Court Opinion

ID: 8297665
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:09:03.664754+00
Date Added: 2024-06-11T16:44:09.124295
License: Public Domain

Cooper, J.,
delivered the opinion of the court.
By the aet of 1870, chapter 28, the chancery •court of Memphis was abolished, and its business transferred, in equal proportions, to two chancery •courts created for the same district by the names, of the first and second chancery courts of Shelby county, Under this act, on June 14, 1870, the defendant. E. A. Cole, was appointed and qualified as clerk and master of the first chancery court of Shelby county, for the constitutional term of sis years. By the act of 1875, ch. 23, sec. 2, the second chancery court of •Shelby county was abolished, and its business transferred to the first chancery court of Shelby county, which was directed to be thereafter styled the chancery court of Shelby county. On June 23, 1876, the defendant, Cole, was reappointed clerk and master of the chancery court of Shelby county, and qualified by giving three bonds, as required by law. His co-defendants are his sureties on his office bond and on his bond as special commissioner and receiver. The ■third bond given to cover public revenue which might •come to his hands is not in controversy. In November, 1878, Cole resigned the office of clerk and master, and the relator, R. J. Black, was appointed and qualified as his successor. On December 6, 1878, the court made an order upon Cole to pay over to his successor all moneys in his hands by virtue of his late office, and Cole acknowledged service of a copy of the order on the next day. This bill was filed •six days thereafter against Cole and the sureties on *369his office bond and bond as special commissioner and receiver, given upon his reappointment as aforesaid, to recover any money for which they had become liable. Cole had previously made an assignment to the relator, Black, of his fees of office to indemnify his sureties against loss by reason of their surety-ship. One object of the bill was to claim the benefit of this assignment for the creditors who were entitled to a recovery against Cole as an official defaulter. Cole made no defense to the bill, and the sureties raised no issue by their answers except as to the extent of their liability. Upon a reference to a ■ commissioner to state an account with the defendant, Cole, it was ascertained and reported that he was a defaulter to a larger amount than the combined penalties of both of the bonds sued on. The report also showed in detail the various items of liability, distinguishing those derived from sales of property or which came to Cole’s hands as receiver proper, and the dates of collection whether before or after his 'last appointment. No exceptions were filed to the report either as to the amount of the items of liability, the dates of reception, or the sources from which they were derived. The only contest^was made by the sureties as to the extent with which they •should be charged with these items on the bond given by Cole as special commissioner and receiver. It was and is conceded,' that the amounts properly chargeable •to the account' of the office bond will exceed the penalty of that bond. The only contest is over the liability of the sureties upon the other bond. The *370chancellor gave a decree against. Cole for the whole, amount reported, and against the sureties for the penalty of the other bond, giving the sureties a- preference under Cole’s assignment of his fees for their-indemnity, any surplus to be applied to the payment of the creditors. The complainant has brought the-case up by a general appeal, and the sureties by a writ of error. The Referees have reported that the-sureties should be charged with several items upon the bond as special commissioner and Receiver, in addition to those charged by the chancellor, and the-sureties have excepted.
The contest of the sureties is over the following items, with which the Referees have reported that they should be charged upon the bond of Cole as special commissioner and receiver, viz:
First, Amount received by Cole during Ms first'term of office, being the proceeds of sales of property made by [him during that term.$7,210 62:
Second, Amounts received by Cole during his^secondj term .of office from the following sources:
Proceeds of sales made by A. Alston as clerk and master, etc., of the chancery court of Memphis.$ 939 45
Proceeds of sales made by M. D. S. Stewart as clerk and master of the second chancery court of Shelby county.“ 438 81
Proceeds of sales made by Cole himself during his first term 6,475 09-
One objection made to all of these items, although-not much pressed, is that the sureties on the bonds*, under the last ■ appointment of Cole as clerk and master, can only be held liable upon the ground that Cole was his own successor, and also the successors of Alston and Stewart, whereas he was, under his first appointment, as well as the other officers named *371respectively, clerk of a different court from the court-under which he was last appointed. The position is based upon the fact that Alston was clerk of the chancery court of Memphis, Stewart of the second chancery court of Shelby county, and Cole, during his first term, of the first chancery court of Shelby county, while under the last appointment Cole was-clerk of the chancery court of Shelby county. The-last change by the act of 1875 was, as we have-seen, merely in name, and the other changes, although in form more, were in substance the same. Each of' these several courts was for the same chancery dis- " trict, and possessed precisely the same jurisdiction, namely all the equity jurisdiction of the chancery courts of the State for the particular territory. The-pre-existing court was abolished, and the new courts or court took, by express transfer, all the pending-business of its predecessors. There was only a change of names and officials, not of jurisdiction or business-Each following court was in legab effect the successor-of that which went before, and its officers were entitled to the possession and control of the books,, papers and effects of its predecessor, and to enforce-their delivery either - summarily under the statute, Code, sec. 806, et seq., or otherwise. The Legislation making these changes fairly implies, even where it is-not so expressed in words, that the new court and its -officers were the successors of the pre-existing court and its officers.
