Indiana Trust Company v. International Building & Loan Association No. 2

Decision Date08 December 1905
Docket Number20,734
Citation76 N.E. 304,165 Ind. 597
CourtIndiana Supreme Court
PartiesIndiana Trust Company, Executor, v. International Building & Loan Association No. 2

From Marion Circuit Court; Austin F. Denny, Special Judge.

Action by the International Building & Loan Association No. 2 against the Indiana Trust Company as executor of the will of Norman S. Byram, deceased. From a judgment of the Appellate Court (36 Ind.App. 6) reversing in part a judgment for plaintiff, plaintiff appeals under subd. 3, § 1337j Burns 1901, Acts 1901, p. 565, § 10.

Affirmed in part and reversed in part.

Ayres Jones & Hollett and Nelson, Myers & Yarlott, for appellant.

Chambers Pickens, Moores & Davidson and Harding, Hovey &amp Wiltsie, for appellee.


Jordan, J.

The International Building & Loan Association No. 2, appellee herein, filed in the office of the clerk of the Marion Circuit Court a claim against the estate of Norman S. Byram, deceased, itemized as follows:

"June 2, 1902. Cash balances as treasurer

of the association

$ 1,186.48

June 30, 1898. To loan


Interest on the above loan at 6%



$ 8,741.84"

This claim was not allowed by appellant, the executor, consequently it was transferred to the trial docket of the Marion Circuit Court. Appellant appeared and filed an answer of counterclaim in five paragraphs, the first of which was for money laid out and expended by the decedent, Norman S. Byram, as treasurer of the plaintiff association at its special instance and request, in the sum of $ 5,000.

The second was for money had and received from the decedent, Byram, at the special instance and request of plaintiff in the sum of $ 5,000.

The third paragraph counted upon a check for $ 5,000, drawn by Byram, as the treasurer of plaintiff, on June 5, 1894, upon the funds of appellee association in his hands as such treasurer, to the order of Charles Schurmann, the secretary of appellee, and that the amount of said check was received by said Schurmann as secretary and agent of the plaintiff for its use and benefit, and was so applied and used, and that the defendant never had any credit therefor.

The fourth and fifth paragraphs are similar. The latter is based upon the alleged fact that Charles Schurmann was secretary of plaintiff association, and as such was authorized to receive and disburse its moneys; that on June 5, 1894, the decedent, Byram, then treasurer of the plaintiff association, was about to make an extended journey of uncertain duration for the benefit of his health; that, in order to place the funds of the association then in his hands as said treasurer in such a shape that they might be available in carrying on the business of the association in his absence, on said 5th day of June, 1894, he, as treasurer, executed or drew, to the order of said Schurmann, a check for $ 5,000 upon the funds of plaintiff in his hands; that while such check did not by its terms designate said Schurmann as secretary of plaintiff, it was in point of fact executed to and accepted by him, and the money received thereon by him was in his said capacity of secretary of plaintiff; that decedent never received any credit for it, or any part thereof.

All the paragraphs of the counterclaim apparently show that the demand therein set up arises out of the same matter and transaction as embraced in plaintiff's cause of action, being a settlement of the account of the decedent as the treasurer of plaintiff. The defendant, appellant herein, also answered by way of set-off in five paragraphs, setting up the same matter as alleged and set out in the respective paragraphs of the counterclaim. Appellee unsuccessfully demurred to each paragraph of the counterclaim and to each paragraph of the set-off.

It appears that there were two International Building & Loan Associations--numbered one and two--each being officered by the same persons. There was a claim pending at the same time against appellant in favor of association No. 1 for an alleged balance due from Byram as treasurer. These two causes were consolidated and tried together under a certain stipulation and agreement made by the parties. The judgment herein rendered covers and embraces the claims filed in both of the causes so consolidated. Issues were joined between the respective parties upon the pleadings filed, and the court, on request, made a special finding of the facts and stated, adversely to appellant, its conclusions of law thereon. Over appellant's exception to each of the conclusions and over its motions for a venire de novo and for a new trial, judgment was rendered against appellant for $ 9,231. From this judgment appellant appealed to the Appellate Court.

