State v. Middleton's Sureties

• Decision Date: 16 May 1882
• Docket Number: Case No. 4495.
• Citation: 57 Tex. 185
• Parties: THE STATE OF TEXAS v. MIDDLETON'S SURETIES.
• Court: Texas Supreme Court

57 Tex. 185

THE STATE OF TEXAS

v.MIDDLETON'S SURETIES.

Case No. 4495.

Supreme Court of Texas.

May 16, 1882.

APPEAL from Travis. Tried below before the Hon. A. S. Walker.

December 19, A. D. 1879, the state brought this suit against W. B. Middleton as principal, and D. C. Carrington, A. G. Rogers, R. B. Coleman, W. P. Evans, W. M. Evans, H. B. Pruitt, H. H. Thompson, W. L. Rogers and A. W. Landers as sureties, on the official bond of Middleton as sheriff and collector of taxes of Leon county, dated the 2d day of May, A. D. 1876, for the balance due the appellant by Middleton, as collector of taxes of Leon county, on his account for the year 1876, amounting to $5,868.37, besides interest. Pending the suit, Middleton, the principal, died.

On the 4th day of April, A. D. 1881, the sureties filed their second amended original answer, in which, besides demurrers on various grounds to plaintiff's amended original petition, and a general denial, they pleaded, in substance, that their principal had been in the office of collector of taxes for a term previous to the one for which they became his sureties, and had other sureties; and that at the time they became his sureties, he was largely indebted to the state on his accounts for the years 1874 and 1875, and was actually a defaulter to the amount of such indebtedness; that while they were the sureties of Middleton, he collected and paid into the treasury large sums of money, which they specified, which the comptroller wrongfully appropriated to the settlement of the accounts of Middleton for the years 1874 and 1875.

On the 4th day of April, A. D. 1881, plaintiff filed an amended first supplemental petition in reply to the defendants' second amended original answer, in which, besides demurrers and a denial, it was alleged, in substance, that all payments made to the plaintiff by Middleton were applied and credited by the comptroller of public accounts as directed by Middleton, whenever he gave directions, and when no direction was given, the comptroller credited Middleton with all payments made to plaintiff on his indebtedness, and applied such payments properly to some of the accounts due to plaintiff by Middleton; that the application of the payments was made at the time of payment and before the commencement of any controversy on the subject of the application of payments; that neither the plaintiff nor the comptroller had any knowledge of the source from which the money was derived with which any payment was made; and that before the commencement of any controversy about the application of payments, Middleton's accounts for the years 1874 and 1875 had been closed.

On the 11th day of April, A. D. 1881, the case was tried. The death of Middleton and of A. G. Rogers was suggested, and the suit was discontinued as to them. All the demurrers in the record were overruled, and the court submitted the case to the jury on special issues, and upon their verdict declined to render judgment for the plaintiff for $5,868.37, the full amount claimed, but allowed the defendants credits to the amount of $4,708.64, leaving $1,159.73, for which amount, and the further sum of $397.04 interest (in all $1,556.77), judgment was rendered for the plaintiff, to which judgment both parties excepted.

Each party made a motion for a new trial, both of which were overruled, and the plaintiff appealed.

The opinion sufficiently shows the testimony and rulings of the court below.J. H. McLeary, Attorney General, and D. W. Doom, for the appellant.-- On the verdict the court ought to have rendered judgment for the amount claimed by the plaintiff and found by the jury to be due on the account sued on, without regard to the credits claimed by defendants for payments made and applied on other accounts due the plaintiff. Bruce v. United States, 17 How., 437;United States v. Kirkpatrick, 9 Wheat., 720;United States v. Vanzandt, 11 Wheat., 184; Story's Eq. Jur., sec. 459 g, note 4; Brandt on Suretyship and Guaranty, sec. 294; Chapman v. The Commonwealth, 25 Gratt., 721.

Shelley, Carrington & Rector, for appellees.

