State v. Gramm

• Citation: 52 P. 533,7 Wyo. 329
• Parties: STATE v. GRAMM ET AL
• Decision Date: 10 March 1898
• Court: United States State Supreme Court of Wyoming

52 P. 533

7 Wyo. 329

STATE v. GRAMM ET AL

Supreme Court of Wyoming

March 10, 1898

RESERVED questions from the District Court for Laramie County, HON. CHARLES W. BRAMEL, Judge of the Second District presiding.

This case was submitted to the district court upon the motions of plaintiff and defendants respectively for judgment upon the pleadings. The suit is brought in the name of and by the State upon the bond given by Otto Gramm, as State treasurer on the 4th day of July, 1893, with Henry G. Balch, Daniel C Bacon, William C. Wilson, Jr., Francis E. Warren, and Thomas A. Kent as sureties. The material allegations of the petition are substantially as follows: That said Otto Gramm was elected to the office of State treasurer, on the 11th day of September, 1890, for a term ending on the 7th day of January 1895; that he entered upon the discharge of the duties of such office on the 7th day of November, 1890, and continuously acted as such officer until January 7, 1895, at which time he was succeeded by Henry G. Hay. He had given a bond upon first assuming the duties of the office, but owing to the death of two of his sureties he gave the bond in suit upon the requirement of the secretary of state; the bond was duly approved. That during his term of office said Gramm had received the sum of $ 44,147.31, which it was his duty to pay over to his successor, but he had failed to make such payment. Judgment is claimed for said amount with interest. All of the defendants except William C. Wilson, Jr., who, it is presumed, was not served with process, appeared and filed an answer admitting the election of said Gramm to the office aforesaid, his entering upon, and continuance in, the discharge of the duties thereof, the execution and approval of the bond; but denying that on January 7, 1895, or at any time thereafter, said Gramm had in his possession the sum of money mentioned in the petition, or any other sum of money belonging to plaintiff, unless the money thereinafter shown to have been deposited in bank be held to have been at that time in his possession. The answer also specifically denies the making of any default in payment to the successor of said Gramm, unless the facts thereinafter set forth constitute such default, and denies the truth of the charge that he did not truly and justly account for all moneys that came into his hands as such treasurer, and alleges that he did honestly, truly, and justly account for all moneys that came into his hands, as such officer, at any time after the giving of the bond sued on. The answer further denies that there was any duty of his office which said Gramm did not faithfully, truly, and justly perform.

The answer then continues with the following which we quote: "And these defendants aver that on the 20th day of July, A. D. 1893, and for many years prior thereto, one Thomas A. Kent was engaged in the general banking business, in the city of Cheyenne, in the county of Laramie, and State of Wyoming, and was of excellent repute and financial standing as a banker in said city of Cheyenne, and throughout the State of Wyoming; that at divers times prior to the said 20th day of July, A. D., 1893, the said Otto Gramm as treasurer of the State of Wyoming, did deposit with and entrust and deliver to the said Thomas A. Kent, doing business as T. A. Kent, banker, as aforesaid, divers sums of money, in the aggregate many thousands of dollars, which said sums of money were of the public funds of the said State of Wyoming, and were in the possession of said Otto Gramm as State treasurer as aforesaid, and were as aforesaid deposited in the said bank conducted by the said Thomas A. Kent, banker, and that at the respective times when each and all of said sums of money were as aforesaid deposited with said Thomas A. Kent, banker, the said public funds and moneys were known by the said banker to be public moneys of the State of Wyoming, and were by him received and held subject to the check and order of the said Otto Gramm as State treasurer, of the State of Wyoming, all of the said deposits being made in the name of Otto Gramm, State treasurer, and being kept entirely separate and distinct from any private funds of the said Otto Gramm, and being so as aforesaid deposited to the sole use and benefit of the said State of Wyoming."

