Court Opinion

ID: 8267790
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:13:12.47291+00
Date Added: 2024-06-11T16:43:25.403581
License: Public Domain

The opinion of the court was delivered by
Reed, J.
On the 12th of May, 1876, the board of chosen freeholders of Warren county, at its annual meeting, elected Edmund Teel to the office of county collector for the term of one year. On that day, Teel, as principal, and Mixsell, the respondent, and Mutchler, the deceased surety, with others, entered into a bond in the penal sum of $85,000, conditioned for the faithful performance by Teel of the duties of his office, and this bond was approved by the board. After the expiration of the term of Teel, a committee appointed to examine his accounts reported that he was indebted to the board of chosen freeholders in the sum of $8,597.70. He afterwards paid $2,181.62, leaving an alleged deficiency of $6,416.08. For the recovery of this amount an action at law was brought by the board of chosen freeholders against Teel and all the sureties upon the bond. After the service of the summons in that action, Mutchler died, and the cause-proceeded to a judgment against the surviving defendants for the sum of $5,920.78. This sum was paid by the respondent, as one of the defendants severally liable for the payment of the same. ' It appears that each of the co-defendants, or their estates, is insolvent, with the exception of the estate of Mutchler. *599and this bill is filed to compel the executors of the latter to contribute a moiety of the judgment already paid by the respondent.
The defence interposed to this suit is based upon two propositibns. The first is that the amount which the respondent paid was not due to the board of chosen freeholders by Teel, and therefore the sureties of Teel were not legally responsible for that sum. The second is that during the official year covered by the bond of the appellant, moneys were illegally borrowed by the board of chosen freeholders and placed in the hands of Teel, as collector, to disburse, and that by this act the sureties were relieved from responsibility for his official acts.
Eirst, then, did Teel fail to pay over the sum of $5,920.78, or any other amount of money received by him during the year beginning on the 12th day of May, 1876 ?
It, appears that there came to his hands during the year cash to the amount of $320,803.33. He disbursed during that period the sum of $320,804.06. In addition to the amount which he so admittedly received, he was, charged in the court of chancery with a balance from the previous year, during which he held the same office, of $8,598.63, and it is upon the presence or absence of this balance in his hands upon the 12th day of May, 1876, that the contest in this case primarily arises. On the part of. the complainant, it is insisted that Edmund Teel, on the day the present bond was executed, had a settlement with the board of chosen freeholders, and his account represented that he owed the county a balance, the amount of which was the above-named sum. This, it is insisted, is an admission on the part of Teel which has probative force against his sureties on the bond.for the year commencing upon the day on which the statement was made. It is clear, however, that the account was presented and the settlement concluded before the execution of the latter bond. The statement was made, therefore, antecedent to the commencement of the performance of his duties of the last year, and as the concluding act of his previous official term.
The declarations of a principal can only operate as evidence against-a surety when they are made in the performance of the official duties for which the sureties are bound, or made after the *600execution of an instrument by which principal and sureties became jointly bound for the faithful conduct of the officer. Town of Union v. Bermes, 15 Vr. 269.
This statement is included in neither of these classes of instances, and it therefore can have no force as evidence against the appellant.
It is next said that a book, known in the case as Exhibit 0, is evidence that the above balance was in his hands after May 12th, 1876. This book was made after the execution of the bond, and upon page 169 of the account the officer charges himself with the balance on hand at last settlement, namely, the sum of $8,598.63. This is an admission which is admissible against the sureties. The objections urged against the accounts contained in this book, upon the ground that they were loosely kept, or only for the private use of the officer, go only to the probative force of the admissions contained in it, and do not destroy the competency of the book itself as evidence. But, admitting that this statement is evidential on this inquiry, the question remains whether the facts proven in the c use are such as to refute this statement of a cash balance in the hi.nds of Teel on May 12th, 1877. Upon Teel’s testimony, taken along with the evidence of the condition of his bank accounts on May 12th, aud his previous loans of money at that time unpaid, and other features which characterised his conduct about that time, I have arrived at the conclusion that he did not have the amount of this balance in hand at the time of the commencement of his last official term.
Teel, in his testimony, says that the most of this cash was in the Phillipsburg and Washington banks, some in his safe, and some probably loaned out. All he had in the banks at that date was the sum of $1,649.83. What he had loaned out was not in hand, nor does it appear to have come to hand during the year. He says he had used a part for his personal expenses. The only cash in hand, outside of what was in bank, was in his safe.' He does not fix any amount as representing what was in his safe. On May 9th he drew out $400 to go to Belvidere. If he had had that amount in his safe, it is not probable that he would have drawn it from the bank.
*601Indeed, he still continued to draw upon the Easton bank until May 12th, when his account is drawn down to about $100.
Again, on the 13th of May, he borrows and deposits $5,364.94. If he had had any considerable amount of money in his safe, why did he not use it ? He is unable to fix any amount he had in his safe, and the strong probability is that he had little or none. I am clear that the amount of the deposit in the banks -represented all that remained in the hands of the officer of the moneys of the preceding year. This sum, as we have seen, -amounts to $1,647.91.
