Gartley v. People ex rel. Pueblo County

Mr. Justice G-arbert delivered the opinion of the court. 1. It is unnecessary to determine whether or not the liability of the treasurer for public funds received by him was presented for adjudication when the case was here before, or whether the disposition of that question was required for the decision announced. The rule of law measuring the liability of the treasurer for such funds as then declared is correct. It was then held that the receiver of public funds should be held to strict accountability for their safety; that the deposit by him of such funds in a solvent banking institution .in good repute, and which subsequently failed, whereby the funds so deposited are lost, without negligence upon his part, was no defense to the action. The reasons for the extraordinary liability of the receiver of public funds which the law imposes upon him with respect to their safety, and the cases on the subject, are fully discussed in the former opinion in this case. The rule is founded upon public policy, which it is necessary to observe for the preservation of public moneys. It finds support in a long series of decisions of the courts of last resort in the United States, beginning with the case of United States v. Prescott, 3 Howard, 578, decided in 1845. In some of the states the rule is established that the treasurer is relieved from responsibility [231] for the loss of funds which he has exercised due care and diligence to' preserve. These cases, however, are few in number, as compared with those supporting the other, and what we regard the safer rule, founded, as it is, upon considerations of public policy. The first decision was announced in this case in 1897. In 1893 this court, in McClure v. La Plata County, 19 Colo. 122, held that the liability of county treasurers for public funds collected was express and extraordinary. In the face of these decisions, the law-making power has not indicated by any act that the liability of a receiver of public moneys should not be as great as this court has declared. If the liability thus imposed is too onerous, relief must come from the legislature. Courts can only declare the law as it now stands. 2. The extraordinary liability which attaches to the receiver of public moneys for their safety does not prevail as against a bailee of private funds. The next question presented relates to the character of the money received by the treasurer from the administrator of Armstrong, deceased, and the relation of the treasurer thereto. On the determination of these propositions the sufficiency of the amended answer depends. Such funds, by virtue of having been paid to the treasurer, did not become the property of the county. The latter, through its treasurer, became the mere bailee of these moneys, with the obligation imposed to pay them, without interest, to such persons as the county court having administration of the estate might direct. As the custodian of these funds,, it was only bound to exercise that degree of care, through its treasurer, in protecting them from loss which a reasonably prudent man would in like circumstances. The liability of the agent would be no greater than that of the principal; in other words, if the county was not responsible for the loss of such funds, its agent would not be, either to the county or the persons entitled thereto. In principle the case is similar to Wilson v. People, 19 Colo. 199, in [232] which it was held that the clerk of a court, who, by virtue of his office, has custody of the funds of litigants pending process and proceedings, is responsible for good faith and reasonable diligence, but if such funds are lost notwithstanding an exercise on his part of that degree of care and diligence which prudent men ordinarily exercise with respect to their own funds, he is not liable. .Tested by this rule, the amended answer presented a good defense. The funds received by the treasurer from the administrator were deposited in a bank reputed to be sound. He was the mere custodian of these funds by order of the court under whose direction they were placed in his hands. It appears from the averments of this amendment that he was not guilty of negligence in permitting them to remain on deposit in this bank. On the contrary, it appears that he exercised that same degree of care with respect to these funds which a reasonably prudent person would have ordinarily employed in caring for his own. They were not public, and did not belong to fhe county. The demurrer to the amended defense should have been overruled. 3. The bond was conditioned, as required by statute, to the effect that the treasurer should pay according to law all moneys received in his official capacity, and should deliver to his successor all moneys belonging to the office. Whatever moneys were in the hands of the treasurer at the time he should have paid them over to his successor, became due the plaintiff on that date. According to the statute on the subject of interest, money in his hands belonging to the office not delivered to his successor at the time the latter assumed his duties, would draw the legal rate of interest from that date. The sureties were bound by the terms of the bond to answer for the default of their principal in failing to pay over the moneys in his hands according to law, which imposed upon them the obligation to pay interest on funds not delivered to his successor. In short, by the bond [233] in question, they were required, in order to satisfy its terms and conditions, to discharge the obligations imposed upon their principal. If they wished to relieve themselves from the further payment of interest upon the funds in his hands, which he has failed to pay over to his successor, they should have tendered the plaintiff the sum which these funds represent, with interest to the date of such tender. The j udgment of the district court is reversed, and the cause remanded, with directions to overrule the demurrer to the amendment to the answer, and with leave to plaintiff to reply thereto if so advised, and for a new trial, in accordance with the views expressed in this opinion. Reversed and Remanded.