« AnteriorContinuar »
by the decedent, Norman S. Byram, as treas- the pleadings filed, and the court, on request, urer of the plaintiff association at its spe made a special finding of facts, and stated, adcial instance and request, in the sum of $5,000. versely to appellant, its conclusions of law The second was for money bad and received thereon. Over appellant's exceptions to eacb from the decedent Byram at the special in of the conclusions and over its motions for stance and request of plaintiff in the sum of a venire de novo and for a new trial, judg. $5,000. The third paragraph counted upon ment was rendered against appellant for a check for $5,000, drawn by Byram, as the $9,231. From this judgment appellant aptreasurer of plaintiff, on June 5, 1894, upon pealed to the Appellate Court. The latter the funds of appellee association in his hands court adjudged upon the facts disclosed by as such treasurer, to the order of one Charles the special finding of the trial court that Schurmann, the secretary of appellee, and appellant, as executor of the will of Byram, that the amount of said check was received was entitled to be credited with the $5,000 by said Schurmann, as secretary and agent turned over by the testator, or decedent, to of the plaintiff, for its use and benefit, and Charles Schurmann, secretary and agent of was so applied and used, and that the defend. , appellee association. The judgment of the ant never had any credit therefor. The trial court was accordingly reversed, with infourth and fifth paragraphs are similar. The structions to restate its conclusions of law latter is based upon the alleged fact that one to that effect. To reverse this judgment of Charles Schurmann was secretary of appellee the Appellate Court is the purpose and obassociation, and, as such, was authorized ject of this appeal on the part of appellee. to receive and disburse its moneys; that on After eliminating from the special findings June 5, 1894, the decedent, Byram, then treas- certain conclusions, we extract therefrom the urer of the plaintiff's association, was in ill following facts : health and about to make an extended jour The International Building & Loan AssociDey of uncertain duration for the benefit of ation No. 1 was organized as a corporation his health. It is alleged that in order to under the laws of this state in 1889. The place the funds of the association then in his International Building & Loan Association hands as said treasurer in such a shape that No. 2 was in like manner organized in the they might be available in carrying on the year 1891. Norman S. Byram was the treasbusiness of the association in his absence, on urer and Charles Schurmann was the secthe said 5th day of June, 1894, he did execute retary of both of these associations; the foror draw a check for $5,000, as treasurer upon mer serving as such treasurer from the time the funds of plaintiff in his hands to the order of the organization of the respective corporaof said Schurmann. That while such check tions until the date of his death, hereinafter did not by its terms designate said Schur stated. Charles Schurmann acted and served mann as secretary of plaintiff, it was in point | as secretary thereof from the date of the of fact executed to, accepted by him, and the organization of the associations until the time money received thereon by him as and in of the trial of this cause. Said treasurer his said capacity of secretary of plaintiff. and secretary were directors in each of said That decedent never received any credit for associations, and the latter were officered in it, or any part thereof. All the paragraphs all respects by the same persons. The byof the counterclaim apparently show that laws for the control of each association the demand therein set up arises out of the were alike. The duties of the secretary in same matter and transaction as embraced the main were to receive all moneys paid into in plaintiff's cause of action, being a settle | said associations and to pay the same over ment of the account of the decedent as the to the treasurer each day, taking his receipts treasurer of plaintiff. The defendant, ap therefor; to keep all accounts of the associapellant berein, also answered by way of tions; to draw and sign all orders on the set-off in five paragraphs, setting up the same i treasurer; to keep the books at all times, submatter as alleged, and set out in the respec ject to the inspection of the board of directtive paragraphs of the counterclaim. Ap- | ors; to see to the settlement of all claims pellee unsuccessfully demurred to each para and bills; to have the appointment and genergraph of the counterclaim and to each para al supervision over all employés, agents, and graph of the set-off.
