Court Opinion

ID: 3323025
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:40:37.250744+00
Date Added: 2024-06-11T12:39:19.716695
License: Public Domain

A statement of the reasons for my inability to concur in the conclusion of the majority, is justified by the fundamental character of the question upon which we differ. This question has its source in the following statement of fact in the majority opinion: "There was a breach of Hamilton's bond during each year of his successive terms of office. His act in taking the taxes of one year to pay arrearages of the preceding year was a breach of his official bond of the second year so that his course of conduct constituted a series of embezzlements covering the whole period that he held office." The foregoing facts finally and conclusively establish the legal liability of the surety upon each of the bonds given during Hamilton's tenure of office covered by this case, including the first. The extent of the liability under each bond depends, in this action, upon the amount of money *Page 328 
which the town has lost by the breach of that particular bond. But the opinion further says: "It seems to be conceded, that during each year of his collectorship Hamilton embezzled money paid to him as collector, that each year after the first he took from the taxes received by him that year an amount sufficient to make good his defalcation for the previous year and paid it over to the treasurer, allocating it to the payments for the taxes of that year." Apparently following Pratt'sAppeal, 41 Conn. 191, the opinion of the majority reaches the conclusion that the defalcation for each year except the last was "made good," so that the town suffered no loss in fact, until the last year, when the total of the embezzlements for the series of years was discovered. It therefore sustained the judgment of the trial court that the surety for each year except the last, was free from liability. In my judgment the law does not require a conclusion so clearly unjust to the plaintiff town. The town paid the surety the full premium each year for a bond of $10,000 to protect it against every breach of duty by the collector for that year. Each embezzlement caused the town a loss in that year, of that amount of money, and it has never been reimbursed for any of those annual losses. It is a fiction and not a fact to say that the total loss which the town suffered occurred in the last year. Nor does it seem that Pratt's Appeal can be used to justify the conclusion that the surety was released from its conceded obligation each year preceding the last. In that case the collector took a part of his collections for 1868 and used it to make good a shortage in his account for the collections of 1867. It was held that "when the collector received the rate bills and warrants annexed, he became obligated to pay over to the treasurer of the town, within the time prescribed in the warrants, all moneys due and owing to the town upon the rate bills *Page 329 
entrusted to him. The specific money received by him in the collection of taxes is his money and not that of the town; payments made by him from time to time must be treated as payments from his own funds." (p. 196.) This statement was obviously based upon the ancient theory that upon the delivery of the tax warrants to the collector, the entire amount of the tax became in effect a debt from him to the town, and all and any moneys which he collected, were his moneys for the purpose of discharging that debt. This view is not so difficult to understand if we take note of the fact that the law of that time only required of a collector that he pay the treasurer of the town within a time limited by the town officials, and if he failed to do so, he was required to surrender his rate bill and some other person was named by the selectmen to complete the collection. That law further provided that if he failed to pay "within a reasonable time after the same shall become due and payable" he could be removed from his office by a judge of the Superior Court. General Statutes, Rev. 1866, Title 64, Chap. 2, §§ 65-67. The status of Hamilton, under the law in force during his term, was very different. Apparently first enacted in substance by Chapter 31 of the Public Acts of 1878, that law required him to report and pay over to the treasurer each month the moneys collected the previous month, with a list of the taxpayers who had paid the moneys and the several amounts paid by them. This, if obeyed by the collector, not only furnished a means of checking his work each month, but it effectually prevented the application of the proceeds of one month's collections to the payment of any other month's collections. After this legislation was enacted the collector could not allocate these collections as he pleased, and it could not longer be said that the money was in effect his own money for that purpose. In *Page 330 State v. Griswold, 73 Conn. 95, 46 A. 829, which was decided in 1900, essentially the same requirements were imposed upon the collector as were imposed on Hamilton. In that case we said: " A tax collector of a town has by virtue of his office the custody of the money he has received as taxes. He holds this money in the nature of a trust. United States v. Boyd, 15 Pet. [40 U.S.] 187. So far as the necessities of his duty require, he may treat the money as his own, and no further. The town is at all times the real owner of all the taxes." Then, referring to the statement inPratt's Appeal that "the specific money received by him in the collection of taxes is his money and not that of the town," we said: "That case did not hold that money paid as taxes and in the hands of the tax collector is his own money for all purposes. The contrary is the law as shown in the later cases. Hartford
