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Naltner v. Dolan.

Do the facts found warrant the conclusion of law stated? Money belonging to a client having been received by the attorneys, in payment of a claim left with them for collection, the transmission of such money having been arrested by garnishee process before an opportunity for transmitting it occurred, the question is, having acted in the utmost good faith, and without any suggestion of fault or neglect, are the attorneys responsible for the continued solvency of the bank in which such funds were deposited in their own name, but not with their own funds, notwithstanding the bank was in good credit when the deposit was made?

The receipt of money by an attorney, under the circumstances disclosed in this case, does not ipso facto create the technical relation of debtor and creditor between the attorney and client. It is because it does not that a suit cannot be maintained by the latter against the former without first making a demand. Money so col lected belongs to the client. The attorney occupies toward it the relation of a trustee, so long as he chooses to treat and preserve the fund as a trust fund. The circumstances under which he will be liable for its loss are precisely those which govern in the case of any other trustee. While it is preserved in its trust character, if he exercises the same caution in respect to depositing it, if a deposit becomes necessary or proper, as a prudent man would in regard to his own money, and a loss happens, he will be excused. Norwood v. Harness, 98 Ind. 134; s. c., 49 Am. Rep. 739; State, ex rel., v. Greensdale, 106 Ind. 364; s. c., 55 Am. Rep. 753.

The authorities however distinguish between cases in which the deposit was made in such a manner as to preserve its trust character on the books of the bank in which the fund was deposited, and those in which the owner of the fund might be put to the trouble of proving by extraneous evidence that the fund was not the individual money of his trustee. Whenever a trustee, unless properly authorized to do so, puts the fund in such shape as to invest himself with a legal title to it, the cestui que trust has his election, either to treat the fund, according to the appearance of things, as the property of the trustee, and regard the latter as his debtor, or he may demand that the title be transferred to him. If a deposit is made in such manner, as on the face of the books of the bank in which the deposit is made, to authorize the trustee, his assignee, or legal representative, to claim it as the fund of the depositor, the cestui trust has the option to do likewise. Merket v. Smith,

que

Naltner v. Dolan.

33 Kans. 66; McAllister v. Commonwealth, 30 Penn. St. 536; Morris v. Wallace, 3 Penn. St. 319; Jackson v. Bank, etc., 10 Penn. St. 61; School District, etc., v. First Nat'l Bank, 102 Mass. 174; Utica Ins. Co. v. Lynch, 11 Paige, 520; Bartlett v. Hamilton, 46 Me. 435; 2 Pom. Eq. Jur., §§ 1067-1076; Perry Trusts, §§ 443. 444; Story Agency, § 208.

In case it becomes the duty of an agent or trustee to deposit money belonging to his principal, he can escape the risk only by making the deposit in his principal's name, or by so distinguishing it on the books of the bank, as to indicate in some way that it is the principal's money. If he deposit in his own name, he will not, in case of loss, be permitted to throw such loss on his principal. Williams v. Williams, 55 Wis. 300; s. c., 42 Am. Rep. 708; Norris v. Hero, 22 La. Ann. 605; Mason v. Whitthorne, 2 Cold. 242; Jenkins v. Walter, 8 Gill & J. 218; s. c., 29 Am. Dec. 539; Robinson v. Ward, 2 C. & P. 60; Macdonnell v. Harding, 7 Sim. 178; State ▼. Greensdale, supra.

In such a case the good faith or intention of the trustee is in no way involved. Having for his personal convenience, or from whatever motive, deposited the money in his own name, thereby vesting himself with a legal title, it follows as a necessary consequence, when a loss occurs, he will not be permitted to say, as against his cestui que trust, that the fact is not as he voluntarily made it

appear.

What the legal or equitable rights of the real owner of the fund would be in such a case, as against the bank, or as against attaching creditors of the depositor, has been the subject of much discussion, and of some diversity of opinion. Pennell v. Deffell, 4 DeG., M. & G. 372; Farmers', etc., Bank v. King, 57 Penn. St. 202; School District, etc., v. First Nat'l Bank, 102 Mass. 174; Jackson v. Bank, supra; Bundy v. Town of Monticello, 84 Ind. 119, 131, and cases cited; McLain v. Wallace, 103 Ind. 562; McComas v. Long, 85 Ind. 549; Ellicott v. Barnes, 31 Kans. 170, 173; Morse Banks, 300-302.

Whatever diversity of opinion may be found in respect to the rights of the bank, or other creditors of the depositor, the authorities agree that a trustee who either invests or deposits trust money in his own name, without in some way designating it as trust property, will be responsible for any loss that may occur to the fund while so invested or deposited. Gilbert v. Welsch, 75 Ind. 557; 2 Lead. Cas. in Eq. 1805.

City of Indianapolis v. Emmelman.

Having put the owner of the fund to the hazard of losing it, or of maintaining its trust character by such proof aliunde as may be available to him, the trustee thereby gives the former the privilege of treating the latter as his debtor, or of supplying the proof, or accepting his admission of the facts, at his option.

Applying the principles stated to the facts found, the conclusion follows, that the appellants assumed the risk that the bank, in which the fund was deposited in their name, and from which it could only have been drawn by their check, would be able to respond with the money when their check for it should be presented.

