197 Ill. 572 | Ill. | 1902
delivered the opinion of the court:
The errors, assigned upon the record by the appellant, relate to the admission of evidence in the trial below, and to the holding and refusal of the propositions of law asked by the parties.
First—The first class of objections, made by the appellant to the action of the court below, relates to the execution of the bond sued upon. It is said by the appellant, that there was no proof of the signatures to the bond; and section 65 of the act in regard to administration of estates is referred to, as showing that it was necessary to prove the handwriting of the signatures to the bond. Such proof was unnecessary here, for the reason that section 1 of chapter 103 of the Revised Statutes in regard to official bonds provides that such bonds shall be “acknowledged before some officer authorized by law to take acknowledgments of instruments under seal,” and that such acknowledgments shall be deemed and taken as prima facia evidence, that the instrument was signed, sealed and acknowledged in the manner therein set forth; and it is therein provided, that such acknowledgments shall have the same force and effect as evidence in all legal proceedings, as that given to deeds of conveyance of real estate. The bond, here, was acknowledged, and no proof was introduced by appellant to overcome the prima facie proof of execution made by such acknowledgment.
The objection is also made in the argument of counsel, that a mere certified copy of the bond was offered without proof of the loss of the original. The certified copy was not objected to upon this specific ground when it was offered upon the trial below, but upon other grounds hereinafter stated. For this reason the objection comes too late. But, independently of this consideration, section 7 of chapter 124 of the Revised Statutes in reference to the Secretary of State provides, that copies of all bonds, legally deposited in the office of the Secretary of State, when certified by him and authenticated by his seal of office, shall be received in evidence in the same manner, and with the like effect, as the originals. The bond here was so certified and authenticated as required by the statute, and, therefore, the certified copy was properly received in evidence.
Objection was made to the introduction of the bond, upon the alleged grounds that it was not approved by the penitentiary commissioners, or the Governor, and that it was not delivered in the lifetime of Ramsay. Section 8 of chapter 108 of the Revised Statutes in relation to the penitentiary provides, that, “the warden, before entering upon the duties of his office, shall take and subscribe the oath or affirmation prescribed by section 25, article 5, of the constitution of this State. And he shall also enter into a bond to the People of the State of Illinois in the penal sum of $50,000.00, with good and sufficient sureties to be approved by the Governor and by the said commissioners, or a majority of them, conditioned for the faithful performance of the several duties, which now are, or may hereafter be, required of him by law, which said bond and oath or affirmation shall be deposited in the office of Secretary of State.”
So far as the approval of the bond by the penitentiary commissioners is concerned, it is marked “approved” upon the face of it by the three commissioners, E. G. Kramer, W. Y. Choisser and John J. Schneider. It is not shown, however, that it was approved by the Governor. But this makes no difference with the validity of the bond, so far as the sureties are concerned. The requirement, that an official bond shall be approved by some representative of the government, is for the purpose of furnishing some means, by which the public may be assured that the bond tendered is sufficient, and is properly executed. The duty of thus approving the bond is a duty, which is due to the public, and not to the principal in the bond, or to his sureties. It follows, “that, where, by virtue of the bond, the officer has been inducted to the office, his sureties cannot escape liability for his defaults, because the bond was not approved by the proper officer, or was not approved at all.” (Mechem’s Public Offices and Officers, secs. 311-313; Green v. Wardwell, 17 Ill. 278.) Baker assumed and entered upon the duties of warden of the penitentiary under the bond, executed by him on February 15,1893, and, therefore, Ramsay, as one of his sureties, could not escape liability for Baker’s defaults, because of the non-approval of the bond by the Governor. The same is true of Ramsay’s estate. The proof shows, that the bond was approved by the commissioners of the penitentiary, to whom it was presented soon after its execution, and that it was at once sent to Springfield to the Secretary of State. When it was thus approved, and deposited in the office of the Secretary of State, as required by law, the presumption is, that there was a delivery of it. It is true, that the file-mark upon the original bond in the office of the Secretary of State bears date January 9,1895, a date subsequent to the death of Ramsay; but there is nothing in the statute, which requires the date of the filing of the bond to be endorsed upon it by the Secretary.
