State ex rel. Cunningham v. Helms

• Decision Date: 19 December 1893
• Docket Number: 15,828
• Citation: 35 N.E. 893,136 Ind. 122
• Parties: The State, ex rel. Cunningham, v. Helms et al
• Court: Indiana Supreme Court

35 N.E. 893

136 Ind. 122

The State, ex rel. Cunningham, v. Helms et al

No. 15,828

Supreme Court of Indiana

December 19, 1893

From the Hancock Circuit Court.

Judgment reversed, with instructions to overrule the demurrer to each paragraph of the complaint.

A. V Brown, S. E. Urmston, J. A. New, F. Winter and J. B. Elam for appellant.

C. G Offutt and R. A. Black, for appellees.

OPINION

Dailey, J.

This action was instituted in the court below by the State of Indiana on the relation of Joseph W. Cunningham, appellant, against Albert Helms, trustee of Sugar Creek township, in Hancock county, Indiana, principal, and Benjamin F. Rice, William T. Eaton, William Nichols and Henry C. Nichols, his sureties on his official bond as such officer.

The complaint charges, that at the April election in the year 1888, the defendant, Albert Helms, was elected the trustee of Sugar Creek township, in said county, and that on the 12th day of April, 1888, the said trustee qualified by executing his certain official bond, with his coappellees as his sureties thereon, approved by the auditor of said county, on the said 12th day of April, 1888; that on the 12th day of November, 1888, the said Helms, then being the trustee of said township, and acting under the said official bond, was engaged in erecting a schoolhouse suitable for the educational purposes of said township, and necessary therefor, and that to complete said building it became necessary for the said Helms to borrow the money and incur an indebtedness on behalf of his township, and in order to obtain the money necessary in that behalf, he, as such trustee, and in the name of and in behalf of said school township of said county, executed the promissory note for the sum of $ 1,000, to the relator, herein exhibited with the complaint; that thereupon the said Helms, as such trustee, received said sum of $ 1,000, represented by said note, in money, for the purposes aforesaid; that such loan was made, and the said funds so received by said trustee, for the purposes aforesaid, which the said Helms, without the knowledge of the plaintiff, appropriated to his own use; that the said sum of money has never been repaid to the relator, or any part thereof; that the debts of said township were, at the time, in the aggregate, in excess of the fund on hand to which said loan about to be made by the relator is chargeable, to wit, the special school fund; that the fund on account of which said sum of money was borrowed, to wit, the special school fund of said township, then and before said loan was made, in the hands of said trustee, and the fund to be received and to be derived from the taxes assessed against the said township and the property thereof for the year 1888, in which said debt was incurred, together, were less in sum and amount than the amount of the loan aforesaid, to wit, the sum of $ 1,000, made to defendant by relator; that the said trustee did not at any time procure an order from the board of commissioners of said county in which said township is situate, authorizing him to contract such indebtedness; and that said township trustee did not at any time file a petition in the auditor's office of said county setting forth the object for which said debt was made or was to be incurred, or the proximate amount to be required. Neither did said trustee make affidavit to said board that he had caused notice to be given of the pendency of any petition in that behalf, or that any notice of said petition was ever given or posted; that said relator loaned said money to said township in good faith and without any knowledge of the fact that there were no funds in hand nor a sufficient amount of funds arising from the current levy to pay said debt so made, and prays judgment upon the official bond of said Helms for the amount of money received and the interest thereon.

The official bond of said trustee is made part of and exhibited with each paragraph of the complaint.

The complaint consists of two paragraphs, to each of which a demurrer was sustained by the court below and proper exceptions reserved.

The plaintiff refusing to plead further, judgment was rendered against it for want of a complaint, and from this decision plaintiff has appealed, and presents the question of the sufficiency of the complaint.

The first inquiry to be considered in this investigation is whether the township trustee, Helms, as such, contracted any debt in the name of or on behalf of his township, and of which he was the trustee.

The complaint, as stated, charges "that in order to obtain the money necessary in that behalf (to build the schoolhouse), he, as such trustee and in the name of and in behalf of Sugar Creek school township of said county, executed the promissory note for the sum of $ 1,000, to the relator herein, and that thereupon said Helms, as such trustee, received the said sum of $ 1,000, represented by said note, in money."

