Case Name: Serrill v. Wilder et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1907-12-17
Citations: 77 Ohio St. 343
Docket Number: No. 10230
Parties: Serrill v. Wilder et al.
Judges: Shauck, C. J., Price, Summers, Spear and Davis, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 77
Pages: 343–359

Head Matter:
Serrill v. Wilder et al.
County treasiwer — Anticipating his appointment — Agreed with bondsmen — To apply portion of salary to pay obligations — Of bondsmen and himself — Invalidity of such contract.
Plaintiff in error, in anticipation of his appointment to the office of county treasurer, promised and agreed with the defendants in error, that in consideration of their becoming sureties on his official bond, he would, if appointed thereto, devote and apply all the fees, salary and emoluments of said office, in excess of a certain stipulated amount, to the payment and discharge of certain obligations on which he and they were jointly liable. Held: such contract is contrary to public policy, and is void.
(No. 10230
Decided December 17, 1907.)
Error to the Circuit Court of Defiance County.
A sufficient narrative of the facts in this case, is found in the amended petition filed by plaintiffs below — defendants in error here — which amended petition reads as follows:
“Said plaintiffs for their cause of action against the defendant say that at the general election held in November, A. D. 1891, one Wesley O. Barney was duly elected to the office of county treasurer of Defiance county, Ohio, to serve for a full term of two years commencing on the first Monday in September, 1892.
“That the said Wesley O. Barney qualified as such county treasurer and entered upon the discharge of his duties as such officer on the said first Monday in September, 1892.
“That previous to entering on the duties of his said office, the said Wesley O. Barney gave bond as such officer in the sum of $125,000 payable to the state of Ohio, and conditioned as provided by law, which bond with the oath of office of said treasurer and the approval of the commissioners thereon indorsed, the said Wesley O. Barney deposited with the auditor of said county.
“That the said plaintiffs together with one W. H. Fee, one J. T. Wilcox and one A. Wilcox and the defendant became and were sureties on and upon the bond of the said Wesley O. Barney as such county treasurer.
“That at the general election held in November, 1893, the said Wesley O. Barney was duly elected to the said office of the county treasurer of Defiance county, Ohio, to succeed himself for the term of two years beginning the first Monday of September, 1894, and the said Wesley O. Barney being duly qualified under his said re-election to the said office and on the said first Monday in September, A. D. 1894, entered upon the discharge of the duties thereof.
“That the said Wesley O. Barney served in his said office as county treasurer of said county under his re-election thereto, as aforesaid, from the first Monday in September, A. D. 1894, until about the 27th day of November, A. D. 1894, when the said Wesley O. Barney resigned the said office, leaving said office vacant for the balance of said term to which he-had been re-elected as aforesaid.
“That about December 1st, 1894, the board of county commissioners of said county of Defiance, duly appointed the defendant, George C. Serrill, as county treasurer of said county to fill the said vacancy in said office occasioned by the resignation of the said Wesley 0. Barney, as aforesaid, that is to say, to serve thereof from the date of his qualification as such treasurer until the first Monday in September, 1896.
“Said plaintiffs say that during the said Wesley O. Barney’s incumbency in said office for the term for which he was first elected, he misapplied the. public funds coming into his hands by virtue of his said office and did not pay over according to law all such moneys which came into his hands for state, township, county and other purposes.
“That the said public moneys so misapplied by the said Wesley O. Barney and not paid over according to law, as aforesaid, amounted to more than nine thousand dollars ($9,000), and by reason of the said misapplication of the said moneys and the failure of the said Wesley O. Barney as such county treasurer as aforesaid, to account for and pay over according to law the moneys so misapplied, the plaintiffs herein and the said defendant as sureties upon the said official bond of the said Wesley O. Barney were obliged to and did pay into the said county treasurer, to make good the amount so misapplied by the said Wesley O. Barney, as county treasurer, as aforesaid, more than nine thousand dollars ($9,000).
“Plaintiffs say that in order to obtain the said sum of nine thousand dollars ($9,000) wherewith to make good the said amount so misapplied by the said Wesley O. Barney as county treasurer as aforesaid, these plaintiffs and the defendant borrowed the said amount from certain banking institutions, and to evidence the amount so borrowed from the said banking institution respect-. ively, gave their joint and several promissory notes.
