Court Opinion

ID: 6676731
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:16:40.429116+00
Date Added: 2024-06-11T16:00:43.486699
License: Public Domain

The opinion of the court was delivered by
Mit. Chief Justice Simpsoh.
Adopting the statement of this case found in the opinion prepared by Mr. Justice McGrowan, and concurring in that opinion down to the matter of the statute of limitations, but differing somewhat upon that question from said opinion, I beg leave to present the following as my views thereon.
The vital question in this case is the statute of limitations. His honor held that as to all of the alleged breaches of the bond, except the failure to pay to the parties the amounts collected for them, the statute was a bar, but as to this last alleged breach, while Lake, the clerk, could not be protected, the sureties were. Hence the verdict was against Lake for the penalty of the bond, but in favor of the sureties. The discussion of this question requires at this point a statement of some of the general principles governing the statute of limitations, as applicable to the different classes of cases in which it may be interposed. And, first, we may say, that in a contest between a cestui que trust and his trustee, the statute has no application until the trustee has done some act throwing off the trust, or indicative of his purpose to throw it off. The trustee, however, is not precluded from interposing the doctrine of laches in a proper case. Second. Before the adoption of the code, the statute had no application to a sealed obligation creating a debt; such obligations, however, were subject to the presumption of payment by lapse of time, which became conclusive after the lapse of 20 years or more. Third. The statute has application to unsealed contracts creating a debt. And fourth. Also to sealed obligations or contracts amounting to covenants, &c., &c.
Now, to which class does the bond sued on below belong ? or, rather, what was the purpose of the action below ? Was it to enforce a trust, to collect a debt, or to recover a penalty for a breach of covenant ? The action below' is in the name of the State as plaintiff, the payee of the bond of the clerk, and is against the said clerk and his sureties for certain alleged breaches of duty on the part of the clerk, for the performance of which the *49said bond bound the said clerk while he remained in office. It is conceded that as to all of the said -breaches, except the last, the clerk committed them. As to these, his honor ruled that the statute could be interposed as a defence by all of the defendants. This must have been upon the ground that the bond sued on was substantially a covenant for the performance of certain duties by the clerk, and therefore belonged to the last class of cases mentioned above, and subject to the statute. We concur in this conclusion. And this being so, an action would accrue upon any breach by the clerk during the time he remained in office, to be commenced at least within the statutory period after the expiration of the office — according to the nature of the breach — or be barred. Thirteen years, then, having elapsed after Lake went out of office before the action below was commenced for these breaches, the conclusion is inevitable, that as to these, the action, being on a covenant, was subject to the statute and was barred, and that his honor was correct in so ruling.
As stated above, however, his honor held that as to the last alleged breach, to wit, the failure of the clerk to pay over the money collected by him to the parties entitled thereto, the sureties were discharged, but that the clerk could not be, and this ruling forms the main subject of appeal upon exceptions both by the State and the clerk, Lake. We do not understand upon what distinct ground his honor held that the sureties should be discharged, whether because there was really no breach as to this matter during the term of office of the clerk, as there was no proof that he had refused a demand during said term, which was necessary for a breach (Wright v. Hamilton, 2 Bail., 51; Lever v. Lever, 1 Hill Ch., *62; Vaughan v. Evans, Ibid., *414); or whether, there being a breach during said term, a right of action accrued on the bond, which gave currency to the statute, and more than the statutory period having elapsed since, the statute was a good defence. But in either point of view, we concur in his honor’s ruling as to this branch of the case.
The liability of the obligors on the bond must be ascertained from the terms of the bond itself, and they cannot be held responsible beyond said terms as properly construed. The bond is their *50contract, and they have a right to stand on that. Now, the condition and obligation of the bond here was, “That Thomas M. Lake shall well and truly perform the duties of the. said office, as now or hereafter required by law, during the whole period he may continue in said office.” This condition clearly made the obligors liable only for failure of duty during the term of office, but not for any failure after the expiration of said term.
