People v. Holten
| Decision Date | 02 April 1919 |
| Docket Number | No. 12294.,12294. |
| Citation | 287 Ill. 225,122 N.E. 540 |
| Parties | PEOPLE v. HOLTEN et al. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Error to Circuit Court, St. Clair County; John Hay, Judge.
Bill by the People, for the use of all taxpayers in the Town of East St. Louis and the City of East St. Louis, against Frank Holten, as City Treasurer, and others. Decree dismissing the bill, and complainant brings error. Reversed and remanded.
John Hay, for plaintiff in error.
Turner & Holder, of Belleville, for defendant in error Frank W. Puderer.
Thomas E. Gillespie, Silas Cook, D. J. Sullivan, Corporation Counsel, H. L. Browning, City Atty., and Kramer, Kramer & Campbell, all of East St. Louis, for other defendants in error.
This is a suit in equity against Frank Holten and the sureties on his official bonds as city treasurer of East St. Louis and as ex officio collector of the town of East St. Louis for a failure to turn over and account for taxes collected by Holten as such officer.
Holten was duly elected treasurer of the city of East St. Louis for the years 1910 and 1911. The town and city of East St. Louis are coextensive, and the city treasurer of said city was ex officio collector of taxes for the town of East St. Louis. In 1912 separate suits were brought on Holten's two official bonds, one at law and one in equity. Both suits were brought in the name of the people of the state of Illinois by five taxpayers for the use of all taxpayers in the town of East St. Louis and the city of East St. Louis. A demurrer was sustained to the declaration in the action at law and the suit dismissed, from which judgment an appeal was prosecuted to this court, resulting in a reversal of the judgment of the circuit court. People v. Holten, 259 Ill. 219, 102 N. E. 171. Upon the redocketing of that suit in the circuit court of St. Clair county, it was transferred to chancery and consolidated with the other suit in chancern then pending in that court. Thereafter an amended bill and a second amended bill were filed in the consolidated case. The second amended bill alleged Holten, as such officer, collected the taxes for the years 1909 and 1910; that in addition to his salary and compensation as such officer in the year 1910 he deducted from the taxes collected that year 2 per cent., amounting to $10,296.44, and paid of that amount to the city $1,989.83, but retained $8,306.61; that from the taxes collected in the year 1911 he deducted 2 per cent., or $11,236.86, and paid of that amount to the city $2,089.29 and retained $9,147.57. This litigation was instituted to recover, for the use of the municipalities interested, these sums of money, and interest thereon, alleged to have been retained and appropriated by Holten to his personal use in addition to his salary and compensation as fixed and provided by law. The bill asked for a foreclosure of the lien of the bonds against the real estate of Holten, and certain parties alleged to have or claim some interest in the real estate were made parties defendant. The city and town of East St. Louis were both made parties defendant. The second amended bill also alleged that during the pendency of the litigation the defendants, their attorneys, and the town and city of East St. Louis by their officers, entered into a fraudulent and unlawful plan and scheme to settle and dispose of the indebtedness of Holten sued for, for the benefit and advantage of defendants and without any consideration therefor; that it was agreed the city should pretend to prosecute two actions on the bonds of Holten in the name of the people for the use of the town and city; that suits were instituted in the city court of East St. Louis and were compromised and judgments by agreement entered-in one case for $925 where the indebtedness was $8,306.61, and in the other case for $975 where the indebtedness was $9,147.57. The bill at great length charges that such agreement and settlements were fraudulent and unlawful and of no binding effect. The bill prayed that the city and town of East St. Louis be enjoined from further interfering with the prosecution of the suits on the bonds of Holten; that the judgments entered by agreement upon stipulation be set aside and vacated; that an account be taken of the money collected by Holten as such collector, and that he be required to disclose and show all matters and things necessary to determine the liability of himself and sureties upon said bonds; that the defendants be required to pay the sums found due on said bonds, with interest at 10 per cent. thereon, to be compounded semiannually from May 1, 1910, and May 1, 1911, respectively; that a lien be decreed against the real estate of Holten by reason of the filing of his bonds in the recorder's office, and that such lien be adjudged prior to any lien of any of the defendants to the bill; that said real estate be decreed to be sold and the proceeds applied first upon the indebtedness due under the first bond and second upon the indebtedness due upon the second bond. The bill further prayed that the complaining taxpayers be allowed their costs and disbursements necessarily expended in the prosecution of the suit, together with their attorneys' fees, out of the fund recovered.
Holten filed a separate answer to the bill; also, the town of East St. Louis and the city of East St. Louis filed answers, and the other defendants joined in an answer. All of the answers were substantially the same, and denied the right of the taxpayers mentioned in the bill to maintain and prosecute the suit, and denied that Holten failed to discharge his duties as collector to the injury of the taxpayers, the town of East St. Louis, and the city of East St. Louis. The answers denied that the settlement and compromise of the claims against Holten as collector, and the judgments entered by agreement upon his bonds, were fraudulent or the result of a plan to divert and dispose of money due or authorized to be recovered against Holten and his sureties.
It appears that for a number of years previous treasurers and collectors had charged and retained 2 per cent. commissions on taxes collected in addition to their salary and compensation fixed. The bonds had been signed by bankers and others, and the bringing of the suits against Holten on his bonds attracted attention and caused comment. Henry D. Sexton, president of one of the banks of East St. Louis and who has signed the bonds of a number of other collectors besides Holten, called the then mayor's attention to the matter and suggested the bringing of suits on the bonds by the city in order to clear up the matter. The mayor consulted with the corporation counsel, who thereafter brought suits on each of Holten's bonds and 22 other...
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