State of Indiana Stanton v. Glover

• Decision Date: 07 January 1895
• Docket Number: No. 57,57
• Citation: 155 U.S. 513,15 S.Ct. 186,39 L.Ed. 243
• Parties: STATE OF INDIANA ex rel. STANTON v. GLOVER et al
• Court: U.S. Supreme Court

155 U.S. 513

15 S.Ct. 186

39 L.Ed. 243

STATE OF INDIANA ex rel. STANTON

v GLOVER et al.

No. 57.

January 7, 1895.

This was an action brought in the name of the state of Indiana, on the relation of Walter Stanton, trustee, a citizen of New York, against Arista Glover and four other defendants, citizens of Indiana, on the official bond of said Glover as trustee of Mill Creek township, in the county of Fountain, state of Indiana, the other defendants being sureties on said bond. The complaint was demurred to on the grounds that it did not state facts sufficient to constitute a cause of action, and that the court had no jurisdiction of the subject- matter. The demurrer was sustained, and judgment rendered in favor of defendants, and plaintiff sued out a writ of error.

The complaint averred that Glover was elected trustee of the township, April 7, 1884, qualified April 19th, and entered upon the discharge of his duties as such, and so continued until some time in the month of August or September, 1885, when he abandoned his office and fled the country; that on April 19, 1884, he executed his bond as such trustee, with his codefendants as sureties thereon, a copy of which bond is made part of the complaint, and the first condition expressed therein is that 'the said Arista Glover shall well and faithfully discharge the duties of said office according to law.' The complaint stated facts showing that, under the provisions of law in that behalf, the township trustee had no right to incur any further debt on behalf of his township without first procuring an order from the board of county commissioners allowing him to contract therefor, and averred that, in violation of the duties of his office and of the terms of his bond, said Glover executed and delivered to R. B. Pollard certain promissory notes, seven in number, aggregating $5,375.76, all of the same form, filed as exhibits, and made part of the complaint, and one of which is as follows:

'$772.50. State of Indiana, County of Fountain, Trustee's Office, Mill Creek School Township, May 19th, 1885.

'This is to certify that there is now due from this township to R. B. Pollard or order seven hundred & seventy-two & 50-100 dollars, for school supplies bought for and received by this township, and payable out of the special school funds, for which taxes are now levied, at the Citizens' Bank, at Attica, Indiana, on the 20th day of January, 1887, with interest at 8 per cent. per annum on the amount from date till paid, and attorney's fees.

Arista Glover,

'School Trustee of Mill Creek Township.'

It was further alleged that Glover, 'as such trustee, did not, at or prior to the execution of said promissory notes, or either or any of them, nor at any other time, obtain any order from the board of commissioners of said Fountain county, authorizing him to contract any indebtedness for or in the name of said Mill Creek school township, but the execution and delivery of said notes, and each and every of them, was executed and issued in express violation of the provisions of sections 1 and 2 of the act of the general assembly of the state of Indiana, entitled 'An act to limit the powers of township trustees in incurring debts and requiring them to designate certain days for transacting township business,' approved March 11, 1875, the same being sections numbered 6006 and 6007 of the Revised Statutes of 1881 (sections 8081, 8082, Rev. St. 1894) of the state of Indiana.' The complaint then averred the transfer by Pollard of the notes, in blank, for value received, to certain banks and a trust company, citizens of Rhode Island, and their transfer and delivery to the plaintiff; that subsequent to the indorsements, and prior to the institution of the suit, Pollard abandoned his residence and citizenship in the United States, and fled beyond the seas; and that plaintiff was unable to state whether Pollard had acquired a citizenship in a foreign country, or of what country; but plaintiff averred that he is not now, and was not at the commencement of this action, either a resident or citizen of the state of Indiana.

In the second paragraph or count of the complaint, plaintiff averred that Glover 'did, in violation of the duties of his office, and of the terms and conditions of his bond aforesaid, purchase and obtain from one R. B. Pollard a large amount of goods for the use of the schools of said Mill Creek township, and in payment therefor did execute and deliver to said R. B. Pollard' the notes (describing them), and that said Glover, 'as such trustee, did not at, or prior to the purchase of said goods or the execution and delivery of said promissory notes, or either or any of them, nor at any other time, obtain any order from the board of commissioners of said Fountain county authorizing him to contract any indebtedness for or in the name of said Mill Creek school township, but the purchasing of said goods and the execution and delivery of said notes, and each and every of them, was made in express violation of the pro- visions' of sections 6006 and 6007, Rev. St. 1881 (sections 8081, 8082, Rev. St. 1894). Both paragraphs of the complaint were otherwise the same, and the breach alleged was the execution of the notes or certificates in question.

Section 6006 of the Revised Statutes of 1881 (section 8081, Rev. St. 1894) is: 'Whenever it becomes necessary for the trustee of any township in this state to incur on behalf of his township, any debt or debts whose aggregate amount shall be in excess of the fund on hand to which such debt or debts are chargeable, and of the fund to be derived from the tax assessed against his township for the year in which such debt is to be incurred, such trustee shall first procure an order from the board of county commissioners of the county in which such township is situated, authorizing him to contract such indebtedness.'

Section 6007, Rev. St. 1881 (section 8082, Rev. St. 1894), provided for the manner in which such order of the board of country commissioners should be obtained by the trustee.

On March 5, 1883, an act of the legislature of Indiana was approved, entitled 'An act touching the duties of township trustees with reference to liquidating and contracting indebtedness of townships in certain cases.' The second section of this act reads as follows: 'And it is further provided that any township 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 one and two of 'An act to limit the powers of township trustees in incurring debts, and requiring him to designate certain days for transacting township business,' approved March 11, 1875, (the same being numbered 6006 and 6007 of the Revised Statutes of the state of Indiana,) shall be personally liable, and liable on his official bond, to the holder of any contract or other evidence of such indebtedness, for the amount thereof.' Acts Ind. 1883, c. 95, p. 114. This act was repealed March 9, 1889 (Acts Ind. 1889, c. 138, p. 278), but was in force at the date of the bond sued on, and at the date of the alleged breach thereof.

J. M. Wilson, S. Claypool, and Wm. A. Ketcham, for plaintiff in error.

W. W. Dudley, L. T. Michener, and Chas. B. Stuart, for defendants in error.

Mr. Chief Justice FULLER, after stating the facts in the foregoing language, delivered the opinion of the court.

The case must be treated, so far as the jurisdiction of the circuit court is concerned, as though Stanton was alone named as plaintiff. Maryland v. Baldwin, 112 U. S. 490, 5 Sup. Ct. 278. If the suit could be regarded as founded on the certificates attached to the complaint, there would be a want of jurisdiction, as it does not appear that Pollard could have prosecuted the suit in the circuit court. Rev. St. § 629; 18 Stat. 470, c. 137; 24 Stat. 552, 553, c. 373. But as the suit is upon the bond, and Stanton and his cestuis que trustent were citizens of other states than Indiana, we think the jurisdiction may be maintained.

But, although the suit is upon the bond, the liability asserted under section 2 of the act of 1883 is to the holder of the certificates, 'for the amount thereof,' and the breach alleged is the execution of the certificates.

Such a liability might be transferable to successive holders of the warrant or certificate, but it would seem quite clear that, if the liability did not exist in favor of the payee, subsequent holders would stand in no better position. Certificates like those exhibited in the case at bar, made and payable in Indiana, out of a particular fund, and purporting to be the obligations of a corporation existing under public laws, and endowed only with restricted powers, granted for special and purely local purposes of a noncommercial character, are not governed by the law merchant, and are open, in the hands of...