Berger v. City of Vinita
| Decision Date | 16 October 1934 |
| Docket Number | 23159. |
| Parties | BERGER et al. v. CITY OF VINITA. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Jan. 8, 1935.
On Rehearing.
Syllabus by the Court.
1. In the absence of any statute limiting the liability of a city treasurer as custodian of money belonging to the city sinking fund, the duty imposed by law and assumed by him and his sureties will be deemed to be absolute.
2. The above doctrine has been modified by the Legislature of Oklahoma to the extent that the obligation of said treasurer is similar to that of a bailee for hire when said deposits are made in accordance with the legislative acts.
3. In order for a city treasurer and her bondsmen to obtain the benefits of the various depository acts and to be relieved from being an insurer of sinking funds entrusted to her as such officer, a strict compliance with the depository acts is necessary.
Appeal from District Court, Craig County; Ad V. Coppedge, Judge.
Action by the City of Vinita against Mrs. Al Berger and the United States Fidelity & Guaranty Company, a corporation. Judgment for plaintiff, and defendants appeal.
Affirmed.
Ames Cochran, Ames & Monnet, of Oklahoma City, and Richard L Wheatley, of Vinita, for plaintiffs in error.
Carey Caldwell, of Vinita, for defendant in error.
The parties will be referred to herein as they appeared below. This is an appeal from the action of the trial court in directing a verdict in favor of the plaintiff and against the defendants. The facts as shown by the undisputed evidence and stipulation of the parties are that Mrs. Al Berger was elected city treasurer of Vinita in April, 1929, qualified as such, and executed her official bond with the United States Fidelity & Guaranty Company as surety. The uninvested sinking fund of the city, to the extent of $15,000, was deposited by her in the Farmers' State Bank of Vinita, Okl., on a time certificate of deposit, dated the 17th day of October, 1929. May 16th following, the bank failed and was taken over by the banking commissioner and placed in liquidation. After due demand, this suit was filed resulting in a directed verdict in the amount of $12,144.42, with 6 per cent. interest thereon from the 1st day of October, 1930.
On the 10th of May, 1927, personal bond in the amount of $50,000, signed by the various officers and directors of said bank, was taken and approved by the city council to secure deposits made in said bank. The city of Vinita brought suit on that bond also, and obtained judgment in like amount to the judgment rendered herein. In the present suit, defendants filed an amended answer asking that upon satisfying any judgment rendered in this case they be subrogated to the rights of the plaintiff.
On October 30, 1929, the defendant, city treasurer, received a letter from the Attorney General's office directing her attention to chapters 62 and 88 of the Session Laws of 1925, calling her attention specifically to the law governing the depositing of sinking funds, and that a bond signed by a surety company was required.
Numerous errors are assigned by defendants in their motion for new trial, which are likewise embodied in their petition in error.
The legal propositions involved in this case as raised by the motion for new trial and petition in error may all be grouped under three grounds:
(1) In the absence of any statute limiting the liability of a city treasurer as custodian of money belonging to the city sinking fund, is the duty imposed by law and assumed by him and his surety to safely keep said money absolute?
(2) Has the doctrine laid down by the Supreme Court of the territory of Oklahoma, that said treasurer is an insurer, been modified by the various acts of the Legislature to limit the liability of a city treasurer to that of a bailee for hire?
(3) In order for a city treasurer and her bondsmen to obtain the benefits of the various depository acts of the Legislature, is a strict compliance with the provisions of said depository acts necessary?
1. In the absence of any statute limiting the liability of a city treasurer as custodian of money belonging to the city sinking fund, is the duty imposed by law and assumed by him and his surety to safely keep said money absolute?
In the early case of Van Trees et al. v. Territory of Oklahoma, 7 Okl. 353, 54 P. 495, the territorial Supreme Court decided that: "In an action on an official bond of a county treasurer, the fact that the moneys were deposited in a solvent banking institution, which thereafter failed, resulting in the loss of the funds, without any fault or negligence on the part of the treasurer, constitutes no defense to said action."
At the time of this decision, section 5689 of the Statutes of Oklahoma, 1893, forbade the loaning of county money with or without interest, and section 5692 of the same statute provided in effect that the loaning of county funds with or without interest amounted to embezzlement, and provided on conviction for punishment in the penitentiary. This latter section of the statute is carried forward in the Compiled Statutes of 1921 as section 9781, with only slight modification, which section of the statute provides that said officer is subject to punishment for embezzlement for loaning money with or without interest "except when authorized by law."
We therefore hold that under the rule laid down by this court the city treasurer is liable for the sinking fund deposited in a solvent banking institution which thereafter failed, resulting in the loss of funds, without any fault on the part of the treasurer, constitutes no defense to the action "except when authorized by law."
2. Has the doctrine laid down by the Supreme Court of the territory of Oklahoma, that said treasurer is an insurer, been modified by the various acts of the Legislature to limit the liability of a city treasurer so that it is similar to that of a bailee for hire?
In State ex rel. Adair County Com'rs v. McCloud, 64 Okl. 126, 166 P. 1065, this court holds, "A county treasurer, who in good faith and without notice of any lack of responsibility in the bank, or defect in the bond, deposits his official funds in a duly designated county depository, which has given a bond, legally approved and accepted by the county commissioners, and which bond, by its terms, is in force during the period of such deposit, is not liable for loss of funds, within the amount of said bond, occasioned by the failure of the depository;" which is a modification of the rule of absolute liability and reduces the liability of a treasurer so that it is similar to that of a bailee for hire under the conditions therein stated.
This doctrine is further sustained in the case of Hinton v. State ex rel. Neal, 57 Okl. 777, 156 P. 161, 163, in which case this court says: "It is well settled by authority and on principle that, when such depositories have been designated according to law, neither the county treasurer nor his bondsmen are liable for the loss of funds deposited therein, so long as the treasurer keeps within the requirements of the law."
In Board of Com'rs of Grant County v. Soucek, 128 Okl. 151, 261 P. 947, this court holds:
From the foregoing decisions we conclude that the liability of a city treasurer for sinking funds coming into his hands is absolute except when the manner of handling said funds is defined by law, and that the doctrine that said treasurer is an insurer has been modified by the various acts of the Legislature so that when the treasurer complies strictly with the legislative acts his responsibility as an insurer is reduced so that it is similar to that of a bailee for hire.
3. In order for a city treasurer and her bondsmen to obtain the benefits of the various depository acts of the Legislature, is a strict compliance with the provisions of the depository acts necessary?
Section 1 of chapter 62 of the Session Laws of 1925 provides:
Chapter 88 of the Session Laws of 1925, in part, provides ...
To continue reading
Request your trial