Wilkinson v. Stewart

• Decision Date: 30 November 1862
• Citation: 1862 WL 3443,30 Ill. 48,20 Peck 48
• Parties: WILLIAM R. WILKINSON, Plaintiff in Errorv.JOSIAH STEWART and JAMES FACKNEY, Defendants in Error.
• Court: Illinois Supreme Court

30 Ill. 48
1862 WL 3443 (Ill.)
20 Peck (IL) 48

WILLIAM R. WILKINSON, Plaintiff in Error
v.
JOSIAH STEWART and JAMES FACKNEY, Defendants in Error.

Supreme Court of Illinois.

November Term, 1862.

ERROR TO WABASH.

When county bonds have been deposited by a railroad company with its president, under an agreement with an accommodation indorser, that the bonds should be held for the purpose of paying notes which had been indorsed for the benefit of the company, the president becomes a trustee, independent of his official character, and is personally responsible for the execution of the trust. In such a case it will be no defense for him to allege that he was directed by the corporation to make another disposition of the bonds.

An indorser, who takes up and cancels the indorsed paper by giving a new obligation, has a right to regard this as a payment, and to call upon his principal for indemnity.

[30 Ill. 49]

THIS was a suit in equity, by defendants in error, to enforce a trust against plaintiff in error.

The bill stated that Stewart and Fackney, on the 13th of May, 1859, indorsed, for accommodation only, a bill of exchange, drawn by J. C. & D. N. Stanton, on the cashier of the bank at Vincennes, in favor of defendant, for $2,060, payable three months after date, at the branch of the Bank of Indiana at Vincennes; that said bill was discounted at Mt. Vernon, Ind., and the proceeds applied to the use of the Illinois Southern Railroad Company. The said bill not being paid when due, was protested for non-payment. That on the 25th of October, 1859, the said Illinois Southern Railroad Company, to protect the defendants against their liability on said bill, and to provide for payment thereof, delivered to plaintiff (Wilkinson) one hundred and fifty Wabash county bonds, amounting to $15,000, which were accepted by him in trust, for the purpose of paying certain notes given by S. H. Martin, J. Fackney, J. Stewart, G. Williams, I. N. Jaquess and others, as makers or indorsers, viz.: five notes, for about $4,000, and then lying in the Mt. Vernon Bank; and three others for about $5,000, negotiable at the Canal Bank at Evansville. That the said bill of exchange was one of the claims last aforesaid, and said bonds were to be sold and disposed of as soon as possible for the payment of said notes.

Wilkinson's receipt is as as follows:

“Received of the Board of Directors of the Illinois Southern Railroad Company, the following bonds of Wabash county, viz.: Nos. 201 to 350 both inclusive, making 150 bonds, each for one hundred dollars, which bonds have been specially set apart by the said company for the express purpose of paying certain notes given by S. H. Martin, James Fackney, Josiah Stewart, George Williams, I. N. Jaquess and others as makers or indorsers, viz.: five notes for about $4,000 and now lying in Mount Vernon bank, and three notes for about $5,000 and negotiable at the Canal Bank at Evansville, with interest, cost, etc., and which bonds have been placed in my hands as trustee for said makers and indorsers of said notes, to sell and dispose of as soon as possible, and

[30 Ill. 50]

apply the proceeds thereof in payment of said notes as aforesaid, and account with the treasurer of said company for any surpuls which may remain in my hands; this receipt is given in duplicate.

+-------------------------------------+
                ¦October 25, 1859.¦W. R. WILKINSON.”¦
                +-------------------------------------+
                

The bill also charged that plaintiff refused to execute the trust, and had surrendered the bonds to the railroad company in violation of the trust, and the same had thereby been lost to defendants, and they had been compelled to settle and pay the said bill of exchange with interest, etc.

Wilkinson, Martin, Williams, Jaquess, and the Illinois Southern Railroad Company, were made defendants, and a decree prayed against Wilkinson to enforce the trust, or to pay said Stewart and Fackney, and the other makers and indorsers of said notes, the amount paid out by them on that account.

Wilkinson and Williams answered, and default as to the other defendants below.

The answer of Wilkinson admits that Stewart and Fackney indorsed the bill for accommodation; admits he received the $15,000 of bonds and executed the receipt therefor; that the bonds were to secure said parties, and to be sold for that purpose. He denies that he refused to execute the trust, but that before he could sell the bonds and apply the proceeds as first directed, the orders of said company of the 15th and 16th of February, 1860, were made, authorizing the sale of the...