It is next insisted as to the first of the above-named items that the defendant sureties are not liable- *372’ therefor, because the proof shows that no part of the money was on hand at the date of the execution of the bonds under the re-appointment of June 23, 1876. It is conceded that, under our decisions, if a clerk pay over money in his hands to his successor in office the liability of the first for such money is ended, and the latter becomes bound; and, in analogy, that if the clerk becomes his own successor, having the money on hand, the old sureties will be released and the new sureties become liable. And the presumption, in the absence of proof to the contrary, is that the money is in hand at the commencement of the second term: Yoakley v. King, 10 Lea, 67, 72; Bowen v. Evans, 1 Lea, 107; Smalling v. King, 5 Lea, 585. The proof in this case shows that there was no official default by Cole during his first term. The witness, Black, who was Cole’s clerk from his first appointment until he went out of office, and kept his books and financial accounts generally, but did not •control his bank account or deposits, testifies that .after 1872, Cole kept his accounts with various banks, naming them. “But,” he adds,' “on June 23, 1876, wlien he was re-appointed clerk and master, he was keeping his book account alone, I* think, with the Fourth National Bank of Memphis. On that day his .account was overdrawn to the amount of $1,781.29. .After that time he kept his account solely with the Fourth National Bank, and continued to do so until the day I left the office, August 1, 1878. The above .statement is made from my knowledge of his business at the office, and not as to private business out*373side of the office. He may have had other accounts independent of those as clerk and master. I only have reference to those I was conversant with.” This-is the only evidence to rebut the presumption that, the money was on hand at the commencement of the second term.- All that can be said of it is that it states a fact from which an inference may be drawn in favor of the contention. But we do not think the rights of creditors should be made to depend upon inference. If they were to sue the first set of sureties, those sureties might prove by Cole that the money was on hand' at that time, and thus deprive the creditors of all remedy. It was incumbent upon the present sureties to introduce the best evidence of the fact in controversy, or at any rate satisfy the court that it was not their fault that the best evidence was not produced. The objection is, therefore, not well taken.
A more difficult question, in view of one of our decisions, is whether the items in controversy as above specified are chargeable to the sureties upon the bond of the principal as special commissioner and receiver, or on the office bond. The office bond is in the penalty of $10,000, conditioned to safely keep the records of the court, and faithfully discharge the duties of his office.” The other bond is in the penalty of $30,000, and conditioned to “faithfully account for all property, and funds which may at any time come into his hands as special commissioner or receiver, and shall truly and faithfully deliver and pay over such property and funds to the persons who *374may be entitled to the same.” To intelligently dispose of the questions made in argument, it will be necessaiy to review our legislation and decisions on the subject.