“Said plaintiffs say that at the time of the appointment of the said defendant to fill the said vacancy in said office of county treasurer as aforesaid, the said joint and several obligations of the plaintiffs and of the defendant given to evidence the said moneys by them borrowed to make good the said misappropriation of the said Wesley O. Barney were still outstanding and wholly unpaid, and the said plaintiffs and said defendant were jointly liable thereon for the whole of the said sum by them borrowed as aforesaid.
“Said plaintiffs further say that the said defendant by reason of his appointment to fill the said vacancy in the said office of county treasurer became ex officio treasurer of the moneys and funds of the city of Defiance in said county and entitled to the pay, salary and emoluments of such office.
“Said plaintiffs further say that upon the appointment of said defendant to fill said vacancy in the said office as aforesaid, the said defendant solicited these plaintiffs to become his sureties upon his official bond as such county treasurer under said appointment, and then and there offered and proposed to the plaintiffs that if they would sign his said official bond and become his sureties thereon, the said defendant would forthwith upon the execution and acceptance thereof, enter upon- the discharge of the duties of such office and of said office of city treasurer of the said city; and in consideration of the said plaintiffs becoming sureties upon his said official bond, would use and employ all the fees, salary and emoluments of said office received by him as such county treasurer and as treasurer of the said city in excess of ninety-one dollars and sixty-seven cents ($91.67) per month in the discharge of the said joint obligations of the said plaintiffs and said defendant given by them as aforesaid in evidence of moneys by them borrowed and otherwise procured and paid over to make good the said public moneys misappropriated by the said Barney as such treasurer as aforesaid.
“Plaintiffs say that they then and there accepted said offer and proposition of said defendant, and in consideration that the said defendant use and employ all the said fees, salary and emoluments received by him during his incumbency in said office under such appointment on account of his services as such county treasurer, and as such 'city treasurer, in excess of the said sum of ninety-one dollars and sixty-seven cents ($91.67) per month, in the payment of the said joint obligations of the said plaintiffs and said defendant and in consideration of the said promises and agreements of the said defendant so to do, the said plaintiffs signed the said bond of said defendant in the sum of one hundred and twenty-five thousand dollars ($125,-000) ; that the said bond of the said defendant as such county treasurer was conditioned as provided bv law and signed by these' plaintiffs as sureties as aforesaid, and was duly approved by the county .commissioners of such county, and such approval indorsed thereon, and the said bond deposited by the said defendant with the auditor of said county.
' “Plaintiffs say that the defendant as such appointee entered upon the discharge of the duties of said office on the first day of December, 1894, and served as treasurer of said county under such appointment for the whole of the said vacancy, that is to say, until the first Monday in September, 1896.
“Plaintiffs say that between December 1st, 1894, and September 1st, 1896, the fees, salary and emoluments coming into the hands and received and paid over to-the said defendant on account of the services -of said defendant as county treasurer and the services of said defendant as said city treasurer, amounted to the sum of fiye thousand and ninety-four dollars and sixty-one cents ($5,094.61), which amount was paid to and received by said defendant; that under and by the terms of said contract and agreement of said plaintiffs and said defendant, by which said plaintiffs became sureties upon the said official bond of the said defendant as aforesaid, the said defendant was liable for the payment and required to pay over for the benefit of said plaintiffs and said defendant upon their said joint obligations, all of said fees, ■salar}'- and ■ emoluments paid to and received by said defendant during his incumbency in said office as' aforesaid, in excess of the sum of $1,925.07, that is to say, to so use arid employ out of said fees, salary and emoluments paid to and received by said defendant during his incumbency in said office, the sum of $3,169.54.
“Plaintiffs say that the said defendant, pursuant to his said contract with the plaintiffs, did use, employ and pay out in the discharge of the said joint obligations of the said plaintiffs and said defendant and in the discharge of certain other joint obligations of the said plaintiffs and said defendant growing out of their said suretyship upon the said official bond of the said Wesley O. Barney, and arising through the misappropriation of the said public funds of the said county by the said Barney, in the aggregate the sum of $2,-079.77, which amount was so paid by the said defendant out of the said excess of the said fees, salary and emoluments of the said office, earned, paid • to and received by the said defendant over the said sum of ninety-one dollars and sixty-seven cents per month.
“Plaintiffs say that the said defendant never in any wise paid out, used or employed any further or additional amount in the payment of the'said joint obligations of the said plaintiffs and defendant, nor did the said defendant ever pay to the said plaintiffs or to either or any of them, or for their use or the use or benefit of either or any of them, any part or portion of the said fees, salary and emoluments of the said offices earned and received by him as aforesaid, excepting the said sum of $2,079.77, so paid out bv the said defendant as hereinabove stated.
