Opinion
13876
June 15, 1934.
Before JOHNSON, J., Bamberg, January, 1933. Affirmed.
Action by Bamberg County against the Maryland Casualty Company and W.D. Rowell. From a decree for plaintiff, the Maryland Casualty Company appeals.
The decree of Judge Johnson, directed to be reported, is as follows:
This is an action by Bamberg County against W.D. Rowell, former auditor of said county, and Maryland Casualty Company, his surety, on three bonds in the sum of $3,000.00 each, for the recovery of losses sustained by Bamberg County by reason of breaches of trust, defalcations, and derelicts of duty of the said Rowell during his last three terms of office. The complaint asks for an accounting and for judgment against W.D. Rowell for such sums as may be determined to be due by him to the plaintiff, and for judgment against Maryland Casualty Company for such sums as may be determined by the said accounting, not to exceed $3,000.00 on either of the said three bonds.
The case was duly referred by order of this Court to Hon. H.L. O'Bannon as special master, to take the testimony and pass upon all issues. Several references were held by the said master, and the testimony so taken by him is filed herein, together with his report thereon, dated July 26, 1933.
From this report the plaintiff has excepted on several grounds. The defendant Maryland Casualty Company has also filed sustaining grounds. The defendant Rowell has filed no exceptions.
The cause was fully argued before me by counsel for the plaintiff and counsel for the defendant Maryland Casualty Company, at Bamberg, S.C. on the 3rd day of November, 1933, after which I reserved my decision until this day.
The Special Master found, as will appear by reference to his very clear and comprehensive report, that W.D. Rowell is liable to Bamberg County for misappropriations and defalcations occurring during the period beginning July 1, 1925, and ending June 30, 1927, covered by the first bond, in the sum of $501.20; that W.D. Rowell is liable to Bamberg County for misappropriations and defalcations occurring during the period beginning July 1, 1927, and ending June 30, 1929, covered by the second bond, in the sum of $3,073.52; that W.D. Rowell is liable to Bamberg County for misappropriations and defalcations occurring during the period beginning July 1, 1929, and ending December — , 1930, when Rowell was removed by the Governor — covered by the third bond, in the sum of $1,548.60. This finding is fully sustained by the evidence, and I so hold. In fact, there is no exception to this finding.
The Master also found that W.D. Rowell is liable to Bamberg County because of derelicts of duty resulting in his failure to obtain certain building aid funds from the State during the first bond period in the sum of $1,070.00, during the second bond period in the sum of $3,203.88, and during the third bond period in the sum of $3,675.00.
Plaintiff's counsel admit that the plaintiff received $1,100.00 from the State during the said first bond period; and now concede that the Master was in error in holding Rowell liable for any loss occurring during that period because of his failure to obtain said state-aid funds; and it is my judgment that neither Rowell nor his surety, the Maryland Casualty Company, is liable under the said bonds for Rowell's failure to procure state aid for building purposes; the law in force at the time (Section 2632, Civ. Code 1922) requiring such aid to be procured by the county board of education (not merely by the county superintendent of education), and there being no evidence warranting a finding that Rowell prevented the county board from procuring such aid.
Although the master found that W.D. Rowell is liable to Bamberg County for the amounts above stated, he held that the limitation of the Maryland Casualty Company's liability was $1,000.00 on each of the said bonds for reasons stated in his report, as by reference thereto will appear. In so finding and holding, it is my judgment that the said Master erred.
I am aware of the fact that in some jurisdictions it is held that: "Where an officer holds two distinct offices, although one is held ex officio, a bond given for the faithful performance (of the duties) of one office does not cover his liability for his acts in the other office." But I am of the opinion that under the statute creating Bamberg County (Act Feb. 25, 1897 [22 St. at Large, p. 580]), W.D. Rowell held only one office, that of auditor. The office of superintendent of education in Bamberg County was abolished, and the duties incident to that office were devolved upon the auditor by the terms of said Act, and the fact that Rowell, as auditor, was required to perform the duties incident to the office of superintendent of education did not make him hold two offices. Even if it be conceded, however, that he held two offices, one of them merely ex officio, I am of the opinion that the sounder view is that his bond as auditor would cover his duties as superintendent of education, and although required to execute a bond for only $2,000.00, he and his surety voluntarily elected to execute a bond for $3,000.00 covering both offices, and they are bound by their contract.
