Court Opinion

ID: 6562888
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:17:09.299827+00
Date Added: 2024-06-11T15:56:36.344629
License: Public Domain

Me. Justice Goddakd
(dissenting).
I cannot concur with my associates in the conclusion that the admitted facts set out in the separate and special answer do not absolve the defendants from liability for the loss of the money in controversy. The importance of the question involved justifies a brief statement of my reasons for dissent. This question concisely stated is, whether under our statutes a county treasurer and his sureties are liable for public funds deposited by the treasurer in a reputable and apparently solvent bank, which are lost by an unexpected and sudden fail*167ure of such hank, when such deposit was made by him in' good faith, and after due inquiry touching the solvency of the bank; and where he was guilty of no negligence or fault in allowing it to remain there, coupled with the fact that neither the state nor county authorities provided such treasurer with any safe place or means for the custody of such funds.
Upon the question of the liability of a county treasurer and the sureties on his official bond for the loss of public money coming into Iris hands, the courts of this country entertain different and irreconcilable views. Some hold, and among them those cited by the chief justice, that the liability is absolute; and that it constitutes no defense to an action for its recovery, that the money was taken by irresistible force, or the loss occurred through unavoidable accident; basing their conclusion either upon the ground that the officer holds the relation of debtor to the county for the money received by him, or upon the theory that an absolute obligation to pay the money when called upon is imposed, when the statute, or the condition of the board, provides for such payaueart without modification or coardition. This doctriaie was first announced in U. S. v. Prescott, 3 Howard, 578, decided in 1845, and was based largely oar considerations of public policy and the particular provisions of the federal statute, and was accepted as the correct rule as to the liability of receivers of public money in subsequent cases in that court, until very much modified, if not in effect overruled, by the decision iar U. S. v. Thomas, 15 Wallace, 337.
While it is true that the court did not, in the latter decision, expressly overrule the doctrine of absolute liability araaiouiaced iaa. the foraner cases, such I think was the logical result of its reasoning aaad conclusion. This was the view of Mr. Justice Miller, as shown by the language he uses in his dissenting opinion. Pie says :
“ I understand the opinion in the present case to be directed to two points: First, mainly to undermiiaiaag the ground oar which the prior decisions oaa. this subject rest. * * * As regards the first point, if the opinion or judgmeaat of the court *168were based upon a frank overruling of those cases, and an abandonment of the doctrines on which they rest, I should acquiesce in that. * * * But if the opinion of the court is to be construed as permitting those cases to stand as law, while the principles on which alone they can be defended are weakened by its argument, I must express my dissent from that view of the case.”
And in the same opinion, in speaking of United States in Prescott, supra, and the other federal decisions wherein so much had been predicated upon the ground of public policy, he said:
“Nor do I believe that prior to these decisions there was any principle of public policy recognized by the courts or imposed by the law which made a depositary of public money liable for it when it had been lost or destroyed without any fault of negligence or fraud on his part; and when he had faithfully discharged his duty in regard to its custody and safe-keeping.”
And, no doubt influenced by the manifest injustice of the harsh and oppressive doctrine of those cases, congress, on May 9,1866, enacted a statute (14 Stat. at L. p. 44), conferring upon the court of claims jurisdiction to hear and determine the claim of any paymaster or other disbursing officer, for relief from responsibility on account of loss of government funds occurring without his fault or negligence, thus practically destroying the effect of those cases in so far as they deny to such officer the right to interpose such defense.
The other line of decisions is to the effect that a treasurer is a bailee of the money that comes into his hands by virtue of his office; and while he is bound to exercise a verjr high degree of care in the protection and preservation of such funds, and to strictly and faithfully perform the duties prescribed by the statute, he and his sureties are not responsible for its loss, without fault on his part. This rule is approved in Cumberland v. Pennell, 69 Me. 357.; York County v. Watson, 15 S. C. 1; State v. Houston, 78 Ala. 576 ; Supervisors v. Dorr, 25 Wendell, 438 ; affirmed, 7 Hill, 583, by an equally divided court, Chancellor Walworth voting in the *169affirmative; and it is also recognized by implication in State v. Lanier, 31 La. Ann. 423. In Walker v. British Guar. Ass’n, 18 Ad. & E. (N. S.) (83 En. Com. Law. Rep. p. 276), an action on the bond of a treasurer of a benefit association, the same rule of liability obtained.
Upon the doctrine that a public officer who receives money by virtue of his office holds the relation of bailee and not of debtor, former decisions of this court are in accord with the latter cases. McClure v. La Plata County, 19 Colo. 122; Wilson v. People, 19 Colo. 189.
