Miami Cnty. Bank v. State ex rel. Peru Trust Co.

• Court: Indiana Appellate Court
• Writing for the Court: FELT
• Citation: Miami Cnty. Bank v. State ex rel. Peru Trust Co., 61 Ind.App. 360, 112 N.E. 40 (Ind. App. 1916)
• Decision Date: 29 March 1916
• Docket Number: No. 9337.,9337.
• Parties: MIAMI COUNTY BANK v. STATE ex rel. PERU TRUST CO. et al.

61 Ind.App. 360

112 N.E. 40

MIAMI COUNTY BANK

v.STATE ex rel. PERU TRUST CO. et al.

No. 9337.

Appellate Court of Indiana, Division No. 1.

March 29, 1916.

Appeal from Circuit Court, Miami County; Joseph N. Tillett, Judge.

Action by the State on the relation of the Peru Trust Company, administrator, against the Miami County Bank and others. From a judgment for plaintiff, the named defendant appeals. Judgment reversed, with instructions.Cox & Andrews, of Peru, for appellant. Albert Ward and Antrim & McClintic, all of Peru, for appellee.

FELT, P. J.

This is an appeal from a judgment of the Miami circuit court, rendered against appellant and John F. Perry as principals and William and H. G. Ballard and Maryland Casualty Company as sureties, in favor of Peru Trust Company, administrator de bonis non of the estate of Fred M. Perry, deceased.

The errors assigned and relied on for reversal of the judgment are, in substance, as follows: (1) Overruling appellant's demurrer to the complaint of appellee, State ex rel. Peru Trust Company Administrator, de bonis non, etc. (2) The overruling of appellant's separate demurrer to each of the first, second, and third paragraphs of the cross-complaint of Maryland Casualty Company. (3) Overruling appellant's motion for a new trial. (4) Overruling appellant's motion to modify the judgment. (5) Error of the court in each separate conclusion of law numbered, respectively, 1, 2, 3, 4, and 5. (6) Overruling appellant's motion in arrest of judgment.

Some of the undisputed facts of the case are as follows: On November 9, 1912, John F. Perry was appointed administrator of the estate of Fred M. Perry, deceased, and qualified as such administrator, and gave bond in the sum of $100, with appellees William and H. G. Ballard as sureties thereon. On March 14, 1913, said administrator gave an additional bond in the sum of $5,000, with appellee Maryland Casualty Company as surety. From 1911 until the trial of this case appellant was a partnership engaged in the banking business, and John F. Perry had a deposit and checking account with such bank. On April 9, 1913, said administrator received a draft for $4,250 from a railway company, payable to the order of “John F. Perry, administrator of the estate of Fred M. Perry, killed near Traft, Cal., November 9, 1912.” On April 17, 1913, said John F. Perry indorsed said draft “John F. Perry, Administrator,” and placed it with appellant for collection, and on said day appellant gave John F. Perry credit on his individual checking account for the face value of the draft. On said day John F. Perry owed appellant $2,300, and before making said deposit had to his credit in his checking account the sum of $11.41. On May 16, 1913, appellant applied on the aforesaid indebtedness of John F. Perry, $1,944.39 of said deposit, by charging that amount against his checking account. The balance of the funds to the credit of Perry were checked out by him for his individual use from time to time, and on September 13, 1913, his checking account with appellant was overdrawn $30.99. On June 11, 1914, John F. Perry resigned as such administrator, without accounting to the estate for said funds, and appellee the Peru Trust Company was appointed administrator de bonis non of the aforesaid estate, and thereupon brought this suit against John F. Perry, William Ballard, H. G. Ballard, Maryland Casualty Company, Miami County Bank, and Willard F. Pearson, receiver of the estate of John F. Perry.

The first paragraph of complaint is against John F. Perry and William and H. G. Ballard, sureties on the bond for $100. It avers the execution of the bond for $100, the receipt and deposit of the funds by John F. Perry, in the Miami County Bank, and charges that, while acting as such administrator, he unlawfully embezzled and appropriated said money to his own use, and has wholly failed and refused to turn over the same, or any part thereof, to persons entitled to receive the same; that said Perry and his sureties on said bond are liable for the full amount of said money so embezzled as aforesaid with 10 per cent. penalty, a copy of which bond is filed with and made a part of the complaint.

The second paragraph of complaint is against John F. Perry, Maryland Casualty Company, and Willard F. Pearson, receiver, “On the second bond given by John F. Perry as administrator” in the sum of $5,000.