While the statute required the auditor to furnish a bond for $2,000.00 only, it is my judgment that he and his surety could lawfully, by contract, increase the amount of the county's security by voluntarily executing a bond in a larger sum, and, when they chose to execute a bond for $3,000.00, conditioned for the proper discharge of Rowell's duties as auditor and superintendent of education, it is my opinion that the county was secured as to either and both offices in that sum. That is, if there were no liability as auditor, the county would be protected to the amount of $3,000.00 against his defalcations as superintendent of education; if there were no liability as to the latter, the county would be protected against his defalcations or derelictions of duty, as auditor, to the extent of $3,000.00; if there were defalcations in both offices aggregating $3,000.00, the county would be protected to that extent. In other words, the amount of the bond, $3,000.00, is not divisible in such a way as to restrict his liability to $2,000.00 as auditor and to $1,000.00 as superintendent of education; or to $1,500.00 as to the former, and $1,500.00 as to the latter.
I am aware of the general principle of law to the effect that the statutory law must be read into an official bond, but that means the general provisions of the statute, and has no reference to the amount of the bond; for example, if a statute required an official to be bonded for $2,000.00, and a surety company should execute its bond in the sum of $500.00, it could not be contended, logically, that such a company would be liable for more than the amount of the bond it executed, to wit: $500.00; on the other hand, if a surety company and its principal choose to execute a bond in a larger sum than required by statute, that is a mere matter of private contract, since none of our statutes requiring the bonding of public officials prohibit a county from requiring or accepting a larger bond than that required by statute; in such case the official could not be compelled to give a larger bond than the statute required, but if he and his surety elected to give a larger bond, that would be a mere matter of contract.
In the instant cause it does not appear that the surety company has offered to return to Bamberg County the premiums collected by it from such county in excess of what the premium on a $2,000.00 bond would be; having elected to execute a bond larger than that required by statute, having collected the premiums thereon, and not having tendered such excess premiums to the county, the surety must stand by its contract.
It is true that there is no evidence as to the collection of such premiums, but it is a fair inference to be indulged, since it is a matter of common knowledge that all insurance companies require payment of premiums in advance.
There is no evidence to warrant the Master's finding that it was the intention of the parties to execute bonds in the sum of $3,000.00, bonding Rowell in the sum of $2,000.00 as auditor, and in the sum of $1,000.00 as superintendent of education, and such finding is disapproved.
It is my opinion, and I so find and hold, that the Maryland Casualty Company, as Rowell's surety, is liable to Bamberg County on the first bond hereinabove referred to for the sum of $501.20; on the second bond for the sum of $1,548.60, making a total of $5,049.80.
It is therefore ordered that the report of the said Master be and is hereby modified to the extent and in the particulars above stated, and in all other respects the same is confirmed.
Further ordered, that the plaintiff, Bamberg County, have judgment against the defendant W.D. Rowell for the sum of $5,123.32, and that the plaintiff, Bamberg County, have judgment against the defendant Maryland Casualty Company for the sum of $5,049.80, and for the cost of this action.
Mr. E.H. Henderson, for appellant, cites: Contracts: 42 S.C. 291; 106 S.C. 470; 165 S.C. 36; 9 C.J., 34; 13 C.J., 560; 46 C.J., 1066; 25 C.J., 1092. As to bond required by statute: 166 U.S. 587; 41 L.Ed., 1125; 171 S.C. 235.
Messrs. B.D. Carter, Solicitor, and Kearse Kearse, for respondent, cite: Statutory bond: 2 Bail., 362; 2 Nott McCord, 426.
June 15, 1934. The opinion of the Court was delivered by
The reasoning and conclusions of his Honor, Judge Johnson, in the above-stated case, are satisfactory to this Court, and his decree, which will be reported, is affirmed.
MR. CHIEF JUSTICE BLEASE and MESSRS. JUSTICES CARTER and BONHAM and MR. ACTING ASSOCIATE JUSTICE W. C. COTHRAN concur.