167 P. 414 (N.M. 1917), 1980, State v. Llewellyn

Docket Nº:1980.
Citation:167 P. 414, 23 N.M. 43, 1917 -NMSC- 031
Opinion Judge:ROBERTS, J.
Party Name:STATE v. LLEWELLYN ET AL.
Attorney:S. P. Weisiger, of El Paso, Tex., and Francis C. Wilson, of Santa F
Judge Panel:HANNA, C.J., and PARKER, J., concur.
Case Date:July 18, 1917
Court:Supreme Court of New Mexico
 
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Page 414

167 P. 414 (N.M. 1917)

23 N.M. 43, 1917 -NMSC- 031

STATE

v.

LLEWELLYN ET AL.

No. 1980.

Supreme Court of New Mexico

July 18, 1917

Rehcaring Denied September 10, 1917.

Syllabus by the Court.

Sections 20, 21, c. 138, Laws 1889 (sections 3571, 3572, C. L. 1897) construed. Held, that such sections require the secretary treasurer of the board of regents of the New Mexico College of Agriculture and Mechanic Arts to execute a bond to the state of New Mexico in not less than the penal sum of $20,000 before entering upon the discharge of his duties as such.

Where one section of an act of the legislative assembly requires the secretary treasurer of a named institution to execute to the state a bond before entering upon the discharge of his duties, and another section, in providing officers for another named institution, provides that the officers thereof shall be the same and shall possess the same qualifications as the officers named in the prior section, the secretary treasurer of the latter institution is not "qualified" to enter upon the discharge of his duties until he has executed the bond required by the former section.

The state is not bound by the declarations of its agents, unless it appears that the agent was acting strictly within the scope of his authority; hence the state is not bound by the declarations made by the board of regents of the New Mexico College of Agriculture and Mechanic Arts to a proposed surety upon the bond of its secretary treasurer that his accounts were in good shape, and that he had the money on hand as shown by his report, where there is no statute of the state authorizing the board of regents to make any representations in that regard.

The proceeds of the sale of lands granted to the state of New Mexico by the Enabling Act, for certain specified purposes, and the natural products of such lands, with certain named exceptions, were intended by Congress to constitute permanent funds, the interest only being available for current use.

The rentals derived from such lands may be used for the support and maintenance of such institutions.

Statutes will be construed in the most beneficial way which their language will permit to prevent absurdity, hardship, or injustice, to favor public convenience, and to oppose all prejudice to public interests.

The general terms of a statute are subject to implied exceptions founded on the rules of public policy and the maxims of natural justice, so as to avoid absurd and unjust consequences.

Sureties upon the bond of the secretary treasurer of the New Mexico College of Agriculture and Mechanic Arts are liable for moneys received by such official under color of his office, and hence are liable for moneys in the hands of such official which were derived from the sale of lands granted the territory of New Mexico, although the Enabling Act made some other official the custodian of such funds.

Evidence that the assets of the depository bank, holding funds in the hands of an officer of the state were depleted on a named date is insufficient to defeat recovery upon the bond of such officer for loss of such funds, where such surety does not undertake to show that such depleted assets were not restored prior to the loss of such funds; the bank having continued as a going concern for more than ten months after the bond was given.

Appeal from District Court, Santa Fé County; Mechem, Judge.

Action by State of New Mexico against Morgan O. Llewellyn and the Southwestern Surety Insurance Company. Judgment for plaintiff, and defendants appeal. Affirmed.

Page 415

S. P. Weisiger, of El Paso, Tex., and Francis C. Wilson, of Santa Fé, for appellants.

F. W. Clancy, Atty. Gen., and H. S. Bowman, Asst. Atty. Gen., for the State.

ROBERTS, J.

This action was instituted in the court below by the state against Morgan O. Llewellyn and Southwestern Surety Insurance Company upon an alleged bond given by Llewellyn as secretary treasurer of the New Mexico College of Agriculture and Mechanic Arts in the penal sum of $75,000. The complaint set up the execution of the bond by Llewellyn, with the surety company as surety, and alleged a default in the condition of the bond and prayed for judgment in the full amount of the bond. A copy of the bond was attached to the complaint as an exhibit. To this complaint the defendant surety company answered, admitting the execution of the bond and set up certain defenses.

