State ex rel. Board of Ed. v. Buchanan

LEACH, 0. This is an action by independent school district No. 3, of the town of Hickory, Murray county, as plaintiff, against Robert F. Buchanan and American Surety Company, as defendants, on the official bonds of Buchanan given by him as treasurer of Murray county, to recover funds belonging to tlie school district which plaintiff alleged were i>aid out and disbursed unlawfully and without authority of law by the defendant to one William Mosely, Jr., acting treasurer of the school district. The cause, was tried to a jury, resulting in a verdict and judgment for the defendants, from which the plaintiff has appealed. The several grounds of error assigned may be considered under assignment No. 11: “That the judgment of the trial court is contrary to law, and is not supported by sufficient evidence.” There ‘is little dispute as to the facts in the case, the principal difference between plaintiff and defendants being the interpretation and application of th'e law as applied to the facts. The record discloses in part that the defendant Buchanan was elected to the office and assumed- the duties of county treasurer of Murray county in July, 1921, [13] was later re-elected to the office, and continued to serve as such treasurer until January 1, 1925; that he gave bonds as provided by law, the ones sued upon in this action; that during his term of office, he disbursed and paid out to one William Mosely, Jr,, at various times and dates, certain sums of moneys belonging to the plaintiff school district, upon warrants indorsed and presented to him by the said William Mosely, Jr,, which warrants were 'in the following form: “Office of the Clerk of Murray County to the Treasurer of Murray County, Oklahoma. June 28, 1921. On d'emand, pay to the order of the treasurer of school district No. 8 $_, the amount said school district through you collected for the month of June, as -shown by the records of this office as follows: (stating amounts) Signed, Willie Kaye Dotson, County Clerk.- I hereby Certify that William Mosely, Jr., is the legal treasurer of the above school district, and that his bond as such has been filed and approved as provided by law. * * *” “(Signed) Tom McGibboney. “County Superintendent of Schools.” • — -the form of such warrant having been prepared and furnished by the State Examiner and Inspector. The evidence on behalf of plaintiff was in part and substance: An audit of the school district No. 3- covering a period from July 1, 1921, to January 2, 1926, which was admitted upon the stipulation that it was an audit by a member of the State Examiner and Inspector's office and that if he were present he wo-uld testify that it was correct. Also, the testimony of Solon Watson, a former member of the school board, who became a member of such board in March, 1024, who stated that after he became a member he made inquiry as to who was the treasurer of the school district, .and if he was under bond; that Bill Mosely claimed to ‘be treasurer; that he, witness, did not learn whether or not he ever made bond; the other two members of the board told him he had not; witness said he went to see the county school superintendent and she could tell him nothing; went to the defendant Buchanan, and told him that he thought Mosely was not under bond, and that the board wanted him to stop payment of the money until there was a bond made, and the defendant said he was going up to the bank to see Mosely’s -book, and investigate it, and see whether he was under bond or not; h’e later received a letter from the defendant dated May 28, 1924, which letter was introduced in evidence, the substance of which is as follows; “I went to the bank and William showed me his books which appear to be kept in good order, and show that the district have sinking fund on hands in the bank $6,447. William said any time you would come over he would prepare and furnish you with a complete statement of the financial condition of the district.” Plaintiff also introduced as a-witness the then clerk of the school district, who testified that he had been such clerk since April, 1926; that he had made a search of the books and records of the school district, but was unable to find any record where William Mosely was ever elected treasurer, or where he ever gave a bond as such; that he was present when the witness, Watson, spoke to th'e defendant about the bond of the. school treasurer; that such other witness informed the defendant that he did not think that Mr. Mosely was bonded, and that he, the defendant, had better investigate it. On cross-examination the. witness stated that he did not know whether he got all the books and records that belonged to his office, he hardly thought so; that William Mosely acted as treasurer of the school district; that Mosely registered the warrants of the school district; no one else attempted to act as treasurer. The defendant introduced the testimony of two former members of the school board, who testified, in substance, that they were members of the school board during the year 1921, during which time the board elected William Mosely, Jr., as treasurer of the school district, but that they did not know whether he ever gave a bond or not. Also, the deposition of a witness who testified that h'e was clerk of the school board for a number of years, including the year 1921, during which time the board elected William Mosely, Jr., as treasurer; that he, as clerk, made a record of such election in the minutes and records of the school board, but was unable to say whether Mosely gave a bond or not; that he, Mosely, acted as treasurer of the school district. The defendant Buchanan testified that, during his term of office, William Mosely, Jr., acted as the school district treasurer ; that he paid the funds of the district to him on regularly drawn warrants, the same as