McClelland v. The State ex rel. Speer

• Decision Date: 20 June 1894
• Docket Number: 16,536
• Citation: 37 N.E. 1089,138 Ind. 321
• Parties: McClelland, Trustee, v. The State, ex rel. Speer
• Court: Indiana Supreme Court

37 N.E. 1089

138 Ind. 321

McClelland, Trustee, v. The State, ex rel. Speer

No. 16,536

Supreme Court of Indiana

June 20, 1894

From the Marion Superior Court.

The judgment is reversed, with instructions to overrule the demurrer to the second, third and fourth paragraphs of the defendant's return to the writ of mandate, and for further proceedings not inconsistent with this opinion.

W. N Harding and A. R. Hovey, for appellant.

F. J Van Vorhis and W. W. Spencer, for appellee.

OPINION

Dailey, J.

William H. Speer was trustee of Wayne township, in Marion county Indiana, and of Wayne school township, in said county and State, from April, 1882, to April, 1884. Prior to August 10 1883, he had deposited in the bank of the Indiana Banking Company, a bank of discount and deposit of the city of Indianapolis, Indiana, to his personal credit and in his individual name funds belonging to said civil and school township, to the amount of $ 5,278.75, of which amount $ 2,701.04 belonged to the school funds denominated in section 4,325 of the R. S. of 1881 as the "common school fund," interest on the "Congressional township school fund," and the "school revenue for tuitions," and $ 1,328.14 thereof belonged to the special school fund, all of which had come into the hands of said Speer as trustee of said Wayne school township for use in maintaining the common schools of said school township under the laws of the State of Indiana. On said 10th day of August, 1883, said bank suspended payment, and a receiver was appointed therefor, and said Speer lost the deposit. After the loss of the funds, said Speer, out of his private means, repaid himself as the trustee of said school township, all said sum of $ 2,701.04 belonging to said school fund, and also repaid to himself as such trustee $ 111.86, as part payment of said "special school fund," amounting in the aggregate to $ 2,812.90. Firman Stout was elected as successor in office to said Speer, and continued in office until April, 1888, when he was succeeded by John F. McClelland. On June 23, 1884, there was still due from Speer to said township, on other than school funds, the sum of $ 2.286.05, for which sum Stout, as trustee of said township, on that day recovered judgment against Speer and the sureties on his official bond in the superior court of Marion county, Indiana, $ 1,064.18 of which sum has since been collected and paid on said judgment through the receiver of the Indiana Banking Company. On April 8, 1885 (Acts 1885, p. 157), an act for the relief of said William H. Speer and the sureties on his official bond became a law (if constitutional) without the Governor's signature, by which act it was provided as follows:

Section 3, p. 159. "The trustee of Wayne township in Marion county, Indiana, is directed to pay to William H. Speer, late trustee of said township, twenty-eight hundred and twelve dollars and ninety cents ($ 2,812.90) out of the township fund, being the amount paid into the several funds of said township by said William H. Speer on account of the loss by the failure of said Indiana Banking Company, in excess of one-half of ten hundred and thirty-two dollars and nine cents, dividend received from the receiver of said bank: Provided, he shall transfer to the trustee of said township all claims he may hold against said bank for money belonging to the township deposited therein."

Section 4, p. 160. "The said William H. Speer, and his sureties, Robert N. Harding and Israel J. Connorroe, are hereby released from all liability on account of judgment rendered in cause 32,370 of Marion Superior Court against the said Speer and his sureties in favor of the State of Indiana, on the relation of Firman Stout, trustee of Wayne township, and said trustee is directed to enter satisfaction thereof upon the record."

Section 5 declares an emergency.

Upon the passage of said act said Speer transferred to said Stout, who was then trustee of the township, all claims held by him against the bank for money belonging to the township deposited therein, and demanded of Stout, as such trustee, payment of said sum of $ 2,812.90, or, if he did not have sufficient township funds on hand to make such payment, that he levy a tax sufficient to pay that amount. This the trustee refused to do, and, upon the election of said McClelland as successor in office of said Stout, Speer renewed the demand upon McClelland, as trustee, and, not receiving payment, brought this suit in the superior court of Marion county to procure a mandate against the appellant, requiring him to forthwith make such payment, or if there were not sufficient funds on hand for that purpose, to levy a tax sufficient therefor.

