Board of Educ. of the Indep. Sch. Dist. Of Huron v. Whisman

• Decision Date: 21 February 1930
• Docket Number: 6677
• Citation: 229 N.W. 522
• Parties: BOARD OF EDUCATION OF THE INDEPENDENT SCHOOL DISTRICT OF THE CITY OF HURON, Appellant, v. H. M. WHISMAN, Treasurer of School District of City of Huron, et al., Respondents.
• Court: South Dakota Supreme Court

229 N.W. 522

229 NW 522)

BOARD OF EDUCATION OF THE

INDEPENDENT SCHOOL DISTRICT OF THE CITY OF HURON, Appellant, v. H. M. WHISMAN,

Treasurer of School District of City of Huron, et al.,

Respondents.

South Dakota Supreme Court

Appeal from Circuit Court, Beadle County, SD

Hon. Alva E. Taylor, Judge

#6677—Affirmed

Null & Royhl, W. C. Peterson, Huron, SD

Attorneys for Appellant.

Gardner & Churchill, Huron, SD

Attorneys for Respondents.

Opinion filed Feb 21, 1930

CAMPBELL, J.

Plaintiff’s amended complaint reads as follows:

“Now comes the plaintiff by way of Amended Complaint and for cause of action against the defendants and each of them, states, complains and alleges:

“I. That the plaintiff at the times hereinafter mentioned was and still is a public corporation, organized and existing under and by virtue of the laws of the State of South Dakota.

“II. That at the regular school election held in said city of Huron, Beadle County, South Dakota, on June 19th, 1923, the defendant H. M. Whisman, was duly elected to the office of Treasurer of the Independent School District of the city of Huron, Beadle County, South Dakota, for a period of three (3) years from the 1st day of July, 1923.

“III. That on or about September 26th, 1923, the said H. M. Whisman, as principal, and the defendants Geo. W. Wright, J. P. Stahl, Ed. J. Miller, E. D. Sutton and O. E. Wright, as sureties, made, executed and delivered to the Huron Independent School District of the City of Huron, Beadle County, South Dakota, their certain bond or obligation in writing, of which a copy is attached hereto and made a part of this complaint and marked Exhibit ‘A.’

“IV. That on the 26th day of September, 1923, the said bond was duly approved by A. A. Chamberlain, as Chairman of the Board of Education, of the Independent School District of the city of Huron, Beadle Co., So. Dak., and the said bond was duly filed for record in the office of the County Auditor of the County of Beadle, State of South Dakota, on the 26th day of December, A. D., 1923. That said defendant H. M. Whisman, took the oath of office as Treasurer of Huron Independent School District on September 26th, 1923, which oath of office was filed in the office of the County Auditor of Beadle County, South Dakota, on December 26th, 1923, and upon the execution thereof and upon the execution of the bond aforesaid, entered upon the duties of his said office and continued to exercise the same until the present time and still continues so to act.

“V. That said defendant H. M. Whisman, between the 1st day of July, 1923, and the 28th day of January, 1924, and while said bond was in full force and effect and liable thereunder and therefore, received various sums of money as such Treasurer, amounting in the aggregate, and unexpended for any purpose on the 28th day of January, 1924, the sum of Fifty-Three Thousand Four Hundred Seventy-three and 38/100 ($53,473.38) Dollars.

“VI. That said defendant H. M. Whisman, deposited the funds coming into his hands as such Treasurer in the First National Bank of Huron, South Dakota. That said First National Bank of Huron, South Dakota, had not been designated as a depositary of such funds. That said First National Bank of Huron, South Dakota, closed on or about January 28th, 1924, and then and there became and ever since has been and now is insolvent.

“VII. That subsequent to the 28th day of January, 1924, the said Independent School District of the City of Huron, Beadle County, South Dakota, by and through its Board of Education and right and proper officers thereof, drew warrants on the general funds of said District in the hands of said Treasurer H. M. Whisman, but the said H. M. Whisman, wholly failed, refused and neglected to use and exhaust the moneys in his hands as such Treasurer, then in said general funds of said School District, and does now fail, refuse and neglect to meet such warrants to the extent of such moneys in his hands.

