Lexington Insulation Company v. Davidson County

90 S.E.2d 496 (1955) 243 N.C. 252

LEXINGTON INSULATION COMPANY
v.
DAVIDSON COUNTY, North Carolina.

No. 377.

Supreme Court of North Carolina.

December 14, 1955.

Charles W. Mauze, Lexington, for defendant-appellant.

Hugh Mitchell, Statesville, and Phillips & Bower, Lexington, for plaintiff-appellee.

BARNHILL, Chief Justice.

Defendant assigns as error (1) the order of the court overruling its demurrer to the complaint, and (2) the denial of its motions for judgment of nonsuit.

We need discuss only the exception to the refusal of the court below to dismiss as in case of involuntary nonsuit.

In some cases where the contract with the municipality or public agency is void, we have permitted a recovery on a quantum meruit or under the doctrine of unjust enrichment. Abbott Realty Co. v. City of Charlotte, 198 N.C. 564, 152 S.E. 686; Hawkins v. Town of Dallas, 229 N.C. 561, 50 S.E.2d 561; Charlotte Lumber & Manufacturing Co. v. City of Charlotte, 242 N.C. 189, 87 S.E.2d 204. In the cited and like cases no moral turpitude or breach of public policy was involved.

When, however, the cause of action is made to rest on a transaction which is in direct contravention of the provisions of G.S. § 14-234, quite a different question is presented.

That section of the General Statutes provides that: "If any person, appointed or elected a commissioner or director to discharge any trust wherein the State or any county, city or town may be in any manner interested, shall become an undertaker, or make any contract for his own benefit, under such authority, or be in any manner concerned or interested in making such contract, or in the profits thereof, either privately or openly, singly or jointly with another, he shall be guilty of a misdemeanor." (In addition the Act contains certain provisos which are not pertinent here.)

The General Assembly is the policy-making agency of our Government, and, in adopting this Act, it made the condemnation of the transactions embraced within the terms thereof a part of the public policy of the State so as to remove from public officials the temptation to take advantage of their official positions to "feather their own nests" by letting to themselves or to firms or corporations in which they are interested contracts for services, materials, supplies, or the like.

The statute simply recognizes that "No man can serve two masters." Matthew 6:24; Davidson v. Guilford County. 152 N.C. 436, 67 S.E. 918; Snipes v. City of Winston, 126 N.C. 374, 35 S.E. 610.

"This law was enacted to enforce a well-recognized and salutary principle, both of the moral law and of public policy, that he who is intrusted with the business of others cannot be allowed to make such business an object of pecuniary profit to himself." State v. Williams, 153 N.C. 595, 68 S.E. 900, 902.

The prohibition of G.S. § 14-234 extends to an officer of a corporation who makes a contract between the corporation and a municipality or board of which he is a member. State v. Williams, supra.

Thus it appears that plaintiff acted advisedly in admitting in its amended complaint that the original contracts are void and unenforceable. Now then, the question arises as to whether the plaintiff is entitled to recover in an action indebitatus assumpsit on a quantum meruit basis. That is, will the court imply a promise on the part of the County to pay the reasonable value of the services rendered and materials furnished and enforce the same? The answer is no.

No man ought to be heard in any court of justice who seeks to reap the benefits of a transaction which is founded on or arises out of criminal misconduct and which is in direct contravention of the public policy of the State. Standard Fashion Co. v. Grant, 165 N.C. 453, 81 S.E. 606; Marshall v. Dicks, 175 N.C. 38, 94 S.E. 514; Lamm v. Crumpler, 233 N.C. 717, 65 S.E.2d 336; Waggoner v. Western Carolina Publishing Co., 190 N.C. 829, 130 S.E. 609.

Public office is a public trust, and this Court will not countenance the subversion thereof for private gain. Not only will it declare void and unenforceable any contract between a public official, or a board of which he is a member, and himself, or a company in which he is financially interested, whereby he stands to gain by the transaction, but it will also deny recovery on a quantum meruit basis. In entering into such contract a public official acts at his own peril and must suffer the loss incident upon his breach of his public duty. He may look in vain to the courts to aid him in his efforts to recoup his losses, due to the invalidity of the contract, on the grounds the public agency which he serves has been enriched by his misconduct.

In other words, this Court will not recognize or permit any recovery bottomed on the criminal conduct of a public official. To put it simply, the doors of the courts are closed to any individual, or firm in which he is financially interested, who engages in a transaction which comes within the language of the statute. Snipes v. City of Winston, supra; Davidson v. Guilford County, supra; King v. Guilford County, 152 N.C. 438, 67 S.E. 919; State v. Williams, supra. Annotations, 84 A.L.R. 969, 110 A.L.R. 164, 154 A.L.R. 375, 12 A.J. 498.

The court below should have sustained the motion to dismiss this action as in case of involuntary nonsuit. Hence the judgment entered in the court below must be

Reversed.