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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. Mr. J. McCarter for appellant. Messrs. Frank S. Quinn, W. H. Arnold, and Webber & Webber, for appellees:

If any right of action against defendants existed, it was in favor of plaintiff as an individual and by way of subrogation to the original rights of the county. The right of subrogation being purely equitable, the chancery court alone had jurisdiction.

Wilson v. White, 82 Ark. 407, 102 S. W. 201, 12 Ann. Cas. 378.

Where an illegal contract has been made, neither courts of law nor equity will interpose to grant relief to the parties, but will leave them where it finds them, if they have been equally cognizant of illegality.

Millington v. Hill, 47 Ark. 301, 1 S. W. 547; Shattuck v. Watson, 53 Ark. 150, 7 L.R.A. 551, 13 S. W. 516; Kirkland v. Benjamin, 67 Ark. 480, 55 S. W. 840.

Both parties having requested a directed verdict, the court's finding in favor of the defendants has all of the force and effect of a verdict of the jury.

St. Louis Southwestern R. Co. v. Mulkey, 100 Ark. 71, 139 S. W. 643, Ann. Cas. 1913C, 1339; St. Louis, I. M. & S. R. Co. v. McMillan, 105 Ark. 25, 150 S. W. 112.

In determining whether the evidence is sufficient to sustain the verdict, the evidence is to be considered in the strongest light favorable to appellees, and the verdict will not be disturbed if there is substantial evidence to support it.

St. Louis, I. M. & S. R. Co. v. Brabbzson, 87 Ark. 109, 112 S. W. 222; St. Louis, I. M. & S. R. Co. v. Coleman, 97 Ark. 438, 135 S. W. 338; Chicago, R. I. & P. R. Co. v. Grubbs, 97 Ark. 486, 134 S. W. 636; Boshears v. Johnson, 101 Ark. 120. 141 S. W. 763; Hodges v. Bayley, 102 Ark. 200, 143 S. W. 92; Vaughan v. Cooper, 103 Ark. 260, 146 S. W. 503; St. Louis, I. M. & S. R. Co. v. Owens, 103 Ark. 61, 145 S. W. 879.

McCulloch, Ch. J., delivered the pinion of the court:

Appellant was treasurer of Miller ounty and instituted this action

against the appellees, who were
stockholders of a defunct banking
institution known as the Texarkana
Trust Company, to recover the
amount of certain funds alleged to
have been deposited as the county
funds in
in that institution. The
facts are undisputed, and the court
gave a peremptory instruction in
favor of appellees. Even if there
had been any substantial conflict in
the testimony, all doubt would have
to be resolved in favor of the court's
finding, inasmuch as both sides
asked for a peremptory instruction,
without requesting


the court to give Appeal-
any instructions instruction-
submitting the is- fict of evidence.
sues to the jury.

duty as to con

St. Louis Southwestern R. Co. v.
Mulkey, 100 Ark. 71, 139 S. W. 643,
Ann. Cas. 1913C, 1339.

The facts are that appellant deposited in the Texarkana Trust Company the sum of $2,500 on August 1, 1913, and the same was credited to him on the books of the bank as treasurer, and a pass book was delivered to him. A few days thereafter, he decided to change the deposit to a personal one in his own favor, and by agreement with the cashier the word "treasurer" was erased from the bank ledger, the pass book showing the deposit in his name as treasurer was surrendered, and a new pass book was issued to him, showing the deposit to be an individual one in his own name. Three months thereafter the bank allowed him a credit because of interest on the deposit, and the credit was placed on his individual pass book. The bank was found to be insolvent in November, 1913, and on the 12th day of that month the bank was placed in the hands of a receiver by order of the chancery court of Miller county. On the day the doors of the bank were closed and the receiver appointed.

(118 Ark. 134, 176 S. W. 336.)

about thirty minutes before that occurrence, one of the witnesses testified that appeliant and the cashier made an agreement that the deposit should be charged back to the account of appellant as treasurer, so as to give him security by reason of the statutory liability of the stockholders for deposit of public funds (Kirby's Dig. § 1990), and, pursuant to that agreement, the cashier added the word "treasurer" to the account on the ledger, and also on the pass book.