The latter court adjudged upon the facts disclosed by the special findings that appellant, as executor of the will of Byram, was entitled to be credited with the $ 5,000 turned over by the testator, or decedent, to Charles Schurmann, secretary and agent of appellee association. The judgment of the trial court was accordingly reversed, with instructions to restate its conclusions of law to that effect. To reverse this judgment of the Appellate Court is the purpose and object of this appeal on the part of appellee.

After eliminating from the special findings certain conclusions, we extract therefrom the following facts: The International Building & Loan Association No. 1 was organized as a corporation under the laws of this State in 1889. The International Building & Loan Association No. 2 was in like manner organized in the year 1891. Norman S. Byram was the treasurer and Charles Schurmann was the secretary of both of these associations, the former serving as such treasurer from the time of the organization of the respective corporations until the date of his death, hereinafter stated. Charles Schurmann acted and served as secretary thereof from the date of the organization of the associations until the time of the trial of this cause. Said treasurer and secretary were directors in each of said associations, and the latter were officered in all respects by the same persons. The by-laws for the control of each association were alike.

The duties of the secretary in the main were to receive all moneys paid into said associations and to pay the same over to the treasurer each day, taking his receipts therefor; to keep all accounts of the associations; to draw and sign all orders on the treasurer; to keep the books at all times subject to the inspection of the board of directors; to see to the settlement of all claims and bills; to have the appointment and general supervision over all employes, agents and agencies; to be the custodian of all mortgages, deeds, etc., and once in each quarter to compare his books with those kept by the treasurer and to report discrepancies to said board.

The duties of the treasurer were to receive all moneys from the secretary; to pay all orders drawn upon him by the president and secretary; to keep a correct account of all moneys received and paid out; to be the custodian of all bonds received for loans and other securities not in the custody of the secretary; when required, to make a statement of the business of the office to the board; and to compare his books once each quarter with those kept by the secretary, reporting discrepancies to the board.

On June 4, 1894, Byram, the testator, was in poor health, and had made arrangements to sojourn indefinitely in the state of California. The directors of both the aforesaid associations on said day, by a formal resolution, granted him an indefinite leave of absence. No record, however, was made as to the manner in which the business of the association should be carried on during his absence. On the following day, June 5, he drew a check against the funds of the associations in his hands, in terms as follows: "Indianapolis, Indiana, June 5, 1894, No. 6. Merchants National Bank: Pay to the order of Charles Schurmann $ 5,000. N. S. Byram, treasurer." At the same time he wrote on the back of said check as follows: "This check was given by me to Mr. Schurmann against the funds of the Nat. Bldg. Assn. for which he gave me no receipt, and he is indebted to me or to the association to that amount; he has a memo. of the same in tin box in secretary's office. N. S. Byram." He delivered this check to Charles Schurmann, and he and said Schurmann went together to the Merchants National Bank, in the city of Indianapolis, where Schurmann indorsed the check, and thereupon opened a deposit account with said bank, under the name and style of "Charles Schurmann, secretary." In the presence of Byram, Schurmann deposited the check in the bank, and received credit on said deposit account for $ 5,000. Schurmann, in making said deposit, stated to the bankers that it was a building and loan account. At the time he received the check from Byram he was secretary of said associations and a director thereof. After making this deposit, as aforesaid, up to October 14, 1903, Schurmann deposited in said account sums and balances in his hands as secretary of each of said associations, without separating the funds of one association from those of the other, or from other funds deposited by him.

After June 5, aforesaid, he drew checks on said deposit account in payment of the expenses of said associations, in the payment of warrants turned over by him to the treasurer as cash, and in payment of balances due from him in sundry settlements with the treasurer. Byram was not credited with the proceeds of said check, nor was Schurmann charged with the same upon any of the books of said associations.

On June 5, 1894, Byram, as treasurer, had of the funds of the International Building & Loan Association No. 1, $ 18,854.78, and of the funds of the ...

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