Court Opinion

ID: 7129563
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:17:18.500593+00
Date Added: 2024-06-11T16:14:25.110165
License: Public Domain

Judge Duvall
delivered the opinion of the court:
This action was brought by the appellee to recover from the appellants $1,635 89, which sum he alledges was paid them, over and beyond w’hat they were entitled to receive, upon a final adjustment of his account as keeper of the Kentucky penitentiary. He alledges that he was elected keeper for a term of five years, commencing the 1st of March, 1839, and ending 1st March, 1844; that by the act of 1839, under which he was elected, he was to receive, as compensation for his services, Sic., one-half the net profits of the institution, the other half to be paid over by him to the commissioners of the sinking fund,, with whom he was to make annual settlements and payments, which annual settlements and payments were regularly made, based upon full and fair statements of the accounts, furnished by him, but that a final settlement could only be made at the close of the term, at which period an inventory was to be taken of all the manufactured articles, raw material, &c., then on hand; that the appellants, refusing to make such final settlement, the attorney general was afterwards directed, by an act of the legislature, to institute suit in the name of the commonwealth against the appellee and his sureties, in the general court, for a settlement of his accounts as keeper, the result of which was, a decree to the effect that the appellee had paid to appellants the sum of $1,635 89, and that they owed him that sum, which he now claims with interest from the rendition of the decree; that the appellees appealed from said decree to this court, by whom it was affirmed ; but that the act under which the suit was brought made no provision by which he could coerce the amount found due, either against the commonwealth or the appellees. The record of that suit, as also the opinion and mandate of this court, are referred to as part of the petition.
The demurrer of the appellees having been overruled, they answered, denying their liability for the *477amount claimed. They alledge that they are the mere fiscal agents of the commonwealth, and that their duties and responsibilities are defined by law; they deny that there is any judgment or decree against them, or against the commonwealth, in favor of the appellee, for any sum whatever ; or that they have received from him any amount over and above wrhat he was bound to pa.y; or that the}^ have in their hands, or under their control, any money subject to his demand; they deny that they were parties, or privies, to the proceedings in the general court, or that they are in any manner bound thereby; they say that they, nor the commonwealth, are indebted to him; that they have no knowledge as to what amount of the net profits there was from time to time paid into the treasury, nor can they say. what amount of raw materials may have been delivered over by him, or the value thereof, and therefore require proof, &c.
The law and facts being submitted to the court, judgment was rendered against the appellants for the amount claimed in the petition, to reverse which they have appealed to this court.
It appears from the pleadings and proof in the case that,by the act of 1839, under which the appellee was elected keeper of the Kentucky penitentiary, he and the commonwealth were to be entitled each to one-half the profits. The keeper was to settle with the commissioners of the sinking fund on first December in each, year during his term, and to pay over to them the state’s share of the profits, provided such profits could be made out of the cash on hand, bills of exchange or notes ; or if that was impracticable, the commissioners were authorized to receive such of the manufactured articles as could probably be converted into cash; but were not permitted to take any portion of the raw materials or stock on hand for that purpose. At the close of the term, a final settlement was to take place between the keeper and the commonwealth. By an act, of March 8, 1843, it *478ig provided, “that for the purpose of making this set-tie meat, the raw material, stock and manufactured articles on hand, shall fee valued by two disinterested persons, to be selected by the commissioner? of the sinking fund, at the expiration of the keeper’s term, (1st March, 1844 ;) said valuers to take an oath faithfully and impartially to value said property at a fair wholesale cash value, and annex the value to each article thereof, and return the same to the commissioners of the sinking fund,” &c.
