State ex rel. County Commissioners v. Hill

41 A. 61, 88 Md. 111, 1898 Md. LEXIS 188

Opinion

Pearce, J.,

delivered the opinion of the Court.

This is an action of debt for the use of the Board of County School Commissioners of Howard County, upon the official bond of John E. Hill as secretary and treasurer of such board; the Fidelity and Deposit Company of Maryland being his surety upon said bond, and the suit being brought to recover the amount of certain payments, made by him during his term of office, and claimed by the appellants to have been made without warrant of law, and in violation of the condition of his bond. The appellee claims not only that all these payments were ordered by the board of School Commissioners, but that they were authorized by law, and further that even if not warranted by law, that the defendants are not liable upon a proper construction of the language of the bond, for any payments made by Hill on the order of the board; and the agreed statement of facts upon which the case was tried below, shows that each of these payments now sought to be recovered, was made upon the formal recorded order of the Board of County School Commissioners of Howard County. If the payments thus made do not constitute a breach of the condition of the bond there can of course be no recovery upon the bond in respect to said payments, and we proceed at once to consider this question.

The material part of the condition of the bond is as follows: “that if the above bound John E. Hill shall faithfully perform the duties of Secretary and Treasurer of the Board of County School Commissioners of Howard County, and shall pay over and apply all moneys that shall come to his hands or care as Treasurer, to such persons and in such manner, as said Board of County School Commissioners shall direct .... then the above obligation to be void.” Art. 77, sec. 67, of the Code of Public General Laws of Maryland, requires the secretary and treasurer to give bond to the State of Maryland, with surety to be approved by the board; and in such penalty as it shall determine, with condition “ that he will faithfully perform the duties of Secretary and Treasurer, pay over and apply all moneys that shall come to his hands or care as Treasurer, to such persons and in such manner as said Board may, under the provisions of this article, direct.” It will thus be seen that in the condition of the bond given, the words of the statute, “ under the provisions of this article,” are omitted. It appears from the agreed statement of facts that Hill offered to give to the board, a bond with private persons as sureties, to be satisfactory to the board, but that the board deeming it best for the interests of the school fund required a bond in a regular surety company, and that thereupon the bond now sued on was given and approved; and it further appears from said statement, that the words, “ under the provisions of this article,” were deliberately omitted from the condition of the bond, by the surety company, for the express purpose of preventing any liability attaching to it, by reason of any mistake made by the board itself in ordering the payment of any moneys by Hill, and that the surety would not have entered into any bond, the effect of which would be to guarantee the legal correctness of the orders of the board, in addition to the honesty and integ rity of said Hill, his faithful performance of duty, and a strict compliance with the orders of his superiors.

In Archer v. The State, 74 Md. 450, Archer being then State treasurer, and duly qualified as such, was on January 13th, 1888, appointed by the Legislature his own successor, and on January 27th he executed a new bond with security, but neglected further to qualify under that appointment until November 18th, 1889, when he took the prescribed oath, and the Governor approved his bond. In a suit by the State on this bond, it was held no action could be maintained thereon, and this Court said: “ It is familiar law that the contract of a surety upon an official bond is subject to the strictest interpretation. They undertake, in the language of Judge Cooley, £ for nothing which is not within the strict letter of their contract. The obligation is strictissimi juris, and nothing is to be taken by construction against the obligors. They have consented to be bound to a certain extent only, and their liability must be found within the terms of that consent.’ The bond recites that he was duly appointed treasurer January 13th, 1888, pursuant to the Constitution of the State, and is conditioned for the faithful discharge of all the duties required of him by the Constitution and laws in all things pertaining to his office, under that appointment. That is 'the contract into which the sureties entered. It would be doing violence to its terms, if the contract could be read as making the sureties responsible for the discharge of any duties save those that became incumbent on him by that appointment and a due qualification thereunder.” The above citation will serve to show with what strictness this Court protects sureties against mere constructive liability.

In the case at bar, the breach alleged is that the payments claimed, were inade without authority of law, while the condition of the bond the breach of which is alleged, is that all payments should be made to such persons and in such manner as the board should direct. Tested by the plain and unequivocal language of this condition, Hill has fulfilled the letter of his contract, and it was to that extent only the surety consented to be bound. Beyond that it can only be bound by construction, and this Court has said “ nothing can be taken by construction against sureties.” It would seem where the language of a contract is thus plain, and the utterance of this Court just quoted is so emphatic, that we might rest upon it without hesitation, but the appellants have so earnestly and ably argued the authorities upon which they rely that we think it proper to give them full and respectful consideration.