I. The sureties were entitled to credits upon the account for all taxes for the year 1876 collected by their principal and actually paid into the state treasury by him. This right cannot be affected by any application of such funds after they reach the treasury. Hetton v. Lane, 43 Tex., 279;United States v. January, 7 Cranch, 572; United States v. Eckford's Ex'rs, 1 How., 251; Abraham Meyers v. The United States, 1 McLean, 496; United States v. Boyd, 5 How., 48;United States v. Girault, 11 How., 28;Jones v. United States, 7 How., 681; Pickering v. Day, 2 Del. Ch. R., 366; Boring et al. v. Williams, Treas., 17 Ala. (N. S.), 525; Porter v. Stanley, 47 Me., 515; Snider v. Alexander, Supreme Court of Ohio in 1878; see The Reporter, vol. 6, 664; Miller v. The Commonwealth, 8 Pa. St., 444; Thomson v. McGregor, 11 Reporter, 203; Cullom, Governor, v. Dalloff, vol. 8, Reporter, 107; S. C., Supreme Court of Illinois; Lyndon v. Miller, 36 Vt., 329.

II. Between conflicting sureties on different bonds of a collector, one set of whom must suffer, the source from which the money came, and not the ignorance of the comptroller as to its origin at the time of its application, will determine to which bond it must be applied. Boring v. Williams, 17 Ala. (N. S.), 525; Porter v. Stanley, 46 Me., 515; Snider v. Alexander, vol. 6, Reporter, 664, Ohio case, 1878.

STAYTON, ASSOCIATE JUSTICE.

This action was brought by the state of Texas against W. B. Middleton, collector of taxes for Leon county, and the sureties upon his bond, to recover the sum of $5,868.37 on his account as collector of taxes due the state for the year 1876.

W. B. Middleton having died pending the suit, it was dismissed as to him and prosecuted to final judgment against his securities.

The cause was tried by a jury, which, under the instructions of the court, made special findings, upon which the court rendered a judgment against the defendants for the sum of $1,159.73, with interest, from which the state appealed, and both parties have assigned errors.

The jury found that the collector had collected of the taxes due for the year 1876 the sum of $4,151.90, and that the same had been paid into the state treasury, but that it had been applied by the comptroller upon the accounts of the collector for the years 1874 and 1875, he having been the collector of taxes for Leon county during those years, and being in arrear for those years about $12,000. It was, in effect, found that the collector had none of the money by him collected for the years 1874 and 1875 in his hands on the 2d day of May, 1876, at which time he executed the bond upon which the present suit is based. No direction was given by Middleton as to how the $4,151.90 should be appropriated, and it does not appear that the comptroller knew from what source the same was derived.

Although the sum so paid into the treasury of the state had been appropriated by the comptroller to two accounts of the collector for the years 1874 and 1875, the court applied the same as a credit upon his account for the year 1876; and this is assigned as error by the state.

It is claimed by the state's counsel that as no directions were given by the collector to the comptroller, at the time the money was paid into the treasury, as to what account the same should be appropriated, that the appropriation made by the comptroller must stand, he having no notice at the time the appropriation was made that the fund arose from taxes collected for the year 1876, after the execution of the bond sued upon.

There has been some contrariety of decision upon this question, but it is believed that by the great weight of authority, as well as upon principle, the question must be decided adversely to the position assumed by the state.

The rule for the appropriation of payments between parties acting in their own right is well settled, and is that the debtor may direct in what manner the money paid by him shall be appropriated, and that if he fails to do so, that the creditor may make the appropriation; and that in the absence of an appropriation by either the debtor or creditor, the law will appropriate it as may be just between the parties, having reference to the character of the indebtedness and all the circumstances.

It is not, however, believed that this rule obtains between the collecting officers of the state and their sureties, and the auditing or accounting officer for the state. The sureties upon the collector's bonds for the years 1874 and 1875 were not the same as on the bond sued upon. The rule is thus stated by the supreme court of the United States: “A majority of the court is of opinion that the rule adopted in ordinary cases is not applicable to a case where different sureties, under distinct obligations, are interested. The treasury officers are the agents of the law. It regulates their duties, as it does the duties and rights of the collector and his sureties. The officers of the treasury cannot, by any exercise of their discretion, enlarge or restrict the obligation of the collector's bond. Much less can they, by the mere fact of keeping an account current, in which debits and credits are entered as they occur, and without any express appropriation of payments, affect the rights of sureties. The collector is a mere agent or trustee of the government. He holds the money he receives in trust, and is bound to pay it over to the government as the law requires. And in the faithful performance of this trust the sureties have a direct interest, and their rights cannot be disregarded. It is true, as argued, if the collector shall misapply the public funds his sureties are responsible. But that is not the question under consideration. The collector does not misapply the funds in his hands, but pays them over to the government, without any special directions as to their application. Can the treasury...