Case Name: Lancaster County v. Hershey, Appellant
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1903-04-20
Citations: 205 Pa. 343
Docket Number: Appeal, No. 153
Parties: Lancaster County v. Hershey, Appellant.
Judges: Before Mitchell, Dean, Brown, Mestrezat and Potter, JJ.
Reporter: Pennsylvania State Reports
Volume: 205
Pages: 343–366

Head Matter:
Lancaster County v. Hershey, Appellant.
Public officers — County officers — Principal and surely — Settlement by county auditors — Action—Premature action.
Where a county treasurer has kept accounts, and handed his books of account over to his successor, but has failed to pay to his successor a balance shown by his books to be due to the county, a common-law action may be maintained by the county against the sureties on the treasurer’s bond, although the county auditors may have not as yet settled0 and adjusted the treasurer’s account.
Mestrezat and Potter, JJ., dissent,
Reargued Feb. 2, 1903.
Appeal, No. 153, Jan. T., 1902, by defendants, from order of C. P. Lancaster County, Feb. T., 1900, No. 85, making absolute rule for judgment for want of a sufficient affidavit of defense in case of Lancaster County v. Emanuel H. Hershey, C. H. Hershey, Amos Hershey, Jacob L. Brubaker and Joel S. Eaby.
Before Mitchell, Dean, Brown, Mestrezat and Potter, JJ.
Affirmed.
Rule for judgment for want of a sufficient affidavit of defense.
Landis, J., filed an opinion which was in part as follows:
Emanuel H. Hershey, having been elected treasurer of Lancaster county, before entering upon the duties of his office, gave two bonds, one to the county of Lancaster, in the sum of $100,000, conditioned to “ faithfully perform all the duties of the said office,” to “ keep safe and render just and true accounts of all moneys that shall come into his hands on behalf of the said county,” and to “ deliver to his successor all books, papers, documents and all other things held by him in right of said office,” and to “ pay to his successor in office any balance of money belonging to the said county; ” and the other to the commonwealth of Pennsylvania, in the sum of $60,000, conditioned to “ keep safe and account, as directed by law, for all moneys received by him for the use of the said commonwealth,” and to “faithfully discharge all duties enjoined on him by law in behalf of the said commonwealth of Pennsylvania.” His term of office expired on the first Monday in January, 1900, and his successor, Jacob Stoner, then assumed the duties of the office. He proved to be a defaulter, the amount of his deficiency being $65,037.94. From this the plaintiff, in its amended statement, admits there should be deducted certain commissions and allowances. It is not assumed that any moneys came into his hands which were not covered by one of these bonds, and the present proceeding is to ascertain the liability on the county bond.
In Commonwealth to the use of the County of Lancaster v. Hershey et al., 200 Pa. 306, the liability on the state bond was fixed at $10,666.43, and judgment was entered for that amount. That case conclusively settles the law as to the liability of the state bondsmen, and it would be futile for us to again enter into a discussion of that question. [It would, therefore, seem to follow, as a corollary, that, if the whole default was $65,037.94, and the state funds included in that amount and which the state bondsmen were compelled to pay were 110,666.43, the difference, less the deductions above referred to would be the amount of county moneys not paid over, and, therefore, that would be the liability for which the sureties on the county bond are now responsible.] [1] It must, of course, be conceded that the judgment in the case against the state bondsmen cannot absolutely determine the rights of the sureties on the county bond; but the principles decided in that case must necessarily be effective against these defendants, if the facts as here presented are similar to those coming before the court in that proceeding. If, therefore, no new legal difficulties would intervene, we would be bound to render a judgment based upon the conclusion there laid by the Supreme Court, and it only then remains for us to investigate what additional objections have been here interposed to prevent the entry of such a judgment which were not presented at the hearing of the other case. . . .