The act, also, provides for an inventory and valuation of the tools and implements of trade in the penitentiary, &c , and directs the commissioners of the sinking fund to settle with the present keeper, and to divide the raw materials, stock, manufactured articles, debts and effects belonging to the penitentiary, in which the keeper and the commonwealth are jointly interested, in such manner as to provide for the payment of the debts, and the return of the $25,000, with interest, which was advanced to the keeper when he was last appointed, and to divide the profits equally between him and the commonwealth, according to the law under which he was elected. Pursuant to this act, the commissioners of the sinking fund afterwards appointed Apperson and Bullock, who made the inventory and valuation, which was returned to the commissioners, together with a report showing that, according to the directions of the act, the property was so disposed of as to pay the $25,000 to the commonwealth, and to set apart for her use half the residue, and that in other respects they had pursued the directions of the act. It appears from the testimony of Mr. Harlan, that the commissioners of the sinking fund afterwards “gave notice to Theobald that they were ready to settle with him; and Theobald appeared before them to make the settlement, but owing to the complaints which Craig was making against the fairness of the valuation of Apperson and Bullock, the commissioners declined to go into the settlementthat “Thee-*479bald repeatedly urged the commissioners to make the settlement, but the commissioners declined doing so.”
1. Asa corporation the commissioners of the sinking fund have only a limited power and prescribed duties imposed on them by the legislature. The money placed i^the inoncy of the commonwealth. It is the mere instrument or agent of the governmentment, to take certain specified revenues of the state, and disburse them, as discharge of te public debt.
*479Thus the matter stood, until the legislature passed an act directing the attorney general to institute suits against the keeper, in the general court, for a final adjustment of the accounts between him and the commonwealth ; pursuant to which, two bills in chancery were afterwards filed by the attorney general against the keeper and his sureties, impeaching the valuation as too high, and as unfairly obtained, and asking for a settlement,&c. The result of this litigation was a decree, by which it was decided, in substance, that a division of the joint property had been made between the commonwealth and Theobald, and possession taken thereof by the parties, and the division acquiesced in by both; that the valuation subsequently made by Craig & Henry, (successors of Theobald,) which was greatly below that previously made by Apperson and Bullock, should not be made the basis of the action of the court, for reasons stated in the decree; that the evidence failed to establish the alledged fraud or palpable mistake in the valuation ; that by the commissioners’ report it appears that the commonwealth has received the sum of $1,635 89-J- more than her share of the profits of the penitentiary, and that the share of Theobald is deficient a like amount; and the bills were, therefore, dismissed. The decree was afterwards affirmed by this court, and is made the foundation of the claim set up in this action against the commissioners of the sinking fund, and the only question presented for our consideration is whether, upon the facts stated, and the law applicable to them, they are liable for the sum claimed, or any part of it.
The sinking fund was created by an act of the legislature passed in 1836. It was made to consist of certain specified revenues of the state, to be appropriated to the payment of interest on money borrowed for internal improvements, and the final redemp*480tion of the loans. The governor, and the presidents . ° r of the various banks, were, by the act, constituted “commissioners of the sinking fund,” who were to control, manage, and appropriate its resources to the ’ . ’ \ purposes designated, {session Acts, 1835-6, p. 415.) various subsequent acts of the legislature, not necessary to enumerate, its organization has been . , . , , , changed, its resources from time to time enlarged, an<^ it® efficiency and operations greatly increased and extended. By an act of 1840, the commissioners the sinking fund were authorized to “sue and be sued ag other corporations,” arid by the act of 1846, , , , , they were regularly incorporated, and the usual corPorai:e powers conferred upon them. As a corporation, it is the mere instrument and financial agent of the state, its powers limited and its duties prescribed by the legislative power which created it. All money or property of which it has the control or management, is the money and property of the state. In its own right it can own nothing, and can have no function, or capacity, or interest as a corporation, except through its connection with the state. It may be said to be a mere agency of the government, whose important duty it is to take charge of certain revenues belonging to the government, and to apply them to the discharge of the principal and interest of the public debt.