All these facts are fully set out in the appellee's complaint, and also in the alternative writ of mandate, together with the specific statement that at the time the relator was elected trustee the funds of the township and school township were deposited in the Indiana Banking Company of Indianapolis, Indiana, a bank in good standing and generally regarded as solvent; that such funds remained deposited at said place, and such other funds of said township as came into his hands; that the relator had no knowledge of any kind that led him to believe or suspect that the money deposited in the bank was not secure; that prior to the 10th day of August, 1883, he had deposited the funds of said civil and school township to the amount of $ 5,278.83; that said funds remained in said bank on said date and were lost by the failure of the bank without any fault or negligence on the part of the relator. On this complaint and affidavit the court made an order directing the alternative writ of mandate to issue, and the same was issued. To this writ a demurrer was filed, which demurrer was overruled. Thereupon a return was made to the alternative writ of mandate in four paragraphs, the first of which was afterwards withdrawn.

The remaining paragraphs of the answer allege, substantially, "that the money that came into the hands of the relator was for the purpose of maintaining schools in the township; that the relator repaid himself the sum of $ 2,701.04, belonging to the tuition fund, and $ 111.86 belonging to the special school fund, out of his own private means; that these two items are the same money which the relator repaid himself; that the defendant only has on hands a small amount of money, not over $ 50; that he expects to draw from the county treasury the sum of $ 525, or about that amount; that said amount, together, will barely pay the current expenses of the township during the current fiscal year, and until the next levy of taxes for township purposes can be made and collected, and that to pay out the money on hands and to come into his hands, as aforesaid, will leave him destitute of means to carry on the necessary business of the township. And in the last paragraph it is alleged that the funds so repaid by said relator to himself as such trustee were special funds raised under said law for maintaining the common schools of the State; that they were not originally raised by direct taxation in said school township or elsewhere, and that the property in said Wayne township can not be taxed for the purpose of repaying said relator for funds paid by him into said 'common school fund,' 'interest on Congressional township school fund,' and 'school revenue for tuition fund.'"

The relator filed his separate demurrers to the second, third and fourth paragraphs of the return. The demurrers to each paragraph of the return to the alternative writ were sustained, to which the appellant excepted. The appellant refused to amend said paragraphs of answer, or to further answer said complaint, and elected to abide the rulings of the court on the demurrers to the several paragraphs of the answer as herein above stated; whereupon judgment was entered and the writ of mandate issued against said McClelland, trustee as aforesaid, to which judgment the appellant excepted. This judgment was against John F. McClelland, trustee of Wayne township, and no judgment whatever was entered against the trustee of Wayne school township. Such school trustee, therefore, has no interest in this appeal, but appears hereto for the purpose of saving any question as to the parties. The appellant filed a motion for a new trial, which was overruled, and he appealed from the special to the general term of the superior court. No assignment of error is made upon the motion for a new trial. The assignments of errors on appeal by the township trustee, from the special to the general term of the superior court were as follows:

1. The complaint does not state facts sufficient to constitute a cause of action.

2. The court erred in overruling the demurrer to the complaint herein.

3. The court erred in sustaining the demurrer to the second paragraph of the defendant's return to the writ of mandate herein.

4. The court erred in sustaining the demurrer to the third paragraph of the defendant's return to the writ of mandate herein.

5. The court erred in sustaining the demurrer to the fourth paragraph of the defendant's return to the writ of mandate herein.

The appellant's assignment of error in this court is that "the court in general term erred in affirming the judgment of the court in special term."

The first and second assignments of error involve the constitutionality of the act for the relief of William H Speer, of April 8th, 1885 (Acts 1885, p. 157, supra), and the power of the Legislature to indirectly impose taxation upon a township for such purpose. Counsel for the appellant say: "The relator had no claim whatever, legal or equitable, against Wayne township. He had been trustee of the township, and as such had given bond with...