Board of Supervisors v. Wandel

By the Court—Gilbert, J. We are of opinion that the judgment appealed from is in all respects correct. It is not disputed that Wandel is liable in the sum found by the referee. But it is claimed that the defendants, who are his sureties, are not liable for the item of interest received by Wandel on moneys belonging to the county. It is difficult to discover any reasonable ground upon which to exempt them from liability. The liability of Wandel on the bond, for these moneys, arises from the fact that they belonged to [38] the county, and came to his hands as county treasurer. This point has already been decided by this court, and admits of no question. The notion that a public officer may keep back interest which he has received upon a deposit of public moneys, as a perquisite of office, is an affront to law and "morals, for if done with evil intent, it is nothing less than embezzlement. Having been received by Wandel as county treasurer, the item of interest is within the terms of the bond. The liability of the defendants, originally, for the other money embraced in the judgment, is not contested. But it is claimed that they have been discharged therefrom by the acts of the board of supervisors. We think otherwise. The allowance made to Wandel of the moneys in controversy .was without authority of law, arid, therefore, void. Boards of supervisors may 'audit and allow demand§ against the county. In performing this duty they act judicially. But they do not so act in passing upon the annual accounts rendered by the treasurer, nor have they any power, in passing upon the treasurer’s accounts or otherwise, to sanction the withholding by him of any moneys belonging to the county, or to discharge him from liability therefor. The referee has discussed this subject at length, and we quite agree with the views expressed by him.* Hot* did .the acts [39] or omissions of the supervisors, on which the defendants rely,. have the effect to discharge them as the trustees of Wandel, [40] for the reason, that the trustees of one public officer will not he allowed to plead in their own discharge the neglect or [41] illegal acts of other public officers. (Looney v. Hughes, 26 N. Y., 522.) The judgment must he affirmed, with costs. Footnotes [*] The following is an extract from the opinion of Hámilton W. Robinson, Esq., the referee before whom the case was tried: “ As to any accounts against the county, duly presented to the board of supervisors, they act judicially, and their determination or adjudication upon them is final. But as to the accounts of the county treasurer rendered to them, their functions are to 1 audit and allow ’ them. (1 R. S., 369, § 4.) Their action as to any matters of charge against the county, presented to them, on such settlement, in the manner required by law, in discharge of any claims of the county, and which arise from any discharge, diminution or recoupment against any such claim' of the county, I regard as equally vvithin the scope of the judgment which the supervisors are authorized to render upon the claims and accounts of the treasurer, submitted to their examination for 1 audit and allowance.’ Were this present claim merely for interest on funds belonging to the county alleged to have been unreasonably and illegally retained by him, the judgment of the supervisors seems to me conclusive, because the matter presented for their consideration, engrosses [39] the entire consideration of the subject-matter, and their ‘ audit and allowance’ of the account disposes of all tire items of discharge which might be presented in abatement or disallowance of the account thus presented. “Interest is but an incident to the principal debt and the disallowance by the supervisors, upon settlement of the treasurer’s account, of a charge against him of interest upon the sums of money in his hands as treasurer, improperly retained by him, is within the rule as above stated. But as to moneys shown to have been actually received by the treasurer for interest on any such moneys, a different rule prevails. Being omitted in his accounts, as rendered and settled by the board of supervisors, they exist as affirmative claims in favor of the county for moneys never embraced in any previous account rendered by their agent or trustee, and presented for the consideration of the board. “ By the then existing provisions of the Revised Statutes, the boards of supervisors of the several counties of this State were authorized at their annual meeting (1 R. S., 367, § 4, sub. 2), ‘ to examine, settle, and allow all accounts chargeable against such county, and to direct the raising of such sums as may be necessary to defray the same.’ By 2 R. S., 369, section 20, it is made the duty of the county treasurer ‘ to receive all moneys belonging to the county, from whatever source they may be derived, and all moneys belonging to the State which by law are directed to be paid to him, and pay and apply such moneys in the manner required by law.’ By section 21, ‘ the county treasurer shall keep a just and true account of the receipts and expenditures of all moneys which shall come into his hands, by virtue of his office, in a book or books to be kept for that purpose.’ By section 23, 1 at the annual meeting of the board of supervisors, or at such other time as they shall direct, the county treasurer shall exhibit all his books and accounts, and all his vouchers relating to the same, to be audited and allowed.’ “ By chapter 180, of the Laws of 1845, section 24 (as amended by chap. 490, § 2, of the Laws of 1847), it was enacted that ‘ no account shall be audited by any board of town auditors or supervisors,-or superintendents of the poor, for any services or disbursements, unless such account shall be made out in items, and accompanied with an affidavit attached to and filed with such account, made by a person presenting or claiming the same, that the items of such account are correct, and that the disbursements and services charged therein have been in fact made or rendered, or necessary to be made or rendered, at that session of the board, and stating that no part thereof has been paid or satisfied.’ “ By the Revised Statutes (p. 370, § 26), the county treasurer is entitled to retain a commission of one per cent on every dollar which he shall receive and pay, to wit, one-half of such commission for receiving, the other half [40] for paying; and by chapter 189, section one, of the Laws of 1846, it was provided that such compensation should in no case exceed the sum of $500 per annum. From these provisions, it will be perceived, the duty of the board of supervisors is confined to auditing and allowing the account of the county treasurer for the money received and disbursed by him as such officer; that they authorize no allowance to him in the settlement of his account of any private claims against the county, unless they are presented in the mode prescribed for the presentation of claims against the county by other persons; that to confer jurisdiction for the allowance of adverse claims against the county, the account must be made out in items, and verified by affidavits of the persons presenting the claim ; and the statute above referred to prohibits the auditing of any claim against the county not so presented and verified. “ The liability of the defendant Wandel for the several sums of interest money allowed to him by the New York Life Insurance and Trust Company, upon the deposits made by him in his name as treasurer of the county, is established, unless the action of the subsequent board of supervisors, in settling his account as treasurer, with full knowledge that he had collected these moneys and failed to charge him therewith, is conclusive upon the question of those interest moneys. In each year (1861,1862 and 1868) the board had evidence before them that he had received the interest moneys, with which he is now sought to be charged, from the New York Life Insurance and Trust Company, and abandoned the claim to them by failing to assert the right of the county to them on the annual average settlements of the treasurer's account. In Supervisors of Chenango v. Birdsail (4 Wend., 461), the Supreme Court held that ‘ if supervisors, in the adjustments of accounts, which it is their province to audit and settle, abandon a just claim (for interest claimed from the treasurer on sums he had illegally withheld) respecting which there is a dispute, they cannot, on a future occasion, when it may suit their convenience, set it up again.’ But, nevertheless, the right of the supervisors to recover commissions illegally charged in the account then settled as ‘ an allowance beyond compensation authorized by law,’ notwithstanding such settlement, is there asserted by the court. That case involved the right to add to the charges against the treasurer, for interest on money he had unreasonably, and perhaps illegally, withheld, and the claim being of a mere incident to the principal debt, and the principal being paid or accounted for, the waiver of any claim for interest was held to be within the discretion of the board of supervisors; but in the present case, the treasurer having, as I find, actually received these moneys (several sums) from the New York Life Insurance and Trust Company, for interest upon the funds of th county, and the claim to retain it being merely as a perquisite of office [41] the board of supervisors, in my opinion, had no jurisdiction to allow it on that ground, or to release or discharge him therefrom. In an ordinary settlement of accounts between individuals, they are at liberty to make any contracts they choose in respect to it; in the accommodation of mutual claims they may relinquish, each to the other, any pretensions or claims, and, in making a settlement, may each agree that a certain fixed sum shall be the true balance of their respective claims. The account thus stated raises an implied promise upon the part of the person found indebted to pay the balance settled between them. '• “But, as between public officers, upon one of whom the duty is conferred ‘ to audit and allow ’ the accounts or claims of the other, no such right exists of entering into a ‘ mutual accounting,’ or making any such contract with each other, either express or implied, in respect to the matters involved, as gives to an account stated or a simul computasseni its legal efficacy. The authority conferred upon the board to audit and allow 1 the accounts of the treasurer is to be strictly construed. It confers no power to allow any but legal county charges.’ (Chemung County Bank v. Supervisors Chemung, 5 Denio, 20.) It does not authorize the discharge or con-donation of any amounts found legally due from the accounting party, nor the exercise of any discretion in respect to the- matters submitted. (Morris v. The People, 3 Denio, 382.) The board of supervisors, upon any such audit of the treasurer’s account, cannot allow any claim upon any notions of then1 own as to its equity (People v. Lawrence, 6 Hill, 244), nor as a 1 perquisite of office,’ nor any but such as are expressly sanctioned by statute. I am of the opinion that the failure of the board to bring into the account of the treasurer, for the years 1861,1862 and 1863, the items of money actually received by him for interest on the public funds does not prevent their recovery, although the receipt by him of these moneys was brought to their notice, and they neglected to charge him with them. “In the case of the Supervisors of Chenango v. Birdsall (4 Wend., 453), the question as to a charge for interest on money the treasurer illegally withheld, was submitted to the supervisors, and they took into consideration his liability for such interest. The right of the county to maintain any such claim was disputed, and was waived. This interest was not money received by the treasurer, but existed in a claim against him as an incident to the principal debt, and the principal being accepted, the claim for interest thereby fell with it; and Justice Mabcy regards this inchoate and disputed claim, to recover from the treasurer, interest on money illegally withheld by him, as within the jurisdiction and judgment of the board on auditing the account, and that, as it was abandoned after full knowledge of all the facts, it could not be sued [42] for and recovered in a subsequent action. In the present case, the treasurer received these moneys from the county funds. The statute is peremptory that he shall receive and account for ‘ all moneys belonging to the county, from whatever source they may be derived,’ and ‘ pay and apply such moneys in the manner required by law.’ (1 R. S., 369, § 20.) The board of supervisors, in respect to money so received by him, had no discretion or authority to allow them as1 perquisites of office,’ or to make a gift or gratuity of them to him, nor to condone, discharge or absolve him, without proper consideration, from liability for them, and their attempt to do so (in 1861), by ignoring or disregarding the rights of the county in respect to the sum he had received for such interest, was without any authority conferred upon them by statute, and constituted no relinquishment or release of the claims for them by a subsequent board; and although the county treasurer, at his several subsequent annual accountings, in 1862 and 1863, exhibited to the board his bank book, showing the receipt by him of interest on the moneys of the county in those years, they failed to take any notice of them, or to require that he should be charged with them. Such non-action on their part, even with full knowledge that he claimed them as a perquisite of office, for a stronger reason was of no effect as a surrender or release of the rights of the county. “His duty was made, by the statute, imperative, and he rendered himself and his sureties liable for these moneys thus received, and which he has failed to pay or apply according to law, notwithstanding that the board for those years, in auditing and allowing his account, may have knowingly and designedly omitted them as a charge against him. “ For these reasons, I am of the opinion that the defendants are liable for these several sums collected or received by him for interest money on county fund, in 1861, 1862 and 1883. Third, as to the sums received by Mr. Wandel, as county treasurer, from the school funds, amounting for the years 1861, 1862 and 1863 (beyond any credits or deductions, properly allowed to him), and afe above stated, for 1861, $2,059.38; for 1862, $2,046.59; and for 1863, $2,951.96, beyond what he has accounted for, the errors are fully established, and he has never paid or applied any portion of them in the manner required by law. “ No defence is offered against a recovery of them, except an alleged accounting, in which it is claimed they were merged and satisfied. It appears from the evidence that, at the annual meeting of the board in 1864, and after his accounts for that year had been audited and allowed, Mr. Wandel stated to the board that in relation to the school moneys 1 he was befogged; ’ that he could not understand the system of accounts kept at the comptroller’s office; that he had never actually received any money from the State, having passed over the checks he received for moneys immediately, in payment of the county indebtedness; the chairman asked him what the difference would amount, to and he replied from $ 1,000 to perhaps $8,009 or $7,000. He retired, and the board conferred together; they discussed and took into consideration the services he had [43] performed in enlisting men and procuring substitutes to fill the quota required from the county toward filling the draft and in raising funds to meet the expenses of the draft, which were stated to have been arduous, and Mr. Keeley, one of the members, moved (substantially) 1 that whatever difference existed in Wandel’s accounts with the county, in respect to these school moneys, should be allowed to him for services in relation to the draft.’ This proposition was put to vote, and passed unanimously. “ This resolution, however, was never signed by the chairmaa or the clerk of the board, nor recorded in any book of record of the county, nor was it ever reduced to writing, or manifested otherwise than by the verbal resolution above stated. “Another resolution, highly commendatory of him and his services in behalf of the county in effecting the enlistment of men to fill the quota of the county, was then also passed and recorded in the county ledger. “ From the accounts of the treasurer, presented in evidence, it further appears that Wandel, in 1863, received credit for commissions (on war loan of $30,000) $300, and for fees for obtaining loans and issuing bonds, stamps and disbursements, $1,000; and in his accounts, audited and allowed in 1864, he charged and received credit for commissions for raising and disbursing money in enlisting volunteers to fill the quota of the county, with which duty he had been entrusted ($1,874 and $4,041.50), $5,915.50; for a commission of $3 per man on 1,000 men enlisted ($3,245 and $3,715), the sum of $3,000; for completing and delivering bonds ($300 and $350), $550, making a total of allowances for these very services of $11,463.50; and had also been allowed credit in his account, as superintendent of enlistments, for raising moneys, to wit: two and one-half per cent on $05,‘000, $2,375, five per cent on $62,000= $3,100, and ten per cent on $189,000 = $18,900, together amounting to $34,375. None of those charges and allowances are questioned, but this attempt to make him an additional allowance, gift or gratuity of upward of $10,000 has been repudiated by a subsequent board, which ordered the bringing of this suit, and I am of the opinion that the resolution and action of the board in 1864 to effect that object was void, because— “1st No such claim for services was ever presented by Mr. Wandel, in the form or verified manner required by the twenty-fourth section of chapter 180 of the Laws of 1845, as amended by section 2 of chapter 490, of the Laws of 1847, above quoted. It is uncertain from the resolution whether the amount of the deficiencies in the treasurer’s account for school moneys (amounting, in fact,, to $10,120.99, exclusive of interest) should be specifically allowed for his entire compensation for his services ‘ in relation to the draft,’ as expressed in the verbal resolution, or should be in addition to the $11,465.50 already allowed him therefor, exclusive of $24,375 credited him for commissions on the bonds issued for loans. The act of 1864 (chap. 8), authorizing the payment of expenses incurred and services rendered in procuring enlistments, does not exempt him from the operation of the act of 1845. This provision of law regulated and con [44] trolled proceedings of this character, and was intended to prevent any such vague and indefinite action; the presentation of the account so verified was necessary to confer jurisdiction to act upon the subject. Without presentation in writing of the claim verified, the action of the board was entirely without authority. “ 2d. That the action of the board in passing this resolution had no reference to the auditing and allowance of any account then before them, and was void, because, First: It was of a judicial character and should have been in writing. (Meeker v. Van Bensselaer, 15 Wend., 398; Smith v. Helmer, 7 Barb., 417; 1 Rev. Stat., 367, § 9, Subs. 1, 2; Taylor v. Henry,2 Pick., 397; Britton v. Lawrence, 1 Chipman, 103.) Second: It was founded upon a misstatement made by Mr. Wandel of the amount of school money unaccounted for, and without any correct knowledge or information as to the facts of the case being afforded them by Mr. Wandel, or ascertained by them from any other source, as to the true balance of school moneys for which he had failed to account, then amounting, as before stated, to §10,120.99. Third: Whatever was the intention of this board in making the allowance, by way of offset of the services of Mr. Wandel, in the enlistment service of the county, against those school moneys, the legal effect of the resolution was to tender or offer to him the amount of his deficiency as ‘compensation’ and full satisfaction therefor. He never accepted this proposition, but exacted and retained the full sums for commissions and services, as before stated, of §11,465.50, or, including the commissions credited him, of $35,840. It is for these reasons that I hold that the defendants are liable for the full amount of these school moneys, with interest to be computed on the principal sums from the several dates when they were erroneously allowed or should have been entered in the treasurer’s account.”