Court Opinion

ID: 6542188
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:16:37.857742+00
Date Added: 2024-06-11T15:55:51.898689
License: Public Domain

Cockrill, C. J. The appellants are sureties in the-official bond of R. H. Lee — late treasurer of Independence county. This suit, was instituted against them by the state, for the benefit of the county, to recover the county funds which the county court, after a settlement with the administrator, found remained in Lee’s hands-at the time of his death. The complaint alleges and the records of the county court show that preliminary steps for a settlement were taken by the court in Lee’s lifetime, through the instrumentality of a committee of accountants called in by the county judge to aid him in investigating the treasurer’s accounts. It does not appear that Lee had notice of this proceeding. Its only object seems to have been to acquaint the court with the facts necessary to an intelligent understanding of the official accounts, when the time for final action should come. Before the accountants made their report the treasurer died. R. M. Desha was appointed administrator of his estate ; and at the next term of the county court thereafter, he appeared in obedience to the order of the court and of the duty imposed upon him by the statute, to make a settlement of his intestate’s accounts as treasurer. The administrator waived formal service of the citation to appear and settle; and the new treasurer being present to receive from the administrator the public funds which had come to his possession, the court, to quote from the record entry, “after a thorough investigation of the books, papers and vouchers pertaining to the office of the late treasurer, * * * * found that said Richard H. Lee, deceased, late treasurer of said county, at the time of his death was short in the funds belonging to the county, in the sum of $2649.-41;” and it was further found that Desha, as administrator, had in his possession $529.83, “turned over to him as part of the funds of the county,” The court, thereupon, required the administrator to pay over that amount to the then ■ treasurer, placed it to Lee’s credit, found the deficit to be $2119.58 and directed the new treasurer to collect that amount from the sureties. This ¡suit was instituted for that purpose. The complaint alleged the election of Lee as treasurer, the execution and approval of the bond, the receipt thereafter of the county funds by Lee as treasurer, the settlement of his accounts by the county court as before detailed, and a failure to discharge the balance thus found to be due the county. The sureties’ answer denies none of the allegations of the complaint; it does not deny that their principal was indebted to the county in the amount stated by the county court, but alleges that they were not required, and that no opportunity was afforded them in the county court, to show the state of their principal’s accounts. This was the only defense. They raised the same question by •demurrer to the complaint, and by interposing objections to the record of the county court as evidence of the amount of their liability. Their objections were all overruled. There was judgment for the plaintiff and the sureties appealed. It is the settled doctrine in this state that no action can be maintained against the sureties on a county treasurer’s bond until the accounts of the principal have been adjusted by the county court. State v. Croft, 24 Ark. 550 ; Hunnicutt v. Kirkpatrick. 39 Id. 172. "Wheu the settlement is made by the principal himself, or the accounts are adjusted by the court after notice to the principal, the adjustment, in the absence of fraud or collusion, concludes any further inquiry into the state of the officers accounts, whether the sureties have notice or not. Cases, supra. Stovall v. Banks, 10 Wall. 583; 2 Whart. Ev. sec. 770; Freeman on Judgments, sec. 180; Baylies on Sureties, p. 140; Shouler on Ex. sec. 531; Norton v. Miller, 25 Ark. 108; George v. Elms, 46 Id. 260.  County Treasurer Action against sureties of: Settlement made by adminisrator. The county court is the tribunal designated by law for the settlement of the treasurer’s accounts. The sureties, by their contract and by force of law, covenant for the faithful performance of their principal’s duty to settle in accordance with the orders of that tribunal, if no appeal is prosecuted from its findings. As was said by Chief Justice Watkins, in State Bank v. Robinson, 13 Ark. 221, “when one covenants-in respect to the acts or omissions of another, he is bound by the act or omissions as the principal is bound- by the act of the agent.” But the contention now is that the adjustment o,f the accounts through the administrator of the estate of