492 SIms V. CRAIG. [171 • SIMS V . CRAIG. Opinion delivered June 21, 1926. 1. COUNTIES—ACCOUNTING OF PUBLIC FUNDS.—In an action to surcharge and correct the accounting of a county treasurer, where the complaint alleged that errors and fraud therein were not discovered by the use of ordinary diligence until more than two years after settlement with the county court, the chancery court is the proper forum, under Crawford & Moses' Dig., § 10165. 2. CouNTIES—ACCOUNTING OF PUBLIC FUNDS.—U nintentional errors or mistakes in accounting of county officers, resulting in loss to the county, may be corrected within two years after the settlement by the county court, and such errors may likewise be corrected by the chancery court after the expiration of two years and before the expiration of five years from the time of such settlement. 3. LIMITATION OF ACTIONS—ACTIONS NOT SPECIALLY PROVIDED FOR.— After five years from the time of settlement of a county treasurer, a cause' of action to surcharge and falsify his account is barred by Crawford & Moses' Dig., § 6960. 4. COUN TIES—ACCOUNTING OF PUBLIC FUNDS.—A taxpayer's action to surcharge and falsify .the accounts of a county treasurer for the benefit of the county is in effect the same as an action by the county or by the State for the use of the county. LIMITATION OF ACTIONS—ACTION S BY COUNTIES. — The statute of limitations applies to actions by individuals or by the State for the 'benefit of a county to surcharge and falsify the accounts of a county treasurer. 6. LIMITATION OF ACTIONS—TIME OF ACCRUAL.—The right of action of a county to surcharge a settlement of a county treasurer for accident, fraud or mistake accrues upon the approval of the settlement, unless he was guilty of some fraud or concealment in making the settlement. 7. LIMITATION OF ACTIONS—PLEADING IN ANTICIPATION OF DEFEN SE.— Since the law requires that all county warrants be numbered
ARK.] SIMS V. CRAIG. 493 and show the date of issue, name of payee and .amount, allegations, in a complaint to falsify the settlement af a county treasurer, that the treasurer took credit for warrants , previously credited to him do not show that the fraud could not have been discovered by the exercise of diligence nor toll the five-year statute of limitations (CraWford & Moses' Dig., § 6960). Appeal from Prairie _Chancery Court, . NOrthern District ; John E. Martinean, Chancellor ; affirmed. Cobper Thweatt and John D. Thweatt, for appellant. Emmet Vaughant, Trimble ce Trimble, and Gregory Holtzendorf, for appellee. . WOOD, J. This is an action brought in the chancery court of Prairie County by J. F. Sims, a qualified elector and taxpayer of the county, against one. Geo. W. Craig and Lloyd Eddins. The appellant alleged in substance that Craig was elected on November. 7, 1916, to the office of treasurer of Prairie County, and duly qualified and entered upon his duties as such; that he filed a settlement as treasurer of the county with the county court of .Prairie County on July 1, 1918, which- was . passed on by; the county court and approved, and confirmed by such court on September 2, 1918; that said settlement was false and fraudulent in that on October 29, 1917, Craig, -as treasurer, received from the State of Arkansas the sum of $172.78 for the payment of nomination fees which should have been placed to the credit of the general-county fund, bilt which Craig instead appropriated to his oWn that Craig also, as treasurer, had received money from the Farmers' & Merchants' Bank of Des Arc, Arkansas, for interest on county funds deposited therein amounting in the aggregate to $352.97, which amount should have been placed -to the credit of the county general fund, and instead the said Craig, as treasurer, appropriated to his own use ; that Craig paid off certain warrants and took credit for the same by covering a period of time up to and including June 30, 1917, and also took credit for- the same warrants in his .settlement covering a period of tinad. ending June 30, 1918, thereby taking credit twice for the same warrants. These warrants amounted in the
494 Sims V. 'CRAIG. [171 aggregate to $5,776.42 ; that in his final settlement with the county .court, filed on January 1, 1919, covering a period ending December 31, 1918, he showed all the moneys received -and disbursed by him and the amount of money leffin his hands as treasurer' due his successor in office. Thia final settlement was in all things approved and confirmed: . by the county court on October .7, 1919. The complaint alleged that . this final aettlement was false and fraudulent, and a fraud was practiced on the court by including the .former fraudulent settlements, as . alleged, which final settlement resulted in Craig's taking credit to himself . in , the sum of $340.10, which amount . in his hands belonged to the county and should have been creditecL to :the general fund .of 'the county, but which instead was appropriated by Craig to his:own use. SiMs