Kempner v. County of Galveston

Gaines, Associate Justice.— This suit was brought by Galveston County to recover of W. J. Burk, its former treasurer, and the sureties upon his official bond certain moneys alleged to have been received and not to have been paid out or accounted for by him, and also the value of certain securities which came into his hands belonging to the county, which are alleged to have been converted by him to his own use. An exception was sustained to so much of the petition as sought a recovery for the conversion of the securities and for certain moneys which belonged to the school fund of the county. The securities and money for — 222 — which a recovery was denied were the proceeds of the sale of lands donated by the State to the county for the benefit of its public schools. The bond upon which the suit was brought was claimed to be a bond given under article 3435 of the Revised Statutes in substitution of a former bond given under article 988. The court held that the defendants were not liable under this obligation for the school fund sued for, but there was a verdict and judgment for the plaintiff for the moneys not belonging to the school fund which Burk was alleged to have received and not to have paid over or accounted for. The sureties on the bond have appealed and the plaintiff has brought a writ of error to this court. The appeal and writ of error have been consolidated in tins court and will be disposed of in this opinion. The questions raised by the defendants’ appeal go to the foundation of the whole action and will therefore be first discussed. The evidence shows that Burk was elected county treasurer in 1884, and gave bond as required by article 988 of the Revised Statutes. On May 12, 1885, J. 0. League, one of the sureties upon the first bond, desiring to be relieved of further liability, came with Burk before the Commissioners Court and requested to be released therefrom. An order was immediately entered which recited the fact and granted the request, and thereupon Burk tendered the bond sued on in this action, and it was ordered that the bond so tendered be approved and that the sureties on the former bond be released from further liability. The substituted bond is ' conditioned that “if the said W. J. Burk as such coimty treasurer shall faithfully execute the duties of his office and pay over according to law all moneys which shall come into his hands as county treasurer from and after-May 11, 1885, and render a just and true account thereof to the Commissioners Court of Galveston County, Texas, at each regular term thereof, then said obligation shall be null and void, otherwise it shall remain in full force, virtue, and effect.” The court held in effect that a bond so given was good as a statutory bond and so charged the jury, and refused an instruction to the effect that unless the bond was accepted and approved after an application by the surety to the Commissioners Court asking to be released from the former bond, and after service of notice' upon the principal, the bond was invalid. We are of opinion that there was no error in the court’s ruling in these particulars. The policy of the statute is to permit the surety upon a county officer’s bond to terminate his liability upon the obligation at anytime. Rev. Stats., art. 3435. The right is given absolutely. But in order to protect the rights of the officer it is necessary to afford him a reasonable opportunhw to give a new bond. For this purpose the statute provides that an application shall be made by the surety and notice given to the officer and a copy of the application served upon him. Id. The provision is made solely for his protection. Being informed of the — 223 — wish of his surety to be released, we see no reason why he may not waive the notice and give the new bond. lío personal prejudice can accrue either to him or to the new sureties by such a course. If the attempt were to vacate his office without the statutory notice a different question would be presented. In the present case the surety upon the old bond ■appeared before the court with the treasurer and made known his desire; the treasurer in effect waived the statutory notice, accepted the result, and immediately filed a new bond which was at once approved. We fail to perceive that either he or his sureties have any right to complain. It is also insisted that because the words “from and after the 11th day of May, 1885,” appear in the condition of the new bond it is not valid. If these words had been omitted the sureties would have been liable for all money which came into the officer’s hands as county treasurer after the 11th day of May. The words used neither increased nor diminished their liability, and the legal effect of the obligation is the same as if the words had been omitted. It appeared by the evidence that Burk kept an account as treasurer with the Island Oity Savings Bank. Ii. Weekes was at the time cashier of the bank and also the tax collector of the county. In turning over to the treasurer money collected by the tax collector for the use of the county, it Avas the course of dealing betAveen the parties for Weekes as ■tax collector to give Burk a check for the money due the county, taking his receipt as treasurer therefor. The check Avas immediately endorsed by Burk and delivered to Weekes as cashier of the bank to be placed to Burk’s credit. Weekes testified that there Avas