City of Detroit v. Weber

• Decision Date: 27 January 1874
• Court: Michigan Supreme Court
• Parties: The City of Detroit v. Henry Weber and others. [+]

29 Mich. 24

The City of Detroit v. Henry Weber and others. ^[+]

Supreme Court of Michigan

January 27, 1874

Heard January 14, 1874

Error to Wayne Circuit.

Assumpsit. Plaintiff brings error. Affirmed.

Judgment affirmed, with costs.

D. C Holbrook, City Counselor, for plaintiff in error.

Moore & Griffin, G. V. N. Lothrop and Theodore Romeyn for defendants in error.

Cooley J. Graves, Ch. J., concurred. Campbell, J. dissenting. Christiancy, J., did not sit in this case.

OPINION

Cooley, J.

This is a suit against the sureties on the official bond of Edward S. Leadbeater as treasurer of the city of Detroit. Leadbeater was treasurer for three successive terms, and the evidence is believed to establish the fact that he was a defaulter during each term. The question here relates not to the amount of his defalcations, but to the apportionment of liability as between the sureties in the several bonds. These defendants were sureties in the third bond. It seems to have been proved at the trial that the defalcation at the end of the second term was twenty-three thousand one hundred and twenty-four dollars and twenty-eight cents, which was represented on the treasurer's books by four fictitious entries by means of which a balance was forced. The fictitious items were the following:

Advances

$ 5,000 00

Cash in safe

7,321 82

Paid board of education

6,468 09

Paid metropolitan police board

4,334 37

Total

$ 23,124 28

Leadbeater died during his third term, and it was then found that his defalcation was twenty-three thousand five hundred and eighteen dollars and fifty-two cents, that is to say, that it had increased in the term for which defendants were sureties three hundred and ninety-four dollars and twenty-four cents. For this sum and the interest upon it, defendants are liable; but it is plain that if all the defalcations which existed when the third term commenced still continued to exist to his death, they cannot be liable further, because in that case there could have been no default in the third term beyond the sum last mentioned.

It is not pretended, as I understand it, that any default of Leadbeater during the second term was made up in the third, unless by taking city moneys for the purpose. Certainly the evidence would not have warranted the jury in finding it was made good in any other way. But the idea that a defaulting agent may make good his default, as between himself and his sureties on the one hand and his principal on the other, by taking the principal's money for the purpose, is one which needs no refutation. I think the jury were right in finding the defendants liable only for the increase in the default which took place during the third term.

The most satisfactory method of determining the liability of these sureties is to take Leadbeater's third term and consider it by itself just as we should if he had succeeded some other person instead of being his own successor, and then require them to account for all the public money that came to his hands during that term. As that was all they undertook to do by the bond, that is all that can be required of them in this suit. The evidence enables us to do this without difficulty, and we can state the account as follows:

Amount appearing by the books to have been

received during the third term

$ 1,524,279 28

But this includes two fictitious items as having

been passed to him from the preceding

term as follows:

Advances

$ 5,000 00

Cash in safe

7,321 82

$ 12,321 82

Deducting which leaves actual sum received

$ 1,511,957 46

This is the sum these sureties must account for.

The books show payments to

$ 1,479,262 86

But the city authorities show that certain sums

were in fact not paid which aggregate

14,871 92

Leaving actual payments of

$ 1,464,390 94

Add cash which after Leadbeater's death came

to the hands of his successor

36,369 82

It is further shown that during the third term

the following sums were paid by the treasurer,

which he had falsely credited as paid

in the preceding term:

To the board of education

6,468 09

To the police board

4,334 37

These sums make a total of

$ 1,511,563 22

Showing a deficiency of $ 394.24, which is in accordance with the finding of the jury.

The city insists that these last two items should not be allowed to these sureties because Leadbeater had already taken credit for them in the preceding term. But that credit, as before stated, was a fictitious one, and made to assist in forcing a balance. What have these sureties to do with his fictitious entries made at a time when they had not agreed to be responsible for his good conduct? What right have they even to enquire into his previous official action if he accounts according to law for all he receives while they stand his sureties? As already stated, the case is no different from what it would have been if Leadbeater had succeeded another person. Suppose that to have been the case, and these sureties had shown that their principal had lawfully paid or accounted for all the money received by him except the small balance above stated; would any one pretend that the fact that certain amounts which he had paid over to boards entitled by law to receive them, were falsely stated in the accounts of his predecessor to have been previously paid, could preclude these sureties having credit for them?

This case, because of its very peculiar circumstances, is capable of assuming very deceptive appearances, but in any light that I have been able to regard it the claim of the city is an attempt to fix upon these defendants the responsibility for official defaults with which they have no more concern than any other citizens.

I think the rulings of the circuit judge were correct, and the judgment should be affirmed, with costs.

Graves, Ch. J., concurred.

DISSENT

Campbell J.

I think the judgment below cannot be allowed to stand without practically leaving the city without any redress for the frauds committed during the treasurer's last term. His present sureties are only responsible for his doings during that term. But for all of his acts and omissions during that period I think their liability is precisely the same as his in all respects. And there is no reason for exonerating them in preference to any others, or in preference to him.

It is not to be forgotten that the treasurer's bond is conditioned, not merely for a just application and safe keeping of funds, but also for the faithful performance of all of his duties. This includes the keeping of his accounts and books truly. He is the only person who is entrusted with the means of keeping a record of the exact condition of his office. The city has a right, and it is necessary for the public security, to assume that all money charged by himself to himself during the term has been in his hands during the term, and that he has paid out no more than the vouchers for the term show to have been paid. As he always had it in his power to keep the specific cash received wherever he chose to put it, there is no other rule that would be safe or reasonable. And his sureties cannot complain that his representations against himself are acted upon. They are official statements and entries in the course of official duty, and, at...