Ross v. Hatch

Stockton, J. The bond of the defendant as treasurer, is payable to the county of Alamakee, and suit is brought upon it, in the name of the plaintiff, as School Fund Commissioner, by virtue of the provisions of the Code, sections 1693 and 2116, 219, 297. It is further to be observed, that the suit is against defendant, alone, as treasurer, and not against his sureties. The question raised by the demurrer is, whether the defendant is excused from his liability to pay over the money received by him for the School Fund, by the fact that it was stolen from him, without his fault. The breach is assigned upon that clause of the bond, in which defendant undertakes “ to pay over promptly to the person or officer entitled thereto, all money which may come into his hands by virtue of hi's office.” The exemption from liability claimed by defendant, is based upon another clause of the bond, in which the undertaking is, that “ he will exercise all reasonable dilligence and care in the preservation and lawful disposal of all money, books, papers, securities and other property appertaining to his said office.” It is claimed for defendant, that neither by the well settled rules of law, nor by the terms of his official bond, is he liable for school money received by him as treasurer, and stolen from his office, without any want of reasonable dilligence and care on his part, in the preservation of the same. The law requires the county treasurer to keep a separate account of the several taxes for state, county, school and road purpbses, received by him, and to open an account between himself and these several funds, charging himself with the amount of the tax, and crediting himself with the amount paid over, and with the delinquent tax, when authorized so to do. Code, section 156. — 151 — He is also required to pay to the school fund commissioner, on the 10th of February of each year, the amount of the school tax by him collected; and should he fail at any time to pay over the same as by law required, he shall forfeit the sum of fifty dollars and double damages, to be collected on his official bond. Code, sections 1153, 1154. From the provisions of the code, a very plausible argument is drawn, that the treasurer is liable at all events for the funds in his hands, and that no- degree of care or dilligence in their preservation, will excuse him, if the money is lost or stolen. It is claimed that when the treasurer receives the money on the tax list, an absolute debt to the school fund is created, and not a technical bailment. The responsibility is likened to that of a bank receiving the money of its customers on deposit, for which, though it may be lost without the fault of the bank, it is liable to the depositor. See Commercial Bank of Albany v. Hughes, 17 Wend., 100; Muzzy v. Shattuck, 1 Denio, 233; Supervisors of Albany v. Door, 7 Hill, 584, note; United States v. Prescott, 3 Howard, 578. The duties and responsibilities of the defendant are, however, fixed by his official bond, and from it the measure of liability incurred by him in the preservation and disposal of the money received by him as treasurer, is to be ascertained and determined. The condition of the bond is, that he will exercise “reasonable dilligence and care.” When he has done this much, he is not liable on his bond for any loss of the money, occurring by theft or casualty. No conclusion establishing the relation of debtor and creditor between the parties, or creating a greater liability than is imposed by the bond, can be drawn from the provisions of the statute cited above. The State, in prescribing the condition of treasurers’ bonds, has determined the nature and extent of the obligation to be assumed by him. This condition should have been framed in different words, if it was designed by the legislature, to make him an insurer of the public funds coming into his hands. Nor is it clear, that the salary flowed to the treasurer, is given to him as — 152 — a compensation for tbe risk incurred by him in tbe custody of the public funds. In Whitfield v. Le Despencer, Cowper, 765, it was beld by Lord Mansfield and tbe Court of King’s Bench, that in a matter of revenue and police, under tbe authority of an act of parliament, tbe salary annexed to tbe office, is for no other consideration than tbe trouble of executing it. Tbe question as to tbe measure of tbe liability of public officers, having tbe charge and custody of money and property by virtue of their office, has arisen and been decided in a large number of cases, both in England and tbe United States. It has been beld that a sheriff levying upon goods, must use due diligence to keep them safely to satisfy