It has, however, been strenuously urged that no suit could be commenced upon the bond until the county auditors had first settled the treasurer's accounts. We have carefully examined the numerous cases, which, through the industry of the learned counsel for the defendants, have been cited upon this point; but among them we fail to find a single one which supports the proposition in its entirety. It is true that it has been held that a settlement, when once made by the auditors, is conclusive between the officer and the county, unless appealed from in accordance with the statute, and, where the auditors have thus adjusted the account, the officer could neither maintain an action against the county for items not included in the settlement nor the county against the officer: Siggins v. Commonwealth, 85 Pa. 278; Blaekmore v. County of Allegheny, 51 Pa. 160 ; County of Schuylkill v. Boyer, 126 Pa. 226 ; Westmoreland County v. Fisher, 172 Pa. 317; Northampton County v. Herman, 119 Pa. 373. These, however, are not the real questions, as we understand them, -which are now presented for decision.
[Suit here is really brought against the sureties alone, there being no personal service upon the principal, who, prior to the issuing of the writ, had left the jurisdiction, although technically he has been served by leaving a copy of the writ at his residence.] [8] [It is asserted, and not denied, that subse quently to the bringing of the suit the county auditors audited his accounts and found the balance due as is claimed by the plaintiff.] [9] At best, then, if no judgment could have been recovered until after the holding of such an audit, what was there in either the acts of assembly, or the decisions of the court, to prevent the bringing of the suit, and then awaiting such an adjudication before entry of judgment ? Some inconvenience and great danger of loss might attend any other construction of the law. If, as in this case, one of the sureties was dead, leaving real estate, and the period of two years was approaching since his decease, after which time his debts would cease to be a lien upon the same, the neglect or inability of the auditors to settle finally the account before that period had elapsed would bring about the loss of the security, and perhaps wholly take away the protection of the public, were there not others upon the bond of equal responsibility against whom it could be enforced. If, too, as has been forcibly said, an appeal was taken from the settlement, years might elapse before a final disposition of it, and, in the meantime, all the county’s money, whether hr dispute or not, could be retained by the outgoing officer, to the great prejudice and injury of the county, and perhaps to an impairment of its credit. [It is true that in Branch Township v. Youndth, 23 Pa. 182, it was held that, where one of the supervisors of a township was- appointed to collect the road taxes and gave bond with sureties, no action would lie against the sureties without a previous settlement of the account of the collector by the township auditors. This proceeding was, however, under a special act of assembly, and the same principle does not, as we think, apply to a case such as that now under consideration. But, even if it does, we strongly doubt whether it is well considered.] [6]
The acts of assembly which direct that official bonds of public officers shall be sued for in the name of the commonwealth would seem to refer to those bonds such as are given by the prothonotary, register, recorder and the like, in which the individual citizen has an interest for which he can maintain an action upon the bond for his use. Even this direction is not, however, compulsory, for in Clarke v. Potter County, 1 Pa. 159, Gibson, C. J., says : “ Nor is it an available objection that the bond is not payable to the commonwealth instead of the county. Though the 6th section of the act of 1836 directs how an official bond to the commonwealth shall be sued, it prescribes not what bonds shall be given to the commonwealth as a trustee; and the 33d and 34th sections of the act of 1834, which require the treasurer to give one bond for his duties to the county and another for his duties to the commonwealth, are silent as to the person of the obligee. But it seems to be most natural and proper to give them respectively to the agents of the interests to be secured by them ; in other words, to the county or the commonwealth, as the case may require.” [In like manner the Act of June 14, 1836, P. L. 637, would seem to have no application to cases like this. That act provides for the assignment of specific breaches of the bond, and the purposes intended to be subserved are those which refer to such public officers, executors and administrators and the like, whose bonds are given for the benefit of individual interests, and may thus be used.] [4]
