1906-1908 Ind. Op. Att'y Gen. p. 188b

ceedings, or calls of the meetings, if there were any which could have been waived by Matthews if personally pres- ent, could be waived by his proxy, and such waiver was binding upon him." In view of the fact that thirty days' notice was given of the business to be transacted, I think there could be no question of the right and power of the proxy to vote under so comprehen- sive a power as that given in the proxy or power of attorney. INSURANCE-DEPOSIT OF FIRST 50 PER CENT. OF CAPI- TAL STOCK IN PRIVATE BANK, ETC. May 16, 1907. Hon. John C. Billheimer, Auditor of State, Indianapolis, Indiana: Dear Sir-In answer to your inquiry as to whether in my opinion section 48 94p Burns' Annotated In'diana Statutes, Re- vision 1901, prohibiting a loan to any stockholder or officer of the first fifty per cent. of the capital stock paid in of a life insurance company to be invested as therein provided, forbids a deposit of any part of said fifty per cent. in a private bank owned solely by a person who is a stockholder in such life insurance company, whether the deposit is made an ordinary account subject to check, or is made under a certificate of deposit bearing interest, I beg to advise that in my opinion said statute does forbid such deposit. It is well settled that the relation of debtor and creditor exists between a bank and a depositor in case of such deposits, and such deposits could amount to no more than a loan to such stockholder, and in my opinion comes clearly within the letter and spirit of the prohibition contained in the section of the statute referred to. SCHOOLS-RECOVERY OF INTEREST ON COUNTY FUNDS LOANED TO CITY SCHOOL BOARD NOT ACCOUNTED FOR BY TREASURERS. May 16, 1907. Hon. Fassett A. Cotton, Superintendent of Public Instruction, Indianapolis, Indiana: Dear Sir-I have your favor of the 14th inst., wherein you state that according to a recent report of the city comptroller of Evansville, the county treasurers of Vanderburgh county have been in the custom of loaning county funds to the city school board in anticipation of the school revenues, and have charged interest upon the same, which interest the treasurers have not accounted for to the county. You ask what should be done towards recovering this money, and whose duty it is to proceed in the matter. The statute of this state in force since 1881, respecting the loaning of public funds by officials, reads as follows: "Whoever being charged or in any manner intrusted, with the collection, receipt, safekeeping, transfer or dis- bursements of any money, funds, securities, bonds, choses in action, or other property belonging to or under the con- trol of the state or of any state' officer, or belonging to or under the control of any county, civil or school town- ship, city, or town in this state, converts to his own use, or to the use of any other person or persons, corporation or corporations, in any manner whatever, contrary to law; or uses, by way of investment in any kind of property; or loans, either with or without interest; or deposits with any person or persons, corporation or corporations, con- trary to law; or exchanges for other funds, except as al- lowed by law, any portion of such money, funds, securi- ties, bonds, choses in action, or other property-is guilty of embezzlement, and upon conviction thereof, shall be imprisoned in the state prison not more than twenty-one years nor less than two years, fined not exceeding double the value of the money or other property embezzled, and disfranchised, and rendered incapable of holding any office of trust or profit for any determinate period." In view of this provision the acts of the treasurers of Van- derburgh county in loaning the county funds were in violation of law and subjected them to criminal prosecutions. Whether or not such treasurers are also liable to a civil action remains to be considered. It was held in the case of Shelton v. State, 53 Ind. 331, that a county treasurer could not be held liable for interest received from the deposit of county funds with a bank. That decision, however, was rendered long before the above act of 1881 was passed, and proceeds upon the ground that the money held by county treasurers is their own money, because they are insurers of its safekeeping. The case has been qualified in the subsequent decisions of Rowley v. Fair, 104 Ind. 189, and Winchester Co. v. Veal, 145 Ind. 506, 510, 516. It is difficult, if not impossible, to reconcile the latter with the case of Shelton v. State, supra. It is much more consistent with true legal principles and sound morals to regard the treasurer as a fiduciary, and that all profits realized by him from loaning the public funds, belong to the public, the real beneficiary. This view has the support of respectable authorities. (Dillon v. Munic. Corps., Sec. 444; Su- pervisions v. Wandel, 6 Laws, 33, affirmed 59 N. Y. 645; U. S. v. Mosley, 133 U. S. 273, 287; Wilkesbarre v. Rochafellow, 171 Pa. St. 177, 30 L. R. A. 393; U. S. v. Thomas, 15 Wall, 337 ; State v. Copeland (Tenn.) 34 S. W. 427; State v. McTetridge (Wis.) 20 L. R. A. 223; State v. Hardsaw (Wis.), 54 S. W. 17; State v. Windle, 156 Ind. 648). If such liability on the part of the treasurers exists, as I cou- sider it does, it can be enforced by suits prosecuted against them by the state on the relation of the county auditor. Hunt v. State, 93 Ind. 311; Gauntt v. State, 81 Ind. 137. The interest having been received at least by color of office, the treasurers' bondsmen are also liable therefor. State v. Walford, 11 Ind. App. 392. Replying to your questions, my opinion is that suits should be brought against the treasurers respectively and their bondsmen, these actions being brought in the name of the state on relation of the county auditor. LIBRARY COMMISSION-RAILROAD AND HOTEL EXPEN- SES OF SECRETARY TO ASHEVILLE, NORTH CARO- LINA (AMERICAN LIBRARY ASSOCIATION). May 17, 1907. Hon. Chalmers Hadley, Secretary Public Library Commission, Indianapolis, Indiana: Dear Sir-I am in receipt of your favor of the 16th inst., ask- ing whether there is any law preventing the public library com- mission from paying your railroad and hotel bill at the Ameri- can Library Association at Asheville, North Carolina. The general appropriation act of 1907 provided that all appro- priations designated and intended as and for traveling and hotel