The felonious taking and carrying away the public moneys in the
custody of a receiver of public moneys, without any fault or
negligence on his part, does not discharge him and his sureties,
and cannot be set up as a defense to an action on his official
bond.
On 4 March, 1839, Prescott was appointed Receiver of Public
Moneys at Chicago, in Illinois.
On 1 October, 1840, he executed a bond, together with
twenty-seven other persons, who were all defendants in the present
suit, in the penal sum of $150,000, the condition of which was as
follows:
"If the said Eli S. Prescott had truly and faithfully executed
and discharged, and should truly and faithfully continue to execute
and discharge, all the duties of said office according to the laws
of the United States, and moreover had well, truly and faithfully
kept and should well, truly and faithfully keep safely, without
loaning or using, all the public money collected by him or
otherwise at any time placed in his possession and custody till the
same had been or should be ordered by the proper department or
officer of the government to be transferred or paid out, and when
such orders for transfer or payment had been or should be received,
had faithfully and promptly made and should faithfully and promptly
make the same as directed, and had done and should do and perform
all other duties as fiscal agent of the government which have been
or may be imposed by any act of Congress or by any regulation of
the Treasury Department made in conformity to law, and also had
done and performed and should do and perform all acts and duties
required by law or by direction of any of the executive departments
of the government as agent for paying pensions or for making any
other disbursements which either of the heads of those departments
might be required by law to make and which were of a character to
be made by a depositary constituted by an Act of Congress entitled
'An act to provide for the collection, safekeeping, transfer and
disbursements of the public revenue,' approved July 4, 1840,
consistently with the other official duties imposed upon him, then
the said obligation to be void and of none effect, otherwise it
should abide and remain in full force and virtue."
In June, 1843, the United States brought an action of debt upon
this bond against Prescott and all his securities setting forth,
amongst other breaches, that on 15 June, 1842, Prescott was ordered
by the Secretary of the Treasury to transfer the public
Page 44 U. S. 579
moneys to Edward H. Haddock, and that he neglected and refused
so to do.
The defendants filed several pleas. The 3d, 4th and 5th were of
the same character, and it is only necessary to insert one of
them.
"3. And for a further plea in this behalf, the said defendants
say
actio non, because they say that the said Eli S.
Prescott, before the commencement of this suit, did pay to the said
plaintiffs all moneys which came into his hands as receiver of
public moneys excepting the sum of $12,815, and the said defendants
aver that the said Eli S. Prescott tendered to the said plaintiff
the sum of $127 before the commencement of this suit, and the said
defendants aver that whilst the said Eli S. Prescott had said money
in his possession, and before the commencement of this suit, some
person or persons, to said defendants unknown, feloniously did
steal, take, and carry away from the possession of the said Eli S.
Prescott, the sum of $11,688; part and parcel of said money
received by the said Eli S. Prescott, as receiver of public moneys,
although the said Eli S. Prescott used ordinary care and diligence
in the safekeeping of the same, and this they are ready to verify,
wherefore they pray judgment,"
&c.
To these pleas the plaintiffs demurred generally, and the
defendants joined in the demurrer.
And the cause being argued upon the said demurrer before the
court, the opinions of the judges were opposed on this question,
namely does the felonious stealing, taking, and carrying away the
public moneys in the custody of a receiver of public moneys,
without any fault or negligence on his part, discharge him and his
sureties, and is that a good and valid defense to an action on his
official bond?
Upon this question the cause came up.
Page 44 U. S. 587
MR. JUSTICE McLEAN delivered the opinion of the Court.
This action was brought in the Circuit Court for the District of
Illinois on a bond given by Prescott, with the other defendants as
his sureties, for his faithful performance of the duties of
Receiver of Public Moneys at Chicago, in the State of Illinois. The
defense pleaded was that the sum not paid over by the defendant,
Prescott, and for which the action was brought, had been
feloniously stolen, taken, and carried away from his possession by
some person or persons unknown to him, and without any fault or
negligence on his part, and he avers that he used ordinary care and
diligence in keeping said money and preventing it from being
stolen.