The bond of the' county treasurer is, however, somewhat different from other bonds. It is for the protection of the county alone, and is, therefore, given by virtue of the 33d section of the Act of April 15, 1834, P. L. 537, to the satisfaction of the commissioners, conditioned “ for the faithful performance of the duties of his office, for a just account of all moneys that may come into his hands on behalf of the county, for the delivery to his successor in office of all books, papers, documents and other things held in right of his office, and for the payment to (by) him of any balance of money belonging to the county remaining in his hands.” No individual can reap any benefit from it, nor can a default entail any individual loss, except that which may fall upon the sureties upon being compelled to pay. It is true that by the 48 th section of the same act it is provided that “ the auditors of each county, any two of whom, when duly convened, shall be a quorum, shall audit, settle and adjust the accounts of the commissioners, treasurer and sheriff and coroner of the county, and make report thereof to the court of common pleas of such county, together with a statement of the balance due from or to sucli commissioners, treasurer, sheriff or coroner; ” and section 55 says: “ The report of the auditors shall be filed among the records of the court of common pleas of the respective county, and from the time of being so filed shall have the effect of a judgment against the real estate of the officer, who shall thereby appear to be indebted either to the commonwealth or to the county ; ” and in the next section,“ An appeal may be made from such report to the court of common pleas of the same county, either by the commonwealth, the county or the officer.” But the sureties in the bond have no standing before the auditors, and the adjudication is simply between the officer and the county or the commonwealth. No judgment can be entered, by reason of the settlement, against the sureties, nor can they appeal from the finding. Of course, the conclusion arrived at by the auditors maybe binding npon the sureties in a subsequent suit upon the bond, but, outside of the mere ascertainment of the balance in the hands of the officer, their rights are not prejudiced, and any other defenses which they may have are open to them in the subsequent action. [We, therefore, hold that the suit was not prematurely brought, and the fact that no prior auditor’s report was filed before its commencement does not make this proceeding void.J [5J
It is also alleged that the defendants are not liable for the loss occasioned by the default, because it occurred through the laches and negligence of the county commissioners. This objection may be very summarily disposed of. In Commonwealth v. Wolbert, 6 Binn. 292, it was held, even in case of a voluntary bond, there being no act of assembly which compelled one to be given, that “ an omission on the part of the accounting officers of the commonwealth for a year and upwards to compel the prothonotary of the common pleas to settle his account of fees does not discharge the sureties on the official bond of the prothonotary, although the officers are authorized to compel an account at the end of each year and to enforce payment by execution.” And in Commonwealth v. Porter, 21 Pa. 885, it was said: “It is no answer to this that the auditor general for a long time neglected to decide upon the account, for it is settled by numerous decisions, beginning with our own case of Commonwealth v. Wolbert, 6 Binn. 292, that the state is not chargeable with the negligence of its officers in such cases, even as against sureties.” The court then proceeds to say: “ On the principle of common justice, how can it be otherwise ? There is no duty more plainly implied and written than that of a county treasurer to pay, and how can he excuse his neglect by pleading that of his superior officer to call on him ? His is the first fault, and it is not forgiven because of a similar neglect of another. The auditor general did not settle the account, and what of that ? It was no less the duty of the county treasurer to pay, and if he kept his accounts as he ought to have done he knew exactly what to pay.” See also Commonwealth v. Brice, 22 Pa. 211, Pitts-burg, Fort Wayne & Chicago Railway Co. v. Shaeffer, 59 Pa. 350, Tliroop on Public Officers, sec. 283, p. 289, and Supervisors v. Otis, 62 N. Y. 88. The doctrine that the sureties of a public officer are not discharged by the laches or omissions of another officer, or board of officers, to take proceedings against the principal or to settle his accounts, as required by law, although such laches have been gross and unreasonable, and the principal has meanwhile become insolvent, has been established in numerous cases : Throop on Public Officers, sec. 283, p. 290.
The mere denials contained in the affidavit are of no effect, where it plainly appears on the face of the affidavit that the general words are a mere evasion of the real facts. Assertions on the part of a defendant that he has paid a debt, without setting forth when and the manner in which he has paid it, are of no account, and in a similar way an allegation that he does not owe the claim will not be considered. The general allegations contained in the affidavit of defense are based upon the assumption that some of the moneys for which this suit is brought were state moneys and not county moneys. A calculation based upon the figures presented will show this to be the case. That question has, however, already been settled. They allege that the sum of $42,730.61 was all of the funds of the county of Lancaster in the hands of the treasurer on January 1, 1900. The difference between that amount and $126,661.44, which was claimed to be the total of the indebtedness before any payments were made, is $83,930.83, the exact amount of the state tax. There, then, having been paid by the treasurer to his successor by checks and cash $61,623.50, the defendants hold that the amount due upon this bond was settled, because so much should be appropriated for this purpose from the treasurer’s payment. They ignore, however, their admissions that no separate accounts were kept of the state and the county moneys in the bank, and that the same were deposited under one account, and they not even allege that the treasurer himself made such an appropriation for their benefit.
