City of Scottsbluff v. Southern Surety Company
| Decision Date | 12 January 1933 |
| Docket Number | 28314 |
| Citation | 246 N.W. 346,124 Neb. 260 |
| Parties | CITY OF SCOTTSBLUFF, APPELLEE, v. SOUTHERN SURETY COMPANY, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Scotts Bluff county: EDWARD F CARTER, JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
1. Where the official bond of a city clerk provides that he " shall faithfully perform such duties as may be imposed on him by law," he breaches that obligation if he issues to himself in addition to his lawful salary a city warrant for extra compensation inhibited by statute, and his surety in that event, is liable for resulting damages within the penalty of the bond, whether the warrant is issued by virtue of office or under color of office.
2. Void action by a city council in allowing the city clerk unlawful compensation and in ordering a city warrant to pay it, if positively inhibited by statute, does not have the effect of an appealable judgment, but is open to collateral attack and does not estop the city to seek redress for resulting damages by means of a suit on the official bond of the city clerk.
3. In a suit on an official bond, the surety is liable for interest from the date of the breach on the amount then recoverable.
4. Where judgment is properly rendered against a surety company on an official bond, a reasonable attorney fee may be taxed as costs in favor of obligee. Comp. St. 1929, § 44-346.
5. In determining the amount of an attorney fee to be taxed as costs, the calling of witnesses may not be necessary, where the record of the trial acquaints the court with the material facts.
6. " A city having a regular salaried attorney is not for that reason prevented from employing special counsel in particular instances when the city attorney is absent or ill or disqualified." Meeske v. Baumann, 122 Neb. 786, 241 N.W. 550.
7. In absence of evidence to the contrary, it may be presumed that public officers faithfully performed official duties.
8. For the purpose of review in the appellate court, it is incumbent on a litigant aggrieved by the taxation of costs to present a record showing error in that particular.
Appeal from District Court, Scotts Bluff County; Carter, Judge.
Action by the City of Scottsbluff against the Southern Surety Company. Judgment for plaintiff, and defendant appeals.
Affirmed.
Morrow & Morrow, for appellant.
Clarke & Patterson, contra.
Heard before GOSS, C. J., ROSE, DEAN, GOOD, EBERLY, DAY and PAINE, JJ.
This is an action by the city of Scottsbluff, plaintiff, against the Southern Surety Company, defendant, surety on the bond of Charles C. Cross as city clerk during the official term of two years beginning April 14, 1925. In the penal sum of $ 1,000 the bond contains the condition that the city clerk "shall faithfully perform such duties as may be imposed on him by law and shall honestly account for all money that may come into his hands in his official capacity during the said term." The salary of the clerk had been previously fixed at $ 900 a year or $ 75 a month. In addition thereto the clerk drew from the city treasury as "disbursing officer" $ 50 a month from July 1, 1926, until April 1, 1927, a period of nine months, or a total of $ 450. To recover back this latter sum as unauthorized compensation drawn from the city treasury in violation of law, with interest on each monthly payment of $ 50 from the date thereof, the city sued the surety on the clerk's official bond.
Defendant, the surety, admitted in its answer that Cross as clerk and disbursing officer drew from the city treasury $ 125 a month for the nine months beginning July 1, 1926, and interposed the defenses that the mayor and council by motion, second and vote, April 21, 1925, constituted the clerk a "disbursing officer" with duties different from those imposed by law upon the clerk and allowed Cross an additional salary of $ 50 a month for performance of the new duties imposed; that he performed the duties of the new office and drew the authorized salary of $ 50 a month therefor; that he presented to the mayor and council in one voucher a monthly claim of $ 75 for the salary of the clerk and of $ 50 for the salary of the disbursing officer; that for nine months the council allowed each monthly claim and ordered a warrant on the city treasurer for payment thereof; that Cross drew each of the nine monthly warrants for $ 125 in favor of himself and presented one of them to the city treasurer on the first day of the month or a little later; that the creating of the new office, the fixing of the salary therefor, the performing of the duties thereof, the allowing of the claims for compensation and the ordering of the warrants therefor estopped the city from asserting that Cross did not faithfully perform his duties as clerk or that he was not entitled to the $ 50 a month received by him as disbursing officer or that the city was damaged by a breach of the clerk's bond.
In a reply to the answer, plaintiff admitted that, at a meeting of the city council April 21, 1925, it was moved, seconded and carried that the city clerk be constituted a disbursing officer at a salary of $ 50 a month. Other allegations of the answer were denied.
From judgment on a directed verdict in favor of plaintiff for $ 605.88, including interest from the date of each 50-dollar payment, defendant appealed.
It is first argued that the surety is not liable for the additional compensation of Cross as disbursing officer for the reason that he did not receive it by virtue of his office of clerk but under color of office. In support of this proposition the surety cited State v. Moore, 56 Neb. 82, 76 N.W. 474, State v. Porter, 69 Neb. 203, 95 N.W. 769, and other similar cases in which a distinction was drawn between "color of office" and "virtue of office," in testing the liability of sureties on official bonds. The effect of these decisions was to release sureties from liability for conduct in which public officials without authority of law, but under color of office, illegally enriched themselves at public expense. The distinction noted complicated the law applicable to sureties. The history of litigation on this subject shows that the rule adopted in the cases cited limited or partially destroyed the protection of official bonds and resulted in public losses. The weight of authority seems to be contrary to the cases cited, but a different rule and another line of cases control the case at bar. However, since contracts by principal and surety have been executed pursuant to law as construed in the Moore case and in other Nebraska cases, the situation perhaps calls for legislation requiring sureties on official bonds to assume liability for wrongful acts committed under color of office, if resulting in public loss, rather than for the overruling of former holdings of the supreme court.
In the Moore case the report shows that the state auditor used his official position to get possession of fees payable to the state treasurer which he was not authorized to collect or retain and which never reached the public treasury. In the case at bar public money already in the city treasury was taken therefrom for excessive and forbidden compensation by means of warrants executed by the city clerk in favor of himself, the issuance of proper warrants being a function of his office.
In Kane v. Union Pacific Railroad, 5 Neb. 105, the official bond of a county treasurer, who had exacted excessive fees, contained a provision that "he shall faithfully and impartially, without fear, favor, fraud, or oppression, discharge all the other duties, now or hereafter, required of his office by law." In an action on the bond the surety was held liable. The case was subsequently overruled on the question of jurisdiction, but on the point now in issue the court in the opinion said:
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