To this plea the plaintiffs filed a general demurrer, and on the
argument of the demurrer the opinions of the judges were opposed on
the question whether
"the felonious taking and carrying away the public moneys in the
custody of a receiver of public moneys, without any fault or
negligence in his part, discharged him and his sureties, and may be
set up as a defense to an action on his official bond."
And this point is now before this Court, it having been
certified to us under the act of Congress.
On the part of the defendant it is contended that the defendant,
Prescott, was a depositary for hire and that unless his liability
was enlarged by the special contract to keep safely, he is only
subject to the liabilities imposed by law upon such a depositary;
that the special contract does not enlarge his liability.
This is not a case of bailment, and consequently the law of
bailment does not apply to it. The liability of the defendant
Prescott arises out of his official bond and principles which are
founded upon
Page 44 U. S. 588
public policy. The conditions of the bond are that the said
Prescott has "truly and faithfully executed and discharged, and
shall truly and faithfully continue to execute and discharge, all
the duties of said office" of receiver of public moneys at
Chicago
"according to the laws of the United States, and moreover has
well, truly, and faithfully and shall well, truly, and faithfully
keep safely, without loaning or using, all the public moneys
collected by him or otherwise at any time placed in his possession
and custody till the same had been or should be ordered by the
proper department or officer of the government to be transferred or
paid out, and when such orders for transfer or payment had been or
should be received, had faithfully and promptly made and would
faithfully and promptly make the same as directed"
&c.
The condition of the bond has been broken, as the defendant,
Prescott, failed to pay over the money received by him, when
required to do so, and the question is whether he shall be
exonerated from the condition of his bond on the ground that the
money had been stolen from him?
The objection to this defense is that it is not within the
condition of the bond, and this would seem to be conclusive. The
contract was entered into on his part, and there is no allegation
of failure on the part of the government; how then can Prescott be
discharged from his bond? He knew the extent of his obligation when
he entered into it, and he has realized the fruits of this
obligation by the enjoyment of the office. Shall he be discharged
from liability contrary to his own express undertaking? There is no
principle on which such a defense can be sustained. The obligation
to keep safely the public money is absolute, without any condition,
express or implied, and nothing but the payment of it when required
can discharge the bond.
The case of
Foster v. Essex Bank, 17 Mass. 479, was a
mere naked bailment, and of course does not apply in principle to
this case. The deposit in that case was for the accommodation of
the depositor and without any advantage to the bank, as the court
said,
"which can tend to increase its liability. No control whatever
of the chest, or of the gold contained in it, was left with the
bank or its officers. It would have been a breach of trust to have
opened the chest or to inspect its contents."
Public policy requires that every depositary of the public money
should be held to a strict accountability. Not only that he should
exercise the highest degree of vigilance, but that "he should keep
safely" the moneys which come to his hands. Any relaxation of this
condition would open the door to frauds, which might be practiced
with impunity. A depositary would have nothing more to do than to
lay his plans and arrange his proofs so as to establish his loss
without laches on his part. Let such a principle be applied to our
postmasters, collectors of the customs, receivers of public
Page 44 U. S. 589
moneys, and others who receive more or less of the public funds,
and what losses might not be anticipated by the public? No such
principle has been recognized or admitted as a legal defense. And
it is believed the instances are few, if indeed any can be found,
where any relief has been given in such cases by the interposition
of Congress.
As every depositary receives the office with a full knowledge of
its responsibilities, he cannot, in case of loss, complain of
hardship. He must stand by his bond and meet the hazards which he
voluntarily incurs.
The question certified to us is answered that the defendant
Prescott and his sureties are not discharged from the bond by a
felonious stealing of the money without any fault or negligence on
the part of the depositary, and consequently that no such defense
to the bond can be made.
