by the decedent, Norman S. Byram, as treasurer of the plaintiff association at its special instance and request, in the sum of $5,000. The second was for money had and received from the decedent Byram at the special instance and request of plaintiff in the sum of $5,000. The third paragraph counted upon a check for $5,000, drawn by Byram, as the treasurer of plaintiff, on June 5, 1894, upon the funds of appellee association in his hands as such treasurer, to the order of one Charles Schurmann, the secretary of appellee, and that the amount of said check was received by said Schurmann, as secretary and agent of the plaintiff, for its use and benefit, and was so applied and used, and that the defendant never had any credit therefor. The fourth and fifth paragraphs are similar. The latter is based upon the alleged fact that one Charles Schurmann was secretary of appellee association, and, as such, was authorized to receive and disburse its moneys; that on June 5, 1894, the decedent, Byram, then treasurer of the plaintiff's association, was in ill health and about to make an extended journey of uncertain duration for the benefit of his health. It is alleged that in order to place the funds of the association then in his hands as said treasurer in such a shape that they might be available in carrying on the business of the association in his absence, on the said 5th day of June, 1894, he did execute or draw a check for $5,000, as treasurer upon the funds of plaintiff in his hands to the order of said Schurmann. That while such check did not by its terms designate said Schurmann as secretary of plaintiff, it was in point of fact executed to, accepted by him, and the money received thereon by him as and in his said capacity of secretary of plaintiff. That decedent never received any credit for it, or any part thefeof. All the paragraphs of the counterclaim apparently show that the demand therein set up arises out of the same matter and transaction as embraced in plaintiff's cause of action, being a settlement of the account of the decedent as the treasurer of plaintiff. The defendant, appellant herein, also answered by way of set-off in five paragraphs, setting up the same matter as alleged, and set out in the respective paragraphs of the counterclaim. Appellee unsuccessfully demurred to each paragraph of the counterclaim and to each paragraph of the set-off.

the pleadings filed, and the court, on request, made a special finding of facts, and stated, adversely to appellant, its conclusions of law thereon. Over appellant's exceptions to each of the conclusions and over its motions for a venire de novo and for a new trial, judgment was rendered against appellant for $9,231. From this judgment appellant appealed to the Appellate Court. The latter court adjudged upon the facts disclosed by the special finding of the trial court that appellant, as executor of the will of Byram, was entitled to be credited with the $5,000 turned over by the testator, or decedent, to Charles Schurmann, secretary and agent of appellee association. The judgment of the trial court was accordingly reversed, with instructions to restate its conclusions of law to that effect. To reverse this judgment of the Appellate Court is the purpose and object of this appeal on the part of appellee.

After eliminating from the special findings certain conclusions, we extract therefrom the following facts:

The International Building & Loan Association No. 1 was organized as a corporation under the laws of this state in 1889. The International Building & Loan Association No. 2 was in like manner organized in the year 1891. Norman S. Byram was the treasurer and Charles Schurmann was the secretary of both of these associations; the former serving as such treasurer from the time of the organization of the respective corporations until the date of his death, hereinafter stated. Charles Schurmann acted and served as secretary thereof from the date of the organization of the associations until the time of the trial of this cause. Said treasurer and secretary were directors in each of said associations, and the latter were officered in all respects by the same persons. The bylaws for the control of each association were alike. The duties of the secretary in the main were to receive all moneys paid into said associations and to pay the same over to the treasurer each day, taking his receipts therefor; to keep all accounts of the associations; to draw and sign all orders on the treasurer; to keep the books at all times, subject to the inspection of the board of directors; to see to the settlement of all claims and bills; to have the appointment and general supervision over all employés, agents, and agencies; to be the custodian of all mortgages, deeds, etc., and once in each quarter to compare his books with those kept by the treasurer and to report discrepancies to said board. The duties of the treasurer were to receive all moneys from the secretary; to pay all orders drawn upon him by the president and secretary; to keep a correct account of all moneys received and paid out; to be the custodian of all bonds received for loans and other securities not in the custody of the secretary; when required, to make a statement of the business of the office to the

76 N.E.-20

quarter with those kept by the secretary, reporting discrepancies to the board.

