New Amsterdam Cas. Co. v. Madison County Trust Co.

• Decision Date: 21 February 1924
• Docket Number: No. 11757.,11757.
• Citation: 142 N.E. 727,81 Ind.App. 157
• Parties: NEW AMSTERDAM CASUALTY CO. v. MADISON COUNTY TRUST CO.
• Court: Indiana Appellate Court

81 Ind.App. 157

142 N.E. 727

NEW AMSTERDAM CASUALTY CO.

v.MADISON COUNTY TRUST CO.

No. 11757.

Appellate Court of Indiana, Division No. 2.

Feb. 21, 1924.

Appeal from Circuit Court, Hamilton County; Fred E. Hines, Judge.

Action by the Madison County Trust Company against the New Amsterdam Casualty Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Chas. E. Henderson, of Indianapolis, and Shirts & Fertig, of Noblesville, for appellant.

Ralph Kane, of Indianapolis, Thomas Kane, of Noblesville, and J. A. Van Osdol, of Anderson, for appellee.

NICHOLS, J.

Appellee's complaint in this cause is in two paragraphs, one for money had and received, and the other seeking reimbursement for money paid by appellee in conducting as receiver the Wagner Axle Company, upon an oral premise, made prior to the appointment of the receiver by a representative of appellant, to appellee to reimburse it for money advanced and for services rendered in administering the receivership and attorney's fees and other expenses incurred therefor. There was an answer in general denial, a trial by the court, and a finding and judgment for appellee in the sum of $2,294.64. The error assigned is the action of the court in overruling appellant's motion for a new trial, under which is presented that the decision of the court is not sustained by sufficient evidence, and that it is contrary to law.

The averments of the second paragraph of complaint, so far as here involved, and which are substantially proven are that on or about January 22, 1918, the Wagner Axle Company was then in possession of and operating a manufacturing plant at Anderson, Ind., and as such it then entered into a certain contract with the United States government for the manufacture of artillery hubs and wheel fastenings. To enable said company to proceed with production the United States government advanced to said company on account of said contract $30,000. To secure the United States from loss by reason of said advancement, appellant became surety for said company, and guaranteed the United States against loss by reason of the advancement aforesaid. Said Axle Company was then holding possession of and claiming to be the owner of said manufacturing plant, under a certain contract with one Sansberry, by the terms of which, upon the failure of said Axle Company to pay certain installments of purchase money then falling due on May 1, 1918, the said Sansberry would be entitled to have possession of said plant. Shortly before the maturity of said installment, it became evident to the appellant that said Axle Company would not be able to meet its said payment when due, was in danger of being ousted from said plant, would be thereby prevented from carrying out its contract with the government, and would make default thereon. It also became apparent to appellant that said Axle Company was so managing its affairs that it was in imminent danger of insolvency,and, if left to its own resources, would default on its obligation to carry out said contract, and on its obligation to repay said advancement so made by the United States. Appellant believing its interest seriously imperilled by reason of the facts aforesaid, and that its interests would be better protected if said Axle Company was under receivership, and learning that one of its creditors was preparing to bring an action against it to enforce a demand in such creditor's favor approximating $8,000, appellant then requested said creditor to ask, as part of the relief which it would demand, the appointment of a receiver. Such action was commenced, and as part of the relief sought there was a demand for the appointment of a receiver, to which action said Axle Company appeared and consented to such appointment and on April 30, 1918, said court appointed appellee as such receiver.

At the earnest solicitation of appellant appellee was induced to and did accept said appointment, took charge of the business and affairs of the said Axle company, and, under order of said court, proceeded to carry on the business of said Axle Company, until the time when its property and assets were seized in bankruptcy. Said Axle Company had no funds with which to carry on its manufacturing operations, and as an inducement to appellee to accept said receivership and conduct the manufacturing business of said Axle Company, and especially to proceed promptly with the work of producing said hubs and wheel parts, appellant solicited appellee to advance from time to time such funds as might appear necessary to carry on said manufacturing business, and promised that appellant would pay appellee for such advances and for such services and claims for services as might be allowed by said court therefor. Relying upon the promises and representations of the appellant so made as aforesaid, appellee accepted said receivership, took charge of the business of said Axle Company, proceeded to conduct its operations as a manufacturing plant and with the production of said artillery hubs and wheel fastenings, and to carry on the business of said Axle Company. In so doing appellee employed such help and advanced such moneys as were necessary for that purpose. Appellee, prior to the bringing of this action, advanced and paid out in the due administering of said receivership $2,025.93, is legally bound for an additional sum of $670.86, and is entitled to $500 for services as receiver. The moneys so advanced and the services so rendered were necessary in administering said receivership and in carrying on the business of said Axle Company. Appellee continued to discharge the duties of such receiver and to carry on the business of said Axle Company continuously up to and including June 17, 1918, when proceedings in bankruptcy were instituted against said Axle Company, in the United States District Court of Indiana, and such proceedings were there had that a receiver was appointed in said bankrupt court, who took from appellee on said June 17, 1918, the possession of said plant, and all of the property and assets of said Axle Company. After applying to said receivership and the expenses and costs thereof all the moneys which had come to the hands of this appellee as such receiver, there remained unpaid on the indebtedness sued on herein, including interest on money advanced, the sum of $3,254.29, which was allowed by the superior court and its payment by the bankrupt court recommended, but no funds remained after the settlement of said estate in bankruptcy which could be applied to the payment of all or any part of the claim sued on herein. Demand has been made upon appellant for payment thereof, all of which it has refused to do. There is now due and unpaid to appellee, by reason of the facts aforesaid, the sum of $3,254.29, for which it demands judgment against appellee, together with interest.

[1] The negotiations with appellee that preceded its appointment as such receiver, and which...