U.S. Fidelity & Guar. Co. v. Com.

• Decision Date: 24 October 1907
• Citation: 104 S.W. 1029
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. COMMONWEALTH ET AL.
• Court: Kentucky Court of Appeals

104 S.W. 1029

UNITED STATES FIDELITY & GUARANTY CO. v. COMMONWEALTH ET AL.

Court of Appeals of Kentucky.

October 24, 1907

Appeal from Circuit Court, Graves County.

"Not to be officially reported."

Action by commonwealth of Kentucky and others against United States Fidelity & Guaranty Company and another. From a judgment for plaintiffs, defendant company appeals. Affirmed.

Robbins & Thomas, for appellant.

W. J Webb, Joe H. Weaks, and Samuel H. Cross-land, for appellees.

HOBSON J.

On August 4, 1898, T. J. Murphy was appointed by an order of the Graves county court, the trustee of the Graves County Academy fund. He accepted the trust, qualified, and executed bond with the United States Fidelity & Guaranty Company as his surety. The amount of the fund received by him was $3,623. He renewed his bond from year to year, with the same surety; the last bond being executed on August 4, 1904. On June 7, 1906 B. C. Bowden was by a like order appointed trustee of the fund. Murphy did not pay over the fund to Bowden, and this action was brought in the name of the commonwealth of Kentucky, Graves county, and Ben C. Bowden, as trustee of the Graves County Academy fund, against T. J. Murphy and his surety, the United States Fidelity & Guaranty Company. Murphy made no defense. The surety filed answer, to which the circuit court sustained a demurrer, and, it failing to plead further, judgment was entered against it for the amount of the fund, with interest at 6 per cent. from June 1, 1905.

In one paragraph of its answer the defendant pleaded that before the last bond was given it on July 27, 1904, inquired of James T Webb, the county judge, and received the following answers as to Murphy: "Q. When were his accounts last examined? A. July 1, 1904. Q. Were they at that time in every respect correct, and proper securities and funds in hand to balance? A. Yes." The defendant alleged that Murphy at once after his appointment in 1898 had converted the entire fund to his own use, and had lost it all long before the above answers were made; that the answer to the second question was wholly untrue; that, but for this misrepresentation by the county judge to the surety, it would not have signed the last bond; and that it in fact relied on his representations as true. It pleaded these facts in bar for a recovery. If this were a suit by a private corporation, or by an individual, the answer would be good; but it is not good in a suit by the state. The reason is that a public officer has no authority, except such as is conferred upon him by law. It was the duty of the county judge to settle the accounts of the trustee of the fund; but it was not his duty as county judge to furnish any information to the surety on the bond. In answering the questions asked him by the surety, he acted as a private person, because in answering the questions he was discharging no duty which the law imposed upon him. The state is never affected by the acts of her officers beyond the scope of their duties; for all persons dealing with them must take notice of the laws of the land. The state is no more bound by the answers of the county judge than it would be if James T. Webb had not been county judge when he made the answers, for the reason that the answering of the questions was not within his duties as county judge, and the state, not having authorized him to act for it in this matter, is not bound by his acts. See Fidelity & Deposit Co. v. Com., 104 Ky. 583, 47 S.W. 579, 49 S.W. 467; Com. v. Tate, 89 Ky. 587, 13 S.W. 113.

The defendant also pleaded that in Murphy's settlements he had been charged with interest on the funds at 10 per cent and credit was claimed for the usury thus charged to him. The fund is governed by an act approved February 13, 1846. See Sess. Acts 1845-46, p. 153, c. 154. By the seventh and eighth sections of that act it is the duty of the person holding the fund to keep an account of the interest on the fund, and annually to pay over to the trustees of the common schools in each district for the use of the school the proportion of the interest coming to it. Bowden, as the successor of Murphy, is only entitled to recover, and only sought to recover, the principal of the fund, with 6 per cent. interest from the last settlement. The annual interest for previous years belongs to the common schools of the county. No recovery was so sought of this, for...