80 Ind. App. 677 | Ind. Ct. App. | 1923
Lead Opinion
(after stating the foregoing facts) : An extended discussion of the merits of the second, sixth and eighth paragraphs of the answer would serve no useful purpose. It is sufficient to say that, excepting the averments relating to the balancing of the pass book, the facts averred in these paragraphs were substantially the facts averred in. the complaint. The only purpose of these paragraphs (with the exception above stated) was to present the defendant’s theory of the legal effect of the facts. See Trinkle v. Ladoga Building, etc., Assn. (1917), 65 Ind. App. 415, 423, 117 N. E. 542. No evidence was adduced under these paragraphs which would not have been admissible under the general denial; and therefore, because of the provision of the Code applicable to this feature, the ruling on the demurrer could not be reversible error even if technically erroneous. §350 Burns 1914, §345 R. S. 1881.
We must now discover, if possible, the true theory of the complaint; for a definite understanding of that theory is essential to an intelligent consideration of the motion for a new trial.
By indulging inferences with a liberality which can hardly be justified, it may be said that the cause of action rests on the ground that the street commissioner, for the purpose of defrauding the city, falsely represented to the board of public works that certain persons were entitled to wages for work done by them on the streets; that in truth there were no such persons and that they had no existence except in the imagination of the street commissioner; that in making the allowances, in preparing and delivering the orders to the street commissioner, the city officers believed that the payees were real persons; that since, in truth, the
To meet the contentions of the parties, an inquiry into the regularity of the method pursued by the city officers in allowing the claims and issuing the orders, is essential.
The general Act of 1905, prescribing the details of municipal government, as amended, provides that the board of public works shall have power to repair, clean, light, and sprinkle the streets, alleys and other public places within the city; and that this work may be done either by contract or by the board itself. §8696 Burns 1914, Acts 1913 p. 253. The only inference to be drawn from the complaint is that the board elected to do the street work itself by and through its own. employes. See Brunaugh v. State (1910), 173 Ind. 483, 90 N. E. 1019. No statute has been pointed out to us, and we know of none, which provides for any such officer as street commissioner. Therefore we indulge the further inference that the street-working force was organized, and for convenience was designated “Street Department that one Dennis J. Bush had general supervision of the laborers engaged in street work and for convenience was designated “Street Commissioner;” that the department in all respects was under the immediate direction and control of the board of public works; and that Bush furnished the board, from time to time, information concerning wages due the men employed in the street department.
It is averred that the claims, as allowed by the board, were presented to the controller. That averment may be taken to mean that the board presented to the controller what the statute denominates a “warrant” and that the “warrant” was based upon the claims thus allowed. With respect to this averment, it should be observed, that the controller, as head of the finance department, had ample power to investigate the claims and to approve or disapprove any item in the warrant, notwithstanding the allowance by the board. He had power to require evidence to enable him to determine whether the amount claimed in any item was justly due; and, for that purpose, he was authorized to summon before him any officer, agent or employe, of any department, or any other person, and to examine him upon oath relative to the claims or the warrant. §8690 Burns 1914, supra; Brunaugh v. State, supra. The controller approved the claims, and his action in that regard was quasi judicial.
*689 “All warrants and orders for the payment of public money, excepting state and township funds, shall be drawn by the proper officer upon the proper treasurer; * * * shall be presented to the proper treasurer * * * who * * * shall stamp upon the warrant or order the name of the depository by which such warrant or order is payable, and countersign the same, and no warrant or order shall be effective until so stamped and countersigned.” §7545 Burns 1914, Acts 1907 p. 391, as amended Acts 1911 p. 616.
Under the Act of 1907 the legal title to the funds vests in the municipality; and when the funds are deposited in a public depository,- the relation of depository and depositor is thereby created between the depository and the municipality. The legislature has undertaken to control the entire subject. It has pointed out specifically the method by which claims against the municipality shall be paid; and, in the case at bar, it is evident that the city officers followed the method designated in the act of 1907. It is unfortunate that the two statutes are not entirely harmonious.
