City of University City v. Schall

BLAIR, P. J. James F. Coyle was treasurer of University City. Appellant is administrator of his estate. The city sued for a balance it alleges Coyle, as treasurer, owed it at the time of his death. The verdict was against the city. A new trial was granted, and the administrator appeals from that order. The petition alleges the balance is $28,197. It is stipulated this has been reduced by payment of over $17,000 out-of the assets of the People’s Savings Trust Company. No point is made on the pleadings. One ground upon which the new trial was granted was that the verdict was “contrary to the law.” There is no dispute that bonds for $100,000 were authorized, issued and sold, and that the checks for the proceeds were made out to James F. Coyle, Treasurer of University City; that he endorsed these cheeks for deposit with the People’s Savings Trust Company, and, — 672 — in Ms own hand, made out the deposit slip used in that transaction; that the account was opened by the Trust Company in the name of James F. Coyle, as treasurer of the city, and always carried that way on its books; that the portion of the sum withdrawn, with the exception of’ one large item, was paid out on Coyle’s treasurer’s check'or paid on warrants issued.in the ordinary way and Coyle’s check subsequently made to cover the payment. The city does not question the propriety of any of these payments. Appellant offered oral evidence tending to show that- the mayor and aldermen examined the statutes and concluded they had the right to control the fund; that they agreed they would do so; that they directed the deposit to be made in the Trust Company in Coyle’s name as treasurer; that the Trust Company offered interest as high as offered by any other and was located in University City; Coyle, the-may of and some of the aldermen were directors of the Trust Company. The city attorney and Coyle took to the Trust Company the checks representing the fund in question; the account was opened, as already stated, and the notation “special deposit” was placed upon the books in connection with the account. A little later the Trust Company issued and delivered to Coyle a pass book marked on cover “Mo. 165, People’s Savings Trust Co. By Mail Only. University City, St. Louis, Mo. In account with— Name, James F. Coyle, Treasurer — Town, University City, Mo.” In this book appear the deposits, withdrawals and balances. The heading over them is: “Book No. Mo. 165. People’s Savings Trust Co. In account with James F. Coyle, Treasurer University City, Mo.” This book and other evidence show that the proceeds of the bonds went into this account. On March 24, 1910, the balance was $61,793.16. On that date Coyle demanded the balance. The bank did not have it and Coyle accepted a certificate of deposit for $50,000. This left $11,793.16 in the account. Payments reduced the balance, and on December 3, 1910, Coyle surrendered his certificate of deposit, caused $10,000 to be placed — 673 — in the account, and took another certificate of deposit for $40,000. Under like conditions similar transactions occurred. On May 25, 1911, the account showed a balance of' $4419.63, and Coyle had in his possession a certificate of deposit for $25,000. The body of the certificate read: “This certifies that Jas. P. Coyle, Treasurer of University City, Mo., has deposited in the People’s Savings Trust Company the sum of twenty-five thousand no/Dollars, payable 6 mos. after date on return of this profit sharing certificate of deposit, properly assigned. This certificate is entitled to share in the profits as provided,” etc., “This certificate is transferable only in person or by attorney upon the books of the company.” This was subject to a contract as to the method of computation and payment of profits. The certificates of deposit previously issued to Coyle were of like character. Payments out- of the fund were made on checks signed by Coyle and issued by him in payment of warrants ordered issued by the city council. Some payments seem to have been made by the Trust Company directly to the holder of the warrant. In such circumstances generally Coyle subsequently would issue his treasurer’s check to cover such payments. There may have been instances in which no check was issued for payments made on warrants. The answer avers and the evidence shows that Coyle’s reports as city treasurer during the per'idd from January, 1910/to the expiration of his term, contain no reference to the $100,000 fund. They had reference to other funds of the city. The balance (aboht $2,900) shown by these reports Coyle had paid o've'r.to his successors. He paid dver no part of the $100,000 fund. His bond was for $5,000 and was executed prior to the issuance of the City bonds. The amount was fixed by ordinance. It is established that the Trust Company placed the $100,000 deposit with its other funds and paid it out as stated and charged itself with interest'on the deposit and treated the deposit as it treated its ordinary de — 674 — posits. The mayor was president of the Trust Company. The city attorney was connected with its legal department. Coyle was a director. The city clerk was its treasurer. Coyle made the deposit and knew, as a matter, of fact, all about the manner in which it was being managed. It never was treated as a special deposit. The Trust Company failed in 1911. Appellant’s brief presents several questions. m ' I. It is contended the checks and money were never entrusted to Coyle’s care. It is not denied the checks were made out and delivered to him and endorsed by him and deposited for collection by him, and the account opened and carried by him, all in his name as city treasurer. It is argued