Doty v. Ellsbree

The opinion of the court was delivered by Brewer, J.: The defendant in error brought his action on the bond of the county treasurer of Labette county. The sureties demurred. The demurrer was overruled, and they now allege error. The petition alleged ownership of certain county warrants bearing date prior to August 1st 1870; that the county commissioners submitted to the voters the question of issuing bonds to pay off the warrants and orders due Aug. 1st 1870; that the vote was in favor of the issue; that the bonds were issued, negotiated, and the proceeds placed in the hands of the county treasurer; that the amount was sufficient to pay off this entire indebtedness; that after the money was so-placed in the treasurer’s hands these warrants of plaintiff’s were presented for payment and payment refused. The sureties, plaintiffs in error, claim that the commissioners had no power thus to fund the county indebtedness; that the bonds were void; that hence, “ the ownership of the money paid thereon was not changed, and if paid into Bridgman’s (the treasurer’s) hands he was a mere private bailee, and of course his sureties were not liable for his acts as such.” This claim is not tenable. The commissioners are, it is true, agents with limited powers, but they have express statutory authority to borrow money “to meet the current expenses of the county [213] in case of a deficit in the county revenue.” Gen. Stat., ch. 25, §16, clause 4. True, they cannot borrow without first submitting the question to a vote of the people of the county: Gen. Stat., ch. 25, § 17. But that was done in this case, so that they were authorized to borrow money to make good the deficit in the county revenue. And power to borrow money carries with it the power to issue the ordinary evidences and security of a loan, and among them are county bonds. Commonwealth, ex rel., v. The Council of Pittsbwrg, 41 Penn. St., 278. Counsel claims that there cannot legally be any such thing as outstanding indebtedness to be funded, because by § 1 on page 295 of the General Statutes the commissioners are' restrained from issuing warrants in excess of the levy, less the amount for delinquency. This is all true; but as the warrants issue before the taxes are payable, suppose no one pays any taxes: then the warrants which were legally issued will be outstanding, and the treasury empty. For all the record shows that was partially at least the case here. We think therefore that so far as appears from the record the bonds were valid, and the money received from their sale, county funds, and properly in the hands of the treasurer, and' .secured by his official bond. Again, it is urged that if county funds they could be used to pay off any county indebtedness, and it is not averred that they were not so used. This is not true. County funds raised for a specific purpose can be appropriated by the treasurer only for that purpose. The money' was borrowed to pay off certain indebtedness. The treasurer could not divert the funds from that purpose without rendering himself and sureties liable to the holders of that indebtedness. Again, it is said that the warrants are not tendered for cancellation. It is unnecessary to make a formal tender of them in the petition, any more than it would be of a note upon which the plaintiff sued. We would suggest however that it is proper and desirable for all courts to require the .surrender to the clerk of the court, and the cancellation by him of all municipal paper before the entry of judgment 'thereon. This will prevent any imposition on innocent pur [214] chasers. We see no error in the ruling of the district court, and its judgment will be affirmed. All the J ustices concurring.