State ex rel. Cherokee County v. Brown

• Decision Date: 25 April 1938
• Docket Number: 14671.
• Parties: STATE ex rel. v. BROWN et al. CHEROKEE COUNTY et al.
• Court: South Carolina Supreme Court

196 S.E. 889

187 S.C. 223

STATE ex rel. CHEROKEE COUNTY et al. v. BROWN et al.

No. 14671.

Supreme Court of South Carolina

April 25, 1938

Appeal from General Sessions Circuit Court, of Cherokee County; G Dewey Oxner and T. S. Sease, Judges.

Action by the State of South Carolina, upon the relation of Cherokee County, S. C., and another against H. M. Brown and another to recover penalties on taxes of the Hamrick Chain of Mills and costs of an audit of the treasurer's office of Cherokee County. Judgment for plaintiffs, and defendants appeal.

Judgment affirmed.

GRIMBALL Acting Associate Judge, dissenting.

The opinion of Judge Oxner follows:

This is an action against H.M. Brown, former treasurer of Cherokee County, and American Surety Company of New York, surety on the official bond of the said H. M. Brown. The action involves various items which the plaintiffs contend should be allowed. Subsequent to the commencement of the action the parties amicably adjusted between themselves all items in dispute except two. The plaintiffs seek to recover against the defendants approximately $3,000 in penalties on taxes of the Hamrick Chain of Mills. The remaining item in dispute is the claim on the part of the plaintiffs for approximately $1,000 representing costs of an audit of the treasurer's office which was made soon after the defalcation was discovered. These two items which are in dispute will be discussed in the order above set out.

It appears that on March 30, 1934, checks were given by the Hamrick Chain of Mills for the 1933 taxes, including a 2 per cent. penalty. Tax receipts were issued upon receipt of checks and taxes marked paid on books. There were about eight of these checks by the various mills in the chain. The treasurer did not immediately deposit any of these checks but, on the contrary, held these checks for various periods of time before depositing them. The checks were deposited at various times between July, 1934, and December, 1934. The testimony shows that during all of this time the mills had on deposit ample funds to have taken care of these checks, and there is no testimony of any request or effort on the part of the mills to have the treasurer withhold depositing the checks. When the checks were deposited, on some of them the dates were changed from March 30, 1934, to a later date. Apparently, these changes in dates were made by the treasurer, or under his supervision.

The bond in question is conditioned, in substance, that, during the period which he may continue in office, the said Brown shall well and truly perform the duties of said office. It must be remembered in the consideration of this case that his bond is not conditioned upon turning over all money placed in his hands, but is conditioned upon faithful performance of his duties.

Under section 2795, Code 1932, a treasurer is not authorized to receive checks in payment of taxes. Independent of statute this is also true at common law. When a taxpayer uses a check in the payment of taxes, he constitutes the treasurer his agent in the handling of said check. The law does not regard the taxes as paid until the checks are paid. It is urged by counsel for the defendants that checks are usually used in South Carolina as a medium of paying taxes. The fact that taxes are usually paid in this manner does not give such procedure the sanction of law. The statute above referred to is mandatory. Therefore, the situation is the same as if the mills in question paid the taxes when the checks were actually deposited. At that time the subsequent penalties for the year 1934 had accrued.

It is clear to me that section 2836 of the Code of 1932 is conclusive of the liability of the defendants. This section, in substance, provides that after the treasurer has receipted the auditor for his duplicate, he shall be charged with the taxes, assessments, and penalties charged thereon, except such as may be put on the delinquent list. The statute is clear that he is personally liable for all such taxes, penalties, and assessments on the duplicates, except such as are placed on the delinquent list. The section specifies what causes may be assigned by the treasurer for placing taxes on the delinquent list. Neither of the causes therein set out is applicable to the taxes and penalties in question. The liability of the surety is coextensive with that of the treasurer. When the treasurer collected the taxes in question, the remaining penalties for the year 1934 had accrued. The situation is the same as if, upon the accrual of all taxes for the year 1934, the treasurer had accepted the taxes and only a portion of the penalties in settlement. So that after May 1, 1934, the treasurer stood charged as a matter of law with the total amount of all taxes for 1933 against the four mills, and all penalties which had accrued under the provisions of the joint resolution of March 31, 1934, which reads as follows: "The time for the payment of property taxes assessed for the year 1933 is hereby extended to May 1, 1934, at which time all such taxes remaining unpaid, together with all penalties accrued thereon, as now provided by law, shall go into execution."

The following section, section 2837, gives the treasurer a remedy when charged with taxes not in fact paid. It is strenuously urged by the surety that if there is any liability for these penalties on the part of the mill, execution can now be issued for such penalties and same collected, and consequently there has been no damage to the plaintiffs. At first, this contention gave me some concern. I am now convinced, however, that it is clearly untenable. As above stated, section 2836 is mandatory. If the treasurer is liable, it follows that the surety is liable. It may be, although I do not undertake to so decide, that the county and state could now issue executions for these penalties. Assuming, however, that such is the case, under the foregoing sections, the state and county are not compelled to do so as a condition precedent to holding the treasurer and his surety liable. If the treasurer stands charged with taxes which should be paid by the taxpayer, he is amply protected by section 2837. If the treasurer could escape liability by first requiring the county to issue execution, there would have been no necessity for section 2837.

As above stated, this bond is conditioned upon the treasurer faithfully performing the duties of his office, and not upon turning over all moneys received by him.

None of the attorneys have cited any cases in point and I have been able to find only one case bearing on the particular issue here involved. In the case of Ward v. Marion County, 26 Tex.Civ.App. 361, 62 S.W. 557, 558, 63 S.W. 155, the tax collector issued receipts to his creditors for taxes which he did not collect. It was there held that the sureties on his bond were liable therefor. The sureties contended in that case that the collector was not authorized to receive anything but money in the payment of taxes; that no money came into the collector's hands by reason of...