99 Colo. 456 | Colo. | 1936
Lead Opinion
delivered the opinion of the court.
An action by the people, on relation of the board of county commissioners of the county of Jefferson, to recover from, the county treasurer, Koenig, and Fidelity and Deposit Company of Maryland, surety on his official bond, the sum of a balance to the credit of the county with Kountze Brothers, a failed New York banking copartnership, for which the treasurer and surety, disclaiming liability, refused to account. The defendants had judgment at trial.
In all essentials the controversy parallels Patterson v.
It is urged, however, that because, pursuant to section 8366, C. L. 1921, certain school districts of Jefferson county had made their bond coupons payable at the banking house of Kountze Brothers in New York, the. treasurer of the county was bound to keep funds on deposit with that institution to meet such obligations as they matured and were presented for payment. We. are not of that view. Since there is no express statutory requirements to that end, which is frankly conceded, we think that in no responsible sense can the county treasurer be concerned about the place, the manner, or the. fact of payment of school district obligations. Of course, by virtue of his office the county treasurer collects tax levies made by or for the school districts of his county,
But it is contended that the county treasurer had a responsible care for the credit of school districts in his county having obligations payable in the circumstances of the record here, constituting their agent indeed, and, premised so, not only was he legally justified in making the deposit of funds in the New York bank, the failure of which worked discomfiture, but in the interest of the districts was bound to do so. We cannot think that position is sound. Only incidentally, if at all, does a county treasurer know of school district indebtedness and how or where it is to be paid. The credit of such an entity, important of course, as well as the burden of the ways and means of its protection, rests with itself and its board. In whatever view considered, therefore, as we think, when the county treasurer deposited county funds with Kountze Brothers he acted gratuitously, and since loss attended his unauthorized action, the situation is con
We do not regard as sound the view that an exception exists in relation to those school districts which made their coupons payable only at the banking house of Kountze Brothers, and that in forwarding money to it, in the circumstances here, so far as required to meet those particular coupons, the treasurer was justified. For accounting purposes, as we have uniformly held, all money, state, county, school district, and whatever, collected by a county treasurer, as such, belongs to the county. Patterson v. People ex rel., supra; Cooper v. People, 28 Colo. 87, 63 Pac. 314, cited in Bell v. People, 92 Colo. 585, 22 P. (2d) 857; McClure v. La Plata County, 19 Colo. 122, 34 Pac. 763. Here, the sum of the net credits of all the activities for which the treasurer makes collection, as shown by his books, exceeded exhibited vouch ers and what he had in hand by the amount sought to be recovered, $1,927.41. He had neither school board warrants nor cancelled coupons to cover the sum, and had not made, debits to the accounts of school districts for any part thereof. He was frank to say that the sum involved was the balance of a deposit he carried in the Kountze Brothers institution, which had failed. Considering that by our decisions a county treasurer is held strictly accountable for the public money collected by him, the failure of banks in which he has deposited funds and with whatever faith, constituting no defense (Gartley v. People, 24 Colo. 155, 49 Pac. 272; Gartley v. People, 28 Colo. 227, 64 Pac. 208; McClure v. La Plata County, supra), the treasurer here must be held to bear the burden resulting from the failure of a banking institution which he trusted, and the rule applies to the entire sum. He did not pay coupons with the money sought to be recovered — indeed, as we have seen, he did not even charge it to the school districts. In the circumstances here, section 1, chapter 83, S. L. ’27, which requires county treasurers to deposit public funds “in one or more responsible banks located
The sole assignment of error, being general only, may be said to be insufficient under our rule 32, as emphasized by counsel for defendants in error, but in view of the public nature and importance of the major question involved, we have elected to proceed under rule 35, which is to the effect that in our discretion we may notice any error appearing of record.
In fairness to those concerned we observe that the judgment of the trial court was given prior to our pronouncement in the Patterson inquiry.
Let the judgment be reversed, the trial court to enter instead the judgment prayed for in the complaint.
Mr. Chief Justice Campbell, Mr. Justice Burke and Mr. Justice Young concur.
Mr. Justice Butler concurs in part and dissents in part.
Mr. Justice Bouck and Mr. Justice Holland dissent.
Mr. Justice Butler, concurring in part and dissenting in part.
So far as the decision concerns coupons made payable at the office of the county treasurer or at the banking
Mr. Justice Bouck and Mr. Justice Holland concur in this opinion so far as it deals with coupons made payable at the banking house of Kountze Brothers only.
Dissenting Opinion
dissenting.
I regret that I must dissent from the judgment and opinion of the court.