It is, therefore, established by the uncontradicted evidence that the funds deposited were in fact public funds in the hands of appellant as treasurer, and were originally deposited in his name as treasurer; the deposit was changed to conform to the real intention of the parties so that it could be treated by the bank as an individual deposit, and interest thereon allowed to appellant individually in conformity with the custom of the bank to allow depositors interest. Appellant accounted for the funds to the county before the commencement of this suit. We are of the opinion that appellant was not entitled to recover from the stockholders of the defunct bank by imposing on them the statutory liability, and the court was correct in giving a perempperemptory instruction. The county had no

Subrogationright of one with unclean hands.

cause of action at the time this action was commenced, for the simple reason that the funds had been accounted for by appellant.

In Bank of Midland v. Harris, 114 Ark. 344, 170 S. W. 67, Ann. Cas. 1916B, 1255, the facts were that the treasurer brought suit against the stockholders of a defunct bank to recover public funds in his custody, deposited with the bank, and he was allowed to recover notwithstanding the fact that he had accounted to the county for the funds after the commencement of the action. It was held that the action did not abate by the payment of the county funds, and that the officer, who was the custodian of the funds, had a right

of action to recover the amount after he had paid the same over on settlement. We said that the right of recovery was based on the equitable principle of subrogation. That, however, was a case where the funds were in fact and in form deposited as public funds. It is unnecessary in this case to decide whether or not the mere fact that the payment Iwas made before the institution of the suit would defeat the right of subrogation, for we can base our conclusion on the broader ground that the parties intended this in fact as an individual deposit, for the purpose of enabling appellant to reap the fruits of such deposit by way of interest, and he cannot now treat it as a deposit of public funds. The statute permits him to deposit funds in incorporated banks for safe-keeping, but it was manifestly in contemplation of the lawmakers that the funds should be deposited as public funds. The deposit made by ap- deposit in bank pellant in his own name. name, for the pur

Public money


pose of collecting interest, was not a lawful deposit in conformity with that statute. We do not mean to say that it is necessary that the deposit be in form so as to show that it is public funds in order to impose liability on the stockholders, for we held, in the recent case of Black v. Special School Dist. 116 Ark. 472, 173 S. W. 846, 1104, that school funds deposited by a board of school directors would be treated as public. funds in the hands of the treasurer, the lawful custodian, and that the latter could recover the amount from the stockholders. There is no question involved in the present case of the right of the county to recover from the stockholders, for, as already shown, the county has sustained no loss. Appellant is trying to recover for his own benefit, and must do so, if at all, upon the equitable doctrine of subrogation. Now, equity aids only those who come into court with clean hands, and it cannot be said that appellant was in that attitude after having entered

Bankchange in form of account.

into an agreement with the cashier of the bank to treat the deposit as an individual one, so that he could reap the fruits of it. Though the deposit was made as treasurer, and the fund was not in fact checked out, the surrender of the pass book and the change of the form of the account by agreement with the cashier was equivalent to drawing the money out and redepositing it. Cunningham v. State, 115 Ark. 392, 171 S. W. 885. The deposit stood as an individual one until the bank became insolvent, and appellant then, for the sole purpose of imposing liability on the stockholders, entered into the agreement with the 'cashier for the change of the nature of the deposit. It was too late for him to do that after having accepted the benefits of the deposit as an individual one, and it would not be in accordance with the principles of natural justice to permit him to shift the deposit at that time so as to impose a liability on the stockholders. We have said in this class of cases that, where the cause was tried without objection in the law court, it should be disposed of, nevertheless, according

Equityenforcement in action at law.

to principles of equity. Wilson v. White, 82 Ark. 407, 102 S. W. 201, 12 Ann. Cas. 378; Bank of Midland v. Harris, supra. This case was tried in a court of law without any question being raised, but the case was correctly decided upon the undisputed facts, and the judgment should therefore be affirmed. It is so ordered.

Kirby, J., dissents.