This amount would represent the deficit for which" his sureties were liable, unless this is extinguished by a payment made by Teel to his successor in office, after the expiration of Teel’s term. This sum was $2,181.62. If this payment is applied to the last year of Teel’s successive terms, it more than pays the deficit of that year, and relieves the sureties upon that bond entirely. '
Had the officer, at the time of payment, made an application of this sum to any particular one of his successive official years, such application, in the absence of any design to defraud sureties of which the county officials were cognizant, would be recognized, and the rights of the sets of sureties would be fixed by the act of the debtor. State v. Sooy, 10 Vr. 539.
But the amount was paid, generally, upon a balance which represented the financial conclusion of his successive years of office.
Had it appeared that the money which paid this item, was derived from the county revenues which came to the hands of the officer in any particular year, then it would be proper to apply the amount to any balance for that year remaining unpaid. Postmaster General v. Norvell, Gilpin 106.
And if it had appeared that the money was paid during one of the official years, the prima faaie inference, I think, would have existed that the fund was derived from the received revenues of that year.
But this money was paid after the close of the last year.
There is no satisfactory evidence to show whence the ex-officer derived the money.
*602He says that he thinks he paid it out of his bank account, but of what the fund was composed or when deposited does not appear.
In this posture of the cause, the rule seems applicable that the law will apply the payment to the oldest item of indebtedness, in the absence of any circumstance which would render such an application unjust to third parties. Toulmin v. Copland, 2 Cl. & F. 681; Mills v. Fowkes, 5 Bing. N. C. 455-461; De Colyer on Guaranties 428.
The effect of an application of this sum in this manner would leave the sum of $1,647.41, with interest thereon, as the sum. due by the collector for the first year.
But it is again argued that the sureties upon his official bond for that year are not responsible for his default, because it appears that a part of the money which Teel received as funds belonging to the county, was borrowed upon notes illegally made in behalf of the board of chosen freeholders. The argument is that inasmuch as the board of chosen freeholders imposed upon Teel the duty of disbursing money which was illegally borrowed, therefore the sureties are discharged from all responsibility for his official conduct.
This contention is grounded upon the rule enunciated in a number of cases in England and this country, to the effect that when a surety’s engagement relates to the performance of the duties of a particular office, it applies only to such matters as-were included in the office at the time the engagement was entered into, and that when the nature of the office is so changed that the duties are materially altered, so. as to affect the peril of the sureties, the bond is avoided. Pybus v. Gibb, 6 El. & B. 902; Oswald v. Berwick, 5 H. of L. Cas. 856; Bonar v. Macdonald, 3 H. of L. Cas. 226; Leigh v. Taylor, 7 B. & C. 491.
Whether the stringent rule of these cases should be adopted by this court, in view of the case of Morris Canal and Banking Co. v. Van Vorst, 1 Zab. 100, decided in the supreme court over thirty years ago, it is not now necessary to discuss. It is not necessary, because the facts in the present case do not present an *603occasion for the application of this rule, if it be admitted to be entirely sound..
In this case there was no change in the extent or character of the duty of Teel while in office.
The law fixed the boundaries of his official conduct., The reception and disbursement of the borrowed money was not an official duty, created after the execution of defendant’s bond, but was a transaction outside of the functions of his office. There was no duty thrown upon him to receive or disburse a penny of this money.
Now, I do not perceive upon what principle it can be claimed that, because the principal undertook to perform an extra-official act, his sureties are relieved from responsibility for the manner of his performance of his official duties.
Nor can the fact that this borrowed money was raised at the instance of officers of the county, inasmuch as they were acting outside of any official authority, afford any support to this contention. Brandt on Suretyship § 476.
I am unable to see any plausibility in the argument rested upon this ground, to relieve the sureties from responsibility for the conduct of Mr. Teel in dealing with the moneys which came legally into his official custody.
Indeed, it has been held by the Supreme Court of Pennsylvania that instead of avoiding their bond absolutely, the sureties upon a collector’s bond, where money had been illegally borrowed and placed iu the hands of such officer by the supervisors of a county, are responsible for his failure to disburse the entire amount. Franklin v. Hammond, 45 Pa. St. 507; Wylie v. Gallagher, 46 Pa. St. 205; Boehmer v. County of Schuylkill, 46 Pa. St. 452.
In these cases it was held that the officer having received the money as county funds he was estopped from denying that he held them for county purposes, and that his sureties occupied the same position.
I think, however, in this.regard the sureties do occupy a different position, and that while they are responsible for any act of their principal within the line of his official conduct, they are not *604concluded by his admission that he is acting officially in a matter clearly beyond the scope of his official duty.
I conclude, therefore, that for the disbursement of t'he money which legally came into the possession of Teel, his sureties were . liable.
In dealing with the case upon this basis, it is important to ascertain what portion of the last year’s deficit results from a failure to disburse this part of the money received.
There is nothing in the testimony by which this can be determined.
The officer intermingled the funds derived from all sources, and payments were made out of the joint fund for all purposes. It is thought equitable to the sureties to deduct from the deficit already found, such sum as bears to it the proportion which the borrowed money bore to the entire amount received by Teel.
This sum, by my computation, is $607.03. Deduct this from $1,647.91, and it leaves as the balance for which these sureties are liable the sum of $1,040.88, with interest upon the same from May 12th, 1877.
I think the decree below should be modified-so that the executor of Mutchler shall pay one-half of the above sum, with interest.

Decree unanimously reversed.