot logically rest on the opinion filed by the trial court. If the dealings of the treasurer With the public funds were unlawful, his acts were never adopted or ratified by the state so as to entitle it to stand as principal in the contract and demand the fruits thereof. State-v. Buttles, 3 Ohio St. 319; State v. Keim, 8 Neb. 63; Me-chem, Agency, secs. 111-126, 130, 136; Ooók v. Tullís, 18-Wall. 332-338; Ooleman v. Darling, 66 Wis. 160; MeOraeken 'o. San Franeiseo, 16 Cal. 623; Taymouth Tp. v. Koehler, 35-Mich. 22-27; Marsh v. Fulton Oo. 10 Wall. 676-684; Zott-man v. San Franeiseo, 20 Cal. 96; People v. Swift, 31 id. 28; Poehester v. Alfred Bank, 13 Wis. 440; Dispatch Line v. Bellamy Mfg. Oo. 12 N. H. 232, 37 Am. Dec. 203; Pratt-v. Swanton, 15 Yt. 147, 157; North Star B. <& S. Oo. v. Stéb-bins, 48 N. W. Rep. (S. Dak.), 833; Galloway v. Hamilton, 68 Wis. 652-656; Palmer v. Williams, 24 Mich. 328; Spof-ford v. Hobb$, 29 Me. 148, 48 Am. Dec. 521; Glealand v. Walker, 11 Ala. 1058, 46 Am. Dec. 238; Delafield v.- Illinois, 2 Hill, 1-75; Clark v. Janesville, 13 Wis. 419; People v. Phoenix Bank, 24 Wend. 431; Concord Bank v. Gregg, 14 N. H. 331; Newsom v. Hart, 14 Mich. 233-237; State v. State Bank, 5 Ind. 358; Hamson v. McHenry, 9 Ga. 164; State v. Torinus, 24 Minn. 334. If the state must trace its title to the money in suit through the conti-act made by its agent with the banks, and if, as assumed by the trial court, such contract ivas unlawful, a recovery is blocked by the maxim “Ex turpi causa non oritur actio.” Melehoi/r v. MeOarty, 31 Wis. 254; Wells v. MeGeoeh, 71 id. 234; Clarke v. Lincoln L. Oo. 59 id. 657; Day v. McAllister, 15 Gray, 433; Chippewa V. & S. P. Oo. v. O., St. P., M. <& 0. R. Go. 75 Wis. 224; Hardy v. Stonebraker, 31 id. 647; Murdock v. KiTbowrn, 6 id. 470; McLain v. Hoffman,, 30 Ark. 428.; Worthington v. Black, 13 Ind. 344; Gardner v. Grubb, 4 Houston (Del.), 448; Jackson v. McLecm, 100 Mo. 130; Watson v. Murray, 23 N. J. Eq. 257-261; Gould v. Kendall, 15 Neb. 549; Cook v. Sherman, 20 Eed. Rep. 167; Dent v. Ferguson, 132 U. S. 50; Armstrong v. Am. Ex. Nat. Bank, 133 id. 433-469; Den ex dem. Wooden v. Shotwell, 24 N. J. Law, 791; Sykes v. Beadon, 11 Ob. Div. 170, 27 Moak’s Eng. 235-256; Thomson v. Thomson, 7 Ves. Jr. 473; Fades v. Mayberry, 2 Gall. 562-3; Caldwell v. Hording, 1 Lowell, 330; Leonard v. Poole, 55 N. Y. Super. Ct. 213; Clements v. Ytnrria, 81 N. Y. 291.
