City of Fayette v. Silvey

• Decision Date: 06 December 1926
• Docket Number: No. 15793.,15793.
• Citation: 290 S.W. 1019
• Parties: CITY OF FAYETTE v. SILVEY et al.
• Court: Missouri Court of Appeals

290 S.W. 1019

CITY OF FAYETTE v. SILVEY et al.

No. 15793.

Kansas City Court of Appeals. Missouri.

December 6, 1926.

Certiorari Denied January 24, 1927.

Appeal from Circuit Court, Howard County; H. J. Westhues, Special Judge.

Action by the City of Fayette against David E. Silvey and others. From a judgment for plaintiff, defendants appeal. Affirmed.

Jasper Thompson, of Fayette, and Willard P. Cave, of Moberly, for appellants.

Lionel Davis, of Fayette, for respondent.

ARNOLD, J.

This is a suit to recover on a surety bond. Plaintiff is a municipal corporation, chartered as a city of the fourth class, and is the county seat of Howard county, Mo. Defendant David E. Silvey was elected collector of the city of Fayette at the general election in April, 1922. He duly qualified as such officer, and executed a bond as required by ordinance, with the Fidelity & Deposit Company of Maryland as surety, on April 6, 1922. The conditions of said bond were stated therein as follows:

"The condition of the aforegoing obligation is such that, whereas, the said principal has been elected or appointed city collector, city of Fayette, state of Missouri, for the term beginning April 5, 1922, and ending April 5, 1924, or until his successor is elected or appointed and qualifies:

"Now, therefore, if the said principal shall well and faithfully perform all and singular the duties incumbent upon him by reason of his election or appointment as said city collector, and honestly account for all moneys coming into his hands as said city collector, according to law, then this obligation shall be null and void; it is otherwise to be and remain in full force and virtue."

The bond was duly approved by the city, and Silvey entered upon the discharge of his duties as such collector. Silvey was re-elected city collector at the general election in April, 1924, and under such election continued to serve in that capacity. He did not execute a new bond, but renewed the old one by paying the same amount of premium he had paid when the bond was first made. At the time the original bond (the one sued on herein) was executed, the city collector was required by ordinance to collect all taxes and licenses due the city. At that time the city owned and operated a waterworks system, and also owned and operated an electric light plant, thus supplying the inhabitants of the city with water and electricity. These two plants, the only ones of the kind in the city, had been operated by the city for some time, and the light and water bills were collected by the city. On July 5, 1922, about two months after the bond sued on was furnished, an ordinance was passed and approved, requiring all water and light bills to be collected by the city collector.

The evidence shows that, at the time the duty of collecting the water and light bills was put upon the city collector, there was some discussion between the mayor, the aldermen, and defendant Silvey about the necessity for a new bond to cover Silvey's additional duties put upon him by said ordinance; but it seems that, upon Silvey's suggestion to the effect that his old bond would be sufficient to cover, no new bond was required, and thereafter the old bond was renewed by payment of the same premium, for an additional term of two years, as above stated. It was stipulated by the parties to this action that the —

"Farmers' & Merchants' Bank at Fayette was at the date of its closing, June 10, 1925, and for some years prior thereto, the city depository of the city of Fayette, Missouri, and duly selected by the city authorities, and bonded as such a city depository."

In respect to this bank it was also stipulated:

"That the Farmers' & Merchants' Bank of Fayette, Missouri, for many years was a banking institution in the city of Fayette, Missouri, and that it had a good reputation in the community of Fayette and vicinity as a sound, solvent, and safe banking institution, and that such reputation continued up to the time it actually closed its doors on the 10th of June, 1925."

Defendant Silvey testified at the trial that the mayor of the city of Fayette had directed him to deposit city money when collected in said Farmers' & Merchants' Bank, which he did. In June, 1925, the said bank failed and was closed by the commissioner of finance of the state. It appears that during the month of June, 1925, defendant Silvey collected the sum of $1,740.40, all derived from the collection of light and water bills, excepting $13.81, which was duly deposited in the, Farmers' & Merchants' Bank to the credit of D. E. Silvey, city collector.

Immediately after the institution of this suit, Silvey paid into court the item of $13.81, composed of taxes collected and interest on the same, together with all the costs of this action to that date, and refused to pay over the balance upon demand of the city, upon the grounds, first, that these funds were not public funds, because in the operation of the water and electric light plant the city was acting in a private capacity; and, second, the law requires only such care and prudence in depositing such funds as is required of ordinarily prudent persons under the same or similar circumstances, and that as such collector he was not an insurer as to such funds; and, third, having deposited said funds in the designated city depository, he is absolved from further liability.

Upon the refusal of Silvey to pay the sum as demanded, this suit was instituted. The petition alleges the facts as above indicated, and sets up therein the condition of the bond as above, and the necessary averments as to parties, dates, etc., in respect thereto; the bond being made part of the petition by exhibit. The petition also alleges demand and the failure and refusal of defendants to pay. Judgment was asked in the sum of $1,740.40, with interest from June 23, 1925.

Defendants each filed separate second amended answer, each denying liability under the bond sued on and setting up the reasons therefor, which we need not here...