City of Dickinson v. White

• Decision Date: 22 October 1913
• Citation: 143 N.W. 754,25 N.D. 523
• Parties: CITY OF DICKINSON v. WHITE et al.
• Court: North Dakota Supreme Court

25 N.D. 523

143 N.W. 754

CITY OF DICKINSON

v.WHITE et al.

Supreme Court of North Dakota.

June 13, 1913.

On Rehearing, Oct. 22, 1913.

Syllabus by the Court.

In an action by a municipality upon the official bond of its treasurer to recover for alleged defalcations, a jury was waived, and the trial court found that during the treasurer's second term he was short in the sum of $645.11, and that during his third term the aggregate shortages amounted to more than the penalty in the bond, and he allowed a recovery for such latter shortages in the sum of $2,000, the penalty of the bond, with interest. Evidence examined, and held amply sufficient to sustain such findings.

Plaintiff, instead of introducing the books of the city in evidence for the purpose of establishing the shortages alleged, proved the same by introducing in evidence certain receipts given by its treasurer to the county treasurer for sums paid by the latter to the former as the proceeds of taxes collected and belonging to the city, and it followed this proof by official reports made by its treasurer to the mayor and city council wherein lesser amounts were reported. Sufficient foundation was laid for the introduction of these receipts and reports. Held, that such testimony made a prima facie case for the city as against both the treasurer and his surety. The prima facie case thus established is fully corroborated by the testimony of its ex-treasurer and other witnesses. Held, that such proof was competent and amply sufficient to establish the alleged shortages.

The question of the sufficiency of the complaint to state a cause of action is not challenged by certain assignments of error merely attacking certain findings as not supported by the evidence.

A shortage shown to exist at a certain time will, in the absence of proof to the contrary, be presumed to have arisen on account of defalcations occurring during that term of office, and not to include shortages occurring in previous terms.

The evidence discloses that defendant White, the ex-treasurer of the plaintiff, and the principal in the bond sued upon, was also county auditor of S. county, and, to cover up an admitted shortage in his account as city treasurer existing on July 14, 1909, he issued a fraudulent county warrant, payable to another, and indorsed the payee's name upon the back, and on such date deposited the same in the First National Bank of Dickinson; such bank giving him credit as city treasurer on its books for said amount. The trial court found, and such finding is supported by ample evidence, that the bank received such warrant merely for collection, and that thereafter on discovering the fraudulent character of the warrant they charged such credit off its books by debiting White as city treasurer with the amount of such warrant. Held, that the above transaction did not operate to liquidate such shortage so as to exonerate White's surety on his official bond.

The trial court allowed plaintiff interest at the rate of 7 per cent. per annum on the amount of such shortage shown to exist from the expiration of White's term in which such shortages arose. Held, that such allowances were sufficiently favorable to appellant. The fact that the recovery, including interest, exceeded the penalty of the bond does not render the allowance of interest unwarranted.

On Rehearing.

Upon a rehearing and a reconsideration of the evidence relative to the extent of a shortage which occurred in White's account with the city of Dickinson during his last term, held, that such evidence is insufficient to support a finding that such shortage amounted to $2,150. The fair import of the testimony warrants a finding merely that such sum constitutes the aggregate amount of all shortages occurring in that and the two prior terms. A new trial is accordingly ordered, unless plaintiff elects, within 30 days from the date of filing the remittitur, to remit from the judgment the portion in excess of $2,050, with interest and costs; the cause of action to recover for the shortage of $100 shown to have occurred during the first term being barred by the statute of limitations.

The presumption that a shortage shown to exist in a certain term is presumed to have occurred during that term is, for reasons stated, held not applicable.

On such rehearing we recede from the views expressed in our former opinion relative to the time from which interest may be computed, and it is held as against sureties on official bonds that interest may be reckoned only from the date of notice to the sureties of the breach, or from the date of a demand on them to make good such breach. No notice or demand having been shown, interest is allowed only from the date the action was commenced.

Appeal from District Court, Stark County; Crawford, Judge.

Action by the City of Dickinson, a municipal corporation, against J. S. White and the Northern Trust Company, a corporation. From judgment for plaintiff, the Northern Trust Company appeals. Affirmed on condition.