alleged that the fraud perpetrated on the county court Of .Prairie County could not have been .discoveied by the use , , of ordinary diligence, and was not discovered 'until a . short time:prior to the , institution of this , g nit, when an audit of the , treasurer 's books was Made ; that ,theae • settlements with the , county court were had more , than two years prior to the institution of *this' action, and the county , court : therefore did not have jniisdiction tO correct the . errors in the settlement, ancV that relief could only be had in a cOurt of chancery to surcharge and • falsify. the , settlements of the accounts of Ciaig as treasurer with Prairie County. The piayei of the complaint is that the settlements , of the countY colirt With Craig be reviewed for: fraud in the procurement thefeof and .that , the same . be readjUsted, and ,that Sims - haVe judgment for the use and benefit 'of the &minty for the anynints found io be due by Craig, tagether With penalty and costs. The complaint was filed and summons issued Jannary 8; 1925. The answer denied specifically all . allegatiens of the Complaint as to the fraudulent settlements with the_ Connty .court. The defendant admitted that , certain Wariants listed in the complaint were received by hiin and returned as a; credit for a -period of time ending in 1918. He
ARK.] SIMS V. CRAIG. 495 alleged that, if the amount of the warrants was not cor-frectly added, the mistake occurred by failure to list warrants. which he was entitled to credit for, which was an error against which the statute of limitations had run; • that the evidence of suck mistake had been destroyed, . rendering it impossible for the defendant to defend the . charge. The defendant alleged that- all warrants that had been presented to him through the collector' ' s office were paid and filed - with the county clerk, and checked by him, and were then passed to the county judge, and were by him stamped "Redeemed." The warrants were ,Then filed away by the county clerk and were later checked by the commissioners of accounts, and , then rechecked by the , county judge and found to be correct, and-then were burned by the commissioner and the county judge ; that this methed of checking and rechecking the warrants paid by the • defendant, for which he received credit, rendered it impossible for , him to use and receive .credit for the . warrants a second time ; that it was impos-sihle for hirn'to have used the 'warrants a second • time, • because there was no money , in the treasury sufficient to pay them a second time. Defendant alleged that, if fraudulent warrants were presented to and received by him, he'. ieceived them . through mistake, believing them to be genuine, and that the statute of limitation had now run against. such mistake. He pleaded. the statute of limitation g 'against the plaintiff's alleged cause of Action. -The defendant also filed-a separate demurrer to the corn-, plaint -in which he alleged that the complaint on its face showed-that -it was barred by the statute of limitation, in -that the matters and facts set forth as alleged fraudulent • . settlements with the county court occurred five -years before the filing of the complaint herein, and that the • complaint did not allege facts sufficient to thke the cause out of the operation of the statute of limitation; that the alleged fraudulent- acts occurred prior to December 31, 1918, when the defendant filed the statement of his account with the county ;. that the complaint was in the nature of a collateral attack upon the judgment of the
496 SIMS v. CRAIG. [171 county court approving and confirming the statement of the defendant as treasurer of Prairie County, rendered October 7, 1919, and that the remedy of the plaintiff, if any, was by appeal from that judgment to the circuit court. The decree of the trial court recites that the cause was submitted to the court on the complaint of the. plaintiff, ;the answer and demurrer of the defendant, and the separate demurrer of the defendant, and the court sustained each of said demurrers ; that the plaintiff duly excepted to the ruling of the court, and refused to plead further, and stood on his complaint, which . was thereupon dismissed for want of equity, and judgment entered in favor of the defendant for costs, from which is this appeal. 1. It will be observed that more than five years elapsed from the time Of the approval by the county court of the final settlement of the appellee, George W. Craig, with the county court to the institution of this suit on January 8, 1925.- Our statute on the limitation of actions, Ch. 111, C. & M. Digest, after enumerating various actiohs and specifying the time in which same may be brought, and not thereafter, contains this general provision : "Section 6960. All actions not inCluded in the foregoing provisions shall be commenced within five years after the cause of action Shall have acciued." The action under revi'ew comes within the-above provision. It is alleged in the complaint that the alleged errors and fraudulent settlement of appellee Craig were not discovered and could not have been discovered by the use of ordinary diligence until a short time prior to the institution of this action. Therefore the alleged errors and fraud could not have been corrected by the county court itself under the authority of § 10165 Of C. & M. Digest, and the chancery court was the proper forum for the correction of such errors and the granting of the relief prayed for in the appellant's complaint. State v. Turner, 48 Ark. 311, 5 S. W. 302 ; State ;sr. Perkins, 101 Ark. 364, 142 S. W. 515; Fuller v. State, 112 Ark. 91, 164
