State v. Churchill
| Decision Date | 05 February 1887 |
| Citation | 3 S.W. 352 |
| Parties | STATE <I>v.</I> CHURCHILL and others. |
| Court | Arkansas Supreme Court |
Action on bond of state treasurer. Judgment for defendants. The state appealed.
Dan W. Jones, Atty. Gen., and J. M. Moore, for appellant. U. M. & G. B. Rose, F. W. Compton, S. W. Williams, John McLure, and R. C. Newton, for appellees.
The principal defendant in this cause, Thomas J. Churchill, was elected treasurer of the state at the general election held in October, 1874, and executed his official bond with A. H. Garland, R. C. Newton, Gordon N. Peay, John D. Adams, S. W. Williams, Thomas Fletcher, Elisha Baxter, James A. Martin, W. D. Blocher, W. W. Wilshire, B. Hempstead, Will. J. Murphy, Ben S. Johnson, R. A. Little, Thomas Fletcher, Zeb. Ward, Thomas W. Newton, Thomas D. Radcliffe, W. W. Adams, H. L. Fletcher, A. Mills, and R. M. Scruggs as his sureties, and the same was approved by the governor of the state, the said A. H. Garland, on the thirteenth of November, 1874; and he immediately entered upon the discharge of his duties as such, and so continued for and during the period of his first term, which expired on the eleventh day of January, 1877. The said Thomas J. Churchill was re-elected treasurer at the general election held in September, 1876, and executed his official bond with A. H. Garland, H. L. Fletcher, G. F. Baucum, Thomas Fletcher, W. J. Murphy, S. W. Williams, B. F. Danley, W. D. Blocher, B. S. Johnson, John D. Adams, Thomas W. Newton, Richard H. Johnson, S. P. Hughes, W. W. Adams, and Anderson Mills as his sureties, and the same was approved by W. R. Miller, governor of the state, on the first day of January, 1877; and he immediately entered upon the discharge of his duties of his second term, and continued as such treasurer until the expiration thereof, on the fourteenth day of January, 1879. The said Thomas J. Churchill was again reelected treasurer at the general election held in September, 1878, and executed his official bond with A. H. Sevier, Fred Hanger, S. P. Hughes, John F. Boyle, B. D. Williams, G. F. Baucum, R. H. Johnson, James Cook, W. J. Murphy, A. Thauemmler, A. Mills, John D. Adams, H. L. Fletcher, J. E. Isbell, and H. W. Worthen as his sureties, and the same was approved by W. R. Miller governor of the state, on the fourteenth day of January, 1879; and he entered upon the discharge of his duties of his third and last term, and continued to act as such treasurer until the expiration of his said third term, in the month of January, 1881. All of the sureties on said first bond are made defendants herein except Thomas Fletcher, W. D. Blocher, and Gordon N. Peay, and all on the second bond except B. F. Danley and W. D. Blocher, and all on the third bond; and, the following having died since the institution of this suit, their deaths were suggested and admitted, and this cause revived in the name of their legal representatives, respectively, to-wit, W. W. Adams.