the evidence tends to show the mayor and board of aldermen took over the fund and Coyle acted as their agent in all these matters. Section 9371, Revised Statutes 1909, provides that “the mayor and board of aldermen . . . shall have the care, management and control of the city and its finances. ’ ’ This is relied upon to show that the board of aldermen had such care and control of the bond proceeds that they might retain custody of them to the exclusion of the treasurer. The question need not be discussed. Section 9395, Revised Statutes 1909, provides that “the treasurer shall receive and safely keep all moneys, warrants, books, bonds and obligations entrusted to his care, and shall pay over all moneys, bonds or other obligations of, the city on warrants or orders duly drawn, passed or ordered by the board of aldermen,” etc. The applicable city ordinance followed the language of the statute and provided that the treasurer should “pay over all moneys belonging to the city according to law. ” It is said the evidence tends to show the fund was not “entrusted” to Coyle’s care as treasurer, but that he held it as “agent” of the board of aldermen. As pointed out, appellant proved beyond dispute that the money was in Coyle’s possession and that all the checks and accounts show — 675 — it stood in Ms name as city treasurer. In onr opinion, when he obtained such custody of the fund it was entrusted to his care in the statutory sense and he became responsible for it as treasurer. Concede the board might have retained the fund. It did not do so. It turned it over to Coyle, as treasurer, so far as all the records show. The board then had no power to select a depository for city funds of this character. It had no authority to interfere with Coyle’s disposition of funds in his hands as treasurer. It was his duty under the statute to care for funds entrusted to him and respond in case of loss. Whatever advice the board or its members gave him as to a place of deposit, he acted upon it at his peril. The board’s view as to its authority under the statute did not bind Coyle. It could neither usurp his duties nor exonerate him from liability for funds in his hands. If he saw fit to accede to a suggestion as to the place of deposit, whether made by the board or by its individual members, this cannot now be used to relieve him of responsibility which the law placed upon him in his official capacity. An ordinance regularly passed by the board and signed by the mayor could not have changed Coyle’s status once he secured possession of this city money as city treasurer. We hold that sound public policy does not permit a city treasurer, in circumstances such as appear here, to take into his possession in his name as city treasurer funds of the city of which he is treasurer, hold these for years in an account kept in his name as treasurer and, when called upon for a balance, relieve himself by showing that the mayor and board of aldermen attempted orally to confer upon him the character of agent so that he might hold the fund for them, and withhold it from himself in his character as treasurer. The easy evasion of liability a contrary holding would permit is sufficient answer to any argument in behalf of such a rule. It may be added that appellant’s evidence as epitomized above establishes the fact that whatever effort was made to constitute Coyle agent of the board or city, it con — 676 — clusively appears the fund was not, in fact, confided to him in that capacity. The records put this beyond dispute. ^ , _ .. II. The question whether oral evidence of the action of the board of aldermen can be offered in the absence of a record of such action in a case like this need not be determined. In our opinion, the board could not, even by ordinance duly passed, have exonerated Coyle from liability for city funds shown to have been actually in his hands as treasurer of the city. Deposit III. The writing of the words “special deposit” upon the bank book is of slight consequence. Interest was to be paid and was paid on the account. The necessary implication was that the funds would employed by the Trust Company in the usual way. The account was to be and was a checking account in the sense that current obligations payable' out of the fund were to be paid and were paid out of it on checks and warrants in a customary way. No suggestion was made or thought of that the money was to be segregated from other moneys of the Trust Company and kept intact ■ as- a special deposit. The , deposit had no single attribute of a Special deposit. The writing of the words on the books amounted to nothing in view of the clear Understanding that the account should be dealt with as it was. Further, we think the evidence, as a matter of law, shows Coyle, as treasurer, placed the money in the bank. His liability is absolute, under the rule in this and most other states. [State ex rel. v. Powell, 67 Mo. 395; State ex rel. v. Moore, 74 Mo. 413; County of Mecklenberg v. Beales, 111 Va. 691, 36 L. R. A. (N. S.) 285.] IV. The reports of the treasurer and the report of an auditing committee which examined one of them constituted no account stated. As the answer avers, these reports did not include the fund in the TrUst — 677 — Company. There was no dispute about the portion of the fund expended and there is no such dispute now. There was no controversy about the fund. The board was powerless to exonerate Coyle by express action and, as a consequence, its action or lack' of action respecting the reports made eould not estop' or affect the city. The trial court was right in granting a new trial on the ground that the verdict was contrary to law. The order is affirmed and the cause remanded. All concur.