In the reported case (HILL v. KAVANAUGH, ante, 1) it appeared that a county treasurer deposited county funds in his individual account, to get for himself the interest thereon. When the bank was about to fail, the funds were transferred to his account as treasurer. After the failure of the bank he accounted to the county for the loss, and sought to be subrogated to the rights of the county against the bank. It was held that he was not entitled to relief, since he did not come into equity with clean hands. The cases applying the "clean hands" maxim are reviewed at length in the note following LANGLEY V. DEVLIN, post, 44.



MARY C. BARNES, Admrx., etc., of Erastus A. Barnes, Deceased, Plff.

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(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.]

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4. A woman who, for many years, lived with her brother, who received and took charge of her money and invested it for her, and died leaving securities in a safe deposit box, as to ownership of which it is impossible to determine without evidence, is entitled to an accounting.

[See 1 R. C. L. 224.]

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trust relation between the parties comes to an end.

[See 17 R. C. L. 794-796.]

Equity fraudulent act effect.

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7. Where the origin of a claim is not inequitable, a fraudulent act in relation to it will not bar relief in equity. [See 10 R. C. L. 391.]

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8. The fabrication of evidence as to some items in an account will not bar relief in equity as to other items or claims under the maxim that "he who comes into equity must come with clean hands."

[See 10 R. C. L. 391.]
reference to master.

9. Where an account consists of
many items covering a great length
of time, and the testimony is conflict-
ing, the court cannot proceed to an
accounting until the account has been
stated by a master, and objections to
the account settled by him.
[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.


The facts are stated in the opinion of the court.
Messrs. Henry W. Magee, Elmer W.
Adkinson, and Samuel B. King, for
plaintiff in certiorari:

The Statute of Limitations is an effective bar to the bill for accounting, notwithstanding allegations of agency and trust therein contained, because the equitable remedy for accounting is concurrent with the legal remedy for the same object, and where the equitable remedy is concurrent with the legal remedy, the Statute of Limitations which will bar the legal remedy will bar the concurrent equitable remedy.

Bonney v. Stoughton, 122 Ill. 536, 13 N. E. 833; Richardson v. Gregory, 126 Ill. 166, 18 N. E. 777; Quayle v. Guild, 91 Ill. 383; Lancaster v. Springer, 239 Ill. 481, 88 N. E. 272; Albrecht v. Wolf, 58 Ill. 186; Hayward v. Gunn, 82 Ill. 385.

A court of review will not disturb the findings of the chancellor, but will affirm a decree based upon such findings.

Preston v. Lloyd, 269 Ill. 152. 109 N.

E. 687; Nolan v. Zagar, 266 Ill. 39, 107
N. E. 105.

There is a presumption of law against the entire case of a party who is guilty of fabrication or spoliation. of evidence.

Wigmore, Ev. § 278; Winchell v. Edwards, 57 Ill. 41; 1 Phillipps, Ev. 4th Am. ed. 639.

Since the crime of forgery was not charged in the pleadings, but the matter arose during the proof, defendant was required to prove forgery only by a clear preponderance of the evidence, and not beyond a reasonable doubt.

Sprague v. Dodge, 48 Ill. 142, 95 Am. Dec. 523; Grimes v. Hilliary, 150 Ill. 141, 36 N. E. 977.

The introduction in evidence by plaintiff of certain forged letters and writings, as a basis of her claim against the estate of Erastus A. Barnes, bars her of all relief in a court of equity.

Worthington v. Miller, 134 Ala. 420, 32 So. 748; Mobile Land Improv. Co. v. Gass, 129 Ala. 214, 29 So. 920; King