The first paragraph of the complaint avers "That said Helms, as such trustee, and in the name of and in behalf of the civil township, and of Sugar Creek school township of said county, borrowed and received from Joseph W. Cunningham, the relator herein, the sum of $ 1,000; that said debt contracted was made in the name of and in behalf of said corporation above stated."

It is true that the note is exhibited with each paragraph of the complaint, but the action is upon the official bond of the township trustee, and not upon the note. The note, not being the foundation of the action, it can neither add to nor take from the pleading. When the complaint is not predicated on the exhibit, we can not look to the latter to supply an omitted averment, or to otherwise aid the complaint. In such case, it can not be made part of the pleading. To withstand a demurrer, the pleading must be good within itself, without reference to the writing. Huseman v. Sims, 104 Ind. 317, 4 N.E. 42; Dumbould v. Rowley, 113 Ind. 353, 15 N.E. 463; 1 Works Prac., etc., section 420, and cases there cited.

It is settled by the authorities, that municipal and quasi corporations can make, in a proper case, a promissory note. It may bind itself by a negotiable promissory note or bill of exchange for any debt contracted in the course of its legitimate business, for any expenses incurred in any matter or thing which it is authorized to do, or any matter which is not foreign to the purposes of its creation. A school township may also execute a note, but being payable out of a particular fund, it is not commercial paper. Sheffield School Tp. v. Andress, 56 Ind. 157; School Town, etc., v. Kendall, Admx., 72 Ind. 91.

Counsel for the appellees contend that the words "trustee of Sugar Creek township, Hancock county, Ind.," following the signature "Albert Helms," can only be regarded mere descriptio personae, and being so considered, the note * * * must be held to be the individual note of Albert Helms. Many authorities are cited as supporting or tending to support this contention.

In School Town, etc., v. Kendall, Admx., supra, this court said: "It is further insisted that these notes do not purport to bind the corporation, and must be regarded as the notes of the individuals whose names are signed, and the words 'school trustees' and 'trustees of Monticello school,' must be treated as mere descriptio personae. If the appellant were a private corporation, there would be great force in the suggestion. Hays v. Crutcher, 54 Ind. 260. But the rule laid down, and so well illustrated in the case cited, is not without exceptions. Contracts made by public agents stand upon a different footing from those made by agents of persons or of private corporations."

The learned judge then quotes from Story on Agency, sections 302, 303 and 304, in support of this doctrine, and concludes his very able opinion with this statement: "It is clear that a school town or township is a purely public corporation, and the trustees thereof public agents. These notes, therefore, which were confessedly executed upon considerations moving only to the use and benefit of the appellant, are binding on no one unless upon the appellant. We have no hesitation in holding them to be, under the facts averred and upon the proof made, the obligations of the appellant." We also cite Mackenzie v. Board, etc., 72 Ind. 189.

In Bicknell, Admx., v. Widner School Tp., 73 Ind. 501, it was held that "Where money is loaned to a township trustee for the purpose of completing a needed and suitable schoolhouse, the trustee not then having the funds on hand to finish the same, and the money is applied to such purpose, the school township represented by such trustee and receiving the benefit of such money is liable therefor."

We cite, in this connection, Wallis v. Johnson School Tp. 75 Ind. 368; Pine Civil Tp. v. Huber, etc., Co., 83 Ind. 121.

All of these authorities go, without contradiction, to the one proposition that under the averments in the complaint, and even the note exhibited therewith, the said trustee did contract a debt in the name of and in behalf of his township.

Section 2 of an act entitled "An act touching the duties of township trustees with reference to liquidating and contracting indebtedness of townships in certain cases approved March 5, 1883," which will be found in the Acts of 1883, p. 114, reads as follows: "And it is further provided that any trustee, in any county of the State of Indiana, who shall contract any debt in the name or in behalf of any civil or school township of which he may be the trustee, contrary to the provisions of sections 1 and 2 of 'An act to limit the powers of township trustees in incurring debts, and requiring him to designate certain days for the transaction of township business,' approved March 11,...