These cases also recognize the doctrine that the duties and obligations of such officer in respect to the money so received, are measured by the law of bailment, unless effected by constitutional or legislative provisions; and that his official bond does not extend such obligations, but its office is to secure the faithful and prompt performance of his legal duties. This rule is also expressly approved in U. S. v. Thomas, supra, Mr. Justice Bradley, who delivered the opinion of the court, said:
' “ So much stress has, in almost every case, been laid upon the bond as forming, either directly or indirectly, the basis of a new rule of responsibility, that it seems especially important to ascertain what are legal obligations that spring from such an instrument. The learned judges in the great generality of the remarks made in some of the cases referred to, with regard to the liability of a receiving officer, and especially of his sureties, by virtue of Ms bond, have evidently overlooked what we conceive to be a very important and vital distinction between an absolute agreement to do a thing and a condition to do the same thing, inserted in a bond. In the latter case the obligor, in order to avoid the forfeiture of his obligation, is not bound at all events to perform the condition, but is excused from its performance when prevented by the law or by an overruling necessity. * * * The condition of an official bond is collateral to the obligation or penalty; it is not based on a prior debt, nor is it evidence of a debt; and the duty secured thereby does not become a *170debt until default be made on the part of the principal. Until then, as we have seen, he is a bailee, though a bailee resting under special obligations. The condition of his bond is, not to pay a debt, but to perform a duty about and respecting certain specific property which is not his, and which he cannot use for his own purposes.”
And Mr. Justice Miller, in the opinion already quoted from, said:
“ When the case of U. S. v. Bashiel came before the court I was not satisfied with the doctrine of the former cases. • I do not believe now that on sound principle the bond should be construed to extend the obligation of the depositary beyond what the law imposes upon him, though it may contain words of express promise to pay over money. I think the true construction of such a promise is to pay when the law would require it of the receiver, if no bond had been given; the object of taking the bond being to obtain sureties for the performance of that obligation.”
To the same effect are Potter v. Titcomb, 7 Me. 302; Mechanics’ Bank v. Hallowell, 52 Me. 545.
Therefore, in my opinion, the solution of the question before us depends upon whether the provisions of the statute of this state prescribing and regulating the duties of county treasurers, impose an absolute duty to pay over the public moneys received by them. These provisions are as follows:
“ (Mills’ Ann. Stats.) sec. 890: It shall be the duty of the county treasurer to receive all moneys belonging to the county, from whatsoever source they may be derived, and all other moneys which are by law directed to be paid to him. All moneys received by him for the use of the county shall be paid out by him only on the orders of the board of commissioners, according to law', except where special provision for the payment thereof is or shall be otherwise made by law.”
“ Sec. 891: The said treasurer shall keep a just and true account of the receipts and expenditure of all moneys which shall come into his hands by virtue of his office, in a book or *171books to be kept by him for that purpose, which, books shall be open at all times for the inspection of the board of county commissioners, or any member thereof, and to all county and state officers; and at the meeting in July and January of the said board of commissioners, or at such other time as they may direct, he shall settle with them his account as treasurer, and for that purpose he shall exhibit to them all Ms books and accounts, and all vouchers relating to the same, to be audited and allowed.”
Section 893 makes it “ the duty of the district court of each county in this state, at each term thereof at which a grand jury is summoned and impaneled, to appoint a committee of such grand jury, or other reputable persons, which committee shall consist of not less than three nor more than five, to investigate the official accounts and affairs of the treasury of such county.”
“ Sec. 894: It shall be the duty of the committee to carefully and fully investigate the official accounts of such treasurer and ascertain the condition of the treasurer’s accounts, and of each fund thereof, and to ascertain and report the amount of money due each and every fund and account in the hands of such county treasurer, * * * and the exact amount of each of such funds, where the same are or have been kept, and whether, if not kept in the office occupied by the county treasurer, they have been deposited in any bank or banks, or with any person or persons ; to inquire, ascertain and report what interest, if any, has been paid or agreed to be paid, directly or indirectly, for said funds by said bank or banks, or other person or persons with whom said funds may be found to have been left or deposited.”
By the act of 1889, sections 1248-51, Mills’Ann. Stats., it is made a felony for a county treasurer to convert to his own use in any way the public moneys in his hands, or to loan the same, with or without interest.
Section 1250 provides that “ if any such officer * * * shall make any contract or agreement with any person or persons, bodies or body corporate, or other association, by *172which such officer * * * is to derive any benefit or advantage, directly or indirectly, from the deposit with such person * * * of any moneys or valuable securities held by such officer * * * by virtue of his office * * * such contract shall, as to such officer * * * be utterly null and void; but the person or persons, body or bodies corporate, or other association, shall be liable to the county * * * in an action for the recovery of all such benefits or advantage as would, by the terms of such contracts or agreement, have accrued to such officer * * *; and payment to the officer * * * shall not protect the person or persons, body or bodies corporate, or other association, against an action of recovery brought by the county * * * whose funds are so deposited.”
