Clark v. Peoples Sav. & Loan Ass'n of De Kalb Cnty.
| Decision Date | 22 February 1943 |
| Docket Number | No. 27789.,27789. |
| Citation | 221 Ind. 168,46 N.E.2d 681 |
| Court | Indiana Supreme Court |
| Parties | CLARK et al. v. PEOPLES SAV. & LOAN ASS'N OF DE KALB COUNTY. |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Lagrange County; Aldo J. Simpson, Special judge.
Action by Peoples Savings & Loan Association of DeKalb County, Indiana, against Vern C. Clark and others, to collect $9,000 which defendants as directors of plaintiff association falsely represented to State Department of Financial Institutions they had paid into the association to make up an impairment of its capital to that extent. Judgment for plaintiff, and defendants appeal, and the appeal was transferred from Appellate Court under Burns' Ann.St.1933, § 4-209.
Judgment affirmed.
Atkinson & Sanders, of Auburn, for appellants.
Paul J. De Vault, of Indianapolis, and Henry C. Springer, of Butler, for appellee.
The appellee is a building and loan association organized under the laws of this state. The appellants were its board of directors. In 1935 the Department of Financial Institutions of the State of Indiana discovered that the capital of the association was impaired to the extent of approximately $9,000. The department notified the board of directors that unless the impairment was repaired it would take over and liquidate the association. After discussions with the department, it was agreed that the defendant directors would contribute $9,000 to the capital of the association, and the directors all signed an affidavit that the $9,000 had been contributed and paid into the association. Relying upon this representation, the department permitted the association to continue in business, and it thereafter received deposits. The affidavit and the pepresentation was false. The $9,000 was never paid. This is an action to collect the $9,000. There was judgment for the appellee.
Various errors are assigned which we need not notice in detail.
The complaint alleges all of the facts above set out, and all of those facts were proved and are not in dispute.
The appellants contend that: ‘The promise to pay, if made, was a promise to make a gift to appellee and was not binding unless and until executed by them.’ But the complaint does not declare upon a promise to pay. It declares upon a false and fraudulent representation that the appellants had already made and executed a gift, if it was a gift, by which the capital structure of the association was augmented to the extent of $9,000, and this representation was acted upon by the Department of Financial Institutions representing the public. The association was permitted to continue receiving deposits from the public. This was a fraud upon the depositors. Jewett, Receiver, v. Herr et ux., 1927, 86 Ind.App. 392, 156 N.E. 568.
It is contended that the complaint declares upon an oral contract, and that the banking department had no power to enter into such a contract; that it is ultra vires. The banking department had authority to close the institution or to permit it to continue accepting deposits. It made the contribution of additional capital a condition to continuance. It was falsely and fraudulently represented to the department that the condition had been complied with.
The action of the banking department...
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...there should be a recovery as though there had been a promise." Sonnenburg, 573 N.E.2d at 408 (quoting Clark v. Peoples Sav. & Loan Ass'n, 221 Ind. 168, 46 N.E.2d 681, 682 (Ind.1943)) (emphasis added); see also Galloway v. Methodist Hosp., Inc., 658 N.E.2d 611, 613-14 (Ind.Ct.App.1996) (quo......
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