On the thirtieth day of May, 1883, this action was instituted against the parties aforesaid by the attorney general in the name and for the benefit of the state, by filing his complaint in the Pulaski chancery court. The complaint states and alleges, in substance and in brief, as follows, to-wit: That the said Thomas J. Churchill, as such treasurer, received from his predecessor in office large amounts of money, United States bonds, state funding bonds of 1869, state scrip, state levee bonds, swamp-land warrants and scrip, county scrip, and certificates of indebtedness issued by the city of Little Rock, naming the amount of each; that a large amount of state scrip was funded during the first term of said Churchill, under the provision of an act of the general assembly of the state to provide means for defraying the expenses of the state government, approved December 23, 1874; that he issued 74 of the bonds issued under said act of the denomination of $1,000 each, (all issued thereunder being of the same denomination,) to the permanent school fund, and took in exchange therefor an equal amount of 5 per cent. interest-bearing state scrip, and received credit therefor as against said school fund; that during said term he sold 81 of said bonds, of the denomination aforesaid, for the same kind of state scrip at par; that he sold other of said bonds for non-interest-bearing scrip, without authority of law or the direction of the board of finance, said bonds aggregating the amount of $165,000; that he failed and neglected to verify said scrip, as his duty was, and failed also to burn the same as required by said act, and failed to take certificates of said burning, except as to the sum of $6,000; that said Churchill failed and neglected to verify or receive certificates for and cause to be burned state scrip received in exchange for 10 of said bonds directed to be sold, for interest-bearing state scrip, by said board of finance, on the ninth March, 1877, and 35 of said bonds, so directed to be disposed of on the fifth of April, 1877, during his second term; that on or about the thirty-first December, 1877, and long after the aforesaid sale of said bonds, the said Churchill, under the provision of "An act to provide for the cancellation of state scrip," approved May 28, 1874, burned, in the presence of the governor, secretary of state, and auditor, $145,000 of state scrip, which he credited to the account of bonds sold; that during his three terms, by his negligence and mismanagement, he occasioned great additional losses to the state by failing to charge interest on bonds sold, and by taking scrip therefor, including advanced interest, and by failing to account for interest due the state in many other instances; and that the books and accounts of said treasurer were kept in such a confused manner that the exact amount of said delinquencies could not be ascertained by plaintiff, whereupon she asked that an account be taken and stated between herself and said defendant Churchill.
The defendants demurred to the complaint on the grounds of (1) want of jurisdiction; (2) multifariousness; and (3) that it does not state facts sufficient to constitute a cause of action; which being overruled by the chancellor as to each of the three several grounds, the defendants answered over, in substance denying all the material allegations of the complaint severally; and such as are sureties on the first bond denying that the same is their deed, because they say, after they had all signed the same, and before it was delivered or approved, the name of their co-surety Thomas D. Radcliffe was erased both from the body thereof, and where signed by him, without their knowledge and consent; and the same plea is made by the defendant sureties on the third bond because of the erasure of the name of their co-surety Fred Hanger; the defendant S. N. Williams, surety on the first and second bonds, alleging in his separate answer that he signed said first bond on condition that Churchill should obtain other signatures thereto than those he did obtain, and that he signed and delivered the same to said Churchill as an escrow, not to be delivered finally until such other names were obtained as well as those who did sign the same.
The cause was thereupon referred to Thomas H. Sim, Esq., as special master, to take and state an account as prayed in the complaint. The report of the special master was made, and excepted to by defendants and by the plaintiff; the exceptions of the latter only being necessary to be stated here, and are, in substance, that the $59,000 in unaccounted-for state scrip should have been either wholly or ratably apportioned to the accounts of the second term, instead of being wholly appropriated to the account of the first term, as was done by the special master, and that the item of $9,589.04 should have been charged to the sinking-fund account of the second term, instead of being placed to that account in the third term. The final account of the special master against the defendant Churchill is expressed as follows, to-wit:
===============================================================================================
| DEBITS. || CREDITS
|-------------|--------------|------------||--------------|--------------
| | | Swamp-Land || | Net Debit
| Currency. | State Scrip. | || State Scrip. |
| | | Scrip. || | Balances
----------------------|-------------|--------------|------------||--------------|--------------
Summary No. 1, for | | | || |
first term ........ | $ 6,579 35 | $57,730 05 | $..........|| $............| $64,309 40
Summary No. 2, for | | | || |
second term .........| 3,986 20 |....... ......| 110 00|| 1,087 33 | 3,008 87
Summary No. 3, for | | | || |
third term ..........| 13,407 86 |..............|............|| 204 12 | 13,203 74
|_____________|______________|____________||______________|______________
Total balances.......| $23,973 41 | $57,730 05 | $110 00|| $1,291 45 |
Deduct credit balance | | | || |
in state scrip ......|.............| 1,291 45 |............|| |
|_____________|______________|____________||______________|______________
Net debit balance on | | | || |
the three terms ....| $23,973 41 | $56,438 60 | $110 00|| | $80,522 01
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