On June 4, 1894, Byram, the testator, was in poor health and had made arrangements to sojourn indefinitely in the state of California. The directors of both the aforesaid associations on said day, by a formal resolution, granted him an indefinite leave of absence. No record, however, was made as to the manner in which the business of the associations should be carried on during his absence. On the following day, June 5th, he drew a check against the funds of the association in his hands, which check was as follows: "Indianapolis Ind., June 5, 1894. No. 6. Merchants' National Bank. Pay to the order of Charles Schurmann ($5,000.00) five thousand dollars. N. S. Byram, Treas'r." At the same time he wrote on the back of said check as follows: "This check was given by me to Mr. Schurmann against the funds of the Nat. Bldg. Ass'n for which he gave me no receipt, and he is indebted to me or to the association to that amount; he has a memo. of the same in tin box in secretary's office. N. S. Byram." He delivered this check to Charles Schurmann, and he and said Schurmann went together to the Merchants' National Bank, in the city of Indianapolis, where Schurmann indorsed the check, and thereupon opened a deposit account with the said bank, under the name and style of "Charles Schurmann, Secretary." In the presence of Byram, Schurmann deposited the check in the bank, and received credit on said deposit account for $5,000.

Schurmann, in making said deposit, stated to the bankers that it was a building and loan account. At the time he received the check from Byram, he was secretary of said associations and a director thereof. After making this deposit, as aforesaid, up to October 14, 1903, Schurmann deposited sums and balances in his hands as secretary of each of said associations in said account without separating the funds of one association from those of the other, or from other funds deposited by him. After June 4th, aforesaid, he drew checks on said deposit account in payment of the expenses of said associations, in the payment of warrants turned over by him to the treasurer as cash, and in payment of balances due from him in sundry settlements with the treasurer. Byram was not credited with the proceeds of said check, nor was Schurmann charged with the same upon any of the books of said association.

On June 5, 1894, Byram, as treasurer, had of the funds of the International Building & Loan Association No. 1 $18,854.78, and of the funds belonging to Association No. 2 $4,861.91. Sometime prior to June 4, 1894, and after said date, Schurmann, as secretary, did not pay over at the end of each day to the treasurer all money which had been paid into the association, but from time to time out of the moneys so received he paid warrants drawn

upon the treasurer, which warrants were afterwards turned over to the treasurer as cash; the latter receipting therefor as stated. Said secretary kept an account of his receipts and of his payments, treating warrants paid by him, as aforesaid, as money; kept all accounts of the association, including an account between the treasurer and said association, which were made up from his payments to the treasurer and reports made by the latter. The secretary kept the books of the associations, which were at all proper times subject to the inspection of the board of directors. The treasurer also kept an account in what was designated as "Byram's Ledger," from which he paid warrants re ceived by him, which were treated as cash.

Schurmann was not secretary of any building association other than the two herein mentioned. Both Schurmann, as secretary, and Byram, as treasurer, of the associations in question, kept in proper books the separate financial accounts thereof, which accounts in their ledger form disclose the amounts and items for which Schurmann was chargeable, and for which he was entitled to credit in favor of and against said two associations, respectively, and the amounts and items for which Byram was chargeable and for which he was entitled to credit in favor of and against said two associations respectively. In none of these accounts were the proceeds of the $5,000 check, June 5, 1894, or any part thereof, credited to Byram as treasurer or charged to Schurmann as secretary, and said treasurer never received credit in either of said associations for said sum of $5,000, or any part thereof. Byram died in Marion county, Ind., on the 16th day of June, 1902.

There are other facts found to show that on the 20th day of June, 1898, the board of directors of plaintiff corporation, at a meeting at which Byram was present, authorized a loan to be made to Byram of $6,000, upon an oral application, and without specifications of any terms, conditions, securities, or written evidence of such loan. It appears that Byram received this money and credited his account as treasurer with $6,000, the amount of said loan, of the date of June 30, 1898. The court finds that the credit of said $6,000 was solely for and on account of said loan to Byram, and that no part of the principal nor of the interest thereon has been paid to the plaintiff or to any other person in its behalf.