always money in the hands of his drawees to meet the checks. Upon this matter the court charged the jury as folloAVs: “If you believe from the evidence that Ii. Weekes in his capacity as tax collector took receipts from W. J. Burk as county treasurer for moneys in Weekes’ hands as tax collector, due Galveston County, and that for such receipts Weekes gave Burk checks on the Island City Savings Bank or any other bank Avhere said Weekes had money to meet said checks, and you find that Burk indorsed said checks and returned them to said Weekes as cashier of the Island City Savings Bank, with instructions to deposit said checks to said Burk’s credit in said bank, and hold the money represented by said checks for account of said Burk as county treasurer, to be thereafter disbursed for account of Galveston County, you are charged that this would be a payment to Burk of the moneys represented by said checks, and this Avould be so even if Weekes failed to place said moneys to the credit of Burk upon the books of said bank; ■and for the purpose of this suit you must regard such checks as money received by Burk as county treasurer and as creating the same liability of Burk and his sureties just as if Burk had received gold instead of the checks.” — 224 — It is complained that this charge is upon the weight of the evidence and is incorrect as a matter of law. If the checks had been drawn upon a bank where Weekes did not have funds to meet them it may be that they should not be treated as a payment. But if there were funds to meet them when Burk received and receipted for them as money and turned them over to the cashier of the bank to be placed to his credit, we think this settled the transaction as between the county treasurer and the tax collector. If Weekes as cashier of the bank failed to give him credit for the checks on the books of the bank the bank was nevertheless responsible to him for their amount. It then became a matter of indebtedness between him and the bank and did not change the character of the transaction between him and the tax collector. We think the court did not err in charging that it was a payment. We think, furthermore, that the evidence discloses that Burk did ultimately get credit for all the checks, though one for a large amount was not immediately credited to his account on the books of the bank. It appears that some of his sureties were officers of the bank and that they as a matter of precaution had the entry, suspended. We conclude that there is no error in the judgment of which appellants have the right to complain. The plaintiff in its proceedings under the writ of error complains that the court erred in sustaining exceptions to so much of its petition as sought a recovery for the conversion of the school fund bonds, and in excluding evidence offered of the receipt by Burk of moneys belonging to that fund. The question presented is difficult to determine. The secuties and moneys for which a recovery was sought do not belong to what is denominated in our laws as the available school fund, but are the proceeds of the sale of the school lands which were set apart to the county for school purposes. It seems to be conceded by both parties that the bond required by article 3728 of Revised Statutes is not intended to secure other than the available school fund, and therefore that it does not cover the proceeds of the sale of the county school lands or the securities in which they may be invested. We think this construction is correct. The article cited "expresses the purpose of the bond to be to secure the faithful performance of the duties of the county treasurer under the chapter in which the article is found. We are not left in doubt to what this refers. That chapter makes the treasurers of the several counties “ treasurers of the available public free school fund for the several counties.” Rev. Stats., art. 3725. But it is contended for the plaintiff that the law requires but one other bond, namely, the official bond prescribed in article 988 of the Revised Statutes, and that the treasurer and his sureties upon this bond are responsible to the county for the faithful performance of all his official duties except as treasurer of the available school fund. It is also claimed — 225 — that the bond which is provided for in article 989 is the same that is mentioned in article 3728. On the other hand defendants contend that three bonds are required, one under article 988, one under article 989, and the third under article 3728, and that the bond required under article 989 was intended to secure the permanent school fund of the county. As we shall have occasion frequently to refer to the language of the several articles of the Revised Statutes which relate to the bonds of the county treasurers we here quote them in connection, omitting such parts as have no bearing upon the question. They are as follows: “Article 988. The county treasurer * * * shall give a bond, payable to the county judge of the county, with at least two good and sufficient sureties to he approved by the County Commissioners Court, in such sum as said court shall deem necessary, conditioned that such treasurer shall faithfully execute the duties of his office and pay over according to law all moneys which shall come into his hands as county treasurer and render a just and true account thereof to said court at each regular term of said court.” * * * “ Article 989. The county