agencies; to be the custodian of all mortIt appears that there were two Internation- / gages, deeds, etc., and once in each quarter al Building & Loan Associations, numbered to compare his books with those kept by the 1 and 2, each being officered by the same treasurer and to report discrepancies to said persons. There was a claim pending at the board. The duties of the treasurer were to same time against appellant in favor of as receive all moneys from the secretary ; to sociation No. 1 for an alleged balance due pay all orders drawn upon him by the presi. from Byram as treasurer. These two causes dent and secretary; to keep a correct account were consolidated and tried together under of all moneys received and paid out; to be the a certain stipulation and agreement made by custodian of all bonds received for loans and the parties. The judgment herein rendered other securities not in the custody of the covers and embraces the claim filed in both secretary; when required, to make a stateof the consolidated causes. Issues were ment of the business of the office to the joined between the respective parties upon | board; and to compare his books once each
quarter with those kept by the secretary, re- ; upon the treasurer, which warrants were porting discrepancies to the board.
afterwards turned over to the treasurer as On June 4, 1894, Byram, the testator, was in cash; the latter receipting therefor as stated. poor health and had made arrangements to Said secretary kept an account of his resojourn indefinitely in the state of Califor ceipts and of his payments, treating warrants nia. The directors of both the aforesaid asso paid by him, as aforesaid, as money; kept ciations on said day, by a formal resolution, all accounts of the association, including an granted him an indefinite leave of absence. account between the treasurer and said assoNo record, however, was made as to the man ciation, which were made up from his payner in which the business of the associations | ments to the treasurer and reports made by should be carried on during his absence. On the latter. The secretary kept the books of the following day, June 5th, he drew a check the associations, which were at all proper against the funds of the association in his times subject to the inspection of the board hands, which check was as follows: "Indian of directors. The treasurer also kept an ac. apolis Ind., June 5, 1894. No. 6. Merchants' count in what was designated as "Byram's National Bank. Pay to the order of Charles Ledger," from which he paid warrants reSchurmann ($5,000.00) five thousand dollars. ceived by him, which were treated as cash. X. S. Byram, Treas'r.” At the same time he Schurmann was not secretary of any buildwrote on the back of said check as follows: ing association other than the two herein men"This check was given by me to Mr. Schur tioned. Both Schurmann, as secretary, and mann against the funds of the Nat. Bldg. Byram, as treasurer, of the associations in Ass'n for which he gave me no receipt, and
question, kept in proper books the separate he is indebted to me or to the association to
financial accounts thereof, which accounts in that amount; he has a memo. of the same in their ledger form disclose the amounts and tin box in secretary's office. N. S. Byram." items for which Schurmann was chargeable, He delivered this check to Charles Schur. and for which he was entitled to credit in mann, and he and said Schurmann went to favor of and against said two associations, gether to the Merchants' National Bank, in
| respectively, and the amounts and items for the city of Indianapolis, where Schurmann in which Byram was chargeable and for which dorsed the check, and thereupon opened a he was entitled to credit in favor of and deposit account with the said bank, under against said two associations respectively. the name and style of "Charles Schurmann, In none of these accounts were the proceeds Secretary.” In the presence of Byram, Schur- of the $5,000 check, June 5, 1894, or any part mann deposited the check in the bank, and thereof, credited to Byram as treasurer or received credit on said deposit account for charged to Schurmann as secretary, and said $5,000.
treasurer never received credit in either of Schurmann, in making said deposit, stated said associations for said sum of $5,000, or to the bankers that it was a building and loan any part thereof. Byram died in Marion account. At the time he received the check county, Ind., on the 16th day of June, 1902. from Byram, he was secretary of said asso There are other facts found to show that ciations and a director thereof. After make on the 20th day of June, 1898, the board ing this deposit, as aforesaid, up to Octo of directors of plaintiff corporation, at a ber 14, 1903, Schurmann deposited sums and meeting at which Byram was present, authorbalances in his hands as secretary of each of ized a loan to be made to Byram of $6,000, said associations in said account without upon an oral application, and without speciseparating the funds of one association from fications of any terms, conditions, securities, those of the other, or from other funds de or written evidence of such loan. It appears posited by him. After June 4th, aforesaid, he that Byram received this money and credited drew checks on said deposit account in pay- | his account as treasurer with $6,000, the ment of the expenses of said associations, in amount of said loan, of the date of June the payment of warrants turned over by him 30, 1898. The court finds that the credit of to the treasurer as cash, and in payment of said $6,000 was solely for and on account of balances due from him in sundry settlements said loan to Byram, and that no part of the with the treasurer. Byram was not credited principal nor of the interest thereon has been with the proceeds of said check, nor was paid to the plaintiff or to any other person Schurmann charged with the same upon any | in its behalf. of the books of said association.
