Vansant v. State

¹²² Boyd, J., delivered the opinion of the Court. This is a suit on the bond of James M. Vansant, former Clerk of the Court of Common Pleas of Baltimore City, to recover interest alleged to have been received by him on sums of money collected by him, by virtue of his office as such clerk, on account of the State. The declaration alleges that he so deposited said sums of money in bank that they drew large rates of interest during the time the bond was in force, to wit, from the 21st day of November, 1895, to the 10th day of December, 1897. The condition of the bond was that if said Vansant “faithfully performs the duties now required of him by law, or which may hereafter be required of him by law, then the above obligation shall be void,” etc. The local law of Baltimore City provides for bonds to be given by the clerks of the Courts of that city in the penalties therein named (that of the Clerk of the Court of Common Pleas being fifty thousand dollars) “each of said bonds conditioned for the faithful performance of all the duties now required of each of said clerks by law.” The State does not rely upon the latter part of the condition, and it is therefore unnecessary to consider the effect of the language, “or which may hereafter be required of him by law,” excepting to say that it cannot invalidate the other portion of the bond.

There was a demurrer to the declaration, which was overruled, demurrers were filed to the first, second, third, fourth and fifth pleas, which were sustained, and a number of prayers were passed on by the Court, but the question involved can be considered under three heads. 1. Can the State require Mr. Vansant to account for interest received by him on money he collected for the State, and which he deposited in bank until the time arrived for him to pay it over ? The record shows that he opened all the accounts in bank as Clerk of the Court of Common Pleas and between April 13th, 1896, and June 2nd of that year, he deposited in the American National Bank of Baltimore moneys received by him as such clerk, amounting to $174,000, and from April 9th ¹²³ to May 27, 1897, he deposited in that bank $173,000. Between May 1st and June 3rd, 1896, he deposited in the Third National Bank of Baltimore $37,000 and from April 26th to the 26th day of May, 1897, he deposited in that bank $38,-207.05.

He remitted all of said sums to the treasurer of the State on the 30th day of June of those respective years in payment of license moneys. In the Mechanic’s National Bank of Baltimore he opened one account in the name of “James M. Vansant, Clerk,” and another as “James M. Vansant, Clerk, Special,” in each of the two years. The total amounts deposited in that bank amounted to $1,025,107.10, of which it was proven he remitted to the treasurer $985,-835.99, the most of it being sent the latter part of June. The cashiers of the American National and the Third National Bank paid him interest by their checks and the Mechanic’s Bank credited an individual account he kept there with interest at the rate of two per centum per annum on daily balances.

That was also the rate allowed him by the American National and one per centum per annum on daily balances was paid him by the Third National. It is contended by the ^appellants that the clerk was the absolute owner of these funds while he held them; that he was simply a debtor to the State, under obligation to account for the principal he received at such times as the law required, and hence was entitled to any interest the funds earned while they were thus held by him. Counsel for the appellants referred to the distinction made by the authorities between cases where the officials were deemed bailees and those in which they were held to be debtors, and seek to show that under our laws the relation of this clerk to the State was merely that of debtor, subject only to such responsibilities as ordinarily attach to one occupying that position. This case, however, does not depend upon the question whether this clerk was a technical bailee or a debtor, but conceding that he belongs to the latter class, as distinguished from the former, is that the only relation he bore to the State ?

It does not necessarily follow that because he was a debtor to the State he was the ¹²⁴ absolute owner of these funds. ' There can be no doubt that he was not required to return to the State the identical moneys which he received, and as our statutes are silent as to how or where he shall keep them, before the time arrives he is required to pay them over, it must be conceded that it was not a breach of trust for such officer to deposit them in bank. Indeed we may assume that the law contemplated that he would deposit them in bank, or some other equally safe depository, as no prudent man, be he a private citizen or public officer, would at this day be guilty of the folly of keeping such lárge sums of money as this clerk handled in his own custody. We are not now concerned, however, as to how far such officer would be responsible in the event of a failure of a bank in which he had deposited public moneys received by him, if he exercised proper precaution in selection of it for such deposits. But, although he was not a technical bailee, and was in a certain sense a debtor, did he have such absolute control oVer these funds as to enable him to use them as he pleased for' his own benefit?

Sec. 38 of Art. 4 of the Constitution of the State provides that the Clerk of the Court of Common Pleas shall have authority to issue all marriage and other licenses required by law within the city, subject to such provisions as are' now, or may be prescribed by law, and' the Comptroller is required by statute to provide him with .blank licenses, upon his requisition. By Art. 17 of the- Code of Public General Laws, every clerk must transmit to the Comptroller on or before the first Monday of June, and the first Monday of December, “a list and account under oath of all public money received by him” (sec. 7), and on the first Monday of March, June,'September and December in each year to “ pay' to the treasurer all public money which he may have received ” (sec. 8), and “ for receiving and paying over all public money received for licenses, fines or otherwise, the several clerks of Courts of this State shall receive five per centum, except the Clerk of the Court of Common Pleas of the city of Baltimore, who shall receive on & per centum commissions for receiving and paying over such public money." These sections refer to ¹²⁵ it as “public money ” when he receives it, when he reports it and when he pays it over and by sec. 8, if he fails to pay it within thirty days after the times therein mentioned, his bond may be put in suit, interest at the rate of ten per centum per annum is recoverable “ from the date or dates when the same became payable,” his commissions are forfeited and he may be removed from office. He receives the money by virtue of the fact that he is clerk, and as such authorized by law to receive it. His failure to pay it over, as required by law, not only subjects him to the penalties we have mentioned, but by sec. 47 of Art. 27 of the Code, he is to be deemed a defaulter and upon conviction to be confined in the "penitentiary.