“Plaintiffs say that the said joint obligations of the said plaintiffs and the said defendant to the amount' of $3,000 still existed and were outstanding and wholly unpaid at the time the said term of the said offices to which the said defendant was appointed as aforesaid expired.
“Plaintiffs further say that afterwards the said obligations were sued upon and judgments were. duly rendered, taken and entered against said plaintiffs and said defendants jointly on said obligations; that said defendant failed, neglected and refused to pay over in the discharge of the said judgments any of the said excess of the fees, salary and emoluments of the said offices over and above the said sum of ninety-one dollars and sixty-seven cents per month earned, paid to and received by the said defendant as aforesaid.
“Plaintiffs further say that the said defendant of his own means and money paid about one-eleventh part of the amount of said judgments, and these plaintiffs were obliged to and did pay out in the discharge of the said judgments about seven-elevenths thereof, and an amount in excess of the sum of $1,089.77, the remaining three-elevenths of said sum having been paid by the said other persons who, with the said plaintiffs and said defendant, were sureties upon the said bond of the said Wesley O. Barney.
“Plaintiffs further say that the said fees, salary and emoluments of the said office earned, paid to and received by the said defendant in excess of the said sum of ninety-one dollars and sixty-seven cents ($91.67) per month in addition to the said excess paid out by the said defendant for the use of the said plaintiffs and said defendant and in the discharge of their said joint obligations as aforesaid, amounts to the sum of $1,089.77.
“Plaintiffs further say that by reason of the making of the said contract between said plaintiffs and the said defendant, and by reason of the other facts aforesaid, the said defendant became and is indebted to these plaintiffs in the sum of $953-54» the said sum being seven-eighths of said sum of $1,089.77, received and retained by the said plaintiff, with interest thereon from the first Monday in September, 1896.
“Said plaintiffs further say that the said defendant has never paid' the plaintiffs the said sum or any part thereof, and there is now due and owing the said plaintiffs from the said defendant by reason of the facts aforesaid the said sum of $953.54, with six per cent, interest thereon from September 5th, 1896, which said plaintiffs claim.
“Wherefore said plaintiffs pray for a judgment against the said defendant for the said sum of $953.54, together with six per cent, interest thereon from September 5th, 1896.”
To this amended petition the defendant below, George C. Serrill, filed a general demurrer. This demurrer being overruled by the court the defendant answered, admitting the election and re-election of Barney, and his qualification as treasurer of Defiance county; the appointment of Serrill and his qualification; the giving of the official bonds by Barney and Serrill and the signing thereof by the sureties named; the defalcation of Barney, and the payment of the shortage by his sureties; the borrowing by the sureties, of the money to make good such shortage, and the giving of their joint and several promissory notes for the amount so borrowed, and denied all the other allegations of said amended petition. Issue being joined, a jury was waived, and by consent of all the parties the cause was submitted to, and tried by, the court. After hearing the evidence and arguments of counsel, the court, upon consideration found and adjudged that the contract and agreement between plaintiffs and defendant, set out in plaintiffs' amended petition, as and for their cause of action, was against public policy, and was illegal and void; and thereupon the court rendered judgment in said cause against the plaintiffs and in favor of the defendant, George C. Serrill. A motion for new trial was made and overruled, and exceptions were duly noted. The case was taken on ' error to the circuit court, and' that court, finding no other error in the record, reversed the judgment of the court of common pleas upon the sole ground, as stated in its journal entry: “that the court of common pleas erred in finding and determining that the said alleged contract of the said defendant, George C. Serrill, with the said plaintiffs — being the contract sued upon by the said plaintiffs — is contrary to public policy and is illegal and void.” George C. Serrill now prosecutes error in this court, asking that said judgment of the circuit court be reversed, and that the judgment of the court of common pleas be affirmed.
Messrs. Harris & Cameron and Messrs. Ans-■ bery & Farrell, for plaintiff in error.
Messrs. Winn & Flay, for defendants in error.

Opinion:
Crew, J.
