230 Pa. 176 | Pa. | 1911
Opinion by
In this case the city of Pittsburg, for the use of the borough of Sheraden, filed a bill in equity against the First National Bank of Sheraden, and against A. R. Al-baugh, William J. Sheraden and Franklin P. lams, directors of the bank. As stated by the trial judge, the • bill sets forth the annexation of the borough of Sheraden to the city of Pittsburg, and charges that the defendant bank has wrongfully in its possession certain vouchers, warrants, bonds, coupons and a check, evidences of paid indebtedness of the former borough of Sheraden, and that said bank demands payment of these vouchers, and threatens suit thereon against the plaintiffs.
The bill prayed that the bank be restrained from attempting by suit or otherwise to enforce the payment of any sums or debts represented by the warrants, bonds, coupons and check in question, and further prayed that the defendants be required to deliver the warrants, bonds, etc., aforesaid, as cancelled vouchers, to the proper authorities of the said city and borough.
The defendant, the First National Bank of Sheraden, filed a cross bill against the city of Pittsburg and borough of Sheraden, praying that the said city and borough be
From the findings of fact by the trial judge, it appears that, in November, 1905, T. Ure Williams, then cashier of the First National Bank of Sheraden, was duly appointed borough treasurer of the borough of Sheraden, qualified as such, and assumed the duties of said office under annual appointment of the borough council, until September 6, 1907. Upon that date he was removed from his office of treasurer by the borough council, and an audit of his account was ordered from March 11, 1907 to November 19, 1907. Among other items for which Williams claimed credit, was the payment of the warrants, bonds, vouchers, etc., which are the subject of this dispute, and this claim was allowed by the auditors. After making this allowance, the auditors found him to be indebted to the borough, as we understand their report, in the sum of $4,547.90. The report of the auditors was filed in the office of the clerk of the quarter sessions court on January 17, 1908, and from this report no appeal was taken.
After the auditors had allowed credit’ to Williams for the warrants and other vouchers, which had been produced by him before them, and which were in their possession during the investigation of his accounts, he (Williams) acting for the bank, secured from the auditors the return of these vouchers in question, and placed them again in the vaults of the bank. The testimony of the auditors was that they were obtained from them for the temporary use of the bank, to check up Williams’ account. After thus obtaining possession of these vouchers, which had been used by Williams in his accounting with the auditors, the bank refused to surrender them, and later claimed to hold them as evidence of indebtedness from the borough to it.
It seems that when Williams became treasurer, no depository was designated by the borough, in which the
In the official settlement by the borough auditors of the accounts of Williams, he was charged with all the moneys which he was shown to have received as treasurer, and was credited with all sums which he paid out
The bank seeks to overthrow the settlement made by the auditors, and sets up the claim that, in so far as these particular items are concerned, the payment by it of Williams’ checks as treasurer for these amounts, was not the payment of funds advanced by it to Williams; that is, of funds advanced to him through the creation of an overdraft; but that such payments were loans to the borough, and that Williams should not therefore have been allowed credit by the auditors for the payment of these items. There are cogent reasons against the soundness of this position assumed by the bank. In the first place, it is directly opposed by the facts as set forth in plaintiff’s ninth request, approved by the court below, as follows: “During the period from March 11, 1907, to September 6, 1907, all of the various warrants, bonds and interest coupons set out in Exhibits ‘A,’ ‘B,’ and 'C’ of the original bill were presented for payment to Mr. Williams as Borough Treasurer, and were paid by him as such Treasurer and the amounts thereof were entered by him in the Borough cash book as disbursements.” If then these payments were made by the treasurer, he was entitled to credit in his account for them. If Williams was entitled to credit for the payment of these items, then of course the bank was not entitled to claim credit for the same items, for that would be to allow a double credit, and would subject the borough to a double charge for payment of these items. It therefore follows that if the bank advanced money to Williams to enable him to meet his obligations as treasurer, it must look to him for repayment-of the.amount, and not to the borough.
It will be noticed that this report showed that the borough had on hand in cash in two accounts, $20,239.84; and that notwithstanding this fact, an overdraft in the bank was reported upon another account of $11,979.69. Even if this were accepted as correct, it showed a balance of $8,260.15, in the treasurer’s hands to the credit of the borough. But the report was not satisfactory,. and one of the councilmen asked how an overdraft in the First National Bank could be possible when the borough had no account there, and the treasurer had not been instructed to borrow money from .the bank. The minutes show no answer to this, pointed question. Certainly, no inference of an acquiescence upon the part of council, in the fact of the overdraft, can be properly drawn from this. occurrence. Then, upon August 16, 1907, the minutes show “Motion carried that the matter of an overdraft on the Sheraden Bank be referred to the Finance Committee for satisfactory settlement.” At this meeting' of'
We can find nothing in the minutes to show that the council ever authorized or ratified or acquiesced in the alleged overdraft in the bank as reported by Mr. Williams, the treasurer. It cannot be pretended that Williams had any authority to borrow money for the borough. The evidence shows that he was a defaulter, and that the money he took from the bank was used to cover up his defalcation by paying the warrants of the borough drawn upon him as treasurer. The warrants would have been met by the funds of the borough in his hands, if he had not embezzled the money; so that the only reasonable inference is that Williams’ prime purpose in obtaining the loan from the bank, through the irregular method of an overdraft, was to screen himself.
In their argument, counsel for the bank reiterate the statement that the warrants and vouchers in question were paid by the money of the bank. This is not correct in any sense which would give the bank a claim to ownership of these instruments; for, as we have pointed opt, they were paid from the proceeds of the loan to the treasurer, through the overdraft. When the treasurer stamped the warrants and made them payable at the bank, he was thereby, to all intents and purposes, drawing his check for their payment upon the bank. And this payment was made out of the loan made by Williams as cashier to Williams as treasurer, manifestly to take the place of other funds which he had misappropriated, and which but for that misappropriation would have been in his hands to meet the demands of the borough. Suppose that, instead of creating the overdraft, Williams had given his note to the bank and thus obtained the same amount of credit. Would it be suggested for a moment that, because the bank paid checks on this fund, to meet the borough warrants, it was thereby advancing money to the borough? Certainly not. The difficulty arises solely
The decree of the court below is reversed, and it is ordered and directed that the cross bill be dismissed, and that the original bill filed in this case be sustained, and the prayer thereof be granted; and that the First National Bank of Sheraden be restrained from attempting to enforce payment of the sums represented by the warrants, check, bonds and coupons, for which credit has been allowed to the borough treasurer, in the settlement of his account by the borough auditors; and that the defend