paid to him is one of his official duties. Acts Ala. 1888-89, p. 1050, § 4.

Having this power to receive and receipt for the funds arising. from the sale of the bonds, he executed a receipt for $111,109.58, proceeds of sale of bonds. Admit, for the purposes of the argument, that the contention here is true, that he received no money but received only a "worthless check," and that there can be no breach of the bond for the failure to safely keep the money, would it not be a breach of the treasurer's bond for him to execute the receipt alleging that he had received the money, when in fact he had not received it? We have seen that he is charged with the duty of both receiving. and keeping the money. In Alabama, by express statute, the officer's bond stands as an indemnity against "the improper or neglectful performance of those duties imposed by law." Code Ala. 1896, § 3087. This statute, before the adoption of the present Code, to which it was transferred, was construed to extend the liability of sureties on official bonds beyond that imposed by the common law. Rev. Code Ala. § 169; Kelly v. Moore, 51 Ala. 364. One of the objects of the statute was to extend the remedy beyond those cases in which a wrong is done in the discharge of the legitimate duties of the office, to those in which a wrong is done under color of office. Mason v. Crabtree, 71 Ala. 479. To receive a "worthless check" as money, receipting for it as money and charging the amount as cash upon his official accounts under such circumstances as to cause a loss to the county, would be, we think, to say the least of it, an improper and neglectful performance of duties imposed by law. And, aside from the statutes, at common law it is an error to suppose that the agreement to perform the duties of the office faithfully means merely that the incumbent will not willfully do any wrong act. It has a stretch beyond this, and is broken by a neglect or by carelessness in the discharge of official duty as well as by an intentional misfeasance. Mayor v. Evans, 31 N. J. Law, 342.

In U. S. v. Girault, 11 How. 22, 13 L. Ed. 587, an action was brought on the official bond of Girault, a receiver of public money. The condition of the bond was that Girault should faithfully execute and discharge the duties of his office as receiver of public moneys. The breach of the bond assigned was that Girault had received a large amount of the public money, which he had neglected and refused to pay to the government. The sureties pleaded that Girault gave receipts as receiver for money to the amount of $10,000, when in fact no money was paid to or received by him, and that this was the same money mentioned in the declaration. After disposing of the question raised by demurrer to the plea, the court added:

"The principle, however, upon which these pleas are founded, is as indefensible as the rule of pleading adopted for the purpose of setting it up. The condition of the bond is that Girault shall faithfully execute and discharge the duties of his office as a receiver of public moneys. The defendants have bound themselves for the fulfillment of these duties, and are, of course, responsible for the very fraud committed upon the government by that officer which is sought to be set up here in bar of the action on the bond. As Girault would not be allowed to set up his own fraud for the purpose of disproving the evidence of his indebtedness, we do not see but that, upon the

same principle, they should be estopped from setting it up as committed by one for whose fidelity they have become responsible."

This case, we think, shows that the execution of the receipts by Girault when he had not received the money was a breach of his duty to faithfully execute and discharge the duties of his office as a receiver of public moneys. If Girault was not liable for the money because he had not received it, he was liable for executing the receipts to the loss of the government in the amount thereof when in fact he had received no money.

In Alston v. The State, 92 Ála. 124, 9 South. 732, 13 L. R. A. 659, the court dealt with a case in many respects like this one. It was an action by the state of Alabama on the official bond of the probate judge. The suit was for money alleged to have been collected by the judge, who had received from one Morris his draft or check for the sum of $250 as state license tax for retail dealer. The draft was on the John McNab Bank, of the city of Eufaula, and on January 20 the judge deposited the draft in that bank, and the same was placed to the "credit of A. H. Alston, Judge of Probate, License Money." The bank was of good repute, and had the confidence of the public. On March 31st the bank made an assignment, and was closed. Alston demanded the money of the bank, but never received it. There was no law which authorized the probate judge to issue a license for a "worthless check." The facts showed that he never received any money. It does not appear that he ever saw or touched any money in reference to the transaction. He only received the check on a bank which turned out to be insolvent, and had the same placed to his credit, as stated. The trial court instructed the jury to find a verdict for the plaintiff for the amount of the check, and the Alabama Supreme Court affirmed the decision. Alston was in no better position from having received a bad check than he would have been if he had received the money. The court held that the deposit of the check under the circumstances was merely a general deposit, and that the probate judge had no right to make such deposit of the state's funds. The result was that he was held liable just as if he had received the $250 in cash and deposited it in the bank. Alston, having accepted payment of the license money by the check of the licensee, and having had the same placed to his credit, it does not seem to have occurred to the court that the check could be treated otherwise than as money in a suit on Alston's bond. It is admitted that this case would be in point if it were the treasurer's duty to collect. "It is clear," the learned counsel admit, "that, if an officer is bound to collect as well as safely keep, he violates the duty of collecting in taking a check which is not afterwards realized." But it is urged the case has no application, because the treasurer's only duty was to safely keep the fund when paid to him. Alston, the probate judge, was not a collector in the sense that he was required to take active affirmative steps to collect. No statute required him to search for the licensee. The person intending to retail liquors applies to the probate judge for the license, and it is his duty to issue it only when the amount prescribed by the statute is paid to him. He is a collector only in the sense that he is to receive the money. A simi

