365 Pa. 271 | Pa. | 1950
Opinion by
In this action for money had and received plaintiff seeks to recover on either of two theories; the court below rejected both, —one of them, in our opinion, mistakenly.
Plaintiff’s complaint alleges that C. C. Stewart, who was the tax collector for the County of Westmoreland, was short in his accounts with the county treasurer in the amount of approximately $9,000. Stewart died, and shortly thereafter his daughter, Anna Kate Stewart, having been appointed tax collector for the School District of Derry Township in that county, executed two checks for the purpose of meeting that shortage, —one in the amount of $5,700 payable to the order of “C. C. Stewart Est.” and endorsed in blank by the administrator of that estate, and the other in the amount of $3,-300 payable to the order of “M. L. McWherter, Treas.”, he being the treasurer of Westmoreland County. The $5,700 check was signed “Anna Kate Stewart, Coll.”; the $3,300 check was signed “Anna Kate Stewart, Tax Coll.”; both checks were drawn on the account which Anna Kate Stewart maintained as tax collector in the Fidelity Deposit Bank of Derry and were duly delivered
Defendant filed preliminary objections in the nature of a demurrer to the complaint. The court sustained the objections, dismissed the complaint, and entered judgment in favor of defendant. It pointed out that plaintiff’s allegation that the $9,000 was paid by Anna Kate Stewart erroneously or inadvertently under an assumption that that amount was due and owing from the school district for taxes was wholly inconsistent with plaintiff’s other allegation that the money so paid by Anna Kate Stewart was a wilful misapplication of funds of the school district in order to pay the shortage in her father’s account with the county treasurer. The Act of Muy 21, 1943, P. L. 349, allows a recovery of any taxes erroneously or inadvertently paid into the treasury of any political subdivision under an assumption that such taxes were due and owing when in fact they were not due and owing to
Plaintiff’s claim rests more securely, however, upon another basis, namely, the common law principle that if an agent dr fiduciary transfers property of his principal or beneficiary to a third person in payment of the personal indebtedness of himself or another, the principal or beneficiary may recover the amount thus paid if the person receiving the payment accepted it with knowledge, or was put upon notice by appearances and circumstances, that the payer was thereby committing a breach of his duty as agent or fiduciary: Fehr v. Campbell, 288 Pa. 549, 556, 137 A. 113, 115, 116; Norristown-Penn Trust Company v. Middleton, 300 Pa. 522, 150 A. 885; Pennsylvania Company for Insurances on Lives and Granting Annuities v. Ninth Bank & Trust Co., 306 Pa. 148, 158 A. 251; Schmitt v. Potter Title & Trust Co., 61 Pa. Superior Ct. 301; Rest. Agency, §314 and comment (a); Rest. Trusts, §§296, 297 and comment (o).
It is not the law in Pennsylvania that a public official who is the custodian of public funds may properly use them for his own benefit, with his resulting liability being limited to his official bond. On the contrary, all of our later cases hold that such funds do not belong to the official as his individual property but are public moneys held by him in a fiduciary capacity and for which he must account accordingly: County of Lackawanna v.
Since the complaint in the present ease avers that the County of Westmoreland, in receiving the payment from Anna Kate Stewart, knew or should have known through its officers that she was paying a shortage, not from her own funds nor from those of the C. 0. Stewart Estate, but from funds belonging to the School District of Derry Township, defendant, by demurring, admitted the truth of that averment, which, for present purposes, must therefore be accepted as a fact. And if the county, in accepting the money, thus blinded its eyes to the fraud being perpetrated by the tax collector of the school district, plaintiff, under all the authorities, would be entitled to recover in this action for money had and received, since the county treasurer would have been under the same legal duty of rejecting a check which he knew or should have known constituted an attempt to pay an individual obligation with public moneys as any private person would have been under similar circumstances. What was known or should have been known to the county treasurer, particularly in view of the signature of Anna Kate Stewart to the checks as “Coll.” or “Tax Coll.”, must be submitted to a jury for determination; such submission is all that plaintiff is seeking on the present appeal.
The decree sustaining defendant’s preliminary objections to the complaint, dismissing the complaint, and entering judgment in favor of defendant, is reversed, and the record is remanded with a procedendo.