ARK.] SIMS V. CRAIG. 497 • S. W. 770. S • ee also Johnson County v. Bost, 139 Ark. 35, 213 S. W. 388. -While this court has held that errors caused by fraudulent settlements of officers handling the public revenue may be corrected and relief granted against such settlements after two years have expired from the date of such settlements, we have not held in any case that a suit to correct mere errors in . the settle-menis 'of revenue officers with the county courts, in the absence of fraud perpetrated upon that court, could be brought and maintained after the expiration of the five-year' period of limitation prescribed by § 6960, supra. Unintentional errors or mistakes in accounting resulting in loss- to the county would be a legal fraud upon the county, and all such errors may be corrected within tWo years after the settlement, ' under the provisions of § 10165, supra, by the county court itself, and such errors might likewiSe be corrected by the chancery court after the expiration of the two years and before the expira-- tion of five years from the time of such settlement. But, after the expiration , of five years from the time of such settlement in the county court, the cause of action to surcharge and correct such accounting or settlement in the chancery court is barred. ' Unless the five-year statute of limitation is thus made to apply in the case of officers making settleMents . with the _county court, such - officers could have no repose whatever against any mistakes in their 'accountings_ and settlements, and their bondsmen would likewise have no repose against such mistakes. Sedion 6960, supra, comprehends eyery character of action -not embraced in those before enumerated, and there . is no authority for the courts to make exceptions in the c -ase of officers handling _the public revenue and their bondsmen. Officers and ' their bondsmen are as much entitled to this provision of the statute as any others embraced therein, and the statute is comprehensive of all character of actions except those thereinbef ore specifically enumerated.
498 SIRES V. CRAIG. [171 The action by the appellant is for the benefit of the county, and in legal effect is the same as , an action by the county itself, or by the State for the use of the county. As is said in People v. Van Ness, 76 Cal..121, 18 P. 139, "the statute .of limitations is as applicable to actions like the one at bar, brought by the State as to those brought by private persons, and public officers and their bondsmen cannot be harassed by suits brought after the statUtory period of limitation has expired." In State ex rei. Board of Commissioners of Fountain County v. Stucirt, 91 N. E. 613 (46 Ind. Appeal 611), it is held : "In action'S for the benefit of a county against an officer thereof; the' Statute of limitations applies the same as between individuals." People for the use of Knox CountY v. Davi.§, 157 IlL App. 438; Knox Comity v. Rebstock, 157 Ill. App. 440 ; Board of COmmissioners Woodward County v. Wittett;,152'Pac. 365, L. R. A. 1916E, 92. Our own 'court hag- held that nannicipal corporations 'are bound like individuals by the statute of limitations. See Fart Smith v. McKibbin, 41 Ark. 45 ; El Dorado v. drocery co., 84 Ark. 104, 104 S. W2549; Clark v. School Distrie . t No. 16, 84 Ark. 516, 106 S. W. 677. 2. Since the five-year statute of limitations (§ 6960 supra) is applicable to aetions of this character,The next question is, When did the dauSe of action, if any; accrue? The right of action to surcharge in the chancery conkt for accident, fraud or mistake, settlements "of the 'County t` reasurer with the countY court, accrues Within five years froth the tithe such settlethents are made arid approved by the countY . court. Blackwell V. Fidelity' & Deposit Co., 173 S. W. (Ky.) 321. The complaint alleges that final settlement was filed -with the' county coUrt of Prairie County by Ahe appellee Ctaig as treasurer thereof on JanuarY 1, 1919, and the same was confirmed and approved by such court on October 7, 1919. 'Thus more' than five years had elapsed between 'that time and the institution of this attion on January 8, 1925. 3. So the issue here, in its final analysis, on the demurrer is whether or not the complaint alleges facts