[It is now too late to insist that the money collected from the state tax was all state money.] [11] The Supreme Court in Commonwealth v. Hershey, supra, and Commonwealth v. Philadelphia County, 157 Pa. 581, have decided that they will consider as paid that which ought to have been paid. Three fourths of the state tax being returnable to the county upon the payment of the whole state tax to the state, that court has also determined that this amount was to be considered as county money, although the interchange had not been really made, and, therefore, the actual amount of state money in the hands of the treasurer at the expiration of his term of office was not $83,930.83, but only $21,612.18, and the cash payment of the amount deposited being apportioned between the state and the county money, the state bond was answerable for its proportionate share, after deducting the credit ascertained upon this basis.
It must be recollected that there is no distinction between the liability of a surety and that of a principal in the bond, and that the same act of neglect which will charge the principal will also charge the surety. Where the statute expressly requires an officer to pay to his successor all moneys in his hands his bond is also conditioned to the same effect. An active duty is thereby imposed upon the officer, and a failure to perform it constitutes a breach of the conditions of the bond : Throop on Public Officers, sec. 295, p. 300. Whenever the condition of the bond is broken an action lies thereon, Avithout notice to, or demand upon, the principal, and, therefore, as in this case, [there being an admitted breach of the bond by the facts as here presented, we are of opinion that the defendants are liable and that judgment should be entered in favor of the plaintiff against them for the sum of $61,104.62.
Judgment for plaintiff.] [12]
Errors assigned were (1, 4, 5, 8, 9, 11, 12) portions of opinion as above.
John Gr- Johnson, with him M. Gr. Shaeffer and Coyle Keller, for appellant. —
There can be no recovery in a suit against the sureties of the bond of a defaulting county treasurer, if there has been no settlement of the accounts by the county auditors: Blackmore v. Allegheny County, 51 Pa. 160; Northumberland County v. Bloom, 3 W. & S. 542; Schuylkill County v. Boyer, 125 Pa. 226; Westmoreland County v. Fisher, 172 Pa. 317; Com. v. Laub, 3 W. & S. 435; Glatfeltor v. Com., 74 Pa. 74; Com. v. Griffith, 1 Lanc. Law Rev. 201; Com. v. Griffith, 2 Lanc. Law. Rev. 17; Northampton County v. Yohe, 24 Pa. 305; Rowand v. Allegheny Co., 111 Pa. 309; In re Report of County Auditors, 1 Woodward, 270.
The agreement of the parties cannot give the court of common pleas jurisdiction. The only tribunal having original jurisdiction is the board of county auditors: Harris v. Luzerne County, 11 W. N. C. 462; Harris v. Luzerne County, 2 Kulp, 105.
A. B. Hassler, with him N. F. Hall, for appellee. —
A report of county auditors, auditing, settling and adjusting the accounts of a county treasurer, is not necessary to enable a county to recover from the sureties on such a bond as a county treasurer is required to give, by section 38 of the act of April .15, 1834, any loss that it has sustained by reason of any breach of the condition of the bond, where such breach is shown by the county treasurer’s accounts: Supervisors v. Clark, 92 N. Y. 391; McKim v. Blake, 139 Mass. 593 (2 N. E. Repr. 157); United States v. Boyd, 5 Howard, 29; Bissell v. Saxton, 66 N. Y. 55; Robertson v. Trigg, 73 Va. 76; Broad v. City of Paris, 66 Texas, 119 (18 S. W. Repr. 342); McLean v. State, 8 Heisk. 22; Ohning v. Evansville, 66 Ind. 59; Van Sickel v. Buffalo Co., 13 Neb. 103 (13 N. W. Repr. 19); Town of Union v. Bernes, 44 N. J. L. 269; Cawley v. The People, 95 Ill. 249; Chicago v. Gage, 95 Ill. 593; Longan v. Taylor, 130 Ill. 412 (22 N. E. Repr. 745); Sooy v. The State, 41 N. J. L. 394; Boone Co. v. Jones, 54 Ia. 699 (2 N. W. Repr. 987).
