Summary
In Trustees of Village of Bath v. McBride, 219 N.Y. 92, 97, 113 N.E. 789, 790, the court remarked, "The rule of strict liability laid down in Tillinghast v. Merrill, supra, is a very important one, and it should not be frittered away in seeking to give relief in hard cases."
Summary of this case from Loughman v. Town of Pelham, Westchester CtyOpinion
Argued June 5, 1916
Decided October 3, 1916
Fred A. Robbins and James McCall for appellant. James O. Sebring for respondents.
This court held in Tillinghast v. Merrill ( 151 N.Y. 135) that a public officer having the custody of public moneys is liable unqualifiedly for the loss thereof, and that it is no defense to an action on the official bond that the money was lost without fault or neglect on the part of the officer.
The trial court in this action found that McBride, the village treasurer, had the custody and possession of the village hall fund, and rendered judgment in favor of the village for the amount of the bond with interest. This judgment was reversed at the Appellate Division and the finding of the trial court as to the custody and possession of the funds by McBride was disapproved, and an affirmative finding was made "that the trustees of the village of Bath on or about October 20, 1911, by resolution, designated the George W. Hallock Bank as depository of the village funds." Such designation, the court held, took the case out of the strict rule of liability laid down in Tillinghast v. Merrill ( supra).
I think there was no evidence to support the finding of the Appellate Division and that we must reverse the judgment appealed from. ( Acme Realty Co. v. Schinasi, 215 N.Y. 495; Hall v. O'Brien, 218 N.Y. 50.)
The only evidence to uphold the finding that the trustees designated the Hallock Bank as the depository of the village funds is the letter from the bank to the village trustees of October 20, 1911, offering to pay the latter three per cent upon the moneys in the village hall fund, and the resolution of the trustees accepting the offer. I have quoted both of these papers in full in the foregoing statement of facts.
It seems to me quite clear that the letter and the resolution are utterly insufficient to sustain the determination of the Appellate Division. The law under which the village is incorporated (L. 1895, ch. 785, tit. 4, § 6) provides that "The treasurer shall receive all moneys belonging to the village, and keep an accurate account of all receipts and expenditures, in such manner as the board of trustees shall direct. All moneys shall be drawn from the treasurer, in pursuance of the order of the board of trustees, by warrants signed by the president or presiding officer of the board, and countersigned by the clerk."
There is nothing in this provision of the village charter which directs the treasurer where he shall keep the moneys belonging to the village, and the use of the word treasurer in the last sentence quoted from the statute indicates that the legislature had no intention to give such direction. All the treasurer is required to do by the charter is to keep his accounts accurately and pay the village money on warrants duly issued by the board of trustees. His bond too was for the safe keeping of the village hall funds and for the keeping of accurate accounts.
Assuming that the board of trustees had power to designate a depository of village money and power to require the treasurer to deposit the money according to such designation, they did not exercise that power.
The trustees undoubtedly expected that the treasurer would leave the funds in the Hallock Bank where they would earn the interest specified in the letter, but there was nothing in the resolution that restrained the treasurer from depositing the funds elsewhere. The letter was nothing more than an offer to pay interest, and the resolution was nothing more than an acceptance of the offer. The defendant, the treasurer, was not informed of either of them.
It seems to have been a case in which the bank itself discharged the duties of village treasurer, and one of its tellers or employees was perhaps put forward to hold the office. The course of business in the bank with reference to the village moneys shows that the defendant McBride held his office more or less as a formality, but though that be so, the court cannot exempt him from the responsibility which he thus assumed. The rule of strict liability laid down in Tillinghast v. Merrill ( supra) is a very important one, and it should not be frittered away in seeking to give relief in hard cases.
My conclusion is that the judgment appealed from should be reversed and the judgment of the trial court reinstated, with costs. This conclusion renders it unnecessary to consider the other questions raised by the appellant.
WILLARD BARTLETT, Ch. J., CHASE, COLLIN and CARDOZO, JJ., concur; HOGAN, J., absent.
Judgment reversed, etc.