v. Ordway, 73 Iowa, 735, 36 N. W. 768; Nelson v. Clay, 5 Litt. (Ky.) 150; Hanold v. Bacon, 36 Mich. 1; McCredie v. Buxton, 31 Mich. 383; Bleakley's Appeal, 66 Pa. 187; Gilbert v. Hoffman, 2 Watts, 66, 26 Am. Dec. 103; Union Nat. Bank v. Hines, 177 Ill. 417, 53 N. E. 83; Harton v. McKee, 73 Fed. 556; 1 Pom. Eq. Jur. p. 397; Chicago v. Union Stock Yards & Transit Co. 164 Ill. 224, 35 L.R.A. 281, 45 N. E. 430; Michigan Pipe Co. v. Fremont Ditch, Pipe Line & Reservoir Co. 49 C. C. A. 324, 111 Fed. 284; Lewis v. Holdrege, 56 Neb. 379, 76 N. W. 890; Scott v. Austin, 36 Minn. 460, 32 N. W. 89, 864; Odessa Tramways Co. v. Mendel, L. R. 8 Ch. Div. 235, 47 L. J. Ch. N. S. 505, 38 L. T. N. S. 731, 26 Week. Rep. 887; Kinner v. Lake Shore & M. S. R. Co. 69 Ohio St. 339, 69 N. E. 614; Longinette v. Shelton, Tenn. 52 S. W. 1078; Jones v. Warden, 1 Mackey, 476; Carey v. Smith, 11 Ga. 539; Bacon v. Early, 116 Iowa, 532, 90 N. W. 353; Dilly v. Barnard, 8 Gill & J. 170; Lawton v. Estes, 167 Mass. 181, 57 Am. St. Rep. 450, 45 N. E. 90; Brindley v. Lawton, 53 N. J. Eq. 259, 31 Atl. 394; Smith v. Kammerer, 152 Pa. 98, 25 Atl. 165; Weakley v. Watkins, 7 Humph. 356; Bearden v. Jones, Tenn. - 48 S. W. 88; Pope v. Towles, 3 Hen. & M. 47; Richardson v. Walton, 49 Fed. 888; Farley v. St. Paul, M. & M. R. Co. 4 McCrary, 138, 14 Fed. 114; Creath v. Sims, 5 How. 192, 12 L. ed. 111; Thorp v. McCullum, 6 Ill. 614; Larscheid v. Kittell, 142 Wis. 172, 125 N. W. 442, 20 Ann. Cas. 576; Trist v. Child (Burke v. Child) 21 Wall. 441, 22 L. ed. 623; Tantum v. Miller, 11 N. J. Eq. 551; Pride v. Andrew, 51 Ohio St. 405, 38 N. E. 84.

No appeal having been perfected from the decree of the circuit court of Cook county, dismissing the bill of complaint for want of equity, the decree of said court is final on this appeal.

Oliver v. Wilhite, 201 Ill. 552, 66 N. E. 837; Bartlett v. Plows, 82 Ill. App. 402; Bates Mach. Co. v. Cookson, 104 Ill. App. 457.

In a bill for accounting, if the evidence leaves the state of the account in such doubt and uncertainty that a court finds it impossible to do justice between the parties, the only proper course is to dismiss the bill for want of equity.

Donaldson v. Donaldson, 237 Ill. 318, 86 N. E. 604, affirming 142 Ill. App. 21; Vermillion v. Bailey, 27 Ill. 230.

Messrs. Oscar E. Leinen and Robert F. Kolb for defendant in certiorari.

Cartwright, J., delivered the opinion of the court:

The defendant in error, Maria P. Barnes, filed her bill in the circuit court of Cook county against the plaintiff in error, administratrix of the estate of her deceased husband, Erastus A. Barnes, who was a brother of the complainant, for an accounting of moneys and securities claimed to have been intrusted by the complainant to her brother for investment and safe-keeping. The bill was answered with a categorical denial of each allegation of the bill concerning the trust and the right to an accounting, and the issues were referred to a master in chancery to take the evidence and report the same, with his conclusions of law and fact. The master in chancery heard the evidence of the complainant, and the defendant moved the master, on such evidence, to find the facts in her favor, and recommend that the bill be dismissed for want of equity. The master having declined to entertain the motion, the court directed him to rule upon it, and certify his report to the court. Pursuant to that order the master made a report containing a detailed finding of facts and conclusions of law that the trust existed and the complainant was entitled to an accounting. He overruled objections to the report, and they stood as exceptions before the court. court. The matter coming on before the court, it was stipulated by the parties that further proceedings in the case should be had before the court. A great amount of additional evidence was then introduced before the court, so that at the conclusion of the hearing there were more than 10,000 typewritten pages and a vast number of exhibits. The court, without making any findings of fact, dismissed the complainant's bill for want of equity, and the complainant appealed to the appellate court for the first district. That court reversed the decree and re

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