lar duty, as we have shown, is imposed upon the treasurer as to the proceeds of the sale of the bonds. It is his duty to receive such proceeds. The official bonds of the probate judge and county treasurer have the same conditions, and the same statute is applicable to increase their common-law liability.

If the treasurer had received, instead of the check, bank bills, and had deposited them to his credit, as he did the check, and had charged himself with the sum on his account as treasurer, causing the county the same loss as in this case, could he or his sureties, when called on for settlement, plead that the bills received and receipted for were in fact counterfeit, that the treasurer placed them to his credit in bank, and that the bank had become insolvent? The same argument could be made that is made here, that the statute made his sureties responsible only for the safe-keeping of money, and that he had received no money. The counterfeit bills would be of less value than the check in question. Would such contention constitute a defense to be submitted to a jury? We think not; because, if the bills were genuine, the treasurer, having received and converted them, would be liable on his bond for the amount; if they were not genuine bills, he would be liable for a neglectful or improper performance of official duty in receiving them as genuine. In either case, there would be a plain breach of the bond.

Public policy requires that every officer charged with the duty of receiving and keeping public money should be held to a strict accountability. He should be required to exercise the highest degree of vigilance. When loss has fallen on the public through his official acts, he should not be permitted to avoid responsibility by averments of the improper or neglectful performance of duties imposed on him by law. To permit such defenses would open the door to frauds which might be practiced with impunity. The treasurer or other depositary could lay his plans and arrange his proofs to make good the defense of his sureties by impeaching his own official acts. His own neglect or fraud would become their defense. The condition of the treasurer's bond and considerations of public policy both forbid such defense. Murfree on Official Bonds, § 694. The Supreme Court has held that a custodian of public money could not defend on the ground that the money was stolen (U. S. v. Prescott, 3 How. 578, 11 L. Ed. 734); nor that he had been robbed of it (Boyden v. U. S., 13 Wall. 17, 20 L. Ed. 527); nor that the notes had been accidentally destroyed by fire (Smythe v. U. S. [decided Jan. 26, 1903] 23 Sup. Ct. 279, 47 L. Ed. —). In the last case the sureties on the bond of the custodian of the money were held for the face value of the burnt notes, although they were merely the government's promises to pay. This harsh conclusion was reached by a divided court, but is upheld by reason and a sound public policy, for a different conclusion would unduly encourage such fires.

It is true that the obligation of the surety is subject to the strictest interpretation, and that his liability must be found within the terms of his contract; but where the bond is for the faithful discharge of official duty, and stands as indemnity against its improper or neglectful performance, and a loss occurs by failure to discharge

such duty, or from a wrongful act done by virtue and authority of the office, such failure and such act are within the very reason and purpose of the law requiring official bonds.

When the board by its clerk declined to receive the check, it was withdrawn, and later the treasurer's receipt for the price of the bonds was presented. It was then that the bonds were delivered.

It is contended that the clerk of the board knew that the treasurer had received only the check. That does not change the result. If the execution of the receipt for the check as for cash and the use of it as proved was a breach of the treasurer's bond, the fact that the board or its clerk was also guilty of negligence or of some breach of duty would not afford a defense to the treasurer. The county entered into no contract with the treasurer that its officers would perform their duty, and it is not bound by their neglect. Hart v. U. S., 95 U. S. 316, 24 L. Ed. 479; Jackson Co. v. Derrick, 117 Ala. 348, 23 South. 193. If the treasurer and the clerk wrongfully combined to do just what was done, knowing the ultimate result of loss to the county, such acts would not be the less a breach of the bond of the former. The culpability of one of the plaintiff's agents or officers could not excuse or justify the improper or neglectful performance of duty by another.

The rulings of the Circuit Court are in conflict with the views we have expressed. The judgment, therefore, must be reversed, and the cause remanded, with instructions to grant a new trial.

HOWARD et al. v. DELGADO & CO.

(Circuit Court of Appeals, Fifth Circuit. March 10, 1903.)

