Otey v. Westerman

276 Ill. App. 395, 1934 Ill. App. LEXIS 285
CourtAppellate Court of Illinois
DecidedJune 4, 1934
StatusPublished
Cited by1 cases

This text of 276 Ill. App. 395 (Otey v. Westerman) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Otey v. Westerman, 276 Ill. App. 395, 1934 Ill. App. LEXIS 285 (Ill. Ct. App. 1934).

Opinion

Mr. Presiding Justice Edwards

delivered the opinion of the court.

This proceeding originated in the circuit court of Crawford county, upon a bill filed by Harry E. Otey and others, sureties upon the official bond óf Austin I. Westerman, treasurer of School Township Number 7, North, Eange 12, West, in Crawford county, for an accounting of the amount of liability of Westerman, as such township treasurer, growing out of his defalcations in such official capacity, to adjudge the amount which the solvent sureties should pay, and to decree that any amount adjudicated against Westerman, under his additional official bond, be paid by Aetna Casualty and Surety Company, which had executed a bond of indemnity, in favor of the complainants, together with costs, and attorney’s fees.

All sureties upon Westerman’s several bonds were made'defendants, as were also the trustees of schools of such township. The several defendants, with two exceptions, who were defaulted, answered the bill, setting forth their various contentions as to liability. In addition, the trustees of schools filed their cross-bill, charging that a part of the defalcations occurred when defendant, United States Fidelity and Guaranty Company, was the only surety on the bond, and that a part took place when both such bond and that of Otey and others were in effect, asking that an account he taken, and the respective liabilities of the several bondsmen be determined, to which cross-bill answers were filed, a hearing was had before the chancellor, who, for reasons to be hereafter discussed, dismissed the bill and cross-bill, as to the defendant, United States Fidelity and Guaranty Company; decreed that Westerman, as principal, and Otey and the other sureties, were liable under their bond of June 30, 1931, for the amount of $16,889.31, and costs; that Westerman, and one of the sureties named, Lindsay, were insolvent; that as a consequence, the full amount of the sum so adjudged be paid by Otey and his solvent cosureties, and further that appellant, Aetna Casualty and Surety Company, be held under the reindemnifying bond, for the amount so found to be due, for the use of the trustees of schools, and also found the sum of $350 to be a reasonable attorney’s fee for compláinants, and ordered same paid by said Aetna Casualty and Surety Company. From this decree, only the latter has appealed.

Most of the facts are not disputed, and the contentions arise out of the legal effects of certain acts of the parties hereto, and the interpretation to be placed upon their conduct. It appears from the evidence that Westerman, who had been township treasurer since 1924, was, in 1926, re-elected for a term of two years, and gave bond therefor in the sum of $100,000, with defendant, United States Fidelity and Guaranty Company, as surety; that on July 7, 1928, he was again re-elected as such treasurer for a term of two years, and gave a new bond in the sum of $100,000, with the same surety thereon.

On July 1, 1929, it appears that the school trustees made an order re-electing Westerman as treasurer for two years, the term to expire July 1, 1931. It seems to be conceded by all parties to this suit that there was no legal authority for this action of the trustees, and that such purported re-election of Westerman was void.

July 1, 1930, Westerman, as principal, with the United States Fidelity and Guaranty Company, entered into bond as such township treasurer in the sum of $100,000, which obligation was approved by the trustees of schools July 14, 1930. The minutes of the school trustees showed an entry, to wit: “The new bond of A. I. Westerman, Treasurer, for $100,000.00 was approved and filed. ’ ’

It further appears that on June 23, 1931, United States Fidelity and Guaranty Company served notice upon Westerman that it desired to be released from liability on account of said bond of $100,000, executed in 1928, and caused to be delivered to the president of the board of trustees, an affidavit showing this service.

Later, on June 30, 1931, the trustees at a meeting took action as evidenced by the following entry on their records: “The purpose of meeting, appointment of Treasurer for term of two years. A. I. Westerman was appointed for term of two years beginning July 1, 1931, ending July 1, 1933,” and on the same day, complainants, Otey and others, entered into bond as sureties for Westerman, in the sum of $250,000, which, on July 8, 1931, was approved by the trustees, and filed with and approved by the county superintendent of schools.

Under date of July 13, 1931, a reindemnifying bond in the sum of $50,000 was given by Westerman, as principal, with defendant, Aetna Casualty and Surety Company, as surety, to reindemnify Otey and his co-sureties, for liability upon the $250,000 bond.

In the summer of 1932, an audit of Westerman’s accounts, as school treasurer, disclosed a shortage, and on December 27, 1932, he was removed from office by the trustees, and James T. Athey appointed in his stead, qualified as such treasurer, and in the January following, this suit was instituted.

The court found, as the proof shows, that between July 1, 1927, and July 1, 1931, the defalcations of Westerman amounted to the sum of $14,541.42, while between July 1, 1931, and July 23, 1932, he embezzled $2,347.89, or a total shortage during his several terms as township treasurer of $16,889.31.

One of the controverted questions in the case is whether Westerman was, on July 1, 1930, re-elected as such treasurer, for a term of two years. It is the contention of all the parties, except the United States Fidelity and Guaranty Company, that such is the fact, while the latter urges that he was not re-elected at said time, and merely held over until July 1, 1931, when he was re-elected for the unexpired portion of the term beginning July 1, 1930, and which would end July 1, 1932.

Section 67 of chapter 122, Cahill’s Revised Statutes, 67, provides that the trustees of schools shall elect a treasurer who shall be ex oficio clerk of the board, and whose term shall be for two years, beginning and ending on the first day of July.

Section 265 of said chapter 122, Cahill’s St. if 389, states that “All school officers elected in pursuance of any general law now in force shall hold their respective offices until their successors are elected and qualified under the provisions of this Act.” These enactments were in force at the time Westerman was reelected as township treasurer in July, 1928.

The effect of these two sections is to establish the rule that the treasurer elected in 1928 held his office for two years up to July 1, 1930, and thereafter until his successor should have been elected and qualified.

The minutes of records of the trustees of schools, dated July 14, 1930, set forth that the annual report of the treasurer was presented and approved; that certain amounts, designating them, were placed to the credit of the several districts from the distributive funds, and one amount withheld therefrom, and that “the new bond of A. I. Westerman, Treasurer, for $100,000.00 was approved and filed,” and there being no further business, the board adjourned.

It will be observed that the minutes of said meeting nowhere recite that Westerman was re-elected as treasurer.

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Related

Trustees of Schools v. American Surety Co. of New York
30 N.E.2d 513 (Appellate Court of Illinois, 1940)

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276 Ill. App. 395, 1934 Ill. App. LEXIS 285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/otey-v-westerman-illappct-1934.