Even though the court should be of the opinion that there could be no recovery from the sureties on such a bond, until the accounts of the county treasurer had been audited, it would not be necessary to delay bringing suit, where his accounts showed him to be a defaulter prior to bringing the suit. The auditor’s report would not be a cause of action, but only con- elusive evidence of a state of facts that existed at the time the county treasurer was in default, and thereby broke the condition of the bond. When the condition of the bond was broken, a cause of action arose, suit could be commenced at once, and the court with its discretionary power could, if necessary, delay the trial until the auditors had reported, so as to have the evidence of the breach of the bond in that form: Boehmer v. Schuylkill County, 46 Pa. 452; Siggins v. Com., 85 Pa. 278; Com. v. Piroth, 17 Pa. Superior Ct. 278; Com. v. Steacy, 100 Pa. 613.
April 20, 1903 :

Opinion:
Opinion by
Mb. Justice Dean,
Emanuel H. Hershey was duly elected county treasurer of Lancaster county. To qualify he gave two bonds, one to the commonwealth and one to the county of Lancaster, the latter in sum of $100,000 ; among the conditions of this bond were these, that he would keep full accounts and that on expiration of his term, he would deliver to his successor all books, papers, documents and all other things held by him in right of said office and pay to his successor any balance of money belonging to said county. The other bond was to the commonwealth in the sum of $60,000, conditioned to keep safe and account as directed by law for all moneys received by him for use of the commonwealth. The treasurer's term of office expired the first Monday of January, 1900, when his successor was duly qualified and assumed the duties of the office. Hershey turned out to be a defaulter, altogether, to the amount of over $65,000. The amount due the commonwealth was ascertained to be $10,666.43. See Commonwealth v. Hershey, 200 Pa. 306. For this amount the commonwealth obtained judgment and the sureties paid it. This amount with some commissions added, deducted from the whole amount of the default, left the balance due the county $61,104.62, the amount for which the court below entered judgment against the treasurer and his sureties on the county bond in this case. The judgment was entered for want of a sufficient affidavit of defense. The two sureties, C. H. Hershey and Amos Hershey, bring this appeal.
There are thirteen assignments of error, most of them to the correctness of the court's method of ascertaining the balance due the county, and the soundness of its conclusions of law based on the admissions expressed or implied in the affidavit of defense, also on the proper effect to be given the judicial determination in Commonwealth v. Hershey et al., supra. A careful scrutiny of the very clear opinion of the court below and an examination of the authorities cited in it leads us to the firm conclusion, that all of the assignments of error except the fifth are without real merit and should be overruled. The fifth raises some doubt and demands special notice; it is as follows: " The court erred in holding that the suit was not prematurely brought, and the fact that no prior auditor's report was filed before its commencement does not make this proceeding void." Although the county auditors did settle and adjust the accounts of the county treasurer before the judgment was entered, they had not yet acted in the matter at the time the suit was brought, therefore, it is argued, the suit was premature and must fail.
Section 48 of the act of 1884 says :
" The auditors of each county, and two of them when duly convened shall be a quorum, shall audit, settle and adjust the accounts of the commissioners, treasurer, sheriff and coroner, of the county, and make report thereof to the court of common pleas of such county together with a statement of the balance due from or to such commissioners, treasurer, sheriff or coroner."