the deceased principal is not within the contract of the sureties,, and is not evidence against them. It has been so ruled in Alabama, in regard to the settlements of the accounts of a deceased administrator. Means v. Hicks, 65 Ala. 241; Martin v. Ellerbe’s. admr, 70 Id. 326. In that state there seems to be original jurisdiction in equity concurrent with the probate court, to adjust the accounts of administrators, and when an administrator dies before final settlement, equity takes the settlement of his accounts and the matter of his liability in charge, brings in the sureties and adjusts the liabilities, and decrees against all in one proceeding. But as the coirnty court in.this state has exclusive jurisdiction of the county finances, no suit can be maintained on a treasurer’s bond in any court without the record evidence of the county court’s adjustment of the accounts. When the official dies, how shall the settlement which is the basis-for an action against the sureties be made ? The statute, which was enacted long before the bond in this case was-executed, devolves that duty upon the administrator or executor of the deceased official’s estate, Mansf. Dig. sec. 1200; acts of 1838, The practice in accordance with the' statute has been long established, and the settlement thus-made has been constantly recognized by this court as laying the foundation for an. action against -the sureties. Goree v. State, 22 Ark. 236; Connelly v. Weatherly, 33 Id. 658; Padgett v. State, 45 Id. 495; Smith v. Smithson, 48 Id. 261. The undertaking of these sureties was, therefore, entered into with the knowledge and consequent understanding that in-case of'the death'of their principal, his administrator would be required to appear before the county court and make settlement of his intestate’s official accounts in lieu of their-principal. It becomes then a part of their contract that he may do so. A settlement of the account in favor of the-principal made by the court in pursuance of the statute, whether before or after the officer’s death, would be evidence-in favor of the surety, and it is reásonable to conclude that-it would be evidence against him, for this rule of evidence,, like an e-stopel, should be mutual and bear alike on each of the parties. Murfree on Official Bonds, sec. 600; State Bank v. Robinson, supra; Snider v. Greathouse, 16 Ark. 72; Griffin v. State, 37 Id. 437. The case of Garnett v. Macon, determined by Chief Justice Marshall on the circuit iu Virginia,>is not inapposite-The contention was that a judgment rendered against - an. executor or administrator establishing the debt of a creditor, was evidence against the heir in a proceeding in equity.to-charge the lands of his ancestor. The. administrator completely represented the decedent as to the legal ownership-of' the personal property, but had no control of, or interest in the lands. The personal assets in the hands of the administrator had to be exhausted before resort could be bad to the lands which passed, directly to the heir. To do this judgment must first be obtained against the administrator, and this judgment afterwards became the foundation for the proceeding against the lands in the possession of the heir,, just as the adjustment, by the county court of .the treasurer’s accounts here 'is the basis for the action against the sureties. The heir was not. a party to .the suit in which the debt was established; he could not controvert the testimony, adduce evidence in opposition to .the claim or appeal from the judgment; and he did not claim under the administrator. Nevertheless Judge Marshall ruled that' as the proceeding' against the administrator or executor was the foundation for the proceeding against the heir’ the argument for considering the judgment at law prima, fdcie evidence against him of the-debt was irresistible. 1 Call. p. p. 338-9. See also 2 Whart. Ev. sec. 771. It is wholly immaterial to the result of this .litigation whether the adjustment is conclusive or prima faoie evidence,because, if it is prima facie only, it would stand until the sureties exonerate themselves. But no effort was made to impeach it. If action by the county court must be had before suit on the bond, and if that court cannot act after the principal’s death except upon personal notice to the sureties, it would follow that the death of the principal would be a practical discharge of a surety who remained beyond the territirial jurisdiction of the court. But as the surety makes his contract of indemnity with reference to the contingency that his principal’s executor or administrator may conduct the settlement under the supervision of the court, the ends of justice ■cannot thus be defeated. Finding no error in the proceedings, the judgment is affirmed.