"And defendants aver that on the said 20th day of July, A. D. 1893, solely by reason of a great, sudden, unusual, unprecedented, and entirely unlooked for business panic in the community in which the said Thomas A. Kent was doing business as a banker, the said Thomas A. Kent suddenly became insolvent and executed a deed of assignment under the laws of the State of Wyoming, wherein and whereby he assigned to one Joel Ware Foster for the benefit of the creditors of the said Thomas A. Kent, all of his property, including any and all money so as aforesaid, in his hands belonging to the State of Wyoming, and deposited with him by the said Otto Gramm as State treasurer of the State of Wyoming. That the amount of such State funds in his hands at the time of the assignment was fifty-six thousand, four hundred and fifty-four dollars and seventy cents ($ 56,454.70)."

"And defendants further aver that for a period of at least eighteen years prior to the assignment of the said Thomas A. Kent, it was the common and uninterrupted custom in the Territory of Wyoming and in the State of Wyoming for the treasurer of the said Territory and State to deposit the public funds belonging to the said Territory and to the said State in banks subject to check of the treasurer thereof, which said custom has at all times been generally known to the citizens of the State of Wyoming and of the Territory of Wyoming, and to the officers thereof. That the said custom was a reasonable one and was necessary for the safe keeping of the funds belonging to the State of Wyoming and belonging to the said Territory of Wyoming. That there was no other way whereby the funds belonging to the State or to the Territory could be as safely and securely kept as by depositing the same in the manner aforesaid. All of which was at all times well known to the said Territory of Wyoming, and to the officers thereof, and to the said State of Wyoming, and to the officers and inhabitants thereof, who with such full knowledge at all times, failed and refused to provide any safe or secure place for keeping the said funds, and at all times acquiesced in the actions of the said treasurers and of the said defendant, Otto Gramm, in depositing said funds in bank, according to the custom aforesaid."

"And defendants aver that the insolvency of the said Thomas A. Kent, banker, was wholly unknown to the said Otto Gramm, or to these defendants, or to the community in which he carried on his business, until the execution of the said assignment, and that the said insolvency was wholly unanticipated until he made his assignment as aforesaid. That in truth and in fact the said Kent, banker, would not have become insolvent but for the sudden, great, and unusual panic which occurred at that time in the community where he carried on his business as a banker; that the property and assets of the said Thomas A. Kent, at the time of the said assignment, were such as to have much more than paid all of his debts and liabilities at the values which said property possessed immediately prior to said assignment, which values said property and assets had maintained for many years prior to said assignment."

"And defendants aver that the said Otto Gramm was not in any degree negligent, nor in any degree unfaithful to his trust as treasurer of the State of Wyoming; nor in any degree at fault in depositing or retaining said moneys or any of them in the said bank, and that the money so deposited in said bank are the moneys which the plaintiff seeks to recover in this action."

"And defendants aver that the said Gramm was not in any degree at fault or in any degree negligent, or in any degree lacking in skill, or in any degree unfaithful in the care, custody, or safe keeping of said moneys or any of them. That no negligence of the said defendant Otto Gramm in any degree, that no unfaithfulness of the said defendant Otto Gramm in any degree, caused, or in any way contributed to the loss of said funds, or any of them."

It is further alleged that in January, 1894, the State brought its action for said moneys against the assignee for the benefit of creditors of said Thomas A. Kent; and that the State by authority of the Legislature elected to and did receive dividends from said assigned estate amounting to $ 12,307.39.

The plaintiff filed a reply admitting the lack of negligence or fault on the part of the officer, the reply in that respect being as follows:

"Comes now the above named plaintiff, the State of Wyoming, and for its reply to the answer of the defendants in said cause admits that on the 20th day of July, A. D. 1893, and for many years prior thereto, one Thomas A. Kent was engaged in the general banking business in the city of Cheyenne, in the county of Laramie, and State of Wyoming, and was of excellent repute and financial standing as a banker in said city of Cheyenne, and throughout the State of Wyoming; that at divers times prior to the said 20th day of July, A. D. 1893, the said Otto Gramm as treasurer of the State of Wyoming, did deposit with the said Thomas A. Kent, banker, many thousands of dollars of the public funds of the said State of Wyoming which said public funds were known by the said Thomas A. Kent, banker, to be public moneys of the State of Wyoming, and which were by him received and held subject to the check and order of the said Otto Gramm as State treasurer of the State of Wyoming, and were kept entirely separate and distinct from the...