The city officials were endowed with ample power to make allowances and to issue orders. They acted within the scope of their authority and their action is binding upon the municipality. The action of the ' treasurer in stamping and countersigning the orders was a positive direction to the depository to pay them. It was not the duty of the depository to inquire concerning the regularity of the allowances. Indeed, on the facts disclosed in this action, it would have been an impertinence on the part of the depository, had it assumed to question the decision of the city officials or to exercise supervisory power over their discretionary action. The depository was not the guardian of the city’s officers. After payment
The appellant concedes that the written instruments paid by the depository were not checks when drawn by the controller. It insists, however, that they became checks when stamped and countersigned by the treasurer, and that therefore the duty of the depository with respect to the payment of them was the same as the duty of a bank with respect to the payment of checks. From the face of the instruments themselves, it is obvious that they are not checks. 7 C. J. 673. Because the amount stated in each order is “Subject to All Delinquent Taxes,” they are not even negotiable instruments. §§9089a, 9089b Burns 1914, Acts 1913 p. 120. They are exactly what they are denominated in the statute, viz.: “orders,” and are spe
If in truth the names written in the orders represented creatures having no existence save in Bush’s fancy, and if in truth the controller believed that he was making the orders payable to real persons, then the orders were not payable to bearer. They were payable to real persons or not payable at all. That is the rule applicable to checks, and we perceive no reason why it should not be applied to these orders. Snyder v. Corn Ex. Nat. Bank (1908), 221 Pa. 599, 70 Atl. 876, 128 Am. St. 780; Guaranty State Bank & Trust Co. v. Lively (1912), (Tex. Civ. App.) 149 S. W. 211; First Nat. Bonk of Hastings v. Farmers, etc., Bank (1898), 56 Nebr. 149, 76 N. W. 430; First Nat. Bank of Hastings v. Omaha Nat. Bank (1899), 59 Nebr. 192, 80 N, W. 810.
Now, is there any proof to support the theory of the complaint? The uncontroverted evidence discloses that during the years 1914 and 1915, labor conditions were such as that the board of public works evidently was obliged to employ whomsoever it could get to do the work of cleaning and repairing the streets and sewers. The laborers who did that work constituted a motley crew. Many of them were transients who would work a week or two and then disappear. Some of them assumed false names, some for the purpose of avoiding the deduction of delinquent taxes from their wages, others for reasons known only to themselves. The number sq employed ranged from fifty to sixty in the winter and from 300 to 400 in the summer. During the week ending June 2, 1915, the number employed in the asphalt repair plant alone was eighty-two. Among them were persons known by such names as Stibby Staub, Goosie Costello, and Greasy Bob Walters. Walters was also
The foreman of each gang recorded, in time-sheets provided for that purpose, the days and hours each man worked. From those sheets the time-clerk of the street department made lead pencil payrolls which he turned into the office, where they were typewritten. The street commissioner certified the correctness of the typewritten payrolls, which were then presented to the board of public works. After allowing the items therein, the board certified the allowance of the payrolls to the controller, as “warrants” for the issuance of orders thereon. When the orders came to the street department, which was usually on Friday of each week, they were given to the timekeeper, who “wbifid sort them out in little bunches for the different gangs and deliver them to the foreman of each respective gang.” Usually each payroll contained several hundred names, and the orders involved in this action are based on items dispersed throughout the various payrolls. It was the custom of the men in each gang to borrow money from their foreman. Some of them began to borrow on Monday and continued borrowing small sums from day to day; and when pay orders “were received, they would repay their loans by indorsing the orders and delivering them to the foreman. It was a common practice for some of the workmen to have their pay orders cashed at saloons, grocery stores, and other places. That the workmen would resort to such methods of obtaining cash might have been anticipated; for they could pot well go to the depository during banking hours. Even if they had taken their orders to the depository, who would have vouched for their identity? Consequently all of the orders, except nine, were paid through the clearing house. When the orders were thus paid by the depository, each one bore several indorsements, all of which
The depository balanced the city’s pass book and delivered it, -together with the redeemed orders, to the treasurer every three or four months. The presumption is that the treasurer took credit on his account with the city for the amount of the orders and returned them to the controller; that the controller laid them before the common council; and that the common council approved the whole matter. The record does not disclose that any city official has ever claimed that the names written in the orders represented fictitious persons or that the depository is in any manner liable to the city. But, in the year 1917, the bureau of public accounting made an examination of the office of the city controller. Field examiners checked the names in the orders with the names in the city directory, in their effort to determihe whether the orders were fraudulently issued. Many persons were interviewed, subpoenas were issued, and a grand jury investigation was conducted. A field examiner laid the matter before the corporation counsel and requested him to institute an action against the depository, but the city’s legal department ignored the request. A field examiner made the demand on the depository, and this action followed. Although the name of the corporation counsel now in office appears upon the brief, no one representing the legal department of the city government has participated in the proceedings.
