The Circuit Court of Lincoln County has certified to this Court the questions of law arising upon the overruling of a demurrer filed by one of the defendants in an action of debt pending in that county of the State of West Virginia suing for the use and benefit of the Boone National Bank of Madison against the members of the County Court of Lincoln County, the sureties on their official bonds and another. The facts as shown by the declaration and as necessary to be considered here may be briefly summarized.
The defendant, Jesse Manns, R. Sias and Elza Vickers were Commissioners of the County Court of Lincoln County. The defendant, The Accident and Casualty Insurance *Page 645 Company of Winterthur, Switzerland, was surety on the official bond of Manns; the defendant, Standard Accident Insurance Company, on that of Sias; and the defendant, National Surety Corporation of New York, on that of Vickers. The defendant, J. H. Pelfrey was the payee and assignor of a certain order directed to the Sheriff of Lincoln County for $2250.00, issued by the said county court and now owned by the Boone National Bank of Madison.
On the 7th day of October, 1940, the said county court, with all members present and acting together, approved and allowed the claim of Pelfrey for $2250.00, for which an order on the sheriff of the county was issued on December 2, 1940, signed by Manns, as president of the court, and by the clerk thereof, payable to the order of said Pelfrey "out of general county fund". This order was in purported payment for repairs to the court house of the county made by Pelfrey, pursuant to a contract between him and said county court, entered into on the 7th day of October, 1940. No sum for such repairs was included in the estimate or levy for the year 1940, nor was there at any time any balance from preceding years available for that purpose.
On the 21st day of December, 1940, Pelfrey "by writing his name across the back thereof" assigned the said order to the Boone National Bank of Madison, receiving therefor the face value of the order. Subsequently, the bank presented the order for payment to the Sheriff of Lincoln County, who refused payment thereof on the ground that the order was illegal and void.
It is claimed by the plaintiff that the making of said contract for the repairs to the court house and the issuing of the order in payment thereof constitute a breach of the official duties of the commissioners of the county court and of the conditions of their official bonds, thereby rendering them, and each of them, and the sureties on their respective bonds, liable to the bank, as the holder for value in due course and without notice of any infirmity *Page 646 in said order, for the amount thereof with interest thereon.
The defendant, National Surety Corporation, filed a demurrer to the declaration, assigning eight grounds, which was overruled. The certificate to this Court is in blanket form covering all questions raised or arising upon the demurrer, but only those briefed here will be considered.
The Boone National Bank of Madison is not a "holder in due course" or an innocent purchaser for value without notice of the infirmities of the order in question. That order was not a negotiable instrument, but a mere voucher to the sheriff as treasurer and disbursing officer of the county court.Huddleston v. County Court of McDowell County, 98 W. Va. 706,128 S.E. 925; Shinn v. Board of Education, 39 W. Va. 497,20 S.E. 604; Davis v. County Court of Wayne County, 38 W. Va. 104,18 S.E. 373; Ratliff v. County Court, 33 W. Va. 94,10 S.E. 28. Moreover, this order bore on its face the limitation that it was payable "out of general county fund". An order for the payment of money out of a particular fund is not negotiable. Code, 46-1-3. This order and any other claim which Pelfrey may have had, however, were assignable. Doss v.O'Toole, 80 W. Va. 46, 92 S.E. 139. As assignee of Pelfrey, however, the bank must stand precisely as he stood, subject to be defeated by any fact or law that would have defeated him.
The contract made and the order issued by the county court being obligations in excess of the levy for the current year and all funds available for the discharge thereof were expressly inhibited by statute. "A local fiscal body shall not expend money or incur obligations: * * * (3) In excess of the amount allocated to the fund in the levy order; (4) In excess of the funds available for current expenses." Acts of Legislature, Regular Session 1933, Chapter 38, Article 8, Section 20, as amended by Acts of 1933 Second Extraordinary Session, Chapter 67, Article 8, Section 26. "Any indebtedness created, contract made, or order or draft issued in violation of sections twenty-five and/or twenty-six of this article shall be void." Acts of Legislature, *Page 647 Second Extraordinary Session 1933, Chapter 67, Article 8, Section 27. It is platitudinous to remark that no action can be predicated upon a contract of any kind or in any form which is expressly forbidden by law or otherwise void. Any recovery in this case must be based on something other than this contract and order, or any part thereof.
The bank would find a sufficient basis for its action in the breach of their official duties by the commissioners in making the contract for the repairs, and in issuing the order in purported payment thereof.