The contention of appellee's counsel is that the transaction between Byram and Schurmann in regard to the check for $5,000 was but a mere private matter between these parties, not as officials, but simply as individ uals. This insistence, however, is not justified by the facts. In the light of the latter it cer tainly cannot be presumed that Byram, as treasurer of the association, was drawing a check upon its funds for $5,000 for the private or personal benefit of Schurmann. It is true

that the check was not, in express terms, made payable to Schurmann, as secretary; but the whole transaction is to be viewed in the light of the facts and circumstances, which disclose that Byram delivered the check in controversy to Schurmann, that they went together to the Merchants' National Bank, and after indorsing the check at the bank Schurmann then and there, in the presence of Byram, opened an account with the bank, not in his own individual name, but under the name and style of "Charles Schurmann, Secretary," and deposited the proceeds of the check in question as a part of that account, and was credited by the bank with the amount of the check so deposited, not to his own individual private account, but to his official account as secretary. While the particular association of which he was secretary is not disclosed by the bank account, nevertheless the facts show that he was at the time the secretary of the two building and loan associations in question, and of no other, and that the bank understood and treated the deposit as one in favor of the association. After opening the deposit account at the bank, Schurmann, as secretary, appears to have drawn various checks against this deposit account in payment of the expenses of the associations in controversy and in payment of warrants drawn by them, as was his custom to do. It is undisputed that the $5,000, before it was transferred by the method shown from Byram's account as treasurer of the association, belonged to and was the money of the latter. The transfer thereof, under the circumstances, from his custody as treasurer to Schurmann, and by the latter deposited in the bank as a credit to his official account as secretary, certainly did not serve to operate to deprive the association of the ownership of the money. figurative sense it may be said that the transaction between Schurmann, the secretary, and Byram, the treasurer, operated only to take the money from one pocket of the association and place it in the other pocket. While possibly it may be said that it was an irregularity on the part of Byram, as treasurer, to have transferred the money in question to Schurmann, nevertheless, when tested by the acts of the latter, he appears to have received it; if not by virtue of his official position as secretary, or in his strict right as such official, he at least received the money from Byram under color of his official position, and so deposited it in the bank. Under the circumstances, the association would have the right to require him, as its official, to account to it for the money had he misapplied it or converted it to his own use. Tyler v. Old Post Building Association, 87 Ind. 323, and cases there cited.

In a

The facts in the case, as herein stated, in effect at least, show that Schurmann was the general manager of the association or corporation. He received all money paid in for

the benefit of the association. If the $5,000 in controversy had been turned over to him for the association by any person other than Byram, the treasurer, there would be no room whatever for the contention that the association was not bound by his receipt of the money as its agent. He, by depositing the money in the bank as shown, to the account of "Charles Schurmann, Secretary," thereby recognized and gave notice of the character in which he received and held the money. Bundy v. Town of Monticello, 84 Ind. 119; Bank, etc., v. Jones, 42 Pa. 536; National Bank v. Insurance Co., 104 U. S. 54, 26 L. Ed. 693. If Schurmann's position as secretary had terminated after depositing the $5,000 in the bank, his successor in office would have been entitled to have checked out the money for and on behalf of the association. Carman et al. v. President, etc., Bank of Baltimore, 61 Md. 467; Gaffney's Estate, 146 Pa. 49, 23 Atl. 163. Under the circumstances the bank would not have been justified in applying any portion of the $5,000 to Schurmann's indebtedness. There is no finding to the effect that Schurmann used for his own individual benefit any part of the money in controversy after he deposited it in the bank, and no presumption to that effect can be indulged. This deposit account which he, as secretary, opened in the first instance by means of the proceeds of the check in controversy as previously said, was an official deposit impressed with a trust. If he thereafter mixed or confused his own money with this trust fund, and was unable to distinguish or to furnish the means for separating his money from the trust fund, he must bear the consequences which may result from the confusion of funds. Pearce v. Dill, 149 Ind. 136, 48 N. E. 788; National Bank v. Insurance Co., 104 U. S. 54, 26 L. Ed. 693. There is nothing to disclose that the association lost any of the money transferred from Byram to Schurmann, or in any manner has been damaged by the transaction, but on the contrary it is made to appear that these corporations have received the benefit thereof. Under such circumstances they are not in a position to successfully avail themselves of the irregularity of the transfer of the money to Schurmann, the secretary and general manager. Tyler v. Old Post Building Association, supra; Bass Foundry, etc., Works v. Board of Commissioners of Parke County, 115 Ind. 234-244, 17 N. E. 593; Rowe v. Major, 92 Ind. 206; Chicago Building Society v. Crowell, 65 Ill. 453; Kilpatrick v. Home B. & L. Association, 119 Pa. 30, 12 Atl. 754; O'Malley v. People's, etc., B. & L. Association (Sup.) 35 N. Y. Supp. 14; Peterson v. People's, etc., B. & L. Association, 124 Mich. 573, 83 N. W. 606; Parsons on Contracts, § 139.