Their first contention is, that a substantial compliance with the form required by the statute is all that is needful, but we do not find any of the cases cited upon this point to be satisfactory authority as applicable to this case. In Hamilton v. The State, 5 H. & J. 503, the bond of an administrator was not in the words of the form prescribed by the Act of 1798, but an express part of the condition of the bond was that he should faithfully pay all just claims against the deceased. The breach assigned was non-payment of a claim duly proved for medicine and attendance on the deceased, and on demurrer plaintiff was allowed to recover, the non-payment being a clear breach of the particular express condition, notwithstanding some informality in the bond in other respects. In Waters v. Riley, 2 H. & G. 305, the suit was upon the bond of an administrator de bonis non, but the words “ not already administered ” were omitted from the condition of the bond, and the sureties were held not liable for a misapplication of the assets not theretofore administered, as to wdiich no duty was imposed by the language of the condition of the bond. Judge Archer, in a dissenting opinion, said that where a bond is so drawn as to include every obligation imposed by the statute, and to afford every defence allowed by it, a slight variance from the prescribed form should not avoid the. bond, and he expressed the view that as the bond in that case was for the discharge of the duties of an administrator de bonis non, the bond was perfect without the omitted words, and that when read in the light of this interpretation “ the condition of the bond corresponded in every respect with the condition prescribed by the Act.” But, waiving the fact that this expression is taken from a dissenting opinion, and conceding for the purposes of argument only, that it was weighty in that case, we do not perceive that it can be fairly applied in- this case where, by no rule of interpretation, and by no deduction from any language in the bond, can its condition be regarded as corresponding with that prescribed by the Code.

In Young v. The State, 7 G. & J. 253, the condition of a sheriff’s bond was that he “ should well and faithfully execute the same office in all things appertaining thereto,” and it then proceeded to enumerate certain of the duties prescribed in the statute, but omitted one of these prescribed duties, viz., “ to detain all persons by him taken in execution,” and the Court said: “ Under this provision we think the sheriff is bound to the discharge of every duty which the omitted words, if inserted in the condition of the bond would have imposed upon him.” That was just such a case as was referred to in Farrar v. The United States, 5 Peters 388, where the Court said:' “ AYhere the conditions are cumulative, .the omission of one condition cannot invalidate the bond, so far as the other condition operates to bind the party.” In Farrar’s case the Act of Congress required the bond of a United States officer to contain a condition that he should “ well and faithfully discharge the duties of this office,” and also that he should “ faithfully disburse the public moneys,” but the last condition was omitted from the bond, and the Court reversed the judgment for error in the manner of rendering it, but declined to decide “ whether the omission of the express words which imposed the liability for faithful disbursement of money, does not preclude resort to their restoration incidentally by proof.”

But the case at bar is not one where there is a general requirement in the bond for the performance of duties, without special provision for the performance of any special duty, the breach of which is sued for, but it is a case where there is a statement of the particular condition, the breach of which is sued for and where the condition so stated does not agree with that prescribed in the statute. The bond we are considering does not omit from the condition expressed, the duty of paying over money that comes to his hands as secretary and treasurer. It states that duty clearly and explicitly, but it states it in different terms and under different conditions from those prescribed in the statute, and the liability of Hill’s surety in this respect must be determined and measured by the terms and conditions which were incorporated, and not by those which should have been incorporated in the bond.

Neither in 18th, 34th or 40th Md. Rep., cited by appellants, were the liabilities of sureties involved. In O’Neil v. Bridge Co., 18 Md. 24, the question was as to the validity of an assessment for taxation, and it was held an assessment ought not to be vacated, and the property be released, because a legal provision, which was merely directory, had not been strictly followed. In Friend v. Hamill, 34 Md. 302, a judge had certified that the list of jurors were selected “ in conformity with the Acts of Assembly, in such case made and provided,” while the statute directed that the certificate should be ■“ in conformity with and according to the spirit and intent of this Act.” On a challenge to the array of jurors, it was held that the certificate made, was “ a substantial compliance with the statute.” In Marlow v. McCubbin, 40 Md. 132, an affidavit to a mortgage stated that the consideration was bona ñde as therein set forth, and on objection that the omission of the word true was fatal to the affidavit, it was held that the affidavit included a plain averment that the consideration set forth in the deed was the true and only cause of its being made, and that the insertion of the w'ord true would not have imparted additional substance or force. Froztmfeller’s case, 66 Md. 80, does involve the liabilities of sureties, but we do not think it can help the appellants’ contention. The Act of 1874 required the collector of taxes to account for and pay over moneys “ at such time as the law shall direct,” and the bond given in that case pro vided for payment “ at such time as the County Commissioners shall by law direct,” and this variance was held immaterial. It is difficult to see how it could have been held otherwise, since under the language used in the bond the County Commissioners could direct no time except that which the law directed, so that in any event the condition of the bond corresponded exactly with that of the statute. We have examined all the cases cited under section 193 of Mur free on Official Bonds, and it is apparent from these cases, that the author when he declared that “ the law enters into and is a part of every contract,” was announcing a rule of interpretation for such contracts, and that he did not mean that the law could import into the contract a term or condition which, though directed by it to be incorporated in the contract, had been deliberately excluded by the parties.