Declaring this case to be governed by Patterson v. People ex rel., 98 Colo. 86, 53 P. (2d) 1187, the majority opinion holds the county treasurer of Jefferson county, to-
A statute the. validity whereof is not impugned, regularly enacted by the legislative branch of the state government, and in force when each of the bonds and interest coupons here involved was issued, seems clearly to authorize all that was done by the county treasurer for which he is now penalized by this court. This statute provided that the interest should be “payable at such place or places as shall be fixed by said board and designated in said bonds.” C. L. ’21, page 2148, §8366. By due action of the respective boards, the bonds of several districts accordingly designated the place by providing that the interest coupons were “payable at the Banking House of Kountze Brothers, in the City of New York, U. S. A., upon presentation of * * * said coupons * * The bonds of other districts designated two places by providing that interest coupons were ‘ ‘ payable at the Office of said County Treasurer or at the Banking House of Kountze Brothers, in the City and State of New York, U. S. A., at the option of the holder, upon presentation of * * * said coupons * * * as the same mature.” The coupons themselves contained corresponding provisions.
These provisions therefore became part of a valid con
Take, first, the coupons absolutely payable in New York City. (These are the coupons upon which Mr. Justice Butler bases his partial dissent herein. I think that he is right but does not go far enough in his dissent, as I shall later endeavor to show.) When a district said it would pay the. principal and interest of its bonds, and made the interest payable at Kountze Brothers’ bank, it of course contemplated payment in the ordinary and unambiguous sense of the word. It would not be reasonable to suppose that it meant merely permission to deliver a coupon at the New York bank for future collection. That privilege of the holder is his without any mention of it, and one can readily see that the language of the statute, bonds, and coupons has no reference to such an empty and futile right. Payment, however, presupposed the existence of a sufficient fund for the purpose at the very place designated for payment; in this instance not in Colorado but 2,000 miles away. In view of the inevitable uncertainty as to the number and aggregate amount of coupons which would be presented during any particular period —matters of which neither the county treasurer, the school district, nor any other person could of course have any definite knowledge — it is obvious that ordinary business prudence and integrity would always supply a sum well in excess of the average of presentations and payments, which, as the record shows, varied greatly. This, to my mind, is exactly what the county treasurer, as a reasonable man, did and had a lawful right and duty to do. If it had been alleged and proved that he had acted recklessly or had been guilty of negligence, there would have been a wholly different issue both at the trial in the district court and now in this court on review. Such, however, is not the case. In the absence of such an issue, the
Thus far I have discussed the coupons which were expressly and unconditionally payable at Kóuntze Brothers’ bank in New York City. I cannot discern, as does Mr. Justice Butler, any difference in principle between such coupons and the coupons payable in the alternative, either at the county treasurer’s office or at Kountze Brothers’ New York bank, at the option of the holder and without any requirement whereby the holder would have to give, previous notice of his election. As to both classes the contract as stated therein and in the bonds themselves is clear. Thereunder it certainly became the duty either of the county treasurer or of the school districts to make provision for actual payment at maturity in either place. In the absence of affirmative action by the districts, the county treasurer did just as the treasurers of the state., of the counties, of irrigation districts, and other public corporations for over half a century had done without protest or objection; he supplied the funds necessary to insure payment according to the solemn promise of the bond-issuing authority. His action, known and acquiesced in by the districts and by the county at all times, should therefore be accepted now as legal and binding upon the districts. The statute obviously called for such action. The statute should be held to protect him in it.
A significant fact is that the school districts are not parties to the present litigation. They are the only real persons in interest, being the owners of the district funds, and yet they are not complaining. This circumstance, I think, should in itself be sufficient to forbid a judgment against the county treasurer. It is a controversy involving fundamental business methods and legal obligations of the districts, not of the county. I fear that the only inference we can now draw from the. situation is that, by deciding as the majority opinion does, this court has lost sight not only of the legal liability but of the business aspect involved, which was obviously the sole reason for
Furthermore, apart from tbe fact that tbe county is not tbe real party in interest because tbe funds in question are not county funds, I respectfully submit that tbe majority has overlooked tbe fundamental principles of interpretation for statutes and contracts. It fails to harmonize tbe various statutes and the various parts thereof with a view to giving effect to all. It fails to give tbe treasurer credit for making tbe initial deposit of tbe district funds in Colorado banks and thus satisfying tbe statute in that respect. It permits a drastic penalty to be visited upon tbe county treasurer at tbe instance of tbe county when tbe school districts were tbe only persons who could, under tbe statutes, have been injured, tbe very ones whose wishes and commands as contained in their express contracts with third persons tbe county treasurer has faithfully carried out in tbe only reasonable way.
In my opinion, tbe Patterson case in 98 Colorado, mentioned at tbe beginning, is not decisive of tbe present one. Moreover, I still believe that that case was wrongly decided. However, tbe two cases, as already indicated, are different in their facts and their presentation, and tbe case at bar seems to me to call for affirmance of tbe judgment rendered by tbe district court in favor of tbe county treasurer. Because tbe majority decides in favor of tbe county, I respectfully dissent.