When all of the facts in the case are considered, it is evident, we think, that the associations in question had knowledge, if not actual, at least constructive, relative to the manner in which their affairs were conducted.

It appears that the treasurer had been granted an indefinite leave of absence, consequently it must have been known that when absent he was not receiving funds each day from Schur. mann, and was not paying warrants of the association at the city of Indianapolis, but that these duties were being discharged by Schurmann. It is disclosed that the associa tions had auditing, finance, and examining committees, upon which devolved an examination of the books and the affairs of the concern. It would be strange indeed if these associations through the means of these agencies did not discover that Schurmann had an official bank account, out of which the expenses of the association and drafts thereon were paid by him as secretary. If

the course of the business of the associations in regard to these matters were of such a character as to put them on inquiry, that, in a legal sense, would be sufficient to charge them with notice. Webb v. John Hancock, etc., Ins. Co., 162 Ind. 616, 69 N. E. 1006, 66 L. R. A. 632; Thompson on Corporations, §§ 5222, 5224, 5237. We are fully satisfied that Byram's estate, under the facts found by the court, is liable for the payment of the $6,000 borrowed by the decedent from the association. We conclude that the judgment of the Appellate Court, reversing in part the judgment of the Marion circuit court, is right, and it is therefore affirmed. The judgment of the Marion circuit court is therefore reversed in part, and the cause is remanded, with instructions to that court to restate its conclusions of law to the effect that Byram's estate, as represented by the appellant herein, is entitled to a credit of $5,000 on the amount found to be due on the general claim presented against said estate in this action and to render its judgment accordingly.

The judgment of said court in all other respects is affirmed.

condition was not a nuisance injurious to the state, it being the intention of the county council to complete the building under other proceedings, the Supreme Court will not grant the state a temporary injunction pending appeal in a suit to restrain the county board of commissioners from issuing bonds and appropriating money to complete the building and to require the unfinished structure to be removed from the county's property.

Appeal from Circuit Court, Newton County; Charles W. Hanley, Judge.

Action by the state of Indiana against the board of commissioners of Newton county and others for an injunction. The complaint was dismissed on final hearing, and the state appealed. On motion for a temporary inJunction pending appeal. Denied.

A. D. Babcock, Robert O. Graves, Merrill Moores, and Herman C. Rogers, for the State. Stuart, Hammond & Simms and William Cummings, for appellees.

BLACK, P. J. The transcript on appeal in this cause having been filed in this court December 7, 1905, the appellant on the same day filed its motion for a temporary injunc tion herein. Upon the hearing of this motion the following state of facts is disclosed by the record on appeal, the verified motion for a temporary injunction, the proceedings of the board of commissioners of Newton county, the proceedings of the county council thereof, and the affidavits of competent witnesses submitted: The town of Kentland is the county seat of Newton county, and therefore the proper place for a courthouse, furnishing suitable accommodation for the courts and the various county officers, and for the proper storing and preservation of the public records. Upon the public square In that town, owned by the county, there exists a building devoted to such uses, which was erected many years ago at a small cost, which is in a dilapidated condition and unfit for the purposes of a courthouse. December 17, 1904, the county council adopted an order purporting to authorize the board of county commissioners to borrow $25,000 to be used for the purpose of erecting a courthouse on the courthouse square in that town, and to authorize and direct that board to issue negotiable bonds of the county for that sum, and to appropriate to such purpose the money derived from the sale of the bonds. On January 2, 1905, the board of commissioners contracted with an architect for plans and specifications for a courthouse and for the superintendence of its construction, and on February 6, 1905, the board approved plans and specifications submitted by an architect, and directed advertisements for proposals for the erection of the building to be received April 3, 1905. Thereupon an action was brought in the court below by the state, on the relation of Benjamin F. Davis and others. voters and taxpayers of that county, against the board of commissioners and others to enjoin the letting of the contract. From the