The moneys paid by the banks to tbe defendant cannot be considered as an increment of the state fund. They were not paid as interest but were intended as perquisites or gratuities to the defendant personally. They were the perquisites referred to in ch. 341, Laws of 1876. See Hughes v. People, 82 Ill. 80; Supervisors v. Wandel, 6 Lans. 38. ■Neither the defendant Harshaw nor the state could have ■recovered anything from the banks by reason of the deposits, because there was no contract to pay anything. See FElna Ins. Co. v. Church, 21 Ohio St. 492-498; Story, 'Agency, sec. 207; Mechem, Agency, sec. 472. The state cannot recover by showing a defect in defendant’s title to the money. Be Grooi v. Van Duzer, 20 Wend. 393; State v. State Panic, 5 Ind. 358; Ben ex dem. Wooden v. Shotwell, 24 N. J. Law, 794; Woodworth v. Bennett, 43 N. Y. 278; Oscanyan v. Arms Co. 103 U. S. 268; Perry, Trusts, sec. 424. The treasurer can be held liable on no theory except that he is a common-law trustee and that the general rules of the common law govern the conduct of state officers. But there is no analogy between the state treasurer, who is a constitutional public officer with duties and liabilities .created by statute, and a common-law bailee or trustee. Where the liability of a public officer is absolute he is not a common-law bailee or trustee and is not liable for any profit made by deposit of the public funds. Harrmgton v. Hoggart, 1 Barn. & Ad. 584, 20 Eng. C. L. 577; Browne v. Southoiise, 3 Brown, Ch. 106; Omro v. Eaime, 39 Wis. 468-473; IT. 8. v. Prescott, 3 How. 578; Hew Providence v. McEachron, 33 N. J. Law, 339; Wilson v. Wichita, 67 Tex. 647-9; Perley v. Muskegon Co. 32 Mich. 132; State v. Harper, 6 Ohio St. 607; Muzzy v. Shattack, 1 Denio, 233-8; Renfroe v. Colquitt, 74 G-a. 618; Shelton v. State ex rel. Morgan Co. 53 Ind. 331; Halbert v. State ex rel. Martm Co. 22 id. 125; Rook v. Stinger, 36 id. 346-8; Lvmille v. Leinin-ger, 72 id. 491; Brown v. State ex rel. Field, 18 id. 239; Booard v. State ex rel. Stevens, 79 id. 270; Colerain v. Bell, 9 Met. 499; Fgremont v. Benjamin, 125 Mass. 19; Hancock v. Hazzard, 12 Cush. 112; R. R. Hat. Bankv. Lowell, 109 Mass. 214, 67 Am. Deo. 365, note; IJ. 8. v. Prescott, 3 How. 578; U. S. v. Morgan, 11 id. 160; IT. S. v. Bashiell, 4 Wall. 185; U. S. v. Koehler, 9 id. 88; Boyden v. IT. S. 13 id. 24; Bevans v. U. S. id. 62; IT. S. v. Thomas, 15 id. 337; Comm. v. Comly, 3 Pa. St. 372; Comm., v. Baily, 129 id. 480; Wayne Co. v. Bressler, 32 Neb. 818; Comm. v. God-shorn, 17 S. W. Rep. (Ky.), 737; Cook v. McCabe, 53 Wis. 258-9. [Counsel also argued other propositions discussed in the briefs in the case of State v. McFetridge, a/nte, p. 473.]
The Attorney General and R. M. Bashford, attorneys, and William F. Vilas, of counsel, for the respondent.
[The briefs for the respondent in this case were substantially the same as in State v. McFetridge, ante, p. 473.]

Opinion:
' The following opinion was filed January 10, 1893:
LyoN, 0, J.
There are two appeals in this action,— one by the defendant Henry B. Harshaw, and the other by all the remaining defendants. Such appeals are from the judgment of the circuit court in favor of the state and against all the defendants.
The defendant Harshaw was state treasurer for the term commencing on the first Monday in January, 1889, and ending on the first Monday in January, 1891. The defendants Sawyer, Hay, McMillen, Porter, and Hooper, together with Charles B. Clark, now deceased, are the sureties in his official bond as such treasurer. The action is to recover interest paid by banks on deposits therein of the pub- lie funds made by Treasurer Harshaw in his name of office. It is like the case of State v. McFetridge, ante, p. 473, except that, instead of receiving the interest on such deposits himself, Treasurer Ilarshaw and his sureties, or some of them, secured the services of the defendant Schriber to collect and receive it. Schriber received over $62,000 of such interest, and deposited the same in the defendant The national Bank of Oshkosh, of which he was cashier, in the name of the defendant S. M. Hay, trustee. Hay is a surety in such bond, and the president of the defendant bank. The money still remains there on deposit. The action is in equity, for an accounting of such interest, and to reach such deposit in the defendant bank.
The court held the defendant Harshaw and his sureties, liable for the amount of such interest, with interest thereon from the close of his official term, with costs. It also held defendant Schriber and the bank liable for the amount thus deposited, but not for interest thereon or costs. Judgment was entered for the state, accordingly, which provided that, when the amount of such deposit should be paid, the same should be applied upon the judgment against treasurer Harshaw and his sureties.
In respect to the liability of the defendants Harshcm- and his sureties, the case is ruled by the McFetridge Case. There can be no doubt that the state is entitled to recover the interest realized on its funds, and deposited in the defendant bank by Schriber.
By the Court.— The judgment of the circuit court is affirmed on both appeals.
PiNNey, J., took no part.
A motion for a rehearing on the appeal of the defendants Sawyer and others Avas denied April 11, 1893. See the opinion, cante, p. 530.