No formal acceptance of an official bond is required, in order to justify a recovery upon it against the sureties, nor is it necessary that there should be written evidence of its acceptance and approval, in order to bind the sureties. Parol evidence is admissible to show its approval. (17 Am. & Eng. Ency. of Law,—1st ed.—p. 64; Bank of United States v. Dandridge, 12 Wheat. 64; Bartlett v. Board of Education, 59 Ill. 364). Where an official bond is executed and delivered to the proper representative of the government, it becomes obligatory upon the parties signing it, unless it is disapproved by such representative. The latter’s mere non-action does not deprive the officer of the power to act as such. So, here, Baker, as warden, was not deprived of the power to act, merely because of the non-action of the Governor in the matter of the approval of his bond. If the Governor and penitentiary commissioners were not satisfied with the sureties upon the bond, they should have disapproved the bond, so that other sureties might be obtained. If this was not done, the bond became binding as an obligation to secure the rights of the public, so far as the sureties signing it were concerned, from the moment of its delivery, as required by statute. The fact of the possession of the bond by the commissioners, even though it was not approved, amounted to a sufficient delivery and acceptance. (17 Am. & Eng. Ency. of Law,—1st ed.—p. 64). A bond takes effect from the date of its delivery, and if an officer, whose duty it is to receive and approve it, accepts it, it is prima facie good. (Leeper v. Hersman, 58 Ill. 218; Shaw v. Havekluft, 21 id. 127). The fact, that the officer acted, and was recognized as such, is sufficient evidence of the acceptance of the bond, and of the liability of the sureties for the non-performance of the officer’s duties. (Bank of United States v. Dandridge, supra). A parol acceptance of it is competent and may be shown. (Bartlett v. Board of Education, supra). In the Bartlett case, where the board of education elected a treasurer and required him to give bond, which he did with security, and it was received by the board and acted upon by the parties, it was held that there was a sufficient approval of it without any endorsement thereof on the bond, or any entry thereof on their records; that such acts implied an approval, and that the provision of the statute, requiring an approval, was merely directory.
We are, therefore, of the opinion that there was a proper execution, delivery, acceptance and approval of the bond, so as to make it binding upon the parties signing it.
Second—The question, urged on our attention by the appellant, and raised by the propositions held for the appellee and refused for the appellant, is the question, whether or not Baker’s liability under the bond sued upon was that of a mere bailee, or whether he was liable as insurer.
The proof is clear that he deposited money, belonging to the State, in the bank of Seiter & Co. at Lebanon, one hundred miles or more distant from the penitentiary at Chester. It is proven clearly, that he had in this bank the sum of $11,750.00, being the amount of the present claim, when he retired from the office of warden of the penitentiary. It is claimed on the part of the appellant, that the bank of Seiter & Co. was reputed to be solvent, and that Baker was guilty of no negligence in placing this fund in that bank. Upon the theory that he was a mere bailee, he was only required to exercise such ordinary care in the preservation and custody of the fund, as a prudent man would take of his own property. (Russell v. Koehler, 66 Ill. 459). The contention, that Baker’s liability was merely that of a bailee, is based largely upon the interpretation given by appellant’s counsel to the language of the bond.
The condition of the bond is that, “if the said James D. Baker shall faithfully perform his duties as such warden, then this obligation to be void,” etc. Stress is laid upon the fact, that the condition of the bond, in addition to requiring the principal therein to faithfully perform his duties as warden, does not also require him to promptly pay over, and account for all public funds, coming into his hands. It is said that, if, according to the terms of the bond, he had agreed to pay over all public funds coming into his hands, then he might be held liable to pay over the sum, even though his ability to do so was rendered impossible by events over which he had no control, but that, under the language of the bond as it actually is, he was only required to perform his duties to the extent of taking care of such public funds in the same manner, as a bailee would be required under the law to care for the same.
