Orlando C. WILLIAMS and National Surety Corporation, a corporation, Appellants,
STATE of Arizona ex rel. Robert MORRISON, The Attorney General of Arizona, Appellee.
[83 Ariz. 35] Whitney & LaPrade, Phoenix, for appellants.
Robert Morrison, Atty. Gen., Jack G. Marks, Sp. Asst. to Atty. Gen., for appellee.
The state of Arizona filed suit against Orlando C. Williams and the National Surety Corporation, his bondsman, for recovery covery of profits which the state claimed the defendant Williams made by acquiring title to certain Federal lands during the time he was state land commissioner. The trial court rendered summary judgment against the defendants on the question of liability and tried the question as to the extent of liability and thereafter rendered judgment against Williams for $21,842 and against the surety company for $10,000 with judgment over in its favor against Williams for the latter amount. Defendants appeal.
The undisputed facts as they appear from the record are that during the time of the transactions herein related defendant Williams was state land commissioner of Arizona; that there was brought to his attention a tract of Federal land in Maricopa county; that he examined this land and through the efforts of some land attorneys he personally acquired title to some land in Mohave county and through application to the proper Federal agencies succeeded in exchanging his Mohave county land for [83 Ariz. 36] the Maricopa county land. He thereafter sold the Maricopa property for $22,162 realizing a net profit of $21,842. The defendant National Surety Corporation issued its bond in the sum of $10,000 to the effect that Williams would 'well, truly and faithfully execute and perform all official duties now required of him by law.'
The state's theory of its right to recover is that under the provisions of the Enabling Act the state is entitled to make indemnity selections of Federal land and the state land commissioner is the public official whose duty it is to examine public land for the purpose of making such selection and initiate the necessary proceedings for its accomplishment. So far as applicable the statutes then and now provide (A.R.S. § 37-201; section 11-201, A.C.A.1939):
'The commissioner shall:
'1. Examine the public lands within the state for the purpose of selecting the lands granted to the state in quantity, or as indemnity, by the enabling act.
'2. Prepare all lists, forms and papers required in the selection of the lands and securing title thereto.
'3. Maintain such records and perform such duties as necessary to protect the rights of the state in the lands.'
A.R.S. § 37-202 (section 11-202, A.C.A.1939) creates a selection board composed of the governor, state land commissioner and the attorney general and provides that this board shall do everything necessary to comply with United States and state law in securing title 'to the lands granted to the state in quantity or as indemnity by the enabling act.' This section also provides that the board 'shall file upon and select, and cause to be withdrawn and surveyed for selection, lands the commissioner from time to time recommends for selection * * *.'
From the foregoing provisions of the statute it is clear that the state has designated the land commissioner as the public officer who shall act as its agent to secure indemnity lands from the Federal government. They can only be acquired upon the examination and recommendation of this official. It is upon his discretionary 'say-so' whether the necessary request and application is initiated that might ultimately result in the acquisition by the state of valuable property rights. When the land commissioner took steps to acquire this Federal land for himself, he created a situation whereby his private interests became antagonistic to that of the state. One who accepts this office assumes the responsibility of performing the duties given and imposed with complete fidelity and must act only for the best interest of the state. In order that he act only for and on behalf of the
state's interest, it is imperative that he have no personal interest that might clash or conflict with that of the state. The relationship[83 Ariz. 37] between a state official and the state is that of principal and agent and trustee and cestui que trust. He has no right to neglect his official duty or fail to exercise a discretion given and thereby gain a personal profit. Neither has he a right to exercise such discretion in a manner that will result in profit to himself. Public policy requires that personal interests not exist as a possible factor influencing a public official in the performance of his duties. United States v. Carter, 217 U.S. 286, 30 S.Ct. 5158 States v. Carter, 217 U.S. 286, 30 S.Ct 515, law principles heretofore announced are more clearly stated in the following language:
'The larger interests of public justice will not tolerate, under any circumstances, that a public official shall retain any profit or advantage which he may realize through the acquirement of an interest in conflict with his fidelity as an agent. If he takes any gift, gratuity, or benefit in violation of his duty, or acquires any interest adverse to his principal, without a full disclosure, it is a betrayal of his trust and a breach of confidence, and he must account to his principal for all he has received.'
On the basis of these principles, the trial court rendered the judgment. Defendants say the common law cannot be invoked for this purpose because of subsection C, section 37-132, A.R.S. ...