State Ex Rel. Thacker v. Fidelity & Deposit Co. of Maryland

Barnhill, J. Is tbe plaintiff’s alleged cause of action against tbe defendants barred by tbe statute of limitations, C. S., 439? If this question presented by this appeal is answered in tbe affirmative — as it must be — it is unnecessary for us to discuss or decide whether tbe admitted default of tbe clerk occurred during either of tbe terms covered by tbe bonds executed by tbe defendants. Tbe clerk of tbe Superior Court is an insurer and guarantor of funds “which have come, or may come, into bis bands by virtue of color of title,” Pasquotank County v. Surety Co., 201 N. C., 325, 160 S. E., 176; Gilmore v. Walker, 195 N. C., 460, 142 S. E., 579; Marshall v. Kemp, 190 N. C., 491, 130 S. E., 193; Williams v. Hooks, 199 N. C., 489, 154 S. E., 828; Smith v. Patton, 131 N. C., 396, and tbe surety upon bis official bond must account for any default by tbe clerk during tbe term for which tbe bond was executed. Gilmore v. Walker, supra, and other cases cited. Failure of tbe clerk to account for funds received by virtue or color of bis office upon demand raises tbe presumption that tbe money was misappropriated and converted upon receipt, and tbe burden is upon tbe clerk or bis surety to “show tbe contrary.” Gilmore v. Walker, supra; Pasquotank County v. Surety Co., supra; Williams v. Hooks, supra. Failure to account, upon demand made during tbe term tbe fund was received, constitutes default which starts tbe running of tbe statute of limitations, presumptively from tbe date tbe fund was received. In tbe absence of such demand, failure by tbe clerk to account for funds re *140 ceived by virtue or under color of bis office at tbe end of tbe term during wbicb tbe fund was received constitutes a default and is a breach of bis official bond. Washington v. Bonner, 203 N. C., 250, 165 S. E., 683. If tbe clerk accounts for and pays over to bis successor funds received by bim under color of bis office, there is no breach of bis official bond executed to cover tbe period of that particular term. An official bond executed for a specified term is not liable for defaults of tbe principal during another term. A bond for one term is not liable for tbe nonperformance of tbe official duties of tbe principal during another and different term, even though tbe principal and sureties be tbe same for -both terms. Tbe two terms are separate and distinct and tbe bonds given by an officer, as security for tbe performance of bis official duties during one term may not be held liable for derelictions occurring in another and different term. Each term “must stand on its own bottom.” Ward v. Hassel, 66 N. C., 389; S. v. Martin, 188 N. C., 119, 123 S. E., 631. Tbe statute of limitations begins to run upon default and not upon discovery. Bank v. McKinney, 209 N. C., 668, 184 S. E., 506. This statute (C. S., 439) is applicable to tbe clerk of tbe Superior Court and tbe surety upon bis official bond. Lee v. Martin, 186 N. C., 127, 118 S. E., 914; Vaughan v. Hines, 87 N. C., 445. Thus, it appears that if there is a default it presumptively occurred at tbe time tbe money was received. If it is shown to tbe contrary, it occurred at tbe time established by tbe evidence, or in any event, when tbe clerk who bad received tbe fund fails to account therefor to tbe successor clerk, even though be is tbe successor. There is no default, and tbe statute does not begin to run, so long as tbe clerk faithfully accounts for tbe fund in bis bands either to tbe cestui que trust or to tbe successor clerk. Therefore, tbe statute of limitations begins to run, at tbe latest, at tbe expiration of tbe term during wbicb tbe default, in fact, occurred. Under these well established principles of law relating to official bonds of public officers and to tbe statute of limitations in respect to actions upon official bonds, it appears that if there was any default by tbe clerk during tbe term for wbicb tbe defendant, Fidelity & Deposit Company of Maryland, became surety upon bis official bond, tbe statute of limitations against any action upon said bond began to run, at tbe latest, on tbe first Monday in December, 1926, when Smith, clerk, qualified as successor for tbe four-year term ending on tbe first Monday in December, 1930, more than twelve years prior to tbe institution of this action. If there was any default during the four-year term ending on tbe first Monday in December, 1930, upon tbe official bond for wbicb tbe defendant, American Surety Company of New York, was surety, tbe statute *141 began to run, at the latest, at tbe expiration of that term, on the first Monday in December, 1930, more than eight years prior to the institution of this action. As the statute provides a six-year period within which actions must be instituted upon official bonds, it follows that as to each of the defendants, plaintiff’s action is barred. The provisions of C. S., 441 (9), have no application to this case. It is admitted that the deceased was sui juris and that he at all times knew that the subject matter of this litigation was in the hands of the clerk, subject to his demand. No fraud or mistake is alleged or proven and the court below found that Smith, clerk, at all times acted in good faith. This is one of those cases which present facts which are incomprehensible. More than $3,000 was paid into the hands of the clerk of the Superior Court of Eockingham County to the use of George E. Thacker in 1910. He had full knowledge thereof and yet he made no demand upon the then clerk, or his successors in office, for principal or interest at any time during his lifetime. The loss admittedly sustained is quite apparently attributable, in part at least, to the negligence of plaintiff’s intestate. The judgment below is Affirmed.