Cummings v. Board of Education , 190 Okla. 533 ( 1942 )

D.R. Cummings, a resident of Oklahoma City, owned 42.12 acres of land (known as the Northwest High School building site). Ed W. Spivey once had the honor and privilege of being a member of the board of education of the city of Oklahoma City. A fraudulent and void contract was entered into between Mr. Cummings and the said board whereby for the consideration of $73,710 the board ostensibly purchased and Cummings ostensibly sold to it the said building site.

The only reason appearing of record why the transaction was not bona fide from beginning to end was that, according to the testimony of Mr. Cummings, he paid a side consideration in the nature of a bribe to Spivey in an amount represented by 10 per centum of the said consideration, less contemplated or necessary income tax on the bribe and other incidental expenses in connection therewith, contemporaneously with the disbursement of the public funds which was made by school district warrant dated November 13, 1936.

This action was commenced December 23, 1938, more than two years after disbursement of funds aforesaid. A jury was waived and judgment went for plaintiff in double the amount of the public funds so disbursed, but one-half of the amount of the judgment was designated a penalty. It must be conceded that the penalty imposed derived whatever justification attached to it from sections 6830-6832, O. S. 1931, 70 O. S. 1941 §§ 131-133, and interpretation of the meaning of those statutes made in State v. Ingram, 164 Okla. 244, 23 P.2d 648. Therein it is held that recovery of the principal is not a penalty, but a joint and several liability owing to the municipal subdivision affected by fraudulent acts. But see State ex rel. Mitchell v. City of Shawnee, 167 Okla. 582, 31 P.2d 552, construing the statute strictissimi juris to the extent that a representative suit brought under it abates upon the death of plaintiff. It is said the right of action, under the statute, is purely statutory, personal and governed by the rule actio personalis moritur cum persona. That was purely a qui tam action, whereas the action at bar is not. Moreover, in the absence of such a statute, nevertheless the school district would be entitled to recover its funds illegally expended, and so under the common law put in force within the State of Oklahoma in aid of statutes. Mr. Cummings and Spivey appeal.

It appears of record that the bribery became known to the other members of the school board on or about, or before, July 2, 1938, when Mr. Cummings testified at the solicitation of the State of Oklahoma, acting by and through its officer, the county attorney of Oklahoma county, the Honorable Lewis R. Morris. Prior thereto, if the fraud was known to members of the school board or any of them, it was purposely concealed.

Mr. Cummings and Spivey contend that knowledge of their fraud was so widespread that the school district, acting by and through the present incumbents, will not be heard to say that the fraud was not known to it long before the grand jury's revelation of it. A court of justice will not tolerate a plea of estoppel based upon wrong of a movant.

The public wrong is obvious and admitted; nevertheless, restitution together with penalty and forfeiture is sought to be obviated by reason of the statutes of limitation, and especially that contained in the fourth subdivision of section 101, O. S. 1931, 12 O. S. 1941 § 95, limiting civil actions, other than for the recovery of real property, after the accrual of the cause of action, to one year when it is based upon "a statute for penalty or forfeiture," except where the statute imposing the penalty otherwise prescribes. There is no merit in this contention insofar as restitution to the treasury of the school district of the ill-gotten gains of defendants is concerned. The bribe was agreed upon and became due and payable under the plan on or about November 13, 1936. It became publicly known on or about July 2, 1938. This action was commenced December 23, 1938, well within a year after discovery of the fraud.

The third subdivision of section 101, supra, permits an action within two years for taking or detaining personal property and for the specific recovery of personal property and for relief on the grounds of fraud, and provides that the cause of action in such case shall not be deemed to have accrued until the discovery of the fraud.

This action for the taking and detention of the public funds was brought in ample time, but, insofar as a penalty is concerned, the action is banned by the fourth subdivision, supra. The acts of defendants, under admitted facts constituting this cause of action, are not only illegal — they are void. They are not only malum prohibiturn; they are malum in se. The acts and deeds are not capable of ratification by the school district; they constitute a felony of which Spivey stands convicted, and doubtless for which Mr. Cummings would have been convicted but for the additional fact that he took recourse to the law providing immunity from criminal liability and forfeiture against the party to the crime. A part of the law of immunity is the statute on bribery, providing that he "who shall first furnish information in relation thereto, as against the other parties and in any prosecution therefor, shall testify to the same truthfully and fully" shall have his immunity both as to his person and his property. Section 1916, O. S. 1931, 21 O. S. 1941 § 391. In event the succeeding members of the school board knowingly ratified or confirmed these acts or this conduct of Spivey or Mr. Cummings, it could be logically said that they and each of them likewise, but for some saving grace, would be guilty of felonious conduct.

