United States Fidelity & Guaranty Co. v. Yazoo City

Sykes, J., delivered the opinion of the court. The appellee, Yazoo City, filed suit in the chancery court of Yazoo county against Hugh W. McCormick and the appellant company, surety on the official bond of McCormick as city clerk of Yazoo City. A decree was rendered in favor of the city for the sum of nine hundred, forty-two dollars and fifty-nine cents and the surety company alone prosecutes this appeal to this court. The bond made by the appellant company is in the usual form of surety bonds. The condition of the bond alleged to have been breached is that portion reading as follows: “That if the said Hugh W. McCormick shall from the 5th day of December, 1910, well and faithfully perform all the duties of the said office. ’ ’ The bill alleges that the said McCormick failed and neglected and refused to account for and'pay over to the complainant the sum of nine hundred forty-two dollars and fifty-nine cents. The testimony in the lower court was conflicting as to whether or not the city clerk, as a matter of .fact, received this money; but the chancellor decided this fact in favor of the appellee. We will therefore state the facts as found by the chancellor. — 368 — During the life of the hond in suit, and while McCormick was the city clerk, a Mr. Rivers, the superintendent of the street car line in Yazoo City, which line belongs to the city, from time to time paid over to McCormick, city clerk, the amount of nine hundred forty-two dollars and fifty nine cents. This amount McCormick failed to turn over to the city, but appropriated it to his own use. The testimony in the case shows that the only moneys which could be collected by the city clerk were those due as city tax privilege licenses. At the time of the alleged defalcation there was an ordinance of the city, duly and legally adopted, and in full force and effect, section 3 of which is as follows: “All moneys collected by the said Rivers shall be paid into the city depository, to the credit of the street railway fund, and no money shall be paid out except upon Warrant of this board.” One of the banks had been regularly selected as a city depository. Despite the above ordinance, the testimony shows that Mr. Rivers had ignored the same, with the knowledge of the city officials, and had made a practice of turning over to the city clerk the street railway money. It is the contention of the appellant surety company that, since the payment of this money by the superintendent of the street car line to the city clerk was in direct violation of the city ordinance in effect when these payments were made, and since the only moneys which could be collected by the city clerk were those for privilege tax licenses, then this money was not paid to the clerk either virtute officii or colore officii, and, therefore, it was not in the contemplation of the surety on this bond, and that it could not be held liable for this money. After a most careful consideration of the case and all of the authorities cited in the briefs of learned counsel, and also of other authorities not cited, we are of the opinion that the surety company cannot be held hable. We do not think there was any real or apparent authority — 369 — vested in McCormick, the city clerk, to receive these moneys, and this fact was well known to Mr. Rivers when he paid the same to the clerk. It is the contention of appellee that the money was paid to the city clerk under color of his office. A careful examination of all the authorities in Mississippi, and those which have fallen under our observation in other states, however, leads us to the conclusion that before the bondsmen can be held in a case of this character there must at least have been some apparent authority for the receipt of the money by the official whose bond is in suit. In Adams, Revenue Agent, v. Williams, 97 Miss. 113, 52 So. 865, 30 L. R. A. (N. S.) 855, Ann. Cas. 1912C, 1129, the moneys came into possession of Williams by virtue of his being the treasurer of the levee board. In the case of Lewis v. State, 65 Miss. 468, 4 So. 429, it was the duty of the circuit clerk to issue witness certificates under certain circumstances. He had the real authority to issue these certificates in proper cases; he therefore had apparent authority to issue any witness certificates, and the forged certificates in that case were therefore issued under his apparent authority or colore officii. In the case of Adams, Revenue Agent, v. Saunders, 89 Miss. 799, 42 So. 602, 119 Am. St. Rep. 720, 11 Ann. Cas. 327, Saunders was the tax collector of Oktibbeha county, and had the apparent authority to collect the taxes therein collected by him. These taxes were therefore collected by him colore officii.' In the case of State v. McDaniel, 78 Miss. 1, 27 So. 994, 50 L. R. A. 118, 84 Am. St. Rep. 618, the mayor was acting within the apparent scope, of the authority of his