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APPEAL by plaintiff from a judgment of the Circuit Court for Miller County (Haynie, J.) in favor of defendants in an action brought to enforce their statutory liability for public funds lost by failure of a bank of which they were stockholders. · Affirmed.
The facts are stated in the opinion of the court.
Messrs. Frank S. Quinn, W. H. Ar- stockholders of a defunct banking nold, and Webber & Webber, for ap- institution known as the Texarkana pellees:
Trust Company, to recover the If any right of action against de
amount of certain funds alleged to fendants existed, it was in favor of plaintiff as an individual and by way
have been deposited as the county of subrogation to the original rights
funds in that institution. The of the county. The right of subroga
facts are undisputed, and the court tion being purely equitable, the chan- gave a peremptory instruction in cery court alone had jurisdiction. favor of appellees. Even if there
Wilson v. White, 82 Ark. 407, 102 had been any substantial conflict in S. W. 201, 12 Ann. Cas, 378.
the testimony, all doubt would have Where an illegal contract has been
to be resolved in favor of the court's made, neither courts of law nor equity finding, inasmuch as both sides will interpose to grant relief to the
asked for a peremptory instruction, parties, but will leave them where it finds them, if they have been equally without requesting
, cognizant of illegality.
the court to give Appeal
peremptory Millington v. Hill, 47 Ark. 301, 1 S. any
instructions instructionW. 547; Shattuck v. Watson, 53 Ark. submitting the is- tict of evidence. 150, 7 L.R.A, 551, 13 S. W. 516; Kirk- sues to the jury. land v. Benjamin, 67 Ark. 480, 55 S. St. Louis Southwestern R. Co. V. W. 840.
Mulkey, 100 Ark. 71, 139 S. W. 643, Both parties having requested a
Ann. Cas. 1913C, 1339. directed verdict, the court's finding in favor of the defendants has all of the
The facts are that appellant deforce and effect of a verdict of the
posited in the Texarkana Trust jury.
Company the sum of $2,500 on AuSt. Louis Southwestern R. Co. v. gust 1, 1913, and the same was credMulkey, 100 Ark. 71, 139 S. W. 643, ited to him on the books of the bank Ann. Cas. 1913C, 1339; St. Louis, I. M. as treasurer, and a pass book was & S. R. Co. v. McMillan, 105 Ark. 25, delivered to him. A few days there150 S. W. 112.
after, he decided to change the deIn determining whether the evidence
posit to a personal one in his own is sufficient to sustain the verdict, the
favor, and by agreement with the evidence is to be considered in the strongest light favorable to appellees,
cashier the word "treasurer" was and the verdict will not be disturbed erased from the bank ledger, the if there is substantial evidence to pass book showing the deposit in support it.
his name as treasurer was surSt. Louis, I. M. & S. R. Co. v. Brabbz- rendered, and a new pass book son, 87 Ark. 109, 112 S. W. 222; St. was issued to him, showing the deLouis, I. M. & S. R. Co. v. Coleman, 97
posit to be an individual one in his Ark. 438, 135 S. W. 338; Chicago, R.
own name. Three months thereI. & P. R. Co. v. Grubbs, 97 Ark. 486,
after the bank allowed him a credit 134 S. W. 636; Boshears v. Johnson,
because of interest on the deposit, 101 Ark. 120, 141 S. W. 763; Hodges
and the credit was placed on his inv. Bayley, 102 Ark. 200, 143 S. W. 92;
dividual pass book. The bank was Vaughan v. Cooper, 103 Ark. 260, 146
found to be insolvent in November, S. W. 503; St. Louis, I. M. & S. R. Co.
1913, and on the 12th day of that v. Owens, 103 Ark. 61, 145 S. W. 879.
month the bank was placed in the McCulloch, Ch. J., delivered the hands of a receiver by order of the opinion of the court:
chancery court of Miller county. On Appellant was treasurer of Miller the day the doors of the bank were Sunty and instituted this action closed and the receiver appointed (118 Ark. 134, 176 S. W. 336.) about thirty minutes before that oc- of action to recover the amount aftcurrence, one of the witnesses testi- er he had paid the same over on fied that appeliant and the cashier settlement. We said that the right made an agreement that the deposit of recovery was based on the equishould be charged back to the ac- table principle of subrogation. That, count of appellant as treasurer, so however, was a case where the funds as to give him security by reason of were in fact and in form deposited the statutory liability of the stock- as public funds. It is unnecessary holders for deposit of public funds in this case to decide whether or (Kirby's Dig. $ 1990), and, pursu- not the mere fact that the payment ant to that agreement, the cashier was made before the institution of added the word "treasurer" to the the suit would defeat the right of account on the ledger, and also on subrogation, for we can base our the pass book.