The appellants relied upon two cases from other States, both of which do sustain their contention but which w’e are unable to accept as authority to control this case.

The first of these cases, Jones v. Newman, 36 Hun. (N. Y.) 634, was a suit upon a constable’s bond, the breach charged being the neglect to return an execution. The condition of the bond was that he should “ faithfully discharge the duties of Constable, and pay over all moneys received by him as Constable.” This was not the form prescribed by the statute, which included the duty to return executions, and it was urged that no recovery could be had for the breach charged as not within the condition expressed, but the Court held otherwise, saying: “ He and his sureties were the persons to see that it was in the right form, as it was his duty to give bond with proper sureties.” Now, if the duty to return an execution directed to a constable, exists apart from the statute which declares that it shall be expressed as part of the condition of the bond, then the failure to return an execution would be a clear breach of the general condition faithfully to discharge the duties of constable, and the decision could be well sustained upon that ground; but if not an inherent duty of the office, then it could not be so sustained, and it is plain from the language we have quoted that the decision was not made upon that ground, but upon the ground that the sureties wrongfully omitted a condition which should have been expressed in the bond in order to conform to the statute and to bring into existence a statutory liability. That was not a decision of the highest Court of the State and on reference to the case cited by the judge to sustain him (Gerould v. Wilson, 81 N. Y. 573), it will be seen that it cannot be cited for that purpose. There letters of administration were issued to B by the Surrogate of Steuben County, and he gave bond with sureties that he would “ faithfully execute the duties of administrator, and obey all the orders of the Surrogate of Ontario County, or of any other officer or Court having jurisdiction in the premises,” and it was held that the mistake in naming the Surrogate of Ontario did not vitiate the bond, because leaving out that clause, enough remained to meet the requirements of the statute, and to hold the obligors. Ch. J. Folger said: “ The Surrogate of Steuben is another officer having jurisdiction in the premises, and his Probate Court is another Court having that jurisdiction. The requirement of the statute is that the bond be conditioned that the principal, in it will obey the orders of the Surrogate who issued letters to him. The Surrogate of Steuben did issue those letters, so that Surrogate falls within, the requirement of the statute and the force of the condition as it reads in the bond.” It is thus clear that the wdiole argument of the judge is to show that the condition of the bond is in accord with the condition of the statute, and not to justify the holding of the sureties, where the condition of the bond varies from that of the statute and there has been no breach of the condition expressed in the bond. From such a decision, based upon such reasoning, the decision in Jones v. Newman can derive no support. The other case relied on by appellants is The Justices of the Inferior Court of Columbia v. Wrynn, reported in Dudley (Georgia) Rep. p. 22, in which it is declared that “ the obligor in a bond can in no case be permitted to take advantage of the omission of statutory conditions when the omission is beneficial to himself,” but it will be found on examining all the cases cited by the Court in reaching that conclusion, that all these cases dealt only with the question whether a bond was in all respects void because its condition did not conform to the statute in every respect. Indeed, in one of the cases cited (Williams v. Yarborough, 2 Devereux N. C. Rep. 14,) the Court said: “I think he who is called on to fulfil it, cannot say the bond is void, or even without the statute, as to the obligations which the bond imposes, because there are other obligations which ought to have been imposed on him, and which have been omitted.” From which it may be safely inferred that while the Court would not have held such bond void as to breach of conditions it did contain, it would not have permitted recovery against sureties for breach of a condition into which they had not entered. In the Georgia case the action was on an administration bond and the statute prescribed as part of the condition of the bond, that a true and perfect inventory should be returned of all goods which should come to his hands, possession or knowledge, but the condition expressed in the bond omitted the words “ or knowledge.” This decision was not made by a constitutional Court, there being no Court of Errors in that State prior to the Constitution of 1846, in spite of repeated efforts to establish such a Court, but in order to secure some degree of uniformity in the administration of the laws, the judges of the Superior Courts began about 1837 to hold semiannual conventions for consultation upon difficult and doubtful questions in their respective Courts, and this case was decided by the Superior Court of Columbia after such consultation. For this disinterested and patriotic action, these Georgia judges deserved the gratitude of their people and the respect and admiration of the legal profession, but the decisions thus rendered, however learned, cannot be invested with the authority that is borne by a constitutional Court of last resort, created for the purpose of reviewing the decisions of trial Courts. We have been referred to no other cases and we have found none which sustain the views of the appellants, and it follows from what we have said that we are of opinion the first prayer of the defendant, which practically directed a verdict in its favor, was properly granted, and the judgment of the Superior Court must be affirmed. In this view of the case, it becomes unnecessary to pass upon any of the other questions presented in argument, some of which would be matters of interesting discussion.

(Decided June 29th, 1898.)

Judgment affirmed with costs above and below.