The contention of appellee's counsel is On June 5, 1894, Byram, as treasurer, had that the transaction between Byram and of the funds of the International Building & Schurmann in regard to the check for $5,000 Loan Association No. 1 $18,854.78, and of the was but a mere private matter between these funds belonging to Association No. 2 $4,861.91. parties, not as officials, but simply as individSometime prior to June 4, 1894, and after | uals. This insistence, however, is not justified said date, Schurmann, as secretary, did not by the facts. In the light of the latter it cerpay over at the end of each day to the treas- tainly cannot be presumed that Byram, as urer all money which had been paid into the treasurer of the association, was drawing a association, but from time to time out of the check upon its funds for $5,000 for the private moneys so received he paid warrants drawn l or personal benefit of Schurmann. It is true that the check was not, in express terms, the benefit of the association. If the $5,000 made payable to Schurmann, as secretary ; ) in controversy had been turned over to him but the whole transaction is to be viewed in / for the association by any person other than the light of the facts and circumstances, I Byram, the treasurer, there would be no room which disclose that Byram delivered the whatever for the contention that the assocheck in controversy to Schurmann, that they | ciation was not bound by his receipt of the went together to the Merchants' National money as its agent. He, by depositing the Bank, and after indorsing the check at the money in the bank as shown, to the account bank Schurmann then and there, in the pres of "Charles Schurmann, Secretary," thereby ence of Byram, opened an account with the recognized and gave notice of the character bank, not in his own individual name, but in which he received and held the money. under the name and style of "Charles Schur Bundy v. Town of Monticello, 84 Ind. 119; mann, Secretary," and deposited tbe proceeds Bank, etc., v. Jones, 42 Pa. 536; National of the check in question as a part of that ac Bank v. Insurance Co., 104 U. S. 54, 26 L. count, and was credited by the bank with the
Ed. 693. If Schurmann's position as secreamount of the check so deposited, not to his tary had terminated after depositing the own individual private account, but to his $5,000 in the bank, his successor in office official account as secretary. While the would have been entitled to have checked out particular association of which he was secre: the money for and on behalf of the associatary is not disclosed by the bank account, tion. Carman et al. v. President, etc., Bank nevertheless the facts show that he was at of Baltimore, 61 Md. 467; Gaffney's Estate, the time the secretary of the two building and
146 Pa. 49, 23 Atl. 163. Under the circumloan associations in question, and of no other, stances the bank would not have been jusand that the bank understood and treated the
tified in applying any portion of the $5,000 deposit as one in favor of the association.