treasurer shall also give an additional bond to the one required in the preceding article for the school fund of his county, with two good and sufficient sureties to be approved by the county judge, in a sum double the amount of such school fund, to be estimated by such county judge, conditioned that he will safely keep and faithfully disburse the school fund according to law and pay such warrants as may be drawn on such fund by competent authority. Said bond shall be given within twenty days after the treasurer has received his certificate of election.” * * * “Article 3728. Within twenty days after the receipt of his certificate of election it shall be the duty of the county treasurer to execute a bond with two or more good and sufficient sureties for the faithful performance of his duties under this chapter. “Article 3729. Such bond shall be in double the probable amount of the available school fund which may come into his hands, to be estimated by the county judge, and shall be made payable and conditioned as prescribed in article 989.” If articles 989 and 3728 refer to and require one and the same bond, it is apparent that such bond covers only the available school fund. But it is not quite clear that article 989 does not require one and article 3728 another and different bond, namely, the first for the permanent or non-available school fund of the county and the other for the available fund. Article 989 mentioned the school fund generally, and may be construed to mean both the available and the non-available fund, or either of them. If it was intended to embrace the entire school fund, which the words taken by themselves would indicate, then clearly the sureties on the general bond required by article 988 would not be liable for the keeping and dis — 226 — bursement- of any part of the school moneys. But since a bond is required for the keeping and disbursement of the available fund it is equally clear that the words “school funds” used in article 989 must be interpreted to mean available school funds or to apply only to the permanent school fund. The general sense of the terms must be restricted so as to mean one or the other, since it is not probable that the Legislature intended that two bonds should be given, one to cover both the permanent and the available school funds and another to cover the latter only. If then the bond required by article 989 is another and different bond from that required by article 3728, it secures only the non-available school fund. Is it reasonable to suppose that the Legislature intended this? That fund consists of the proceeds of the school lands granted by the State to the counties respectively for the benefit of their public schools, and is required to be invested iniinterest-bearing securities, of which the interest only is to be devoted to the maintenance of the schools. In the nature of things the fund consists almost wholly of these securities. The interest as it comes in becomes a part of the available fund. ■ The bond required by article 989 is purely the bond of an officer who is to receive and disburse money, and is not conditioned for the performance of any other function. Could the treasurer’s sureties be held liable on such a bond for his conversion of the securities belonging to the school fund? Clearly not. •If then article 989 be construed to require a bond to secure the permanent school fund only, we have the anomaly of a third and separate obligation of the county treasurer to protect a part of a particular fund, for which, as it will be shown hereafter, there exists no necessity. It is possible that occasionally the county treasurer may have in hands money belonging to the permanent school fund of his county. On the other hand if the money is properly invested in securities a county treasurer might never receive a dollar of that fund. The proceeds of the sale of the public school lands belonging to a county are as much its property as any other property or funds held by i it. They are all held by the county for certain specific public uses. That the general bond required of county treasurers before the Revised Statutes went into effect was sufficient to have secured this fund there can be no doubt. It had the same conditions as the bond now required by article 988. It secured the faithful performance of all the duties of the treasurer, as wrell as the paying over of all moneys that should come into his hands as county treasurer. The sureties upon a bond so conditioned, in the absence of some other statutory regulation, would have been liable for the conversion of the school fund securities as well as for the misappropriated of the moneys of the permanent school fund. Then why, in addition to this and a bond to secure the available school fund, require still another to secure a part only of a certain • fund which but — 227 — for the requirement would have been secured by another obligation? We have no doubt that the sureties on the general bond under that condition of the obligation which makes them responsible generally for the faithful performance by their principal as county treasurer are liable for his conversion of the securities belonging to the school fund. The language is sufficiently comprehensive to embrace this liability, and under no possible construction of the statute is there any other bond that Avon Id cover a defalcation in reference to these securities. If a recovery Avas only