Vill. of Dolton v. Harms

• Decision Date: 06 November 1945
• Docket Number: Gen. No. 43308.
• Citation: 63 N.E.2d 785,327 Ill.App. 107
• Parties: VILLAGE OF DOLTON v. HARMS et al.
• Court: United States Appellate Court of Illinois

327 Ill.App. 107

63 N.E.2d 785

VILLAGE OF DOLTON

v.HARMS et al.

Gen. No. 43308.

Appellate Court of Illinois, First District, Second Division.

Nov. 6, 1945.

Appeal from Superior Court, Cook County; Ulysses S. Schwartz, Judge.

Action in equity by Village of Dolton against James Harms, Jr., and others, to recover against defendant treasurer and sureties on his official bonds in the sum of $150,000, and for an accounting to determine the amount of recovery to be allowed on the bonds. From a judgment dismissing cause, upon plaintiff's refusing to plead further after an order had been entered sustaining motion to strike amended complaint, the plaintiff appeals.

Affirmed.

Harold L. Summerfield, of Chicago, for appellant.

Adcock, Fink & Day, of Chicago (Edmund D. Adcock and John W. Day, both of Chicago, of counsel), for appellee Aetna Casualty & Surety Co.

Otto F. Reich and P. A. Rattray, both of Chicago, and Burton Evans, of Harvey, for appellees John Harms, Jr., and Horace Holmes.

SCANLAN, Justice.

Plaintiff states that ‘this is an action in equity for a recovery by the plaintiff against the defendant treasurer and the sureties on his official bonds in the sum of One Hundred Fifty Thousand Dollars, and for an accounting to determine the amount of recovery to be allowed on the said bonds.’ Defendant Garrett Jacobsma and defendant John S. Van Deursen, who appear in the title of the case as appellees, were not served with process and neither entered his appearance. Defendant John Harms, Sr., died December 20, 1944.

After plaintiff had filed its amended complaint, defendants John Harms, Sr., John Harms, Jr., Horace Holmes and Aetna Casualty and Surety Company filed a written motion praying that the amended complaint be stricken and the suit dismissed. Many grounds were urged in support of the motion. The trial court entered an order sustaining the motion ‘on the sole ground that the above entitled cause is barred by the five year Statute of Limitations of Illinois.’ Plaintiff elected to stand upon its amended complaint and declined to plead further, and the cause was thereupon dismissed. Plaintiff appeals.

