Thomas v. Williford, 74--347
| Decision Date | 23 February 1976 |
| Docket Number | No. 74--347,74--347 |
| Citation | 534 S.W.2d 2,259 Ark. 354 |
| Parties | Marion THOMAS et al., Appellants, v. James R. WILLIFORD, Appellee. |
| Court | Arkansas Supreme Court |
Skillman, Durrett & Davis, West Memphis, for Marion F. Thomas.
Reid, Burge & Prevallet, Blytheville and Wright, Lindsey & Jennings by David M. Powell, Little Rock, for The Fidelity and Deposit Co. of Maryland and Maryland Cas. Co., for appellants.
Oscar Fendler, Blytheville, for appellee.
This is a taxpayers action brought by the Appellee on behalf of Crittenden County, Arkansas to require Appellant, Marion Thomas, to account for and pay over certain sums of money alleged to have come into his hands while he held the office of Sheriff and Collector for said county. Appellee alleged that Appellant Thomas had wrongly and fraudulently misappropriated and converted these funds to his own use during the terms of his office, namely January 1, 1965 thru June 29, 1970. Appellants Maryland Casualty Company and Fidelity & Deposit Company of Maryland were joined in this action as Sureties on Appellant Thomas' statutory bond.
This action was tried to the Chancellor by Assignment over a considerable period of time and the transcript of the proceedings consisted of approximately 2,500 pages. A detail outline of all allegations and specific transactions would be impractical and not necessary to this decision.
At the conclusion of the trial before the Chancellor by Assignment the Court prepared and filed its 'Findings of Fact and Conclusions of Law', the net result of which was to require the Appellants to account for and pay over to Crittenden County approximately $35,000.00 plus interest and an additional $10,500.00 in attorneys' fees awarded attorneys for Appellee. From this award Appellant Thomas and Appellant Surety Companies have taken this appeal.
A number of the points for reversal relied upon by all of the Appellants revolve around the receipt by Appellant Thomas of the sum of $8,800.00 for the years 1965 through 1969 by and from Southland Racing Corporation. 1 The method of the making and receiving of these payments, according to the undisputed testimony, involved a very suspicious method including the submission of fictitious invoices, issuance of checks paying the invoices to a party other than Appellant Thomas, cashing of the checks by a uniform and law enforcement equipment supplier and the paying of the funds to Appellant Thomas in cash. The Trial Court found these funds to have been received by Appellant Thomas in a 'surreptitious manner', to have deprived the citizens of Crittenden County, Arkansas of the benefit thereof contrary to his office of public trust, and that the payments were in violation of the provisions of Article 19, Section 23 of the Arkansas Constitution and the Initiated Act No. 1 of Crittenden County, Arkansas. Having so found, the Trial Court then gave judgment against Appellants for this sum and awarded interest, penalties and attorneys' fees on this sum.
Appellant Thomas had alleged error by the Trial Court in requiring an accounting for these funds (hereinafter referred to as the Southland funds) as such were not 'public funds' for which Appellant Thomas was charged. Appellant Surety Companies further urged this Court that the required accounting of the Southland funds was error as said funds were 'gifts' to Appellant Thomas, for which neither he nor his Sureties should be required to account.
Article 19, Section 23 of the Arkansas Constitution reads as follows:
Initiated Act No. 1 of Crittenden County authorized compensation of the Sheriff and Collector at $5,000.00 per annum, 'and in addition thereto the actual and necessary expense of travel incident to the duties of this office, and shall receive no other fee, commissions, perquisites, or other compensation, either directly or indirectly, for services rendered as such Sheriff and Collector.' The evidence strongly indicates that these funds were not paid to Appellant Thomas for any services rendered or to be rendered by him or his office and were not in any way 'breakage' money or other designated funds to which Crittenden County, Arkansas and its citizens would have been entitled to demand or receive. No person connected with Southland Racing Corporation testified and the exact purpose of such payments was never established. The only real evidence adduced at the trial to explain the payment and receipt of such funds and the interest the county might have to such was the testimony of Appellant Thomas that he 'considered it to be additional remuneration to me in addition to my salary'.