ARK.] SIMS V. CRAIG'. 499 sufficient to toll the statute of limitations. Any error, innocent or intentional, on the part of the treasurer in making the statement : of his accounts and final settlement thereof with the county court, as we have seen, could haVe* been Corrected I by the county court itself within tWO years after • the date of such' settlement.. Section 10165; C: M. Digest: The chancery court, after the two year g' had expired for the county court to•correct tlie settlenient; could have, within the period of five.years frem the date Of the final settlement and approval by the couiaty' cOUrt, sUrcharged and corrected the accoUnts of the treastifer for error caused by inadvertence; accident or miStake: . Thit, after Such five years had expired, an aCtion could not be maintained in equity to' surcharge and correct the settlenient and hold the treasurer liable, unles's he was guilty of some fraud or -concealment in 'inakingthe'settlenient. He could not maintain the action Unless : he' perpetrated A fraud upon the court in ( pro-miring the settlement,- concealed the fraud; and thereby tolled • the statute of lithitations: Now the complaint alleges in substance that; in the settleinent by Craig in June, 1918, he took credit for 61 warrants aggregating $1,333:82, and in: the settlement of 'December 31, 1918, he took credit fOr 53 warrants aggregating a total of $1,442.60, 'or a total credit of 114 warrants aggregating $5;776:42, an'of -Which warrants had been credited to him in the previduS:Settlement of June 30, 1917; that' Craig concealed. the- misappropriation by false 'entries ,in- his bOoks'; that' the fraud was not discovered and could -not have' been-discovered by ordinarY, diligence until a shdrt :time before the .bringing of the suit. The:complaint fur-, ther sets out the number of warrants drawn on the county general fund' of Prairie County, the date of their issue, the name . of the payee and the amount which it is alleged the appellee 'Craig duplicated in making hiS final settlement. It is also alleged that Craig in his 'settlements showed credits for $20,833.77, when it should have-been $20,043.67, thereby showing that' he had taken in excess in the sum of $340.10. While the complaint alleges , in
500 SIMS V. CRAIG. [171 general terms that fraud was covered up and concealed from the county court by false statements and that such fraud could not have been discovered by ordinary diligence on the part of the county court, it does not occur to us that the fads stated are legally sufficient to show that the fraud alleged in the statement of his account as set forth in the complaint could not have been discovered by the exercise of ordinary diligence on the part of the county court. The facts as alleged do not . show that the appellee Craig intentionally made false statements in his accounts and endeavored to conceal the same from the county court. The law requires all warrants presented and paid to be numbered and to show the date of their issue, the name of the payee and . the amount thereof. Therefore if any mistake was made by the treasurer in taking credit twice- for the warrants presented and paid by thim, surely the county court, by the exercise of proper diligence in checking these warrants, could have readily discovered any duplication resulting in an excess credit being.taken-by and given to appellee Craig. In short, it occurs to us that the complaint wholly fails to properly state facts which,. if conceded .to be true, would show that the appellee had intentionally erred in the settlement of his accounts, and had, by false entries and statements in his accounts, perpetrated -a fraud upon the county court in procuring his settlemeht. No fact is stated in the 'complaint which might not have been the result of an honest and unintentional mistake. The facts here alleged do not show any systematic padding of the accounts of the treasurer, and . do not bring this case within the doctrine of Johnson County v. Bost, supra. The facts stated do not show such a confidential relation between the appellee and the county as would constitute the making of a mere mistake in the duplication of credits a fraud upon the county court in procuring an erroneous allowance. The facts alleged do not show any mistake in the statement of appellee's accounts that could not have been readily discovered and remedied by the exercise of rea-sonable diligence by the county
ARK.] 501 --court within two years after the final settlement ; and the facts do not show any mistake that could not have been corrected in the chancery court before the expiration of five years from the date of the settlement. Therefore the allegations of appellant's complaint are not sufficient to toll or defeat the operation of the five-year statute of limitation. The trial court ruled correctly in so holding and in sustaining the appellee's demurrer to the appellant's complaint. The decree is therefore affirmed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.