tbe execution. But be is not an insurer, and is not, like a common carrier, answerable for a loss of tbe goods by fire. His capacity as an officer, is not considered as fixing a more rigorous measure of liability upon him, than if be were a private person. In respect to other public officers, as county treasurers, receivers, postmasters and revenue officers, tbe rule has been held to be more stringent, and the general liability of persons having charge of money or property by virtue of a public office, has been placed by Mr. Justice Story, on the same footing as that of bailees for hire. Story on Bailments, section 130, 620; Edwards on Bailments, 59; Browning v. Hamford, 5 Hill, 591. Tbe case last named, (Browning v. Hamford,) was an action against a sheriff, for failure to make tbe amount of an execution in favor of the plaintiff., Tbe defence was, that tbe goods levied on to satisfy tbe execution, were casually consumed by fire, with the building in which they were stored. Tbe Supreme Court of New York held, that tbe sheriff was not an insurer of goods seized under, execution, though be is answerable, if they be lost, either through bis own negligence, or that of others infanrsted by him with their custody. Tbe same doctrine is assumed as applicable to goods beld by a sheriff under attachment. Jenner v. Joliffe, 6 Johnson, 12. Tbe liability assumed by a receiptor for goods, levied — 153 — upon and taken possession of by an officer, and delivered to the receiptor on Ms undertaking to re-deliver them-when called for, is held to be that of a naked bailee, and he is answerable for gross negligence only. Brown v. Cook, 9 Johnson, 361; Dillenbach v. Jerome, 7 Cowen, 294; Edwards on Bailments, 59. In Whitfield v. Le Despencer, supra, Lord Mansfield and the Court of Ring’s Bench held, that the case of the postmaster general was in no circumstance whatevér, similar to that of a common carrier; and that he was not liable for the value of a bank note stolen from a letter, by one of the sorters of letters in the Post Office, but he is, like all other public officers, as commisioners of the treasury, of customs and excise, who were never thought liable for any negligence or misconduct of the inferior officers in the several departments. In Burke v. Trevitt, 1 Mason, 96, Story, Justice, held, that, in Admiralty, a captor is not held responsible for theft, unless there lies against him the imputation of personal negligence, and a seizing officer is not responsible for a loss of goods happening while they are under the custody of the law. The goods in this case, had been stolen, after the revenue officers had left the vessel, and after the marshal had taken possession of her, without, however, claiming any right to the goods. In the case of The Supervisors of Albany County v. Dorr, 25 Wendell, 440, which was a suit on a treasurer’s bond, the breach alleged was, that the defendant had not paid over the moneys which had come to his hands as county treasurer. Defendant pleaded that the identical moneys received by him as treasurer, had been stolen from his office, without any negligence, want of due care, or other blame or fault on his part. On demurrer to the plea, the Supreme Court of New York, Nelson, C. J., held, that the treasurer was not liable for the moneys so stolen from his office; or in other words, that an officer, charged with the receipt and disbursement of public funds, is not an insurer of the same, wMle thev remain — 154 — necessarily in bis custody. Tbe case was affirmed by tbe Court of Errors; (7 Hill, 583.) As tbe Judges were equally divided in opinion, twelve being for affirmance, and twelve for reversal, it is claimed that tbe affirmance did not settle tbe question of law, and bas no binding force as a precedent. Tbe law was ruled differently in Muzzy v. Shattuck, 1 Denio, 255, by tbe Supreme Court of tbe same State, and tbe case was affirmed unanimously by tbe court for tbe correction of errors. It was an action on tbe official bond of a town collector, which was conditioned for the faithful execution of tbe duties of bis office. Tbe breach assigned was, that tbe defendant bad neglected to pay over moneys collected by him. Tbe plea was, that tbe moneys were feloniously stolen, taken and carried away from the dwelling of defendant, by some person unknown, who broke into said dwelling in tbe night time, for that purpose; and that said moneys were so stolen, without any fault, want of care, or omission of duty, on tbe part of defendant, and by means whereof be bad become unable to pay or account for tbe same. A demurrer to tbe plea was sustained by tbe Court. Tbe Supreme Court (Jewett, J.,) says: “ I cannot assent to