judgment rendered in that cause the plaintiff therein appealed to the Supreme Court of Indiana, wherein, on June 30, 1905, the judgment was reversed as to the board of commissioners, and the court below was directed to enter a finding in favor of the plaintiff therein, and to render judgment thereon enjoining the board of commissioners from entering into a contract for the construction of a courthouse, and from erecting a courthouse or paying out for such purpose any of the funds of the county, under and by virtue of the proceedings of the county council of December 17, 1904. See State ex rel. Davis v. Board of Commissioners (Ind. Sup.) 74 N. E. 1091. In that case the ground upon which the court on appeal declared the invalidity of the action of the board of commissioners appears in the following extract from the opinion of the court: "The record discloses that the county commissioners of Newton county attempted to make the appropriation of money for the building of a courthouse by a mere motion and an order made in pursuance thereof. This procedure was in plain violation of the statute. The adoption of the motion is followed by an order spread upon the record, purporting to authorize the issuance and sale of county bonds to provide the money so appropriated. The statute above quoted requires that the issuance of county bonds can be authorized only by ordinance, and the method adopted in this case was in violation of law, and therefore ineffectual and invalid. It follows that no appropriation of money for the erection of a courthouse had been made by the county council of Newton county at the time the appellee board of commissioners was intending and threatening to enter into a contract for the erection of such a building, and that said appellee was proceeding without warrant of law, and that such contract, if made, would be void." It may seem hardly necessary to remark that the judgment which the Supreme Court directed was to be one having reference to the action of the county council on December 17, 1904, and restraining action pursuant thereto because of its declared invalidity, resulting, not from the purpose of the restrained action, but from the form in which the council proceeded, and that such judgment would not affect any subsequent action relating to the construction or repair of public buildings of the county by the administrative officers thereof proceeding in due conformity to the requirements of the statute relating to such matter.

The judgment in the court below, from which the appeal was so taken, being in favor of the defendants in that cause, the board of commissioners contracted for the erection of the courthouse with one Eric Lund, who commenced the construction of the building of brick, stone, and mortar, and continued the building thereof until the further construction was stopped on June 9, 1905, by an injunction issued by the Supreme

Court, since which time no work has been done on the building, according to the verified complaint herein. In the verified motion for a temporary injunction herein it is stated that since June 30, 1905, and since the order granted by the Supreme Court, no work has been done or attempted, and that the structure now stands as it was when the workmen left work, June 30, 1905. It appears that this structure is an incomplete courthouse two stories in height, without roof, and unfurnished as to doors and windows and otherwise; that the incomplete building is well constructed, according to the plans and specifications, and would be well adapted, if completed, to the purposes of a courthouse. August 7, 1905, the board of commissioners, pursuant to the statute of 1899 (section 5594 et seq., Burns' Ann. St. 1901), presented to the county auditor a verified estimate, itemized, of the expenses of the board for the calendar year 1906, including, among other items, the following: "First item. Expense of public buildings and institutions. (1) Courthouse. Amount required for the repair and completion of the new courthouse, also heating apparatus for the same. plumbing, wiring, and architects' fee, $19,450; electric light fixtures, $800; amount required for furniture for new courthouse and vault fixtures, $25,000; architect's fee for plans, specifications, and superintendent work, $250. Fifth item: To pay attorney fees and costs in case of the State ex rel. Davis v. This Board, and other expenses of said suit in circuit and Supreme Court, $1,000; to pay [attorney named], employed by this board, for services before board and county council relating to repair and completion of new courthouse, and for services in Newton circuit court in relation thereto, $500."

The board in the same instrument prayed for authority by ordinance, to issue and sell bonds of Newton county in the sum of $24,500 to provide funds with which to pay for the repair and completion of the new courthouse, electric light fixtures therein, furniture therefor, for fees, costs, and expenses of the case of State ex rel. Davis et al. v. Newton County Council and others, and fees of the attorney named, above mentioned, and the fees of the architect for such repairs and completion of the new courthouse; "the current funds to be derived from taxation and other sources of revenue being insufficient for the payment of the above-named expenditures. The total of the indebtedness of said county added to the above sum will not exceed two per centum of the taxable property of said county." Afterward, August 25, 1905, in vacation, before the October term of the court below, the appellant filed its verified complaint herein, signed by the prosecuting attorney as such, and by other attorneys, as of counsel, wherein the appellant sought a temporary injunction restraining the members of the board of commissioners and the contractor, Lund, from