South Dakota v. Collins/Opinion of the Court

Suit by the state of South Dakota for an accounting and to recover from defendant interest received by him as treasurer of the the state upon moneys of the state deposited by him in various banks.

There is no dispute about the facts, which are detailed at very great length in the bill of complaint.

Collins was treasurer for four years, beginning January, 1903. As such he was entitled to the salary of $1,800 a year, and it is provided by the Constitution of the state that neither the treasurer nor any other officer of the state shall 'receive any fees or perquisites whatever for the performance of any duties connected with his office.' And there are statutory provisions supplementing the Constitution, one of which is that:

'All moneys belonging to the state, deposited in banks by the     state treasurer shall be deposited not to his credit as an      individual, but in his name as state treasurer, and not      otherwise.' Section 333, Revised Political Code of 1903.

It is alleged that defendant received the sum of $10,000 and more, and it is prayed that he be required to make a full and correct accounting of the moneys received by him and wrongfully withheld from the state.

'I hereby deny the allegation as set forth in the complaint     and plead not guilty to the charge of misappropriating,      withholding or converting to my personal use any money      belonging to the state of South Dakota during my term of      office.'

On motion of plaintiff a referee was appointed to take the testimony on its part and that of defendant and make findings and recommendations.

On May 9, 1918, the referee made return of his proceedings, with the evidence adduced, from which he concluded as follows:

there was paid to the defendant as interest upon the  moneys of the state of South Dakota, which was received   by him as treasurer of said state, and paid to him on   deposits in the several banks above named, interest   amounting to $32,094.27; that said sum was received by   the defendant as interest upon the public moneys of the   state of South Dakota deposited by him as such state   treasurer in said banks in excess of his salary and all   other sums due him from said state as state treasurer,   and that the same was received and retained by him and   he rendered no account thereof to the plaintiff nor any   of its officers and paid no part of the same to the   plaintiff or any of its officers, and that the said   defendant appropriated the said sum to his own use.'

And the referee recommended that judgment be entered in favor of plaintiff and against defendant in the sum of $32,094.27, with interest thereon at the rate of 7 per cent. per annum from January 1, 1907, and for plaintiff's costs and disbursements of the suit.

The case was put down for argument and subsequently submitted on brief, the defendant filing none.

Counsel for the state submits quite a long argument to sustain the report, with citation of authorities to establish the liability of defendant. It is not necessary to review them. There is no doubt of defendant's liability. He has not appeared to contend to the contrary, and at the taking of the testimony his defense or extenuation was that he acted upon his faith in a decision of the Supreme Court of Colorado, and, to evade or to withhold aid from any possible criminal prosecution, he declined to answer in regard to transactions concerning the receipt of interest on the public moneys he had deposited in various banks.

Further discussion is unnecessary. The Supreme Court of the state has decided (December 4, 1917), construing section 333, supra, and other statutory provisions, that in cases like that at bar it is state funds that are deposited and that earn the interest and not the money of the treasurer, and that, therefore, the interest becomes a mere increment of the principal fund and when it is paid to the treasurer it is in effect paid into the state treasury and the treasurer becomes liable for it. State v. Schamber et al., 39 S. D. 492, 165 N. W. 241, L. R. A. 1918B, 803.

The report of the referee is approved and judgment directed to be entered against defendant in the sum of $32,094.27 with interest thereon at the rate of 7 per cent. per annum from January 1, 1907, and for costs and disbursements of the suit.