Knox County v. Lewis' Adm'r

• Citation: 69 S.W.2d 1000,253 Ky. 652
• Parties: KNOX COUNTY et al. v. LEWIS' ADM'R et al.
• Decision Date: 13 February 1934
• Court: Court of Appeals of Kentucky

69 S.W.2d 1000

253 Ky. 652

KNOX COUNTY et al. v. LEWIS' ADM'R et al.

Court of Appeals of Kentucky

February 13, 1934

As Modified on Denial of Rehearing April 17, 1934.

Appeal from Circuit Court, Knox County.

Action by Knox County and another against S. L. Lewis' Administrator and others. Judgment for defendants, and plaintiffs appeal.

Reversed.

Martin T. Kelly, of Pineville, and V. A. Jordan and Tuggle & Tuggle all of Barbourville, for appellants.

H. H Owens, of Barbourville, Jas. S. Golden and Golden, Gilbert &amp Golden, all of Pineville, for appellees.

RICHARDSON Justice.

At the regular November election, 1925, S. L. Lewis was elected sheriff of Knox county, Ky. for a term of four years, beginning the 1st day of January, 1926. In December, 1925, with the Maryland Casualty Company, of Baltimore, Md., as his surety, he executed what is commonly known as his official bond and also a "county revenue bond," the first in the penal sum of $5,000, the latter, $10,000. On the 1st day of January he qualified by taking the oath of office and causing his bond to be approved by the judge of the county court and recorded in the county clerk's office of the county. Each year thereafter, during his term of four years, he executed and delivered with the Maryland Casualty Company the official bond and the county revenue bond, which were properly approved by the county judge. At the beginning of the year 1926 he received from the outgoing sheriff the tax books showing the uncollected taxes, and proceeded to collect the 1925 taxes unpaid on January 1, 1926. During each of the years 1926, 1927, 1928, and 1929 he made a settlement with the fiscal court, through its commissioner, which was accepted and approved. Also he was collector of the taxes for the county board of education for the same years. He seems to have made no settlement for the taxes collected for either year for the county board of education.

This action was instituted by Knox county and the county board of education to surcharge the settlement of Lewis made each year with the fiscal court and to compel settlements of his collection of taxes for both the county and the county board of education, for each year. The petition points out the defects in his settlements with the fiscal court; each credit charged to be improperly allowed and each item charged to be improperly or not at all accounted for by him in each settlement, as well as the total taxes, for which he should have accounted to the county and the county board of education.

A special demurrer was presented to the petition on the ground the county treasurer was not a party plaintiff. This objection, even if a valid one, which we do not decide, was overcome by an amended pleading, making Tom Harris, the treasurer of the county, a plaintiff. Perry County et al. v. Holliday et al., 231 Ky. 587, 21 S.W.2d 989.

In the preparation of the case, an audit was made by an auditor selected by the county, one by an auditor selected by Lewis, and still another by the commissioner of the court. The auditor selected by Lewis adopted the same method or system for ascertaining the status of Lewis' accounts as tax collector, and for determining the result, used by the auditors in Livingston County et al. v. Dunn, 244 Ky. 460, 51 S.W.2d 450, 453. The commissioner of the court adopted and used the same method as the auditor of Lewis for like purposes. Without detailing the report of Lewis' auditor, or the method used by the court's commissioner, it is our conclusion that their audits are predicated on erroneous and improper premise. For the reasons assigned in the Dunn Case, without reiteration, it is our conclusion the results ascertained by the audits by the accountant selected by Lewis and the commissioner of the court should be disregarded.

In Bush v. Board of Education of Clark County, 238 Ky. 297, 37 S.W.2d 849, the various sections of the statute dealing with the subject-matter involved in the present case were considered. In Livingston County v. Dunn again we reviewed with approval these sections as interpreted and applied in the Bush Case.

