Pass v. Grenada County

71 Miss. 426

• Court: Mississippi Supreme Court
• Decided: October 15, 1893
• Status: Published

Opinion

Cooper, J.,

delivered the opinion of the court.

One B. H. Gordon was elected to the office of treasurer of' Grenada county for the term beginning on the first Monday of January, A.D. 1884, and ending on the first Monday of January, A.D. 1886 ; he was also elected as his own successor for the term beginning at the latter date and ending on the-first Monday of January, 1888. He executed his general bond as treasurer for both terms, arid the appellant, Pass, was surety upon each. Neither the board of supervisors nor Gordon and his sureties knew that the law (Code of 1880, § 726) required the treasurer to execute a special bond for the security of the school-funds, and none was given for either term. All concerned supposed that the bond actually given would serve as security of all the funds, school and general, which might come into the hands of the treasurer. It appears now that Gordon had embezzled a part of the general fund and of the school-fund during his first term of' office, but he succeeded in concealing that fact from the county authorities, and pretending to have more cash on hand than he in truth had. His accounts for the first term were audited, and he entered upon his second term a real but not a known defaulter. At the expiration of his second term another person was elected as treasurer, and Gordon, being unable to further use a simulated cash balance as a real one,. his default became known.

Upon discovery of tlie delinquency, the board of supervisors caused the books, accounts and vouchers of the treasurer to be examined by an expert, Mr. McLeod, whose report showed that Gordon was then in default in the sum of $5,810.16. In making this account, no distinction was drawn between the general funds of the county and the school-fund, but Gordon was charged with all moneys that came into his hands, and credited with all disbursements he had made. The report of McLeod having been examined by the board of supervisors, it made an order at its July term, 1888, that Gordon should .at once pay over to his successor the amount found due. The sureties upon the bond of Gordon for his second term, believing that some mistake had been made in the statement of the account, employed "Wirt Adams, who had formerly been revenue agent of the state, to re-examine the accounts, and on the eleventh day of August an arrangement seems to have been made between the board of supervisors and the sureties for a suspension of proceedings until Adams could make his examination. The record in the cause is not well made, and there is no note of evidence made by the chancellor, but there appears in the record an instrument of writing, presumably from the minutes of the board of supervisors, reciting that the sureties believed mistakes existed in the account, and that Adams was then at work to make a fair statement of the same. Wherefore it “is agreed and understood that the sureties of Gordon deposit in the Merchants’ Bank of Grenada the sum of $5,810.16, in the hands of John Powell, as trustee for the county, there to remain until the-Monday in September, 1888, at which time the statements of McLeod and Adams are to be carefully compared by them and the board, and if any mistakes in favor of Gordon aré fouud in the statement of McLeod, then said trustee is to pay over to Grenada county less said mistake, and if any mistakes are found in favor of the county, the said sureties are to make the same good to the county, and, further, that if said ■deposit is not made to-day, and said agreement complied with, suit is to be brought immediately by the district attorney as required by law.” "Whether this deposit was made does not appear, but so it was that the examination of Adams disclosed the fact that Gordon was defaulter for some two or three thousand dollars more than McLeod had reported.

Mr. Adams testifies that he was employed by the sureties of the treasurer. He states that “it was a private examination, as I understood it; it was made in the interest of Mr. Gordon and the bondsmen alone, and my report as to the result of my examination was made to Mr. Pass and those sureties present, in the office of Judge Loan, and the report itself was afterwards handed to Mr. Pass. As I understood it at the time, the county, through its board of supervisors, had employed Mr. McLeod to examine for it.” On the third day of September an order was made by the board of supervisors reciting that it appeared from the report of McLeod that Gordon was indebted to the county of Grenada in the sum of $5,810.16, as treasurer of said county, and directed that he and his sureties should forthwith pay said sum into the treasury of said county, and, in default thereof, that the district attorney should immediately enter suit upon his official bond for said amount, and all damages and penalties allowed by law. Under this order the sureties upon the bond of Gordon for his second term, including the appellant, Pass, who was also one of the sureties upon the bond for the first term, paid into the county treasury the sum of $5,810.16, of which sum Pass paid $4,485.16, and thereupon the hoard of supervisors caused an order to be made directing its clerk, as county auditor, to balance all accounts on-his books against said treasurer as final and absolute. It appears from the evidence that this settlement was made by the board in ignorance of the fact that the account made by Adams, in the interest of the sureties, showed a larger balance against the treasurer. The clerk of the board testifies that “the board had no knowledge of what Mr. Adams’ statement was.”

There were many sureties upon th.e bond of the treasurer for the second term, and this proceeding was commenced by Pass, who had paid more than his share of the bond, against the other sureties thereon, to compel contribution from them. Some of the defendants to the original bill answered, denying that the treasurer had made any default whatever. They further stated that, if, in fact, there was a default, it arose during the first term, and not the second, and, therefore, that Pass, if entitled to contribution at all, must seek it against those who were sureties with him on the bond of the treasurer for the first term.

