St. Louis Union Soc. v. Mitchell

• Decision Date: 17 May 1887
• Parties: ST. LOUIS UNION SOCIETY, Respondent, v. ALBERT MITCHELL ET AL.; C. H. TYLER ET AL., Appellants.
• Court: Missouri Court of Appeals

26 Mo.App. 206

ST. LOUIS UNION SOCIETY, Respondent, v. ALBERT MITCHELL ET AL.; C. H. TYLER ET AL., Appellants.

Court of Appeals of Missouri, St. Louis.

May 17, 1887

APPEAL from the St. Louis Circuit Court, DANIEL DILLON, Judge.

Affirmed.

PATTISON & CRANE, with whom is ALBERT BURGESS, for the appellants There is no evidence that the one thousand dollars paid by Mitchell was stolen money. McDermott v. Railroad, 73 Mo. 516. If it were, its payment by Mitchell, and receipt by the plaintiff, discharged the bond pro tanto, notwithstanding the money was, afterward, refunded to the person who claims to have been robbed of it. Miller v Race, 1 Burr. 452; S. C., with notes, 1 Smith's Leading Cas. [5 and 8 Am. Ed.] 808, 854; Ringling v Kohn, 4 Mo.App. 59; Tyrrel v. Railroad, 7 Mo.App. 298; Murray v. Lardner, 2 Wall. 21; Peacock v. Rhode, 2 Doug. 633; Grant v. Kidwell, 30 Mo. 455; Goodman v. Simonds, 19 Mo. 116; Hodges v. Black, 8 Mo.App. 395; Terry v. Hickman, 1 Mo.App. 119; Davis v. Carson, 69 Mo. 610; May v. Quimby, 3 Bush 96; Eastman v. Plummer, 32 N.H. 238. The damages assessed were excessive, even if the plaintiff was entitled to recover any amount; but no breach of the bond was shown to have been committed during the term of office for which the bond was given, and the sureties are not liable. Savings Bank v. Hunt, 72 Mo. 597; Harris v. Babbit, 4 Dill. 185; The People v. Shannon, 10 Brad. 355; Murfree on Off. Bonds, sects. 625, 641; County of Wapello v. Bigham, 10 Iowa 39.

J. W. COLLINS, for the respondent: The beneficiary of the trust fund, being able to trace it into the hands of the defendant, who is not an innocent holder for value, without notice, may recover it. Taylor v. Plumer, 3 Maule & Selwyn, 574; Clarke v. Shee, Cowp. 197; Miller v. Race, 1 Smith's Leading Cas. [[[[[5 and 8 Am. Ed.] and notes. The appellants are liable for the breaches of the bond, committed by Mitchell on February 15, or 16, 1886, in turning over stolen money on the one thousand dollar order presented to him for payment, and, prior thereto, in not paying taxes, and in not turning over the one thousand dollars, for deposit in the bank, to the board of trustees, as directed by them. Bank v. Hunt, 72 Mo. 597; Chelmsford Co. v. Demarest, 7 Gray 1; Dover v. Twombly, 42 N.H. 69; Welch v. Seymore, 28 Conn. 392; The City of Fon du Lac v. Moore, 58 Wis. 170; Hart et al. v. Guardians, etc., of Pittsburg, 32 P. F. Smith [81 1/2 Pa. St.] 466.

OPINION

ROMBAUER J.

The appellants are sureties upon the official bond of the defendant, Mitchell, who was the treasurer of the plaintiff corporation, and are sued for breaches of the bond, in his failure to pay out the funds of the corporation as directed by its governing body, and in the conversion of such funds to his own use.

The petition alleges that Mitchell was elected treasurer of the corporation December 8, 1884, for a term of office, commencing on, or about, January 1, 1885, and continuing until his successor, in said office, should be elected and qualified by giving bond; that he executed the bond sued on, in the penal sum of two thousand dollars, on February 11, 1885, conditioned as follows:

" If said Albert Mitchell shall duly perform all of his duties as said treasurer, and shall account for, and pay over, all sums of money which shall come into his hands as such treasurer, whenever the payment of the same shall be required by the said St. Louis Union Society, or its proper officers, and shall demean himself as a faithful officer of the said society, then this obligation shall be void, otherwise it shall remain in full force and effect."

The petition further states that, while the said Mitchell was thus acting as treasurer, under said appointment, there came into his hands, as such, the sum of $3,397.90, out of which he paid, upon the plaintiff's orders, the sum of $2,014.50, leaving in his hands the sum of $1,383.40, which he failed and refused to pay over, but converted to his own use.