conclusion on the broader ground It is, therefore, established by the that the parties intended this in fact uncontradicted evidence that the as an individual deposit, for the purfunds deposited were in fact public pose of enabling appellant to reap funds in the hands of appellant as the fruits of such deposit by way of treasurer, and were originally de- interest, and he cannot now treat it posited in his name as treasurer; the as a deposit of public funds. The deposit was changed to conform to statute permits him to deposit funds the real intention of the parties so in incorporated banks for safe-keepthat it could be treated by the bank ing, but it was manifestly in conas an individual deposit, and interest templation of the lawmakers that thereon allowed to appellant indi- the funds should be deposited as vidually in conformity with the cus- public funds. The tom of the bank to allow depositors deposit made by ap- deposit in bank interest. Appellant accounted for pellant in his own the funds to the county before the
name, for the purcommencement of this suit. We are pose of collecting interest, was not of the opinion that appellant was not a lawful deposit in conformity with entitled to recover from the stock- that statute. We do not mean to holders of the defunct bank by im
say that it is necessary that the deposing on them the statutory liabil
posit be in form so as to show that ity, and the court was correct in it is public funds in order to impose
giving a peremp- liability on the stockholders, for we
a Subrogationright of one
tory instruction. held, in the recent case of Black v. with unclean hands.
The county had no Special School Dist. 116 Ark. 472, cause of action at
173 S. W. 846, 1104, that school the time this action was commenced, funds deposited by a board of school for the simple reason that the funds directors would be treated as public had been accounted for by appellant. funds in the hands of the treasurer,
In Bank of Midland v. Harris, 114 the lawful custodian, and that the Ark. 344, 170 S. W. 67, Ann. Cas. latter could recover the amount 1916B, 1255, the facts were that the from the stockholders. There is no treasurer brought suit against the question involved in the present case stockholders of a defunct bank to re- of the right of the county to recover cover public funds, in his custody, from the stockholders, for, as aldeposited with the bank, and he was ready shown, the county has susallowed to recover notwithstanding tained no loss.
tained no loss. Appellant is trying the fact that he had accounted to the to recover for his own benefit, and county for the funds after the com- must do so, if at all, upon the equimencement of the action.
table doctrine of subrogation. Now, held that the action did not abate by equity aids only those who come into the payment of the county funds, court with clean hands, and it canand that the officer, who was the not be said that appellant was in custodian of the funds, had a right that attitude after having entered
into an agreement with the cashier to principles of equity. Wilson v. of the bank to treat the deposit as an White, 82 Ark. 407, 102 S. W. 201, individual one, so that he could reap 12 Ann. Cas. 378; Bank of Midland the fruits of it. Though the deposit v. Harris, supra. This case was was made as treasurer, and the fund tried in a court of law without any was not in fact checked out, the sur- question being raised, but the case render of the pass book and the
was correctly decided upon the unchange of the form disputed facts, and the judgment change in form of the account by should therefore be affirmed. It is agreement with the
so ordered. cashier was equivalent to drawing the money out and redepositing it. Kirby, J., dissents. Cunningham v. State, 115 Ark. 392, 171 S. W. 885. The deposit stood as an individual one until the bank
NOTE. became insolvent, and appellant then, for the sole purpose of impos- In the reported case (HILL v. KAVAing liability on the stockholders, en- NAUGH, ante, 1) it appeared that a tered into the agreement with the county treasurer deposited county cashier for the change of the nature funds in his individual account, to get of the deposit. It was too late for
for himself the interest thereon. him to do that after having accepted when the bank was about to fail, the the benefits of the deposit as an in
funds were transferred to his account dividual one, and it would not be in
as treasurer. After the failure of the accordance with the principles of
bank he accounted to the county for natural justice to permit him to
the loss, and sought to be subrogated shift the deposit at that time so as to impose a liability on the stock
to the rights of the county against the holders. We have said in this class
bank. It was held that he was not enof cases that, where the cause was
titled to relief, since he did not come tried without ob- into equity with clean hands. The Equity
jection in the law cases applying the “clean hands" max
court, it should be im are reviewed at length in the note disposed of, nevertheless, according following LANGLEY v. DEVLIN, post, 44.
enforcement in action at law.
MARY C. BARNES, Admrx., etc., of Erastus A. Barnes, Deceased, Plff.
Illinois Supreme Court - February 20, 1918.
(282 Ill. 593, 118 N. E. 1004.) Equity — maxim — when applicable.