to Schurmann's indebtedness. There is no After opening the deposit account at the
finding to the effect that Schurmann used bank, Schurmann, as secretary, appears to for his own individual benefit any part of the have drawn various checks against this de
money in controversy after he deposited it in posit account in payment of the expenses of
the bank, and no presumption to that effect the associations in controversy and in pay
can be indulged. This deposit account which ment of warrants drawn by them, as was
he, as secretary, opened in the first instance his custom to do. It is undisputed that the
by means of the proceeds of the check in con. $5,000, before it was transferred by the
troversy as previously said, was an official method shown from Byram's account as
deposit impressed with a trust. If he theretreasurer of the association, belonged to and
after mixed or confused his own money with was the money of the latter. The transfer
this trust fund, and was unable to distinthereof, under the circumstances, from his
guish or to furnish the means for separating custody as treasurer to Schurmann, and by
his money from the trust fund, he must bear the latter deposited in the bank as a credit
the consequences which may result from the
confusion of funds. Pearce v. Dill, 149 Ind. to his official account as secretary, certainly
136, 48 N. E. 788; National Bank v. Insurdid not serve to operate to deprive the asso
ance Co., 104 U. S. 54, 26 L. Ed. 693. There ciation of the ownership of the money. In a
is nothing to disclose that the association figurative sense it may be said that the trans
lost any of the money transferred from Byaction between Schurmann, the secretary, and
ram to Schurmann, or in any manner has Byram, the treasurer, operated only to take
been damaged by the transaction, but on the the money from one pocket of the association
contrary it is made to appear that these corand place it in the other pocket. While pos
porations have received the benefit thereof. sibly it may be said that it was an irregulari
Under such circumstances they are not in a ty on the part of Byram, as treasurer, to
position to successfully avail themselves of have transferred the money in question to
the irregularity of the transfer of the money Schurmann, nevertheless, when tested by the
to Schurmann, the secretary and general acts of the latter, he appears to have re
manager. Tyler v. Old Post Building Asceived it; if not by virtue of his official
sociation, supra; Bass Foundry, etc., Works v. position as secretary, or in his strict right
Board of Commissioners of Parke County, as such official, he at least received the
115 Ind. 234-244, 17 N. E. 593; Rowe v. Mamoney from Byram under color of his official
jor, 92 Ind. 206; Chicago Building Society position, and so deposited it in the bank. v. Crowell, 65 Ill. 453; Kilpatrick v. Home Under the circumstances, the association
B. & L. Association, 119 Pa. 30, 12 Atl. 754; would have the right to require him, as its
O'Malley y. People's, etc., B. & L. Association official, to account to it for the money had he (Sup.) 35 N. Y. Supp. 14; Peterson v. People's, misapplied it or converted it to his own use.
etc., B. & L. Association, 124 Mich. 573, 83 Tyler v, Old Post Building Association, 87 N. W. 606; Parsons on Contracts, $ 139. Ind. 323, and cases there cited.
When all of the facts in the case are conThe facts in the case, as herein stated, in sidered, it is evident, we think, that the aseffect at least, show that Schurmann was the sociations in question had knowledge, if not general manager of the association or corpo actual, at least constructive, relative to the ration. He received all money, paid in for manner in which their affairs were conducted. It appears that the treasurer had been grant. condition was not a nuisance injurious to the ed an indefinite leave of absence, consequently | state, it being the intention of the county counit must have been known that when absent he
cil to complete the building under other pro
ceedings, the Supreme Court will not grant the was not receiving funds each day from Schur.
state a temporary injunction pending appeal in mann, and was not paying warrants of the a suit to restrain the county board of commisassociation at the city of Indianapolis, but sioners from issuing bonds and appropriating
money to complete the building and to require that these duties were being discharged by
the unfinished structure to be removed from the Schurmann. It is disclosed that the associa, county's property. tions bad auditing, finance, and examining
Appeal from Circuit Court, Newton Councommittees, upon which devolved an examination of the books and the affairs of the con
ty; Charles W. Hanley, Judge. cern. It would be strange indeed it these
