72 Ind. 491 | Ind. | 1880
— The appellee, as 'trustee of Columbia township, filed his complaint against Josiah B. McDonald, executor of the last will of Geoi’ge Deer, deceased, and thirty-two others, showing that the plaintiff ivas, and since the 10th day of October, 1876, had been, the duly elected, qualfied and acting trustee of said township; that, on the 2d Tuesday of October, 1870, said Geoi’ge Deer was elected trustee of said township, and gave bond and duly qualified as such, and served for two years, and was, in October, 1872, re-elected, and, having given bond and qualified, entered upon the duties of his said office for the second term. From this point, the averments of the complaint are substantially as follows, viz.: That, when first elected trusteé, said Deer was poor, owning only about $90 worth of personalty and $390' worth of real estate, encumbered for an amount unknown to the plaintiff; that, during his official term, said Deer received large sums of money belonging to the tuition, special school, road, township and dog funds of said township, and, unmindful of the trust reposed in him, wrongfully and unlawfully invested large amounts of said trust funds in his own private business, and continued to use the same in his said business from the time they came into his hands until his death, to wit, in the business of making wagons, etc., and in the purchase of the personal property that he had on hands at the time of his death, a bill of particulars of which is filed with and made a part of the complaint as “Exhibit A;” that he unlawfully loaned said funds to divers persons, and took notes therefor payable to himself, but of whom, and for what amounts, is not fully known to the plaintiff, except as shown in “Exhibit 0,” filed herewith and made a part hereof; that the business of said Deer during said time was unprofitable, and did not afford any great income, scarcely enough to maintain him and his family, and said trust funds were used by him as aforesaid, and were converted and put into the property named
The appellant Linville and some of his co-defendants filed a demurrer to this complaint, on the ground that it did not state facts sufficient, which demurrer the court overruled-,
The demurrer should have been sustained. We do not overlook the well established principle of equity jurisprudence, within which thei’e was an evident attempt to frame this complaint, namely, “That whenever the trustee has been guilty of a breach of the trust, and has transferred the property, by sale or otherwise, to any third person, the cestui que trust has a full right to follow such property into the hands of such third person, unless he stands in the predicament of a bona fide purchaser, for a valuable consideration, without notice. And if the trustee has invested the trust property, or its proceeds, in any other property into which it can be distinctly traced, the cestui que trust has his election either to follow the same into the new investment, or to hold the trustee personally liable for the breach of the trust.” And where a part of the funds of the cestui que trust have been mixed up with other funds exclusively belonging to the trustee in the new purchase or investment, “there may be ground to hold the trust funds in charge pro tanto therein.”
These are extracts from the opinion of Justice Story in Oliver v. Piatt, 3 How. 333, (Zinn Leading Cases on Trusts, 18) wherein numerous authorities are cited. But the doctrine so announced as applicable to ordinary trustees, including agents, bailees and the like, is not applicable to public officers who give bond to secure a just and full accounting for the moneys which come into their management and control.
A township trustee is required to “execute a bond conditioned as in ordinary official bonds, with at least two freehold sureties, in a penalty of not less than double the amount of money which may come into his hands at any time during his term by virtue of his office.” 1R. S. 1876, p. 900, sec. 5. In Halbert v. The State, ex rel., 22 Ind.
In Morbeck v. The State, ex rel., 28 Ind. 86, this case was approved and the doctrine applied to the case of a township trustee; and in Rock v. Stinger, 36 Ind. 346, the same judge, speaking for the court, after reaffirming the doctrine and its applicability to a township trustee, says: “Under these circumstances, as the trustee is not a mere bailee, it would seem that the legal technical title to the money in his hands is in himself. Suppose a township trustee should die with moneys received by him as such, in his hands; can it be claimed that the money, even if the specific bills or coin received by him officially could be identified, would go to his successor and not his administrator? We think it quite clear, in the case supposed, that the money would go to the administrator, because simply the title was in the trustee. This view is fully sustained by authority. In the case of Inhabitants of Colerain v. Bell, 9 Met. 499, it was held that ‘the, specific money received by a collector, in the collection of taxes, is his money, and not that of the town.’ ”
But, say counsel for the appellee, in substance, this officer was a ti’ustee, so named in the law, and the duties of a trustee are imposed on him, and, consequently, the law of trusteeship must apply to his transactions. There is no question that in the general management of his office, and in the discharge of its duties, he is responsible as such, and may well be called a trustee ; but, in reference to the public money which comes into his hands, it is not so. That, at
This conclusion necessarily results from the doctrine enunciated in the cases referred to, supra, and the extraordinary liability imposed on public officials and their bondsmen, beyond any which is enforced against an ordinary trustee, or private agent, or bailee, can be maintained consistently on no other theory.
It being conceded that the public officer, under bonds to> account therefor, is not a bailee or trustee, but the owner of the moneys which come into his hands by virtue of his office, there is no room for an application of the equitable-principle which the appellee endeavored to invoke, for that principle applies only in case of trusts and to the subject-matter of the trust. Repeating the expression used in Halbert v. The State, supra, the “liability” of an officer who> is required to give bond “is fixed by his bond,”’ and in case of default resort- must be had to that bond, if the individual responsibility of the officer is not adequate. There is no-principle of equity or rule of law or 'statute by which the preference asked for can be allowed.
Judgment reversed, with instructions to sustain the demurrer to the complaint.