REPORT OF THE COMMITTEE FOR COURTS OF JUSTICE, RELATIVE TO THE RESPONSIBILITY OF THE AUDITOR, SECOND AUDI- The committee for courts of justice have, according to order, had under consideration a resolution to them referred, in which the question is submitted, "whether the auditor of public accounts, the second auditor and the late treasurer, or either of them, are liable as commissioners of the sinking fund, on their several official bonds, by reason of the late embezzlement of State bonds belonging to the fund,” and have adopted the following report and joint resolutions: The committee, in the first place, referred the question submitted, in its legal aspect, to the attorney-general, and requested his opinion thereupon, and in conformity with that request received from him an official report, which is herewith submitted. The attorney-general concludes with the following opinion: "I think the embezzlement in this case too remotely connected with any supposed want of care in the auditor and second auditor in preventing it to be made the subject of legal complaint against them in their offices of commissioners of the sinking fund; but upon the case as it now appears, I think Coleman personally, and Mayo, the late treasurer, on his official bond, are liable for the loss the Commonwealth has sustained;" and the committee concurring in this opinion Resolved by the General Assembly, That there is no liability on the part of the auditor of public accounts or of the second auditor on their official bonds for the loss thus sustained, but that the late treasurer and the clerk of the commissioners of the sinking fund are responsible therefor. Resolved, That the attorney-general be instructed to take proper legal steps to enforce this liability for the benefit of the Commonwealth. OPINION OF THE ATTORNEY-GENERAL. The question submitted is, whether the auditor of public accounts, the second auditor and the late treasurer, or either of them, are liable as commissioners of the sinking fund (virtute officii) on their several official bonds, by reason of the late embezzlewent of State bonds belonging to the fund. These officers went into office the 1st of January, 1872, to continue two years and until their successors should qualify, giving bond with the proper legal condition for the faithful performance of the duties of their office and trust. Their duties as commissioners were prescribed by law before they took office, the act (Code, p. 205, §5, passed in 1865) having defined their duties to be such as were then or may thereafter be prescribed by law, and their duties as commissioners having been prescribed 30th of March, 1871; and the acts out of which their alleged default arose, all occurred in the year 1873; so that, if the default exists, it is covered by the condition of their bonds. The material facts on which the question arises are these: Coleman took certain registered bonds, issued under the funding act and receivable in payment of taxes, which belonged to the sinking fund and were kept in the treasurer's office, to the transfer clerk in the second auditor's office, to be converted in the usual manner into coupon bonds, acting in the matter as secretary of the commissioners of the sinking fund, and siguing the proper receipt on the transfer book as secretary. Having obtained from the transfer clerk the usual warrant for conversion, he carried the conversion out, through the prescribed forms of both offices, the treasurer's and the second auditor's; and the coupon bonds thus obtained, payable to bearer and undistinguishable from other securities of that sort, were signed by the second auditor in the usual routine of the office. A portion of the coupon bonds thus obtained were exchanged by the treasurer with brokers in the city for what are known as "Peelers," and a portion of them were exchanged in the same way by Coleman. The difference in value between the two classes of securities has been estimated at three per cent. in favor of the coupons, and that difference has never been accounted for. As to Coleman's authority to act in the premises, and the liability of the commissioners for his acts: it appears that the present commissioners of the sinking fund, instituted under what is known as the funding act, organized themselves as a board the 2d of August, 1871. A different fund from the former sinking fund was created by the act, different officers, except the first auditor, were designated to control it, and more restricted duties were prescribed for it. All their functions are prescribed in these few lines: "The treasurer, the auditor of public accounts and the second auditor are hereby appointed commissioners of the sinking fund, and shall have (a majority acting) the control and management thereof, and shall annually, or oftener, apply whatever sums may be to the credit of the sinking fund to the purchase and redemption of the bonds issued under this chapter." The duty thus prescribed was simple. The bonds had a long time to run, and none would be redeemable for many years. The whole business to be done was to watch the market and buy up the bonds on the most favorable terms, to the extent of the means at their disposal; and as the market fluctuated, and private sellers |