It is true, that the language of the bond here sued upon is not as full and complete, as the language used in section 8 of the Penitentiary act. By the terms of section 8, the warden is to enter into a bond, “conditioned for the faithful performance of the several duties, which now are, .or may hereafter be, required of him by law.” But we are of the opinion, that the language of the bond must be construed to have the same meaning, as thougii the broader language of section 8 had been used. The sureties of an officer upon his official bond, conditioned for the faithful performance of the duties of the office, are liable for all duties imposed upon him, which come within the scope of his office, whether required by laws enacted before or after the execution of the bond; and the statute in force, when the bond is executed, constitutes a contract between the officer, his sureties and the public. (Governor of Illinois v. Ridgway, 12 Ill. 14; Compher v. People, id. 290; Freudenstein v. McNier, 81 id. 208). Therefore, the statute must be looked at in order to determine what the duties of the warden were, inasmuch as the statute upon this subject entered into and formed a part of the bond itself, as much as though its terms were therein expressed.
The statute herein referred to, as the Penitentiary act, is the act of 1871 in relation to the penitentiary at Joliet; but on May 24,1877, the legislature passed an act in reference to the Southern Illinois Penitentiary, the 14th section of which provides as follows: “In order that uniformity may prevail in the penitentiary system of this State, all laws and regulations now in force, for the government and management of the penitentiary at Joliet, shall hereby, so far as practicable, apply to the government and management of said ‘Illinois Southern Penitentiary. ’ ” (3 Starr & Curt. Ann. Stat.—-2d ed.—pp. 2941, 2953). Section 19 of the act of 1871 provides, that “the warden shall attend to the fiscal concerns of the penitentiary, under the direction of said commissioners, and shall use his best endeavors to defray all the expenses of the penitentiary by the labor of the convicts; he shall superintend the labor of the convicts when employed in manufacturing or other work on behalf of the State, and shall act under the direction of said commissioners in making contracts for the employment of the labor of the convicts, and for furnishing" the necessary supplies for their support, and in purchasing such raw material as may be required for manufacture by convict labor, and in taking charge of the articles so manufactured, and selling and disposing of the same for the benefit of the State.” Section 20 provides, that “he shall render to said commissioners on the first day of each month a full and accurate statement of all moneys received by him and all sums of money expended by him during the preceding month, showing on what account received and expended, and shall accompany said report with proper vouchers for all such expenditures; which report shall be verified by the oath of the warden.”
Section 35 provides, that “the said warden, under the direction of the commissioners, shall be the custodian of all funds belonging to the said penitentiary, whether arising from the avails of the labor of the convicts, the sales of manufactured articles, or appropriations made by the General Assembly, or otherwise.” (Ibid. pp. 294G, 2951). Thus, by the terms of the statute itself, the warden of the penitentiary is required to attend to the fiscal concerns thereof, and is made custodian of all funds belonging thereto. By force of the statute governing the subject, the warden becomes in effect the debtor of the public. His liability being absolute and like that of other debtors, he is not relieved from liability, even though he is so unfortunate as to lose money deposited by him in a bank which he supposes to be solvent, but which turns out to be insolvent. In other words, he is not a mere bailee, and, therefore, cannot call upon the public to bear the loss. (Mechem's Public Offices and Officers, secs. 297-302, inclusive).
A public officer “is liable upon his bond for the loss of public funds, deposited by him in a bank and lost through its failure, though the bank was reputed solvent, and such deposit was necessary for the safety of the funds.” (Mechem’s Public Offices and Officers, sec. 302; State v. Moore, 74 Mo. 413; United States v. Prescott, 3 How. 578). In other words, a public officer, when he executes a bond binding himself to perform the duties of his office, becomes insurer of the public funds coming into his hands, by virtue of the bond and the law which becomes a part of the bond. (Boyden v. United States, 13 Wall. 17; The Harriman, 9 id. 161; United States v. Dashiel, 71 U. S. 182; United States v. Prescott, supra; Commonwealth v. Comly, 3 Pa. St. 372; Muzzy v. Shattuck, 1 Denio, 233; State v. Harper, 6 Ohio St. 607; Mechem’s Public Offices and Officers, sec. 298-302).