This section was not for the protection of the officer or his sureties ; its purpose was the protection of the public; the accounts of the officer must not be left solely to his determination; they must undergo the scrutiny of a board of officers elected by the people entirely independent of him, and having no interest in common with him. This is apparent from the proviso to the act of February 18, 1871. A vicious custom had grown up in some of the counties, of electing as one of the auditors the county treasurer; that proviso expressly prohibits it. The finding of the auditors, may, or may not change the accounts of the officer so as to affect his or his sureties' liability; their finding might, if not appealed from, absolutely determine a breach of the bond, when by the officer's own account no such breach was shown. This suit was brought February 9, 1900; there was no auditor's report until August 21 of that year and if the question, as to whether there is a breach of the condition of the bond, is determinable solely by the adjudication of the auditors, of course the suit was preznature ; but as we have intimated, that board does not alone determine that fact; we must go back of it and take notice of the law defining the officer's duties and the obligation of his sureties. Section 38 of the act of April 15, 1834 says :
" Each county treasurer shall give bond with sureties . conditioned for the faithful performance of the duties of his office; for a just account of all moneys that znay cozne into his hands on behalf of the county: for the delivery to his successor in office of all books, papez-s azid docuznezits and other things, held in right of his office and for the payment to hizn of any balance of money, belonging to the county remaining in his hands."
It will be noticed that in addition to the general duty of faithful performance, he is to do three specific things : 1. Keep a just account of all moneys that come into his hands. 2. Deliver to his successor all books, papers and documents held in right of his office. 3. Pay over to his successor any balance of couzity money remaining in his hazids. And such were the conditiozis of the bond, which conditions his sureties undertook he would pei'form. It is ziot matezial that the written obligation in the bond does not exactly follow the words of the statute; it was a statutory bozid given uzzder and by the provisions of the statute and the liability assumed by the sureties was the one fixed by the statute. No breach of the first and second specific duties is alleged ; the officer did keep accounts, he did deliver to his successor the books and papers held in right of his office; but he failed to perform the third specific duty, pay over to his successor the balance of the county money izi his hands. How do we know this ? We aziswer, from the public account books, which the law enjoined upon him as a duty to keep and which he handed over to his successor; they were not his individual books, they belonged to the public and were kept for a public purpose; they showed a large balance izr his hands belonging to the county: he did not pay this to his successor. Why was not this a breach of duty for which the sureties were at once answerable ? It is answered that the auditors had not yet settled and adjusted his accounts. But this did not postpone the performance of a plain statutory duty on the part of the of fleer. The accounts which the law directed him to keep, and which he did keep and handed to his successor showed a large balance in his hands. This public account kept by an officer was just as much an account authorized by law as the report of the county auditors. True, that report might increase the balance or on evidence of some mistake shown by the officer lessen it, but prima facie his account showed the balance of money in his hands belonging to the county. The county so assumed and brought suit. Afterwards, the county' auditors made adjustment but made no change in the balance; even if they had changed it, that fact would not have affected the prima facie proof of the breach growing out of the distinct unequivocal admission of the officer in the lawful account kept by him. It is conceivable that the county auditors might not have met for a year or more. Is the outgoing officer to retain a large balance of the public money to the possible great prejudice of the public during that interval ? That is, would the neglect or inability of one set of officers to perform their duty suspend the obligation to perform a plain duty on the part of another ? The bond of the sureties, by the express terms of the act, was that the officer should pay over to his successor immediately, the balance on hand, not such sum as in the indefinite future the county auditors might find to be in his hands, when his term ended. This, from the plain account kept by himself he failed to do, and the suit might at once be brought.
We do not undertake to decide in this case, what would have been the proper course of the county had the treasurer failed to perform any one of the three special provisions of the bond, that is, had not kept accounts, had not handed them to his successor and had not paid over the balance ; such default raises a different question and one not before us. The authorities cited by appellant are not in point; they are all under other statutes with other provisions as to other officers with other duties; we decide the case on our statute prescribing specifically the duties of the officer, the conditions in his bond, and the undisputed fact of his default from the official account kept by him.
The opinion of the learned court below fully demonstrates the soundness of the judgment and it is affirmed.