Case ID: ohio_18/html/0006-01.html
Source: Caselaw Access Project
Author: {"author": "Spalding, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George B. Goodin et al. v. The State of Ohio, for the use of Hardin County.
    A settlement made by the commissioners of a county with the county treasurer, at the expiration of his term of office, the taking of his individual note on time, secured by mortgage, for the public money remaining in his hands, and a receipt in full given by the commissioners to the treasurer, will discharge the sureties in his official bond, even though the settlement be obtained by fraud on the part of the treasurer, especially after the lapse erf five years, — no fraud or collusion being imputed to the sureties.
    This is a writ of error to the Court of Common Pleas of Hardin county.
    Suit was brought in the court below, upon the bond of Good-in as treasurer of Hardin county, against him and his sureties in the bond. On the trial, at the April term, 1849, the plaintiff, after introducing the bond, showed a balance of money remaining in the hands of Goodin, on the ninth day of June, 1842, of $869.58, for which sum, by order of the county commissioners, he gave his individual note to his successor in office, pay able five months after date. This note was secured, or sought to be secured, by a mortgage on the lands of Goodin.
    The defendants then introduced in evidence five several receipts of the commissioners, all bearing date the same ninth day of June, 1842, and acknowledging that “ G. B. Goodin, late treasurer of Hardin county, had paid over in full ” the several funds which had come into his hands as such treasurer.
    They further offered in evidence, an order made by the commissioners at their December session, 1842, as follows:
    “ Ordered, that C. W. Stevenson, auditor of Hardin county, proceed to the collection, by law, of a note or bond which G. B. Goodin, late treasurer of said county, signed and made payable to Usher P. Leighton or his successors in office, and dated Juile 9,1842, and due five months after date, for the sum of $869.53 cents and 4 mills, and bring suit so as to have service on or before the first day of April, 1843.”
    They then showed that suit was commenced in pursuance of said order, judgment obtained; and that sundry writs of execution had issued against the defendant Goodin, upon one of which he had paid one hundred and fifty dollars, and, in consideration of such payment, the commissioners had ordered the writ returned and stayed until a subsequent term of the court, and that there had been and was still a subsisting levy on lands of Goodin of small value.
    The plaintiff then offered evidence tending to prove that said settlement with the commissioners, and the receipts for said several funds, had been procured by said Goodin by fraud, he having executed a mortgage of the greater part of his lands to one John Goodin some three weeks before the settlement, without making the same known to the commissioners.
    Upon this state of facts the court charged the jury that “ if Goodin acted fraudulently in procuring the settlement with the commissioners, and in obtaining time for the payment of the money, the sureties in the bond were not discharged though they did not participate in the fraud: And if the said note, giving five months time to Goodin, was not under seal, though reduced to judgment, and execution issued, and levy made, which levy, ■on part of the premises, was still subsisting, it was not a discharge of the sureties in an action on the bond.”
    It is alleged as error that the court of common pleas in thus charging the jury mistook the law. Other causes of error are assigned, but as they are not considered by the court they are not stated here.
    
      3. Lane tf* Son, for plaintiffs in error,
    Contended that under the statute it was the duty of the commissioners to settle with the treasurer on the expiration of his term of office, that they had full power in the premises, and that their settlement was final and conclusive, and discharged -the sureties. They cited Swan’s Stat. 206, sections 9,12, and page 968, sec. 31.
    As to fraud : it was contended that the commissioners having undertaken to act with the principal, without giving notice to the sureties, and concluded an arrangement with the principal which induced the sureties to suppose their liability was discharged, it would be unjust to them afterwards to seek to enforce it. If the commissioners are imposed upon in their .attempt to deal with their debtor, the fault was their own. 8 Pick. Rep. 122.
    
