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Domestic News
August 29, 1883
The Indianapolis Journal
Indianapolis, Marion County, Indiana
What is this article about?
In Indiana, Attorney General Hord advises Governor that 1859 appropriation for secure vaults is ongoing, no funds for extra guards, and State Treasurer is strictly liable for public money losses per bond, barring act of God or public enemy.
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THE FUNDS OF THE STATE.
An Appropriation Available for the Building of Secure Vaults.
The Public Money Must Be Kept in the State's Safes-The Treasurer's Liability for Its Safety.
Attorney-general Hord yesterday submitted to the Governor an opinion upon the questions which have lately arisen in relation to the laws requiring the Treasurer of State to keep the public funds on deposit in the vaults of the State Treasury.
The Governor's communication, soliciting the Attorney-general's opinion upon the different questions, was as follows.
"The first section of the act of 1859, entitled 'An act to provide a treasury system for the State of Indiana, for the manner of receiving, holding and disbursing the public moneys of the State, and for the safe keeping of public moneys.' provides that 'the room now occupied, or which may hereafter be assigned to or occupied by the Treasurer of State, together with the safes, vaults, and other necessary means for the security and safe-keeping of the public money thereto belonging, shall constitute the treasury of the State of Indiana, and the Treasurer of State shall be required to use the treasury so constituted as the sole place for the deposit and safe keeping of the moneys of the State, except as hereinafter provided, and the Auditor and the Treasurer of State, under the direction of the Governor, are required to provide such additional locks, safes and vaults as may render the public funds absolutely secure against fire and burglars, and appropriation is hereby made of such money as may be necessary to obtain the same.'
Pursuant to the requirement of this act, the Governor not long after its passage procured a safe, and caused a vault to be constructed, in which the safe was placed. It is believed, however, that neither the safe nor vault is wholly burglar-proof, and that to render the public funds placed therein absolutely secure against burglars, it would be necessary to purchase what is popularly called a burglar-proof safe, to construct another vault in which to place the same, and to have a guard, composed of at least three courageous and trusty men, to guard the vault and safe in the night time.
I desire your opinion whether the appropriation made in the section above quoted is continuous, so that it may now be used to purchase a new and better safe, and to construct a vault in which to place said safe for the purpose of securing the public funds against fire and burglars, and whether there is any appropriation of which the Governor or Treasurer might avail himself, for the purpose of employing a competent guard to protect the vault and safe against assaults, which might endanger their safety. I also desire your opinion, whether, if funds kept by the Treasurer in the present safe, or in a new safe procured by the direction of the Governor, for his use, should be stolen from the safe without complicity or fault on the Treasurer's part, the State could successfully maintain a suit on the Treasurer's bond to recover the money stolen. I desire your opinion, likewise, whether, if the Treasurer were to place a part of the public funds on deposit in a bank reputed to be solvent, and believed by him to be so, and such funds were to be lost by the failure of the bank, he and his sureties would be liable on his official bond for the moneys lost.'
Reply of Attorney-General Hord.
In giving his opinion upon the questions asked in the foregoing communication, the Attorney-general says:
I most respectfully submit, first, that, in my opinion, the appropriation made for the purpose of procuring necessary locks, safes and vaults to render the public funds secure against fire and burglary is a continuing appropriation, and is available for said purposes. (R. S. 1881, sec. 5.633.) A continuing appropriation can be lawfully made by the Legislature. (Ristine vs. The State, 20 Ind., 328, 333, 339, Ristine vs. State, 20 Ind., 345, 357: Lange vs. Stover, 19 Ind., 175: 43 Ala., 420; 4 Ind., 189; 37 Cal., 193; 4 Neb., 216)
2. The statute provides for the employment and compensation of a single watchman only for the protection of the public money. There is no appropriation whereby other guards can be employed, or paid for such service.
3. Under the statutes (R. S. 1881, sec. 5,633, 5,636, 5,638) the Treasurer of State is rendered a bailee of the public money. (United States vs. Thomas, 15 Wall., 377; Cumberland County vs. Pennell, 69 Me. 357: York County vs. Watson, 40 Amer. R., 675.677; 41 Amer. R., 322; State vs. Moore, 74 Mo., 413.)
