Town of Goshen v. Smith

Hirschberg, J.: The action was brought to recover money alleged to have been misappropriated by one Edward M. Thurston, as overseer of the poor of the town of Goshen, and for whom the defendants were sureties upon his official bond. It appears that he served three successive terms of three years each as overseer of the poor, commencing respectively in the spring of 1891, 1894 and 1897. The defendants are sureties on all of the bonds given by him for these terms, but the action is only on the last two. There is no serious dispute about the fact of his defalcation in the sum for which the defendants have been held liable, but they charge various errors in the rulings of the trial court, which will be considered as presented. [462] The official verified reports filed by the overseer from time to time were received. in evidence as proof of the condition of his accounts, both- of receipts and disbursements. By section 26 of the Poor Law (Laws of 1896, chap. 225) the overseer was obliged to keep books of account, and to render from them verified itemized accounts, to be audited and settled by the board of town auditors. That such accounts were competent evidence against the sureties would seem to follow from the decision in Bd. Suprs. of Tompkins Co. v. Bristol (99 N. Y. 316). That action was on a county treasurer’s' bond, and Chief Judge ¡Roger said (p. 321): “ The undertaking of sureties on a treasurer’s official bond is that he shall faithfully perform his duties, and this involves the obligation of making correct reports, conforming to the requirements of the statute, as well as the payment of funds in his custody. In an action against sureties for an alleged breach of such a bond, the official reports made during the term covered by them are a part of the res gesté and competent evidence, not only of the facts affirmatively appearing therein, but also of such other facts and circumstances bearing upon the liability of the sureties as are legitimately inferable therefrom. • (Fenner v. Lewis, 10 Johns. 38; Douglass v. Howland, 24 Wend. 36; 1 Greenl. Ev. § 187.) This arises not alone from the principle authorizing the reception of such evidence as declarations of the principal, but as being an official act performed under the direction of the statute in pursuance of the stipulations contained in the bond whereby the sureties have assumed the liability of any neglect in the discharge of the duty. (Goss v. Watlinton, 7 E. C. L. 380; Whitnash v. George, 15 id. 295 ; Middleton v. Melton, 10 B. & C. 317.) ” If there is anything in the cases cited by the. appellants, viz., Bissell v. Saxton (66 N. Y. 55) and Kellum v. Clark (97 id. 390), in conflict with this, and I do not think there is, it must be deemed to be overruled by the later decision. In the account of the overseer, audited March 1, 1895, an item of ■ $102.08 appears as “ cash on hand last settlement.” The last .settlement referred to was at the termination of his first three years of service, and the balance then remaining on hand was carried over into the account for his second term. The defendants introduced the overseer’s books of account in evidence, on which this item is carried in the 1895 account as “ cash on hand from last set.” The [463] evidence, therefore, all indicates that the defalcation involved in the misappropriation of this item occurred during the second and not the first term of the overseer and that the defendants were properly charged with it. The case differs in this respect from Kellum v. Clark (supra) in that there the overseer testified that he had spent the money in question for his own use before the commencement of the term covered by the bond sued on. Here there is not only no such evidence, but what there is is the other way. The defendants offered to prove that certain members of the town board knew before the second bond in question was executed that the overseer was short in his accounts. The evidence was excluded, and in this there was no error. The learned counsel for the appellants cite cases to the effect that the fraudulent concealment by the obligee of material facts in relation to the character and conduct of the principal will operate to relieve the surety obligor from liability on the bond, but such cases have no application to this one. The town of Goshen in its corporate capacity has done and omitted nothing by which the bonds in question could be invalidated. The members of the town board are town officers as the overseer was. If they deceived the defendants as to the condition of the overseer’s accounts, the remedy is against them and not the town. The evidence excluded might possibly have been competent if offered for the purpose of impeaching the overseer’s reports or the audits. It does not appear to have been offered or intended for that purpose, nor does sufficient appear to indicate that it would or could have been effective in that regard. But, for the purpose stated by counsel at the time it was offered, it seems clearly incompetent and immaterial. The judgment should be affirmed upon the law and facts. All concurred. Judgment affirmed, with costs.