The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-06-20

proper relator to sue for money due to
the common school fund. Board VS.. the
State, 92 Ind. 1853.
There are numerous other cases reported
in our state reports where the attorney gem
eraI has appeared as relator in suits to
cover money due to the school fund While
true, in these other cases the question was
not raised as TO the right of the attorney
examples as TO what has long been Tn
practice in this State. Our conclusion
therefore on this point is that the attorney
general had authority to appear as relator
in such suit
A second reason which is relied on by the
state is that before suit could be main
tanned by TIE State ii must have made a
demand upo'. the corporation; that the
complaint in the former case contained no
allegauon that demand had been made
before Su1t was brought; that the suit was
therefore premature, and that the demurrer
was correctly sustained for that reason,
and that the judgment on demurrer on that
SUIT is no bar to subsequent suit brought
after demand made
1t is we'll settled that in case of an or
dlnary debt it is the duty of the debtor to
hunt up his creditor and pay or tender the
amount of his obligation if he would avoid
being sued, and in all such cases no
previous demand is necessary before COM
many exceptions to this rule, collecting
agents and attorneys, trustees and persons
who come lawfully into the possession of
funds IN trust for others, as a general rule,
cannot be sued without a demand first
made and complaint which does not show
such demand is bad on demurrer. De-
posits in bank are payable only on de-
mand.
DEBT NOT TOO OLD.
There are many authorities holding that
dividends declared upon the stock of a cor
poration cannot be collected by suit, by the
stockholders, until after demand made and
payment refused. The surplus profits which
the corporation was to pay the State was
was necessary that the corporation should
declare certain dividends to stockholders
and fix the amount of the contingent re-
serve fund before it could be known how
much was due the State, and in case of the
corporations failure or neglect to perform
that dty 1t is but reasonable that before
commencing suit the State should make
a demand upon the corporation to act The
surplus profits due the State are much akin
to dividends declared. In fact it may be
said that such profits are an appropriation
or dividend declared in advance, and we
can see no reason that prevents a stock
holder from suing for dividends declared
until after demand made that does not
apply with equal force to the demand of
the State for it's share in the profits. The
payment of dividends on stock in a corpor-
alton is simply division of net profits and
when by law the corporation is required to
make dividend of a certain per cent. on
the stock and the residue to go to the State,
the States portion becomes just as truly
a dividend as does the portion to be paid
that demand by the State on the corpor-
alton a condition precedent to the
maintenance Of the former suit
1t is further cOntended by the defendant
that, although a demand may be necessary,
that such demand may be waved, and that
when It was shown that the defendant has
converted the fund sueu for to its own use,
or in case a demand would be unavail1ng,
then no demand is necessary, and 1t Is
claimed that in the former suit the COM
plant showed conversion by the defend
ant and that for that reason a sufficient
excuse was shown for not making de-
mand. This reQuiT eS us to decide whether
the allegations in the complaint in the for
mer case show that the defendant had
converted the surplus profits to its own use.
If such conversion was charged, then 1t is
unnecessary to allege a demand. There is
no allegation in the complaint expressly
charging a conversion.
The allegations are that the defendant
failed to declare dividends which ought to
have been declared to the stockholders, and
that instead of applying said sums to said
dividends it had invested the same in stocks
and bonds and held a large sum. to Wit,
900, as a. surplus fund, and that this
system of holding the funds reSorted
to, not for the purpose of apprOpr1ating the
States share of the profits to its own use,
but Of concealing, from the state the fact
could exercise its reserved right to regulate
the tolls and freights.
1t is nowhere alleged that the amount due
the State had been ascertained and set
apart and thereafter used for other pur-
poses is 1T averred that the funds used
from the surplus profits which belonged to
the State, but rather that said stocks and
bonds were purchased out of moneys that
the company could have used in payment
of dividends to stockholders. 1t is charged
that the amount due the State was 81 $780,,
000 but it is also shown that the company
held as a surplus the sum of 81, 600, 900. These
allegations, in our opinion, amount TO moth
ing more than that, having received earn
ingS sufficient TO pay to the stockholders
their capital and 10 per cent per annum
thereon, a Is per cent. per annum dividend
thereafter, and after reserVing a reasonable
contingent fund, and still leave a surplus,
of $2000000, the company had failed and
neglected to pay over to the State its por-
ton thereof
This, we do not think amounts to g
charge of a conversion of the States por-
ton of the surplus profits SO as to excuse
the State from making a demand before
bringing suit, but rather it would appear
that the company then held a fund a
surplus which was more than sufficient to
pay the States portion of profits.
We do not think it can be claimed, while
the company still has fund derived from
the earnings more than sufficient to dis
charge the States claim, that it has con-
verified the States share of the profits to it's
own Use. The mere holding of a fund is
not a conversion of it, We are, therefore,
of the opinion that the demurrer to the
complaint should be overruled, and it is SO
ordered.