City of Casper v. Joyce

• Decision Date: 21 March 1939
• Docket Number: 2086,2087
• Citation: 88 P.2d 467,54 Wyo. 198
• Parties: CITY OF CASPER v. JOYCE ET AL
• Court: Wyoming Supreme Court

88 P.2d 467

54 Wyo. 198

CITY OF CASPER v. JOYCE ET AL

Nos. 2086, 2087

Supreme Court of Wyoming

March 21, 1939

Rehearing denied July 11, 1939.

APPEAL from the District Court, Laramie County; SAM M. THOMPSON Judge.

Separate actions by the City of Casper, a municipal corporation against LeRoy Joyce and the Central Surety & Insurance Corporation of Kansas City, Mo., a corporation. From judgments for plaintiff, the Central Surety & Insurance Corporation of Kansas City, Mo., and LeRoy Joyce appeal.

Reversed.

For the defendant, Central Surety and Insurance Corporation (Appellant in Case No. 2086 and respondent in Case No. 2087) there were briefs and an oral argument by M. A. Kline of Cheyenne, Wyoming.

The trial court erred in refusing to permit the introduction of evidence, showing that the accounts of Mr. Joyce, as Treasurer, had been examined for his term of office, ending January 7, 1932, and that the State Examiner had found all monies properly accounted for by Mr. Joyce and also that defendant, Central Surety and Insurance Corporation, had suffered damages by the laches and neglect of the City of Casper to give said defendant notice of any alleged shortage in the accounts of Mr. Joyce as City Treasurer, thus depriving defendant of securing reimbursement from its principal or from re-insurance which it otherwise could have done. Remittances made by defendant, Joyce, to Kountze Brothers to meet payments of the bonds or interest of the City of Casper as the same became due, was not a violation of the depository act. Defendant, Joyce, did not breach any condition of his bond in making said remittances. The state depository act has no application to the facts in this case for the following reasons: 1--Kountze Brothers was not a bank, but a partnership. 2--Kountze Brothers was the agent of the City of Casper, when these remittances were made. Lusk State Bank v. Town Council of Lusk, 48 Wyo. 547. Mullen Benevolent Corporation v. School District No. 17 Mont. 43 P.2d 902. 3--When funds are entrusted to an agent or broker, the relation between the parties is not that of a depository and depositor. 4--Kountze Brothers was made the agent of Casper by an ordinance. 5--Defendant, Joyce, had nothing to do with selecting Kountze Brothers as such agent of the City of Casper. 6--Monies remitted by Joyce to Kountze Brothers was not a deposit. It was money sent by a principal to its agent to pay the principal's debt. The depository act was never intended to apply to a situation such as is presented in this case, Sec. 92-124, R. S. It was the duty of Defendant Joyce as Treasurer to make said remittances. Sec. 22-400, R. S. He was not a depositor. Merchant's Bank v. Continental National Bank (Calif.) 277 P. 354. State Bank v. Foster (Mich.) 76 N.W. 499. Joyce did not violate his bond in making said remittances. Neither he nor his bondsman are liable. State v. Gramm, 7 Wyo. 329, 52 P. 533. Roberts v. County, 8 Wyo. 177, 56 P. 915. Commonwealth v. Polk (Ky.) 722 S.W.2d 761. State v. Copeland (Tenn.) 34 S.W. 427. City of Healdsburg v. Mulligan (Calif.) 45 P. 337. Cumberland Co. v. Pennell, 69 Me. 357. York County v. Watson, 15 S.C. 1. City of Livingston v. Woods (Mont.) 49 P. 437. State v. Houston, 78 Ala. 576. Ross v. Hatch, 5 Iowa 149. United States v. Thomas, 15 Wall. 337, 21 L.Ed. 89. Albany County v. Dorr, 25 Wend. 440. People v. Faulkner (N. Y.) 14 N.E. 415. Joyce followed the advice of the Attorney whom the plaintiff had employed to advise him. Kountze Brothers failed on October 13, 1931. The surety on an official bond should not be held to a contract broader than the bond. School Dist. v. Surety Company (S. D.) 235 N.W. 921. McFee Guaranty Company (Wash.) 100 P. 174. State v. Hill (Md.) 41 A. 61. State v. Fidelity and D. Co. (Md.) 127 A. 758. Delay on the part of owners of interest coupons in presenting them for payment when due, creates no liability on the part of the payor, where the designated agent fails before the coupons are presented. Lusk State Bank v. Town Council of Lusk, 48 Wyo. 547. As the creditor has consented to the acts of the principal relied upon as causing the surety's liability, the creditor cannot hold the surety therefor. 50 C. J. 111. Pickering v. Day, 2 Del.Ch. 333. Huntington v. Williams, 3 Conn. 427. Stevens v. Partridge, 109 Ill.App. 486. Casper authorities ratified and approved the acts of Joyce in making the remittances to Kountze Brothers. Gage County v. Wright (Nebr.) 125 N.W. 624. Waisner v. Hasbrouck, 34 Wyo. 61. Plaintiff, the City, made an election of remedies by filing its claim in the Kountze Brothers Bankruptcy proceedings. Crook v. First National Bank (Wis.) 52 N.W. 1131. Fowler v. Bank, 113 N.Y. 450, 21 N.E. 172. Homer v. McCormick (Kan.) 56 P. 1124. Whipple v. Stephens (R. I.) 57 A. 375. Sunderlin v. Warner (Ida.) 246 P. 1. Jones v. First National Bank (Nebr.) 90 N.W. 912. In re Kenyon, 156 F. 863. Enterline v. Andrew (Ia.) 231 N.W. 416. Vogel Co. v. Original Cabinet Corp. (Mich.) 233 N.W. 20. Equitable Trust Co. v. Connecticut, etc. Corp., 6 F.2d 582. As to election of remedies, see 20 C. J. 18, 32. The trial court erred in declining to receive evidence of accounts of plaintiff showing it released defendant, Surety Company. Laches and delay on the part of plaintiff, City, deprived defendant, Surety Company, of its right to reimbursement from its principal and the payment of indemnity by its reinsurers. 50 C. J. 156. Rowley v. Jewett (Ia.) 9 N.W. 353. Kirby v. Landis (Ia.) 6 N.W. 173. Poling v. Maddox (W. Va.) 24 S.E. 999. St. Louis Brewing Assn. v. Hayes, 107 F. 395. Bank of Neeleyville v. Lee (Mo.) 165 S.W. 796. Fehr Brewing Co. v. Mullican (Ky.) 66 S.W. 627. West v. Brison (Mo.) 13 S.W. 95. At the trial, it was contended that estoppel would not run against the city. Such is not the law. Seaman v. Big Horn Canal Ass'n., 29 Wyo. 349. Trustees v. Village of Caholia (Ill.) 192 N.E. 565. Deutsch v. San Angelo (Texas) 73 S.W.2d 125. The judgment below should be reversed.

