First National Bank v. Moon , 243 Mich. 124 ( 1928 )

Defendant Moon was re-elected drain commissioner of Cass county in 1916, for the term of two years from January 1, 1917. Defendant Fidelity Casualty Company was the surety on his official bond in the sum of $4,000. This bond was approved by the county clerk, treasurer, and judge of probate, the officers designated by 1 Comp. Laws 1915, § 4872, to approve it. Moon was defeated at the election in 1918, but his successor did not qualify, and Moon held over for the years 1919 and 1920. On January 3, 1919, Moon executed a new bond in the sum of $2,000, with the Maryland Casualty Company as surety, which contained the recital:

"Whereas, Abner M. Moon was elected to the office of drain commissioner in the county of Cass and State of Michigan, at the annual election held therein on the sixth day of November, A.D. 1916, and

"Whereas, Robert E. Cowhan was elected to said office at annual election held November 5, 1918, and has failed to qualify." * * *

This bond was not approved by the officers designated by statute, but came to the board of supervisors of the county, was referred by the board, with the bonds of other county officers, to its judiciary committee on January 9th, and, on January 11, 1919, after report by the committee, it was "accepted, approved and placed on file" by the board.

On February 18, 1919, Moon, as drain commissioner, let a contract for the construction of a drain, and thereafter, beginning May 1, 1919, issued orders to the amount of $2,776 in excess of the contract price. The circuit court held the orders issued by Moon invalid in the amount of such excess. This resulted in plaintiffs being paid only 74.67 per cent. of the face value of orders held by them. The present suit was brought to recover the deficiency, it being the total amount of the excess of the issuance. Plaintiffs seek to recover from the defendant Fidelity Casualty Company upon the theory that the bond upon which it was surety continued in force throughout Moon's hold-over incumbency of the office. The court held the defendant's obligation superseded and discharged by the bond upon which the Maryland Casualty Company was surety, and plaintiffs appealed. This presents the principal question in the case.

Under the statute (1 Comp. Laws 1915, § 4872), a county drain commissioner continues in office "until his successor shall be elected and qualified." The holdover period is, therefore, part of his term of office and the incumbent is a de jure officer. 29 Cyc. p. 1399; 22 R. C. L. p. 555.

It is concededly the law that when an officer is reelected to an office and qualifies for the new term by giving the statutory bond, the surety for the prior term becomes thereby discharged from liability for subsequent acts of the officer. It is also the rule in this State that the obligation of the prior bond continues into the subsequent term until the subsequent bond becomes effective, when the statute provides that the officer shall hold over until his successor shall be elected and qualified. This is because the hold-over period is part of the prior term of office. City of Grand Haven v.Guaranty Co., 128 Mich. 106.

The Maryland Casualty Company bond became effective without the approval of the officers designated by statute. Mechem on Public Officers, § 313; People v. Johr, 22 Mich. 461. And recovery has been had upon it by suit. Maryland Casualty Co. v. Moon, 231 Mich. 56. The recitals in the bond and its inclusion with the other county officers' bonds in the proceedings for approval by the board of supervisors are rather persuasive that Moon intended to present and the board to accept it for the hold-over term and in lieu of defendant's obligation. The issue, then, is whether the board of supervisors had authority to discharge defendant surety from liability on its bond.

Aside from the authority to approve the bonds of certain county officers, the power of the board of supervisors is declared by 1 Comp. Laws 1915, § 2274, subd. 14, to be to require county officers "to give bonds or further or additional bonds, as shall be reasonable or necessary, for the faithful performance of their respective duties." This declaration is found in the grant of general powers to the board, and, under the implied exclusion rule of statutory construction, other authority over such bonds is prima facie deemed to be withheld except as it may be conferred by other statutes. There is no statute granting to the board or any other officers the authority to discharge or release an official bond of a county officer. Nor is such power incident or necessary to the proper exercise of any power expressly granted to the board of supervisors. The bond does not belong to the board, nor are its obligations for the sole benefit of the county. All citizens who may be affected by the official conduct of officers have an interest in the bond, and, on its effective execution, obtain a vested right in its obligation. Without statutory authority, no board nor officer can release it.

Counsel have cited no analogous cases, but independent investigation has disclosed a few authorities, with unanimity of opinion that the authority to approve bonds required by statute does not include the power to release them, and that such obligations cannot be voluntarily discharged except under authority and in the manner provided by statute. It has been so held in Sullivan v. State, 121 Ind. 342 (23 N.E. 150) (clerk of circuit court); Wood v. Williams,61 Mo. 63 (administrator's bond); Fidelity Deposit Co. v.Fleming, 132 N.C. 332 (43 S.E. 899) (sheriff); Hickerson v.Price, 49 Tenn. 623 (clerk and master in chancery); Richter v.Leiby's Estate, 101 Wis. 434 (77 N.W. 745) (testamentary trustee).

It is, therefore, held that the obligation of defendant Fidelity Casualty Company was not released nor discharged by the acceptance of the Maryland Casualty Company bond. The bonds were cumulative.

Defendant further contends that the action is barred by the statute of limitations, as the latest order in suit was dated September 15, 1919, and this action was instituted October 16, 1925. The argument is that the cause of action arises out of Moon's torts (People, for use of Lapeer County Bank, v.O'Connell, 214 Mich. 410), and action against him having tolled in six years after the tort, the surety is also released. The orders were payable March 15, 1921. However, under 3 Comp. Laws 1915, § 12323, actions founded upon bonds of public officers carry a ten-year period of limitation. We think this act applies here.

The decree will be reversed, with costs, as to the Fidelity Casualty Company, and a new one to accord with this opinion may be presented.

NORTH, FELLOWS, WIEST, CLARK, McDONALD, POTTER, and SHARPE, JJ., concurred.