Johnson v. Fleming

116 Ky. 680 | Ky. Ct. App. | 1899

Opinion of the court by

JUDGE HOBSON

Affirming.

The appellee, Charles M. Fleming, was the master commissioner and receiver of the Fleming Circuit Court, and as such received in January, 1896, a considerable sum of money,, which he deposited as receiver in the Exchange Bank of David Wilson & Co. This bank, at the time, was entirely solvent, and good, but before' the money was paid out it failed. It is contended for the appellant that the appellee is responsible for the money, although guilty of no negligence in selecting the bank, or in leaving the money.there. There are many cases holding that the obligation of public officers like appellee to keep safely the money committed to them is absolute, without any condition, express or implied, and nothing but its payment when required will exonerate the officer. This rule seems to be' largely based on the case of U. S. v. Prescott, 3 How., 578, and some subsequent cases in the Supreme- Court of the United States following it; but in U. S. v. Thomas, 15 Wall., 337, the authority of these cases was greatly shaken, so that some of the judges thought it would have been better to have overruled them directly. The current of the latter cases is to the effect that public officers, like other fiduciaries having the custody and management of the property of others, are liable only for the exercise of proper diligence and care. Thus, in the case last referred to, it was said: “A public officer, having propertjr in his custody in his official capacity, is a bailee, and the rules which grow out of that relation are held to govern the case.” “The general rule of official obligatiqn as imposed by «law is that the officer shall perform the duties of his office honestly, faithfully, and to the best of his ability. This is the substance- of all official oaths. In ordinary eases to expect more than this would deter upright and responsible men from taking office. This is substantially the rule by which the common law measures the responsibility of those whose-official duties require them to have the custody of property, public or private. If, in any case, a more stringent obligation is desirable, it must be prescribed by statute, or exacted by express stipulations.” In York Co. v. Watson, 15 S. C., 1, a county treasurer depositing tbe public funds in a savings bank of good standing, was beld not liable for tbeir loss by tbe subsequent failure of tbe bank; tbe court saying: “If it would be wrong in principle to bold a private trustee responsible for a loss wbicb no care of bis could have prevented, would it not be equally wrong to bold a public officer responsible under like circumstances? The liability of a bonded officer . . . arising from official duty ... is governed by tbe principles of the common law.” This case is followed and approved in State v. Houston, 78 Ala., 576. In Wilson v. People, 19 Colo., 199, 34 Pac., 944, tbe clerk of a court who in that State discharges duties similar to those imposed on appellee deposited tbe money in bis custody in a bank of reputed solvency, acting as a prudent man would. Tbe bank afterwards failed, and tbe money was lost. Holding that tbe clerk was not respoiisible, tbe court said: “We believe tbe true rule is that a public officer who receives money by virtue of bis office is a bailee, and that tbe extent of bis obligation is that imposed by law; that, when unaffected by constitutional or legislative provisions, bis liability is measured by tbe law of bailment.” Tbe same rule was adopted in Tennessee, where a county trustee bad deposited tbe money in a bank of undoubted standing, wbicb bad afterwards failed, so that tbe money was lost without fault on bis part. See State v. Copeland (Tenn. Sup.) 34 S. W., 427. Tbe case of People v. Faulkner, 107 N. Y., 477, 14 N. E., 415, was substantially similar to this case, and in a well-considered opinion tbe court beld tbe officer not responsible., See, also, Cumberland Co. v. Pennell, 31 Am. Rep., 284; and Healdsburg v. Mulligan (Cal.) 45 Pac., 337. But it is insisted that a different rule prevails in this State as to receivers, because of our statutes. The provisions relied on are as follows:

“Each circuit court may select and designate by order a bank, State or national, as a place of deposit fo.r moneys-paid into court. Such bank shall before receiving the deposit, execute bond, with good sureties, to be approved by the court, in a penal sum to be fixed by the court, payable to the Commonwealth, and conditioned to pay all moneys deposited by the receiver or commissioner upon any check drawn by him under order of court.

“It shall be the duty of the receiver, or commissioner, acting as such, to receive into his custody and safely keep all moneys paid to him under order of court, and if any depository has been selected by the court, he shall, as soon as practicable deposit such moneys therein. Money paid into the court shall be paid out by the commissioner or receiver on the written order of the court, attested by the clerk and not otherwise.”

“The court shall, when-practicable, require the depository to pay interest on the deposit, and such interest shall be-devoted, under proper rules or orders of the court, to the payment of costs in each case.”

Kentucky Statutes, sections 411, 412, 415.

The purposes of these provisions was not to add to the liabilities of the receiver, but to provide for the greater security of the funds and to make them interest-bearing. It will be observed that the receiver is charged with no duty in regard to the appointment of the depository. This is, left entirely to the circuit court, and is a matter of discretion with him; he may or may not make a selection, as he may deem best. After he had acted, the receiver is charged with no duty until the depository gives bond. Until all this is done, the receiver must take such care of the money coming to his hands as good judgment and diligence require. He is not responsible for the non-action of his superior officer, over whom he has no control. He would not be heard to complain of the action of the circuit court, and, being a subordinate officer, would not be expected to look after matter® left by law to the discretion of his superior.

Under proper instructions, the jury found in favor of appellee on the question of negligence. We think the evidence supports their finding. The appliances of a bank afford SO' much better security for money against fire and theft that business men almost universally put their money in bank, rather than keep it themselves. For the receiver to have kept this money himself would have been much greater evidence of negligence than the putting of it in a bank'universally recognized as solvent. Appellant himself had in the same bank to his own credit a much larger sum than that for which he proposes to hold the receiver responsible, and the evidence is very persuasive that, if he had drawn the fund sued for from the receiver; it would simply have been placed to his credit with his other funds in the same bank, and he would be now in the same situation, substantially, as he is. Judgment affirmed.