Case Name: STATE ex rel. ADAIR COUNTY COM'RS v. McCLOUD et al.
Court: Oklahoma Supreme Court
Jurisdiction: Oklahoma
Decision Date: 1916-12-12
Citations: 64 Okla. 126
Docket Number: No. 8093
Parties: STATE ex rel. ADAIR COUNTY COM’RS v. McCLOUD et al.
Judges: All the Justices concur, except KANE, J., absent.
Reporter: Oklahoma Reports
Volume: 64
Pages: 126–131

Head Matter:
STATE ex rel. ADAIR COUNTY COM’RS v. McCLOUD et al.
No. 8093
Opinion Filed Dec. 12. 1916.
On Rehearing, July 10, 1917
(166 Pac. 1065.)
1. Counties — County Treasurer — Liability.
The bondsmen of a county treasurer, who, in good faith and without notice of any lack of responsibility in the bank, or defect in the bond, deposits his official funds in a duly designated county depository, which has given a bond legally approved and accepted, and which is, by its terms, in force during the period of such deposit, are not liable for loss of funds occasioned by the failure of the depository, and a subsequent adjudication that the surety on the bond was not liable thereon by reason of lack of authority of the person signing such surety’s name to the bond, to bind such surety.
2. Same.
No such exemption from liability is given the county treasurer by.statute, and he is liable for the full amount of such loss.
3. Counties — County Treasurers — Liability.
If a county treasurer deposits in a depository more than the amount of its bond, legally approved and on file, he and his bondsmen are liable for such excess amount Lost by the failure of the bank.
(Syllabus by Burford, C.)
On Rehearing.
4. Same.
A county treasurer, who in good faith and without notice of any lack of responsibility in the bank, or defect in the bond, deposits his official funds in a duly designated county depository, which has given' a bond, legally approved and accepted by the county .commissioners, and which bond, by its terms, is in force during the period of such deposit, is not liable for loss of funds, within the amount of said bond, occasioned by the failure of the depository.
(Syllabus by the Court.)
Error from District Court, Adair County; John H. Pitchford, Judge.
Action by the State, on the relation of the County Commissioners of Adair County, against R. R. McCloud and another. There was a judgment for c.efendants, and plaintiff brings error.
Affirmed on rehearing.
W. A. Woodruff and E. B. Arnold, for plaintiff in error.
W. L. Chase and J. W. Cosgrove, for defendants in error.

Opinion:
Opinion by
BURFORD, C.
Plaintiff sued upon the official bond of R. R. McCloud, former county treasurer of Adair county. The petition was in two counts. Judgment was for defendants upon the first count. Upon the second count "judgment wás for plaintiff. Prom the judgment upon the first count, plaintiff appeals.
As to this count the court made a general finding in favor of the defendants upon the issues joined, and also made special findings of fact. Prom the record and these findings it seems that the material facts involved are as follows:
The board of county commissioners of Adair county designated the Bank of Stil-well as a county depository. R. R. McCloud, the county treasurer oi3 that county, deposited various amounts in the bank. Such bank at various times gave three different depository bonds. The bank failed. At the time of such failure there was on deposit in the bank the sum of $5,498.70. Of the various depository bonds it seems to be conceded that one had expired. Suit was instituted by the county upon the others — one a. personal bond for $12,000, and the other a surety company bond for $5,000. The sureties upon the personal bond defended upon the ground that the bond signed by them was never accepted or approved by the county commissioners. The trial court sustained this defense, and rendered judgment against the bank and for the sureties. That judgment not being before us for review, we express no opinion as to its correctness; but as both parties in this suit apparently accept' it as binding in this causé, we hold them to their theory of the case, and so regard it here. Upon the surety company bond the surety defended upon the ground that the party who signed its name to the bond was without authority so to do. Judgment was for the surety. The instant suit was then instituted. There was proof introduced for the purpose of showing that the treasurer had knowledge that there was no bond; but the effect of the court's finding is that he acted in good faith, both with regard to the bond and the condition and responsibility of the bank. There being evidence reasonably tending to support the finding, we are bound by it. Upon this state of facts the single question is presented of the liability of the treasurer and his bondsmen for the money lost in the bank failure; it having been shown that upon the judgment against the bank it was improbable, if not impossible, that anything would be realized.
In Yan Trees v. Territory, 7 Okla. 353, 51 Pac. 195, the conflicting decisions in the American courts in regard to the liability of a county treasurer for loss of funds through bank failures were reviewed, and the rule was adopted that the treasurer was an insurer of the funds in his hands. It was thbre held that the failure of the bank, without any fault or negligence on behalf of the treasurer, would not relieve from liability upon his bond for failure to account for the funds thereby lost. After that decision the county depository law was passed, and following this, in County Commissioners v. Dun-lop, 17 Okla. 53, 87 Pac. 590, upon a mandamus to compel the county treasurer to deposit the percentage of the public funds determined by the commissioners in the various depositories, the court said:
"When the depositories are designated, and their bonds approved, it becomes the duty' of the county treasurer to use these banks as depositories for the county money in his hands; but it is left to his discretion to fix the amount to be placed in any given bank, subject, however, to the provisions that he shall not deposit an amount greater than the capital stock of such bank, nor greater than the bond given as security."