The third paragraph of complaint is against John F. Perry, Maryland Casualty Company, Willard F. Pearson, receiver of John F. Perry and appellant. It alleges Perry's appointment as administrator, the execution of the bond for $5,000 with Maryland Casualty Company as surety thereon, and alleges the condition of the bond to be that Perry should faithfully discharge his duties as administrator according to law, and the bond is made a part of the pleading by exhibit. It contains substantially the same averments as the first paragraph as to the deposit of the funds by Perry and the wrongful application and embezzlement of the trust funds, and in addition thereto charges that said Perry and appellant-

“unlawfully conspired together for the purpose of converting and appropriating said money, *** and on or about the 17th day of April, 1914, *** did in fact convert and appropriate said money *** to their own joint use and benefit. *** That by reason of the foregoing, the terms and conditions of the bond aforesaid have been broken and violated and the defendant John F. Perry, Maryland Casualty Company, and the Miami County Bank are liable to pay to the relator the full amount of the money so converted and appropriated by the defendant Perry, together with interest thereon from April 17, 1914, and 10 per cent. penalty. *** Wherefore this relator demands judgment against each of said defendants for the sum of $5,000, *** and for all other just and proper relief in the premises.”

The Maryland Casualty Company answered the complaint by general denial, and also filed a cross-complaint in three paragraphs against appellant.

The first paragraph of the cross-complaint of the Maryland Casualty Company avers, in substance, that appellant knew that John F. Perry had and held said $4,250 as such administrator, and knew that the same belonged to said estate; that with such knowledge it accepted the same as a deposit, and knowingly and wrongfully placed the same to the credit of said Perry on his individual account, and knowingly and wrongfully aided and abetted him in diverting, misappropriating, and commingling said trust funds with his individual funds, and thereafter with such knowledge suffered and permitted said Perry, from time to time, to withdraw said money from the bank on his individual checks for his own use and benefit; that by reason of the wrongful assistance so given Perry by appellant he diverted, commingled, and misappropriated all of said funds to his own use, and embezzled the same; that by reason of the acts aforesaid appellant became and is jointly liable with said John F. Perry, as principal, for the payment of the amount of money so received and misappropriated as aforesaid.

The second paragraph of cross-complaint contains substantially all of the averments of the first, and also alleges the execution of the aforesaid bond for $5,000; that said Perry resigned as administrator, and failed to account for said funds, the details relating to the receipt, deposit, and misuse of which was alleged; that cross-complainant was only a surety on said bond; that John F. Perry was indebted to appellant when he received said trust funds, and it wrongfully applied $3,500 of said funds to the payment of his individual debt and thereafter wrongfully aided and abetted said Perry in commingling said trust funds with his own money, and with knowledge of the character of said funds suffered and permitted him from time to time to withdraw the balance of said funds for his individual use, whereby he embezzled the same.

The third paragraph is substantially the same as the second, except it is averred that appellant is a corporation, duly organized under the laws of the state of Indiana and doing general banking business.

Each paragraph of cross-complaint prays that appellant be held jointly liable with John F. Perry as principal in accounting for and paying the amount due on said trust fund; that the property of appellant and said Perry be first exhausted before cross-complainant is compelled to pay any part of the amount found due the relator, Peru Trust Company, administrator.

Appellant demurred to the complaint, and to each paragraph of the cross-complaint for insufficiency of facts alleged. The demurrers were overruled, and exceptions taken. Issues were joined on the cross-complaint by general denial.

[1] Appellant has waived any question on the demurrer to the complaint by failing to set out the demurrer or the substance thereof, and by failing to set out any memoranda of objections to the complaint, as required by the statute. However, in so far as the sufficiency of the facts relied upon for a recovery is concerned, substantially the same questions arise on the exceptions to the conclusions of law that are discussed by appellant in considering the sufficiency of the complaint. Most of the facts relating to the transactions involved are not controverted. The undisputed facts above set out and those alleged in the pleadings are, in substance, stated in the finding of facts.

Omitting the formal and undisputed facts aforesaid, the finding is, in substance, as follows: That John F. Perry resigned as administrator on June 11, 1914, his resignation was accepted by the court, and on the same day appellee the Peru Trust Company was duly appointed administrator de bonis non of the estate. That John F. Perry was principal, and Maryland Casualty Company surety, on his bond for $5,000, and no part of the funds of the estate came into the possession of said surety company. That John F. Perry on June 16, 1911,...