Court Opinion

ID: 6887843
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:33:37.113318+00
Date Added: 2024-06-11T16:05:45.933422
License: Public Domain

SWAN, Circuit Judge
(dissenting).
Under the rule of Tillinghast v. Merrill, 151 N.Y. 135, 45 N.E. 375, 34 L.R.A. 678, 56 Am.St.Rep. 612, a town supervisor was absolutely liable to account for moneys collected by virtue of his office. It was no excuse that he had deposited them in a bank if the bank failed. Yawger v. American Surety Co, 212 N.Y. 292, 297, 106 N.E. 64, L.R.A.1915D, 481. The Town Law of 1909 recognized such absolute liability by requiring a supervisor to give a surety bond to “well and truly keep, pay over and account for all moneys * * * belonging to his town and coming into his hands as such supervisor”. Section 100, Ch. 63, Laws of 1909. The Town Law also recognized the desirability of ameliorating the severity of this rule in case town funds were lost through failure of the bank in which the supervisor had deposited them. Section 101, Ch. 63, Laws of 1909. This section authorized the supervisor to purchase at the town’s expense a surety bond “securing to such supervisor the safety of town funds deposited by him” in any bank within the state, and “indemnifying him against the loss thereof through the failure or insolvency of such bank.” Thus the legislative plan was to hold the supervisor absolutely liable but to allow him at the town’s expense to protect himself against loss resulting from failure of the bank in which he had deposited town funds. There was no statutory requirement that town funds be deposited in a bank. Such requirement came into the legislative plan by Chapter 396 of the Laws of 1916 which amended the Town Law of 1909 by adding Article VI-A. Section 149-c of Article VI-A, so far as relevant, reads as follows: “§ 149-c. Duties of supervisors. The supervisor of any such town shall demand, collect, receive and have the care and custody of, and shall disburse all moneys belonging to or due the town from every source, except as otherwise provided by law. All moneys of the town received by the supervisor shall be deposited by him in such bank, banks or trust companies as shall be designated by the town board for such purpose. * * * ”
My brothers are of opinion that the duty imposed by the second sentence above quoted impliedly relieves the supervisor of his absolute liability to account for town funds lost through the failure of a depositary bank designated by the town board, despite the affirmation in the first sentence that the supervisor shall “have the care and custody” of moneys belonging to the town and despite the saving clause in section 149-e to the effect that nothing in Article VI-A shall be construed to repeal any statute not inconsistent with the provisions of this article. I am unable to agree. I see no necessary inconsistency between requiring an official to deposit funds in a bank designated by other officers and requiring him to account if the deposited funds are lost. His two duties may appear to operate harshly but they are not inconsistent duties. Even the harshness is more apparent than real since section 101 allows the supervisor to protect himself, unless that section also be impliedly repealed. The principle of absolute liability has had so long a legislative recognition and has become so firmly entrenched in the case law of New York that I believe an express legislative mandate is required to get rid of it. In Trustees of *995Village of Bath v. McBride, 219 N.Y. 92, 97, 113 N.E. 789, 790, the court remarked, "The rule of strict liability laid down in Tillinghast v. Merrill, supra, is a very important one, and it should not be frittered away in seeking to give relief in hard cases.” Nor, in my opinion, should it be abolished by an implication derived from section 149-c which is not plainly inconsistent with a continuance of the supervisor’s absolute liability. Moreover, I think it not without significance that when the new Town Law, effective in 1934, was enacted, the legislature not only expressly relieved the supervisor from absolute liability, but at the same time required him to procure a bond or take other security to protect the town against loss resulting from a failure of a bank in which town funds were on deposit. See sections 29(2), 29(6), 64(1), Chap. 634, Laws of 1932. Compare Pyrke v. Standard Accident Insurance Co., 144 Misc. 53, 57, 258 N.Y.S. 869, affirmed sub nom. Baldwin v. Standard Accident Insurance Co., 237 App.Div. 334, 261 N.Y.S. 507, affirmed 262 N.Y. 575, 188 N.E. 71. I believe the judgment should be reversed.