To this answer a demurrer was filed and sustained, whereupon an amended answer was filed. The amended answer set up as the first defense that the bond sued upon was invalid for two reasons: First, that the said pretended bond purports to be an official bond, alleged to have been given by the said Morgan O. Llewellyn as secretary treasurer of said college, and that there was no statute or law of the state of New Mexico which required the execution of any such bond; and, second, that said pretended bond was involuntarily given by the said Llewellyn, in that he was required by the board of regents of the New Mexico College of Agriculture and Mechanic Arts, as a condition precedent to his entering upon his duties as such secretary treasurer, without warrant or authority of law, to enter into a good and sufficient bond to the state of New Mexico in the sum of $75,000, and that in order to enter into the duties of said office and to acquire the same, was required and compelled to enter into the pretended bond.

The second defense set up the prior cancellation of the bond; but as no point is made as to the propriety of the action of the court in sustaining the demurrer to this paragraph of the answer, nothing more need be said relative thereto.

For a third defense the defendant alleged that Llewellyn, in making the application for the bond, acted for and on behalf of the board of regents of said college, and at their instigation and by their direction; and that the surety, prior to the execution of the bond, made and caused due inquiry to be made of the said board of regents as to all facts within their knowledge touching any risk or liability which would be incurred by the defendant as such surety, and particularly as to any fact within their knowledge

Page 416

material to the said risk, and the said board of regents, acting by and through its president, and in response to such request for information and for the purpose of inducing the defendant to become surety upon the said bond, falsely and fraudulently stated and represented to the defendant, among other things, that they had no knowledge or information of any circumstance which might unfavorably affect the risk of the surety on the bond applied for, and that the applicant's accounts on the date of such application were in every respect correct, and that he had property and funds on hand to balance his account. The answer further alleged that such statements and representations were false, and were known by said board of regents and the president thereof to be false, and were made for the purpose of inducing the defendant to become surety upon said bond. It was further alleged that the surety relied upon such representations, and the amended answer then proceeded to set up the facts as to the prior deposit by said secretary treasurer of such funds in the First State Bank of Las Cruces, and alleged that said bank was insolvent at the date of the application for such bond, and that such facts were known to the board of regents.

The fifth paragraph of the answer set up a similar state of facts, and alleged that such facts were known to the Governor of the state of New Mexico, and that he failed to apprise the defendant thereof prior to its becoming surety upon such bond.

The sixth paragraph of the amended answer pleaded as a fifth defense that a large portion of the sum sued for, the exact amount of which was alleged to be unknown, but was stated upon information and belief to be more than $21,000, did not come into the hands of said Morgan O. Llewellyn after the execution of the alleged bond sued upon, but that said sum came into his hands prior to the execution of the bond, and was by him deposited in the First State Bank of Las Cruces long prior to the execution of said bond, and that said sum was and had been lost by said Llewellyn prior to the execution of the bond by defendant herein; that such money was lost by reason of the insolvency of the First State Bank & Trust Company, which was alleged to have been insolvent upon the date that the defendant executed the bond.

Paragraph 7 of the answer need not be set out, as no question is made as to the propriety of the action of the court in sustaining the demurrer thereto.

The eighth paragraph of the answer was as follows:

"And for further answer to said complaint, and without waiving any other defenses thereto, this defendant alleges that of the moneys claimed in this action, a large portion, the exact amount of which is to this defendant unknown, but defendant is informed and believes to be an amount exceeding $21,656.76, were moneys derived from the sale of lands granted to the territory of New Mexico and confirmed by the Enabling Act of Congress approved June 20, 1910, to the state of New Mexico and by section 10 of said Enabling Act should have been kept in the custody of the state treasurer of the state of New Mexico, and were wrongfully in the hands of the said Morgan O. Llewellyn, and this defendant could not be held liable therefor on his said bond, even if said bond should be held valid and binding on this defendant as to funds rightfully coming into the hands of said Morgan O. Llewellyn as such secretary treasurer of said college."

The court sustained the demurrer filed by the state...

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