As aforesaid, Mr. Cummings, apparently being well advised and knowing the law, when called to testify stood on his constitutional rights (sec. 21, art. 2, Const. of Okla.) "No person shall be compelled to give evidence which will tend to incriminate him, except as in this Constitution specifically provided; . . ." The exception applicable here is that provided by section 27, art. 2, Const.:

"Any person having knowledge or possession of facts that tend to establish the guilt of any other person . . . charged with an offense against the laws of the state, shall not be excused from giving testimony or producing evidence, when legally called upon so to do, on the ground that it may tend to incriminate him under the laws of the state; but no person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he may so testify or produce evidence."

Mr. Cummings indicated his willingness to testify, but declined to do so because the facts about which he was interrogated tended to incriminate and jeopardize him. The witness was admonished by the learned trial judge to "answer the question," and so he did. Ex parte Gudenoge,2 Okla. Crim. 110, 100 P. 39; Scribner v. State, 9 Okla. Crim. 465, 132 P. 933.

Self-incrimination is self-abnegation and so contrary to the laws of nature, and in disregard of Deity. Being so, the state will not require incrimination in any case except when the evidence is deemed necessary for the good of society. In such cases freedom from criminality with attendant liability of penalty or forfeiture is vouchsafed by the highest of mandates, so that the true facts may be known, and all others, save and except the witness, when charged of crime, may be adjudged, in a court of justice, guilty or not guilty, according to the law and relating facts immunity is granted.

Mr. Spivey and Cummings, invoking the one-year statute of limitations prescribed in the fourth subdivision of section 101, supra, treat the judgment rendered as constituting in whole an indivisible penalty or forfeiture. It is not so; the judgment in this case consists of two parts and to the extent of double the amount of the public funds fraudulently and feloniously expended to them, the judgment is erroneous. However, this is a matter publici juris, and being so, the duty devolves upon the Supreme Court to declare the law, in the public interest, applicable to the judgment reviewed under the issues presented by the pleading and sustaining evidence of record.

The one-year statute of limitations pleaded does not save Spivey or Mr. Cummings from making restitution of the whole of the public funds so expended. As to restitution in the amount of $73,710, under the rule of National Surety Co. v. State,111 Okla. 180, 239 P. 257, and State for Use of Board of Comr's of Osage County v. McCurdy, 115 Okla. 111, 241 P. 816, cited, quoted, and approved in Abernathy v. State of Oklahoma (C. C. A.) 31 F.2d 547, Spivey and his bondsmen might have been liable for five years had the action been predicated upon his official bond. Moreover, had the fraud never been discovered, Mr. Cummings and Spivey would be liable for two years thereafter, for these are public funds and these defendants would in that event be trustees ex maleficio and accountable. At any rate, under the three-year statute of limitations, aforesaid, this action, insofar as it seeks restitution of public funds, is well within that time.

If the one-year period of time, applicable to a penalty, and provided by sections 6830-6832, O. S. 1931, 70 O. S. 1941 §§ 131-133, had not run, an additional amount would have been recoverable as a penalty against Mr. Spivey, who acted corruptly as a public official and as an individual, by indefensible action he became the agent and tool of the bribegiving vendor, to the consideration of tainted money. Both defendants were in pari delicto, and being so, the law would ordinarily leave them where it found them — in corruption. But as to Mr. Cummings, that is not possible. The state in criminal prosecution of Spivey secured the testimony of Mr. Cummings, and in order to secure it Mr. Cummings was secured in all his personal and property rights involved. The testimony of Cummings, being vouched for by the state, was a verity. The witness, like Achilles of old, became purged of his crime, as at common law he prayed his clergy, read from the book — legit et clerico, and was considered of benefit to the realm, and had his purgation according to law, insofar as penalty or forfeiture against Mr. Cummings is concerned, the witness is as pure as the driven snow — Achilles like, he has been "dunked" according to the vernacular, but like Achilles he has a vulnerable spot. It is where he was held when he was immersed. He must make restitution according to law. In view of his newly-acquired innocence and purity, the law requires that he give up his ill-gotten gains, the amount of which is more than the historic thirty pieces of silver, indeed more than the amount of the bribe about which Mr. Cummings testified resulting in the parting of ways of Mr. Cummings and his agent and tool. It is the amount that he feloniously and fraudulently obtained from the treasury of the municipal subdivision of government by, with, and through the medium of his tool and agent, Spivey, who for his own interest did not see fit to be the first to give evidence of the fraudulent and felonious plan and scheme. But then Spivey could not serve two masters and at the same time serve his own interests and receive the "commission," as that term was so politely and federally used. That commission was not received in the interest of the people, Spivey's primary principal, nor yet in the interest of his secondary principal, Mr. Cummings, but in his own selfish interest. He did not perform the duties of a public servant in any respect, i. e., "to look singly to the good of his master," but as an unfaithful servant and as a corrupt and selfish individual, he sought "to line his own pockets with ill-gotten gains," and now he must account to his primary principal, the school district, for all property that by his felonious acts corruptly passed from it. He can avoid double that amount as a penalty only by virtue of the one-year statute of limitations. His duty as a public servant may not be forgotten or forgiven insofar as restitution of public funds is concerned. United States v. Mammoth Oil Co., 14 F.2d 705. A government official, who makes or procures a contract for the government and receives pecuniary gain in connection therewith, commits a fraud upon his government and it matters not that the government suffers no pecuniary loss or that the contract may be advantageous to the government. Such a contract by fraud is tainted; it is corruption — destructive of government. At the option of the government the transaction is void, for government is dependent upon honesty of administrator. Detriment to the government need not be shown; it is inherent in the transaction. It is preposterous to assume that such an agent could gamble on the chance of discovery and assure himself that in event of it his civil liability would be limited to his bribe and that the innocent principal could be compelled to keep the property or that the faithless agent could find witnesses to "Babelize" its value so as to save the judgment in equity, inclusive of the bribe.