But the liability of the Treasurer is not measured by the rules founded on the doctrine of bailment, but by the stipulations of his bond and the terms of the statute. The Treasurer must give bond, wherein it is provided that he "shall faithfully discharge the duties of his office; that he shall be liable for the fidelity of all persons by him intrusted, and that he will render just and true accounts of the condition of the treasury of State, when required by law, and at the end of his term, or sooner, and at the expiration of his office, he will pay and deliver to his successor, or to such person as may be authorized to receive them, all moneys, securities, assets and property of every kind belonging to the treasury of State, in his hands as Treasurer of State, or in the hands of any of his employees. (R. S. 1881, sec. 5,632.)
The statute further provides: "He shall account for, and pay over all money which may be received by him as such treasurer, and deliver all books, moneys, vouchers, securities and effects of his office to his successor." (R. S. 1881, Sec. 5.647.)
The statute requires all official bonds to be acknowledged by principal and sureties (R. S. 1881, Sec. 5,533), and when so acknowledged the sureties to the official bond, or between the sureties and the State are deemed and taken to be principals, and it is not competent for any surety in such bond to set up as defense to an action brought for a breach of the condition thereof, any matter which would not be available as a defense to the principal in such bond. (R. S., 1881, sec. 5,534.)
THE TREASURER'S RESPONSIBILITY.
The responsibility of the State Treasurer, in the absence of the statute, and the provisions of the bond prescribed by the statute, would be measured by the common law rule, founded on the doctrine of bailment. He would be required virtute officii to exercise good faith and reasonable skill and diligence in the discharge of his duty. And he would not be responsible for any loss occurring without any fault on his part. If, in such case, a more stringent obligation is desirable, it must be prescribed by statute, or be exacted by express stipulation. The Legislature can, undoubtedly, at its pleasure, change the common law rule of responsibility with regard to the public money.
It is the manifest policy of the law to hold all collectors, receivers and depositories of the public money to a very strict accountability. No ordinary excuse can be allowed for the non-production of money committed to their hands. The State Treasurer is a special bailee, subject to special obligations, and the ordinary rule of law as to bailment cannot be invoked to determine the degree of his responsibility. This, by the statute and his bond, is put on a new basis. To the extent of the amount of his official bond, it is fixed by special contract, and the general policy of the law as to general responsibility for the amounts not covered by the bond may be fairly presumed to be the same. The liability of a bonded officer may considered obligation arising, from official duty: and, second of his bond. The first is a duty which the law imposes; the other a duty which he expressly contracts to perform. The first is governed by the principle of the common law, the other by the terms and conditions the bond and himself by an express contract to perform certain acts unconditionally he must be held by the stipulations of the contract, because such is the agreement he has made. The liability of the Treasurer is to be measured by the statute, and his bond, and that binds the Treasurer to pay the money, and there can be no excuse for non-performance, except loss by the act of God or the public enemy. (United States vs. Thomas, 15 Wall., 337; Bayden vs. United States, 13 Wall., 17; Bevan vs. United States, 15 Wall., 57: United States vs. Dashiel, 4 Wall, 182; United States vs, Gibbs, 11 How, U. S. R. 154; United States vs. Prescott, 3 How.. U. S. R., 578; United States vs. Humason, 6 Sawv., U. S. R., 199; Conith vs. Comly, 3 Pa. St., 372: 35 Amer. R., 462: 33 Amer. R., 114; 40 Amer. R., 675; 41 Amer. R., 322; Clay county vs. Simonson, 2 Dakota R., 112; same vs. same. 1 Dakota. 404; United States vs. Watts, 1 New Mex., 553; Holman vs. United States, 11 Ct. of Cl.. 642; State vs. Clarke, 73 N. C., 255; Havens vs. Thalfrem, 75 N. C., 505; State vs. Blair. 76 N. C. 78: New Providence vs. McEackron, 33 N. J. L., 339: 7 Cent L. Jour., 156; Halbert vs The State, 22 Ind., 125; Morbeck vs. The State, 61 Ind. 212: Linville vs. Levinger, 72 Ind., 491; Hart vs. Pittsburg, St. Pa. St., 466; 25 Ark.. 261, 272: Brandt on Suretyship. sec. 472: 8 Cent. L. Jour.. 155.)
A loss by conflagration, not produced by the act of God. would not discharge the principal or sure-
An Appropriation Available for the Building of Secure Vaults.
The Public Money Must Be Kept in the State's Safes-The Treasurer's Liability for Its Safety.