2. The comtbesinidngfund may be sued when a proper case is made out.
It is undoubtedly true, as argued by the appellee, that (he commissioners of the sinking fund “may sue and be sued, as other corporations,” and that they mav jn the discharge of the various duties devolv- ^ ° ing upon them, commit frauds or other wrongful acts which might render them legally responsible, by appropriate proceedings, to the party aggrieved. We need not undertake to specify the cases in which such liability might arise, or how it might be enforced, but will confine ourselves to the inquiry whether it has been made out by the facts of this case. "It has been shown that this corporation is the mere agent of the government, having the control and dis*481bursement of certain revenues belonging to the state, but having no corporate interests or powers except those growing out of its relations to the financial department of the government. Among the revenues' thus subjected by law to the control of this mere agency, are the profits of the penitentiary, or such, portions of them as by law belong to the state. These profits go into the treasury of the state, to the, credit of the sinking fund, to be appropriated only, to the purposes to which that fund is dedicated by, law — the payment of the interest and principal of, the public debt. The commissioners of the sinking fund have no other power over it, and can dispose, of it in no other mode and for no other purpose. As soon as they received this money it became a part of -1 ,. , , , „ . ,. r „ . ' the fund set apart by law for certain creditors of the , state, for whom the commissioners became trustees. And in view of the objects to which this fund is devoted, and the duties of the commissioners with regard to it, as prescribed by law, it may be presum- , r ... r ed that the sums received m each year were drawn , out and appropriated within the year, so that it is not probable, nor is it alledged, that any part of the „ , . , ,, . . . ‘, , fund received from this source remained unexpended, even when the balance now sued for was claimed against (he state, much less when this suit was brought The transactions out of which the appellee’s demand arose occurred in 1844, and from then until the institution of this suit, in 1854, a period of about fen years, no intention was manifested or even intimated, to hold the commissioners of the sinking fund liable for any part of it; on the contrary the facts justify the presumption that the appellee was seeking redress elsewhere.
3 By law the profits of the penitentiary go into lite treasury of the state, to the credit of the sinking (mid to be appropriated to the extinguishment of tlte state debt; and tile commissioners of the sinking tundean dispuse of-it in no other way, ami to no other presumption is that the fund was annually so disbursed; and presumption Piero thTfundeialmed ,he of the commissioners in 1854, instituted and there was no foundation foe-any decree against them.
4. An agent receiving a fund and paying it Over lo iiis prihcjipal, is not liable to the person who may geek to reclaim it; the resort must bo to the principal.
Upon what principle then, of. the law applicable to the relation of principal and agent, can (he right of reclamation againt the commissioners of the sinking fund, as relied upon here, be maintained ? Even regarding them as an independent corporation, having no connection with the state except as agent in this *482particular transaction, if thej’- had. received in the name, and íbr th(e use of the state, as its mere agent, money to which the latter was not entitled, as subsequently ascertained, and had in good faith paid it over to the principal, such agent would be no longer responsible to the party from whom the money was received. If in such case the right of reclamation existed at all as against the agent, it could exist no longer than while the fund remained in its hands, and before it had been paid over or so disposed of as to be completely beyond the control or power of the agent. In all such cases the party must look to the principal, not to the agent. And it is obvious, from the view we have taken, that a recovery in this case would be, in effect, a recovery against the state, of money which had been regularly received into the treasury, through an agency constituted by law for that purpose, and long since appropriated to the ob jects to which it is by law devoted. If the appellee has a just right of reclamation it is against the state, she having received and had the benefit of the fund, and not against the appellants. And such was no doubt the view of the claimant himself up to the time of the institution of this action. . In the suits by the commonwealth against the appellee, above referred to, the appellants were not made parties, and why they were not it is difficult to conjecture, if the appellee-then held or supposed them liable. And it is worthy of remark, that in the decree of the general court, as well as in the opinion of this court affirming it, the claim of the appellee is treated and spoken of throughout as a claim against the commonwealth, for the reclamation of money claimed to have been overpaid to the commonwealth, in the division of the profits of the penitentiary between the commonwealth and keeper. In none of those proceedings, so far as the record shows, is there to be found any reference by either of the courts or by the parties to any supposed liability on the part of the appellants; and it is clear that by the appropriate pleading, in. *483the suits referred to, the relief now sought might have been as fully and effectually obtained as by this action.
Wherefore, the judgment is reversed, and the cause remanded, with directions to dismiss the plaintiff’s petition.