Courts have long had to deal with this proposition, and are in substantial agreement in their conclusions. No public officer is liable to one dealing with him for the ill-performance of an official act, if he is legally vested with discretion, or must use his own judgment, as to the manner or method of performing such act. Judicial and legislative officers are, accordingly, ordinarily immune from such liability, and are not even required to give bond. Other officers in performing acts which involve official discretion likewise incur no personal liability in the absence of fraud. This principle is announced in many old cases: Kendall v.Stokes, 3 How. (U.S.) 87, 11 L. Ed. 506; Fausler v. Parsons,6 W. Va. 486; Bevard v. Hoffman, 18 Md. 479;Burton v. Fulton, 49 Pa. 151; Waterville v. Barton, 64 Me. 321;East River Gas-Light Co. v. Donnelly, 93 N.Y. 557. A multitude of subsequent cases do not depart substantially from this principle.
A corollary to this rule is that a public officer is not liable on a contract in excess of his power, in the absence of fraud, a special assumption of liability, or a statute creating specifically such liability. This principle finds frequent expression in text books and encyclopedias. For instance, 46 Corpus Juris, under the head of "Officers" at Section 332, has this statement: "Nor, unless he sustained other relations toward the transaction than those existing by virtue of his official character, will an officer be held liable on a contract made by him in behalf of the governmental *Page 648 body which he represents, because he has acted in excess of his legal authority since, such authority being fixed by law, those who deal with him are bound to know it." And in 2 McQuillan on Municipal Corporations, Second Edition, Section 560, in discussing officials of municipal corporations specifically, this general statement is found: "Ordinarily, however, when an officer or public agent contracts in good faith with parties having knowledge of the extent of his authority or who have equal means of knowledge, especially where the authority of the officer is prescribed by law, he will not become individually responsible unless the intent to incur liability is clearly expressed, although it should be found that, through ignorance of the law, he may have exceeded his authority."
In the case of Coberly v. Gainer, 69 W. Va. 699, 72 S.E. 790, we recognized and followed this rule. That action was for the price of certain books sold to the board of Education in 1904 to be paid for from funds to be levied in 1905. The contract was therefore void. The seller brought action against the members of the board individually. This Court said: "That said contract was made by the board of education in its official capacity, and, notwithstanding it was in excess of authority, the law then in force imposed no individual liability on account thereof"; and, "In the absence of a statute imposing individual liability upon a public officer for attempting to create a public debt in excess of his authority, he cannot be held personally liable therefor, except upon his agreement."
Moreover, Pelfrey participated in the illegal things done by the commissioners. He was chargeable with full knowledge of the illegal contract and order. Doss v. O'Toole, supra. How could one who cooperated with the members of the county court in the doing of an unlawful act, knowing that it was forbidden by statute, be entertained in court to recover losses therefrom from those who acted with him in the making of the unlawful contract? *Page 649
It is true that the case of Coberly v. Gainer, supra, involved no official bond, members of the board of education not being required to give such bond. But an official bond does not create, or increase, a public officer's liability: it merely secures the liability of such officer already existing. The bond of a member of a county court is by statute required to be "conditioned upon the faithful discharge by the principal of the duties of his office or employment, and upon accounting for and paying over, as required by law, all moneys which may come into his possession by virtue of the office or employment." Code, 6-2-3. While the bond executed by this demurrant is not in these precise words, nothing added to or omitted from the bond actually executed makes the obligation either more or less. Hatfield v. Cruise, 120 W. Va. 16,197 S.E. 23; City of Charleston v. Dawson, 85 W. Va. 353,101 S.E. 728; State ex rel. U.S. School Furniture Co. v.McGuire, 46 W. Va. 328;33 S.E. 313. It required no bond to create the duty of the demurrant's principal to discharge faithfully the duties of his office. To this duty all public officers are bound inherently. Their oath of office, whether or not they give bond, so obligates them. Constitution, Article IV, Section 5. The surety on an officer's bond is liable only as the officer is liable. Hence, the principle pronounced in Coberly v.Gainer, supra, is also applicable to an officer giving bond, and to the sureties on such bond; and, since no fraud is pleaded against the members of the court in this case, and no undertaking to perform the contract individually is shown, any liability of the demurring surety must be created by some existing special statutory provision.
Prior to 1908 there was no such statute, but, by Section 9 of Chapter 9 of the Acts of the Legislature of that year is was provided:
"It shall be unlawful for any county court, board of education, or council of a municipal corporation, or other body charged with the administration of the fiscal affairs of any county, *Page 650 school district or independent district, or municipality, to expend any money or to incur any obligation or indebtedness which such tribunal is not expressly authorized by law to expend or to incur. Nor shall any such tribunal make any contract, express or implied, the performance of which, in whole or in part, would involve the expenditure of money in excess of funds legally at the disposal of such tribunal, issue or authorize to be issued any certificate, order or other evidence of indebtedness which cannot be paid out of the levy for the current year or out of the fund against which it is issued. Nor shall any such tribunal attempt to lay any levy the rate whereof shall exceed the rate specified by this act.