This doctrine prevails in the State of Illinois. (Thompson v. Board of Trustees, 30 Ill. 99; Swift v. Trustees of Schools, 189 id. 584; Oeltjen v. People, 160 id. 409). In Thompson v. Board of Trustees, supra, which was an action brought by the board of trustees of a township upon the bond of the township treasurer, it was held that township treasurers, under our statute, are made insurers of the funds coming to their possession, and that nothing can relieve them from their obligation to safely keep and pay over such funds but the act of God, or of the public enemy. In the latter case it was said (p. 101): “The fact, that the township treasurer is required to receive money, and enter it in his cash-book, implies, without anjr other special regulation, that he is to keep it, and being required to keep it, it follows he is to keep it safely. This is one of the duties of his office he has undertaken faithfully to discharge. Another duty, no less imperative, is that he will deliver to his successor in office all moneys in his hands as such township treasurer, which he could not do, if he suffered it to be lost out of his hands, or it should be so lost by any accident. The undertaking is, that the money shall be in his hands. These duties he has undertaken to perform unconditionally. * * * We cannot discover a shade of difference between this and the case of United States v. Prescott, 3 How. 578. * * * As in that case, so here is an undertaking safely to keep the money by the very force of the language of the condition of the bond. * * * In no sense is this a case of bailment. The liability of the treasurer arises out of his official bond. He has made, by that bond, an express contract with the trustees, that he will keep safely the moneys which shall come to his hands.” So, in the case at bar, under a statute, which provides that the warden shall be custodian of all funds belonging to the penitentiary, and shall render to the commissioners monthly a statement of all moneys received by him, and all moneys expended by him, the implication is that he is to keep such moneys, and as he is required to keep them, it follows that he must keep them safely.
In Swift v. Trustees of Schools, supra, it was held that one, who accepts the office of township treasurer, takes upon himself the duty of safely keeping the moneys of the township, which come into his hands, and of disbursing them pursuant to law, and that he and his sureties cannot be excused from making good a deficiency resulting from the failure of the bank, where the funds were deposited, although he supposed the bank to be solvent. In Swift v. Trustees of Schools, supra, the case of Thompson v. Board of Trustees, supra, was referred to, and endorsed, and quoted from. (Muzzy v. Shattuck, supra; Commercial Bank v. Hughes, 17 Wend. 97).
Even, however, if Baker should be regarded as a mere bailee, the proof in this case does not show that he exercised the ordinary care imposed by the law upon a bailee. The proof tends to show that Baker, who had been a partner of Seiter, knew, when he placed the money of the State in Seiter’s bank, that the bank was, if not actually insolvent, at any rate in an unsound condition. There is testimony tending to show, that this money, and other moneys of the State, were put into the hands of Seiter for the purpose of preventing the failure of his bank as long as possible. The evidence also tends to show, that Baker was aware, that Seiter intended to make an assignmeht some time before he did actually make an assignment, and that, notwithstanding his knowledge of the condition of the bank of Seiter & Co., he allowed the funds of the State to remain therein, and took no steps, until it was too late, to withdraw them therefrom. It being established beyond controversy that Baker received the money of the State for which the present claim is presented, and failed to turn it over to his successor, orto the commissioners of the penitentiary, the burden of proof was upon him, or his sureties, to show why he so failed to pay over the funds in his hands. Under the authorities, the fact that he had deposited it in an insolvent bank, is no excuse, even though the bank was reputed to be solvent.
Where a public officer gives a bond, under which he is allowed to receive moneys, and does actually receive them by virtue of his office, he and his sureties are es-topped from denying the validity of such bond when sued for breach of its condition. It will be obligatory as a common law undertaking, unless prohibited by statute, or opposed to public policy. (Coons v. People, 76 Ill. 383; Longan v. Taylor, 130 id. 412; Mechem’s Public Offices and Officers, sec. 296).