No. 1,188.

1. EQUITABLE LIENS-ADVANCES TO BE REPAID BY SHIPMENTS-INSOLVENCY OF BORROWER BEFORE SHIPMENT.

Interveners made advances to defendant corporation, which was operating a central sugar refinery and a number of plantations, to enable it to carry on its business through the season, under a written contract by which the company agreed to ship all sugar products made at its refinery to interveners, who were to apply the proceeds in payment of the advances. Such advances, however, largely exceeded the amount called for by the contract. What sugar was shipped from the refinery was shipped to interveners, but, owing to a scarcity of cars, it accumulated in the refinery, and a quantity remained there at the time of the appointment of a receiver for the company. Held, that interveners were entitled to an equitable lien upon the sugar so remaining in the hands of the receiver, as against general creditors, under the maxim that equity regards that as done which ought to be done.

2. SAME-EXCLUSION BY STATUTORY LIENS-LAW OF LOUISIANA.

The law of Louisiana, although it makes no provision for liens aside from contractual privileges and mortgages, does not preclude the allowance and enforcement of an equitable lien by a federal court.

Appeal from the Circuit Court of the United States for the Eastern District of Louisiana.

Edward Rightor, for appellants.

John Clegg and Lamar C. Quintero, for appellees.

Before MCCORMICK and SHELBY, Circuit Judges, and NEWMAN, District Judge.

NEWMAN, District Judge. On the 18th day of January, 1902, the Caffery Central Sugar Refinery & Railroad Company was placed in the hands of a receiver on petition of a bondholder, without opposition on the part of the defendant company. The company had operated at Franklin, La., in the sugar country, in the parish of St. Mary, what is known in Louisiana as a "Central Refinery." business consisted of buying sugar cane from the outlying plantations, and manufacturing it into sugar and molasses. It also appears to have operated three plantations-the Peoples, Foster, and Starling places. After the receiver had taken charge of the property, the appellees, Delgado & Co., filed their intervening petition in the cause, which intervening petition was as follows:

"The petition of intervention of Samuel Delgado and Isaac Delgado, and the commercial copartnership composed of the aforesaid persons, all residents of the city of New Orleans, state of Louisiana, with respect shows: That the Caffery Central Sugar Refinery and Railroad Company, Limited, is justly indebted to them in the sum of ninety-eight thousand four hundred and sixty ($98,460.15) dollars and fifteen cents, for this, to wit: That during the year 1901, and for the purpose of enabling the aforesaid defendants to make its crops and to manufacture the same into sugar and molasses. your petitioners, interveners, advanced and paid them large sums of money, which sums are entitled to a credit for the proceeds of certain sugars sold; that there is now due your petitioners for advances made as aforesaid, after deducting the credits that ought to be allowed, the sum of ninety-eight thousand four hundred and sixty and 15/100 dollars, all of which more fully appears by the annexed detailed statement of account, which is made a part hereof, and is marked 'Exhibit A.' Your petitioners show that this sum and these advances thus made were made upon the special lien and privilege granted to your petitioners by agreement and contract made on the 13th day of February, 1901, in the city of New Orleans, by and between your petitioners and the said defendant company, wherein the aforesaid company agreed and stipulated for the advances to be made, the rate of interest being six per cent. from the dates of payments of drafts drawn by the president of the said defendant company, and stipulating further that, in order to secure your petitioners for the advances made, the said defendant company agreed and bound itself to ship all sugars produced by it, or produced under its direction, to your petitioners, and did specially pledge the said crops and sugars to your petitioners, granting them special lien and privilege upon all sugars, syrups, and molasses produced by said defendant company. Your petitioners show that they have a lien and privilege granted them by law as furnishers of supplies, and by virtue of the provisions of article 3217 of the Revised Civil Code of Louisiana. Petitioners further show that they have a lien and privilege granted them by law arising by virtue of their performance of their agreement made on the 13th day of February, 1901, as hereinbefore set out, which agreement is hereto annexed and made a part hereof, and marked 'Exhibit B.' Your petitioners show that during the year 1901 the defendant, with and by means of the aforesaid advances made, grew certain crops of sugar cane in the parishes of St. Mary and Iberia, state of Louisiana, on its own account; and that the said defendant company loaned and advanced to its tenants and to other cane growers sums of money advanced to it by petitioners, in order that these persons might be able to cultivate and harvest the crops of cane, and to grind and manufacture the same into sugar and molasses at the mill and factory of the defendant company. Your petitioners further show that they are entitled to a special lien and privilege on the crops of sugars, syrups, and molasses and the proceeds thereof, and are entitled to be paid by preference