Ogren v. Crystal Springs Sch. Dist. No. 29 of Kidder Cnty.

• Decision Date: 30 March 1925
• Parties: OGREN v. CRYSTAL SPRINGS SCHOOL DIST. NO. 29 OF KIDDER COUNTY.
• Court: North Dakota Supreme Court

52 N.D. 455

203 N.W. 324

OGREN

v.CRYSTAL SPRINGS SCHOOL DIST. NO. 29 OF KIDDER COUNTY.

Supreme Court of North Dakota.

March 30, 1925.

Syllabus by the Court.

An action for money had and received may be maintained whenever one person has received or has in his possession money of another which he is not in equity and good conscience entitled to retain, and this rule applies as well to municipal corporations, where not contrary to express statute or the policy of the law, as to private corporations or to individuals.

An action for money had and received may not be maintained against a school district, to recover money unlawfully borrowed by the treasurer of such district to replace defalcations of the district's funds.

The granting or denial of a new trial on the ground of the insufficiency of the evidence is within the sound judicial discretion of the trial court, and his decision will not be disturbed except where an abuse of such discretion is clearly shown.

The record in the instant case examined, and held, that there was no abuse of discretion on the part of the trial court in granting a new trial on the ground of the insufficiency of the evidence to sustain the verdict returned.

Appeal from District Court, Kidder County; Fred Jansonius, Judge.

Action by S. J. Ogren against Crystal Springs School District No. 29 of Kidder County. Verdict for plaintiff, and from order granting motion for new trial, plaintiff appeals. Affirmed.Divet, Holt, Frame & Thorp, of Fargo, for appellant.

Zuger & Tillotson, of Bismarck, for respondent.

NUESSLE, J.

This is an action for money had and received. The defendant, Crystal Springs school district No. 29 of Kidder county, N. D., is a public corporation. In 1920 George D. Richards was the treasurer of the district. He was also the cashier of the First State Bank of Crystal Springs. The district proposed to build some new schoolhouses. To that end, and in order to take up certain outstanding warrants, a bond issue in the amount of $26,000 was voted. These bonds were sold to the state of North Dakota, but the money was not immediately available. A contract was entered into with one Canning for the building of the schoolhouses, and construction was begun. Preliminary thereto, however, and in order to properly finance the undertaking, a written contract was entered into between the defendant district, the Dakota Savings Bank of Fargo, Canning, and the First State Bank of Crystal Springs. Under the terms of this agreement Canning was to go forward with the work, and as the same progressed was to be given certificates indicating the amount that he was entitled to on his contract on account of the work then done. The Dakota Savings Bank was to advance $12,000 and the Crystal Springs bank $10,000 to make payments on account of these certificates. The money payable from the state on account of the purchase of the bonds was assigned to the Savings Bank, and when received by it was to be paid as follows: $4,000 to take up certain outstanding warrants of the district then held by the Savings Bank; $12,000 to reimburse the Savings Bank for moneys to be advanced by it in payment on certificates to the contractor; $10,000 to reimburse the Crystal Springs bank on account of moneys to be advanced by it for like purpose. The buildings were built. The state did not pay the money for the bonds until 1922. Building operations were financed by the Savings Bank and the Crystal Springs bank in accordance with the agreement. In June, 1920, Richards interviewed the plaintiff, Ogren, at the latter's home in South Dakota. Richards represented that he was the treasurer of the defendant district; that he was authorized to borrow money to finance the building operations, and arranged to procure $5,000 from the plaintiff to be repaid in December or January following. Ogren was to receive interest on his loan at the rate of 8 per cent., and the indebtedness was to be evidenced by the defendant's warrant. Since the law permitted warrants to draw interest at the rate of 7 per cent. only, a warrant was to be issued for $5,030, this on the assumption that the money would be paid in January following. Richards returned to Crystal Springs. He at once induced the clerk of the defendant to issue a warrant complying with the terms of the arrangement made with Ogren, and procured the president of the school board also to sign such warrant. Thereupon Richards took the warrant, indorsed it as presented and not paid for want of funds, and sent it forward to Ogren's bank in South Dakota. The latter thereupon sent forward to Richards a draft for $5,000. He deposited this draft to the credit of his personal account in the Crystal Springs bank. At about the same time or a little later he procured $9,000 from a St. Paul bank by a similar device. This money also was deposited to the credit of his personal account in the Crystal Springs bank.

It appears that Richards in thus proceeding was acting wholly without authority. No proceedings were ever had by the school board authorizing the borrowing of money by Richards on warrants or otherwise, and no action was ever taken by the board authorizing issuance of the warrants above referred to. It also appears that, in the year 1920, Richards received various sums of tax moneys belonging to the district from the county authorities. The business of the school district was conducted in a most negligent and incompetent manner. The board apparently implicitly trusted Richards, and exercised no supervision over his conduct of the office of treasurer. Under the law then in effect, chapter 147, S. L. 1919, all school district funds were required to be deposited with the Bank of North Dakota. Any person charged with the custody of such funds who failed to comply with this requirement was declared guilty of a misdemeanor and subject to punishment on account thereof. Whether or not Richards maintained an account in the Bank of North Dakota at that time or ever is not disclosed. The board of directors and clerk of the defendant district deny having knowledge of the fact that the district funds were kept in the personal account of Richards in the Crystal Springs bank; but it appears that checks were issued on that account from time to time for district purposes by Richards. The members of the board and the clerk were paid by warrant for their services. They cashed these warrants at the bank. Richards testifies that all of the funds realized by him from the negotiation of warrants with the plaintiff and the St. Paul bank were used in payment of school district obligations. The record, however, is conclusive to the contrary. Richards concededly paid himself $400 for his alleged services in connection with the transaction with Ogren, and concededly, the district board had no knowledge of such payment. Various of the other items that Richards testified he paid by check on this account were in fact not paid, the checks not being honored for want of funds.

It appears that while these transactions were in progress the Crystal Springs bank was having financial difficulties. In December, 1920, or January, 1921, Richards ceased to act as district treasurer. Thereafter the bank was closed by the banking authorities. Richards himself was convicted of felony on account of transactions in connection with the bank, and was sentenced to confinement in the penitentiary. In January, 1921, Ogren inquired as to the payment of his warrant. Payment was refused, and this action was brought.

The action may be and was considered as an action for money had and received. In his complaint the plaintiff, generally setting out his version of the facts, alleges that he advanced to the defendant the sum of $5,030; that he received therefor a warrant for that amount; that the same was not paid for want of funds and was duly registered; that the defendant received the money thus paid by the plaintiff and used the same in the building of its schoolhouses; that payment has been demanded but refused. The defendant, answering, denies generally the allegations set out in the complaint, denies that the plaintiff ever furnished to the defendant any money for the erection of a schoolhouse or otherwise, denies the issuance of the warrant as alleged in the complaint, and alleges that the same is false and fraudulent, and that no consideration was ever received therefor. On the issues as thus made, the cause was tried to a jury, which returned a verdict in favor of the plaintiff for $5,000. Thereafter, the proper foundation having been laid therefor, the defendant moved in the alternative for judgment notwithstanding the verdict or for a new trial. The trial court, after consideration, denied the motion for judgment notwithstanding the verdict but granted the motion for a new...