he did to other school districts; that he supposed he was under bond; denied that the witness, Watson, ever told him that he ought to recover the money previously paid, and not to pay Mosely any more money; stated that Watson asked him to find out the amount of the school district sinking [14] fund, which he did; that the reason he went to the Peoples 'State Bank was to check up on certain school district warrants which the bank had deposited with him; further stated that the witness, Watson, said he did not know whether Mosely was under bond, and that he, defendant, in reply, told him if he had any doubt, it was his business as a member of the school board to investigate; that his, defendant’s, records showed that he was under bond, and the warrants that he was paying the money on. There was also introduced by the defendant three financial statements and estimated needs of the plaintiff school district, which statements were signed by e'ertain members of the plaintiff school district board, including William Mosely, Jr., as treasurer. The record and estimates disclose that AVilliam Mosely, Jr., acted as treasurer of the school district, and was recognized as such from the early part of the year 1921 until about January 1, 1926; that he was cashier or president of the Peoples State Bank of Hickory, and carried an account in such bank as treasurer of the district; that the bank failed about January 2, 1926, and that William Mosely absconded about that date. According to the records of the bank, Mosely had $640 to his credit as school district treasurer at the time the bank failed, while it is contended by plaintiff that he should nave had about $14,445, a portion of which was paid him by the county treasurer who succeeded the defendant in office. The plaintiff contends that a bonded officer charged with the receipt and disbursement of public money is held to a strict accounting, and if he pays out money or loses it, it matters not how honest his intentions are, he and his bondsmen are liable ; that it is the duty of the treasurer to ascertain that one representing himself as treasurer of an independent school district is the treasurer, and that he has 'given bond as required by law; that when the county treasurer received information that Mosely was not under bond, it became his duty to investigate the truthfulness of such re^ port, and he is liable for all moneys paid to such person after receiving such information. While the defendant contends he paid out the funds of the school district as provided by law upon legal'warrants signed by the county clerk and certified to by the county superintendent of schools, that the evidence was insufficient to overcome the legal presumption that Mosely was the de jure treasurer; but that, in any event, Mosely was the de'facto-treasurer, and as such entitled to collect th'e funds; that the title of a de facto to officer cannot be collaterally attacked, and that the jury found that th'e defendant did not have notice that Mosely had not given bond. Our attention is called to the provision of section 10386, C. O. S. 1921: “The school boards in independent districts except cities shall elect a school treasurer who is not a member of the board, and who shall give bond for the faithful performance of his duties in such sum as may b'e fixed by the board.” Also s'ection 9658, O. O. S. 1921; “The county treasurer shall, at the end of each month, after apportioning the collections of that month, make a statement to the clerk of the amount apportioned each town, city, municipal township and school district for all moneys which are required by law to be paid to the treasurers of such towns, cities, municipal townships and school districts 'by the county treasurer, and the county clerk shall issue a warrant for the amount shown by th'e statement of the county treasurer, payable to the treasurer of such town, city, municipal township and school district; the form of the warrant and the manner in which they shall be turned over to the various treasurers of the towns, cities, municipal townships and school districts shall be prescribed by the State Examiner and Inspector to conform with the system of bookkeeping now established.” We have considered the text authorities and decisions from this and other state courts cited 'by both of the parties in support of their contentions. We find no case similar in facts to those presented in this appeal; however, we do find decisions from this icourt which appear to enunciate the proper rules and principles to be applied in the instant case. Were we to assume that the evidence was sufficient to establish and show that William Mosely, Jr., was not the de jure treasurer of the plaintiff school district, the record is sufficient to show he was the de facto treasurer.' He acted as treasurer for the school district at all times during the defendant’s term of office, and was considered and recognized as the school treasurer by the school board. No other person claimed the office or assumed to act as treasurer. In the body of the opinion of the case of Board of Education of City of Alva v. Fulkerson et al., 72 Okla. 172, 179 Pac. 599, which was an action to recover on a school treasurer’s bond, and in which it was held that the sureties on such bond were not [15] liable for default by tbe treasurer wbieb occurred subsequent to tb'a expiration of tbe bond, it is there said: “Under section 7797, supra, if tbe treasurer fails to perform any of tbe duties of bis office, and certainly tbe execution of tb'e bond is one of bis highest duties, be forfeits tbe office to wbieb be was elected or appointed. Fulkerson entered upon tbe. duties of bis office on tbe first Monday in May, 1909, but, having failed to execute tbe bond required by law, bis office was subject to forfeiture, and tbe county superintendent could have appointed some one in bis