In an effort to prove that the indorsements were forgeries, seventeen men were called as witnesses. Some of the names of these witnesses were the same as, while others were similar to, the names in some of
Without reciting further details, we are compelled to say that, when viewed in the light most favorable to the plaintiff, the evidence wholly fails to support the averments of the complaint. If the jurors had returned a verdict for the plaintiff, it would have been the duty of the trial court promptly to have set it aside as being contrary to law.
In view of the conclusion we have reached, it is wholly unnecessary to discuss the instructions. Where the jury returns the only verdict that can lawfully be rendered on the evidence, nothing in the charge can constitute reversible error.
The report offered in evidence and excluded by the court is a voluminous document comprising 148 pages of the transcript. It covers all the financial affairs of the city, including every department of the city government; contains elaborate explanations, recommendations, opinions and conclusions of the examiners; recites a multitude of sins chargeable to the city officials but not to the depository; and is certified by G. H. Hendren, State Examiner. Only a very small part of it has any reference to the matter involved in this litigation. While the bulk of it is utterly foreign to the controversy in the case at bar and might be available in an action against city officials, it contains statements that would be prejudicial to the depository, The statute relating to public accounting contains the following :
*695 “Any such report as is described in this section, or a copy thereof duly certified by the state examiner shall be taken and received in any and all the courts of this state, as evidence of the facts in such reports stated and contained.” §7546i Burns 1914, Acts 1909 p. 136.
It is fundamental that the- legislature may not strike down the rights of citizens by invading the province of the judicial department of the state government. While this court is not authorized to declare a statute unconstitutional, nevertheless, where a statute is susceptible of two constructions, one of which would render it constitutional and the other one unconstitutional, it is our duty to adopt the former. Therefore we hold that the legislature intended to declare that such reports only as are found to be competent under the established rules of evidence and in the particular kind of action authorized by the statutes relating to the subject of public accounting, shall be received by the courts.
A witness, who had been a member of two grand juries in 1916 and clerk of a grand jury in 1917 and had otherwise participated in an investigation to determine whether or not the orders were fraudulently issued, was asked the following “question:”
“You may state, Mr. Thomas, if your investigation disclosed that any of the persons whom you' investigated in this matter—persons who were of the same name- as the payees therein—indorsed their names on these checks.”
On what principle could the result of an ex parte investigation .of that character be admissible? Was the defendant not entitled to cross-examine the persons investigated on the question as to whether they indorsed the orders? For other reasons, the question is so obviously improper that further discussion is useless.
The right of the attorney-general to institute and maintain this action has not been questioned, and under certain provisions of the Code it seems to be our duty to regard it as having been waived. §§344, cl. 6, 348 Burns 1914, Acts 1911 p. 415.
Judgment affirmed.
Rehearing
On Petition for Rehearing.
The opinion in Citizens Nat. Bank v. Reynolds (1920), 72 Ind. App. 611, 126 N. E. 234, contains the following statement: “The rule is well established that a bank on which a check is drawn must ascertain at' its peril the identity of the person named therein as payee.” Counsel for appellant insist that the rule there stated is applicable to the case at bar. The contention cannot be sustained. From the nature of the Reynolds case, from the statement of the facts of that case, from the opinion itself, when considered as an entirety, the clear implication is that the rule is limited to the class of cases wherein a check is presented for payment by a person who claims to be the payee. However, in order that no one may be misled, the rule above quoted is hereby expressly so limited.
As stated in the original opinion, the orders involved in the case at bar are not checks. But if the rules of law applicable to checks were applied to these orders, the appellant would not be benefited thereby; for the record before us utterly fails to show any diligence whatever on the part of the city.
The petition for a rehearing is denied.