1. The maxim that "one who does iniquity cannot have equity” is limited in its application to where the substance of the thing is inequitable, and the iniquity must apply to the particular subject-matter.
[See note on this question beginning on page 44.] Accounting - question for court. Appeal dismissal of bill for ac
2. Upon filing of a bill for account- counting. ing, the first question, where the right 3. Upon appeal from a decree disis disputed, is whether or not such missing a bill for accounting, it should right exists, and is for the court. not be presumed that the court at[See 1 R. C. L. 222, 223.]
tempted to state an account where, un
(282 II. 593, 118 N. E. 1004.) der the practice, it could only hear trust relation between the parthe evidence as to a right to an ac
ties comes to an end. counting.
[See 17 R. C. L. 794–796.) [See 2 R. C. L. 219.]
Equity fraudulent act effect. Accounting - who entitled.
7. Where the origin of a claim is not 4. A woman who, for many years,
inequitable, a fraudulent act in rela
tion to it will not bar relief in equity. lived with her brother, who received
[See 10 R. C. L. 391.] and took charge of her money and in
Accounting equity unclean vested it for her, and died leaving se
hands forged evidence. curities in a safe deposit box, as to
8. The fabrication of evidence as to ownership of which it is impossible to
some items in an account will not bar determine without evidence, is entitled
relief in equity as to other items or to an accounting.
claims under the maxim that "he who [See 1 R. C. L. 224.]
comes into equity must come with Trust - personal property - parol.
clean hands." 5. A voluntary, continuing, equitable
[See 10 R. C. L. 391.) trust in personal property may be cre
- reference to master. ated by parol.
9. Where an account consists of
many items covering a great length Limitation of actions against trust
of time, and the testimony is conflictin personal property.
ing, the court cannot proceed to an 6. The Statute of Limitations does
accounting until the account has been not begin to run against a voluntary, stated by a master, and objections to continuing, equitable trust in personal the account settled by him. property until it is repudiated, or the [See 10 R. C. L. 508, 509.]
CERTIORARI to the Appellate Court, First District, to review a judgment reversing a judgment of the Circuit Court for Cook County (Honore, J.) dismissing a bill filed for an accounting of moneys and securities alleged to have been intrusted by complainant to her brother, defendant's deceased husband, for safe-keeping and investment. Affirmed.
The facts are stated in the opinion of the court. Messrs. Henry W. Magee, Elmer W. E. 687; Nolan v. Zagar, 266 Ill. 39, 107 Adkinson, and Samuel B. King, for N. E. 105. plaintiff in certiorari:
There is a presumption of law
a The Statute of Limitations is an ef- against the entire case of a party who fective bar to the bill for accounting, is guilty of fabrication or spoliation notwithstanding allegations of agency of evidence. and trust therein contained, because Wigmore, Ev. § 278; Winchell v. Edthe equitable remedy for accounting is wards, 57 Ill. 41; 1 Phillipps, Ev. 4th concurrent with the legal remedy for Am. ed. 639. the same object, and where the equi- Since the crime of forgery was not table remedy is concurrent with the charged in the pleadings, but the matlegal remedy, the Statute of Limita- ter arose during the proof, defendant tions which will bar the legal remedy was required to prove forgery only by will bar the concurrent equitable rem- a clear preponderance of the evidence, edy.
and not beyond a reasonable doubt. Bonney v. Stoughton, 122 Ill. 536, 13 Sprague v. Dodge, 48 Ill. 142, 95 Am. N. E. 833; Richardson v. Gregory, 126 Dec. 523; Grimes v. Hilliary, 150 ill. Ill. 166, 18 N. E. 777; Quayle v. Guild, 141, 36 N. E. 977. 91 III. 383; Lancaster v. Springer, 239 The introduction in evidence by III. 481, 88 N. E. 272; Albrecht v. Wolf, plaintiff of certain forged letters and 58 III. 186; Hayward v. Gunn, 82 Ill. writings, as a basis of her claim 385.
against the estate of Erastus A. A court of review will not disturb Barnes, bars her of all relief in a court
a the findings of the chancellor, but will of equity. affirm a decree based upon such find- Worthington v. Miller, 134 Ala. 420, ings.
32 So. 748; Mobile Land Improv. Co. Preston v. Lloyd, 269 Ill. 152, 109 N. v. Gass, 129 Ala. 214, 29 So. 920; King
v. Ordway, 73 Iowa, 735, 36 N. W. 768; Messrs. Oscar E. Leinen and Robert Nelson v. Clay, 5 Litt. (Ky.) 150; Han- F. Kolb for defendant in certiorari. old v. Bacon, 36 Mich. 1; McCredie v. Buxton, 31 Mich. 383; Bleakley's Appeal, 66 Pa. 187; Gilbert v. Hoffman,
Cartwright, J., delivered the opin2 Watts, 66, 26 Am. Dec. 103; Union
ion of the court: Nat. Bank v. Hines, 177 Ill, 417, 53 N.