Attorney-general Hord yesterday submitted to the Governor an opinion upon the questions which have lately arisen in relation to the laws requiring the Treasurer of State to keep the public funds on deposit in the vaults of the State Treasury.
The Governor's communication, soliciting the Attorney-general's opinion upon the different questions, was as follows.
"The first section of the act of 1859, entitled 'An act to provide a treasury system for the State of Indiana, for the manner of receiving, holding and disbursing the public moneys of the State, and for the safe keeping of public moneys.' provides that 'the room now occupied, or which may hereafter be assigned to or occupied by the Treasurer of State, together with the safes, vaults, and other necessary means for the security and safe-keeping of the public money thereto belonging, shall constitute the treasury of the State of Indiana, and the Treasurer of State shall be required to use the treasury so constituted as the sole place for the deposit and safe keeping of the moneys of the State, except as hereinafter provided, and the Auditor and the Treasurer of State, under the direction of the Governor, are required to provide such additional locks, safes and vaults as may render the public funds absolutely secure against fire and burglars, and appropriation is hereby made of such money as may be necessary to obtain the same.'
Pursuant to the requirement of this act, the Governor not long after its passage procured a safe, and caused a vault to be constructed, in which the safe was placed. It is believed, however, that neither the safe nor vault is wholly burglar-proof, and that to render the public funds placed therein absolutely secure against burglars, it would be necessary to purchase what is popularly called a burglar-proof safe, to construct another vault in which to place the same, and to have a guard, composed of at least three courageous and trusty men, to guard the vault and safe in the night time.
I desire your opinion whether the appropriation made in the section above quoted is continuous, so that it may now be used to purchase a new and better safe, and to construct a vault in which to place said safe for the purpose of securing the public funds against fire and burglars, and whether there is any appropriation of which the Governor or Treasurer might avail himself, for the purpose of employing a competent guard to protect the vault and safe against assaults, which might endanger their safety. I also desire your opinion, whether, if funds kept by the Treasurer in the present safe, or in a new safe procured by the direction of the Governor, for his use, should be stolen from the safe without complicity or fault on the Treasurer's part, the State could successfully maintain a suit on the Treasurer's bond to recover the money stolen. I desire your opinion, likewise, whether, if the Treasurer were to place a part of the public funds on deposit in a bank reputed to be solvent, and believed by him to be so, and such funds were to be lost by the failure of the bank, he and his sureties would be liable on his official bond for the moneys lost.'
Reply of Attorney-General Hord.
In giving his opinion upon the questions asked in the foregoing communication, the Attorney-general says:
I most respectfully submit, first, that, in my opinion, the appropriation made for the purpose of procuring necessary locks, safes and vaults to render the public funds secure against fire and burglary is a continuing appropriation, and is available for said purposes. (R. S. 1881, sec. 5.633.) A continuing appropriation can be lawfully made by the Legislature. (Ristine vs. The State, 20 Ind., 328, 333, 339, Ristine vs. State, 20 Ind., 345, 357: Lange vs. Stover, 19 Ind., 175: 43 Ala., 420; 4 Ind., 189; 37 Cal., 193; 4 Neb., 216)
2. The statute provides for the employment and compensation of a single watchman only for the protection of the public money. There is no appropriation whereby other guards can be employed, or paid for such service.
3. Under the statutes (R. S. 1881, sec. 5,633, 5,636, 5,638) the Treasurer of State is rendered a bailee of the public money. (United States vs. Thomas, 15 Wall., 377; Cumberland County vs. Pennell, 69 Me. 357: York County vs. Watson, 40 Amer. R., 675.677; 41 Amer. R., 322; State vs. Moore, 74 Mo., 413.)
But the liability of the Treasurer is not measured by the rules founded on the doctrine of bailment, but by the stipulations of his bond and the terms of the statute. The Treasurer must give bond, wherein it is provided that he "shall faithfully discharge the duties of his office; that he shall be liable for the fidelity of all persons by him intrusted, and that he will render just and true accounts of the condition of the treasury of State, when required by law, and at the end of his term, or sooner, and at the expiration of his office, he will pay and deliver to his successor, or to such person as may be authorized to receive them, all moneys, securities, assets and property of every kind belonging to the treasury of State, in his hands as Treasurer of State, or in the hands of any of his employees. (R. S. 1881, sec. 5,632.)
