The Board of Commissioners of Hamilton County v. State ex rel. Michener

• Decision Date: 27 February 1890
• Docket Number: 15,320
• Citation: 24 N.E. 347,122 Ind. 333
• Parties: The Board of Commissioners of Hamilton County v. The State, ex rel. Michener, Attorney General
• Court: Indiana Supreme Court

24 N.E. 347

122 Ind. 333

The Board of Commissioners of Hamilton County v. The State, ex rel. Michener, Attorney General

No. 15,320

Supreme Court of Indiana

February 27, 1890

From the Hamilton Circuit Court.

Judgment reversed, with costs, with direction to overrule the demurrers to appellant's paragraphs of answer.

W. S Christian, for appellant.

L. T Michener, Attorney General, and J. H. Gillett, for the State.

OPINION

Berkshire, J.

The facts involved in this case may be summarized briefly as follows:

The auditor of Hamilton county loaned to one Amos J. Pettijohn out of the congressional school fund, town. 19, range 3, $ 1,000, and to secure the loan a mortgage was executed to the State of Indiana, as required by law, upon certain real estate situated in said county. The said auditor also loaned out of the same fund to one David Stewart $ 1,000, and a mortgage was executed to secure the same on lands situated in said county. For some years the mortgagors failed to pay the interest, and during those years it was paid by the county out of its general fund. Finally foreclosure proceedings were instituted in the Hamilton Circuit Court, and judgments rendered for the amounts due, including the interest that had been paid by the said county, and decrees entered for the sale of the mortgaged lands.

Afterwards the said tracts of land were offered for sale by the sheriff of Hamilton county, and no one bidding for either tract the amount of the judgment for the satisfaction of which the court had decreed its sale, the same was bid in by the said auditor on account of the fund.

Afterwards the tract that had been mortgaged by Pettijohn was sold and conveyed for the sum of $ 1,400, and the tract mortgaged by Stewart sold and conveyed for the sum of $ 1,500. And the county, having continued to pay the interest each year, covered into the fund from which the loans had been made the sum of $ 2,000, that being the principal of said two loans, and all that was due to the said fund, unless, under the circumstances, it was entitled to something more than the principal and the interest thereon.

But the contention of the appellee is that the whole amount for which said real estate was sold belongs to said fund, notwithstanding the payment of the interest from year to year by the said county out of its general fund; while upon the other hand the appellant contends that the said fund is only entitled to the principal and the interest thereon until after its treasury is reimbursed, because of the interest it has paid to the said fund on account of said loans.

Article 8, section 3, of the State Constitution, reads: "The principal of the common school fund shall remain a perpetual fund, which may be increased, but shall never be diminished; and the income thereof shall be inviolably appropriated to the support of common schools, and to no other purpose whatever." Section 184, R. S. 1881.

Section 6 of the same article reads thus: "The several counties shall be held liable for the preservation of so much of the said fund as may be entrusted to them, and for the payment of the annual interest thereon." Section 187, R. S. 1881.

Section 4326, R. S. 1881, reads as follows: "The several counties of this State shall be held liable for the preservation of so much of said fund as is entrusted or may have been entrusted to them, and for the payment of the annual interest thereon, at the rate established by law, the payment of which interest shall be full and complete every year, and shall so appear in the auditor's report to the superintendent of public instruction; and the said superintendent shall, at any time, when he discovers, from the report, or otherwise, that there is a deficit in the amount collected, for want of prompt collection, or otherwise, direct the attention of the board of county commissioners and the county auditor to the fact, and the said board of commissioners are hereby authorized and required to provide for such deficit in their respective counties."

Section 4383 reads as follows: "On failure to pay any installment of interest, when the same becomes due, the principal sum shall forthwith become due and payable, and the auditor may proceed to collect the same by suit on the note, or by sale of the mortgaged premises. He may also, by suit, recover the possession of the mortgaged premises before sale thereof; and he shall, on the fourth Monday in March, annually, offer for sale all mortgaged lands on which payments of interest are due on the first day of January and unpaid on the day of sale."

Section 4392, so far as we need quote from it, is as follows: "At such sale, the auditor shall sell so much of the mortgaged premises to the highest bidder, for cash, as will pay the amount due for principal, interest, damages, and costs * *; if a tract of land so mortgaged, and liable to be sold to satisfy the mortgage, can not be divided without materially diminishing the value of such tract; or if any inlot or outlot be indivisible, by reason of extensive buildings or other improvements thereon, the auditor may sell the whole thereof, and, after paying the amount due for principal, interest, damages, and costs out of the purchase-money, shall pay the balance, if any, to the mortgagor; and if the auditor sell any part of a tract of land, outlot, or inlot for more than the amount of principal, interest, damages, and costs, the excess, if any, shall be paid to the mortgagor."

Section 4393 reads thus: "In case of no bid for the amount due, the auditor shall bid in the same on account of the fund, and, as soon thereafter as may be, shall sell the same--having first caused it to be appraised by three disinterested freeholders of the neighborhood--on a credit of five years, with interest at seven per cent. per annum, being payable annually in advance; but no such sale shall be for a less sum than the appraised value thereof."

Section 4394 reads thus: "Lands heretofore bought in on account of the fund, which have been appraised, shall be sold in like manner; and if, upon sale of any such land, a sum is realized which is more than sufficient to pay the principal, interest, damages, and costs, the overplus shall be paid to the original mortgagor, his heirs or assigns, when collected."

Section 4390 reads as follows: "In all cases when the mortgaged premises shall fail to sell for a sum sufficient to satisfy the principal and interest of the loan made, and the damages accrued by reason of such failure, and costs, the county auditor shall bring suit on the notes executed by the mortgagor; and whenever judgment shall be rendered thereon, no appraisement of property shall be allowed on execution issued on such judgment.

Section 4398 reads thus: "County auditors and county treasurers shall annually report, in writing, to the boards of county commissioners of the respective counties, at the June sessions of said boards, relative to the school fund held in trust by said counties, distinguishing, in said reports, between the congressional township and common school funds; indicating the amount thereof; the additions to them within the current year then ending; the sources from whence such additions are derived; the condition of them as to their safety, giving the amount thereof safely invested, unsafely invested and uninvested, and loss, at the date of said reports; giving also the amount of interest collected upon said funds within the year then ending, and the amount then due and unpaid."

Section 4399 reads as follows: "The boards of county commissioners shall, annually, at their June sessions, in the presence of the auditors and treasurers, examine said reports, the accounts, and proceedings of said officers in relation to said funds, and the revenue derived from them. They shall compare with said reports, the cash, the notes, mortgages, records, and books of said officers, with a view to ascertain the amount of said funds and their safety; and do whatever may be necessary to secure their preservation and the prompt payment of the annual interest thereon as the same becomes due; and make up to said funds losses which have accrued or may accrue."

Section 4400 reads thus, so far as we need quote from it: "Each board of county commissioners, at said session, shall make out a report, in writing, of the result of such examination, showing:

"First. The amounts of said funds at the close of the last year.

"Second. The amount added from sale of land within the year.

"Third. The number of...