Action by the state of Indiana against the associations through the means of these
board of commissioners of Newton county
and others for an injunction. The complaint agencies did not discover that Schurmann had an official bank account, out of which
was dismissed on final hearing, and the state the expenses of the association and drafts
appealed. On motion for a temporary inthereon were paid by him as secretary. If
junction pending appeal. Denied. the course of the business of the associations A. D. Babcock, Robert O. Graves, Merrill in regard to these matters were of such a Moores, and Herman C. Rogers, for the State. character as to put them on inquiry, that, in Stuart, Hammond & Simms and william 1 legal sense, would be sufficient to charge Cummings, for appellees. them with notice. Webb v. John Hancock, etc., Ins. Co., 162 Ind. 616, 69 N. E. 1006, 66 | BLACK, P. J. The transcript on appeal L. R. A. 632; Thompson on Corporations, $8 | in this cause having been filed in this court 5222, 5224, 5237. We are fully satisfied that
December 7, 1905, the appellant on the same Byram's estate, under the facts found by the
day filed its motion for a temporary injunc court, is liable for the payment of the $6,000 tion herein. Upon the hearing of this moborrowed by the decedent from the associa
tion the following state of facts is disclosed tion. We conclude that the judgment of the
by the record on appeal, the verified motion Appellate Court, reversing in part the judge for a temporary iniunction, the proceedings ment of the Marion circuit court, is right,
of the board of commissioners of Newton and it is therefore affirmed. The judgment
county, the proceedings of the county council of the Marion circuit court is therefore re
thereof, and the affidavits of competent witversed in part, and the cause is remanded,
nesses submitted: The town of Kentland with instructions to that court to restate its
is the county seat of Newton county, and conclusions of law to the effect that Byram's
therefore the proper place for a courthouse, estate, as represented by the appellant herein,
furnisbing suitable accommodation for tho is entitled to a credit of $5,000 on the amount
courts and the various county officers, and found to be due on the general claim present.
for the proper storing and preservation of ed against said estate in this action and to
the public records. Upon the public square render its judgment accordingly.
in that town, owned by the county, there ex. The judgment of said court in all other re
ists a building devoted to such uses, which spects is affirmed.
was erected many years ago at a small cost,
which is in a dilapidated condition and unfit (38 Ind. App. 52)
for the purposes of a courthouse. December STATE V. BOARD OF COM'RS OF NEW. 17, 1904, the county council adopted an order
TON COUNTY et al. (No. 5,907.) 1 purporting to authorize the board of county (Appellate Court of Indiana, Division No. 1
commissioners to borrow $25,000 to be used Dec. 23, 1905.)
for the purpose of erecting a courthouse on 1. COUNTIES-RESTRAINING ISSUE OF BONDS the courthouse square in that town, and to OR APPROPRIATION - JUDGMENT - EFFECT authorize and direct that board to issue SUBSEQUENT PROCEEDINGS.
negotiable bonds of the county for that sum, Where, in a suit to restrain county com
and to appropriate to such purpose the money missioners from issuing bonds or appropriating money for the construction of a courthouse, a
derived from the sale of the bonds. On Janjudgment was rendered in favor of complainants, uary 2, 1905, the board of commissioners on the ground that such proceedings should have contracted with an architect for plans and been instituted by ordinance and pot by motion,
specifications for a courthouse and for the such judgment did not affect any subsequent action of the county council relating to the con
superintendence of its construction, and on struction or repair of public buildings by the February 6, 1905, the board approved plans administrative officers thereof, as provided by and specifications submitted by an architect, law.
and directed advertisements for proposals 2. INJUNCTION-PENDING APPEAL.
for the erection of the building to be received Where, pending suit to restrain the construction of a new courthouse on land belong.
April 3, 1905. Thereupon an action was ing to the county, the building was partially brought in the court below by the state, on constructed before it was held by the Supreine the relation of Benjamin F. Davis and others. Court that the proceedings were void, and be fore the officers and contractors engaged in con
voters and taxpayers of that county, against structing the building were enjoined from pro
the board of commissioners and others to ceeding, and such building in its incomplete | enjoin the letting of the contract. From the * Rehearing denied.