The limitation stated by the court as to capital stock is contained in the statute in express words; but the latter limitation as to the amount of the bond is not stated in so many words in the statute, and the .construction given the statute in this regard by the court is apparently dictum. However, this dictum was followed and given the force of judicial decision by this court in Hinton et al. v. State ex rel. Neal, 57 Okla. 777, 156 Pac. 161, where it was held that for any deposit in excess of the amount of the depository bond, lost by failure of the depository bank, the treasurer and his bondsmen were liable. The pertinent provisions of the statute are found in section 1546, Rev. Laws 1910, which provides, in part, as follows:
"In all counties the county treasurer shall deposit daily all the funds and money of whatsoever kind that shall come into his possession by virtue of his office as such county treasurer, in his name, as such county treasurer, in one or more responsible banks located in the county and designated by the board of county commissioners, as the county depositories : Provided, that there shall hot be deposited of such funds in any one bank at any one. time, a greater amount than the capital stock of said bank. Before directing or authorizing the deposit of any such funds aforesaid the board of county commissioners shall take from each such bank a bond in a sum equal to the largest approximate amount that may be deposited in each respectively, at any one time. The condition of said bond shall be that such deposit shall be promptly paid on the check or draft of the treasurer of such county, and the bondsmen of said treasurer shall not be liable for such deposit."
From the statute and the decisions above cited it seems that the following principles may be clearly deduced: (1) The county treasurer and his bondsmen are to be held as insurers of the public funds (Van Trees v. Territory, supra), except as to "moneys which have been destroyed by an overruling necessity, or taken from him by a public enemy, without any fault or neglect on his part" (U. S. v. Thomas, 15 Wall. 337, 21 L. Ed. 89), and except as that liability is modified by statute. (2) The exemption given by section 1540, Rev. Laws 1910, extends to bondsmen of the treasurer, but not to the treasurer himself. This from the fact that, the strict rule of accountability having been adopted in this state prior to the passage of the County Depository Act, and the Legislature having therein, in specific terms, exempted the bondsmen, we take it they did not intend to exempt the treasurer, and the rule "Expressio unius, exclusio alterius est," is to be here properly applied. (3) The treasurer and his bondsmen are charged with knowledge as to what banks have been designated as depositories, and the amounts of the bonds given by each. (4) The treasurer and his bondsmen are liable 'for any amount in excess of the depository's bond, placed in such bank and lost by its failure, even in the absence of negligence upon the part of the treasurer. Hinton v. State ex rel., supra, (5) If, as this court has held, the treasurer and his bondsmen are liable for the loss of any excess deposit over the amount of the depository's bond, it must follow, as above stated, that the treasurer and his bondsmen are charged with knowledge of the amount of such bond, and it must further follow that, if no bond has been given, the treasurer and his bondsmen are charged with knowledge of that fact, and are liable for any deposit made in the designated bank and lost by reason of its failure and the lack of a bond, even in the absence of negligence upon the part of the treasurer.
Bearing these conclusions in mind, we come to the consideration of the facts of this case, and the final question submitted for our determination. We may take it from parties below and here, and the questions x'aised in the respective briefs, that tlhe $10,000 surety bond had expired before the deposit here in question was made, that the $12,000 personal bond had never been lawfully approved and accepted, and therefore was never "taken" by the commissioners as a depository bond, but the $5,000 surety bond stands upon a different footing. The bond was apparently accepted and approved. The dommigsioners must have regarded it as binding and in force so far as these moneys here involved were concerned, for they sued upon it and recovered a judgment against the principal, but failed as to the surety upon the ground, above stated, that the party who signed the surety company's name thereto had no power or authority so to do. Prom the pleadings in that suit introduced in evidence in this cause, it appears that the sole defense made by the surety company was this lack of authority on behalf of the alleged agent. Are' the bondsmen of the treasurer charged with knowledge of this latent defect in the bond, and therefore liable for the deposit lost by reason of such defect? • Suppose judgment had gone against the surety, and it had been found not to be financially responsible, as was the case here, as to the principal, would the bondsmen be liable for the lost deposit? No decision, either of this court or any other, has been cited by counsel or discovered by us, bearing upon this proposition. The statute says that the county commissioners shall take a bond, and that, the bond being taken, conditioned as provided in. the statute, the bondsmen of the treasurer shall not be liable for the deposit. The county treasurer has nothing, to do with taking or approving the bond. The fair conclusion is that, where a bond is taken and approved by the county commissioners, and the treasurer, acting in good faith and without negligence, deposits in the depository giving such bond an account not in excess thereof, his bondsmen are not liable for the loss of such deposit by reason of the failure of the bank, and a latent defect in the bond, such as the one in the case at bar. It seems even a harsh rule to hold the treasurer under such circumstances, especially in view of the fact that he is required to use the duly designated and bonded depositories; but such seems the logical effect of the decisions and legislative acts, and it must be taken that this is a burden which he voluntarily assumes with the office.
It" follows that the defendant R. R. Mc-Oloud should be held liable upon the first cause of action for the full loss, the defendant surety company for the excess of the loss set out in such first cause of action over $5,000, the amount of the bond taken by the commissioners, and for no more of such loss, with proper interest upon each amount, and that the judgment of the trial court' should be reversed in part, with directions to set aside the judgment heretofore given, and to enter one in accordance with the views herein expressed; the costs of this court to be equally divided.