Pierce, Tenneson & Cupler, of Fargo, for appellant. H. A. Burgeson and T. F. Murtha, both of Dickinson, for respondent.

FISK, J.

The city of Dickinson sues to recover against J. S. White, its ex city treasurer, and against his surety, the Northern Trust Company, upon certain official bonds given by the said White as such city treasurer; it being plaintiff's contention that the said White defaulted and failed to account for city funds collected and received by him in his said official capacity. The defendant White was not served with process, and made no appearance in the action, and the Northern Trust Company alone appeals.

A jury was waived, and the cause tried to the court, resulting in findings and conclusions favorable to the plaintiff on the second and third causes of action, but holding that the first cause of action was, at the time this action was commenced, barred by the statute of limitations.

The statement of facts in appellant's brief is substantially correct, and we quote from the same as follows:

“The defendant J. S. White was elected treasurer of the city of Dickinson for three successive terms of two years each, commencing in April, 1904, and ending in April, 1910. He executed his three official bonds, one dated April, 1904, the second dated April, 1906, and the third dated April, 1908, each covering a period of two years from its date, and each for the sum of $2,000. The defendant the Northern Trust Company was surety upon each of these three bonds. In April, 1911, the city of Dickinson commenced this action upon all three bonds to recover an alleged shortage in the accounts of said White. White was also city treasurer from 1900 to April, 1904; but the Northern Trust Company was not surety on his bond during that period.

The first cause of action is based upon the bond dated April, 1904, to which the Northern Trust Company answered, denying that any shortage existed, and also pleading the statute of limitations. As the court found that the first cause of action was barred by the statute of limitations, all allegations of the complaint and answer with reference to the first cause of action, as well as Exhibits 7, 8, 11, and 12, and testimony offered in connection with same, are immaterial.

The second cause of action is based on the bond executed in April, 1906, which is the same in form as Exhibit A. Paragraph 6 of the second count of the complaint alleges ‘that the defendant J. S. White did, during his said term of office and in his capacity as such officer, collect as taxes various sums of money, amounting in the aggregate to the sum of $6,285.11, and that of this said amount the said J. S. White accounted for and paid over to the plaintiff the sum of $5,640,’ making an alleged shortage of $645.11 under the second cause of action. This was denied by the Northern Trust Company.

The third cause of action is based on the bond executed in April, 1908, which is the same in form as Exhibit A, and paragraph 6 of the third count of the complaint alleges that said White failed to account for the sum of $909.88 for taxes collected, and further alleges: ‘That the said J. S. White, in his capacity of said officer and under color thereof, did deposit to his credit as city treasurer a number of worthless warrants purporting to have been drawn on Stark county, North Dakota, the said warrants having been repudiated by said Stark county, and the same were returned by banks holding same as deposits to the said defendant J. S. White, as city treasurer, and same were charged to the plaintiff, together with interest thereon, amounting to the sum of $6,807.96. A list of said purported warrants is hereto attached, and marked Exhibit D and made a part hereof.’ Exhibit D, so far as material, refers to warrant of Stark county No. 12,627, for $2,150, alleged to have been deposited in the First National Bank of Dickinson on July 14, 1909. The allegations of this paragraph were denied by the answer of the Northern Trust Company.

[1] To prove the alleged shortage under the second count, plaintiff offered in evidence Exhibit 9, purporting to be a report of J. S. White to the city council for March, 1908, and Exhibit 13, which purports to be a receipt by White to the county treasurer dated March 31, 1908, for taxes.

To prove the alleged shortage under the third count, plaintiff offered in evidence Exhibit 10, purporting to be a report by White to the city council for February, 1909, and Exhibit 14, which purports to be a receipt by White to the county treasurer dated February 23, 1909. Also under the third count plaintiff offered in evidence Exhibit 15, purporting to be a warrant for $2,150, the slip showing its deposit to the credit of J. S. White, City Treasurer, marked 19, the debit slip of the bank marked Exhibit 20, and the page of the cashbook of the city marked Exhibit 21, all of which were objected to. Exhibits 20 and 21 were made February 10, 1910. White ceased to act as city...