For the defendant, Leroy Joyce, (respondent in Case No. 2086 and appellant in Case No. 2087) J. A. Greenwood of Cheyenne submitted the case on the brief of defendant, Central Surety and Insurance Corporation, by stipulation.

For the plaintiff, City of Casper, (respondent in both cases) there was a brief and an oral argument by W. J. Wehrli of Casper, Wyoming.

The evidence shows that there was a deposit of funds with the firm of Kountze Brothers. Joyce as City Treasurer, presented a claim to the Bankruptcy Court after Kountze Brothers had gone into bankruptcy. The claim was denied on the ground that the City of Casper did not have a special deposit or trust fund in the hands of the bankrupt, but only a general deposit. 7 C. J. 628, 641. People v. Cromwell (N Y.) 7 N.E. 413. Under the Wyoming depository law, a public officer is liable for loss of deposit in unauthorized depository. State v. Gramm, 7 Wyo. 329. Roberts v. Board, 8 Wyo. 177. The weight of authority is that a public treasurer is liable as an insurer for the loss of funds deposited in the bank which fails. Annotation 93 A. L. R. 819. Our depository act so provides. Ch. 92, R. S. 1931. Reed v. People, 34 Wyo. 189. In the case last cited, the court refrained from deciding whether the treasurer became an insurer of public funds under the depository law. See also Roberts County v. Wickard (S. D.) 221 N.W. 246. Sawyer County v. Fretts (Wisc.) 207 N.W. 940. Forest County v. Poppy (Wisc.) 213 N.W. 676. Slope County v. Douglas (N. D.) 195 N.W. 385. Sioux City v. Mullins (Nebr.) 250 N.W. 549. State v. Carney (Ia.) 217 N.W. 472. Patterson v. People (Colo.) 53 P.2d 1187. People v. Koenig (Colo.) 63 P.2d 1235. Ordinances of the City of Casper, making bonds and interest coupons payable at Kountze Brothers was not a designation of that firm as a depository. Said firm not being a State Bank or a National Bank, any such designation would be void. Annotation 66 A. L. R. 1059. The statutes of the state become a part of the treasurer's bond. Reed v. People, 34 Wyo. 189. 9 C. J. 34. Ramsay's Estate v. People (Ill.) 64 N.E. 549. Defendant, City Treasurer, was guilty of negligence and therefore liable. State v. Gramm, supra. Roberts v. Board, supra. Defendants cite Seaman v. Big Horn Canal Ass'n., 29 Wyo. 349, in support of their contention that the City of Casper was estopped to maintain this action, for the reason that it was acting in its business capacity in obtaining funds to construct a water system. Even if it were acting in a business capacity, it could not be estopped by any act or acts of its officers in excess of their powers. Board v. Conners, 245 P. 1030. Board v. Yates Center (Kan.) 32 P.2d 209. Annotation 66 A. L. R. 1059. Board v. Mason, 38 Wyo. 1. The following cases support our position: Bragg City District v. Johnson, 20 S.W.2d 22. City of Scottsbluff v. Southern Surety Co. (Nebr.) 246 N.W. 346. State v. Claypool, 28 P.2d 882. Roberts County v. Wickard (S. D.) 221 N.W. 246. City of Luverne v. Skyberg (Minn.) 211 N.W. 5. Common School Dist. No. 61 v. Twin Falls Bank & Trust Co. (Id.) 4 P.2d 342. Mitchell County v. Odden (Ia.) 259 N.W. 774. City of Cozad v. Thompson (Nebr.) 252 N.W. 606. A city cannot ratify an unlawful act. Tooele County v. De La Mare, 39 P.2d 1051. State v. Hanson (Ia.) 231 N.W. 428. City v. Davis, 95 N.E. 110. Ramsay's Estate v. People (Ill.) 64 N.E. 549. Hale County v. American Indemnity Co., 63 F.2d 275. Anderson v. Blair (Ga.) 48 S.E. 951. Hart v. United States, 95 U.S. 316; 24 L.Ed. 479. 43 C. J., Page 728, Sec. 1230. 46 C. J. 1074-1077, Sections 412-423. The report of the State Examiner, as to the Treasurer's accounts could not be used by defendants as a defense. City v. Skyberg (Minn.) 211 N.W. 5. City v. Carabian (Wash.) 165 P. 381. Bankers Co. v. Newport (Ky.) 172...