In State v. Nicholson, 67 Md. 1 , this Court not only sustained that law as not in conflict with the Constitution which abolishes imprisonment for debt, but in passing on it said: “ Any other construction would deprive the Legislature of all power to punish defaulting officials for the appropriation by them of money received and held in trust for the State” — thus showing that public officials who receive such money were deemed to hold it in trust for the State. And why should not a public officer, whose duty it is to collect the State’s money and pay it over to the treasurer, not be said to hold it in a fiduciary capacity? This State must collect its revenues through its agents — certain officials, including the clerks, are made its agents for that purpose. An agent of an individual, who receives his principal’s money, is in a sense a debtor, but that does not authorize him to use the money for his own benefit and if he does he can be required to account for it, '1 Ency. of Law (2nd ed.), 1072.

So may a trustee or administrator be a debtor to his cestui que trust, but he does not necessarily discharge his obligation to him by simply paying over the prin cipal he received, but may be required to pay interest, if the fund has earned it. Dalrymple v. Gamble, 68 Md. 156 . And although this clerk does not occupy the precise relation that such agent, trustee or administrator does to his cestui que trust, it is of that nature in respect to this public money held by him and the principle above stated is applicable to him, in so far as he attempts to use the State’s money for his own benefit. ¹²⁶ Then again sec. 80 of Art. 27 makes any person holding office in this State, “who shall fraudulently embezzle, or appropriate to his own use money, funds or evidences of debt, which he is by law bound to pay over, account for, or deliver to the treasurer of this State, guilty of a misdemeanor. Is it to be said that if this clerk had fraudulently appropriated to his own use some part of this money before the time he was required to pay it over, and then did not account for it, he could not have been prosecuted ?

Clearly not, and yet if he was the absolute owner of it, how could he be guilty of embezzlement ? That term implies the fraudulent appropriation or conversion of the property of another by one who has the rightful possession, or is intrusted with it. In construing this statute in State v. Archer, 73 Md. 59 , this Court said : “ These funds belong to the State, and are held by him as treasurer,” and, upon his failure to pay them over to his successor, he was criminally responsible “for the embezzlement of such funds by him while in office,” and “ the crime was complete when he embezzled or appropriated the same to his own use." It may be admitted that under the Constitution a State Treasurer occupies a somewhat different relation to the public moneys under his control from what a clerk does, but this statute is applicable to the latter, as well as the former. It would be a unique law if it punished the officer for not paying over the money at the time he was required to do so, but permitted him to do as he pleased with it until that time.

Sec. 47 of Art. 27, above referred to, is intended to punish him for being a defaulter, which he would not be until he failed to pay the money over, as therein provided, but if he fraudulently embezzled, or appropriated to his own use the money before the dates named for paying it over, he could undoubtedly be prosecuted. There might be difficulty in proving it, but it is possible that such facts could be shown as would establish that charge. So we think it clear that a clerk of Court who thus receives public money is not the absolute owner of the fund; pending the arrival of the time when he is required by law to pay it over, but he occupies a position of trust with reference to it, as indicated by the statutes we have referred to. ¹²⁷ But Ms liaMlity to account for this interest does not depend alone upon what we have said. Sec. 45 of Art. 3 of the Constitution limits the amount of compensation to clerks of Courts in Baltimore City to thirty-five hundred dollars a year, over and above office expenses and compensation to assistants.

Sec. 1 of Art. 15 requires every person holding office created by or existing under the Constitution or laws of the State (except justices of the peace, constables and coroners) “whose pay or compensation is derived from fees or moneys coming into his hands for the discharge of his official duties, “<or in any way growing out of or connected with his office," to keep a book in which such sums shall be entered “and each of the said officers, when the amount received by him for the year shall exceed the sum which he is by law entitled to retain as his salary or compensation for the discharge of his duties, and for the expenses of his office, shall yearly pay over to the treasurer of the State the amount of such excess.” Sec. 37 of Art. 4, in speaking of clerks of Baltimore City, provides that “the salary of each of the said clerks shall be thirty-five hundred dollars a year, payable only out of the fees and receipts collected by the clerks of said city, and they shall be entitled to no other perquisites or compensation. ’ ’ Sec. 12 of Art. 17 of the Code requires every clerk “annually to return to the Comptroller a full and accurate account of all his fees, emoluments and receipts, whether on his own account as such clerk, or for the State, city or county,” and by sec. 14 of Art. 17 “The official bond of such clerk shall be answerable for the emoluments of his office over and above the sum prescribed by the Constitution,” and he is subject to a fine of one thousand dollars for failure or neglect to pay or account for the excess. If there be any doubt about the responsibility of this clerk for interest he received on other grounds, these provisions we have last quoted seem to conclusively settle it. These funds were paid to him for the use of the State, because he was Clerk of