City of Indianapolis v. Skeen

• Decision Date: 06 February 1861
• Citation: 17 Ind. 628
• Parties: The City of Indianapolis v. Skeen and Others
• Court: Indiana Supreme Court

17 Ind. 628

The City of Indianapolis v. Skeen and Others

Supreme Court of Indiana

February 6, 1861

APPEAL from the Marion Circuit Court.

The judgment is reversed, with costs. Cause remanded.

B. K Elliott, for the appellant.

J Morrison and C. A. Ray, for the appellees.

OPINION

Hanna J.

It is averred in the complaint that, "on August 18, 1856, the common council adopted a resolution as follows: "Resolved, that Jeremiah Skeen be, and he is hereby appointed, agent of the City of Indianapolis to negotiate a portion of the city bonds authorized to be issued by the city, at a rate not less than ninety-seven cents to the dollar, and that his expenses be paid by the city, the mayor of the city taking the proper security for the proper discharge of the trust." And further, that Skeen accepted the appointment, and executed the bond sued on, together with the other defendants as his securities, conditioned "that the said Skeen was this day appointed agent of said city, &c., to negotiate the bonds of the city, aforesaid. Now if said Skeen shall well and truly execute said trust, and pay all moneys that may come to his hands, as such agent, to the city," &c. And that bonds were delivered to said Skeen, numbering from one to twenty-five, for one thousand dollars each, and being each of the same tenor, payable to Nathan B. Palmer, or bearer, and bearing interest at six per cent. from date, payable semi-annually, on the first of January and July, on presentation of the coupons attached, until payment of the principal sum, which was on a credit of two years, &c. The bond sued on was dated on the same day the above quoted resolution was adopted.

It is further averred that on September 2, said resolution was by the council so far modified by another resolution, as to empower said Skeen to negotiate said bonds at a rate not greater than an interest of ten per centum per annum; and that afterward, on October 6, 1856, the council adopted a resolution directing said Skeen to complete his arrangement for a loan for $ 20,000, principal and interest to be paid at the periods named in said bonds, &c., on hypothecation of $ 25,000 of said bonds. That so much of a former resolution as relates to the times upon which said loan was to be effected, be and is repealed.

It is further averred that said Skeen, in violation of his said trust, and the directions of said city, &c., did on September 27, 1856, borrow of, &c., the sum of $ 5,000, for which he executed a note, payable at thirty days after date, with seven per cent. interest, dated and payable at New York, and that by the laws of said State, said rate of interest was legal; and signed said note, "City of Indianapolis, Indiana, by J. D. Skeen, Agent;" and to secure the payment thereof, hypothecated with the payees of said note said bonds of said city to the amount of $ 21,000, which, by the terms of said note, upon the non-payment thereof at maturity, the said, &c., were authorized to sell without notice; that Skeen, &c., failed, &c., to pay over said $ 5,000; that to obtain a release of said bonds, plaintiff paid to, &c., said $ 5,000, as well as $ 500, interest, and the further sum of $ 500, expenses, &c.

There is a second paragraph, similar to the first in its averments as to the appointment, &c., of Skeen, and as to the resolutions adopted, &c. It then avers that said Skeen did not well and truly discharge his said trust, but in violation of said instructions, &c., borrowed of certain bankers, &c., the sum of $ 5,000, and for the purpose of procuring said loan, falsely and fraudulently represented to, &c., that said city had a debt maturing, &c., and that unless he procured said sum, plaintiff's credit would be lost; whereas, in truth, said plaintiff had no such debt, &c. That he executed said note as agent, but, in fact, without authority, and for his own benefit, &c. Averment of pledge of bonds, &c., and that Skeen fraudulently converted said money to his own use, and falsely represented that the said bonds were deposited for safe keeping, &c. That he has wholly failed to pay, &c.; and that the city has paid, &c., to release said bonds, &c.

The defendants severally demurred to the complaint, and to each paragraph, because, as averred by Skeen, the same did not state facts sufficient, and because it was shown by said complaint and bond that the same was executed and delivered to secure the performance, &c., on the part of said Skeen, of an act and business wholly illegal and void, &c.; that if the city paid any money on account, &c., the same was paid of its own wrong, and not on account of any act of defendant. The securities assigned the same causes of demurrer; and, also, that the bond sued on was given, inasmuch as said Skeen had that day been appointed, &c., to negotiate said bonds, being made under the resolution of August 18, in which the duties of said agent were fixed. That a subsequent resolution imposed new and different duties on said Skeen, and withdrew the power conferred by the former, and gave said Skeen power, simply, to hypothecate bonds; that they are liable, if at all, only...