Kuhl v. Chamberlain

• Decision Date: 17 December 1908
• Citation: 118 N.W. 776,140 Iowa 546
• Parties: THEODORE KUHL, County Treasurer, Appellant, v. E. N. CHAMBERLAIN and ROBERT BELL, Appellees
• Court: Iowa Supreme Court

118 N.W. 776

140 Iowa 546

THEODORE KUHL, County Treasurer, Appellant, v. E. N. CHAMBERLAIN and ROBERT BELL, Appellees

Supreme Court of Iowa, Des Moines

December 17, 1908

Appeal from Crawford District Court.--HON. Z. A. CHURCH, Judge.

THIS is an action by plaintiff upon a bond executed by the defendants as sureties for one H. S. Green. There was a trial to the court without a jury. Findings and judgment for the defendants. Plaintiff appeals.

Affirmed.

Shaw Sims & Kuehnle, for appellant.

Conner & Lally, for appellees.

OPINION

EVANS, J.

The bond sued on is in these words:

Know all men, that we, II. S. Green as principal, and E. N Chamberlain and Robert Bell as sureties, are held and firmly bound unto Theodore Kuhl, county treasurer, and his sureties Crawford County, State of Iowa, in the sum of four thousand no one hundredth dollars, for the payment of which well and truly to be made, we bind ourselves, our heirs, executors and assigns, firmly by these presents. Dated at Dow City, Iowa, this 13th day of January, 1904. The condition of this bond is such that, whereas, the said H. S. Green has been appointed a county depositary of public funds within and for said county. Now, if he shall render a true account of his office, and of his doings therein, to the proper authority, when required thereby or by law, that he will promptly pay over to the person or officer entitled thereto all money which may come into his hands by virtue of his office; that he will promptly account for all balances of money remaining in his hands at the termination of his office; that he will exercise all reasonable diligence and care in the preservation and lawful disposal of all moneys, books, papers, securities or other property appertaining to his said office, and deliver them to his successor, or any other person authorized to receive the same; and that he will faithfully and impartially, without fear, favor, fraud or oppression, discharge all duties now or hereafter required of his office by law--then this bond to be void, otherwise of force and virtue. H. S. Green. Robert Bell. E. N. Chamberlain.

At the time of the execution of such bond, the plaintiff was the county treasurer of Crawford County and continued in such office up to the time of the trial of this case in the court below. H. S. Green was a banker owning and operating an unincorporated bank, known as the "Exchange Bank of Dow City." For more than a year prior to the execution of the bond, the plaintiff, while acting as county treasurer, carried an account in the Exchange Bank by depositing moneys therein and drawing the same from time to time. The deposits in large part were made in this wise: He permitted taxpayers in the vicinity of Dow City to pay the amount of their taxes into the Exchange Bank, and, upon being notified of such payment, he sent the tax receipts to the Exchange Bank to be delivered to the taxpayers. The bank, upon receiving payments from the taxpayers, charged itself by credits to the account of Theodore Kuhl, county treasurer. Whether these credits were made before or after the delivery of the tax receipts to the taxpayers does not appear in the record. About January 13, 1904, Green applied to the defendants severally and stated to each of them that he expected to be appointed on the following day by the board of supervisors as a county depositary for the public funds of the county, and that it was necessary for him to have a bond for such purpose. Upon this statement of Green, the defendants each signed the bond and left the same in Green's hands. The bond never was presented to the board of supervisors for any purpose at any time, nor was the said Green or his bank appointed or selected in any sense as a depositary for public funds. The bond was delivered to the plaintiff, and thereafter the Exchange Bank continued to receive deposits and credit the same to the plaintiff substantially as before, until the 1st day of April, 1904. On that date the bank failed, and Green absconded. His books showed a credit in favor of plaintiff in the sum of $ 2,336. The lower court made a finding of fact that Green was insolvent at the time of the execution of the bond, and for a long time prior thereto. At the June, 1904, meeting of the board of supervisors, the plaintiff made a full settlement with the board, but made no report or account of any public funds in the Exchange Bank of Dow City. On the contrary, he charged himself with the full amount due from him to the county and accounted for it either with cash or proper certification from other banks.

Crawford County claims no interest in the funds on deposit in the Exchange Bank, nor does the plaintiff now claim that such county has any interest therein, although plaintiff in his original petition averred that the funds in question were deposited in the Exchange Bank as public funds. He later filed a substituted petition, in which he omits all allegations as to the public character of the funds, but claims to recover on the bond in his own individual right, on the theory that the same was given to secure him in the repayment of such moneys as should be deposited by him in the Exchange Bank regardless of their public character. He claims to recover upon the bond, not as a statutory bond, but as a common-law bond. His contention is that the same is a valid obligation and supported by sufficient consideration, and that the defendants are liable to him under the express terms of the instrument. The contention of the defendants, in brief is, that the bond was executed by them for the purpose already stated above, that such purpose appeared upon the face of the bond, that it was intended as a statutory bond under the provisions of section 1457 of the Code, that the bond could not be lawfully delivered until appointment or selection of the said Green as a county depositary of public funds was made by the board of supervisors, and that such selection was never made, and that the bond therefore never became effective. Section 1457, so far as material to this inquiry, is as follows:

A county treasurer shall be liable to a like fine for loaning out or in any manner using for private purposes, State county or other funds in his hands, except that when permitted by the board of supervisors by...