Vigo Tp. v. Bd. of Com'rs of Knox Co.

• Decision Date: 27 May 1887
• Citation: 12 N.E. 305,111 Ind. 170
• Parties: Vigo Tp. v. Board of Com'rs of Knox Co.
• Court: Indiana Supreme Court

111 Ind. 170

12 N.E. 305

Vigo Tp.

v.Board of Com'rs of Knox Co.

Supreme Court of Indiana.

May 27, 1887.

Appeal from circuit court, Knox county.

De Wolf & Chambers, for appellant. Cullop, Shaw & Kessinger, for appellee.

Mitchell, J.

During his incumbency in the office of county treasurer of Knox county, Spear S. Hollingsworth, in pursuance of his duty in that behalf, collected various funds belonging to Vigo township, one of the townships within the county above mentioned. Hollingsworth became a defaulter in his office by appropriating public moneys which came in his possession to the amount of $78,000. Among the moneys so appropriated were the funds collected for and belonging to the township of Vigo. Subsequently the state, on the relation of the county auditor of Knox county, instituted a suit upon the official bond of the defaulting treasurer. This suit was compromised by the county auditor and the bondsmen; the latter agreeing to pay over to the succeeding treasurer the sum of $35,000. After the annual settlement in 1886, the county auditor drew his separate warrants on the treasurer of Knox county for the full amount of each several fund which appeared, by the records in his office, to belong to Vigo township. These warrants were duly presented by the township trustee, to whom they were made payable. Payment was refused, on the ground that there were no funds in the treasury for that purpose. The warrants were afterwards presented for allowance to, and were rejected by, the board of commissioners. Acts 1885, p. 80. This suit was then brought; the claim of the township being that, upon the facts substantially hereinbefore stated, the county became liable for the payment of the warrants. The circuit court gave judgment against the township.

The argument in favor of the right of the township to look to the board of commissioners for payment is predicated upon the assumption that the defaulting treasurer was the agent of the county, and that the board of commissioners became, in respect to the several funds, in legal effect the trustee of the township. Hence the claim is, since the wrongful appropriation of the money was the dereliction of the county's agent, in respect to a fund towards which the board of commissioners occupied a fiduciary relation, the latter must make good the loss to the township occasioned by the default of its agent. It is said that the board of commissioners must be treated as the guardian or trustee of the township, because the latter can neither levy nor collect taxes except through the agency and concurrence of the former, and because of the supervisory power of the board over the accounts and expenditures of the township trustees, and for the further reason that the township trustee has no power to bring suit, or control the county auditor in the bringing or conducting a suit, against the treasurer or his bondsmen.

In our opinion, the assumptions upon which the argument rests are without legal foundation. In the first place, a county treasurer is in no such sense the agent of the county as that the maxim, respondeat superior, can be invoked. This maxim has its foundation upon the right of the principal to select his agents, to control, direct, and hold them responsible while in his service, and to discharge them on account of negligence, incompetency, or other delinquency, at his pleasure. If the principal has neither the right to select or appoint, nor to direct, control, or prescribe the duties of, the agent, nor to discharge him in case of refusal to comply with the duties prescribed by the principal, the rule has no application. This rule is applicable to corporations, as well as to natural persons. Dill. Mun. Corp. § 974.

Counties, in a very important sense, occupy a double relation. In one relation, a county is a municipal corporation, charged with corporate functions and duties, and invested with corporate powers. These are exercised for the benefit of the municipality, and in respect to these the county is responsible. A county is also a territorial and political division of the state, established as an instrumentality of government and municipal regulation. Maxmilian v. Mayor, 62 N. Y. 160;Eastman v. Meredith, 36 N. H. 284. Some of the duties of county boards, as well as other county officers, relate to and are exercised in the discharge of their functions as governmental agencies. Of this character are the duties of the board, as also those of the county treasurer and auditor, so far as they are connected with the revenue system of the state. In exercising these duties, the officers exert a power delegated immediately to them by the state, for the benefit of all the citizens who are affected by the sovereign power which pertains to the levying and collecting of taxes. The county as a municipality is not specially interested in the exercise of these powers, except so far as they relate to its own municipal affairs. It is hence not liable for derelictions of officers in respect to their conduct as mere agents of the government. Of course, in respect to such duties as are directly and absolutely imposed upon a municipal corporation by law, or which concern interests specially committed to its charge, and for the performance of which certain agents or officers may have been designated, the delinquency or default of the agent may nevertheless render the municipality answerable. Dill. Mun. Corp. § 980. Liability in such cases grows out of the fact that the municipality failed to discharge some corporate duty which the law expressly and primarily laid upon it, and not upon the officer or agent.

The relations between the board of commissioners of a county and a county treasurer are such that all the requisites to make the county answerable as principal for the defalcations of the treasurer, as agent, are wanting. The treasurer is in no way dependent upon the board for his appointment to or continuance in office. His duties are all prescribed by law, and in the exercise of his office he is in no way subject to the control of the county board. He performs official duties for the state, as well as for the county, and for every township and municipality within the territorial boundaries of the county. His duties are, therefore, not for the special or peculiar benefit of the county, nor for its interest, in any different sense than are they for the benefit or interest of the state, or the other municipalities in whose behalf the law requires the county treasurer to perform official service. He is a person selected in the manner prescribed by law, and has certain public functions to perform, which are all prescribed by statute, and primarily laid upon him, and for the performance of which he is held civilly and criminally responsible. He is not, therefore, the agent of the county, in respect to funds collected by him for townships, nor can the county be held answerable for his delinquency, in the...