office, in the line of his official duty. His action was merely in excess of his jurisdiction, and, for that reason, what he did was done colore officii. The same rule was re-announced and affirmed in the ease of Lizana v. State, 109 Miss. 464, 69 So. 292. Under the above ordinance it is perfectly clear that the city clerk had no more apparent authority to receive this money from Rivers than did the city marshal or any other — 370 — city official. He liad no more right to receive it than a circuit or chancery clerk would have to go out and collect taxes. In the case of Matthews v. Montgomery, 25 Miss. 150, a suit against the sureties on the official bond of the clerk of Madison county, wherein it was alleged that the clerk had collected certain fees -belonging to the sheriff, the court, in part, said: ‘ ‘ The only question made is whether the action can be maintained on the bond. The bond is conditioned that the clerk shall faithfully perform those duties required of him by law. It is no part of his duties to collect or receive the dues of other officers of the court. He is not in such case the officer of the law to receive the'fees, or the agent of the officer for that purpose, but only the agent of the party paying.” See, also, Lewis v. Johnson, Walk. 260; Furlong v. State, 58 Miss. 717; Brown v. Phipps, 6 Smedes & M. 51; Brown v. Mosely, 11 Smedes & M. 354. It was held in the case of Brooks Oil Co. v. Weatherford, 91 Miss. 591, 44 So. 928, that where a judgment debtor pays money to the' sheriff in order to satisfy a judgment, but before any execution has been placed in the hands of the sheriff, this constituted no payment of the judgment. The court, in part, said: “When the payment was made to the sheriff, he was simply the agent of Wea.therford, and, if he did not pay it over, Weatherford must look to him for it.” In the case of Alcorn v. State, 57 Miss. 273, it was held that the sureties on the bond of a chancery clerk are not liable for money received by him as a commissioner, though his appointment as such commissioner was by virtue of his office as chancery clerk. See, also, Denio v. State, 60 Miss. 949. The case of San Luis Obispo County v. Farnum, 108 Cal. 562, 41 Pac. 445, is similar in principle to the case under consideration: “A cause of action is stated against Farnurn, independently of the allegations relating to the bond which — 371 — may be treated as surplusage. That the money in question, having been collected by the tax collector for licenses, belonged to the county, is not questioned; but that it came to the hands of defendant Farnum as- auditor is a conclusion of law wholly unsupported by the facts found. There is no provision of law authorizing the auditor to receive it, nor any authorizing the tax collector to pay over such moneys to him, or" to any one except the county treasurer. Having received the money, it was Farnum’s duty to pay it over to the treasurer; but such duty did not arise out of his office, nor was it at all different from the duty which would have rested upon him to pay it over had he been a plain citizen, not holding any county office. Farnum did not even receive the money colore officii, for under ño circumstances was he authorized or required by law to receive it. The condition of the bond sued upon is not that Farnum should be persoñally honest, or pay his personal debts, or discharge those private duties and obligations which he may have assumed; but the condition is that he ‘shall well and faithfully perform all official duties required of him by law. ’ The ‘ official duties ’ here specified are the duties required by law of the county auditor, and none other.” The overwhelming weight of authority is in line with the decision above quoted. Before an act is done under color of office there must be an appearance of right given under the law to do the act; or, in other words, there must be at least apparent authority for the doing of the act. When the city ordinance provides the only way for the handling of the street car fund, then there certainly can be no apparent authority for the payment of this fund to the city clerk. Rivers directly violated the ordinance when he did so. The city clerk violated the ordinance when he received the money. It was the duty of Rivers to have paid this money into the city depository. He failed so to do, but by paying it over to the city clerk he thereby merely — 372 — made the clerk his agent to pay the money into the proper depository. The money was not paid to McCormick either hy virtue of his office or under color of his office. Before the surety can he held liable on this bond it is necessary for the city to prove that the money came into the hands of the city clerk either virtute officii or colore officii, and this the proof fails to show. The decree of the lower court is reversed, and a decree will he entered here in favor of the appellant. Reversed, and judgment here.