City of University City v. Schall

• Decision Date: 16 September 1918
• Parties: CITY OF UNIVERSITY CITY v. EDWARD G. SCHALL, Administrator of Estate of JAMES F. COYLE, Appellant
• Court: Missouri Supreme Court

205 S.W. 631

275 Mo. 667

CITY OF UNIVERSITY CITY v. EDWARD G. SCHALL, Administrator of Estate of JAMES F. COYLE, Appellant

Supreme Court of Missouri, First Division

September 16, 1918

Appeal from St. Louis County Circuit Court. -- Hon. John W McElhinney, Judge.

Affirmed.

John A Blevins for appellant.

(1) Under the evidence it was a question for the jury as to whether the proceeds received from the sale of the bonds of the city were entrusted to the care and custody of Coyle, as treasurer. (2) Coyle was not responsible for any funds of the city not entrusted to his care as treasurer. Sec. 9395, R. S 1909; Sec. 8531, R. S. 1909; McMillen on Municipal Corp., sec. 539; Borgnis v. Falk Co., 147 Wis. 327; State v. Grann, 40 L. R. A. 690; United States v. Thomas, 12 Wall. 337. (3) The mayor and board of aldermen had the care, control and management of the fund in question. Sec. 9371, R. S. 1909. (4) The evidence offered by defendant to show the action of the mayor and board of aldermen with reference to the control of checks and proceeds of the sale of the bonds and the deposit in the Trust Company was competent and its rejection by the court was error. Sec. 9371, R. S. 1909. (5) Parol evidence was admissible to show the action of the mayor and board of aldermen with reference to the funds, and the exclusion of the evidence of the witnesses upon that question was error. 28 Cyc. 343; Dillon on Municipal Corp., sec. 557; McQuillin on Municipal Corp., secs. 624 and 625; 17 Cyc. 506; Secs. 9320 and 9321, R. S. 1909. (6) The evidence established the fact that the account between the parties had been stated and settled and plaintiff could not, therefore, maintain this action. Sec. 9368, R. S. 1909; City Ordinance No. 28; 1 Cyc. 364, 367, 454; Lansing v. Woods, 57 Mich. 201; Union Bank v. Knapp, 3 Pick. 96; Allen v. Nettles, 39 La. Ann. 788; Rawlins v. Rawlins, 102 Mo. 567; Kronenberger v. Binz, 56 Mo. 121; Note L. R. A. 1917-C, p. 447; Note 29 L. R. A. (N. S.) 334. (7) In any event, Coyle was only bailee of the city's money and responsible for the failure to exercise reasonable care. Healdburg v. Mulligan, 33 L. R. A. (Colo.) 461; Borgins v. Falk Co., 147 Wis. 327; Wilson v. People Colorado, 22 L. R. A. (Colo.) 449. (8) The Trust Company was solvent and the deposit of the money with said company was within the exercise of reasonable care. (9) The deposit of the bond money was a special deposit by agreement with the Trust Company and the title never left the city. Merchants Natl. Bank v. School Dist., 36 C. C. A. 432, 947 F. 705; Marine Bank v. Fulton Bank, 2 Wall. 256; Planters Bank v. Union Bank, 16 Wall. 483. (10) Coyle did not receive any of the proceeds of the sale of the bonds and he did not profit one cent from the transaction. The mayor and board of aldermen interfered and actually controlled the funds and by so doing, relieved Coyle of liability. (11) This is not a suit upon the treasurer's bond. A different rule prevails where a suit is upon a bond given by a treasurer whereby he has obligated himself beyond that created by law. (12) The plaintiff city is estopped by its conduct and action and interference with the bond money to assert any claim against Coyle on account thereof. Edward v. Kirkwood, 147 Mo.App. 599; McQuillin on Municipal Corp., secs. 629, 1916 and 1083; 29 Cyc. 476.

Rodgers & Koerner for respondent.