tbe proposition, that tbe liability of tbe collector is limited by tbe common law rule applicable to tbe ordinary case of misfeasance or neglect in tbe discharge of tbe duties of office, by a public officer. Tbe provisions of the statute seem to recognize tbe collector of taxes, in tbe light of a debtor for tbe amount of taxes directed to be collected, and to provide tbe manner in which that obligation is discharged. Tbe statute imposes a definite liability on tbe collector and bis sureties, for tbe omission to collect and pay; and whether that omission is tbe result of misfeasance, or neglect, unavoidable accidents, or felony committed by another, I do not think it furnishes any defence to tbe action.” This decision was based on tbe statute of New York, which fixed tbe liability of tbe collector. Tbe condition of tbe bond, was entirely differ — 155 — ent from that given by a county treasurer under our Code. He is bound by it, “ faithfully to execute the duties of his office,” and these duties are prescribed by law. The court says, (page 238): “ Nothing short of' a credit or payment amounts to a performance of the condition of the bond. And that this is the true construction of the condition of the bond, is evident from the various provisions of the statute.” A similar decision has been made by the Supreme Court of the United States, in the case of The United States v. Prescott, 3 Howard, 578. The defendant was receiver of public moneys at Chicago, Illinois. The condition of the bond was, that he should “ truly and faithfully continue to execute the duties of his office — and should well, truly and faithfully, keep safely, without loaning or using, all the publie moneys collected by him, until ordered to transfer or pay out the same; and when so ordered, should faithfully and promptly transfer or pay out the same.” The breach assigned, was his faiffire to transfer the public moneys as directed. The plea was, that while the moneys were in his possession, they were feloniously stolen from him, although he had used ordinary care and diligence in the safe keeping of the same. On demurrer to this plea, it was held by the Court, (McLean, J.) that this was not a case of bailment, and that the law of bailments does not apply to it; that the liability of defendant arises out of his official bond and principles founded on public policy; that the condition of the bond was broken, when defendant failed to pay over the money received by him, -ydien required to do so; and that he was not exonerated by the fact that the money had been stolen from him. The court farther says: “Public policy requires that every depository of the public money, should be held to a strict accountability; not only that he should exercise the highest degree of- vigilance, but that £he should keep safely ’ the moneys which come to his hands. Any relaxation of this condition, would open a door to frauds, which might be practiced with impunity. A de — 156 — pository would have nothing more to do, than to lay his plans and arrange his proofs, so as to establish his loss, without laches on his part. Let such a principle be applied to our postmasters, collectors of customs, receivers of public moneys, and others who receive more or less of the public funds, and what losses might be anticipated by the public. No such principle has been recognized or admitted as a legal defence.” ■ • While we admit the full force of the reasoning of the court, on the grounds of public policy, it will be seen that the decision is based on the condition of the bond of defendant, in which he undertakes “to safely keep” the public funds hi Ms hands. There was no such provision or condition in the bond of the collector at Chicago ,as is prescribed by our statute for the bonds of the county treasurer. His duties were in no sense limited to the exercise of “reasonable dilligence and care in the preservation and lawful disposal of the moneys appertaining to Ms office.” On the other hand, as the court says, having undertaken to safely keep the public moneys, he received the office with a full knowledge of its responsibilities, and cannot in case of loss, complain of hardship. The case of the county treasurer is different. The state has not seen proper to require of him, more than reasonable diligence and care in the preservation find disposal of the public funds; and when he shows that he has exercised this diligence and care, and that the moneys have been stolen from him, notwithstanding, he is discharged from all liability. We conclude, therefore, that the District Court did not err in overruling the demurrer to the defendant’s answer, and the judgment will be affirmed. Judgment affirmed.