Ijams v. Andrews

• Decision Date: 11 February 1907
• Docket Number: 1,283.
• Citation: 151 F. 725
• Parties: IJAMS et al. v. ANDREWS.
• Court: U.S. Court of Appeals — Seventh Circuit

151 F. 725

IJAMS et al. v. ANDREWS.

No. 1,283.

United States Court of Appeals, Seventh Circuit.

February 11, 1907

The plaintiffs in error were five of seven defendants named in the complaint of the defendant in error, in a suit to recover the amount of advances made by the Vigo County National Bank for their alleged use and benefit, and the writ of error is prosecuted from a judgment therein against the plaintiffs in error and another defendant, Gustav A. Conzman, who defaulted and declined to join in the writ. The remaining defendant named in the complaint was one George E. West, who was not made a party by service or appearance, and is not included in the judgment. Issue was joined between the present parties under the complaint in four paragraphs, two of which charged upon promissory notes signed by West and Miller, but averred to be the obligation of the seven defendants as associates one charged for money had and received, and the fourth averred facts of joint association for purposes stated and moneys advanced by the bank for the use and at the instance and request of all. The hearing was submitted to the court upon waiver of a jury-- the first-mentioned two paragraphs founded upon promissory notes being dismissed-- and special findings of fact were filed and judgment awarded thereupon.

Error is assigned for the conclusions of law upon the facts so found, which are preserved in the bill of exceptions-- with no further questions raised--and are substantially as follows:

'(1) Some years prior to June, 1905, the Vigo County National Bank of Terre Haute, Ind., was organized as a corporation under the laws of the United States concerning national banks, and had been carrying on business in the city of Terre Haute, county of Vigo, and state of Indiana. On the 28th day of that month it ceased to do business, and Charles S. Andrews was appointed receiver by the Comptroller of the Currency of the United States, and since his appointment he has been, and still is, engaged in winding up the affairs of the bank under the direction of the Comptroller of the Currency.

'(2) Late in December, 1899, or early in January, 1900, all of the defendants associated themselves together for the purpose of procuring from the city of Terre Haute a franchise to supply the citizens of that city with refrigerating fluids and fuel and illuminating gas by conducting the same through pipes laid in the streets of that city, and in furtherance of their scheme they executed, and on the 1st day of March, 1900, filed in the office of the Secretary of State and in the office of the recorder of Vigo county, Ind.,' an instrument which is set forth, executed by all the defendants, as written articles reciting their association 'pursuant to the statutes of the state of Indiana for the organization of corporation,' and stating (1) the corporation name to be 'Terre Haute Pipe Line Company'; (2) that the capital stock shall be $500,000, in shares of $100; (3) that 'the object of this association shall be to acquire, construct, own, and operate works for the manufacture and production of various fluids and the distribution of the same by pipe-lines for refrigeration preservation, and fire protection, and to furnish the same to public and private consumers, and the manufacture and distribution by pipe lines of heating and illuminating gases, and to furnish the same to public and private consumers; and the production of the by-products connected with the operation of said works; and the sale of all said products'; (4) that the business shall be carried on in the city of Terre Haute; (5) that there shall be seven directors; (6) naming each defendant as director to manage the affairs for the first year; and (7) that the 'corporation shall have an existence of fifty years.'

'(3) During the evening of the day the foregoing instrument was filed, all of the defendants met and elected defendant Ijams president, defendant Henry G. Miller vice president, and defendant Gustav A. Conzman secretary and treasurer, the last-named defendant being also cashier of the Vigo County National Bank.

'At this meeting defendant Hamill explained to all the other defendants that they would probably have to pay to the city of Terre Haute for the desired franchise $10,000, or perhaps as much as $20,000, and that as an evidence of good faith they would also have to purchase probably a lot upon which to construct their plant.

'(4) On March 2, 1900, all of the defendants, except the defendant West, appeared before the board of public works of the city of Terre Haute and presented an application for the franchise they desired, made out in the name of the Terre Haute Pipe Line Service Company, and offered to pay for the franchise $10,000, or furnish free gas to all city buildings. After negotiations had been continued for some days, the board of public works and the defendants reached an agreement which was reduced to writing and executed under date of March 24, 1900, the agreement on the part of the defendants being made in the name of the Terre Haute Pipe Line Service Company, and executed by defendant Ijams as president, and defendant Conzman as secretary. This agreement, among other things, provided that the Terre Haute Pipe Line Service Company should within 20 days from the approval of the agreement by the common council of the city of Terre Haute, Ind., pay into the city treasury $10,000, and that the company should within two years spend not less than $100,000 in the construction of its plant, and should also give a bond to the city in the sum of $10,000 conditioned for the faithful performance of the agreement on the part of the company. On April 3, 1900, the agreement, with an ordinance approving and ratifying the same, was submitted to the common council and referred to a committee. On April 10, 1900, at the next meeting of the common council, an agreement with the Terre Haute Pipe Line Service Company, signed by defendant Ijams, as president, and defendant Conzman, as secretary, was approved, in which it was recited that the $10,000 called for by the contract of March 24, 1900, had been paid into the city treasury, and it was agreed that the sum so paid should never be refunded under any circumstances. The ordinance approving the contract of March 24, 1900, was then taken up and passed.

'(5) It became known on the 15th day of March, 1900, that the board of public works would make the contract, which was afterwards executed under date of March 24, 1900, and within a day or two afterwards all of the defendants met and decided upon a plan of campaign for getting the contract approved by the common council, and, among other things, agreed that certain members of the council should be seen by certain of the defendants. At the close of this meeting, defendants West and Miller, at the suggestion of defendant Conzman, signed two blank printed forms of notes used by the Vigo County National Bank. Neither of these forms was dated, nor was any time of maturity stated. In one of them the sum of $10,000 was written, but in the other no amount was stated. Defendant Conzman stated at the time that it was not yet known what amount it would take to purchase the site for the plant, and that he would get both notes signed by some of the other defendants before they were used.

'(6) On April 24, 1900, all the defendants met, and the president and secretary were directed to accept the contract made with the city, and to provide for the bond called for in the contract, and the president and secretary, together with the consulting engineer, were authorized to locate and purchase property on which to erect the plant. The president and secretary were further authorized to make a contract with J. Motte Martin and Eugene F. Osborne, trustees, for license letters for certain inventions and discoveries pertaining to the production of carbon dioxide, and certain methods and devices for the utilization of said dioxide for refrigeration, preservation, and fire protection, and also to make a contract with the Osborne Steam Engineering Company for doing the engineering work.

'(7) It became known to the defendants prior to the meeting of the council on April 3, 1900, that the ordinance approving the contract of March 24, 1900, would not be passed until the sum of $10,000 had been paid into the city treasury, and defendant Conzman on April 3, 1900, drew a check for $10,000 on the Vigo County National Bank, signed by him as treasurer, and payable to the order of the city treasurer. The amount of this check, after it had been indorsed by the city treasurer, was placed to the credit of the said treasurer with the Vigo County National Bank on April 7, 1900, and on April 12, 1900, an account was opened on the books of the Vigo County National Bank in the name of G. A. Conzman, treasurer, and this account on that date was credited and charged with $10,000. Defendant Conzman filled the blanks left in the note for $10,000 previously signed by defendants West and Miller by giving the note the date of April 10, 1900, and making it payable on demand, and had the same taken by the bank on the 12th day of April, 1900, all without the knowledge or consent of either West or Miller.

'(8) On May 23, 1900, a piece of real estate in the city of Terre Haute which had been selected by defendants Ijams and

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