Court Opinion

ID: 6676733
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:16:40.434169+00
Date Added: 2024-06-11T16:00:43.357911
License: Public Domain

Mr. Jcstioe McGowan,
dissenting [omitting his statement, which is given above]. As to the exceptions of Lake, the principal. We do not think it was error to receive in evidence the records in the cases of Hill v. Watson, Thompson v. Thompson, and Smith v. Lake. One of the allegations was that Lake, during his term of office as clerk, officially received certain funds in the two eases first named, and the records, including his own statement of the accounts therein, were the very best evidence of the alleged fact. Another allegation was, that these funds were never turned over to Smith, his successor in office, and the record in the case of Smith v. Lake was offered as evidence upon that point. *54In the case of Featherston v. Norris (7 S. C., 485), it was said that “a bank book containing proper credits was the proper evidence of such a deposit, to be delivered by the outgoing commissioner in equity to his successor.” If such a bank book was evidence of what it contained, surely a record of the court, to which Lake himself was a party, was admissible, as tending to show that the funds in his hands as clerk were never turned over to his successor. The records proved the fact of their existence. “It is, therefore, the only proper legal evidence of itself, and is conclusive evidence of the fact, and of all the legal consequences resulting from that fact, whoever may be the parties to the suit in which it is offered in evidence.” Grreenleaf on Evidence, sections 527 and 538.
II. Then as to the alleged errors of the judge, in charging and refusing to charge certain requests as bearing on the question of the statute of limitations. Both sides complain, and it will prevent confusion and repetition to refer to the charge itself, which is printed in the Brief. As to the liability of Lake, the judge charged substantially as follows: “If Lake received the money as clerk, he became as to these funds an express trustee, and although he might have relieved himself by turning them over to his successor, if he did not do so, the trust continued until such time as it was terminated by his repudiating the trusteeship and holding in defiance of the parties, setting them at arm’s length. * * * If there was no order to pay out these funds, but he still continued to hold them, the trust would continue to attach, and the liability of Lake himself would continue indefinitely until there was demand made, on the part of the persons entitled to the funds ; and the statute would not run in favor of Lake. In order to give currency to the statute, there must be a cause of action. If there was no order to pay out, the statute would not protect him, because in that case there would be no cause of action. But if there was an order to pay out, the question was made whether the statute would run from the time of the order or the time of demand. I think that an order to pay out funds in the hands of the clerk, would authorize him to pay, and make it his duty to pay on demand, and that no right of action against Lake would commence until there had been a demand and refusal. *55Whenever, after demand, he refused to pay, then that refusal would be a breach of the bond and there would be a right of action — from that moment they dealt at arm’s length, and in six years Lake would be protected by the statute,” &c.
Was there error in this, of which Lake can complain ? The obligation sued on was under seal, a penal bond executed in 1868," before the code, and if it had been for the payment of money only, would not have been subject to the statute of limitations, but have remained in full force until presumed paid in 20 years. But while the penalty was in money, the bond was really given to secure the performance of covenants — that the said Lake “shall well and truly perform the duties of the said office (clerk) as now or hereafter required by law, during the whole period he may continue in said office.” It is manifest that there was no liability on the part of the obligors, until Lake failed to perform the duties of the office. Then, however, there was a breach of the condition, and the obligors liable therefor. As to that liability (although arising out of a bond), it seems that the statute of limitations may be pleaded. It is true, as a general rule, that the statute commences to run at the moment the right of action accrues; but, as it seems to us, this is not always the case in reference to those actions which arise out of breaches of official bonds, for the reason that those breaches may be very different in character, some being complete and perfect by a single act, and others continuous in their nature; and as to this latter class, the question as to the currency of the statute, must always be- — ■ not when the right of action first accrued, not when the party entitled might have sued — but when he was bound to sue, on pain of being barred by the statute.
Now, in reference to the alleged breach of not paying out to the parties money received by Lake as clerk, and still in his hands under orders to pay, we cannot doubt that such breach was continuous until the money was either paid or presumed to be paid, or Lake upon demand had disclaimed his obligation to pay. “If a clerk neglects or refuses to perform his duty, he commits a breach of his official bond, and becomes liable to an action for the penalty. The default consists, not in receiving money, but in neglecting or refusing to deposit it in bank; or where it is to be *56immediately paid out, in not paying out according to'the order of the court. This is a continuing duty, and the default continues so long as the performance of such duty is neglected.” State v. Moses, 18 S. C., 372.