Pass then exhibited an amended and supplemental bill against the county of Grenada and the sureties on both bonds. lie averred 'that, if the default was during the first term, he was entitled to contribution from his co-sureties during that term; if the default was during the second term, he was entitled to contribution from his co-sureties on the bond for that term; and if, in truth, there was no default, then, that he was entitled to recover back from the county of Grenada the sum he had paid, which payment he alleged had been made by him under coercion- by the board, and which was made by him and received by the board under protest by him, by which all his rights -were reserved. The county of Grenada answered this amended and supplemental bill, averring that there was no default by Gordon during his first term, but that the default arose during the second term. It denied'that the payment made by Pass and others was coerced by the board, or that such payment was made or received under protest, but averred that it was made and received as a final and absolute discharge of the indebtedness of the treasurer, whatever it might be; but that since Pass, by his bill, repudiated the settlement, the board set up, by way of cross-bill, that the default was, in fact, $7,890.89, instead of $5,810.16, and, for the difference between said sums, the board demanded a decree against Pass and the other sureties on the second bond.

The court referred the account to a commissioner, with instruetions to separate the two terms, and make and state an account as to each; and that in such accounting no charges or allowances should be made against or in favor of the treasurer, except as to the general funds of the county. This order of reference is the first intimation of a recognition of the fact that neither of the bonds were security for the school-funds of the county. Por although it had been decided by this court in the year 1877, in the case of the State v. Mayes, that there was no liability upon the general bond of the county treasurer for the school-funds, and, though the statute construed in that case had existed since the code of 1871 was adopted, the county authorities were all proceeding in blind and inexcusable ignorance of the law. The report of the commissioner showed that, as to the general county fund, Gordon was a defaulter during his first term in the sum of $2,680.44, and in the second term in the sum of $2,928.04.

When this report was made, the county of Grenada asked leave to file a supplemental answer and cross-bill, which was denied. By this cross-bill it was sought to fix liability upon both bonds for the school-funds of the county by a reformation of the bonds. It is sufficient to say, in reference to this matter, that the action of the court was correct; the effort was to bring this case within the control of the decision in Lafayette County v. Hall, 70 Miss., 678, but the facts alleged were insufficient.

On final hearing, the court held: 1. That the payment made by Pass and- others was as upon a default for the second term of Gordon, the treasurer; that the payment was not a voluntary one, and, since the amount paid was in excess of what the county had a right to enforce as against the sureties on the bond of Gordon for that term, the county should repay to the sureties such excess. 2. That the sureties on the first bond were protected by the statute of limitations against any liability on that bond.

The county and Mr. Pass appeal from this deci’ee. There are assignments of error touching other subordinate matters decided by the chancellor, but they are all rendered immaterial by the decision of the main points, and need not be noticed. "We fail to find any support in the evidence for the decree of the court below. It is entirely certain that Gordon, during his two terms of office, embezzled more money of the general fund and the school-fund than the county has received, and it is equally certain that, when the settlement was made, the county authorities and the sureties supposed that the entire default had arisen during the second term, and that the sureties on the general bond were liable not only for the general fund, but also for the school-fund. More than this may be said, in the light of the facts developed in this cause. The county authorities had caused the accounts to be examined, and the accountant employed bj them had reported a deficiency of $5,810.16. This amount the sureties were unwilling then to pay, and, to verify the account of the treasurer, they employed Mr. Adams to make for them a pi’ivate examination of. the accounts of the officer. By agreement with the board of supervisors, it was stipulated that they should deposit in bank and with a gentleman named as trustee, the amount found to be due by McLeod, the accountant of the board, and that when Adams should complete his examination, the balance found due by McLeod should be enlarged or diminished according as the facts should be made to appear. But, unexpectedly to the sureties, Adams’ examination disclosed that the whole default of Gordon exceeded the amount found due by McLeod by over $2,000. This fact was not disclosed to the board, but was privately reported by Adams to the sureties of the delinquent officer, who, concealing the fact that an additional deficiency had been discovered, closed with the demand of the board for the payment of the sum found due bj McLeod. There was no mistake of fact by the sureties, other than that the default occurred partly in one term and partly in another; and as to Pass, the actor in this suit, this was immaterial, because he was surety ou both bonds. They knew the facts more accurately than the board of supervisors, from whom the disclosures made by Adams were withheld, and undoubtedly withheld for the purpose, by Pass and his co-sureties, of securing a settlement of their liability for a less sum than they believed to be due. The averment now made that the payment was coerced by the board and made under protest, finds no support in the evidence as a real coercion or a genuine protest made in good faith by parties who believed they were paying more than could lawfully be demanded of them. The very truth is, that the sureties believed they were discharging their obligation by the payment of a less sum than that for which payment might be enforced. The mistake was one of law, in assuming that the effect of the general bond was to secure the school-funds as well as the general fund of the county. In truth, the sum paid by the sureties is less than the county would have recovered by suit on the bonds on which Pass was surety, for, by suit, a recovery would have been for double the amount embezzled by the treasurer. Code 1880, § 375.

The appellant, Pass, in the light of the proved facts, does not occupy a position to commend him to a court of equity for relief. He withheld from the county authorities facts known to him, and which it was then supposed made the sureties on the bond liable for a much larger sum than the board of supervisors was demanding. He has since discovered that, though these facts might exist, yet by law their liability was less. The payment made under these circumstances cannot be recovered back, and the chancellor should have denied all relief against the county.

The county, having received an amount equal to that for which the sureties on the general bond were bound, can have no further relief. It suffers because of the inefficiency of its board of supervisors, which failed to inform itself of the law requiring a bond from the treasurer for its school-fund, and because of the dishonesty of that treasurer.

The sureties on the first bond are not protected by the statute of limitations. The right of Pass to seek contribution arose upon payment by him of the money, which payment operated to discharge them from an action by the county. This payment was made September 3, 1888, and his bill against them was exhibited October 20, 1890.

The decree is reversed, and cause remanded.