Anderson v. Roberts

• Decision Date: 24 December 1898
• Citation: Anderson v. Roberts, 147 Mo. 486, 48 S.W. 847 (Mo. 1898)
• Parties: Anderson et al. v. Roberts et al., Appellants
• Court: Missouri Supreme Court

48 S.W. 847

147 Mo. 486

Anderson et al. v. Roberts et al., Appellants

Supreme Court of Missouri

December 24, 1898

Appeal from Boone Circuit Court. -- Hon. John A. Hockaday, Judge.

Reversed.

C. B Sebastian and W.M. Williams for appellants.

(1) The circuit court erred in charging the defendants personally with the shortage of treasurer Gillespy in his accounts with this fund. The judges of the county court had the right to employ an agent to hold the actual custody of the securities and money and to keep the accounts. Trustees may employ agents, when to do so is in accordance with the usual and ordinary course of business. 2 Story's Eq. Jur., sec 1269; Carpenter v. Carpenter, 34 Am. Rep. 716; 1 Beach, Modern Eq. Jur., sec. 252; Purdy v. Lynch, 40 N.E. 232. (2) The defendants, having the right to appoint an agent as the actual custodian of the fund, under their supervision and direction, and having exercised due care in the choice of a party to fill that position, can not be made liable for a misappropriation of a part of said funds by him without their knowledge and without any fault or negligence upon their part. Speight v. Gaunt, 9 App. Cas. 1; State ex rel. v. Meagher, 44 Mo. 356; Atterberry v McDuffee, 31 Mo.App. 603; 1 Beach on Modern Eq. Jur., sec. 252; Purdy v. Lynch, 40 N.E. 232; Carpenter v. Carpenter, 34 Am. Rep. 716; 2 Story's Eq. Jur., p. 703, sec. 1269.

Turner & Hinton and Wellington Gordon for respondents.

(1) The trustees were guilty of a breach of trust in confiding the custody and keeping of this fund to the hands of an agent, and are liable for the amount of the agent's shortage. Turner v. Corney, 5 Beav. 517; Ghost v. Waller, 9 Beav. 497; Trutch v. Lamprell, 20 Beav. 116; Griffiths v. Porter, 25 Beav. 236; Corwell v. Gatacombe, 27 Beav. 568; Rowland v. Witherden, 3 Mac. & G. 568; Clough v. Bond, 3 Myl. & Cr. 490; Walker v. Simmonds, 3 Swanst. 1; Bostock v. Floyer, L. R. 1 Eq. 26; Lewis v Nobbs, L. R. 8, Ch. D. 591; Fry v. Tapson, L. R. 28 Ch. D. 268. (2) The trustees in their selection of an agent, and in their supervision over him, failed to exercise proper care, and are liable for the loss arising therefrom. Robinson v. Harkin [1896], 2 Ch. D. 415; Rowland v. Witherden, 3 Mac. & G. 568; Mendes v. Guendella, 2 J. & H. 259; Hanbury v. Kirkland, 3 Sim. 265; Thompson v. Finch, 22 Beav. 327; Bates v. Underhill, 2 Redf. 365; Richards v. Seal, 2 Del. Ch. 266; Fesmire's Appeal, 19 A. 502; State v. Guilford, 15 Ohio 594; McCloskey v. Gleason, 56 Vt. 264.

Turner & Hinton and Wellington Gordon for respondents on motion for rehearing.