The statute further provides: "He shall account for, and pay over all money which may be received by him as such treasurer, and deliver all books, moneys, vouchers, securities and effects of his office to his successor." (R. S. 1881, Sec. 5.647.)
The statute requires all official bonds to be acknowledged by principal and sureties (R. S. 1881, Sec. 5,533), and when so acknowledged the sureties to the official bond, or between the sureties and the State are deemed and taken to be principals, and it is not competent for any surety in such bond to set up as defense to an action brought for a breach of the condition thereof, any matter which would not be available as a defense to the principal in such bond. (R. S., 1881, sec. 5,534.)
THE TREASURER'S RESPONSIBILITY.
The responsibility of the State Treasurer, in the absence of the statute, and the provisions of the bond prescribed by the statute, would be measured by the common law rule, founded on the doctrine of bailment. He would be required virtute officii to exercise good faith and reasonable skill and diligence in the discharge of his duty. And he would not be responsible for any loss occurring without any fault on his part. If, in such case, a more stringent obligation is desirable, it must be prescribed by statute, or be exacted by express stipulation. The Legislature can, undoubtedly, at its pleasure, change the common law rule of responsibility with regard to the public money.
It is the manifest policy of the law to hold all collectors, receivers and depositories of the public money to a very strict accountability. No ordinary excuse can be allowed for the non-production of money committed to their hands. The State Treasurer is a special bailee, subject to special obligations, and the ordinary rule of law as to bailment cannot be invoked to determine the degree of his responsibility. This, by the statute and his bond, is put on a new basis. To the extent of the amount of his official bond, it is fixed by special contract, and the general policy of the law as to general responsibility for the amounts not covered by the bond may be fairly presumed to be the same. The liability of a bonded officer may considered obligation arising, from official duty: and, second of his bond. The first is a duty which the law imposes; the other a duty which he expressly contracts to perform. The first is governed by the principle of the common law, the other by the terms and conditions the bond and himself by an express contract to perform certain acts unconditionally he must be held by the stipulations of the contract, because such is the agreement he has made. The liability of the Treasurer is to be measured by the statute, and his bond, and that binds the Treasurer to pay the money, and there can be no excuse for non-performance, except loss by the act of God or the public enemy. (United States vs. Thomas, 15 Wall., 337; Bayden vs. United States, 13 Wall., 17; Bevan vs. United States, 15 Wall., 57: United States vs. Dashiel, 4 Wall, 182; United States vs, Gibbs, 11 How, U. S. R. 154; United States vs. Prescott, 3 How.. U. S. R., 578; United States vs. Humason, 6 Sawv., U. S. R., 199; Conith vs. Comly, 3 Pa. St., 372: 35 Amer. R., 462: 33 Amer. R., 114; 40 Amer. R., 675; 41 Amer. R., 322; Clay county vs. Simonson, 2 Dakota R., 112; same vs. same. 1 Dakota. 404; United States vs. Watts, 1 New Mex., 553; Holman vs. United States, 11 Ct. of Cl.. 642; State vs. Clarke, 73 N. C., 255; Havens vs. Thalfrem, 75 N. C., 505; State vs. Blair. 76 N. C. 78: New Providence vs. McEackron, 33 N. J. L., 339: 7 Cent L. Jour., 156; Halbert vs The State, 22 Ind., 125; Morbeck vs. The State, 61 Ind. 212: Linville vs. Levinger, 72 Ind., 491; Hart vs. Pittsburg, St. Pa. St., 466; 25 Ark.. 261, 272: Brandt on Suretyship. sec. 472: 8 Cent. L. Jour.. 155.)
A loss by conflagration, not produced by the act of God. would not discharge the principal or sure-
What sub-type of article is it?
Politics
Economic
What keywords are associated?
Indiana Treasury
Public Funds Security
Treasurer Liability
Attorney General Opinion
State Appropriation
What entities or persons were involved?
Attorney General Hord
Governor
Where did it happen?
Indiana
Domestic News Details
Primary Location
Indiana
Key Persons
Attorney General Hord
Governor
Outcome
the appropriation is continuing and available for secure vaults; no appropriation for additional guards; treasurer liable on bond for lost funds unless act of god or public enemy, even if no fault.
Event Details
Attorney-general Hord opines on 1859 act: appropriation for locks, safes, vaults is continuing; only one watchman can be employed; Treasurer is bailee but strictly accountable per bond and statute, liable for losses not due to act of God or public enemy, including bank failures or thefts without fault.