In the last case we said: "He (the sheriff) must account to and pay to the county the amount of taxes as shown by such books (the tax books as made out by the county clerk) and his receipt to the county clerk." The sheriff then in office declined to permit the county's auditor to inspect the tax books, then in his custody, or to have possession of them for the purpose of an audit. The court was resorted to, to compel him to comply with the law in this respect, the proceedings finally reaching this court. The tax books were eventually delivered, in accordance with an order of court, to the office of the county clerk, and on the night of the day following a disposition of the case by this court, sustaining the county's rights to require the sheriff to permit its auditor to have access to the books for the purpose of auditing them, the county clerk's office was broken into, and eight of the tax books of the largest taxing districts were stolen, and their whereabouts have not since been discovered. The rest of the tax books remained in the county clerk's office, carelessly and indifferently kept, and on this ground their integrity is assailed in the action.

In the absence of the receipt which the law requires the sheriff to execute and deliver to the county clerk at the time he receives the tax books for the purpose of collecting the taxes from the taxpayers, the next best evidence is the tax books themselves. "If any errors were made by the county clerk in his preparation of the tax-books when fixing the amount to be paid by a taxpayer or in deducting his exemptions, unless such errors are corrected by the tribunal clothed with authority to make such correction, within the time and in the manner and form provided by law, at the instance of the taxpayer or the sheriff, and the sheriff thereby exonerated, the sheriff is bound to account for and pay the county the amount of the taxes shown by the county clerk's tax-books or his receipt therefor. Such correction may not be made in this action to surcharge his settlement." In the pending case it is shown that no receipt for the tax books was executed and delivered by the sheriff to the county clerk for either of the years for either taxing unit. At the beginning of the effort to bring about a settlement by the sheriff of the county and school taxes here involved, the tax books, as made out by the county court clerk and delivered to the sheriff each year, showing the kind and valuation of the property of each taxpayer, after deducting his exemptions, the rate of taxation, the amount of taxes due each taxing unit, with a detachable receipt to a stub showing a duplicate of the equalized property of the taxpayer, and the amount of taxes as well as the exemptions to which he was entitled, were in the custody of Lewis. These tax bills in the aggregate contained the total county and the common school taxes with which he was chargeable.

At the time the auditor of the county attempted to audit the tax books in the possession of the sheriff, the receipts to be delivered to the taxpayers who up to that date had not paid their taxes, and the stubs from which the receipts of those who had paid their taxes had been detached, were in the tax books. These stubs, in the absence of the attached receipts, so long as they are legible, are the next best evidence of the taxes collected from each taxpayer by the sheriff for each of the years for county and common school purposes. The stubs in the tax books as they were prepared by the county clerk, so long as they remained in existence, without the presence of receipts of the sheriff to the county clerk and the receipts in the tax books as they were originally prepared by the clerk, are controlling in determining the amount of taxes chargeable to the sheriff for county and common school purposes for each of the four years. As to those taxing districts, where the tax books or the stubs therein were lost, destroyed, or stolen, the books of the tax commissioner after the county clerk had made the entry required by the statute, showing whatever, if any, flat raise, or reduction, special raise, or reduction of the equalized assessment of the taxpayers, are the next best evidence of the taxable property of each individual taxpayer of the county from which, if necessary, it may be determined the amount of the taxes with which the sheriff was chargeable. Indeed, if need be, a new set of tax books may be prepared for the purpose of determining the amount chargeable to him, as having been collected from each taxpayer on his equalized assessment, less the exonerations and the exemptions, if any, as shown on the taxpayer's bill as it had been prepared by the county clerk.

The sheriff, when collecting the taxes for county or common school purposes, accepts and holds the same as a trust fund for the taxing units, and he must account for same as a trustee. Hill v. Fleming, 128 Ky. 201, 107 S.W. 764, 32 Ky. Law Rep. 1065, 16 Ann. Cas. 840.

The courts, if need be, to determine fairly and justly the total taxes with which he is chargeable, in the circumstances, will cause a reproduction of the tax books, at his expense, so long as it is possible to do so by the fragments of the records of the county tax commissioner, the state tax commission, and the county clerk; accepting, however, as evidence, the intelligible stubs remaining in the tax books showing the taxes chargeable, according thereto. In making his audit the auditor of the county utilized for this purpose the stubs in the tax books, which were in existence. As to those taxing districts, where the tax books containing the stubs had been taken from the office...