By the act of 1794, ch. 1, which antedates the formation of our State government, clerks of court were required'to give bond “for the safe keeping of the records and the faithful discharge of the duties of his office.” In this state of the law, and with only such a bond, a clerk and master of the chancery court was authorized by order of the court to receive certain money, and by the same order was appointed receiver and directed to loan the money at interest. The clerk received the money, but failed to loan it. This court held that he and his sureties on his official bond were liable for the money, because it did not appear that he had done any act a's receiver: Waters v. Carroll, 9 Yer., 102. It was said by Judge Beese, in delivering the opinion of the court, that in England a receiver is an indifferent third person appointed ’ by the court to receive the rents of lands pending litigation, who is usually selected by the master, before whom he passes his accounts, and is ordinarily required to give security. “ In the constitution of our courts of chancery,” he said, “ we have united the office and duties of master, so far as they exist under our system, with those of clerk; but no statute, has been passed to annex the office and duties of receiver to those of clerk and master.” He then notices the existence of a practice in our chancery courts of sometimes appointing the *375■clerk and master a. receiver in those cases in which it was supposed the latter office would least interfere •■with the proper discharge of his other duties, owing to the limited number. of persons qualified to act as receivers, and ’^suggested the advisability of discontinuing the practice.
The practice was, however, not discontinued, and •the Legislature afterwards passed the act of 1849, ch. 150. By the .first section of this Act, the clerks of the circuit, chancery and supreme court, and their sureties upon the bond given under the act of 1794, were made liable under the bond for all money that may come into their hands by virtue of their appointment by the court as special commissioners to sell •property, or as receivers. The second section made it the duty of the judges of those courts to require the clerk to execute a bond in such sum as the judge may deem sufficient, conditioned for the faithful accounting for and paying over of all such sums as may come into their hands as such special commissioners. In Williams v. Bowman, 3 Head, 679, the liability of a clerk of the circuit court was considered, who had given bond as required by the second section of the act, and who had sold property by order of the court and retained and collected the notes after he, went out of office. The court held -that the act did in some sense annex the office of special commissioner and receiver to that of clerk, but not so as to merge the former in the latter, and -that the duration of the appointment of special commissioner not being limited by law, it might con*376tinue beyond the term of the office of clerk if a' successor be not appointed by the court. The clerk and his sureties were therefore held liable upon the bond as commissioner, for the money collected. The correctness of this ruling is recognized in Horton v. Cope, 6 Lea, 155, 159, and Yoakley v. King, 10 Lea, 67, 73.
The act of 1852, ch. 164, required all clerks of court to give a special bond to faithfully account for and pay over as the law directs all money which may come to their hands by the sale of property under orders of the court. By section 3, the court might declare the office vacant if the clerk refused to give the bond. In the State ex rel. v. Blakemore, 7 Heis., 638, 654, the learned Judge who delivers the opinion of the majority of the court, says that the office of commissioner is by this act made a part of the office of clerk, but the requirement of a special bond must be taken as a merger of all liability under the bond of office for his duties as commissioner into the new bond. And yet, curiously enough, he held the clerk and his sureties liable on his bond, of office, which covenanted for the faithful discharge-of his duties as clerk and master, “for the proceeds of sales made by. his predecessor which fell into his hands upon succeeding to the office, and for all moneys that came into his hands otherwise than by sales-made by him, and for any moneys which, though they came into his hands as commissioner, were nevertheless retained under the orders of the court, and *377converted into a trust fund, and which he failed to account for.” The bond executed in this case as a commissioner was conditioned “to well and truly pay over and account for all moneys that shall or may come to his hands upon sales of property made by-him under the orders and decrees of said chancery court.” The limitation of the liability to the proceeds of such sales as were made by the clerk himself compelled the court, if it would not leave suitors without redress, to include every other liability-under the bond of office. This might well have been, under the first section of the act of 1849, the clerk having failed to give a proper commissioner’s bond,, but the learned judge considers that act repealed by the act of 1852. The rationale of the decision is-left in grave doubt. The real question in the case, which overshadowed every other 5 and, upon which the-judges differed, was whether the sureties could claim, credit for the payments made by one of them, the father of the clerk, without special reference to the-bond.
