City of Philipsburg v. Degenhart

MR. COMMISSIONER CLAYBERG- prepared the folloAving opinion for the court-. This is an appeal from a judgment and order overruling a motion for a new trial. The action Avas brought by the city against the sureties upon the official bond of Charles A. Wallender, treasurer of the city of Philipsburg, to recover for a deficiency in his account as such city treasurer. The court found that “the shortage of C. W. Wallender, defendant, is the sum of $1,284.21.” Nevertheless judgment Avas entered for defendants? The official bond sued upon is attached to the complaint on file, and is conditioned as follows: “Now, therefore, if the said Charles A. Wallender shall well, truly and faithfully perform all official duties now required of him hy law, and also such additional duties as may be imposed upon him by any law of the state, and if he shall account for and pay over and deliver to. the person or officer entitled to receive the same, all moneys or other property that may come into his hands as such city treasurer, then this obligation to- be void and of no effect; otherwise to- remain in full force and virtue.” The defense set up in the answer was, briefly, that the officers and. agents of the city collected money from various gambling houses and houses of prostitution, which they had no right to collect, and therefore the city had no- right to the money received therefrom, and that the conversion and embezzlement of the — 302 — moneys alleged in the- complaint “was only the conversion of money not belonging to the city of Philipsburg, but received by the illegal means above set forth.” The court found that the moneys thus collected by the city officials amounted to- the sum of $¡1,072.53. The condition of the bond is substantially within the provisions of Section 1057 of the Political Code, as amended .(Laws of 1899, p. 79). Under the terms, of-this, bond, the city treasurer and his sureties- were liable for all moneys that came into his hands as such city treasurer which he did not pay oyer “to the person, or officer entitled to receive the same.” The record discloses the election ,of his successor in office, his demand on Wallender for the money, and his failure to pay over the sum for which suit is, brought. Counsel for respondent seems to be of the impression, as shown by his brief, and authorities cited therein, that the statutory bond of a city treasurer can be conditioned only that he faithfully perform the- duties of his- office. We- gather this from the citation of Subdivision 1 of Section 4788 of the Political Code, and of cases, which uniformly hold that, where a bond is given for the performance of the duties- of an office only, its language cannot be extended. In some way counsel seems to have overlooked the fact that wé have a statute entitled “Bonds of Officers” (Article IX, Sec. 1050 et seq., Political Code). This Article contemplates all official bonds. That it is intended to- include official bonds of city treasurers seems apparent from Section 1075, which provides: “Any surety on the official bond of a city, town, township-, county or state officer, may be relieved from liabilities thereon afterwards accruing, by complying with the provisions of the three sections- following.” We have searched our statutes, diligently, but, aside from the provisions of this Article, we find none prescribing what shall be the condition of an official bond of a city treasurer. All 'legislation seems to have been enacted upon the theory that this Article'covers such bonds; for instance, Section 4761 of the 'Political Code malíes if the duty, of ,the. city council to provide — 303 — accountability of all officers “by requiring from them sufficient security for the faithful performance of their duties,” but does not prescribe what the conditions* of the bond shall be. Section 4762 of the Political Code provides that “the city treasurer * * * and such other city officers as the council by ordinance may require, must give official bonds in such sums and securities as the ordinance may prescribe.” Section 475S of the Political Code provides that “each officer of a city or town must take the oath of office, and such as may be required to give bonds, file the same, duly approved, within ten days after receiving notice of his election or appointment.” Section 4788 of the Political Code prescribes certain statutory duties of a city treasurer. A duty devolves upon all officials to turn over and account for all moneys in their hands, which they have received in their official capacity, toe their successor in office. This duty is so plain that i.t needs no statutory affirmance. If an officer receives money by virtue of his office, and as such official, such money, so far as the officer is concerned, belongs to the municipality of which he is an officer, and not to him. Ilis duties as to money received by him as treasurer are exactly the same as his duties regarding the office furniture and supplies in his office. That this duty exists and is recognized by the legislature is apparent from the provisions of Section 1057, supra, which prescribes* the conditions of all official bonds: “The condition of an official bond must he that the principal will well, truly and faithfully perform all official duties then required of him by law, and also all such additional duties* as may be imposed on him by any law of the state, and that he will account for and pay over and deliver to the person or officer entitled to- receive the same, all moneys or other property that may come into* his hands as* such officer. Such