sought for the conversion of these securities we might stop here. But since the plaintiff also seeks to recover moneys belonging to the non-available school fund of the county, we are called upon to determine whether the obligation of the bond sued on embraces such moneys or not. We have shown good reason Ave think for presuming that the Legislature did not intend to require three bonds. The unreasonableness of the requirement Avould not, however, justify us in disregarding it if the language of the statuté made it clear that the Legislature did so intend. In ■order to hold that articles 989 and 3728 require the same obligation, namely, a bond to secure the available school fund; it is necessary to reconcile some apparent inconsistencies in the language of the two articles. The íavo, however, are upon the same subject, matter and must be construed together. Each article requires a bond payable to and to be approved by the county judge and with same conditions. Article 989 prescribes that the bond shall be for the “school fund of the county.” The bond mentioned in article 3728 is evidently for “the available school fund” of the county. Arts. 3725, 3729. To say that the language “the school fund of the county ” used in the article first named is to be taken in its unrestricted sense leads at once into an insuperable difficulty. This, the literal construction, would embrace the available school, which articles 3728 and 3827 show clearly was to be secured by a bond covering that fund only. The language must be restricted. We have seen as the ■condition shows that it does not embrace the' securities belonging to the non-available fund, and also that it can not be held to embrace both the available and non-available fund. Which then is the more reasonable construction, that by the words was meant the money of the permanent fund, or that they were to be taken as a part of and in connection with articles 3728 and 3729, and to be limited by the language there used? The latter construction meets the necessity of the case, as Ave shall hereafter attempt to show, and is within the recognized rules for interpretation of statutes. It best harmonizes all the provisions on the subject. The former construction leads to inconvenience and confusion and to the unreasonable conclusion that the Legislature intended to require a third bond, which Avas not necessary, in order to secure a part, and a part only, of a particular fund. Thus it appears that it is more reasonable to sup — 228 — pose that by the words “school fund” found in article 989 is meant the available fund than that they were meant to embrace only a part of the permanent fund. But it may be said that there is a difference in the basis upon which the amount of the bond required in article 989 and that required by article 3728 is to be estimated, inconsistent with the theory that but one-bond is meant. Both articles require the amount of the bond to be estimated by the county judge. In article 989 the language is “in a sum double the amount of such school fund,” while in article 3729 the words: are “in double the probable amount of the available school fund.” If our view is correct, then the words “school fund” in the former maybe limited by the language of the latter article, and the two may be so far reconciled on the theory that they apply to but one bond. Does the words “amount” in the former and “probable amount” in the latter show a different intention ? We think not. If the amount of the moneys "which, should come into the hands of the county treasurers of the respective counties from the permanent fund was a fixed sum, then the contention that article 989 required a separate bond for such moneys would have been plausible. But we having seen that the conditions of the bond required by that article do not cover the securities, and we think it clear that the moneys of that fund which would probably come into the hands of any particular treasurer more uncertain as to the amount than those he would probably receive from the available fund, it follows that if a separate bond were required for the non-available school moneys of the county that the county judge would be compelled to estimate the amount of the bond by the probable amount of the fund. So that the words “amount” in one article and “probable amount” in the other must be construed to have the same meaning. Since, then, the county judge must of necessity fix the bond by the estimated probable amount in either case, this apparent discrepancy between the two provisions disappears. The necessity which gave rise to the legislation which requires a special school fund bond of the county treasurer in addition to his general bond will 'throw light on this subject. The provisions of article 988 of the Bevised Statutes in regard to the conditions of the general bond of the county treasurer have been the law of this State ever since 1846. Pasch. Dig., art. 1096. In 1874 the Legislature seemed to have considered it necessary for the first time to require an additional bond for the security of the school fund. By the act in reference to public free schools passed May 2 of that year it was required that before the county treasurer should receive any part of the school fund he should give a bond in double the amount of the public school fund apportioned to the county, conditioned that he will faithfully receive and disburse all such funds as may come into his hands as treasurer of the school fund. Pasch. Dig., art. 6680hh. At that time the counties had no permanent funds. Const. 