“VIII. That on or about the 25th day of September, 1925, the Independent School District of the City of Huron, Beadle County, South Dakota, a Corporation, by and through its Board of Education, and officers thereof and therefor, and at a regular meeting of said Board passed the following resolution, viz., ‘Whereas, two (2) members of the Board of Education of Huron Independent School District have but recently become members thereof, and,

“‘Whereas, the exact financial condition of the said School District is not known to its members, and it is necessary that the Board of Education of said School District know the condition relating to the funds of said district in the hands of the Treasurer thereof:

“‘Now, Therefore, Be It Resolved that the Treasurer of the Independent School District of the City of Huron, Beadle County, South Dakota, be required to turn over and surrender to said Board on October 5th, 1925, all moneys, credits and assets of every kind, nature and description that have come into his hands as such treasurer for the purpose of audit thereof. That a meeting of this said Board will be held at the office of the Sup’t. of Schools in the High School Building, 5th and Illinois Ave., City of Huron, Beadle County, South Dakota, on the 5th day of October, A. D., 1925, at 8:00 o’clock P. M., when and where said Treasurer is required to present himself with said funds of said district for audit purposes.’

“That said resolution was regularly and duly adopted by said Board of Education of said School District.

“IX. That thereafter and on October 5th, 1925, pursuant to the resolution regularly and duly adopted as set out in paragraph VIII, hereof, the said H. M. Whisman, Treasurer as aforesaid, presented himself and then and there offered and tendered all items of cash and credits coming into his hands subsequent to the 28th day of January, 1924, or thereabouts, but offered and tendered in lieu of cash coming into his hands as such Treasurer from July 1st, 1923, to January 28th, 1924, or thereabouts, inclusive, Receiver receipts or vouchers of the First National Bank of Huron, South Dakota, a Corporation, as follows, viz., No. 1792, in the amount of $15,200.37; No. 1794, in the amount of $37,391.72; and, No. 1795 in the amount of $781.29. That said H. M. Whisman, Treasurer as aforesaid then and there wholly failed, refused and neglected and does now fail, refuse and neglect to turn over and surrender for auditing purposes or any other purpose the cash moneys coming into his hands as such Treasurer.

“That the bond aforesaid was conditioned specifically for the return and payment of all moneys coming into the hands of said Treasurer H. M. Whisman, as such Treasurer, and by virtue of such failure to turn over said moneys to the qualified officers and agents of said District the said sureties of the said Treasurer became liable to said District upon their written obligation and bond to the extent of the moneys so refused to be returned to said district and its proper officers for auditing and other purposes, and said co-defendants of the said H. M. Whisman are now liable to said plaintiff in the sums and amounts so refused to be surrendered and turned over as aforesaid.

“That upon the refusal to turn over and surrender the moneys aforesaid the following resolution was duly and regularly passed and adopted by the Board of Education of said Huron Independent School District of the City of Huron, Beadle County, South Dakota, a corporation, viz.,

“Be It Resolved, That Whereas H. M. Whisman as Treasurer of the Independent School District of the City of Huron, Beadle County, South Dakota, pursuant to call and demand of this Board for a surrender and presentation of all funds in his hands as such Treasurer belonging to the aforesaid Huron Independent School District, has failed and refused to comply therewith and in lieu of presenting the funds mentioned the said H. M. Whisman as such Treasurer has presented to this Board receivers receipts numbers 1792, am’t. $15,200.37; No. 1794, am’t. $37,391.72; and No. 1795, am’t. $781.29, of the First National Bank of Huron, South Dakota, a Corporation, now insolvent and suspended and in the hands of the Comptroller of the Currency of the United States of America for liquidation, and,

“Whereas, H. M. Whisman as such Treasurer has failed and refused to comply with the demands as made, except, by tender of the aforesaid receivers receipts, for the purpose of audit or any other purpose, and,

“Whereas, this said Board of Education of the Independent School District of the City of Huron, Beadle Co., So. Dak., a Corporation, by and through its officers has heretofore drawn and issued warrants against its general funds in the hands of said H. M. Whisman, Treasurer as aforesaid, and

“Whereas, the said H. M. Whisman, Treasurer as aforesaid has failed and refused to pay such warrants to the extent of the general funds in his hands as such Treasurer and,

“Whereas, the said H. M. Whisman, as Treasurer of said District as aforesaid is in default under the terms and conditions of his bond as such Treasurer by virtue of the above and foregoing acts and omissions and by failure to turn over and surrender to this Board the moneys and credits coming into his hands as such Treasurer and by other acts of default:

“Now, Therefore, Be it resolved that the above and foregoing offer of said Receivers Receipts or certificates be and they are each and all hereby refused as and in lieu of the cash coming into the hands of said Treasurer, and which funds and moneys are represented thereby, and the said H. M. Whisman, Treasurer as aforesaid is hereby declared to be in default and liable, together with his sureties, under the terms and conditions of his bond as such Treasurer in force and effect at the time of the closing of the said First National Bank, a Corporation, and which said moneys so represented by the above mentioned certificates, were then and there in said...