As to the alleged failure of the clerk to pay the money collected to the parties entitled. He was not required, under the lawr, to pay except upon demand (see Hamilton v. Wright, Lever v. Lever, Vaughan v. Evans, supra); and if there was no demand during his continuance in office, there was no breach, in this respect, of the bond, and, therefore, no right of action on the bond for said alleged breach. But if there was a demand during the term, such as required by the law to give rise to a right of action, then, as we have stated above, the statute began to run, and more than the statutory period having elapsed since, his honor was correct in holding the plea good as to the sureties. But why was it not held good also as to the principal on the bond — Lake ? His honor ruled that Lake occupied a fiduciary, relation to the parties entitled to the money collected by him, and that to pay it over, or to account for it on demand, was a continuing duty as trustee, commencing when he received it, and continuing until he either paid it or on demand refused to do so, or did some other act throwing off the trust before the currency of the statute could begin. No doubt, this was sound doctrine, if the action below had been against Lake himself by the parties entitled to the money, not on breaches of the bond, but for so much money had and received for their benefit collected and held by him as a public officer. In such case, the clerk could not shield himself on the ground that the breach had not occurred during his term of office, because he would be liable individually to the parties, whether he failed to pay over the money on demand as well after his office expired as before.
But the action below was not by the parties themselves, claiming the money against Lake alone as their trustee, but it was an action on the covenant or bond by the State, and such action could only be maintained for a failure of duty by the clerk during *51bis term of office, because there could be no breach of the bond after the termination of the office, the bond itself specifying that the obligors should be held liable only for such failure during the term ; and this, it seems to us, applied as well to the principal, Lake, as to his sureties. We mean to say, that Lake, as clerk, occupied two distinct positions in regard to his responsibility for failure to discharge his duties. First, he gave bond to the State, with the other defendants as his sureties, that he would discharge all the duties of his office during the time that he held it, which subjected him and his sureties to the penalty of said bond for any failure made during the term of the office, but not for any subsequent failure. Second, he was liable individually as a receiving public officer, independent of the bond, to the parties for whom he may have collected money, on demand made, whether during his term of office or afterwards. But as no action could accrue to the parties until demand in an action by the parties, he could not plead the statute until six years after said demand. But in an action by the State on the bond for a breach alleged to have occurred during the existence of the office, we do not see why he should not stand with his sureties, with precisely the same liabilities and the same defence, in so far as the statute is involved.
Now, the action below, as we have already stated, was upon the bond for alleged breaches, of course made, if at all, during the term of the office, and if the sureties were entitled to relief, as has been held, why not the principal on the bond? We can see no reason for the distinction. If there was no breach for nonpayment, because no demand was made while Lake held the office, then no action could arise on the bond against any of the obligors. If there was a breach, then a right of action accrued to the State against all, and the statute was given currency as to all. Without adjudicating the question, whether Lake, the clerk, could interpose the statute if the parties entitled to the money had sued him alone for money had and received, which is not the case before us, yet we think it was error in the Circuit Judge to apply in this action by the State, on the bond, a different rule to the principal on said bond from that which he applied to the sureties. If there was a cause of action at all, it was the same as to *52all of the obligors; and if the statute protected one, it protected all. We think, therefore, that the judgment below against Lake should be reversed.
It may be urged that these views are in conflict with Langston v. Shands (23 Shand, 149), in which Judge Fraser, in delivering the opinion of the court, said: “The bond is conditioned that the guardian shall faithfully account for, and pay over, whatever may come into his hands as guardian. To secure the performance of this duty, the bond runs for full twenty years from the time at which the ward attains majority, or, as in this case, from the time when, by her marriage, there was a person sui juris and competent, as her husband, to receive and receipt for the fund.” I think not. In that case, the relation of trustee and cestui que trust■ — guardian and ward — existed. It was, therefore, clearly a case in which the statute had no application, and a right of action as between them did not give currency to the statute. In addition, in that case there was no time fixed in the bond, as in the case before the court, for the failure of duty by the guardian to occur in order to attach liability to the bondsmen. A failure on the part of the guardian to account at any time after the majority of the ward, during the 20 years, as I suppose, breached the bond, and gave a right of action thereon ; while here the breach giving a right of action had to occur within the four years of Lake’s clerkship, from which occurrence the statute began to run in favor of the obligors.
Judgment below, as to the sureties, affirmed; but reversed as to the principal, Lake.