Court Opinion

ID: 8174990
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:20:02.523417+00
Date Added: 2024-06-11T16:39:54.237363
License: Public Domain

Dent, Judge,

(dissenting) :

The essential facts in this case are as follows: N. J. Keadel was elected sheriff of Mingo County, for the term beginning January 1, 1897, and gave bond as such with certain persons as sureties whose names are not revealed in the record.
On the — day of -, 1898, by the requirements of the county court, he executed an additional bond with John Effier and Wm. M. Cox as his sureties.
The county court having ascertained that Keadle was defaulting in the discharge of the duties of his office and that his sureties were insufficient, required him to execute a second additional bond, which he did on the 14th day of August, 1899, with J. E. Peck, G. W. Taylor, G. R. Buskirk, Mary Taylor, S. J. Stratton, M. E. Beavers, John A. Sheppard, M. H. Waldron, J. S. Miller, M. W. Hawley, Lucy E. Keadle, Wells Goodykoontz, W. A. Johnson, R. W. Peck and J. B. Buskirk as his sureties. These sureties being aware of Keadle^s defalcation, before they would become his sureties required him to enter into an arrangement to appoint J. E. Peck and G. W. Taylor of their number his deputies, and permit them to arrange and control all financial matters so as to prevent any further defalcation on his part and preserve them harmless from loss thereby. The auditor and the county court both had notice of this arrangement and made no *487objection thereto. Under it .these deputies proceeded to collect and account to the State, county and district for the tax levies of 1899. Sheriff Keadle was in arrears to both county and State for taxes, licenses and fines collected for the year 1898.
In January, 1900, the sureties on the last bond learning that the sheriff in violation of his agreement was about to make an effort to have the auditor to apply the tax levies for county purposes on railroad corporation for the year 1899, paid to the auditor for the county’s benefit, on his defalcation to the State for the year 1898, for the purpose of self-protection, notified the auditor not to make such application and moved the county court because thereof to relieve them from further liability on the sheriff’s bond. The county court required Keadle to give a new bond, and he failing to do so, on the 29th day of January, 1900, his office was declared vacant and George W. Taylor, one of the sureties and a deputy was appointed to fill out the unexp'ired term. He therefore demanded that the auditor should pay over or account to him for said railroad tax levies for county purposes for the year 1899, amounting to six thousand three hundred and ninety dollars and twenty-three cents. This the auditor refused to do for the reason that Keadle had given directions in writing before liis removal from office to apply these levies on his defalcation for the year 1898, and while he had not yet done so he believed he had the legal right to do so.
Thereupon these proceedings were instituted to test this question and to determine promptly to whom these county funds now in the hands of the auditor were legally payable. The circuit court determined that it was the duty of the auditor to pay or account for these levies to the present sheriff as the treasurer of and for the benefit of the county and that Keadle had no right to direct or the auditor any right to apply these funds to the sheriff’s default for the year 1898, to the State, and now this Court in its wisdom holds that the circuit court erred and that Keadle had the right to misappropriate the county’s levies for county purposes for the year 1899, to pay his default to the State for the year 1898, and that he is legally authorized to make such appropriation.
The auditor is simply seeking to discharge his duty to the State and has wisely left such misappropriation of the county’s funds to be made by this Court.
*488This makes such appropriation a legal application by the defaulting sheriff of funds held to be subject to his order and relieves his sureties on his last bond from any liability by reason thereof. His legal application of such funds could create no default for which sureties could be held liable, as such sheriff during the existence of their liability never had such funds in his possession nor under his control, but they were in the hands of the joint collecting agent of both the State and the county. If his direction to misapply this fund was legal, and the judgment of this Court makes it so, these sureties incur no liability for he is guilty of no default under his bond. It is true he has authorized the misappropriation of the county’s funds to the payment of his indebtedness to the State, yet this Court holds that he had the right to do this for the reason that he was sheriff at the time the assessment was made and that he is chargeable with the funds not at the date of the receipt thereof, but at the date of the assessment which throws the liability wholly on his sureties at that time and not on those who subsequently because his sureties, and that after such assessment the county court could not remove him so as to prevent his making such application without regard to who was injured thereby. For if the county court could effect such result one day after the assessment was made they could do so at any time before the fund was paid over to him.
By this holding the liability for these funds is placed on the sureties getting the benefit thereof and they must account to the county therefor, and hence they gain nothing and are put in no -better condition by this misapplication of the county’s funds. Their liability remains the same and they have no interest in this controversy.
The last sureties being relieved from all liability by the holding of the court in sustaining the legality of the sheriff’s misappropriation are no longer interested in this controversy.
