Court Opinion

ID: 9540287
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:14:20.927116+00
Date Added: 2024-06-11T14:59:49.244918
License: Public Domain

BISTLINE, Justice,
dissenting.
The decision of the trial court should be affirmed. I am able to agree with the Court’s statement that a cause of action on a surety bond such as that here involved accrues at the end of each individual term during which a defalcation has occurred, provided, however, only as applicable to discovered defalcations. I see the 1974 amendment to I.C. § 5-218(1) as urged by respondent county, and as apparently so viewed by the trial court. At the time of the amendment the legislature was obviously well aware of the judicial pronouncements applying the discovery rule, and I see in the language of the statement of purpose only legislative recognition of such coupled with legislative desire to go on record as declaring its intent — thus obviating future judicial debate on the issue. Even were that not the case, the 1974 amendment provides a clear indication of the legislative frame of mind, and should influence the Court into coming to the right determination. The interested legal scholar or practitioner will note with some concern that in Martin v. Clements1 the Court looked to the “clear legislative intent of amended I.C. § 5 — 219(4),” 2 for guidance and direction in reaching its determination in that case, even though the amendment was conceded to have- no applicability to a cause of action which had accrued prior to the amendment.
City of St. Anthony v. Mason3 did not involve public monies surreptitiously taken, but city monies lost during the bank failures of the great depression. The fact that Justice Budge wrote the Court’s unanimous opinion is of more than mere passing interest — keeping in mind that he wrote the dissenting opinions in the earlier cases of Canyon County v. Moore4 and its predecessor, Wonnacott v. County of Kootenai.5 Canyon County v. Moore is a short and wholly unenlightening opinion of one full page which makes no discussion whatever of the discovery rule, and does not disclose whether the defalcations were or were not discovered early on and within the three year time period. The case simply goes off on the basis of the Wonnacott case. Justice Budge, however, in dissent, observed that “It is necessary, therefore, to determine whether or not there is an exception, *493whether there was such fraud or mistake, and whether the county had or was presumed to have had notice of such breach.” 6 Citing a multitude of authority, some of which is directly quoted in his opinion, none of which was refuted or discussed in the opinion of the Court (a hardly acceptable state of affairs), he concluded (1) that if it appears that fraud is involved, the cause of action will not be deemed to have accrued until the facts have been discovered, (2) that a county official possessing public funds occupies the position of a fiduciary to the county, and (3) that where a public official appropriates public moniés to his own use, and submits false and misleading reports, he should not be permitted by reason of his own wrongful acts to profit thereby, requiring “as supported by the great weight of authority” that the running of the statute is tolled until the discovery of the fraud.
Wonnacott, as is readily seen is of doubtful weight, having been decided in the days of a three member court with no two of the justices agreeing, and all three writing opinions. Wonnacott stands no better, in fact, worse than Canyon County. Two members of the Court improperly7 held that the statute of limitations could be raised in bar of a claim of set-off — with which we have no concern, other than to note the error — and there was no claim of fraudulently concealed defalcations. Justice Budge in his opinion thoroughly decimated the other two opinions on the two propositions before the Court, observing with a jaundiced eye the view of one opinion that a county official whose defalcations are not discovered during his term “by reason of exceptional skill, or for any other reasons” 8 ought to stand in better stead than the county official whose indebtedness to the county is discovered during the term.
It is my considered view that counsel for the county are entirely correct in the assertion that the opinions of Justice Budge are the better reasoned. In fact, the other opinions in those early cases are unfortunately bereft of any reasoning whatever, and Canyon County simply purports to be premised upon Wonnacott.
Concurring in Justice Budge’s depiction of a county official’s stand as a fiduciary, I add that much of that which I wrote in Ralphs v. Spirit Lake9 and Martin v. Clements is applicable, particularly the companion California cases of Neel v. Magana,10 and Budd v. Nixen.11 I am also much influenced by that which Justice McFadden wrote in Harbaugh v. Myron Harbaugh Motor, Inc.,12 as to the running of the statute of limitations where a fiduciary relationship exists:
“The question of when the statute of limitations commences to run in the guardian-ward relationship is one of first impression in Idaho. But this court has had occasion to decide the issue in analogous fiduciary contexts.
“In an action by a beneficiary against his trustee, the rule has long been that the period of limitation begins when the trust is terminated, disavowed or repudiated by the trustee, and such conduct is *494unequivocably made known to the beneficiary. Shepherd v. Dougan, 58 Idaho 543, 76 P.2d 442 (1937); Brasch v. Brasch, 55 Idaho 777, 47 P.2d 676 (1935); Davenport v. Bird, 45 Idaho 280, 261 P. 769 (1927); Olympia Mining & Milling Co. v. Kerns, 24 Idaho 481, 135 P. 255 (1913).” (Emphasis added, p. 299, 597 P.2d 18.)
Concluding, I submit that the Court may find that it has blithely placed too much reliance on the early Idaho cases without making any in-depth study as to their applicability. As a result the bonding company, which received a premium from the county and assumed the risks, escapes a substantial loss which in turn has to be absorbed by the county taxpayers. It is to be kept in mind that official bonds are required of most county officials, and that there are in Idaho 44 counties. Unlike assigned risks in the field of liability insurance, a bonding company is under no obligation to bond anyone. A compilation of statistics would probably show that bonding company losses to counties and to the state are less than V2 of 1%, if that high. And it is not to be forgotten that bonding companies ordinarily require indemnity agreements before they will execute an official bond.
With all of the foregoing in mind it is difficult to conceive that it was ever intended that bonding companies would escape liability where the officials whom they bonded were the unworthy but possessed of the “exceptional skill” referred to by Justice Budge. To so hold is to hand a windfall to the bonding companies at the expense of the defrauded public.
I respectfully dissent.

. Martin v. Clements, 98 Idaho 906, 575 P.2d 885 (1978).

. 98 Idaho at 910, 575 P.2d at 889.

. City of St. Anthony v. Mason, 49 Idaho 717, 291 P. 1067 (1930).

. Canyon County v. Moore, 34 Idaho 732, 203 P. 466 (1921).

. Wonnacott v. County of Kootenai, 32 Idaho 342, 182 P. 353 (1919).

. 34 Idaho at 737, 203 P. at 467 (Budge, J., dissenting).

. In Hirning v. Webb, 91 Idaho 229, 419 P.2d 671 (1966), Justice McFadden wrote for a unanimous Court:
“In Kelson v. Ahlborn, 87 Idaho 519, 393 P.2d 578, this court was presented with the issue of whether a defendant’s cross-demand, arising from the same transaction as the plaintiffs original claim, could be set off against the plaintiffs claim even though affirmative relief on the cross-claims was barred by the statute of limitations. This court held that such cross-demands, although barred as the basis for affirmative relief, could be set off against the plaintiffs claim.” Id. at 231, 419 P.2d at 673.

. 32 Idaho at 352, 182 P. at 356 (Budge, J., dissenting).

. Ralphs v. Spirit Lake, 98 Idaho 225, 560 P.2d 1315 (1977).

. Neel v. Magana, 6 Cal.3d 176, 98 Cal.Rptr. 837, 491 P.2d 421 (1971).

. Budd v. Nixen, 6 Cal.3d 195, 98 Cal.Rptr. 849, 491 P.2d 433 (1971).

. Harbaugh v. Myron Harbaugh Motor, Inc., 100 Idaho 295, 597 P.2d 18 (1979).