The defendant in error, Maria P. E. 83; Harton v. McKee, 73 Fed. 556; Barnes, filed her bill in the circuit 1 Pom. Eq. Jur. p. 397; Chicago V. court of Cook county against the Union Stock Yards & Transit Co. 164 plaintiff in error, administratrix of Ill. 224, 35 L.R.A. 281, 45 N. E. 430; the estate of her deceased husband, Michigan Pipe Co. v. Fremont Ditch,
Erastus A. Barnes, who was a Pipe Line & Reservoir Co. 49 C. C. A. 324, 111 Fed. 284; Lewis v. Holdrege,
brother of the complainant, for an 56 Neb. 379, 76 N. W. 890; Scott v.
accounting of moneys and securities Austin, 36 Minn. 460, 32 N. W. 89, 864;
claimed to have been intrusted by Odessa Tramways Co. v. Mendel, L. R. the complainant to her brother for 8 Ch. Div. 235, 47 L. J. Ch. N. S. 505, investment and safe-keeping. The 38 L. T. N. S. 731, 26 Week. Rep. 887; bill was answered with a categorical Kinner v. Lake Shore & M. S. R. Co. denial of each allegation of the bill 69 Ohio St. 339, 69 N. E. 614; Long- concerning the trust and the right inette v. Shelton, Tenn. 52 S. W. 1078; Jones v. Warden, 1 Mackey,
to an accounting, and the issues 476; Carey v. Smith, 11 Ga. 539; Bacon
were referred to a master in chanv. Early, 116 Iowa, 532, 90 N. W. 353;
cery to take the evidence and report Dilly v. Barnard, 8 Gill & J. 170; Law
the same, with his conclusions of law ton v. Estes, 167 Mass. 181, 57 Am.
and fact. The master in chancery St. Rep. 450, 45 N. E. 90; Brindley v. heard the evidence of the complainLawton, 53 N. J. Eq. 259, 31 Atl. 394; ant, and the defendant moved the Smith v. Kammerer, 152 Pa. 98, 25 Atl. master, on such evidence, to find the 165; Weakley v. Watkins, 7 Humph. facts in her favor, and recommend 356; Bearden v. Jones, Tenn.
that the bill be dismissed for want S. W. 88; Pope v. Towles, 3 Hen. & M. 47; Richardson v. Walton, 49 Fed. 888;
of equity. The master having deFarley v. St. Paul, M. & M. R. Co. 4
clined to entertain the motion, the McCrary, 138, 14 Fed. 114; Creath v.
court directed him to rule upon it, Sims, 5 How. 192, 12 L. ed. 111; Thorp and certify his report to the court. v. McCullum, 6 ill. 614; Larscheid v. Pursuant to that order the master Kittell, 142 Wis. 172, 125 N. W. 442, 20 made a report containing a detailed Ann. Cas. 576; Trist v. Child (Burke finding of facts and conclusions of v. Child) 21 Wall. 441, 22 L. ed. 623; law that the trust existed and the Tantum v. Miller, 11 N. J. Eq. 551;
complainant was entitled to an acPride v. Andrew, 51 Ohio St. 405, 38 N. E. 84.
counting. He overruled objections No appeal having been perfected to the report, and they stood as exfrom the decree of the circuit court of
ceptions before the court. The Cook county, dismissing the bill of matter coming on before the court, complaint for want of equity, the de- it was stipulated by the parties that cree of said court is final on this ap- further proceedings in the case peal.
should be had before the court. A Oliver v. Wilhite, 201 Ill. 552, 66 N.
great amount of additional evidence E. 837; Bartlett v. Plows, 82 Ill. App.
was then introduced before the 402; Bates Mach. Co. v. Cookson, 104 Ill. App. 457.
court, so that at the conclusion of In a bill for accounting, if the evi
the hearing there were more than dence leaves the state of the account 10,000 typewritten pages and a vast in such doubt and uncertainty that a number of exhibits. The court, court finds it impossible to do justice without making any findings of between the parties, the only proper fact, dismissed the complainant's course is to dismiss the bill for want of equity.
bill for want of equity, and the comDonaldson v. Donaldson, 237 111. 318, plainant appealed to the appellate 86 N. E. 604, affirming 142 Ill. App. 21;
court for the first district. That Vermillion v. Bailey, 27 Ill. 230.
court reversed the decree and re