      B. Stanton, for defendant,
    'Maintained that as fraud vitiated all contracts, if the settlement made by the commissioners was tainted with fraud it was not binding upon them, and the right of action upon the bond was not lost.
    Neither was the settlement, the giving of the note for the balance found due from Goodin, and the proceedings had upon it, even, if free from all imputation of fraud, a discharge of the sureties. There was no giving of time to the principal, such as to prevent the commissioners at any time from bringing suit on the bond. Neither was there toy merger'of the covenant in a higher security.
    He relied on the following authorities: Chit, on Bills, 274; 11 Wend. Rep. 320; 3 East’s Rep. 251; 3 Barn, and Cress. Rep. 208; 4 Carr. & Paine’s Rep. 151; Theobald on Pr. & Sur. 79; 5 Dowl. & Ryl. Rep. 259; 5 Ohio Rep. 173; 8 East’s Rep. 242; 4 Pick. Rep. 153; 5 Pick. Rep. 307; 8 Pick Rep. 458; 10 Pick. Rep. 129; 18 Pick. Rep. 240; 3 Term Rep. 251; 12 Wheat. Rep. 554; 13 Ohio Rep. 84.
    As to Goodin, the right to sue upon the bond clearly has not been lost by the settlement, and as he is sued jointly- with his sureties, the defense does not go to the whole cause of action. Farr1ington v. Galoway et al., 10 Ohio Rep. 543; 8 East’s Rep. 242.
   Spalding, J.

In considering this case the court has deemed it unnecessary to consider any of the points raised, except those which depend upon ruling of the court below, upon the prominent facts in the case.

It seems to have been admitted that a settlement of Goodin’s account as treasurer was made on the ninth day of June, 1842, and that the commissioners of Hardin county were then satisfied to take his individual note at five months, with the mortgage security he óffered, for the balance of the money in his hands belonging to the county. But it is said the transaction is tainted with fraud, and so the settlement is void.

If Goodin mortgaged lands to the county which were subject to a prior incumbrance, it may or may not have been a fraud on the commissioners, according to the circumstances of concealment. But be this as it may, there is no pretense that the sureties of Goodin were implicated in any such charge.

And, indeed, the ruling of the court is made expressly upon the hypothesis that the sureties had no participatiop in the fraud. How then stands the case ? Goodin’s term as treasurer hud expired in the spring of 1842. In transferring the funds to bin Successor he was found tobe deficient in the sum of $869.53.-The commissioners of the county, being authorized by our law so to do, adjust and settle this balance by taking the note of the delinquent treasurer on time, and by giving to him in refurn a full and perfect aequitanee for all moneys received by him in his said capacity of treasurer.

In this transaction the sureties have no agency, directly or indirectly.

They are informed, however, that their principal has made a satisfactory compromise with the commissioners, and he exhibits to them full receipts for all funds that had passed through his hands as treasurer.

In process of time suit is instituted against Goodin upon hia note, judgment is recovered and execution is levied upon lands. Some portion of the judgment is satisfied by advancements of money made by Goodin, and occasionally, a stay of execution is acceded to by the -commissioners for his convenience. Finally, after the lapse of five years, it is ascertained that Goodin had executed to some third person a mortgage deed of the most valuable part of his lands a few days before he gave his note to the commissioners, and a suit is instituted against his sureties on the bond.

Such a proceeding cannot be sustained. We look upon the transaction of the 9th of June, 1842, not as an extension of time merely by the commissioners to the principal in the bond, but as a full and final settlement of the treasurer’s account; and the sureties, in the absence of any fraud or collusion on their part, could interpose no more effectual shield to a claim against them on their bond, than the receipt of the commissioners to their principal, acknowledging payment in full of all moneys' that had come into his hands as treasurer. If there was fraud or mistake in such settlement, the commissioners should have repudiated it within a reasonable time. Their subsequent -proceedings in commencing suit, recovering judgment, levying on lands, etc., would preclude them from setting up the fraud' practiced on them by Goodin, to the prejudice of third persona who were innocent.

Besides, for the space of five years the sureties had reason to suppose themselves absolved from all manner of liability by reason of said bond. They of course would take n'o steps to obtain indemnity at the hands of Goodin. Every principle of law would require that the commissioners should be held to the settlement, so far as it concerns the rights of the sureties. In the case from Massachusetts, cited by counsel for the plaintiffs in error, (8 Pick. 122,) it appeared that the creditor had told the surety that the obligation was paid.

It turned out afterwards that he was mistaken ; and the court-held that the surety was discharged if injured by such declaration, notwithstanding it was a mistake.

In the case before us, the principal debtor produces to his sureties a full and complete discharge from his creditors, and for five years that discharge is permitted to go unquestioned. Are not the sureties discharged ? We say unhesitatingly they are ; and the judgment of the court of common pleas of Hardin county is therefore reversed.