COUNTIES ‑- EMPLOYEES ‑- BONDS ‑- TERM

COUNTIES ‑- EMPLOYEES ‑- BONDS ‑- TERM

Blanket Bonds for non-elective county employees are not restricted by statute to annual basis.

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                                                                 January 12, 1955

Honorable Joe L. Johnson
Prosecuting Attorney
Cowlitz County
Courthouse
Kelso, Washington                                                                                                                  Cite as:  AGO 55-57 No. 5

Dear Sir:

            You have requested our opinion as to whether or not blanket bonds for nonelective county employees must be purchased on an annual basis only.  You cite and ask that we review opinions given to the Division of Municipal Corporations on October 31, 1940, and to the prosecuting attorney of Benton County on April 2, 1941, which hold that such bonds must be annual.

            In our opinion the answer to your question is "no," and the cited opinions are hereby overruled.

                                                                     ANALYSIS

            The statute authorizing bond coverage for county employees is RCW 36.16.070, which provides in relevant part that:

            "In all cases where the duties of any county office are greater than can be performed by the person elected to fill it, the officer may employ deputies and other necessary employees with the consent of the board of county commissioners.  The board shall fix their compensation and shall require what deputies shall give bond and the amount of bond required from each.  The  [[Orig. Op. Page 2]] sureties on deputies' bonds must be approved by the board and the premium therefor is a county expense.  * * *"  (Emphasis supplied)

            This provision gives the county commissioners discretion in determining the necessity for a bond, and the amount of coverage; noting in this or any other statute prescribes the term of such bonds.  See AGO 51-53 No. 235 [[to J. Chytil, State Representative on April 8, 1954]], a copy of which is attached.  We think it follows that the county commissioners may use their best judgment as to the type and form of bond to be used, within the general limitations indicated by the last-cited opinion.

            The reason given for the contrary result reached in the two opinions you have asked us to review appears from the following paragraph in the opinion of October 31, 1940.

            "Obviously, the purpose is to procure insurance against loss by defalcation by such employees, thus the bond is no doubt in the amount to afford protection from such loss.  Otherwise, the purpose of the law is defeated, and the premiums paid out are unlawfully expended.  The bond is a limited contract, and only the penalty recited in the same may in any event be recovered.  Hence, if a defalcation occurs in the first year in an amount equal to such penalty, and the same be not discovered, the bond affords no protection for the following years.  North St. Louis Bldg. & Loan Assn. v. Obert, 169 Mo. 507, 69 S. W. 1044;Sparks v. Farmers Bank, 3 Del. Ch. 274.  Therefore, where the Bonding Company collects an annual premium on the bond, the sum paid is paid on the same obligation for which the former premiums were paid."

            No statute or other authority is cited in support of the conclusion.

             [[Orig. Op. Page 3]]

            It appears to us that the only question raised by the foregoing reasoning is as to the price for the amount of coverage and the wisdom of any given bonding arrangement as a business proposition.  Our office is of course authorized to render opinions only upon legal matters.  We cannot superimpose our business judgment upon that of the county commissioners.

            We conclude that present statutes do not prohibit the purchase of blanket bonding coverage for non-elective county employees for periods of more than one year.  The opinions to the Division of Municipal Corporations on October 31, 1940 and to the prosecutor of Benton County on April 2, 1941, are accordingly overruled.

            We hope this analysis will prove helpful to you.

Very truly yours,

DON EASTVOLD
Attorney General

A. J. HUTTON, JR.
Assistant Attorney General