De Rockbraine Sch. Dist. No. 1. of Corson Cnty. v. N. Cas. Co.

• Decision Date: 01 December 1915
• Docket Number: No. 3771.,3771.
• Citation: 36 S.D. 392,155 N.W. 10
• Parties: DE ROCKBRAINE SCHOOL DIST. NO. 1. OF CORSON COUNTY v. NORTHERN CASUALTY CO.
• Court: South Dakota Supreme Court

36 S.D. 392

155 N.W. 10

DE ROCKBRAINE SCHOOL DIST. NO. 1. OF CORSON COUNTY

v.NORTHERN CASUALTY CO.

No. 3771.

Supreme Court of South Dakota.

Dec. 1, 1915.

Appeal from Circuit Court, Corson County; Raymond L. Dillman, Judge.

Action by De Rockbraine School District No. 1 of Corson County against the Northern Casualty Company. Judgment for plaintiff, and defendant appeals. Affirmed.Boucher & Johnson, of Aberdeen, and E. N. Hoffman, of McIntosh, for appellant.

P. J. Tscharner, of Lemmon, for respondent.

McCOY, P. J.

Findings and judgment were in favor of plaintiff, and defendant, Northern Casualty Company, appeals.

There is but one question vital to a determination of this cause. One Beacom was treasurer of the respondent school district, and appellant, Northern Casualty Company, was a surety on his official bond. The obligation of such bond was as follows:

“The conditions of the above obligation are such that, if said P. William Beacom, treasurer as aforesaid, shall honestly and faithfully discharge his duties as treasurer of said school district, according to the laws which now are or may hereafter be in force, and shall render a true account of all funds and property that shall come into his hands, and pay over and deliver the same according to law, and at the expiration of his term of office deliver to and pay over to his successor in office all moneys, books, papers, securities, and property in his hands as treasurer, then this obligation shall be null and void; otherwise, to remain in full force.”

Beacom deposited with the First State Bank of McIntosh $3,192.07 of the moneys of respondent, which came into his hands as such treasurer. While said moneys were so deposited, the said bank became insolvent and failed, and said moneys by reason thereof became lost to plaintiff; the said Beacom never having paid the same to plaintiff. There was no malfeasance in office on the part of said treasurer, nor any negligence in the selection by him of said bank as a depositary for said moneys.

It is the contention of appellant that under these circumstances it is not liable to make said moneys good to respondent; that appellant by such bond only obligated itself to make good such moneys as plaintiff might lose by reason of the malfeasance, fraud, or dishonesty of said treasurer. It is contended that such treasurer was only required to make payments of said money to plaintiff according to law; that said treasurer, being a bailee for hire, was only required by law to use due care in selecting a depositary for said moneys, and, having done so, cannot be required to make good the loss occasioned by such bank failure. We are of the opinion that such contention is not well grounded. There are some authorities, however, holding otherwise; but we are of the view that the great weight of judicial authority is against appellant's contention, when applied to a statute and an obligation such as is contained in the bond in question. The statute under which the bond in question was given provides that such treasurer shall give a bond conditioned that he will honestly and faithfully discharge his duties as treasurer, that he will render a true account of all funds that shall come into his hands, and pay and deliver the same according to law.

The question here is: Has there been a breach in the conditions of the bond? Has the condition of the bond been broken where the treasurer, although guilty of no negligence or malfeasance, fails to account for and pay over the funds intrusted to him...