The fact that none but money belonging to clients was deposited in the account in which the fund in question was placed does not alter the case. The controlling consideration is, that it was deposited to the credit of the firm, without any thing to designate or preserve its trust character. They took and retained the legal title to the deposit in themselves. In the event of a controversy, the character of the fund would have depended wholly on extraneous proof. This being so, the owner had the right to elect to stand upon the title to the deposit, as he found it. Having so elected, there is no rule of law which authorizes any inquiry into the motives for so taking the title, short of an express or implied direction from the owner of the fund. The judgment is affirmed, with costs. Rehearing denied.

Judgment affirmed.

CITY OF INDIANAPOLIS V. EMMELMAN.

(108 Ind. 530.)

Municipal corporation — negligence-dangerous excavation for bridge — infant.

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A city, in constructing a bridge, in continuation of a street, excavated the bed of the stream, and built a levee from the bank to the excavation, leaving it unwatched and without safeguards. A child, five years old, at play, fell into the excavation and was drowned. The city authorities knew the habit of young children to play in the neighborhood. Held, that the city was liable.

A

CTION for death of plaintiff's son by negligence. The opinion states the case. The plaintiff had judgment below.

VOL. LVIII — 9

City of Indianapolis v. Emmelman.

C. S. Denny, D. V. Burns and W. L. Taylor, for appellant.

J. S. Duncan, C. W. Smith and J. R. Wilson, for appellee.

MITCHELL, J. This action was brought against the city of Indianapolis by Henry Emmelman, to recover damages for wrongfully causing the death of the plaintiff's infant son.

The complaint charges, that on the 23d day of July, 1883, the city of Indianapolis was engaged in constructing a bridge over Pleasant run, a small stream of water running through a portion of the city, at a point where Spruce street crossed the above-mentioned stream. It is alleged that preparatory to the erection of the proposed bridge, the city caused a deep square hole to be dug in the bed of the stream, which hole had abrupt perpendicular sides, and which became and remained filled with water. During the progress of the work, the city constructed a levee or dam from the edge of the stream out to the hole, so as to prevent the water from standing in the bed of the stream between the hole and the north bank, and in such manner as to afford an easy approach over the levee to the pit or hole.

It was averred further that a large number of families, having small children, resided in the immediate neighborhood of the crossing of Spruce street over the stream, and that many small children were accustomed to play in that vicinity, which fact was well known to the defendant.

The water outside the hole was only a few inches in depth, yet the defendant, notwithstanding it knew all the facts, negligently failed to place any barriers or warning of danger about the pit, so as to prevent children from falling in, when its workmen quit the premises.

The complaint avers that the plaintiff had no knowledge of the existence of the pit, or of any danger in the vicinity, and that the boy was too young, being about five years old, to appreciate the danger. That on the date first above mentioned, the plaintiff's son, without any fault whatever on the part of the plaintiff, while the hole was so negligently left unguarded and exposed, fell into the pit and was drowned.

A demurrer to this complaint was overruled, and the propriety of this ruling is the first question presented.

The initial proposition upon which the appellant rests its argument against the sufficiency of the complaint is, that it does not

City of Indianapolis v. Emmelman.

appear from the facts averred that the city was guilty of any breach of duty, in respect to the plaintiff or his child. That the liability of the city can only be affirmed upon the theory that it has violated its duty in the premises, is too clear for serious controversy.

Speaking upon the subject, as applied to an adult, this court, in the case of Evansville, etc., R. Co. v. Griffin, 100 Ind. 221; s. c., 50 Am. Rep. 783, used the following language: "Before it can be affirmed that the appellant was negligent, with respect to the transaction concerning which its omission is imputed to it as wrongful, it must appear that it was under some legal duty or obligation to the plaintiff, at the time when and place where the injury occurred, which was left undischarged. If it is liable at all, this is the foundation upon which its liability rests." Lary v. Cleveland, etc., R. Co., 78 Ind. 323; s. c., 41 Am. Rep. 572.

In respect to cases such as we are considering, a learned author says: "It is important to bear in mind, in actions for injuries to children, a very simple and fundamental fact, which in this class of cases is sometimes strangely lost sight of, viz., that no action arises without a breach of duty." 2 Thomp. Neg. 1183, note.

With this rule in view, and with the further concession that in dealing with cases which involve injuries to children, courts and juries have sometimes strangely confounded legal obligation with sentiments that are independent of law, it must nevertheless be kept in mind that wherever an adult may be without incurring the imputation of being an intruder, a child may also go free from the like imputation. The same circumstances which would justify a recovery by one who had reached years of discretion, and had sustained an injury from the act of another while free from fault, would justify a recovery by an infant of such years as to be incapable of fault, provided its parents or guardian were also guilty of no neglect which could be imputed to the child. And so conversely, except when a child is seen in time so that injury to it might be avoided, persons who are lawfully using, or carrying on business on their own premises, are not liable for injuries to children, unless under the same circumstances they would have been liable to others who were equally free from fault.

The conclusion to be drawn from the approved cases on the subject is, that the owner of premises, who has neither expressly nor impliedly invited the public to come upon or pass over his grounds, is under no legal obligation to keep them free from pitfalls, or in a

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