But if it is an illegal misappropriation of the county’s funds notwithstanding the court’s decision, now res adjudicatei, the sureties of the last bond have relieved themselves from all liability by doing far more than is required of them in notifying the proper authorities of such threatened illegal misappropriation in time for them to prevent the same and they cannot be made liable by a miscarriage of justice in a proceeding in this *489Court to which they are not parties and by which they are not bound.
When the county authorities bave notice of a wrong about to be committed to the county’s detriment it becomes their duty to prevent such wrong for the protection of interested third parties not in a position to protect themselves and if they fail to do so the county and not such interested third party should bear the loss.
These last sureties not being liable whatever may be the fma.1 result of this suit and not necessary parties. thereto, and the former sureties having a fixed liability which this suit cannot change are also unnecessary parties. If they could get the funds credited on their old liability they acquire a new liability equal in extent. Nor is Keadle a necessary party, for his liability continues regardless of the result of this litigation. His creditor may be changed from the State to the county, but not the amount of his indebtedness. He creates a new debt to pay an old one.
The'question in this case narrows itself down between the county of Mingo, represented by its treasurer and collector, sheriff Taylor, on the one side, and the State represented by its auditor on the other side, as to whether the county or State shall be compelled to sue the sheriff and his sureties on the first two bonds, or they being admittedly insolvent, which shall bear the loss occasioned thereby, the taxpayers of the county or the taxpayers of the State ?
It is argued that because the court failed to take a good bond the loss equitable should fall on the taxpayers of the county. This would make the taxpayers of the county all sureties of the sheriff, although the law nowhere so provides. The county court in taking the sheriff’s bond acts as the agent of the State as well as of the county under laws made by the former, and which has not yet seen fit to enact a law making the taxpayers of each county responsible for the defaults of its sheriff. Before this is done the people must be consulted, unless it can be effected by judicial construction in violation of the constitutional inhibitions regardless of the fundamental principles of right and justice.
The funds in controversy belong to the county. They arise from levies made to meet the county’s current expenses for the fiscal year beginning in 1899 and ending in 1900. The auditor *490holds them as trustee for the county. There is no law other than the decision of this Court authorizing him tonuse them to pay a default of the sheriff of State moneys for the fiscal year, 1899, but if the sheriff as treasurer and collector of public moneys for State funds for 1899, to this extent the two funds may be set off against each other but not otherwise. In such case the sheriff would have State funds to substitute for the county funds in the hands of the auditor. A fair exchange would be no robbery.
But where the sheriff has no State funds in his hands but he is a defaulter to the State for a previous year, there is no law (except the decision of this Court) that will permit him to satisfy his default to the State by creating a like default to the county. He cannot spoil the few to satisfy the obligations of the many.. Such was not the intention of the legislature in authorizing the auditor to make such arrangements with the sheriffs as may be most convenient.
To adopt the argument of Judge GreeN in the case of the State v. Wade et al., 15 W. Va. 535, to this case we would say, “to construe this statute to authorize the Auditor at his mere will and pleasure by connivance with or direction of a defaulting sheriff to apply a sum of money paid on the taxes of one year for county purposes to the arrears of taxes of other years for State purposes, is to convert a statute intended merely for the convenience of the State into a statute which would enable the auditor to do gross injustice to the taxpayers of the county and confer great pecuniary benefit on the taxpayers of the State by shifting liability from the large resources of the latter to the limited resources of the former and thus render the burdens of taxation grossly unequal. A statute thus interpreted its constitutionality is undoubted. The just burdens of the taxpayers of the State ought not to be imposed on the taxpayers of a single county.
The legislature enacted no such law,- but it becomes law by the misconstruction of this Court, and if persisted in, it can only be obviated by the legislature placing the liability where it justly belongs.
Admitting that this controversy is a question of liability between two sets of sureties the same conclusions must follow.
The last sureties, if liable for the taxes of 1899, have the *491right to prevent their principal from misapplying them to his default for the year 1898 for which they are not liable. They do this by notifying the auditor not to make such misapplication even though authorized so to do by their principal. This relieves them from all liability if the auditor persists in making the misapplication. For as is said in Chapman and others against Commonwealth, 25 Grat. 748, “The auditor must of course act in good faith.’ lie cannot legally apply to the benefit of A. money he knows ought to be applied to B. If a sheriff receive money for which his surety, B., is liable, he ought to apply it to the discharge of such liability and not to the discharge of the liability o f A. on his account. Such a misappropriation would be a fraud on the rights of B, and if the auditor received the money with, knowledge of the fraud he would be particeps criminisSuch misapplication would be void and the parties legally entitled thereto to have the right to recover the money so misapplied.