1869, sec. 6, — 229 — art. 9. The funds that were to come into the hands of the treasurer were the county’s pro rata of the available fund (Pasch. Dig., art. 6680dd) and such sums as might be raised by local taxation. Id., arts. 6680ff, 6680gg. By the Constitution of 1876 (art. 7, sec. 6) the lands previously granted to the counties were restored to them and the title vested in them for the use of the public schools of the counties respectively. These lands were placed under the control of the Commissioners Courts. By the Act of August 19, 1876, “to establish and provide for the support and maintenance of an efficient system of public free schools,” the county treasurers are made “ treasurers of the available public free school fund for their respective counties.” Sec. 22. By section 23 of the same :act it is provided that “on receipt of notice from the board of education ■of the amount of the State fund apportioned to the county, the county treasurer shall execute bond for double the amount thus apportioned, with two or more good securities to be approved by the county judge, conditioned that he will safely keep and faithfully disburse the school fund according to law, and pay such warrants as may be drawn on said fund by competent authority.” It is apparent that this bond was intended to secure the available school fund only. It is to be approved by the same •officer and has precisely the same condition as the bond subsequently required by article 989 of the Revised Statutes. That articles 989 and 3728 st seq. of the Revised Statutes are derived from the section 23 of the Act of August 19, 1876, is shown by the fact that that section is referred to in the margin as the source of the law. These references are the official work of the commissioners who reported the Revised Statutes for adoption. The act providing for their appointment required them “ to digest the laws and to report which ought and which ought not to remain in force; and to arrange under appropriate chapters and sections all the different acts and parts of acts relating to the same subject matter which they shall deem ought to be continued or adopted, with such marginal and foot notes and explanations as they may deem essential to a clear understanding of the same,” etc. Acts, of 1876, p. 58. In their report to -the Legislature the commissioners say in reference "to “ Title 25, County Treasurer:” “ The only changes upon the old law will be found in articles 990 and 991, intended to compel this officer to .give all the bonds required by law.” See 2 Sayles’ Ann. Stats., p. 720. The bonds referred to in the report are the bonds required by title 25. See art. 991. This title was as reported adopted by the Legislature without change. See 2 Sayles’ Ann. Stats., p. 720. Again, as to title 78 on Public Education, they say “ no serious changes have been made in the existing laws.” See 2 Sayles’ Ann. Stats., p. 732. The existing laws required of the county treasurer two bonds only, a general bond and one for the available school fund. It is very apparent that the commis■sioners did not construe the statutes as reported by them for adoption as — 230 — requiring more than two bonds of this officer. So much of title 78 as: relates to his duties is as nearly as practicable a literal transcript from the act of 1876 previously cited. If the report of the commissioners is-to be followed in construing the law this would be decisive of the question. But we hardly think that a construction shown by that report ought to prevail over the clear import of the language of the law as-adopted. If on the other hand the language requires construction, we-think the report may be looked to to aid in determining its meaning. Mr. Bishop says: “In this aspect it is proper for them (meaning the courts) to look if they choose into discussions of the legislative body, the views of the draftsman of a bill, of the revisers of statutes, and of the Legislature-passing an act. As opinion to persuade it varies with particular circumstances.” Bish. on The Written Laws, sec 76; see also Henry v. Tilson,. 17 Vt., 479; Horton v. School Comrs., 43 Ala., 598; State v. Nicholls,. 30 La. Ann., 980. In this particular instance we have the opinion of five eminent lawyers upon the construction of their own language, made in the performance of an official duty, with ample time for deliberation. This report they were expressly required to make for the guidance of the Legislature in. passing upon their work. ■ Their report has been looked to and their construction followed by this court in determining a question of interpretation of the provisions of the Revised Statutes in regard to the practice in. injunction suits, and we think in other cases to which we can not now refer. Coates v. Caldwell, 71 Texas, 19. It is reasonable to suppose-that when the construction of any one or more provisions of the Revised Statutes is doubtful and they were adopted without change, the Legislature approved the construction placed upon the language by the commission and intended that such should be the meaning. We have endeavored to show that the language employed in articles. 