Appellee forcefully argues that Appellant Thomas should be charged with these funds since, regardless of the purpose of such payment, they were received 'by virtue of his office'. See White v. Williams, 187 Ark. 113, 59 S.W.2d 23 (1933) and State to Use of Union County v. Harmon, 190 Ark. 621, 80 S.W.2d 619 (1935). Further, since such funds were received 'by virtue of his office' they must be considered a 'Perquisite' within the definition of Article 19, Section 23 of the Arkansas Constitution and Initiated Act No. 1 of Crittenden County. In so holding we find the Trial Court committed error.
All the cases cited by Appellee (White v. Williams, supra, State v. Harmon, supra, and Brewer v. Hawkins, 248 Ark. 1325, 455 S.W.2d 864 (1970)) involve monies which came into the hands of respective county officials from sources with which the respective counties were charged or were funds to which the respective counties were entitled. We do not find the gratuitous payments in the instant case to be analogous to fees for the feeding of prisoners, fees received for taking care of federal prisoners and cash bonds. We reaffirm the holding of each of the hereinabove cited cases. It is our finding that the Southland funds in the instant case, however, were not funds to which the county was entitled, had any interest in or could demand or file suit for collection. They were not paid for any public purpose nor to the detriment of any public obligation. They were not 'Public funds' for which we believe Appellant Thomas could be charged and the receipt by him of such funds was not in violation of Article 19, Section 23 of the Arkansas Constitution or Initiated Act No. 1 of Crittenden County, Arkansas.
This Court has taken special notice of the manner in which the Southland funds were paid to and received by Appellant Thomas. While holding these funds not to be 'public funds', we in no way intend to approve of the method, legality or morality of such manner as might be the subject of a criminal prosecution. This, however, is a civil action for an accounting.
Contrary to the argument of Appellant Surety Companies, we do not hold that in a taxpayers suit for accounting it must be shown that some amount of wrongdoing in connection with the receipt of funds such as this existed. We do find, however, that there must be some interest of the county and its citizens to the funds received before a public official may be held responsible in a civil accounting action. We do not feel the proof of Appellee in the instant case was sufficient.
In reversing the Trial Court on the issue of the Southland funds we also, of necessity, must reverse on that Court's finding the Appellant Surety Companies liable for the payment of the Southland funds and in the awarding Appellee penalty and attorneys fees under Arkansas Statutes Ann., Section 66--3238. It should be noted that by this finding the amount for which the Appellant Surety Companies would be liable has been reduced below the demanded amounts as required for the awarding of such penalties and attorneys fees.
The next contention of Appellant on this appeal is that the Trial Court erred in applying the Statute of Limitations as to Appellant Thomas. Appellant Thomas argues that either Arkansas Statutes Ann., Section 37--203 or Section 37--204, both being two-year statutes, is applicable to the instant situation and not the four-year Statute of Limitation provided by Arkansas Statutes Ann., Section 37--207. Appellant further argued that there was no allegation or proof of any fraud or concealment on the part of Appellant Thomas that would toll any of the Statutes of Limitation. On this point this Court disagrees with Appellant as to all transactions except the payment and receipt of a $150.00 per month expense allowance. To the contrary the pleadings are replete with allegations of fraud, concealment and misappropriation on the part of Appellant Thomas and the proof by Appellee more than met this burden. Accordingly, we find that the allegation and proof of fraud and concealment in the instant case was sufficient to toll any Statute of Limitation applicable under the circumstances and affirm the Trial Court in so holding.
Appellant Thomas next contends the Chancellor by Assignment erred in requiring him to account for certain funds which were the result of some 15 specific transactions and for which Appellant contended he had accounted and was entitled to credit. These transactions range from checks on Appellant's department accounts to individuals which were endorsed by the individuals and applied toward Appellant's personal obligations, to checks payable to cash, to checks in payment of allegedly fictitious law enforcement equipment supplier invoices, to a $150.00 per month expense allowance paid by the county to Appellant. This Court has reviewed each of these transactions thoroughly...
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United States v. Blackmon
...statute does not begin to run against the defrauded party until the fraud is or should have been discovered. Thomas v. Williford, 259 Ark. 354, 359-60, 534 S.W.2d 2, 5-6 (1976). It is alleged that Piney Woods had no knowledge of the fraud or breach prior to July 12, 1974, when an indictment......
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Crittenden County v. Williford
...decree required the sheriff to account to the county for the money. The decree was, in the main, affirmed. Thomas v. Williford, 259 Ark. 354, 534 S.W.2d 2 (1976). On remand the final decree entered judgment against the sheriff for $106,467. Part of that amount, $29,040, was paid to the coun......
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