The primary and controlling question arising upon this record, is whether the contract sued on in this case is a valid contract that will be enforced, or whether, it being a contract to devote and apply the unearned fees of a public office to the payment of the joint debt of the promisor and promisees, such contract is illegal and void, because contrary to, and against public policy. As appears from- the above statement of facts: At the general election held in November, 1891, Wesley Q. Barney was elected treasurer of Defiance county, Ohio, for the full terrh of two years, commencing on the first Monday of September, 1892. Before entering upon the duties of the said office Barney gave bond in the penal sum of one hundred and twenty-five thousand dollars, payable to the state of Ohio, and conditioned as provided by law. Plaintiff in- error, and the defendants in error, were sureties on said bond. In November, 1893, Barney was re-elected to said office of county treasurer, and again qualified and entered upon the discharge of his duties on the first Monday in September, 1894, and continued in said office until about the 27th day of November, 1894, at which time he resigned. On December 1st of the same year, the commissioners of Defiance county appointed the plaintiff in error, George C. Serrill, treasurer of said county to fill the vacancy occasioned by the resignation of Barney ; and by virtue of his said appointment, Serrill thereby became ex officio treasurer of the city of Defiance. Serrill accepted said appointment and executed his official bond in the sum of one hundred and twenty-five thousand dollars, with defendants in error as sureties thereon. After the resignation of Barney, it was discovered that he had, during his first term, misappropriated about nine thousand dollars of the public funds which came into his hands as treasurer, and the sureties upon his official bond were required to, and did, pay into the county treasury of Defiance county the amount so by him misappropriated. In order to obtain said sum of nine thousand dollars wherewith to make good the amount so wrongfully appropriated by Barney as treasurer, the .plaintiff in error and the defendants in error, borrowed said sum from certain banking institutions, executing their joint and several promissory notes therefor, which notes, at the time of the appointment of George C. Serrill treasurer, were outstanding and unpaid. The plaintiffs below, by way of particular statement of the consideration, terms and conditions of the oral contract made and entered into between them and George C. Serrill, upon which they seek to recover in this action, aver in their amended petition: "that upon the appointment of said defendant to fill said vacancy in the said office as aforesaid, the said defendant solicited these plaintiffs to become his sureties upon his official bond as such county treasurer under said appointment, and then and there offered and proposed to the' plaintiffs that if they would sign the said official bond and become his sureties thereon, the said defendant would forthwith upon the execution and acceptance thereofK enter upon the discharge of the duties of such office and of said office of city treasurer of the said city; and in consideration of the said plaintiffs becoming sureties upon his said official bond, would use and employ all the fees, salary and emoluments of said office received by him as such county treasurer and as treasurer of the said city in excess of ninety-one. dollars and sixty-seven cents ($91.67) per month in the discharge of the said joint obligations of the said plaintiffs and said defendant given by them as aforesaid in evidence of moneys by them borrowed and otherwise procured and paid over to make good the said public moneys misappropriated by the said Barney as such treasurer as aforesaid.
"Plaintiffs say that they then and there accepted said offer and proposition of said defendant, and in consideration that the said defendant use and employ all the said fees, salary and emoluments received by him during his incumbency in said office under such appointment on account of his services as such county treasurer, and as such city treasurer, in excess of the said sum of ninety-one dollars and sixty-seven cents ($91.67) per month, in the payment of the said joint obligations of the said plaintiffs and said defendant and in consideration of the said promises and agreements of the said defendant so to do, the said plaintiffs signed the said bond of said defendant in the sum of one hundred and twenty-five thousand dollars ($125,000)."