The respondents pray the court to set aside the judgment of reversal in this cause, and grant them a rehearing for the reasons following: First. Because the majority opinion is based upon evidence not preserved by the bill of exceptions. All of the evidence touching the prior administration of this trust, was introduced at the first hearing at the June term, 1895, on the issue as to the acceptance of the trust. At that time a decree was entered finding an acceptance of the trust in 1887, and directing that an account be taken of its administration. No bill of exceptions was filed at this term, and no leave obtained for a subsequent filing. After the lapse of several terms, the decree was entered charging the defendants with the amount of Gillespy's shortage, and then for the first time a bill of exceptions, attempting to embrace the evidence adduced at the hearing several terms before was filed. Under the statute, this bill could not preserve for review anything occurring prior to the time at which the last decree was entered. R. S. 1889, secs. 2167 and 2168; Barber Asphalt Co. v. Ullman, 137 Mo. 564; Ins. Co. v. Rosenheim, 56 Mo.App. 27. Second. Because the majority opinion, in so far as the same holds that the will creating the trust constituted the county court the trustee, overlooks the ruling of this court in Harwood v. Tracy, 118 Mo. 631, wherein it is expressly held that a county court is a special statutory tribunal, having no powers whatever beyond those expressly conferred by statute. Third. Because the majority opinion, is so far as it justifies the conduct of the appellants in instrusting this fund to the treasurer, on the ground that it was covered and protected by his official bond, raised a question not heretofore presented by brief or oral argument, and on which counsel for respondents have had no opportunity to be heard. Because it overlooks the fact, that under the ruling of this court in Harwood v. Tracy, 118 Mo. 631, the county court, as such, had no power or jurisdiction to place any funds in the hands of the county treasurer except those of which he is made custodian by the statute. And if the opinion means to hold that the appellants, in their capacity as trustees under the will, could render the county treasurer's bondsmen responsible by turning over to him a fund which it was not his duty under the statutes to keep, then it overlooks the ruling in State ex rel. v. Davis, 88 Mo. 585, wherein it was held, that an officer's bondsmen were only liable for the performance by him of such duties as the law imposes, and not for such duties as individuals might see fit to confer upon him. Fourth. Because if the appellants, in their capacity as county judges, had power or jurisdiction to order this fund into the hands of the county treasurer, so that he became liable to account for it as in case of county funds, then the appellants admittedly failed to semiannually ascertain by actual examination and count the funds in the hands of the treasurer, and to what funds they belonged, as required by statute. R. S. 1889, sec. 3175. And for a failure to perform their statutory duty with reference to public funds under their charge, county judges are personally liable. Knox County v. Hunolt, 110 Mo. 67. Fifth. Because, if the county treasurer was liable on his official bond for the misapplication of this fund, then it was the duty of the trustees, when they discovered the shortage in January, 1891, to require the bondsmen to make it good, within the period of limitations under section 6776, Revised Statutes 1889; and no excuse is shown for their failure during the succeeding four years of their incumbency in office as trustees to require a settlement of this shortage, the amount of which they admittedly did not take the trouble to ascertain.

MARSHALL, J. Sherwood and Brace, JJ., concur. Burgess, J., concurs, but places it on the ground that the county court is the real trustee, and that the judges as a court could only be held liable for malfeasance in office. Williams, J., having been of counsel did not sit and took no part. GANTT, C. J., dissenting. Robinson, J., agrees in Gantt's views.

OPINION

In Banc.

MARSHALL J. --

In 1845, Anthony W. Rollins died, testate, devising to the then judges of the county court of Boone county the sum of ten thousand dollars, in trust, to loan the same upon good security, collect the interest, apply three-fourths of the interest to the education of such poor youths, male or female, of Boone county as desired to avail themselves of such aid and who should be selected by the president of the State university and the principal of the Columbia Female Academy; the remaining one-fourth of the interest and any unexpended balance of the three-fourths to be added to the principal.

The fund remained in the hands of James S. Rollins from 1856 to September 8, 1867, when on motion of Rollins the county court ordered that the county treasurer receive of said Rollins, Union military bonds, at their par value, for the debt due by James S. Rollins to the county court, on account of the Rollins bequest, and pursuant to this order Rollins turned over the bonds to Moss Pruitt, the then county treasurer, who held the fund during his term, and turned over the same to his successor, R. B. Price, in January, 1868. Price held the fund during his term, and at the end thereof, in December, 1876, he turned it over to his successor, J. M. Samuels. He likewise held the fund until the end of his term in December, 1882, when he turned it over to his successor, G. W. Trimble (one of the plaintiffs herein). Pursuing the course of business of his predecessors Trimble held the fund until the end of his term in January, 1887, when he turned it over to his successor, J. C. Gillespy. The fund at this time amounted to $ 37,844.70, of which $ 880.15 was in cash, and the balance in bonds and secured notes. Gillespy was re-elected county treasurer in 1891, and held office until January, 1895. Upon his final settlement Gillespy was found to be $ 4,758.44, short in respect to the fund, and also short in his accounts as county treasurer.

The various county treasurers kept separate statements as to this fund, but adopted different methods of keeping the securities and cash and paying out the money. The plaintiff Trimble while county treasurer kept the money of this fund mixed with the money of the county and made payments by checks signed by him as treasurer of Boone county and sometimes in cash. Prior to his election as county treasurer Gillespy had been twice elected sheriff and once collector of Boone county, his reputation for honesty was beyond question and he was generally regarded as a responsible man financially. At the end of the first term his bondsmen, who were directors and stockholders of the bank in which he kept his deposits, refused to go on his bond for his second term, but he gave a good bond signed by some of the best people in Boone county. The defendants, then judges of the county court, are not shown to have had any notice of this refusal of his former bondsmen.

The practice of the judges of the county court had always been to have reports from time to time...