bond must be signed by the principal and at least two sureties.” This section was amended by the Laws of 1899, p. 79, by inserting after the word “state” the words “subsequently enacted.” We therefore have no hesitancy in saying that the. official bond of a city treasurer, as contemplated by the Political Code, comes — 304 — clearly within the purview of Article IX, supra, and must be conditioned in accordance with Section 1057. Article III, in which Section 4788 is found, is entitled “Executive Powers,” and does not assume to say anything about official bonds, but prescribes certain duties of officials of a city. That other duties may exist is apparent from Section 4740 of the Political Code. The only question, therefore, involved in this case, as to the liability of the sureties, is whether or not the city treasurer received the money for which suit is brought in his official capacity. S'ection 4788 of the Political Code provides that it is the duty of the treasurer, among other things (Subdivision 3) : “To present on the first Monday of each month to the council a full and detailed statement of the amounts of money belonging to the city or town received by him, and by him disbursed, during the preceding month, and the state of each particular fund, -which statement must he verified by- his oath.” Subdivision 6 provides: “To give every person paying to him money as treasurer, a receipt therefor, specifying the date of payment, the amount) and for what paid.” The record discloses the receipts of the treasurer for the moneys sought to be recovered, as required by Subdivision 6, supra, thus showing that he received this money as city treasurer. The record also discloses the monthly reports of the treasurer, properly verified by him, stating that he held this money as city treasurer. These reports comply with the requirements of Subdivision 3, supra. Under all the testimony introduced at the trial, and the finding of the court, it is conclusive that the money for which the suit was brought was received by the city treasurer by virtue of his office, and not otherwise. The sureties on the official bond, who are defendants in this case, have not sought to contradict any of these receipts or reports) and they are therefore bound thereby. Reports of an officer which are required by law may be given in evidence against the sureties on his official bond, and are prima facie true. (Board of Supervisors v. Bristol, 99 N. Y. — 305 — 316, 1 N. E. 878; State v. Smith, 26 Mo. 226, 72 Am. Dec. 204; Van Sickel v. County of Buffalo, 13 Neb. 103, 13 N. W. 19, 42 Am. Rep. 753; Bissell v. Saxton, 66 N. Y. 55; Broad v. City of Paris, 66 Tex. 119, 18 S. W. 342; Mahon v. Kinney County (Tex. Civ. App.), 28 S. W. 1024; Mechem on Public Officers, See. 289.) We agree with, the position taken by counsel for appellant that Wallender, tlie city treasurer, having received and receipted for all the moneys in question as city treasurer, and having acknowledged the receipt and the holding of said money as moneys of the city, by his monthly reports and accounts to1 the city, his failure ton pay over such moneys i» his successor in office is a breach of the condition of his bond, and that the sureties thereon are liable therefor. The conduct of the city officials in the collection of this money is reprehensible, and should not be upheld. By the method recognized and practiced in the city of Philipsburg, the statutes of the state of Montana were allowed to1 be constantly violated. There is no showing in the record but that the money thus collected was paid voluntarily, and therefore could not be recovered from the city by the parties paying the same. Although illegally collected, it was therefore the money of the city of Philipsburg. JEt was paid to the treasurer, and he embezzled or converted the same. The sureties on his official bond contracted with the city against such conduct of the treasurer. It does not lie in their mouths to' say that the money was paid illegally and therefore does not belong to the city, or that it was so tainted with corruption that it would be violative of public policy to allow the recovery against the treasurer’s bond. The more fact that the money was collected without authority can make no difference in the liability of the sureties upon the bond here involved. This question has been practically decided in the cases of Smith v. Lovell, 2 Mont. 332, and Commissioners of Meagher County v. Gardner, 18 Mont. 110, 44 Pac. 407. Mechem on Public Officers, Section 295, uses the following language: “An officer who has received money for and on ae — 306 — count of his principal cannot, in general, when called upon to pay it over, defend on the ground that it was. money which his principal had no'right to. obtain, procure or receive. It is held that his sureties are equally estopped.” See, also, Sutherland v. Carr, 85 N. Y. 105; Wylie v. Gallagher, 46 Pa. St. 205; Boehmer v. Schuylkill County, 46 Pa. St. 452; Heppe v. Johnson, 73 Cal. 265, 14 Pac. 833; Detroit Savings Bank v. Ziegler, 49 Mich. 157, 13 N. W. 496, 43 Am. St. Rep. 456; Galbraith v. Gaines, 10 Lea, 568. We advise that the judgment and order appealed from be reversed, and the case remanded, with instructions to the court below to render judgment in favor of appellant against the defendants for the sum of $1,284.21. Per Curiam. For the reasons stated in the foregoing opinion the. judgment and order appealed from are reversed, and the case is remanded, with instructions to the court below to render judgment in favor of appellant against the defendants for the sum of $1,284.21.