judgment rendered in that cause the plain- , Court, since which time no work has been tiff therein appealed to the Supreme Court done on the building, according to the verified of Indiana, wherein, on June 30, 1905, the complaint herein. In the verified motion for judgment was reversed as to the board of a temporary injunction herein it is stated commissioners, and the court below was di that since June 30, 1905, and since the order rected to enter a finding in favor of the plain granted by the Supreme Court, no work has tiff therein, and to render judgment thereon been done or attempted, and that the strucenjoining the board of commissioners from ture now stands as it was when the workentering into a contract for the construction men left work, June 30, 1905. It appears of a courthouse, and from erecting a court that this structure is an incomplete courthouse or paying out for such purpose any of house two stories in height, without roof, the funds of the county, under and by virtue and unfurnished as to doors and windows of the proceedings of the county council of and otherwise; that the incomplete building December 17, 1904. See State ex rel. Davis is well constructed, according to the plans V. Board of Commissioners (Ind. Sup.) 74 N. and specifications, and would be well adaptE. 1091. In that case the ground upon which ed, if completed, to the purposes of a courtthe court on appeal declared the invalidity house. August 7, 1905, the board of comof the action of the board of commissioners missioners, pursuant to the statute of 1899 appears in the following extract from the (section 5594 et seq., Burns' Ann, St. 1901), opinion of the court: "The record discloses presented to the county auditor a verified that the county commissioners of Newton estimate, itemized, of the expenses of the county attempted to make the appropriation board for the calendar year 1906, including, of money for the building of a courthouse by among other items, the following: "First a mere motion and an order made in pur item. Expense of public buildings and insuance thereof. This procedure was in stitutions. (1) Courthouse. Amount required plain violation of the statute. The adoption for the repair and completion of the new courtof the motion is followed by an order spread house, also heating apparatus for the same. upon the record, purporting to authorize the pluinbing, wiring, and architects' fee, $19,450; issuance and sale of county bonds to provide electric light fixtures, $800; amount required the money so appropriated. The statute for furniture for new courthouse and vault above quoted requires that the issuance of fixtures, $25,000; architect's fee for plans, county bonds can be authorized only by or specifications, and superintendent work, $250. dinance, and the method adopted in this case .
Fifth item: To pay attorney fees was in violation of law, and therefore in- and costs in case of the State ex rel. effectual and invalid. It follows that no Davis V. This Board, and other expenses appropriation of money for the erection of a of said suit in circuit and Supreme Court, courthouse had been made by the county $1,000; to pay [attorney named), employed council of Newton county at the time the by this board, for services before board and appellee board of commissioners was intend county council relating to repair and coming and threatening to enter into a contract pletion of new courthouse, and for services for the erection of such a building, and that in Newton circuit court in relation thereto, said appellee was proceeding without war $500." rant of law, and that such contract, if made, The board in the same instrument prayed would be void." It may seem bardly neces for authority by ordinance, to issue and sell sary to remark that the judgment which the bonds of Newton county in the sum of $24,500 Supreme Court directed was to be one having to provide funds with which to pay for the reference to the action of the county council repair and completion of the new courthouse, on December 17, 1904, and restraining action electric light fixtures therein, furniture there pursuant thereto because of its declared in for, for fees, costs, and expenses of the case validity, resulting, not from the purpose of of State ex rel. Davis et al. v. Newton County the restrained action, but from the form in Council and others, and fees of the attorney which the council proceeded, and that such named, above mentioned, and the fees of the judgment would not affect any subsequent architect for such repairs and completion of action relating to the construction or repair the new courthouse; "the current funds to of public buildings of the county by the ad. be derived from taxation and other sources ministrative officers thereof proceeding in of revenue being insufficient for the payment due conformity to the requirements of the of the above-named expenditures. The total statute relating to such matter.
of the indebtedness of said county added to The judgment in the court below, from the above sum will not exceed two per centum which the appeal was so taken, being in of the taxable property of said county,” Affavor of the defendants in that cause, the terward, August 25, 1905, in vacation, before board of commissioners contracted for the the October term of the court below, the aperection of the courthouse with one Eric pellant filed its verified complaint herein, Lund, who commenced the construction of the signed by the prosecuting attorney as such, building of brick, stone, and mortar, and and by other attorneys, as of counsel, wherecontinued the building thereof until the fur- | in the appellant sought a temporary injuncther construction was stopped on June 9, tion restraining the members of the board of 1905, by an injunction issued by the Supreme commissioners and the contractor, Lind, from