The answer was a mere general denial.

The trial resulted in a judgment for the plaintiff for the penalty of the bond, with an award of damages for $1,383.40, as claimed in the petition.

The errors complained of are, substantially: (1) That there was not sufficient evidence of conversion of any part of the funds during the term for which the bond sued on was given. (2) That, even if the defendants could be held liable as sureties on this bond, up to the date when Mitchell was removed from the office as treasurer of the corporation, yet it affirmatively appeared that, besides the amount which the petition admits he accounted for, he also accounted for the further sum of one thousand dollars, and, hence, the damages are excessive. (3) That the court gave erroneous instructions to the jury.

The plaintiff, as part of its case, gave in evidence the articles of incorporation of the society, which, among other things, provide: " Amendment first. The officers of this society shall be a president, vice-president, a secretary, an assistant secretary, a treasurer, a board of trustees, composed of seven members, and a committee composed of six members, all of whom shall be elected annually, on the second Monday of December, by members of the society, at a regular meeting, and shall hold their offices until their successors are elected and qualified."

It thus appears that, while the bond sued on did not, by its express terms, limit the liability of the sureties to any definite time, the office of treasurer was an annual office by the articles, and the liability of the sureties on the bond was limited to one year, and until the successor of their principal was elected and qualified. Morse on Banks, 225; Savings Bank v. Hunt, 72 Mo. 597, 599. The same instrument which fixed the duration of the tenure of office, also, provided that, previous to entering upon its duties, the treasurer should execute a bond, with satisfactory sureties, and this was an essential part of his qualification.

This is a feature which distinguishes this case from Savings Bank v. Hunt (supra ). There the tenure of office, though not limited by the terms of the bond, was limited by a public law, which, for all intents and purposes, formed part of the contract, and the requirement to give a bond was one of a by-law, which the court held the corporation might waive if it saw fit to do so. It was, therefore, held that the corporation could not hold sureties liable who were on the bond of a cashier for one year, for defalcations which occurred a year or more after the expiration of the year, although the cashier had been appointed as his own successor, and never had given any new bond. In speaking of the obligations of the sureties, the court said: " Their obligation is for his discharge of the duties of cashier for one year, if, at the expiration of that time, a successor should be appointed, and for one year, and such additional time as should elapse thereafter before a successor was appointed. The same policy which, in case of public officers, continues the incumbent in office until a successor is appointed, keeps alive the bond for the same period. Hence, if there had been no election of a successor to Hunt, in this case, the liability of the sureties would be unquestionable, under our decisions."

These preliminary remarks are pertinent in view of the first point made by the appellants.

It appears that Mitchell was elected treasurer in December, 1884. He gave, under that election, the bond sued on February 11, 1885. He was reë lected treasurer in December, 1885, and never gave another bond. The exact date of his defalcation is not shown, but it is fairly inferable, from the testimony, that it was prior to February, 1886, in which month he was arrested for larceny of the one thousand dollars hereinabove mentioned, and his connection with the corporation ceased.

January 14, 1886, Mitchell made a report as treasurer, showing a balance in his hands of $1,383.40, although it does not otherwise appear whether the money was in his hands or not. He was ordered, at the time, to present his bond or to renew it, and the board recommended that one thousand dollars of the funds be deposited with the Boatmen's Bank, on interest for six months. On January 28, the board again met, the treasurer presented his bank book, and was ordered to have it balanced, and to bring up a statement from the bank certifying what amount he had on hand. On February 4, the board again met, and the treasurer stated that he could not get his book balanced up to that time. No warrant on the treasurer for the one thousand dollars had been drawn up to that date, but, at a meeting of the board, February 11, a warrant for the one thousand dollars was ordered to be drawn to make the deposit above referred to, and, also, a warrant for an amount, sufficient to pay the taxes for the preceding year.

It was, also, in evidence that, though the officers are elected annually, in December, they are never installed into office until the third Monday of the succeeding January, and that some formalities of installation were gone through with other officers, in this instance, in January, 1886, but not with Mitchell, because the latter had failed to renew his bond, or to give a new bond as treasurer, and because, as it seems, the board had some suspicions as to the state of his accounts. It appeared, however, that he was permitted to receive moneys of the corporation as its treasurer, notwithstanding that he had failed to give bond, subsequent to the January meeting, at which the other officers of the corporation were installed.

The defendants claim that, this state of facts being shown, their liability as sureties of Mitchell was determined, at the date of the first regular meeting, in ...