154 Ga. 1 | Ga. | 1922
(After stating the foregoing facts.)
The City of Sparta filed certain exceptions of law to the report of the auditor, which are fully set out in the foregoing statement of facts. The trial judge overruled the first of these exceptions, and sustained those numbered from two to ten, inclusive. The second, third, fourth, and tenth of these exceptions are, in substance, (2) that the statement in the finding of facts that the plaintiffs had used due diligence in keeping the bonds of the city, for which they are sought to be charged in this case, in a safe place,
Section 19 of the charter of the City of Sparta provides that “ said mayor and aldermen, in council assembled, are hereby authorized to elect or appoint a bond commission, consisting of three citizens of said city, who shall serve without compensation, to whom the secretary and treasurer of said city shall turn over the sinking-fund now on hand in the treasury of said city and the additional sum of five hundred dollars on the 1st day of January hereafter so long as a sinking-fund is required to meet the bonded indebtedness of said city, and from year to year so long as said necessity exists therefor; who shall loan the same to the best advantage of said city at not less than six per cent, interest per annum, taking good and sufficient security thérefor,- subject to the approval of the mayor and aldermen, to meet the bonded indebtedness of said city, and shall report each loan made to the mayor and aldermen for their approval, and that a record thereof may be made on the minutes of the council. Said bond commissioners shall collect and pay over to the secretary and treasurer of said city annually the interest on all loans made by them, which shall be first applied to any deficiency in the sinking-fund, if any, and then to become a part of the general fund of said city. If any additional amount of bonds should be issued and floated by said city, the sinking-fund provided for their redemption shall in the same way be paid over to said bond commission, and by them so applied and the interest so applied. Said bond commission shall be perpetual, and all vacancies from death or removal from the city or otherwise therein filled by the mayor and aldermen.” Under this provision the plaintiffs and John D. Walker, on or about May 1, 1906, were elected members of said bond commission, and have since continued such, with the exception of Walker, who absconded on September 27,1917. No vacancy was declared or filled by reason of the absconding of said Walker; and the plaintiffs since then have been and are now the sole acting members of said commission.
Under this law are the plaintiffs public officers? An individual who has been appointed or elected in a manner prescribed by law, who has a designation or title given him by law, and who exercises functions concerning the public, assigned to him by the law, is a
The above provisions of the charter of said city contemplated and required that the bond commission should have the custody of said sinking-fund and the custody of the securities in which the same was invested. It was their duty to collect the interest on loans made, and first apply such interest to any deficiency in the sinking-fund, and to pay over any surplus of such interest, after replenishing the sinking-fund, to the secretary and treasurer of the city. The faithful discharge of these duties necessarily required the bond commissioners to have custody of the sinking-fund and of the investments made thereof. By the act of August 13, 1910 (Ga. Laws
This court has held that “If a sheriff collect money, and of
A receiver having money in his possession, awaiting the result of litigation, can not part with the custody thereof by depositing it in a bank or otherwise, save at his own risk, without some order, leave, or direction of a court authorizing him so to do. A.general deposit of such funds in bank is a loan, although entered to his credit in the bank as receiver; and although the loan is made in good faith, the receiver will still be liable. His diligence is to be exercised in keeping the money, not in putting it out on deposit, either general or special. Ricks v. Broyles, 78 Ga. 610 (3 S. E. 772, 6 Am. St. R. 280). In the case just cited this court said: “ His poundage or
When a county treasurer makes a general deposit of the funds of the county in a bank, which are lost on ¿count of the subsequent failure of the bank, he is liable therefor on his bond as treasurer, although he believed the bank solvent at the time of the deposit, aiifl up to the time of its failure, and it was so regarded and reputed by the public. Lamb v. Dart, 108 Ga. 602 (6) (34 S. E. 160). In the last-cited case this court said: “ Such general deposits in bank really create the relation .of debtor and creditor between the bank and the depositor. It therefore simply amounts to a loan to the bank. With the same reason might it be contended by a public official that he is relieved from liability for public funds in his hands because he loaned it to an individual in the utmost good faith, and with the honest belief that the borrower was perfectly solvent. Public policy will not tolerate such a defense by a public official. It is true the rule of law which is announced in this case may in some instances operate harshly, but a county treasurer when he accepts his office takes it with all of its responsibilities and its perils. Among these responsibilities is the safekeeping and the proper disposition of the county funds that go into his hands; and among the perils he assumes is the liability of its loss, whether he keeps it himself or deposits it in bank; and when it is lost, especially when the loss results from the failure of another with whom he has deposited the fund without authority of law, there has been a breach of his bond, and he is liable to the county for the loss. These views are sustained by an overwhelming weight of judicial decisions rendered by various courts of last resort in this country. Indeed the trend of adjudications upon the subject leads to the conclusion that a loss by an official of public money intrusted to his care can not be excused unless it be the result of the act of God or the public enemy. Repeatedly has it been ruled that the taking of such funds by a thief, or its seizure by a robber, or its consumption by fire, much less the failure of a bank, unaccompanied at that with any negligence on the part of the official, will not constitute a valid defense for a failure to account for the money.”
