Pittsburgh-Buffalo Co. v. Schmidt

Opinion by Mr. Justice Stewart, In this action the effort was to charge the defendant, Charles H. Schmidt, with personal liability for his failure as treasurer of the city of Meadville, to retain out of the money due from the city to George J. Vetter on the latter’s contract, the amount Vetter had assigned thereout to this plaintiff. The action was against the bonding company that had become surety 571 for Schmidt as treasurer to the city, as well. The facts appear in the case of Vetter to use versus City of Mead-ville, to No. 128, January Term, 1912, 236 Pa. 563, just decided, and they need not be repeated here. The appeal is from a judgment sustaining a demurrer to plaintiff’s statement. In the case referred to, we held that in accepting the order or assignment as authority for retaining so much of the money as might become due to Vetter on his contract and paying it to the plaintiff, the defendant, Schmidt, was acting outside his duty, and that therefore his act imposed no liability on the city. The obligation of this bond was that Schmidt would well, faithfully and truly discharge his official duties as treasurer. Such an obligation imposes no liability for acts not done as part of or in connection with, official duty. It sometimes becomes a question whether the act complained of is a duty appurtenant to the office when, as was the case of McCaraher v. Commonwealth, 5 W. & S. 21, the character and bounds of the officer’s duty are left to be determined by the nature of the office, the general principles of convenience, policy and public security, by usage and by such matters of express legislation as may be connected with the subject; but where, as in this case, the duties of the office are expressly defined by law all such questions are avoided. Having decided that the act of Schmidt on which plaintiff rests its present action was not within the scope of his official duty, it follows that no cause of action was shown against the surety, the United States Fidelity and Guaranty Company, one of the defendants. There is like insufficiency in the statement of cause of action against Schmidt, the other defendant. The plaintiff must be held to knowledge of the fact that in accepting the order from Vetter, Schmidt was acting without authority. “When a man deals with a corporation officer, and no representations are made by the latter, and he simply proposes to bind the corpora 572 tion, but as matter of fact the corporation is not bound because the contract is ulta vires, the officer is under no liability.” This was said by Mr. Justice Brewer in Holt v. Winfield Bank, 25 Fed. Repr. 812. The principle here asserted cannot be disputed. The assignments are accordingly overruled and the judgment is affirmed.