It will be observed that the above contract, in plainest terms, is a contract for the sale and application of the unearned fees or salary of George C. Serrill, as treasurer of Defiance county. It is in form, and by its express provisions, an undertaking and promise on his part, to pledge, and pay over for the benefit of his co-obligors, all the fees, salary and emoluments of said office that may thereafter be received by him, in excess of $91.67 per month, or eleven hundred dollars per year. The fees and salary of said office, as shown by the record, amounted to about two thousand nine hundred dollars per year. The English authorities seem to be unanimous in holding that such contracts are absolutely null and void as being against public policy. And such we think is the American doctrine, clearly established by the overwhelming weight of authority. In Bliss v. Lawrence, 58 N. Y., 442, a leading case on this subject, where many authorities, both English and American, are cited and reviewed, the court says: "The controlling question in these cases is that of the lawfulness of an assignment, by way of anticipation, of the salary to become due a public officer. Salaries are, by law, payable after work is performed and not before, and while this remains the law it must be presumed to be a wise regulation and' necessary, in the view of the law-makers, to the efficiency of the public service. The contrary rule would permit the public service to be undermined by the assignment to strangers of all the funds' appropriated to salaries. It is true that, in respect to officers removable at will, this evil could in some measure be limited by their removal when they were' found assigning their salaries; but this is only a partial remedy for there would still be no means of preventing the continued recurrence of the same difficulty. If such assignments are allowed then the assignees, by notice to the government, would on ordinary principles be entitled to receive pay directly and to take the place of their assignors in respect to the emoluments, leaving the duties as a barren charge to be borne by the assignors. It does not need much reflection or observation to understand that such a condition of things could not fail to produce results disastrous to the efficiency of the public service. The substance of it all is, the necessity of maintaining the efficiency of the public service by seeing to it that public salaries really go to those who perform the public service. To this extent, we think, the public policy of every country must go to secure the end in view." Mechem in his work on Public Offices and Officers, .at Section 874, says: "While the compensation already earned by a public officer may validly be assigned by him, it is settled by a clear preponderance of authority that an assignment of future compensation not yet earned, whether payable by salary or fees, is opposed to public policy and void." To the same effect is Throop on Public Officers, Sections 42 and 43. The validity of an assignment of unearned fees was the subject of consideration in Schloss v. Hewlett, 81 Ala., 266, and it was there held that the contract of assignment was against public policy and void, the court sajdng: "It is easy to see how great abuses would follow if such transfers were permitted. Not only would there exist a constant temptation to anticipate future earnings under the stress of present financial pressure at usurious rates of discount, but when completed one of the strongest incentives to industrious exertion — the expectation of pecuniary reward in the near future —would be gone." In Shannon v. Bruner, 36 Fed. Rep., 147, it was held that an assignment by a master in chancery of his unearned fees was void as being against public policy. Mr. Justice Brewer, speaking for the court, said: "Now, can an officer make an assignment in advancé of his fees or his salary? The law is very clear that he can not. Public policy has affirmed the necessity of securing to every public officer, when earned, his fees or his salary, unhindered by any present legal attack, or any previous voluntary assignment. There are many cases, both in England and this country, affirming the necessity of upholding such public policy. It is familiar law that you can not garnish an officer's salary; and the same public policy which forbids that, prevents him, before he has earned his salary or done the work which entitles him to the fees, from making a voluntary transfer of them." A like view of the rule and doctrine was adopted and applied in the following well considered cases. Bowery National Bank v. Wilson et al., 122 N. Y., 478; The State v. Williamson, 118 Mo., 146; Bank v. Fink, 86 Tex., 303; Stevenson v. Kyle, 42 W. Va., 229; Field v. Chipley, 79 Ky., 260; Bangs v. Dunn, Auditor, 66 Cal., 72; King v. Hawkins, Auditor, 2 Ariz., 358; State v. Barnes et al., 10 S. D., 306; Schwenk v. Wyckoff, 46 N. J. Eq., 560; Elwyn's Appeal, 67 Pa. St., 367. See also, Mechem's Public Offices & Officers, Sec. 874; 9 Cyc., 495. The cases of Brackett v. Blake, 7 Metcalf, 335; Mulhall v. Quinn et al., 1 Gray, 105, and Macomber v. Doane et al., 2 Allen, 541, are sometimes referred to as announcing a contrary doctrine, but in neither of these cases was the rule of public policy suggested to, or considered by, the court. The only cases we have found that seem to sustain as valid an assignment of unearned fees or salary, are State, ex rel. Bank v. Hastings, 15 Wis., 75, and The People, ex rel. v. Dayton Supervisor, 50 How. Pr. Rep., 143. The latter case has since been directly overruled by the Court of Appeals of New York in Bowery National Bank v. Wilson, supra; hence the case of Bank v. Hastings, stands alone in its support of the validity of such contract of sale or assignment. In obedience, then, to the clear weight of authority, and to what we conceive to be a sane and sound rule of public policy, we are constrained to hold that the contract sued on in the present case is illegal and void and ought not to be enforced. The demurrer to the amended petition in this case should have been sustained by the court of common pleas, but the same having been overruled, and the cause having been submitted to said court upon the pleadings and evidence without the intervention of a jury, there was no error in the finding and judgment of said court that, "the alleged agreement between the plaintiffs and the defendant, set up in plaintiff's amended petition as constituting plaintiff's cause of action, is against public policy and void," and dismissing said amended petition.
Judgment of the circuit court reversed and that of the common pleas affirmed.
Shauck, C. J., Price, Summers, Spear and Davis, JJ., concur.