The San Francisco call., 1905-08-04
COMPANY MUST
REIMBURSE CITY
Mayor Demands That Surety
on Smiths Bond Make Good
Amount of His DefalcatiOn
LONG SUBMITS OPINION
McDougald Should Release
Claim on S5273.15, but Has
Right to Employ Attorneys
LONG SUBMITS OPINION

In reply to queries propounded by
Mayor Schmitz, City Attorney Long
yesterday rendered an opinion advising
the city's chief executive to make for
NAL demand on the National Surety
Company, which is on the official bond
of defaulting Tax Collector Smith for
$51,672 IS. the sum fixed by the experts
as the amount of Smiths defalcation.
Long recites the history of the pro-
ceedings already begun to recover part
of the shortage, including the serving
of attachments on the following prop
critics believed to belong to Smith:
Moneys, credits, etc, In Western Ma
tfonal Bank; lot northwest corner
Twenty-third and Douglass streets, be-.
ing lot 81. Horners Addition: lot on
Fair Oaks street. sixty-six feet
north of the northerly line of
Twenty fifth street. part ot Hor-
ner's Addition; together with improve
ments thereon (Smiths residence; lot
northwest corner Eugenia and Chapul-
tepec streets, 25x70 feet. being part Of
Heyman subdivision of Cobb Tract. lot
III; lot in Alameda County; drug store
15S Eddy street.
Longs opinion continues thus:
The attachment so levied upon said proper
ties was prior in tina to AL other attach
ments of which am m, informed ,n2,. there were "a
June 16. 1903. my attention having been
called by the National Surety Company to
some 30o0 shares of stock in the Pacific Jupiter
Steel Company. standing upon the books Of
said company in the name OF e. j. Smith. an
attachment was levied On such stock The e
shares of stock of the Southern Pacific Com
pany.
NO ACTION TAKEN YET.
No action has as vet been taken against the
National surety Company. the surety COM
pany appearing upon the official bond given by
smith as Tax Collector in the sum OF slo9 o09
article XIV of the charter. The assurances
given by the officers OF this company at the
time the defalcation was discovered that
prompt payment would be made of the amount
found 10 be due encouraged the belief that no
action at law would be necessary to collect
such amount.
The demand on the surety company to
make good the S51.672 IS may be regarded
amount due should the city and county of San
Francisco b compelea 10 TO resors s 70 such ae
of the surety company TO pay the amount. the
Mayor should at once inform this office, and
instruct the City Attorney to commence an
action.
Mayor Schmitz stated that he would
Immediately follow the advice and
make written demand on the surety
company for the full amount of Smiths
defalcation.
SHORTAGE MADE GOOD.
Relative to the liability OF City
Treasurer McDougald for the $15,5s0 0S
paid out on Smiths personal check,
Long refers to the notification received
that McDougald had returned the full
amount to the city treasury, and says:
There is no doubt that the Treasurer
is liable for the sum paid out by his
deputy on E. ]. Smiths check. With
regard to sections 424 and 425 of the
Penal Code, however, l am of the opin-
ion that they must be read in connec-
tion with section 20 of the same code,
which provides that in every crime or
public offense there must exist a un-
ion or joint operation of act and intent.
Accepting your statement that in your
opinion there was no guilty intent, 1
consider that the Treasurer must be
held guiltless of intentional violation
of the penal statutes"
Replying to the Mayors query as to
his duty relative to the payment of
s9935 20 as attorneys fees for collec-
ton of collateral inheritance taxes and
McDougald's holding out of S5273 Is
claimed as his commission for collect
ing such tax, Long says:
NOT ENTITLED TO FEES.
II hold in view of certain decisions
on the point that in no event is the
Treasurer entitled to retain the COM
missions attempted to be allowed him
by section 20 of the said act to his own
use. On the contrary, such commits
sions belong to the municipality and so
far as they have accrued prior to the
amendment of February, 1903, herein
after considered, they should be paid
into the treasury to the credit of the
unappropriated fee fund, If such pay
ment has not been made.
II hold that section 201a of the act
of 1908 is constitutional and authorizes
the Treasurer to appoint and compen-
safe special counsel for services rem
dered in the collection of collateral in
heritance taxes, in an amount not ex-
ceeding the percentages named in sec
tion 20 of the act. The tax imposed
owes it's existence entirely TO this act.
1t is a direct tax imposed by State
authority upon the bequests, devises
and transfers named in the act and is
in no manner dependent upon municipal
action for it's imposition. Not only Is
it imposed directly by the State but 1t
is payable to the State