Daniel v. . Grizzard

The defendant was appointed Register of Deeds for Halifax County, and on 13 December, 1882, entered into the usual bond required by law, with the other defendants as his sureties thereto — which office he continued to hold and exercise until 6 November, 1883.

On 15 January, 1883, J. R. Whitaker and wife executed a mortgage to Spier Whitaker for $1,500, which was that day registered by defendant Grizzard; but he failed to index the same as required by law, and the debt secured by this mortgage was kept alive and in date by successive payments until 1894.

(107) On 28 January, 1890, the said J. R. Whitaker and wife executed another mortgage to the plaintiff on the same land for something over $2,000, which was registered and duly indexed on that day.

On the date of the execution of this last mortgage the plaintiff examined the index in the Register's office for the purpose of seeing whether there was any mortgage or other encumbrance on said land, and, said mortgage not being indexed, plaintiff was thereby deceived and took said mortgage when he would not have done so if the mortgage to Spier Whitaker had been properly indexed.

In 1894 plaintiff was proceeding to foreclose the mortgage to him when he discovered for the first time that there was any such mortgage on said land as that to Spier Whitaker.

It has been judicially determined that the mortgage to Spier Whitaker was valid (Davis v. Whitaker, 114 N.C. 279) and therefore had priority over the mortgage of plaintiff.

Under a decree of the Superior Court of Halifax County said lands have been sold and the whole of the proceeds of said sale has been applied to costs and the payment of the Spier Whitaker mortgage. The mortgagor is insolvent and plaintiffs have lost their entire debt.

Plaintiffs therefore bring this action against the defendant Grizzard and his bondsmen and claim that by defendant failing to index the Spier Whitaker mortgage they have lost their entire debt, and ask judgment against defendants for that amount.

Defendants deny the plaintiffs' right to recover on this bond, for the reasons which they assign, and also plead the statute of limitations in bar of plaintiffs' right of action.

The facts of this case are agreed upon, but we have made this summary for the purpose of abridging them as much as we can to retain the substantial facts. And it is further agreed that the (108) facts present but two questions for our consideration: 1. Whether the defendant Grizzard and the sureties on his bond are liable to plaintiffs. 2. Whether the action is barred by the statute of limitations as to said Grizzard and his said sureties or either.

This case presents some very interesting questions of law, which have been well argued on both sides and which have very much assisted us in our investigation.

There is no bond sent in this record, but the case states that on 13 December, 1882, the defendant Grizzard gave a bond in the penal sum of $5,000, with the other defendants as sureties, and was duly inducted into office, which he continued to hold and exercise until 6 November, 1883. So it will be seen that he gave the bond and entered upon the duties of his office before The Code went into effect on 1 November, 1883 (section 3866 of The Code), but that he continued to hold his office for six days after The Code did go into effect.

At the time defendants executed the bond they would not have been liable for failing to index the mortgage to Whitaker unless this was one of the conditions of the bond. Holt v. McLean, 75 N.C. 347; Moretz v. Ray, 75 N.C. 170; Eaton v. Kelly, 72 N.C. 110, and that line of cases. But by the adoption of The Code the liabilities of public officers and their bondsmen were very much broadened. The Code, section 1883. And it is now held that the conditions of the bond are coextensive with the duties required by law of such officers. Kivett v.Young, 106 N.C. 567; Thomas v. Connelly, 104 N.C. 342. It is true that this amendment seems in terms to provide only for acts done by the officer, and not for those which he should do but does not. The amendment is as follows: "And every such officer and the sureties on his official bond shall be liable to the person injured for all acts (109) done by said officer by virtue or under color of his office." But it would be putting a very narrow construction on the statute to say that he and his sureties are liable for what he did, but not for what he should have done and did not do, although the damage to the party was equally as great.

But we are relieved of any trouble as to this question, as it has been construed by this Court in Young v. Connelly, 112 N.C. 646. In that case Connelly was Clerk of the Superior Court and neglected to docket a judgment, by which plaintiff lost his judgment lien and his debt. And the Court said that although it was a neglect of duty it was one of the duties required of him by express statute, and he and his sureties are liable. And so was it one of the duties required of the defendant Grizzard by express statute that he should have indexed the Whitaker deed. The Code, section 3664.

