pointment, to his successor, when appointed and qualified, as herein provided by giving bond. The penalty of said bond shall be increased from time to time, as the increase of the amount of notes, bonds, mortgages and effects may require, and whenever, in the judgment of the trustees or county superintendent, the security is insufficient. Any and every township treasurer appointed subsequent to the first, as herein provided, shall execute bond with security, as is required of the first treasurer. The bond required in this section shall be in the following form, viz:

Know all men by these presents, that we, A. B,, C. D. and E. F., are held and firmly bound, jointly and severally, unto the board of trustees of township..... range.. ......9 in said county, in the penal sum of.... dollars for the payment of which we bind ourselves, our heirs, executors and administrators firmly by these presents.

In witness whereof we have hereunto set our hands and seals this.. day of.........., A. D., 19.... The condition of the above obligation is such that if the above bounden A. B., township treasurer of township..

range.

in the county aforesaid, shall faithfully discharge the duties of said office, according to the laws which now are or may hereafter be in force, and shall deliver to his successor in office, after such successor shall have fully qualified by giving bond as provided by law, all moneys, books, papers, securities and property which shall come into his hands or control, as such township treasurer, from the date of this bond up to the time that his successor shall have duly qualified as township treasurer, by giving such bond as shall be required by law, then this obligation to be void; otherwise to remain in full force and virtue.

1. It is not essential to the validity of the bond that it should be literally in compliance with the statute. The statute is directory, and if the bond is substantially as required, there is no valid objection. Trustees of Schools v. Rodgers, 7A-33.

2. The township treasurer is appointed by the board of trustees of schools. The statute does not require such treasurer to take an oath of office. School Directors v. The People, 79–511.

3. The township treasurer is the only lawful depository and custodian of of all district school funds, and they are to be paid out only on the order of the school directors drawn on the township treasurer. The township treasurer is, therefore, the proper officer to make demand for such school funds of any one holding the same unlawfully. School Directors v. The People, 79-511. 4. A township treasurer, by virtue of the statute, is an insurer of the funds coming into his possession, and, to exonerate himself upon his bond, he must show that he has paid out or disposed of the funds in his hands in pursuance of law, or that he has been prevented from so doing by the act of God or the public enemy. Thompson v. Trustees of Schools, 30-99; Trustees of Schools v. Smith, 88-181; Swift v. Trustees of Schools, 189-584; Humiston v. Trustees of Schools, 7A-122; Scheik v. Trustees of Schools, 24A-369.

5. When a defaulting treasurer misappropriates funds that come to him in his official capacity during his term of office, his securities for a succeeding term of office are under no legal obligation to make good such defalcation. The obligation for such defalcation rests upon the sureties for the terms in which the misappropriations severally occurred. Potter v. Board of Trustees, 11A-280.

6. If an officer succeeds himself, the second bond is liable for what he had in his hands at the end of his first term. The accidental circumstance that

he succeeds himself does not extend the obligation of the first bond. He is presumed to have the money on hand when the second bond is executed. The obligation of a bond itself is satisfied by payment to successor and faithful performance of the duties of the office. Trustees of Schools v. Arnold,

58A-103.

7. Where a treasurer is appointed at the expiration of the term of his predecessor, or is reappointed, his own time having expired, and the bond executed is in form as required by the statute, his sureties are liable for his official acts and doings, for the full term of the bond, notwithstanding any representations the principal may have made to such sureties, as to the term or purpose of such instrument. Ladd v. Board of Trustees, 80-233.

8. When a township treasurer makes entries in his books, or in a report which the law requires him to make, both he and the sureties on his bond are estopped to deny the correctness of such entries, in a suit on the official bond of such officer. Longan v. Taylor, 130–412.

9. The law is well settled by numerous decisions of the Supreme Court of this State that where the identity of a trust fund is lost by reason ofi ts having been mingled with other funds, that as against general creditors, the owners of the fund have no priority. School Trustees v. Kirwin, 25-73; Zerwick v. Weir, 81A-181.

10. The duties of school directors are derived exclusively from the statute, are specifically defined, and if they exercise powers and functions not conferred upon them, the statute has made them responsible for all losses that may ensue. They may borrow money for enumerated purposes, on terms prescribed, and, when obtained, it is their duty to pay it over to the treasurer, who is the only proper custodian. Should they place it in the hands of any one else, it is at their own risk. Adams v. State of Illinois, 82–132.

11. A person who acts as township treasurer for a number of years, thereby sanctioning the acts and doings of the board of trustees, and afterwards contracts to sell a lot for a school house site, knowing that the title would go to the trustees, is estopped from denying the legality of the election of the school trustees. Frick v. Trustees of Schools, 99–167.