Third—Some other points are made by the appellant, as arising upon the refusal of propositions of law submitted, a few of which will be noticed. Much stress is laid by the appellant upon the fact of the alleged destruction of what is called the Ford bond, referred to in the statement preceding this opinion. When Baker was first appointed, he presented to the penitentiary commissioners at Springfield in the latter part of January, 1893, a bond, signed by himself, Ford, Seiter and Reuter. This bond was acknowledged by Seiter only. Baker explained to the commissioners, that Ramsay was absent from Springfield, and asked them to accept the bond temporarily, so that he could assume the duties of his office at once. The proof tends to show, that the bond was so accepted with the understanding that another would be given shortly thereafter, and, in less than thirty days, another bond, signed by Ramsay instead of Ford, and which is the bond here sued upon, was presented to the commissioners, and by them approved and sent to Springfield. Upon cross-examination, Ford testified that Baker told him that, shortly after he gave the new bond, this old bond had been destroyed. Whether it was destroyed or not is not clearly established, but it would make no difference, so far as the liability of the estate of Ramsay in this suit is concerned. The second bond, executed by Ramsay, and accepted and approved by the commissioners, was a good and valid bond as against Ramsay, irrespective of the question, what became of the temporary bond executed in the first place. Whether Ford did, or did not, give notice, under section 10 of the statute in regard to official bonds, (2 Starr & Curt. Ann. Stat.— 2d ed.—p. 2833), the fact is, that a new bond was given, and, under section 11 of the last named act, the sureties upon the new bond were liable for all the official delinquencies of Baker as warden, whether of omission or commission, which occurred after the approval of such new bond. The proof shows that the first transaction, which Baker, as warden, had with Seiter’s bank occurred on July 15, 1893, several months after the giving of the bond signed by Ramsay. The official delinquency, with which Baker is charged in the present suit, was the failure to pay over the sum of §11,750.00, which he deposited in the bank of Seiter & Co., and, as this deposit was made long after February 15, 1893, when the bond here sued upon was executed, Ramsay and his estate became liable on such bond.
It is said that the commissioners of the penitentiary, who appointed Baker to the office of warden, were guilty of negligence, not only in permitting him to have money in his possession, which it was unnecessary to expend in carrying on and maintaining the penitentiary, but also in allowing him to deposit his money in the banking house of Seiter & Co. No error was committed in refusing the proposition of law, which embodied this idea, because “an officer, who has received money for and on account of his principal, cannot, in general, when called upon to pay it over, defend upon the ground that it was money, which his principal had no right to obtain, procure or receive. And it is held that his sureties are equally estopped.” (Mechem’s Public Offices and Officers, sec. 295; Lovingston v. Board of Trustees, 99 Ill. 564). It is also well settled, that the sureties, in an action on an official bond, cannot be heard to say that some other officer has been negligent, or failed to perform some duty, and thus escape liability. (Stern v. People, 102 Ill. 540; Campbell v. People, 154 id. 595; Spindler v. People, id. 637). In Stern v. People, supra, we said (p. 550): “Statutory directions to public officers are given for the security and convenience of the government, and to regulate the conduct of its officers, but being directory, they form no part of the contract with the surety, and hence sureties on bonds * * * cannot plead the negligence, or failure of public officers to require their principal to render an account, or to remove him for negiect, as required of such officers by law, as a defense to their liability, upon a subsequent breach of his bond.”
A proposition of law, asked by the appellant, was also refused, holding that, by reason of delay in obtaining satisfaction of the debt sued for, the estate of Ramsay has been released from liability. All that need be said in reply to this contention is that, as a general principle, laches is not imputable to the government. This maxim is said by Judge Story to be founded upon “a great public policy.” “The government can transact its- business only through its agents; and its fiscal operations are so various, and its agencies so numerous and scattered, that the utmost vigilance would not save the public from the most serious losses, if the doctrine of laches can be applied to its transactions. It would, in effect, work a repeal of all its securities.” (Mechem’s Public Offices and Officers, sec. 308; United States v. Kirkpatrick, 9 Wheat. 720). The claim here sued upon is sued in the name of the People of the State of Illinois for the use of the commissioners of the Southern Illinois Penitentiary, and the money sought to be recovered belongs to the government of Illinois.
The judgment of the Appellate Court is affirmed.
Judgment affirmed.