Under the Justinian law expressed in the phrase "Safety of the State is the highest law" and upon this plane of public policy equity gives way to the law. The law closes the door to temptation. Providence Tool Co. v. Norris, 2 Wall. 45, (17 L. Ed. 868). "The principle which prevents an agent from contracting with himself, or from entering into any agreement which gives him an interest conflicting with his duty, applies more strongly to officers, servants, and agents of a municipal government than to private parties." 1 Dill. Mun. Corp. sec. 444; City of Findlay v. Pertz et al. (C. C. A.) 66 F. 427, 29 A. L. R. 188. It applies with equal force to agents of foreign governments when they appear in American courts of justice. Oscanyan v. Winchester Repeating Arms Co., 103 U.S. 261, 26 L. Ed. 539; Abernathy v. State of Oklahoma, 31 F.2d 547. State or municipal officers so remiss in performance of their public trusts are so bound by the law. Cheney v. Unroe, 166 Ind. 550, 77 N.E. 1041, 117 Am. St. Rep. 391. While eminent council for defendants concede that an agent's acts, while acting in a dual capacity, are voidable as counterdistinguished from void, it is insisted that the remedy is limited to recovery of the secret commission. The concession is rejected by the law, which indulges several remedies, and in the cause at bar the plaintiff has not seen fit in election of remedies to rescind the contract and sue at law for the consideration unlawfully paid. Nor has the plaintiff offered, as a part of that remedy, to restore to the parties sued that which was received by virtue of the contract. Howe v. Martin, 23 Okla. 561,102 P. 128; Byers v. Brisley et al., 81 Okla. 215, 198 P. 90; Jeter v. De Graff, 93 Okla. 76, 219 P. 345. They are cases where the seller was sued. Herein both the seller and the agent are joined, not in equity for rescission and cancellation of a contract, but in damages and for recovery of public funds wrongfully disbursed. It is contended the school district suffered no loss because the real estate feloniously purchased is worth the amount expended. If that were true, according to defendants' witnesses, it seems quite foolhardy to bribe and corrupt in order to sell such land.

The school district presumably has need of the land. If an appropriation of it has not been made according to law, any party concerned may proceed under liberality of the statute in condemnation proceedings, or yet a court of equity is available to either party defendant in event they or either of them have suffered wrong and they or either of them may successfully proceed there in event their hands are cleansed.

The school district is not required to accept the result of perfidy and chicanery in order to secure return of money wrongfully extracted from the public treasury, but may elect, as it has done, to hold liable as for money had and received those who obtained that money wrongfully and were thereby unjustly enriched. City of Findlay v. Pertz, supra. 13 C. J. 410.

In cases involving acts mala prohibita, the courts will take notice of the circumstances and will give relief, if justice and equity require restoration of property received by either party, but not so with agreements to commit a crime, all acts in connection therewith are contrary to public policy and so void. The courts must leave the briber where he stands, and deny him any benefit from the contract, and the school district in a proper action therefor may obtain a cancellation of the contract obtained by bribery, "without returning or offering to return the money paid by the briber upon the contract." State v. Cross, (Kan.) 17 P. 190. This does not amount to a forfeiture as prohibited by the Constitution. It amounts to a mere selection of remedies and affords Mr. Cummings an opportunity to select his own remedies either at law, under special proceedings, or in equity, for the recovery of the real estate that was his prior to his voluntary but corrupt act in transferring title thereto to the board of education of the city of Oklahoma City.

As modified by elimination of the penalty provision, the judgment should be affirmed.