The sureties on the last bond to avoid such liaiblity first protected themselves by an agreement as they had a perfect right to do, of which the auditor and county court both had notice.
Second, they notified the auditor not to make the threatened misapplication.
And third, they notified the county court and it became its duty to protect the sureties. This they undertook to do by removing the old and appointing a new sheriff who was authorized as its agent and treasurer to receive the money’due the county in the hands of the auditor. He forthwith demanded the fund and on refusal of the auditor immediately began this proceeding, not in his own, but in the interest of the county to secure the funds due it.
If he had received the fund to which he was legally entitled he would receive it as treasurer of the county and his sureties would have become liable for the proper disbursement on the order of the county court. But not being able to secure, but being deprived of it by the decision of this Court, neither he nor his sureties became responsible for it in any manner. It is for the county’s and not for his or his sureties’ interests for him to receive it.
Had he failed to do or neglected his duty in this respect the county court could have held him and his sureties liable for his default. In taking these many steps to protect themselves the *492sureties did far more than tire law required of them, for it was the duty of the auditor haying full knowledge of the source of the fund and being both the agent of the State and county with regard thereto, apply the same as the law directs, and if he fails to do so they cannot be held responsible for his malfeasance but are thereby relieved from all liability for the fund, especially when such illegal misapplication is sustained by this Court, for however erroneous such decision may be, it is law until abrogated by the legislature.
These sureties without taking any steps whatsoever had the right to rely on the auditor’s legal application of the fund.
The law governing in such cases is plainly stated in the fifth point of the syllabus of Chapman v. Commonwealth, 25 Grat. 722, as follows: “If the debts be due by a collector or other receiver of public money under bonds with different sets of sureties, then the law will so apply the payment if possible as that the money collected under one bond shall be applied to the relief of the sureties in that bond. And the creditor in such a case, if he be informed as to the source from which the money with which a payment may have been made was derived, cannot apply it otherwise, even with the consent or by the directions of the principal debtor.”
The provisions of the statute directing the auditor to account for and settle the taxes assessed for the last year of the term of office of a sheriff with the occupant of the office at the time sucn taxes were assessed, was not intended to apply to a defaulting sheriff nor enlarge his rights nor authorize him to change the rights of his sureties nor transfer his default from the State to the county, but it was to have each year’s taxes preserved sepa-. rately and applied properly to the year to which they belong. If Keadle had received the taxes levied for the State on persons and property within the county of Mingo for the year 1899 other than the railroad taxes then he is entitled to receive the railroad taxes for such year. As the record discloses, he, by agreement with his sureties, was'to receive no taxes for the year 1899. They were to go into the hands of his sureties and now they must go into the hands of his successor who succeeded to all his unsettled business and who must account to the State for its share of the taxes for 1899. Taylor as sheriff might have held back from the auditor the State taxes for the year 1899, sufficient to cover *493the county taxes for the same year withheld by the auditor, and thus compelled the auditor to sue him and his sureties on a final settlement and in such suit raised the questions here presented. The writ of mandamus, however, furnishes a more speedy, efficacious and just remedy to all the parties concerned and the right thereto is undoubtedly clear.
The sureties as heretofore shown are not interested in this controversy. Nor is Taylor or his sureties, for if he does not receive the money he is not chargeable therewith. Neither a sheriff nor his sureties are chargeable with the moneys collected by the auditor until they are actually paid over or accounted for in some way to such sheriffs credit or benefit being an obligation for which such sureties are liable. An auditor by paying a sheriffs back defaults though with his consent or direction cannot make his present sureties liable unless they were liable for such debts beforehand. An auditor without the consent of parties interested cannot change old or create new liabilities, nor can a principal without their consent increase the liability of his sureties.
This case plainly stated is this: The auditor has in his hands six thousand three hundred and ninety dollars and twenty-three cents funds belonging to the county of Mingo arising from the tax levies on railroad property for county purposes for the year 1899. The sheriff as treasurer and agent for the county in its name and for its benefit demands its application to the purposes for which the levies were made. This Court says no, the fund cannot be so applied because a defaulting sheriff whose place the plaintiff now holds has directed the auditor to misapply the same on his defalcation to the State for a previous year and thus transfer his default to the State for the year 1898, to the county in 1899, lifting the burden from the shoulders of the taxpayers of the State and placing it on the shoulders of the taxpayers of .the county.
Such a perversion of law, justice, right and the taxing power has not, nor ever will receive the sanction of the legislature, nor will the taxpayers of the State at large become particepts crim-inis thereto by suffering the taxpayers of the little county of Mingo to bear this unjust burden imposed upon them by the inequitable judgment of this Court. If they permit injustice to grow though they sow not the seed, in the end they will reap its fruits more bitter than gall.