v. Franey, 47 Conn. 76; Waterbury v. Lawlor, 51 Conn. 171." The Pratt case has been practically overruled, and certainly furnishes no authority at the present time for the proposition that a collector may use collections for one year as though the money was his own, by attempting to make good his embezzlement for the previous year. Hamilton was forbidden, by the express terms of the statute in force at the time, from making that use of the town's money. He was holding it for the town, in trust, as public official, and one of the statutory requirements of his trust was that he use it in one way, and one way only, to hand to the treasurer, with a detailed report of its source. He violated this requirement each year of his incumbency and fraudulently and falsely handed in money belonging to the current year saying it was money collected the previous year. Thus the embezzlements for the different years were never "made good" in any honest sense of the word. If to cover his shortage he *Page 331 
had used money which did not belong to the town, the loss so far as the town was concerned would of course have been made good. As it was, the loss which the town suffered the first and each succeeding year, remained a loss, the total annually growing greater until the discovery of the full amount during the last year. To hold otherwise is to say that if A has two funds of $10,000 each and B is the trustee under bond for one of the funds and embezzles it and then steals the other fund from A he can use the money obtained from his theft to "make good" to A for the embezzlement and thus free his surety from liability. This seems to me to be the answer to the question asked in the majority opinion: "How can there be any liability upon the surety on his official bond based upon a failure to account for money collected during that period, when the money has actually been accounted for and paid over?" Moreover, to say that each year's shortage "has actually been accounted for and paid over," does not accord with the actual figures already in evidence, and the finding should have been corrected. Property taxes were covered by the bond, while other taxes which Hamilton collected were not. In the table made up by the accountants and put in evidence, it appears that in the year 1919-1920, for example, the total collections of property taxes amounted to $113,982.80, and of other taxes and interest, $8,415.33, making a total of $122,398.13. All that was turned in amounted to but $111,194.39. This was a shortage of $11,203.74, so that if we assume that he paid in the full amount of the taxes and interest other than property taxes, there would still be a shortage in the property taxes of $2,788.41. A similar situation is disclosed in 1922-1923. The total collections of property taxes amounted to $227,717.20, and of other taxes and interest $8,136.39. The total which was turned in was but *Page 332 
$226,107.26, leaving a shortage of $9,746.33. If we again assume that the other taxes and interest were all turned in, there still remained a shortage which must have been in the property taxes of $1,609.94. Here is concrete evidence, prima facie, that there was a shortage in property taxes in both of those years which has never been paid over to the town out of the collections of the succeeding or any other year.
The opinion says there can be no liability, and in support of that assertion cites Pratt's Appeal at length. The textbook authorities cited in apparent accord with that view are not, of course, based upon our statute law which is controlling in this State. If Hamilton had had another bondsman, say for $60,000, the last year, the conclusion which the opinion reaches would impose upon that bondsman the entire amount of the aggregate embezzlements for all the years, on the theory that the loss all occurred in the last year. This would be contrary to the law and contrary to the fact as well. In my opinion we should hold that the liability of the surety was fixed by the embezzlement in each year, and that the case should have been remanded to the Superior Court to determine the actual shortage for that year.
There is a broader aspect of the question. The bond given by Hamilton and signed by this surety contained this provision: "Now therefore, the condition of the foregoing obligation is such that if the principal shall faithfully perform such duties as may be imposed upon him by law and shall honestly account for all money that may come into his hands in his official capacity during said term, then this obligation shall be void; otherwise it shall remain in force." In each year the principal failed to perform the duties of payment and accounting required of him by the statute; each year he failed to honestly account for all money that *Page 333 
came into his hands in his official capacity, during that year. The bond was breached, whether or not there was actual embezzlement. "Where the law requires absolutely a ministerial act to be done by a public officer, and he neglects or refuses to do such act, he may be compelled to respond in damages to the extent of the injury arising from his conduct." Amy v. Supervisors, 78 U.S. (11 Wall.) 136, 138, 20 L. Ed. 101. This is an action on contract for damages which the town suffered by its breach. It is conceded that each yearly contract was breached. The total loss of near $60,000 is the result of the different breaches and each breach was the direct cause of part of the entire loss. It is obvious, and is of course conceded, that there was not an embezzlement of some $60,000 of the collections of the last year. A contract liability such as we concededly have here, for the dishonest and unfaithful act of a principal (an embezzlement), cannot, in my judgment, be avoided or cancelled by showing that the principal was guilty of another dishonest and unfaithful act (making a false and illegal accounting for that same year), by which the embezzlement was concealed. Otherwise, the very act the surety contracted to ensure the town against, would be held to have freed the surety from its obligation.
In this opinion WHEELER, C. J., concurred.