The amended complaint alleges that plaintiff is a municipal corporation, located in Cook county; that Garrett Jacobsma was Treasurer of plaintiff Village starting on May 1, 1928, and that he performed the duties of the office until May 1, 1929; that John Harms, Jr., was duly appointed as Treasurer of plaintiff Village on April 24, 1929, and qualified; that the Aetna Casualty and Surety Company was surety upon the bond filed by him; that on May 1, 1930, said Harms was reappointed as Village Treasurer and filed a renewal certificate, executed by said Surety Company, which continued the said bond until April 30, 1931; that on May 1, 1931, said Harms was reappointed as Treasurer of the plaintiff Village for one year commencing May 1, 1931, and filed a bond in the penal sum of $150,000 with said Surety Company as surety; that on December 15, 1931, Harms Jr., as principal, and John Harms, Sr., John S. Van Deursen and Horace Holmes executed a surety bond in the sum of $60,000; that numerous special assessment proceedings were confirmed on behalf of plaintiff Village during the term of office of the Treasurers hereinabove named, warrants were issued for the collection of the assessments, and substantial amounts of money were collected pursuant thereto and came into the hands of the Village Treasurers heretofore named; that funds collected in connection with the special assessment proceedings by the Village Collector of plaintiff Village, and by the County Collector of the County of Cook, and by them remitted to the Village Treasurers of plaintiff Village hereinabove named, were funds collected solely for the purpose of paying the bonds and vouchers issued to defray the cost of construction of the improvements confirmed in the special assessment proceedings and could be used for no other purpose whatsoever, and constituted trust funds to be used only for the purpose of retiring pro rata bonds issued in the respective installments of the respective special assessment proceedings in connection with which the moneys were remitted to the Village Treasurers; that the handling and disbursement of said special assessment funds according to law was one of the duties and obligations of the Treasurer of plaintiff Village in office during the period the various funds were received from time to time; that said Village provided adequate and proper books and records for use concerning special assessment funds and in compliance with the law; that said Village had regularly caused to be made audits of the collections and disbursements of the Village Treasurers for the purpose of determining the amount of funds still on hand applicable to the respective special assessment and the installments thereof; that commencing with the year 1936, claims were made against said Village because of the fact that said special assessment funds had not been properly disbursed by the Village Treasurers in office from time to time, and said Village was made party defendant in several cases that arose as the result of the method of handling special assessment funds by the Village Treasurers hereinabove named; that several of the cases have gone to final decree and the municipality was held liable for substantial sums of money; that numerous other claims have been made against said Village for payment out of general corporate funds of substantial sums of money because of the method of handling special assessment funds by the treasurers heretofore named, said treasurers having diverted collections made on account of special assessments from principal to interest, from one installment to another installment in the same special assessment, and having failed to prorate collections proportionately as between holders and owners of bonds in the same installment of various special assessments, which acts were the acts of the Village Treasurers of said Village, and contrary to their duties as treasurers; that as a result of the filing of said proceedings and the claims thereunder, plaintiff ordered an analysis prepared by a firm of certified public accountants to determine in what respects the Village Treasurers of said Village hereinabove named had failed to prorate collections, as provided by law; the summary of said analysis showing the payments by the Village Treasurers on account of bonds and interest coupons in excess of the moneys received by the said treasurers properly applicable thereto, thereby paying out more money than there was in the respective installment, or by failing to prorate the moneys equally among bondholders entitled thereto because of giving a preference to some bondholders over others, is made a part hereof, as Exhibit E; that said Village had no knowledge of the said wrongful acts of the Village Treasurers prior to the preparation of said analysis, and ordered by the municipality after the institution of the first proceedings in the year 1936; that the Village does not know what the total amount of liability on behalf of the Village is because of the acts of said treasurers which were contrary to law, and that said liability can only be determined after an audit has been made subject to the supervision and direction of a court of chancery of all of the special assessment records of said Village from May 1, 1928, up to and including April 30, 1932; that no claim on behalf of the municipality is made that said Treasurers received any of the money personally; nor is any claim made in connection with the handling of any funds except the special assessment funds which constituted trust funds which can only be used for a specific purpose as provided by law. Plaintiff prayed that an accounting may be taken of all special assessment moneys turned over to said Village Treasurers; that it may be determined whether or not any funds were illegally and improperly paid out by said Treasurers; that defendants herein may be adjudged and decreed to pay to plaintiff what if anything appears to be due from them or any of them; that plaintiff may have such other and further relief as equity shall require and which to the court shall seem meet. Attached to the amended complaint as exhibits were copies of the several bonds referred to in the complaint.

Plaintiff's contention that in determining this appeal we can consider but one question, viz., whether the trial court was justified in holding that the action was barred because of the five year Statute of Limitations, is without merit. Defendants have the right to sustain the judgment upon any ground warranted by the record irrespective of whether the particular reasons given by the trial judge or his specific findings are correct. Bullman v. Cooper, 362 Ill. 469, 472, 200 N.E. 173;Hillmer v. Chicago Bank of Commerce, 375 Ill. 266, 272, 31 N.E.2d 309.

At the outset, it must be noted that the amended complaint does not charge that any of the alleged diversions were wilful or that the Treasurers converted any funds to their own use. Indeed, the complaint specifically disavows any claim of malfeasance on the part of the Treasurers. During the entire period involved in the instant suit (May 1, 1929, to May 1, 1932) Section 43 of the Local Improvement Act as amended in 1927 (Smith-Hurd Rev.St.1929, c. 24, § 745 note, 1929 Cahill Ill.Rev.Stat., Chap. 24, Par. 169) was upon the statute books. It read as follows: ‘§ 43. Whenever sufficient funds are on hand for that purpose the treasurer of the municipality shall select by lot bonds of series, to such amount, to be paid therewith and shall send notice by registered mail to the address of the original purchaser (or known present or subsequent owner) of each of such bonds, as set out in the treasurer's records, stating that the designated bonds will be paid thirty (30) days thereafter at his office and the treasurer also shall give notice in some...