(1) The custodian of public funds is liable for money committed to his keeping, and lost through failure of the bank in which deposited. R. S. 1909, sec. 9395; State ex rel v. Powell, 67 Mo. 395; State ex rel v. Moore, 74 Mo. 413; County of Mecklenburg v. Beales, 111 Va. 691, 36 L. R. A. (N. S.) 287; 28 Cyc. 472; State to use, etc. v. Reed, 116 Tenn. 114. (2) Neither the mayor nor the board of aldermen of a municipality have any right to direct how, where, or in what manner funds in the hands of the treasurer shall be kept. R. S. 1909, secs. 9395, 9368, 9363; Butler Co. v. Boatmen's Bank, 143 Mo. 27; Halbert v. State ex rel., 22 Ind.App. 125. The mayor and board of aldermen having no power in the premises, any direction they may have made was a nullity and it is no defense to the treasurer that he followed such direction. Inglish v. State ex rel., 61 Ind. 212; Halbert v. State ex rel., 22 Ind.App. 125. (3) The board of aldermen was required to keep a journal of its proceedings. R. S. 1909, sec. 9320. Hence, the action of the board can be proved only by its records. State v. Lawrence, 178 Mo. 374; Light & Water Co. v. Lebanon, 163 Mo. 254; Kane v. School Dist., 48 Mo.App. 414; Surveying Co. v. St. Louis, 68 Mo.App. 187. (4) The liability of the custodian of public funds is fixed by law. The bond given by him does not define his liability, but merely super-adds to his personal responsibility the security of his bondsmen. State to use v. Copeland, 96 Tenn. 326. (5) There is no element of estoppel in this case for the reason that Mr. Coyle had no right to act upon any representations the board of aldermen may have made to him. DeLashmutt v. Tettor, 261 Mo. 441. Furthermore, the board of aldermen had no right to make such representations, and there is no evidence that any such representations were made. Wheeler v. Poplar Bluff, 149 Mo. 36. (6) A special deposit is one made with the understanding that the identical money deposited shall be returned to the depositor. Butcher v. Butler, 134 Mo.App. 61; Bouvier Law Dictionary, p. 3098. The fact that the fund here in question was deposited in an interest bearing account and that subsequently a "profit sharing" certificate was accepted for the amount due, conclusively shows that it was not intended as a special deposit.

OPINION

BLAIR, P. J.

James F. Coyle was treasurer of University City. Appellant is administrator of his estate. The city sued for a balance it alleges Coyle, as treasurer, owed it at the time of his death. The verdict was against the city. A new trial was granted, and the administrator appeals from that order.

The petition alleges the balance is $ 28,197. It is stipulated this has been reduced by payment of over $ 17,000 out of the assets of the People's Savings Trust Company. No point is made on the pleadings. One ground upon which the new trial was granted was that the verdict was "contrary to the law."

There is no dispute that bonds for $ 100,000 were authorized, issued and sold, and that the checks for the proceeds were made out to James F. Coyle, Treasurer of University City; that he endorsed these checks for deposit with the People's Savings Trust Company, and, in his own hand, made out the deposit slip used in that transaction; that the account was opened by the Trust Company in the name of James F. Coyle, as treasurer of the city, and always carried that way on its books; that the portion of the sum withdrawn, with the exception of one large item, was paid out on Coyle's treasurer's check or paid on warrants issued in the ordinary way and Coyle's check subsequently made to cover the payment. The city does not question the propriety of any of these payments.

Appellant offered oral evidence tending to show that the mayor and aldermen examined the statutes and concluded they had the right to control the fund; that they agreed they would do so that they directed the deposit to be made in the Trust Company in Coyle's name as treasurer; that the Trust Company offered interest as high as offered by any other and was located in University City; Coyle, the mayor and some of the aldermen were directors of the Trust Company. The city attorney and Coyle took to the Trust Company the checks representing the fund in question; the account was opened, as already stated, and the notation "special deposit" was placed upon the books in connection with the account. A little later the Trust Company issued and delivered to Coyle a pass book marked on cover "Mo. 165, People's Savings Trust Co. By Mail Only. University City, St. Louis, Mo. In account with -- Name, James F. Coyle, Treasurer -- Town, University City, Mo." In this book appear the deposits, withdrawals and balances. The heading over them is: "Book No. Mo. 165. People's Savings Trust Co. In account with James F. Coyle, Treasurer University City, Mo." This book and other evidence show that the proceeds of the bonds went into this account. On March 24, 1910, the balance was $ 61,793.16. On that date Coyle demanded the balance. The bank did not have it and Coyle accepted a certificate of deposit for $ 50,000. This left $ 11,793.16 in the account. Payments reduced the balance, and on December 3, 1910, Coyle surrendered his certificate of deposit, caused $ 10,000 to be placed in the account, and took another certificate of deposit for $ 40,000. Under like conditions similar transactions occurred. On May 25, 1911, the account showed a balance of $ 4419.63, and Coyle had in his possession a certificate of deposit for $ 25,000. The body of the certificate read: "This certifies that Jas. F. Coyle, Treasurer of University City, Mo., has deposited in the People's Savings Trust Company the sum of twenty-five thousand no/Dollars, payable 6 mos. after date on return of this profit sharing certificate of deposit, properly assigned. This certificate is entitled to share in the profits as provided," etc. "This certificate is transferable only in person or by attorney upon the books of the company." This was subject to a contract as to the method of computation and payment of profits. The certificates of deposit previously issued to Coyle were of like character. Payments out of the fund were made on checks signed by Coyle and issued by him in payment of warrants ordered issued by the city council. Some payments seem to have been made by the Trust Company directly to the holder of the warrant. In such circumstances...