Without questioning the case of Pickens v. Dwight (4 S. C., 360), or undertaking to decide definitely that Lake, the clerk, was a technical trustee as to the duties imposed on him,’there can be no doubt whatever that “he was a public officer, to whom was entrusted by law the collection and custody of the money of others and the care and custody of their bonds and other property,” and as to such money and property so entrusted to him, we do not see why the clerk of the court should not fall under the same rule which is applied to all other persons who receive the money of others in a fiduciary capacity, and are under bond to secure the performance of certain prescribed duties in reference thereto; that is to say, that being a quasi trustee, he may not plead the statute of limitations as to funds officially in his hands, until he has done some act which purports to be a full execution of the trust, and the parties in interest are put to the assertion of their rights. See Motes v. Madden, 14 S. C., 488; Houseal v. Gibbes, Bail. Eq., 484; Van Wyck v. Norris, 15 S. C., 256; Roberts v. Johns, 16 Id., 183, and 24 Id., 588; Langston v. Shands, 23 Id., 153; Owens v. Watts, 24 Id., 79.
Accepting this view, however, it is urged that the law required Lake to turn over to his successor all funds in his hands officially ; and that alone put an end to the trust and gave currency to the statute; and for this, the case of Van Wyck v. Norris, supra, is cited. It is true, it was held in that case that “when a commissioner turned over his office, bank book, &c., to his successor, claiming to withhold nothing, the statute of limitations then commenced to run in his favor against persons having funds in his hands,” &c. That ruling most certainly was correct, but we do not think it should control this case. There all the office property of Norris (the out-going officer), including funds in his hands officially, was actually or intended to be turned over to his successor. That was throwing off the trust and started the statute ; while here the very contrary is true. There ivas no effort to throw off the trust, hut Lake, the outgoing officer, successfully *57resisting the claim of his successor, retained and still retains possession of the funds. The difference between the two cases is simply that between doing and not doing — between commission and omission. We agree with the Circuit Judge, that the mere existence of that law, which was ignored and disregarded, could not, contrary to the fact, be considered as a complete execution of the trust by Lake, and that he could not take advantage of his own wrong in refusing obedience to that law.
But it is also urged that the claim of Smith, the successor, although unsuccessful, must be regarded as a demand by the parties entitled to the funds, and that such demand for payment gave currency to the statute against them. We cannot accept this view. As we understand it, Smith, the incoming officer, was in no way the agent or attorney in fact of the parties, and we fail to see how or why they should be bound by his unsuccessful effort to get control of the funds. Smith’s effort to obtain control of the funds should not afford Lake protection against the real owners.
But it was still further urged that the orders of court to pay out the funds operated as a demand for payment, which gave currency to the statute in favor of the clerk, and the case of Vaughan v. Evans (1 Hill Ch., 430) was cited as favoring the view'. But we think it will be found upon a careful examination that nothing was there ruled which, going beyond the particular circumstances of that case, declared a general rule upon the subject. The question was as to which of two bonds of the same officer, a default as to money received during the first term should be referred. Chancellor Johnstone, on the Circuit, held that “there was no evidence that the money was ever demanded from Evans by the insurance company. The principles of Wright v. Hamilton are as applicable to a commissioner as to a sheriff; that case is therefore an authority that a right of action could not arise against Evans until demand of payment.” Chancellor Harper, in delivering the opinion of the Appeal Court, said: “And w'hat is the evidence here of default during the first term ? The strongest cases are those in which the commissioner was ordered to pay over the funds. These orders were an authority to pay over the money, and made it his duty to do so, if it were *58demanded. Certainly, however, it did not impose on him the duty of seeking out the parties, wherever they might be found, and making a tender. According to the case of Wright v. Hamilton (2 Bail., 51), there was no default and no cause of action against Evans till the money was demanded and he refused to pay it, and no demand was shown during the first term,” &c. Appended to this opinion there is the following remark of Johnson and O’Neall, as members of the Appeal Court: “We are of opinion that the neglect of the commissioner to pay over or invest money as ordered by the court, wras a breach of the condition of the bond, and that the application for such an order ought to be regarded as prima facie evidence of a demand, and that the sureties to the bond of the term in which such order was made are liable.”
