James v. State

• Decision Date: 09 February 1932
• Docket Number: 19989.
• Citation: 15 P.2d 591,160 Okla. 99,1932 OK 105
• Parties: JAMES, County Treasurer, et al. v. STATE ex rel. FINNEY, Co. Atty., et al.
• Court: Oklahoma Supreme Court

15 P.2d 591

160 Okla. 99, 1932 OK 105

JAMES, County Treasurer, et al. v. STATE ex rel. FINNEY, Co. Atty., et al.

No. 19989.

Supreme Court of Oklahoma

February 9, 1932

Withdrawn Corrected, Refiled and Rehearing Denied Nov. 1, 1932.

Syllabus by the Court.

1. A board of county commissioners is without authority of law to enter into an agreement with a private individual for such person to act as trustee for the county in funding county indebtedness held by the county treasurer for the benefit of the sinking fund of the county.

2. Under section 4270, C. O. S. 1921, the county treasurer is liable on his official bond for funding bonds of the county issued under article 4, ch. 25, C. O. S. 1921 (section 4268 et seq.), after such funding bonds have been signed by the judge of the district court and delivered to the county treasurer, where the bonds are to be sold and the indebtedness for which they are issued paid out of the proceeds, or where the bonds are to be delivered to the owners and holders of the indebtedness for which they are issued.

3. Where indebtedness of a county is held by the county treasurer for the benefit of the sinking fund of the county and funding bonds are issued by the county funding such indebtedness along with other county indebtedness, it is the duty of the county treasurer, after funding bonds have been signed by the judge of the district court and delivered to the county treasurer, to see that money derived from a sale of the funding bonds, if the same are sold, to the amount of the indebtedness held by him for the sinking fund, is paid into such fund, and, if the funding bonds are not sold, he must hold sufficient bonds to reimburse the sinking fund. Where he fails to do either, and as a result thereof the county suffers any loss, the county treasurer is liable for such loss on his official bond.

4. A municipality is not estopped by the unauthorized or wrongful act of its officer or agent.

5. Subdivision 5, of section 185, C. O. S. 1921, provides the limitation of time within which an action may be commenced against a county treasurer and the surety on his official bond to recover for loss to the county on the liability created by section 4270, C. O. S. 1921, making the county treasurer custodian of funding bonds issued by the county after such bonds have been signed by the judge of the district court.

Appeal from District Court, McCurtain County; Earl Welch, Judge.

Action by the State, on the relation of Tom Finney, County Attorney in and for McCurtain County, and another, against Mayo James County Treasurer of McCurtain County, and another. From the judgment, defendants appeal.

Affirmed.

Tomerlin & Chandler, Troy Shelton, and John C. Head, all of Oklahoma City, and George H. Montgomery, of Idabel, for plaintiffs in error.

L. E. Mifflin, Co. Atty., and Tom Finney, both of Idabel, for defendants in error.

RILEY J.

This is an appeal from the judgment rendered in the district court of McCurtain county in an action brought by the state of Oklahoma, on the relation of the county attorney of McCurtain county and the board of county commissioners of said county, herein referred to as plaintiffs, against Mayo James, county treasurer of said county, and the American Surety Company, surety on his official bond, the Tradesman's National Bank of Oklahoma City, and A. J. Waldock, herein referred to as defendants. The action, however, was dismissed before the trial as to the defendant Tradesmen's National Bank.

The action was brought to recover the sum of $24,000 alleged to have been lost to McCurtain county because of alleged breach of duty of defendant James, as county treasurer, in that defendant James, as county treasurer, had delivered certain funding bonds issued in a proceeding brought in the district court for the purpose of funding certain judgment and warrant indebtedness of the county, to parties other than the owners and holders of such judgment, and warrant indebtedness after said bonds had been signed by the judge of the district court and delivered to said defendant Mayo James, as county treasurer, as provided by section 4270, C. O. S. 1921. Before the trial in the district court, the defendant A. J. Waldock was granted a severance or separate trial. Judgment was for the sum of $7,889.56. The parties agree that this amount had never been paid to the county treasurer out of the proceeds of the funding bond issue above mentioned. Funding bonds were issued in the amount of $66,000. About $14,000 of the indebtedness funded was in the form of judgments rendered against the county in favor of several different parties. Defendant James, as county treasurer, and R. C. Oldham, his predecessor in office, had theretofore paid some of said judgments out of the sinking fund of the county, and had taken assignments of the judgments from the several judgment creditors amounting to something over $9,000, and the county treasurer had also bought some of the warrants out of the sinking fund of the county. One-third of some of the judgments had been paid by a tax levy made for that purpose. In funding the county indebtedness, the balance due on the judgment so held by the county treasurer was included. The warrant indebtedness funded, some of which was held by the county treasurer, as investments of the sinking fund of the county, amounted to about $49,000, and some of the judgments so funded were held by parties other than the county treasurer. The board of county commissioners had entered into a purported agreement with A. J. Waldock, described therein as owner and holder of the judgment and warrant indebtedness sought to be funded. The application, or petition to fund, alleged that the county commissioners had agreed with the owners and holders of the judgment and warrant indebtedness of the county, and contained the complete list of the judgments and warrants sought to be funded, in which was included the judgments and warrants held by the county treasurer for the benefit of the sinking fund of the county. Prior to the issuance of said bonds, the board of county commissioners had entered into an agreement with the Piersol Bonding Company of Oklahoma City for the sale of the bonds when issued to said bonding company. The judgment of the court authorizing said bond issue contained the following clause: "And the Court now in open Court sign said bonds his act being attested as aforesaid under the seal of said Court, and does now deliver the same, so signed, to the Clerk of said Court, to be by him delivered to the Treasurer of said County, after the time for taking an appeal has expired, if no appeal be taken, the said Treasurer to have said bonds endorsed registered and approved as required by law, and to deliver the same to the owners and holders of the warrants and judgments funded thereby upon cancellation of said warrants and judgments which is now surrendered to him for that purpose."

After the bonds had been so signed by the judge and delivered to defendant James, as provided in the above order, he delivered the bonds to the Attorney General for approval, and wrote the Attorney General a letter directing him to deliver the bonds, after he had approved them, to the Tradesmen's National Bank of Oklahoma City, and then wrote said bank to hold the bonds subject to the order of A. J. Waldock, trustee, and that Waldock would instruct said bank as to their final disposition. Thereafter the Tradesmen's National Bank, under an order from A. J. Waldock, delivered the bonds to the Piersol Bonding Company and remitted to A. J. Waldock, $66,000, the proceeds of the sale of said bonds. Waldock deposited the money in a bank at Idabel in his name as trustee. Waldock never paid to McCurtain county, or the county treasurer, $7,822.56, the balance due on the judgments, and $67, due on warrants held by the county treasurer for the sinking fund of the county.

The trial court, under an agreed statement of facts showing the transaction substantially as above set out, directed a verdict for plaintiff in the sum of $7,889.56, and defendants appeal.

The position of plaintiff is that defendant James, as county treasurer, is liable for the loss because he failed and neglected to deliver the bonds to the owner and holder of the indebtedness so funded. That is, the plaintiffs contend that A. J. Waldock, trustee, was not the owner and holder of the judgment and warrants held by the county treasurer for the benefit of the sinking fund of the county, and that of the bonds so issued, to the amount of indebtedness held by the county for the benefit of the sinking fund, defendant James had delivered them to a party not authorized to receive them and that, instead of so doing, he should have retained the bonds to that amount for the benefit of the county in...