989, 3728, and 3729 of the Revised Statutes is reconcilable with the theory that those article referred to the same bond. We think also there-are some additional affirmative reasons for holding that they do not require two. Article 3729 provides that the bond required by the next, preceding article shall be “payable and conditioned as prescribed in article 989.” We think this is to be construed as if it read “conditioned, as required for such bond in article 989,” which would evidently mean, that the two articles referred to the same obligation. If it. had said the-bond shall have like conditions to these prescribed in article 989 it would have indicated that two bonds were demanded with different but similar-conditions. But the bonds named in the two articles being required to-have the same conditions we think the presumption is strong that they were intended to refer to the same obligation. Morever, the available school fund provided by the Acts of 1876 and. — 231 — the previous laws under the Constitution of 1870 belonged to the State, though it was to be set apart to the use of the schools of the counties. The State may have provided a. disbursing agent of this fund other than the county treasurer. When the Legislature devolved the duty upon him it became necessary to require an additional bond of him to secure the fund. The first acts provided that he should not receive the fund until he had given the bond. This was proper to protect the fund. This provision is omitted in the Revised Statutes. In lieu thereof he is required to make the bond required by article 989 within twenty days after receiving his certificate of his election, as in the case of his general bond. If article 989 referred to the same bond as article 3728, the mode of enforcing the duty of giving the available school fund bond is provided. If it refers to a different bond, then we have the anomaly of the treasurer being required by articles 3728-9 to give a bond within twenty days after receiving his certificate of election without the penalty of a forfeiture of his office for his failure being attached as in case of his other bonds. There is no provision in the title of the Revised Statutes on Public Education which prescribes the consequence of the treasurer’s failure to give the bond required in that title; and we think that the reason is that the penalty is prescribed in article 991 in the title relating to his duties generally. That title provides a forfeiture of his office for his failure to give the two bonds prescribed in articles 988 and 989; and we think it follows that the bond required by article 989 is the same mentioned in article 3728. A still further reason for concluding that the permanent school fund of the county was intended to be secured by the treasurer’s general bond is found in the fact that that fund is subject to the control of the Commissioners Court (Const., art. 7, sec. 6), and it is made their duty to fix the amount of and to approve that bond. Rev. Stats., art. 988. On the other hand the county judge is given a supervision over the public schools of his county and he is required to approve the warrants drawn on the available school fund. Rev. Stats., art. 3744. It is made his duty alone to approve the bond required by articles 989 and 3728. This is a circumstance tending to indicate that the bond required to be approved by him alone is that intended to secure that fund alone of which he has a limited control, namely, the available fund. We conclude that our statutes require of the county treasurer two bonds only—one a general bond which is intended to secure the faithful performance of all his duties except such as are devolved upon him as treasurer of the available school fund, the other to secure only the safe keeping and faithful disbursement of the last named fund. We have not found any express provision of the statutes which makes the county treasurer the custodian of the securities belonging to the permanent school fund. But he is required by article 995 to keep an ac — 232 — count of “the debts due to and from his county, to direct prosecutions according to law for the recovery of all debts that may be clue his county, and superintend the collection thereof.” Article 996 requires him to report the debts due to the county to the Commissioners Court, and the next succeeding article contains this language: “He shall deliver the moneys, securities, and all other property of the county in his hands * * * to his successor in office.” These articles are sufficient to show as we think that it was contemplated that the county treasurer should be the custodian of the securities belonging to the school fund of the county. It follows from what we have said that we are of opinion that the court below erred in sustaining the exceptions to the petition and in excluding evidence offered to show the receipt by Burk of money belonging to the non-available school fund to the county. We do not consider this a case in which the judgment may be affirmed in part and reversed in part, as plaintiff in error claims it to be. The judgment will therefore be reversed and the cause remanded. The defendants in error will pay the costs both of the appeal and of the writ of error. Their sureties on their appeal bond are only liable for the costs of the appeal. Reversed and remanded. Delivered March 5, 1889. I doubt the correctness of so much of the above opinion as holds that the sureties on the county treasurer’s general bond are liable for money that went into his hands from the sale of school lands belonging to the county. Station, O. J.