In some of the above cases the rule is based upon public policy. U. S. v. Prescott, Mecklenburg County v. Beales, Tillinghast v. Merrill, supra; Cameron v. Hicks, 65 W. Va. 484 (64 S. E. 832, 17 Ann. Cas. 926). In some, stress is put upon the fact, that the actions were on official bonds in which the officers obligated themselves to account for all moneys which come into their custody; and that nothing would relieve them for non-compliance with such stipulations. Ward v. School Dist. No. 15, Oneida v. Thompson, supra; Gartley v. People, 28 Colo. 227 (64 Pac. 208); Bush v. Johnson, 48 Neb. 1 (66 N. W. 1023, 32 L. R. A. 223, 58 Am. St. R. 673); State v. Hill, 47 Neb. 456 (66 N. W. 541); Hart v. Pitts-burg, 81 Pa. 466; Montgomery County v. Cochran, 121 Fed. 17, 1020 (57 C. C. A. 261, 679); Lamb v. Dart, supra. In other cases the officers’ liability is made to depend either wholly or in part upon statutes or bonds, or both. Fairchild v. Hedges, Com. v. Bailey, supra. In other adjudications it is held that the liability of a public officer charged with the custody of public funds is greater
As on all other questions which perplex the courts, there are well-considered cases in which the contrary rule is announced; but in those cases public officers are .held to reasonable skill, prudence and diligence. Healdsburg v. Mulligan, 113 Cal. 205 (45 Pac. 337, 33 L. R. A. 461); Livingston v. Woods, 20 Mont. 91 (49 Pac. 437); York County v. Watson, 15 S. C. 1 (40 Am. R. 675); State v. Gramm, 7 Wyo. 329 (52 Pac. 533, 40 L. R. A. 690); Roberts v. Laramie County, 8 Wyo. 177 (56 Pac. 915); State v. Copeland, 96 Tenn. 296 (34 S. W. 427, 31 L. R. A. 844, 54 Am. St. R. 840); Fentress County v. Reed, 116 Tenn. 110 (95 S. W. 809).
But it is earnestly insisted by'counsel for the plaintiffs, that the latter are not liable for the bonds in which portions of the sinking-fund was invested, and for that portion of the fund not invested, because the auditor found that they were deposited in the First National Bank of Sparta by the bond commission; that this bank was the acknowledged and authorized depository of the City of Sparta, notwithstanding there was no formal action taken by the mayor and council declaring this bank to be such depository; that the plaintiffs were not duly notified by the treasurer of the City of Sparta of the deposits made with the First National Bank of Sparta, and placed to their credit, the plaintiffs having made proper inquiry of the officers and employees of said bank, and the treasurer of the city, to find out whether any funds were in bank or on hand for the bond commission, and were informed by the officers of the bank and by said treasurer that there was no money to the credit of the bond commission in said bank or with said treasurer for their use; that the plaintiffs had nothing to do with the removal or the conversion of the bonds, and were not instrumental in drawing out from said bank the money therein deposited
Neither the advice nor direction of either the State superintendent of public instruction, the school commissioner, or the county board of commissioners, as to the deposit of money, would discharge a township trustee from liability for loss caused by the subsequent failure of the bank; the court saying that he had the custody and control of the money, and that it was for him and him alone to determine where and in what manner it should be kept. Inglis v. State, 61 Ind. 212 (supra). A township trustee, who kept the township money on deposit in a bank with the knowledge and consent of the township board, was held liable when the bank failed and such money was lost. Rose v. Douglass Township, 52 Kan. 451 (supra). The direction of the county commissioners’ court to the county treasurer, to deposit county funds in a particular bank, would not exonerate the. treasurer’s bond from liability for loss thereof through the subsequent failure of the bank, where by statute the treasurer was made custodian of such funds, since to allow the county commissioners’ court to direct as to the custody of the funds would abrogate the statute. McKinney v. Robinson, 84 Tex. 489 (19 S. W. 699). Where the deposit was made with the knowledge, consent, and approval of the county commissioners, the same conclusion was reached by a similar process of reasoning. Kittitas Co. v. Travers, 16 Wash. 528 (supra). A town treasurer can not relieve himself from liability on a bond obligating him to pay over all county funds, by showing that he was directed by the board of trustees to cash tax warrants at the failing bank, when the board did not direct to keep the funds in such bank. Cicero v. Grisko,