We think it manifest from these different opinions that the principal difficulty in Vaughan v. Evans was in reference to the particular facts of the case. In equity cases especially, orders to pay out funds in court are generally taken, as a matter of course, by the solicitors engaged; and when the parties are numerous, such orders may be entirely unknown to them. We take the view of Chancellor Harper, that it was not the duty of the clerk to hunt up parties to whom money was due. “Demand” is defined to be “a request addressed to a person to do some act which he is legally bound to do, after the request has been made.” 1 Lt. L. Law Dict., 869. I cannot hold that the judge erred in refusing to charge that the orders of court to pay out the funds, amounted to demands of payment by the parties in interest, so as to give currency to the statute against them and in favor of the clerk.
It is said, however, that the demand and refusal was after the clerk’s term of office had expired, and therefore was no breach of the bond, and for that reason there can be no recovery in this action upon the bond; but the parties in interest must be left to their separate actions for money had and received against Lake as an individual. It is true that the State is the obligee of the bond, but, as it seems to me, it was required to be executed in that form, for the benefit of all persons who should suffer from the official default of the clerk; and that the bond, though in the *59name of the State, should be liberally construed so as to cover and protect all persons who have so suffered.
I cannot agree that the Circuit Judge erred in his charge as to the defence of the principal obligor, Thomas M. Lake.
Plaintiff's exceptions as to sureties. Mr. Murfree, in his recent work on official bonds, says: “The contracts into which sureties enter are not founded on any valuable consideration passing to them from the obligee. Hence they are regarded by the law with favor and indulgence, which has been formulated into a maxim that the liability of sureties is strictissimi juris. They are held to be bound as far as they distinctly bind themselves, but their responsibility cannot be extended by construction beyond the terms of their agreement.” Murfree, section 620; Tinsley v. Kirby, 17 S. C., 1. One of the characteristics of “official bonds” is, that they are generally limited to a particular period of time. The term of the office of clerk in this State is four years, and the agreement of his sureties on the official bond is, “that he shall perform the duties of the office, during the whole period he may continue in said office.” It is manifest that the sureties of Lake made themselves responsible for his good conduct during his term of office; that is to say, from November, 1868, to November, 1872, and for nothing that he might do or • omit to do after that time. “The responsibility of sureties is limited to such money as the officer may have received, either by himself or his accredited agent, during the currency of the bond and the term of office which it represented, and w'hich he failed to account for.” Murfree, section 302.
This seems to be plain, and as a necessary consequence, that at the expiration of the office, there would be a right of action for all breaches of the bond which had been committed during the term. And if this be so, it must follow that from that time (expiration of the office) the statute would begin to run in favor of the sureties — certainly as to all breaches which could only be committed during the term, or immediately upon its close; as, for example, in respect to a default in making regular return to the court, or in failing to turn over official funds to the successor upon the close of the term. As to these breaches, we think there can be no doubt that, in favor of the sureties, the statute com*60menced to run upon the expiration of the office, or within a reasonable time thereafter. Murfree, section 621, and the authorities cited in sections following. “In some of the States there are special statutes limiting actions against sureties on official bonds of certain officers. These statutes [wrn have none] are, of course, to be construed according to their respective terms, but in all of them a vital question is, when does the statute begin to run ? The answer to this question is, upon general principles, that the statute begins to run as soon as the liability of the surety is fixed.” Murfree, section 784.
Suppose, however, the officer during his term of office regularly receives funds, which, not being accounted for, remain in his possession after he goes out of office. In any but an extraordinary case, these funds would be turned over to his successor, which would undoubtedly enable the sureties to plead the statute to all liabilities whatever, growing out of the suretyship. Van Wyck v. Norris, supra. But suppose further, that in some way this transfer was not made, and the funds still remain in the hands of the outgoing officer, what then? We have just held that, as to the officer himself still holding the funds, the breach, though first made during the term, was continuous in its nature, and extended beyond the term of office, and until payment or demand made; and the question now is, whether the liability of the sureties was also continuous, and followed the money beyond the term of office. The Circuit Judge held that “when Lake went out of office, the sureties had a right to regard him as having ceased to be trustee, so that no longer could they be bound by any act on the part of Lake; that at that time a right of action accrued against them, and, as a consequence, they would be protected after the lapse of six years” — holding that “the parties in interest, whose funds were in court, could not convert Lake into a continuing trustee, beyond the expiration of his term of office, by neglecting to demand their money of him; still he would be chargeable himself as trustee until he has repudiated the position of trustee,” &c. I cannot say that this was error.
I think, therefore, that the judgment of the Circuit Court should be affirmed.
Judgment reversed as to Lake, and affirmed as to the sureties.