"Any member of any such tribunal, or any officer or person, who in violation of any of the provisions of this act shall expend any money, or incur any debt or obligation, or make or participate in the making of any such contract, or be party thereto in any official capacity, or issue or cause to be issued any such certificate, order or other evidence of indebtedness, or lay or cause to be laid any levy or levies, shall be personally liable therefor, both jointly and severally, and an action may be maintained therefor by the state, or by any county, municipal corporation, district or person prejudiced thereby, in any court of competent jurisdiction; and any such member, officer or person shall be guilty of a misdemeanor, and upon conviction thereof, shall be fined not more than five hundred dollars, or be confined in jail not more than one year, or be both fined and imprisoned; and in addition thereto shall forfeit his office. Whenever any court of competent jurisdiction by mandamus, injunction or other judicial proceeding, shall determine that any officer or person has wilfully violated any of the provisions of this section, it shall enter an order declaring the office of such officer or person forfeited."
These provisions of the Code were reenacted by Section 9, Chapter 85 of the Acts of 1915; by Section 12, *Page 651 Chapter 126 in 1919; and by Section 13, Article 8 of Chapter 11 of the Code, 1931. But by Chapter 38 of the Acts of the Legislature, Regular Session, 1933, this statutory provision was so amended as to omit therefrom the provision for liability of members of a fiscal body, and other officials, except for unlawful expenditures of money. This amending act is entitled
"AN ACT to amend sections one to fifteen, inclusive, article eight, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, by substituting therefor, sections one to twenty-six, inclusive, relating to tax levies."
The enacting clause is: "That sections one to fifteen, inclusive, article eight, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, be amended to read as follows:". There can be no question but that this act wholly, displaced the statute in its earlier form.State v. Sine, 91 W. Va. 608, 114 S.E. 150; State v. Vendetta,86 W. Va. 186, 103 S.E. 53; State v. Harden, 62 W. Va. 313,58 S.E. 715, 60 S.E. 394. A further amendment was made by Chapter 67, Acts of the Legislature, Second Extraordinary Session, 1933. Under said last amendment and as the statute now stands, Section 25 requires funds derived from taxes to be expended "only for the purpose for which they were raised". Section 26 forbids the expenditure of money or the incurring of obligations "(3) In excess of the amount allocated to the fund in the levy order; (4) In excess of the funds available for current expenses". Section 27 provides that "Any indebtedness created, contract made, or order or draft issued in violation of sections twenty-five and/or twenty-six of this article shall be void." Section 28 requires that upon the violation of sections 25 or 26 "suit shall be instituted by the prosecuting attorney of the county, or the attorney general of the state, in a court of competent jurisdiction to recover the money expended or to cancel the obligation, or both." Sections 29 and 30 provide that "A person who in his official *Page 652 capacity wilfully participates in the violation of sections twenty-five and/or twenty-six of this article shall be personally liable, jointly and severally, for the amount illegally expended" and may be proceeded against by the "political subdivision concerned, a taxpayer of the subdivision, the state tax commissioner or a person prejudiced", for the recovery thereof.
Thus there was eliminated completely from this statute the provision for personal liability of an officer, who should "incur any debt or obligation, or make or participate in the making of such contract, or be a party thereto in any official capacity, or issue or cause to be issued any such certificate, order or other evidence of indebtedness." There survives no personal liability under this statute except for "illegal expenditure", and in this case there has been no such expenditure.
What consideration led the legislature to eliminate this personal liability of the members of fiscal bodies we cannot, and need not, know. Nevertheless, we cannot but reflect that under the law as it was before this amendment of the statute, one dealing with fiscal bodies or other public officials and knowing, constructively or actually, that his contract was forbidden by statute, could act with impunity, being assured that he could collect thereon either from the public or from the officials individually and from the sureties on their bonds. It was thus made profitable for him to induce the making of such illegal contracts. This could not make for public honesty. As the law now stands the officers who create an illegal indebtedness are liable to fine, imprisonment and removal from office, Acts of Legislature Second Extraordinary Session 1933, Chapter 67, Article 8, Section 31, while their coviolator of the law is left without remedy for any loss which he shall sustain, a situation which does not appear wholly inequitable.
As no fraud is alleged against the defendant commissioners, and as there is no pretense that they expressly or by implication pledged their personal credit to the *Page 653 contractor Pelfrey, we consider that the demurrer of the defendant National Surety Corporation must be sustained. The other grounds of the demurrer thus become immaterial.
The questions whether the declaration shows liability on the part of the defendant Pelfrey under the principle announced inHouston v. Lawhead, 116 W. Va. 652, 182 S.E. 780, and whether there is a misjoinder of parties defendant under the rule laid down in State ex rel. Shenandoah Valley National Bank v. Hiett,123 W. Va. 739, 17 S.E.2d 878, are not raised or decided.
Without further discussion of the other questions which may be considered as arising on said demurrer, the action of the trial court in overruling the same is reversed.
Reversed.