But we have said that this bond was given before The Code went into effect, and it is therefore contended that it is to be construed by the light of Eaton v. Kelly, Holt v. McLean, supra, and defendants are not liable.

But it must be remembered that defendant Grizzard continued to hold and exercise the duties of this office under this bond until 6 November, 1883, six days after The Code went into effect, and the defendants were liable for any breach that took place while Grizzard continued to hold the office. The breach in this case being the neglect to perform a duty, it continued as long as he remained in office. He would have had the right to index the Whitaker mortgage any day while he remained in office, and, this being so, he failed to index this mortgage after The Code went into effect and when the penalties of the bond required him to do so.

This, we think, must be so, if the Legislature had the right to increase the liabilities or obligations of the bond during the tenure of (110) office under it, and this question seems to be settled. A learned author says: "It has been held that all laws enacted during the continuing contract of an official bond are also part of the contract, and that the obligors entered into the engagement in view of the possible and probable modification of their liability by the legislative branch of the government." Murfree on Official Bonds, section 193. And to the same effect is People v. Vilas, 36 N.Y. 458; also see Prarie v. Worth, 78 N.C. 169;Boger v. Bradshaw, 32 N.C. 229, 232.

We therefore sustain the plaintiffs upon the first question as to the liability of defendants.

Then, is the lapse of time and the plea of the statute of limitations a bar to plaintiffs' action? This depends upon the time when the statute commenced to run. Defendants contend that it commenced when Grizzard failed to index the mortgage to Spier Whitaker as he was required by law to do; while plaintiffs claim that it did not commence until the land was sold and the proceeds applied to the older mortgage.

The statute commenced to run from the time the cause of action accrued — the breach of the bond; and this must have taken place while the defendant Grizzard was in office. He could not commit a breach after that time. This could not make the breach later than 6 November, 1883, and that would be more than ten years before this action was commenced. And the statutory limit for bringing actions on official bonds seems to be six years. The Code, sec. 154.

Then there is to be a limit to such actions or there would have been no statute passed. The breach of the bond — the failing to index the mortgage — was the cause of action. It was not damage — damage is never the cause of action, but the result of the action — the consequences arising from the cause. It seems to us that these (111) propositions are sustained by sound reason and show that the statute must commence to run from the time of the breach complained of. But we are not without the authority of decided cases from some of the highest courts of the Union to support the proposition that the statute runs from the time of the breach.

"The statute of limitations commences to run from the date of the breach of the bond that gives the right of action, and not from the time when the injury resulting from it occurred or was discovered." Kerns v. Schoomaker,4 Ohio, 331, 22 Am. Dec., 757; Wilcox v. Executors, 4 Peters, 172; Lottenv. Gillett, 95 Cal. 317; Betts v. Norris, 21 Me. 314.

We have examined the cases cited by plaintiffs and think they are distinguishable from the one under consideration. Godley v. Taylor,14 N.C. 178, is a divided opinion — Ruffin, C. J., dissenting — and is in direct conflict with Raynor v. Watford, 13 N.C. 338. Godley v.Taylor was an action upon the warranty in a deed for land, and there was no breach of the warranty until there was an ouster of possession. It was the breach that gave the right of action — there was none before. So in this case it was the breach — the neglect to register the mortgage — that gave the right of action. And it seems to us this case tends to sustain the position of defendants. It certainly does not conflict with the contention that the breach was defendant Grizzard failing to index the mortgage. The case of McKinder v. Littlejohn, 23 N.C. 66, and Armistead v. Bozman, 36 N.C. 117, are cases where there was no one inesse to sue, and are distinguishable from this case.

We are therefore of the opinion that plaintiffs' cause of action (112) is barred by the lapse of time and the plea of the statute of limitations.

No error.

Cited: Warren v. Boyd, 120 N.C. 60; Comrs. v. Sutton, ib., 301; Smithv. Patton, 131 N.C. 398; Mfg. Co. v. Hester, 177 N.C. 612.