Montana Attorney General Opinion 15-133

Opinion No. 133 &hool~ntracts-School Trustees- Husbaml and Wife-Public Policy- Nepotism. HELD: A contract to build a school- house. which involves more than $250,- 000, where one of the tl"llstees voting to let the contract is the hushand of the contractor being awarded the con- tract is void as against public policy. The Nepotism Act does not apply to contracts. March 28, 1933. You request all opinion on the fol- lowing question: "Is a contract to build a schoolhouse. which illY 0 lYe s more than $250.00, legal where one of the trustees Yoting to let the contract is the husband of the contractor being awarded said contract?" The pertinent statutory provisions are Sections 267, 444, 5069, and 1016, It. C. M. 11:)21. These provisions of the statute clearly express the intention to divorce public officials from any fi- !Jancial interest, of a personal or self- ish nature, in any contract made by any board of which such officials are members. The general rule governing public of- ficials towards contracts in which they may be personally interested may be gathered from the following decision and many others: "The general rule stands upon our great moral obligation to refrain from placing ourselves in relations which ordinarily excite a con- flict ,between self-interest and integrity. It restrains all agents, public and priv- ate * * * The disability * * '" is a consequence of that relation be- tween them which imposes on the ·one a duty to protect the interest of the other from the faithful discharge of which duty his own personal interest may withdraw him. In this conflict of interest the law wisely interposes. It acts not on the possibility that, in some cases. the sense of that duty may pre- "ail over the moth'es of self-interest, hut it provides against the probability in many cases, and the danger in all cases, tha t dictates of self-interest will exercise a predominant influence, and supercede that of duty." Michaud v. Girod, 4 Howard U. S. 502, 554. The statutes and most of the deci- sions appear to ha,e had in mind the sole interest of public officials, but Section 5069, It. C. M. 1921, relating to cities and towns, specifically includes "relatives and employees" of officials. This raises the question in the case ~'ou submit as to whether or not it can he said that a husband is interested in the contract of his v.ife. A wife has the legal right to the exclusive control of her own property, (Sections 5810- 5811) but it would be a long stretch of the imagination to say that the hus- band has no' pecuniary interest in his wife's contract. While it cannot be said that the husband has a direct pe- cuniary interest in the contract in ques- tion, many of the authorities we have been able to find lend support to the view that he has an indirect pecuniary interest therein. (Sturr Y. Borough of Elmer, 67 Atl. 1059; Ames Y. Boanl of. Education, 127-Atl. 95; Tuscan y Smith, 153 Atl. 289; Moody v. Shuffle- ton, 262 Pac. 1095; Woodward v. City of Wakefield, 210 N. W. 322; Hobbs, Wall & Co. v. Moran, 293 Pac. 145; Douglas Y. Pittman, 39 S. W. (2d) 979;.2 McQuillin on Municipal Corpor- ations, Sections 531 and 629, 3 Id. Sec- tions 1354 and 1932 Supp.; 56 C. J. 485, 486; 15 C. J. 553.) It would appear to us that the hus- band's interest in the wife's contract would at least be as great and direct as that of a stockholder or director of a corporation in the corporation's con- tract. In the latter instance your at- tention is called to the following cases. Duncan ". Oharleston, 39 S. E. 265 (S. C.); Ann. Cases 1921D, p. 660 an'} cases cited; Noxubee County Hardware 00. v. Macon, 43 So. R04 (Miss.) ; Pres- ident etc., of Oity of San Diego v: Rail- road Company," 44 Cal. 106. In Duncan Y. Charleston, supra, three stockholders of a corporation were members of the city council and a contract was ent8red into between the city 'and the private corporation by which the latter agreed to furnish the city a water supply. The court said: "The high character of the three gen- tlemen in question show that their presence in this contract on both sides, so to speak. was due to their great anxiety to promote the best interests of the public in the matter of a water 102 OPINIONS OF THE ATTORXEY GE:,\ERAL supply and not for any profit to them- selves; still it is our duty to say that their conduct is illegal." In Noxubee County Hardware Co., v. l\facon, supra, two members of the city council were interested in a corpora- tion which entered into a contract with the city. The court declared the con- tract void and said: "The town of Macon will come by its proper rights when both these gentlemen resign as aldermen and resume their business as merchants which • • • we have no doubt they will promptl~' dO." The section of the Mississippi law quoted in the case contains practically the same proYisions as Section 1016 R. C. :\1. 1921 relating to school trustees. In President, etc. of City of San Di- ego Y. Railway Company, supra, a trus- tee of the city was a stockholder and director of a railway corporation. The cit~' was authorized to donate not to exceed 5,000 acres of City land to the rail\va)' company. The court held the conveyance void and further said: "The trustee's relation to the city was that of an agent to his p,rincipal, the city, and he· could do nothing incon- "istent with such relation. This is clear upon principle and rests upon ahundant authorit~·. No man can faithfully serve two masters." In view of the foregoing authorities, it is the opinion of this office that a contract entered into between a woman antl a school board of which her hus- band is a member is clearly against public policy. "Public polic~' of this state is determined by the acts of the legislature, and, in their -rrhsence, by the decisions of the courts." Cruse v. Fischl, 55 Mont. 258. Such contracts have been held void in Iowa (111 N. W. 25) in Illinois (Sherlock v. Winnett, 59 Ill. 389), and in other states, but in others are void- able only. (Tucker v. Howard, 122 Mass. 529). S'ection 446 n. C. M. 1921 is as fol- lows: "Every contract made in viola- tion of any of the provisions of the two preceding sections (444 and 445) may be avoided at the instance of any party except the officer interested therein." Section 444 refers to all public of- ficers but does not specifically mention school officials. but it might be con- strued to inchlde school officials as school districts are Hubdidsions of the state. State Y. Meyers, 65 Mont. 124. Although the language of Section 446 might lead to the belief that the con- tract is merely voidable, yet, the con- tract being contrar~' to public policy, we think it should be held to he abso- lutely void. (McManus Y. Fulton, 85 l\Iont. 170; Berka v. Woodward, 57 Pac. 777; 13 C. ,T. 420-435: 2 Page's Law of Contracts, Section 1020.) The recent act on nepotism, Chapter 12, Laws of 1\)3:3. does not Ilpply in this matter as that act was intended to rela tc only to appointments to office and employees in various governmcntal capacities. Opinion No, 134 County Commissionel's-Meetings-Ex- h'a Sessions, Number of-When Called. HELD: County Commissioners in counties under fourth class may hold as many extra sessions each month as the business of the county requires and special meetings may be called when the board is not in session. . Ma rch 30, 1933. You haye suhmitted for my opinion the following questions: "1. May the board of county com- missioners hold morc than one special meeting of the bOil rd in each month in Fergus County, a county of the fifth class?" "2. l\IIlY the board of county com- missioners cllll a special meeting Ilt a time when the board is not in session?" Section 4462, R. C. l\I. 1921, as Ilmend- ed by Chapter 35, Laws of 1929, gave the county commissioners power to hold extra sessions. After providing for reg- ular meetings, that section provides: "But the board mllY Ilt any time, by ghing at lellst two days' posted public notice, hold an extra session of not over two days' duration." It will be observed that the only changes made were in providing "two days' posted puhlic notice" inste~d of "five days' public notice," and in limit- ing the length of the meeting to two days' duration instead of three days'