City of Washington v. Bonner, 203 N.C. 250 (1932)

Oct. 5, 1932 · Supreme Court of North Carolina

203 N.C. 250

CITY OF WASHINGTON v. JOHN H. BONNER, Administrator of F. H. BRYAN, Deceased, and NATIONAL SURETY COMPANY.

(Filed 5 October, 1932.)

Limitation of Actions B a — Ordinarily, cause of action on official bond accrues upon breach of official duties.

Ordinarily tlie statute of limitations begins to run against an official bond from the time of its breach, and where the bond is given for a city sinking fund commissioner who is not reappointed at the expiration of his term, but another is appointed as his successor who refuses to accept certain notes for money lent by the former: Held, upon the termination of the former’s term the law required him to account for funds and securities in his hands and his failure or refusal to do so constituted a breach of his official bond giving rise to a cause of action thereon immediately, the city being under no disability and being at liberty to sue, and an action brought on the official bond more than six years after the principal ceased to be sinking fund commissioner is barred by the six-year statute of limitations. O. S., 439.

Civil action, before Daniels, J., at April Term, 1932, of Beaufort.

Tlie evidence tended to show that chapter 170, section 11 of the Private Laws of 1903 provided for the appointment of a sinking fund commissioner for the city of Washington, and that on 1 April, 1919, E. H. Bryan was duly appointed commissioner of the sinking fund of the plaintiff. On 10 April, 1919, defendant, National Surety Company, executed an indemnity bond on behalf of said Bryan for the faithful performance of bis official duties “for a period of one year, beginning 7 April, 1919, and ending on 7 April, 1920, or until bis successor is duly elected or appointed and qualified.” On 27 March, 1920, tbe defendant, Surety Company, issued a renewal of said bond “for tbe extended term, beginning 17 April, 1920, and'ending on 7 April, 1921, subject to all tbe covenants and conditions of said bond.” On 9 May, 1921, tbe minutes of tbe plaintiff showed tbe following: “Tbe board accepts tbe report of tbe committee on custodian of tbe sinking fund and on loans. Tbe Trust .Company of Washington was duly elected commissioner of tbe said sinking fund to take effect as soon as tbe books are audited.” On tbe next day, to wit, 10 May, 1921, Bryan was duly notified by tbe city clerk “that be was out as sinking fund commissioner and tbe Trust Company was in.” On 31 May, 1921, Bryan loaned as sinking fund commissioner $16,714.19 to tbe Washington-Beaufort Land Company and $2,544 to Stewart, Bryan, Ellison and Boyd. Bryan’s account as sinking fund commissioner was audited on or about 31 May, 1921, and tbe auditor filed bis report 9 June, 1921. On tbe same day tbe financial committee of plaintiff and tbe auditor met with Bryan and an order was made “that tbe said F. LI. Bryan pursuant to tbe audit above referred to turn over to tbe Trust Company of Washington, tbe sinking-fund commissioner heretofore elected, tbe notes, securities and moneys set forth in tbe statement attached to tbe report of W. A. Thayer, as aforesaid,” etc. On 10 June, 1921, tbe Trust Company accepted tbe office of sinking fund commissioner, refusing, however, “to receipt for any notes or securities executed by F. H. Bryan to himself as sinking-fund commissioner, and refusing to become responsible for any of tbe notes or mortgages tendered by F. H. Bryan, sinking fund commissioner, and tbe president was directed to so advise Mr. Bryan, . . . and tbe city of Washington, and lay tbe matter before tbe city of Washington.” On 11 June, Mr. Bryan was advised in writing by tbe Trust Company of Washington that it bad decided “to accept tbe notes and securities tendered except those hereinafter more specifically mentioned,” etc. On 11 June, 1921, tbe minutes of plaintiff show tbe following: “On motion duly made and carried tbe mayor and city attorney are instructed to take up tbe matter of sinking fund with F. H. Bryan . . . and tbe Trust Company of Washington, to make immediate adjustment and close tbe same.”

Bryan died in November, 1929, and on 25 March, 1931, tbe present action was instituted by tbe plaintiff against tbe administrator of said deceased and tbe bondsman, National Surety Company, seeking to recover tbe amount of $16,714.19 representing a loan made by Bryan as sinking fund commissioner to the Beaufort Land Company, and tbe sum of $2,544 representing a loan made by tbe said Bryan to Ellison and others. The National Surety Company, among other allegations pleaded as a defense the six-year statute of limitations. C. S., 439.

At the conclusion of all the evidence a judgment of nonsuit was entered and the plaintiff appealed.

S. M. Blount and Ward & Grimes for ‘plaintiff.

MacLean & Rodman and S. Brown Shepherd for Surety Company.

Brogden, J.

When did the breach of the official bond of Bryan occur ?

Ordinarily the statute of limitations which bars recovery upon an official bond, begins to run from the breach thereof. Our decisions have declared with unbroken uniformity that an official bond for the faithful XDerformance of a public duty is breached at the time the officer fails or refuses to perform the required duty. Commissioners v. MacRae, 89 N. C., 95; Darnel v. Grizzard, 117 N. C., 105, 23 S. E., 93. Generally speaking, the cause of action accrues to an injured party when he is at liberty to sue, being at the time under no disability. Eller v. Church, 121 N. C., 269, 28 S. E., 364; Brown v. Wilson, 174 N. C., 668, 94 S. E., 419; Pierce v. Faison, 183 N. C., 177, 110 S. E., 857; McIntosh, North Carolina Practice & Procedure, page 158, section 170.

When Bryan ceased to be sinking fund commissioner the law imposed upon him the duty to account for funds and securities in his hands. His failure or refusal to do so constituted a breach of his official bond and a cause of action for the enforcement thereof immediately arose to the city, for the reason that it was then at liberty to sue and under no disability. Obviously the breach occurred in 1921, and the action was not instituted until March, 1931. Consequently the trial judge ruled correctly in entering a judgment of nonsuit.

Affirmed.