Equitable Surety Company of St. Louis v. Board of Finance of Township

• Decision Date: 06 December 1917
• Docket Number: 23,295
• Citation: 117 N.E. 860,186 Ind. 650
• Parties: Equitable Surety Company of St. Louis v. Board of Finance of Jackson Township
• Court: Indiana Supreme Court

117 N.E. 860

186 Ind. 650

Equitable Surety Company of St. Louis v. Board of Finance of Jackson Township

No. 23,295

Supreme Court of Indiana

December 6, 1917

From Hamilton Circuit Court; Meade Vestal, Judge.

Action by the board of finance of Jackson township, Hamilton county against the Equitable Surety Company of St. Louis, Missouri. From a judgment for plaintiff, the defendant appeals. (Transferred from the Appellate Court under § 1405 Burns 1914, Acts 1901 p. 590.)

Affirmed.

Major A. Downing, for appellant.

Fred E Hines and Annias Guy, for appellee.

OPINION

Spencer, C. J.

It appears from an agreed statement of the facts in this case that on January 4, 1913, the Farmers' and Merchants' Bank, a corporation organized under the laws of Indiana and then doing a general banking business in the town of Cicero in Hamilton county, presented its application to the board of finance of Jackson township, in said county, to be made a depository of the public funds belonging to said township under and pursuant to the depository laws of the State of Indiana. The bank was awarded the sum of $ 6,825 by the board of finance and thereafter tendered its bond in the sum of $ 6,000, with appellant as surety thereon, which bond was duly accepted and approved by said board. So far as material the provisions of the bond will be considered later. The board of finance thereafter deposited with the Farmers' and Merchants' Bank various sums of money belonging to the township and on January 4, 1915, when its term as depository expired, there was on deposit in said bank of such funds the sum of $ 2,027.68. On that day the bank was again regularly designated as a public depository for the ensuing two years and was at once duly notified of such designation, but did not at any time file a new bond to cover the new term.

On January 20, 1915, said Farmers' and Merchants' Bank became insolvent and ceased to do business, and a receiver was then appointed by the Hamilton Circuit Court to take charge of its assets and liabilities. At that time the board of finance had on deposit in said bank township funds in the sum of $ 1,870.14. Proper demands were made on the receiver and on appellant for the payment of this amount but the same were refused and this suit followed. Its object is to recover from appellant, as surety, the amount of money which was lost to the township through insolvency of the bank and judgment was rendered accordingly in the court below.

In support of its attack on that judgment, appellant contends, and we agree, that the provisions of the Public Depository Law, so far as applicable, must be read into and considered as a part of the bond which it executed as surety, just as fully as though they were expressly stated in that instrument. United States Fidelity, etc., Co. v. Poetker (1913), 180 Ind. 255, 264, 102 N.E. 372, L. R. A. 1917 B 984; State, ex rel. v. Heim (1914), 58 Ind.App. 654, 657, 108 N.E. 776; Henry County v. Salmon (1906), 201 Mo. 136, 162, 100 S.W. 20.

Reasoning from this premise counsel asserts that as the term of the depository was thus definitely fixed at two years (§ 7538 Burns 1914, Acts 1907 p. 398), and it was required to give a new bond within five days after notice was received of its redesignation in that capacity (§ 7536 Burns 1914 Acts 1909 p. 437), the failure of the Farmers' and Merchants' Bank to give such new bond on or before January 9, 1915, operated to divest that institution of its character as a public depository and the act of the township officers in permitting public funds to remain in the bank after that day was, in effect, a...