stead, but since tbe authorities failed to either forfeit Fulk-erson’s office or to require him to make and file a new bond, be became treasurer de facto of tbe district.” In tbe syllabus in tbe case of Board of Com’rs of Grant County v. Soucek, 128 Okla. 151, 261 Pac. 947, which was a suit upon tbe official bond of a county treasurer, it was said: “Under section 5727, C. O. S. 1921, directing tbe board of county commission’ens to designate tbe depository for tbe deposit of tbe county’s funds coming into tbe bands of tbe county treasury and requiring such depository to furnish bond or other security, tbe position of tbe county treasurer is similar to that of a bailee for hire, and be is only required to exercise good faith and reasonable skill and diligence in tbe care and protection of tbe county’s funds intrusted to him. * * * As to whether such county treasurer has exercised good faith and reasonable skill and diligence is a question of fact to be determined by tbe jury, and on such question of fact, tbe jury’s verdict will not be disturbed on appeal where there is any evidence reasonably tending to support it.” Tbe section of tbe statute No. 5727, supra, referred to in that opinion, provides that tbe surety bond required to be given by tbe depository shall be at all times in the custody and under tbe control of tbe county treasurer. In that case it appears the county treasurer failed to call the attention of tb'e board of- county commissioners to tbe fact that tbe depository bond bad expired, and after tbe expiration of the bond, tbe bank became insolvent, and tbe plaintiff sought to recover on tbe treasurer’s bond tbe balance due it. In tbe body of tbe opinion the court said: “It may be said with some degree of justice that, when tbe bank’s bond expired, it was the duty of defendant to call that fact to tbe attention of tbe board of county commissioners, ‘but the duty of requiring tbe depository bond is placed upon such board, and whether the defendant insisted that the bond be. renewed, or whether he withdrew tbe funds from tbe bank, are both questions which may properly be considered in determining whether be exercised reasonable skill and diligence. “The record in this case, viewed in tbe light of tbe above-cited authorities, leads us to tbe conclusion that when defendant followed the direction of tbe board of commissioners and deposited tbe county’s funds in depository provided therefor by said board of county commissioners, be then owed no ■greater duty than to exercise ordinary care as a bailee for hire, and whether be exercised ordinary care was a question of fact for tbe jury, and, tbe jury having- specifically' found that be did use ordinary care and diligence in depositing said funds, we are bound by such verdict.” If tbe county treasurer in that cas’e be not liable on bis bond, be being tbe custodian of tbe depository bond, it would appear that tbe defendant in the case at bar could not ■be said as a matter of law to be guilty of negligence or liable on his bond, the jury having found generally in bis favor. Defendant bad no authority to fix the amount of the school treasurer’s bond, nor is he made the custodian of such bond by statute. Defendant paid out tbe funds of tbe district to the reeogniz’ed treasurer of tbe district upon legal warrants signed by tbe county clerk and certified to by the county superintendent upon forms prepared and furnished by tbe State Examiner and Inspector. It is contended by plaintiff that tbe defendant Buchanan had sufficient notice from a member of tbe school board to put him on inquiry to ascertain if Mosely had given bond. Upon this point the trial court gave tbe following instruction: “If you should find in this case that the said William Mosely was assuming to act as the treasurer of the plaintiff district without having made an official bond as provided by law. and you further find that this fact was known to tbe defendant, or that tbe defendant was in possession of such knowledge and information that be should have known of such fact, and that with such knowledge paid tb'e funds of said district to Mosely and the district thereby incurred a loss, then you should find for tbe plaintiff and against tbe defendants. Excepted to by defendants and exceptions allowed.” Tbe verdict of tbe jury was a general verdict in favor of tbe defendant, which was in effect a finding in favor of tbe defendant upon all the disputed questions submitted, and if there was sufficient evidence to sustain the verdict, we are bound thereby. The officers of tbe plaintiff school district. [16] whose duty it was to fix the amount of th’e treasurer’s bond, and who, it' would seem, would be required to see that a proper bond was given, now, since no bond is produced and there is a shortage, seek to recover th’e loss from the defendant and his bondsmen. That the school district has suffered loss is conceded, but the right to recover from the defendants must rest on established and recognized legal principles. New Amsterdam Casualty Co. v. Board of Ed., Cons. School Dist. No. 1, 124 Okla. 101, 253 Pac. 1012. We are of the opinion that the verdict and judgment might be sustained, if necessary, alon’e upon the ground that there was insufficient evidence to overcome the legal presumption and inference that the school treasurer had properly qualified and had authority to act as such officer. Garrett v. State ex rel. Attorney General, 113 Okla. 63, 238 Pac. 846. We have read the entire record in this cause, and considering the same in the light of the verdict of the jury and the decisions of this court, we are of the opinion that the evidence reasonably supports th’e verdict, and that the record does not show any reversible error. The judgment of the trial court is therefore affirmed. BENNETT, TEEHEE, REID, and DIF-FENDAFFER, Commissioners, concur. By the Court: It is so ordered.