But the plaintiffs insist, that there is a difference in the degree of diligence which public officers must exercise in taking care of property entrusted to their keeping, and that which they must employ in handling public moneys which come into their hands. Where public property, other than money, is entrusted to an officer, the latter may occupy the position of bailee of the government, and be only bound to due diligence and only liable for negligence or dishonesty. II. S. v. Thomas, 82 U. S. 337 (supra). But the position of an officer who is entrusted with public money for investment in negotiable bonds, which pass by delivery, and which he must safely keep and account for, is in no way different from that of an officer Mio is entrusted with public moneys for safekeeping. In principle and on sound reasoning, the liability is the same.- In the case where the public officer is entrusted with public funds for investment in bonds, and he makes the investment but entrusts the safekeeping thereof to a bank, and the same are lost, there is as good.reason for holding the officer liable for their loss as there is for holding him liable for the loss of such money when deposited in bank and the same becomes a loss by the bankruptcy of the depository or the dishonesty of its officials. The real ground of liability is that under the law the safekeeping of such bonds is entrusted to the bond commissioners, who can not delegate their safekeeping to another.
We come next to consider the question whether the court erred in that portion of the decree which adjudged that the plaintiffs were liable for the sinking-fund of the City of Sparta, amounting to the sum of $17,235.87. It is urged by the plaintiffs, that, under the findings of fact by the auditor which were duly approved by the court, no decree could be entered against them for said sinking-fund, there being no verdict of a jury, the whole case having been
A decree is the judgment of the judge in equitable proceedings, upon the facts ascertained. Civil Code, § 5424; Winn v. Walker, 147 Ga. 427 (94 S. E. 468). In this State the jury and the judge constitute the chancellor. Hargraves v. Lewis, 3 Ga. 162. The facts are to be submitted to a jury, who have the exclusive right to pass upon them, and matters of law are for the court alone. This is what is meant by the language in the last-cited case. Mounce v. Byars, 11 Ga. 180. When the issues of both law and fact in an equity cause are referred to an auditor, the latter, in the first instance, takes the place of the jury and the judge, and is pro hac vice the chancellor. To his report exceptions can be filed, to be separately classified as exceptions of law and exceptions of fact. Civil Code,- § 5135. When exceptions of law are filed they are for the exclusive consideration of the judge. § 5140. In equitable proceedings, if exceptions of fact are filed, and the judge approves the same, the same shall be submitted to the jury. § 5142. If the judge does not approve any exception of fact, the same becomes conclusive. The judge is not required, as a matter of course,- to submit exceptions of fact to the jury. DuBose v. Thomas, 136 Ga. 673 (3) (71 S. E. 1106); Mathewson v. Reed, 149 Ga. 217 (2) (99 S. E. 854); Upmago Lumber Co. v. Monroe, 151 Ga. 801 (108 S. E. 369).
In this case the plaintiffs did not except to the auditor’s findings of facts, which related to the City of Sparta; but filed certain exceptions of law to these findings which in effect amount to a demurrer to the sufficiency of such findings to relieve the plaintiffs from liability. In other words, the City of Sparta, admitting the facts as found by the auditor to be true, by its exceptions of law asserts that the plaintiffs are liable for the loss of its sinking-fund, in spite of these facts; and alleges that the auditor erred in finding that the plaintiffs were not liable under said facts. This ruling of the auditor, if erroneous, being an error of law apparent on the face of the auditor’s report, the court could correct it by its decree. The latter would not be based upon facts not found- by the auditor; but would amoxmt to the correction of an erroneous judgment by the auditor based upon the facts found- by him. The court can adopt the findings of fact by the auditor, and at the same time find that the auditor erred in the .legal conclusion on such facts which he reached.
. The judgment in the main bill of exceptions is affirmed, and the cross-bill of exceptions is therefore dismissed.