12. One accepting the office of township treasurer takes upon himself the duty of safely keeping the moneys of the township which come into his hands, and of disbursing them pursuant to law, and he and his sureties cannot be excused from making good a deficiency resulting from the failure of the bank where the funds were deposited, although he supposed the bank to be solvent. Swift v. Trustees of Schools, 189-584; Swift v. Trustees of Schools, 91A-221, affirmed.

13. The fact that the officer fails to obtain service on the township treasurer, does not affect either the quantum or character of proofs necessary to make out a case against the sureties. Whether the principal was or was not before the court, the procedure and rules of evidence as to the sureties would be the same. Whatever would show a breach of the condition of the bond by the principal, would, in either case, establish the liabilities of the sureties thereon. Cassady v. Trustees of Schools, 105–560.

14. Where a treasurer is elected by the board of education of a district existing by virtue of a special charter, and a bond is executed by the treasurerelect and delivered to the clerk of said board for approval, it becomes obligatory unless subsequently disapproved. It is also held that if the clerk is not satisfied with the sureties, he should disapprove the bond, so that the officer may find other sureties. If this is not done the bond becomes obligatory to secure the rights of the public, and the bond is binding on such parties from the moment it is delivered to the clerk. Bartlett v. Board of Education, 59-364.

§ 2. Every township treasurer shall provide himself with two well bound books, one to be called a cash book, the other a loan book. He shall charge himself in the cash book with all moneys received, stating the charge, when, from whom, and on what account received, and credit himself with all moneys paid or loaned, stating the amount

loaned, the date of the loan, the rate of interest, the time when payable, the name of the securities; or, if real estate to be taken, a description of it.

He shall also enter, in separate accounts, moneys received and moneys paid out, charging the first to debit account, and crediting First-The principal of the township fund, when paid in and when paid out.

Second-The interest of the township fund, when received and when paid out.

Third-The common school fund and other funds, when received from the county superintendent and when paid out.

Fourth-The taxes received from the county or town collector, for what district received, and when and what purpose paid out. Fifth-Donations received.

Sixth-Moneys coming from all other sources; and in all cases entering the date when received, and when paid out. And he shall also arrange and keep his books and accounts in such other manner as may be directed by the State or county superintendent or the board of trustees. He shall also provide a book to be called a journal, in which he shall record, fully and at length, the acts and proceedings of the board, their orders, by-laws and resolutions. And he shall also provide a book, to be called a record, in which he shall enter a brief description of all notes or bonds belonging to the township, and upon the opposite page he shall note down when paid, or any remarks to show where or in what condition it is, as in the following form, viz:

All the books and accounts of the treasurer shall at all times be subject to inspection of the trustees, directors or other persons authorized by this act, or by any committee appointed by the voters of the township, at the annual election of trustees, to examine the same.

1. A township treasurer should keep his books so as to show the exact condition of his accounts, and he has no right, in case of his defalcation, to require the township trustees to ascertain the amount due, and insist that they be bound by the amount they agreed to accept, in the belief that it was correct, but which was afterward found to be too small, owing to misrepresentations by the treasurer as to certain credits claimed by him and allowed by the expert employed by the parties interested, including the trustees, on the faith of such representations. Whitlow v. Trustees of Schools, 191-457; Whitlow v. Trustees of Schools, 93A-664, affirmed.

§ 3. Township treasurers shall lend, upon the following conditions, all moneys that shall come into their hands by virtue of their office, except such as may be subject to distribution. The rate of interest shall not be less than four per centum, nor more than seven per centum, per annum, payable annually, the rate of interest to be determined by a majority of the township trustees at any regular or special meeting of the board. No loan shall be made for less than

one year nor more than five years. All loans shall be secured by mortgage on unincumbered realty situated in this State, worth at least fifty per centum more than the amount loaned, with a condition, that in case additional security shall be required at any time, the same shall be given to the satisfaction of the board of trustees: Provided, however, that nothing herein shall prevent the lending of township funds to boards of school directors, taking bonds therefor, as provided in section one, article nine of this act. (As amended by an act approved May 12, 1905.)

1. The Legislature may, from time to time, direct in what manner the school funds shall be loaned, upon what security, at what rate of interest, and by whom they shall be applied. Bush v. Shipman, 5-186; Keyes v. Jasper, 5-305.

2. The duty of township treasurers as to the kind and amount of security to be by them taken upon the loan of money in their hands, is clearly defined by this section. Board of Trustees v. Baker, 24A-231; Board of Trustees v. Baker, 34A-620.

3. The school fund, while in the hands of the township treasurer, is a public trust fund, and as long as he holds the money it remains a trust fund, but when he pays it out to a board of directors, on its orders, it is not a trust fund in the treasurer's hands which would exclude the operation of the statute of limitations. School Directors v. School Directors, 105-653.

