Hooten v. State
| Decision Date | 21 June 1915 |
| Docket Number | (No. 63.) |
| Citation | 178 S.W. 310 |
| Parties | HOOTEN et al. v. STATE, for Use of CROSS COUNTY et al. |
| Court | Arkansas Supreme Court |
Action by the State of Arkansas, for the use of Cross County, against J. C. Hooten and others. From a decree for plaintiff, the named defendant and others appealed, and the State assigned cross-errors. Affirmed as to the appealing defendants, and reversed and rendered on the cross-errors assigned by the State.
Allen Hughes, of Memphis, Tenn., for appellants. Benj. Harris, of Harrisburg, Hawthorne & Hawthorne and Gordon Frierson, all of Jonesboro, M. P. Huddleston, of Paragould, Archer Wheatley, of Jonesboro, and Bradshaw, Rhoton & Helm, of Little Rock, for appellees.
At the general election in September, 1908, A. H. Hammett was elected treasurer of Cross county. He duly qualified as such treasurer, and executed a bond, in the sum of $50,000, with F. D. Rolfe and others as his sureties. At the general election in 1910 he was again elected treasurer, and executed a second bond, in the sum of $65,000, with W. H. Harrell and others as his sureties. In the summer of 1912, during his second term of office, he made a settlement with the county court, and the sureties on his first and second bond were released. He then executed a new bond, in the sum of $80,000, which purported to have been signed by the Massachusetts bonding & Insurance Company as his surety. There arose a question as to whether the Massachusetts Bonding & Insurance Company had authorized its agents to sign the bond, and at the same term of the county court an order was made setting aside the former order releasing the sureties on the first and second bond. Subsequently it was ascertained that Hammett had defaulted in his office as treasurer of Cross county, and the amount of such defalcation was ascertained to be more than $21,000. The present action was instituted by the state of Arkansas, for the use of Cross county, against the sureties on Hammett's first and second bond, the Massachusetts Bonding & Insurance Company, J. C. Hooten, L. C. Going, the Merchants' & Planters' Bank & Trust Company, who, it is alleged, converted to their own use funds belonging to the county and in the custody of said treasurer to the amount, principal and interest, of something over $14,000, and against J. H. Hammett and the Bank of Commerce, of Earle, Ark., who, it is alleged, converted to their own use funds of the county in the custody of said treasurer to the amount of $1,000 and the accrued interest.
The chancellor found that A. H. Hammett, as treasurer of Cross county, had defaulted in the sum of over $21,000, and the correctness of this finding is conceded. The chancellor also found that L. C. Going, J. C. Hooten, and the Merchants' & Planters' Bank & Trust Company, of Harrisburg, Ark., were primarily liable for the amount of money which it is alleged they converted, and judgment was rendered against them for that sum. The chancellor also found that J. H. Hammett was primarily liable for the sum of $1,000 and interest, which it is alleged he and the Bank of Commerce, of Earle, Ark., converted to their own use, and judgment was rendered against him for that amount, and the Bank of Commerce was discharged from any liability thereon. The chancellor found that much the greater part of the defalcation of the treasurer occurred during the term of his first bond, and judgment was rendered against the sureties on that bond in the sum of over $17,000. Judgment was rendered against the sureties on the second bond for the defalcation which occurred during his second term of office. The chancellor held that the Massachusetts Bonding & Insurance Company had never signed the bond for which it was sought to be held liable, and had never authorized its agents to do so. Judgment was rendered dismissing the complaint against the Bonding Company. The case is here on appeal.
It is contended by counsel for Going, Hooten, and the Merchants' & Planters' Bank & Trust Company, of Harrisburg, that they are not liable for the amount for which judgment was rendered against them. On the question of their liability M. H. Frayzer, cashier of the bank, testified substantially as follows:
I have been cashier of the Merchants' & Planters' Bank since November, 1906. In July, 1912, J. C. Hooten, who was then sheriff and Collector of Poinsett county, was also president of the bank, and had been for about two months prior to that time. He continued as president until January, 1913. L. C. Going was at the time a director of the bank and was its attorney. On July 26, 1912, the bank, through me as its cashier, issued a draft for $13,000, payable to the order of A. H. Hammett. The draft was drawn upon the Mechanics-American National Bank of St. Louis, our correspondent there. Mr. Hooten gave his check on funds in the bank in his custody as collector of Poinsett county for the amount. My recollection is that his check was payable to the bank, and not to Hammett. I gave the draft to Mr. Hooten. If the draft had taken its regular course, it would have been sent to the bank on which it was drawn. The draft did not take that course, but was returned to the bank three or four days after it was drawn. The ledger shows that it was returned July 30, 1912. The draft, when it was returned, was indorsed by A. H. Hammett, individually, to himself as treasurer. I knew Mr. Hammett personally, and had met him and Mr. Going at Wynne some three or four weeks before this time, but did not talk about the alleged shortage of Mr. Hammett with him. Mr. Going spoke to me about the shortage a week or two before the draft was issued. Going was Mr. Hammett's attorney, and I knew from what he told me that Hammett would need some money in settling with the county court of Cross county as treasurer.
J. C. Hooten testified:
The draft in question was drawn at my solicitation and was delivered by the cashier to me. I gave it to L. C. Going. He told me he wanted to borrow it for A. H. Hammett. I returned the draft to the bank on July 30, 1912. It was either delivered to me by Mr. Going, or I received it through the mail. I knew that there was a rumor with reference to Hammett's shortage, and that there was a great deal of discussion about it. I refused to let Hammett have the money as treasurer, but agreed to let him have it as an individual. There was no understanding as to whether the draft should go through the regular course and be cashed at the St. Louis bank on which it was drawn. I was told that I would get the money back in a short time. I was at Wynne the day the settlement of Hammett was made with the county judge on July 29, 1912, and was in the courthouse a part of the time while the settlement was being made. Neither Mr. Hammett nor Mr. Going gave me any written memoranda that the money had been borrowed. I trusted to Mr. Going's word that it would be returned. After the settlement was made in the courthouse at Wynne, Going and I got in an automobile and came back to Harrisburg. We came by Mr. Hammett's house, and Going went in and talked to him a few minutes. I knew that the draft enabled Mr. Hammett to make his settlement with the county court, because I heard them talking about it during the settlement.
The draft was introduced in evidence, and, with the indorsements, is as follows:
Indorsed:
Then comes a space, beneath which is written:
"Treasurer of Cross County, Arkansas."
L. C. Going testified as follows:
I was Hammett's attorney, and think the draft in question was returned by mail to Mr. Hooten by Mr. Hammett. I am sure I did not receive it from Hammett. Mr. Hooten delivered the draft to me at Wynne, and the draft was used in making the settlement of Hammett as treasurer with the county court of Cross county. I had learned that $13,000 would be required by Mr. Hammett to make his settlement as treasurer, and arranged to get the money for that purpose. The draft was payable to A. H. Hammett, individually, and he was required by the county court to indorse the draft to himself as treasurer.
Under this state of facts it cannot be doubted that the draft was converted by Going and Hooten.
"Any distinct act of dominion, wrongfully exerted over one's property in denial of his right or inconsistent with it, is a conversion." Cooley on Torts (3d Ed.) vol. 2, p. 859.
"Anything which is the subject of property, and is of a personal nature, is the subject of conversion." Id. 856.
From the above testimony it appears that Going procured Hooten to arrange to get $13,000 for Hammett to use in his settlement as treasurer with the county court. Hooten...
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