City of Lansing v. Wood
| Decision Date | 10 June 1885 |
| Citation | 23 N.W. 769,57 Mich. 201 |
| Court | Michigan Supreme Court |
| Parties | CITY OF LANSING v. WOOD. |
Error to Ingham.
A.F. Rouse and Isaac Marston, for plaintiff.
J.C. Shields, I.P. Christiancy, and H.P Henderson, for defendants and appellants.
I am of opinion that a new trial should be awarded in this case, for the reasons following:
1. As to the moneys claimed by the city, other than moneys belonging to the school fund. The declaration is upon an official bond given by Wood, as city treasurer of the city of Lansing. The only breach alleged, under which a recovery can be had under the evidence, is the failure to pay over to his successor in office the money remaining in his hands as such treasurer. Section 11 of the charter of the city of Lansing in addition to the powers especially conferred upon them thereby, confers upon the common council the power of management and control of the finances, rights and interests buildings and all property, real and personal, belonging to the city. Local acts 1875, p. 167. Section 29 makes it the duty of the common council to audit and settle with the city treasurer on the last Tuesday of April. Section 14, p. 179 makes it the duty of the treasurer to exhibit to the common council, at the last regular meeting in April, his account, and the state of the treasury, which account shall be referred to a committee for examination; and, if found correct, it shall be filed and published. This account was exhibited by defendant Wood, was referred to a committee, who reported to the council that they found it correct. The same day Wood turned over to his successor in office certain certificates of deposit, which his successor received as a payment of the city funds to him. It is claimed that he had no authority to receive such certificates as payments, and that he is liable nevertheless to the city as for a breach of his bond.
The defense offered testimony tending to show that the act of Wood in delivering to his successor, and the act of his successor in receiving such certificates as money, was ratified by the common council. This testimony was rejected by the court; and yet when he came to charge the jury the learned judge said: "I do not find any evidence in the case to justify me in the conclusion that the common council had, in any way, ratified this arrangement in the delivery of these funds, or these certificates of deposit, to the incoming treasurer." I think it was competent to show ratification by the common council, in view of the extensive powers the charter clothes them with over the finances and property of the city. In my opinion it was error to exclude the testimony offered tending to prove ratification.
2. As to the school moneys. The charter provides that the treasurer of the city shall collect the money, and keep all school funds belonging to the city separate from all other funds, and he shall pay over to the treasurer of the school board all moneys on the order of said board. Section 4, tit. 15. The law also provides that the school board shall hold and control all moneys, etc., belonging to the school-district. The law does not specify by whom the order on the treasurer shall be signed, but it provides that the board shall elect a president, clerk, and treasurer; they shall keep a record of their proceedings, which shall be signed by the president and clerk. Doubtless money drawn from the city treasurer to be paid to the treasurer of the board would require a vote of the board; and a written order, in pursuance thereof, signed by its president, would be sufficient.
Now, the plaintiff claims that before the expiration of the term of office for which Wood was elected, he had in his hands belonging to the school fund $12,000 that he has never paid over to the treasurer of the school board on the order of that board, nor has he paid it to his successor in office. Defendant claims that prior to the expiration of his term he paid to the treasurer of the board, at his request, $12,000, in certificates of deposit on the banking-house of E. Angell, and took the treasurer's receipt, which he turned over to, and which was accepted by, the committee of the council, who settled with him on that basis. It is clear to my mind that the charter makes the city, by its treasurer, simply a custodian of the school fund for the benefit of the board of education. The law directs this fund to be kept separate from the other funds, and does not make it subject to be drawn by warrant by the city authorities. It is not subject to their control in any respect. The treasurer is chargeable with it, and is liable on his bond if he fails to pay it over on the order of the board, or to his successor. The vital question here is whether he has paid it over to the treasurer of the board so as to exonerate him from liability on his bond to the city. I agree with my brother CAMPBELL that a payment to the treasurer of the school board on his request, without an order of the school board, does not exonerate him from liability. But I think a subsequent ratification by the board of the transfer is equally good as an order originally given. I reserve my opinion upon the other questions involved. Upon those I have mentioned I think the circuit judge erred in not submitting them to the jury, and I therefore concur with the chief justice in the result he has reached.
In the opinion of my brother CHAMPLIN, so far as concerns the right of the defendants to show that the act of Wood in delivering to his successor, and the act of the successor in receiving, certain certificates of deposit had been ratified by the common council, I concur.
As to the moneys belonging to the school fund, it appears that they were accounted for by Wood to the treasurer of the board of education, and, by consent of the latter, the banking-house of Eugene Angell issued to him certificates of deposit therefor. This banking-house was at the time in good repute, and the evidence is that the certificates, if then presented for payment, would have been paid. The treasurer of the board of education had authority to deposit the school moneys in bank, and the certificates which were issued were payable to his order. Mr. Wood from that time had no control over them, or over the moneys they purported to represent. Whatever special arrangement was made at the time in regard to the payment of the certificates was made with the concurrence of the treasurer of the board, and if he was entitled to receive the funds, it must be regarded as his own arrangement.
The reasons assigned for still holding Wood and his sureties responsible for this fund are--First, that payment by him could lawfully be made in nothing but money; and, second, that by the city charter moneys are to be transferred from the city treasurer to the treasurer of the board of education on the order of that board. The first reason has, to my mind, no application to this case; for the transaction with the treasurer of the board was such as to amount to a deposit by himself of the amount he receipted to Wood. If Wood had first drawn the money from the bank, and Edwards had taken and immediately deposited it, the latter, unquestionably, if he had a right to the moneys, would have taken upon himself all risks. What difference it can make that the parties did not count out the money and then count it in again, I do not perceive. It is manifest that all parties at the time understood that the fund had been transferred to Edwards, and it is certain that he had all the evidences of right, and the complete and absolute control.
That the board of education took no action for the transfer of the fund seems to me unimportant. The treasurer of that board being legal custodian, a formal order for the transfer was only essential for the purpose of compelling it. If the city treasurer makes the transfer voluntarily, it seems to me equally effectual; the statute only contemplating that it shall pass through his hands to the proper custodian. Besides, there is strong evidence in the case that what was done was subsequently recognized as proper by the official boards, so that a question of ratification was fairly presented.
I agree that there should be a new trial.
Suit was brought and recovery had below on the official bond of defendant Wood, as city treasurer of Lansing, the other defendants being his sureties. The defalcation was in failing to pay over moneys received during his official term, which came to an end May 7, 1883. The principal sums which were received, with interest, included $12,000 of school moneys and $6,700 of general funds.
The school funds of Lansing belong to the board of education, but are collected by the city; and by the city charter it is provided (title 15, � 4) that So far as this school money is concerned, the liability is disputed on the ground that three days before the end of his term of office, and on May 4, 1883, Wood paid over the $12,000 in question to the treasurer of the school board, by turning over to him four certificates of deposit for $3,000 each, signed by Eugene Angell, and payable to J.W Edwards, treasurer, with interest at 4 per cent. Angell (who, as well as Edwards, is one of Wood's bondsmen, here made defendants) had a private banking office at Lansing until May 15, 1883, when he suspended payment, and his affairs were put into the hands of a receiver shortly...
To continue reading
Request your trial