4. Where a township treasurer lent a larger sum than that prescribed by this section before the amendment of 1905, and took a promissory note therefor, it was held that such excess did not render the note void. The obvious intent of the statute is to protect the school funds and the interest of the public therein. It must, therefore, be construed with that intent in view. Edwards v. Trustees of Schools, 30A-528.

5. Where money belonging to one district is paid to another, the school directors of the latter can not refuse to receive the money thus ordered by the trustees to be paid to them; by receiving it, they do not become liable to an action by another district claiming it. If the district to which the money should have been paid has any action, it must be against the trustees of the township. School Directors v. School Directors, 36-140; School Directors v. School Directors, 105-653.

6. The treasurer is appointed by the board of trustees, and it is made his duty to lend school moneys, to collect, to safely keep funds, and discharge other duties prescribed by the statute. While an officer appointed by the board of trustees, his duties are prescribed by the statute and no power can authorize him to neglect or violate those duties. There is a certain supervisory control exercised by the board of trustees in pursuance of the statute. The treasurer must account semi-annually to the trustees, and lay before them all books, notes, bonds, mortgages and all other evidences of indebtedness belonging to the township. Trustees of Schools v. Southard, 31A-359.

7. If at the time a loan is made the treasurer acts in good faith, and with due caution and circumspection, and acting on his own judgment believes that the mortgaged premises are worth fifty per centum more than the loan, he will not be liable. This rule and doctrine finds support in decisions of the supreme court, in cases similar to this, wherein the duties of officers in taking security is fully explained and defined, and also the acts and omissions of the officer with respect thereto, which create liability upon his official bond. Board of Trustees v. Baker, 34A-620.

8. The provision of the statute fixing the amount of the security is complied with by the officer lending the money, if, acting on his own judgment and information, and in good faith, he lends the money, believing at the time, the land mortgaged is worth fifty per centum more than the amount of the loan. But the condition is added, that he must act with due caution and

circumspection and must avail himself of sources of information accessible to him to aid in arriving at a correct estimate of the value of the land offered as security. Ibid.

9. It is the duty of the township treasurer under this section, when he lends money, to secure the loan by a mortgage on real estate, which at a fair and reasonable cash value, is worth fifty per centum more than the amount loaned and he must resort to all accessible means of information to satisfy himself that the title to the land is in the mortgagor and is unincumbered. The title must be such that a prudent and careful man would not hesitate to invest his money in it. If the treasurer neglects to do this, then the loan is not authorized by law, and he is, in legal contemplation, guilty of violating official duty. If he violated the law in lending the money, and thus incurs liability, it is for the illegal loan, and necessarily the liability accrues as soon as the illegal act is done. People v. Haines, 10-528.

§ 4. Notes, bonds, mortgages and other securities taken for money or other property due, or to become due, to the board of trustees for the township, shall be payable to the said board by their corporate name; and in such name, suits, actions, and complaints, and every description of legal proceedings may be had for the recovery of money, the breach of contracts and for every legal liability which may at any time arise or exist, or upon which a right of action shall accrue to the use of such corporation; Provided, however, that notes, bonds, mortgages and other securities in which the name of the county superintendent, or the trustees of schools are inserted, shall be valid to all intents and purposes, and suit shall be brought in the name of the board of trustees as aforesaid. The wife of the mortgagor (if he is married) shall join in the mortgage given to secure the payment of money loaned by virtue of the provisions of this act.

§ 5. Whenever there is a surplus of funds in the treasurer's hands belonging to any school district, the treasurer may loan the same for the use and benefit of such district, upon the written request of the directors of said district and not otherwise; and all such loans shall be on the same conditions as are prescribed in this article for the loaning of township funds.

1. The statute clearly and explicitly imposes upon the treasurer the duty of making loans of such funds, upon request of the directors, and commands him to take a certain kind and amount of security. He cannot relieve himself of liability for a neglect of that duty by following the directions of a body of officers having no authority to give such directions. Board of Directors v. Baker, 24A-231.

§ 6. The township treasurer shall, on or before the 30th day of June, annually, prepare and deliver to the county superintendent of his county, a statement, verified by his affidavit, showing the exact condition of the township funds. Said statement shall contain a description of the securities, bonds, mortgages and notes belonging to the township, giving names of securities, dates, amounts of loans, rate of interest, when due, and all data by which a full understanding of the condition of the funds may be obtained. The county superintendent shall preserve such statement for the use of the township.

§ 7. Mortgages to secure the payment of money loaned under the provisions of this act, may be in the following form, viz:

...and State of....

.do

I, A. B., of the county of..... hereby grant, convey and transfer to the trustees of schools of township.....