The Code provides, • section 320, that each court shall have a clerk “ whose duty it is to attend the court, and perform all clerical functions thereof.” By section 326 every clerk is required to give bond “ for the safekeeping of the records, and for the faithful discharge of the duties of his office;” and by section 327, also a bond “to account for and pay over all moneys arising from taxes on suits, fines and forfeitures ;” and by section 328, a bond also “to cover-property or funds which may, at any time, come to-*378the hand of such clerks as special commissioners or receivers by appointment of. the court, or any judge thereof.” By section 329, it is provided that in the absence of such special bond the clerk and his sureties will be liable on the regular official bon'd for all property or money with which such clerk may be properly chargeable as special commissioner or receiver, and the failure to execute a special bond shall not subject the clerk to any penalty. By section 330 the court is authorized to require special bonds to meet particular exigencies. Section 335 is: “ The official bonds of clerks, executed under the provisions of the Code, are obligatory on the principal and sureties for ■every wrongful act or failure of duty in his official -capacity, whether the act or duty is embraced in the -condition of the bond or not, or grows out of a law 'passed subsequently to its execution.” See also sections 771 el seq., for other provisions regulating the •obligation of official bonds. Section 805 is: “ In all cases in which it is not otherwise expressly provided, when any office is vacated, all books, papers, property and money belonging or appertaining to such office, shall, on demand, be delivered over to the ■qualified successor.” The subsequent sections provide a summary remedy for enforcing such delivery. These ■provisions, it will be noticed, are applicable to all clerks of court;
These provisions plainly show a' legislative intent ■that clerks of court, in addition to what the Code, sec. 320, denominates the “clerical functions'” of the -office, may be appointed to perform, ard may per*379form the duties of a special commissioner or receiver. ■'They also provide for the protection of suitors who may be aggrieved by the action of' the clerk in any of these capacities. They further show that these latter duties should be so far annexed to the office as to pass to the successor in office, for the obvious reason that the suitors might look to the office, and not be compelled to follow the individual after his term has expired. In all of our cases subsequent to the Code, and cited above, it has been taken for granted that the successor in office, whether the clerk himself or a third person, and his sureties would be liable for moneys received from the predecessor. I was of opinion in the first of these cases, Bowen v. Evans, 1 Lea, 107, that the sureties of the clerk on his' first bond, who is his own successor, would be liable for funds received as commissioner or receiver, until the court took some action to transfer the duty to the successor. But ■ a majority of my ' brother .judges thought that the liability of the successor would follow of course unless the default was shown to have been committed before the second appointment, the presumption being that the officer has done his duty. And the court has held that in order to render the ■sureties liable on the bond as special commissioner, it is not necessary that the clerk should. be appointed •or styled special commissioner. It is enough that the •clerk was ordered .to perform the duties, and that the ■duties were not those pertaining to the office of clerk proper. Thé law would refer the acts to the office whose duties require their performance: Bowen v. Evans, *3801 Lea, 107; Buford v. Cox, 3 Lea, 518. And all the cases decided under the Code take for granted that the successor in office would receive funds from his predecessor in the ' character in which the predecessor held them. It must !be so ^on principle, for otherwise he would have no authority to receive the funds at' all. He takes necessarily as successor-in function and office. And, as said in Bufordv. Cox, where money or property comes to the hands of the incumbent, by virtue of his official position,, otherwise than as commissioner or receiver, his sureties on his bond as clerk would be liable.
All of the funds in controversy were derived from sales of property, without any trust being attached to them by any order of court. They were therefore held by Cole as special commissioner. They fell within the condition of the bond given as special commissioner and receiver, and must be charged to-the sureties accordingly.
One other exception of the sureties is to that part of the report of the Referees which finds that the decree below on the office bond, which was for the full penalty, should-bear interest. But this court, upon the affirmance of a money decree in an equity cause, has always allowed interest thereon: Trainer v. Skein, 10 Yer., 369. And it is now so provided by statute, Code, sec. 3165. The interest is on the decree and not on the penalty. And it can make no-difference which party appeals, the interest being an incident to the affirmance.
The complainant' has excepted to the report of the *381Referees that it gives a preference to the sureties ■under the assignment made. by Cole of his fees. But the assignment is primarily for their indemnity, and the sureties are therefore entitled to the preference.
The exceptions to the report of the Referees will be disallowed, the chancellor’s decree modified in accordance with the report and this opinion, and a decree entered accordingly, with the costs of the cause. -against the defendant.