The condition of the bond he is required to give before entering upon the duties of his office, as provided by section 886, is in legal effect, a guarantee on the part of the sureties that the treasurer will faithfully perform the duties thus fixed and prescribed by the statute. It will be seen that these provisions merely prescribe the duties of the county treasurer in collecting and disbursing the public revenues, and do not, like sec. 12, art. 10 of the constitution, which prescribes the responsibility of the state treasurer, “ in direct terms or by their tenor” subject him to an absolute liability as an insurer of the money so collected, or impose upon him a responsibility in regard thereto other than that which the rules governing the relation of bailee sanction and approve. In U. S. v. Thomas, supra, Mr. Justice Bradley, in discussing the general rule of official obligation, as imposed by law, said:
“ The basis of the common-law rule is founded on the doctrine of bailment. A public officer having property in Iris custody in his official capacity is a bailee; and the rules which grow out of that relation are held to govern the case. But the legislature can undoubtedly, at its pleasure, change the common-law rule of responsibility. * * * Where, however, a statute merely prescribes the duties of the officer, as that he shall safely keep money or property received or collected and shall pay it over when called upon to do so by the proper *173authority, it canuot, without more, be regarded as enlarging or in any way affecting the degree of his responsibility. The mere prescription of duties has nothing to do with the question as to what shall constitute the rule of responsibility in the discharge of those duties, or a legal excuse for the nonperformance of them, or a discharge from their obligation. The common law, which is common reason, prescribes that; and statutes, hr subordination to their terms, are to be construed agreeably to the rules of the common law.”
My conclusion is that, while the provisions of our statute hi relation to a county treasurer do not constitute him an insurer of the money that comes into his hands, yet when construed in connection with the nature of the trust imposed upon him, affecting as it does the welfare of the public, their intention manifestly is to exact the utmost fidelity and the exercise of such a degree of care on his part in the safe keeping and preservation of the same as is commensurate with the importance of the duties imposed; that is, the highest care known to the law, such as a very prudent man exercises in the management of his most important affairs. State v. Houston, supra; McClure v. La Plata County, supra.
I think this view is consonant not only with the principle of justice and fairness that is recognized as the controlling consideration in all business dealings between individuals, but will best conserve the interests of the public and better insure the faithful performance of their official duties on the part of its fiscal agents. It is a matter of general knowledge that prudent and cautious business men not only do, but in the transaction of their financial affairs are obliged to resort to the banks of the country as the only depositaries with whom they can place their money with the assurance that unless some unforeseen contingency happens, it will be safe and available when needed. And why should not a practice thus universally approved and adopted by business men in the management of their private affairs, and shown by experience to be the safest and surest way of protecting large *174sums of money from loss, be followed in the handling and administration of the public finances ?
The right of a county treasurer to deposit the public money in a bank for safe keeping is tacitly recognized by .our statutes and prudence and caution dictate that he should do so, when, as disclosed in this case, the county fails to furnish him a safe place in which to keep it. It would be gross negligence, amounting to recklessness, to keep it on his person, or in his office, unless supplied with adequate and safe means for its preservation. For a loss occurring under such conditions he would be clearly liable. And if, under such circumstances, he exercises the strictest care in selecting a bank of unquestioned solvency in which to deposit the public money, and being guilty of no fault in leaving it there, and the money is lost through the unexpected failure of the depositary, it seems to me unfair, unwise and unjust to hold him and his sureties liable for the money so lost.
As stated by the Chief Justice in the majority opinion, out of the four cases in which this defense has been passed on, in but one—York County v. Watson, supra, has it been upheld. Yet, it is also true that in neither of the other three was the decision by a full bench; and in two, there was an express dissent.
A careful reading of these cases convinces me that the weight of authority is not always determined by the numerical preponderance of decisions. Attention is also directed to sec. 3778, Mills’ Ann. Stats., as having some bearing upon the question. I cannot see wherein the treasurer’s liability is affected by its provisions. If it be true that the county cannot legally collect from the treasurer, or his sureties, moneys lost without his negligence, it follows that to that extent they are “ unavailable ” within the provision of the statute, and the county is expressly exempted from responsibility therefor.
That the defendant Gartley did exercise that high degree of care and caution exacted of him as a bailee of the public money in the matter of the deposit in question, is shown by *175the averments in the special answer. The motion for judgment on the pleadings admits the truth of those averments. In my opinion they constitute a complete defense to the action. I think, therefore, the judgment ought to he reversed upon both grounds.