Orange County's first group of settlers were the Quakers who came in 1813 and established the county's first house of worship. They were followed in the next few years by caravans of pioneers including members of both the Methodist and United Brethren churches. Like the Quakers, the United Brethren churches were located in rural areas, while the Methodists established both town and rural congregations. Circuit rider ministers served the congregations, with worship services held in homes. It is said that circuit riders from Kentucky into the Indiana Territory made Paoli one of their regular stops soon after a permanent settlement was established.
One of the circuit riders was William Beauchamp. He seems to have been a prominent man in the early American Methodist Church. At the Baltimore conference in 1823, he came within two votes of being elected a Bishop. He served pastorates in Baltimore, New York, Boston and Philadelphia. He was a well-educated man for his day, and was known as a fine orator who was much in demand for his powerful voice and splendid speaking ability. He was known at the time as "The Demosthenes of the West".
He must have been a very dedicated man to have left the comfortable work along the east coast for the middle western wilderness that was southern Indiana in the early 1800s. The only roads were buffalo traces, and streams had to be forded despite spring flooding. Paoli was one of the earliest points on the Charlestown Circuit. This was considered the roughest assignment in Indiana, so no circuit rider was assigned to the area for more than one year.
The circuit riders always stayed at the Throop family home in Paoli. The Throop family was very active in early Methodist churches and John Throop established the first Sunday School in Paoli. The Throop home is thought to be one of the older homes still standing in Orange County. It is along the ridge of the hill northwest off West Thornton Street.
The town square was laid out in 1816, and the original stone courthouse was built in 1818 in the northeast area of that square. The Paoli Methodists met in that courthouse.
William Beauchamp died in Paoli in 1824, possibly from pneumonia caused by exposure to the elements in the course of his duties. His grave is on the north edge of what is now called the Old Paoli Cemetery, originally simply the Paoli Town Cemetery, which is southeast of the town square just south of highway 150.
The upright marker is inscribed:
died Oct. 8, 1821
52 years 5 months 12 days
A stone slab about 36 by 66 inches covers the grave. There are several above-ground mausoleums in the old Town but this seems to be the only grave with a flat slab cover. It is inscribed:
To the memory of the
Rev. William Beauchamp
Minister of the Gospel
In the Methodist Episcopal Church
Born April 26th, 1772 Died Oct. 8, 1821
While Jerry LeBrun was our pastor (1983-1987), the church obtained a copper medallion embossed with a figure of an early circuit rider on horseback and placed it on Reverend Beauchamp's grave.
In 1838 the first house of worship was built in the town of Paoli, a joint venture of the Methodist and Presbyterian congregations. Lumber and volunteer labor were donated by both congregations, and the church was erected on West Main Street, three blocks from the square. The two congregations shared the building until 1840, when the Methodists became the sole owners.
This building served the growing congregation until 1881, when a new frame building was constructed on Main Street just west of town square. The building had just a single large room. The site was purchased for $250 and the structure built at a cost of $2175.
There were just three churches in the town of Paoli: the Methodist, the Presbyterian, and the Baptist, which had been established in 1868. The Friends established a town meeting in 1892, making for the fourth church.
Meanwhile, the Methodist church was growing. A great remodeling and expansion program began in 1923. A large addition was built on the back of the building, including a kitchen, dining room and classrooms on the basement level, below a large gymnasium where high school basketball games were played. Central heating was installed, brick veneer was added to the exterior, and memorial windows were installed. A large pipe organ, still in service today at the new church, was installed in the renovated and redesigned sanctuary in 1927.
The first United Brethren church was established in Orange County in 1828. A number of rural United Brethren congregations were started around the turn of the 20th Century, but it was not until 1924 that a church was organized in Paoli following a tent revival. Its charter membership was composed largely of persons then living in Paoli who had formerly been members of the denomination's rural churches.
A lot was purchased near the Paoli school and town cemetery, on the east side of town, but building there was not feasible. Church meetings were held in the county court room for just over a year.
The Lithia Springs Company had built a water bottling plant on West Main Street. Lithia water, mineral water containing lithium salts, was popular at the time.
A 1901 report for the Department of Geology and Natural Resources of Indiana, "The Mineral Waters of Indiana: Their Location, Origin and Character", described three artesian wells within Paoli, including the Paoli Lithia Spring with "saline-sulphuretted" water. That state report says:
The water of this so-called spring comes from a well 1,000 feet in depth, which was sunk on the north side of Lick Creek about one-quarter of a mile west of the court house for gas or oil, in 1892. A vein of mineral water strongly charged with hydrogen sulphide, was struck at 250 feet, while a second vein, containing lithia, was found in a blue shale at 1,000 feet. The two veins were allowed to mix and at present flow from an iron pipe into a stone basing at the rate of about two gallons per minute. An analysis of the water, made by Dr. W. A. Noyes, of Terre Haute, showed the presence of the following mineral ingredients:
|ANALYSIS OF WATER FROM PAOLI "LITHIA SPRING."|
|Grains per U.S. Gallon.|
|Calcium sulphate (CaSO4)||101.124|
|Magnesium chloride (MgCl2)||4.395|
|Magnesium sulphate (MgSO4)||52.138|
|Magnesium carbonate (MgCO2)||20.430|
|Lithium bi-carbonate (LiHCO2)||1.630|
|Sodium chloride (NaCl)||120.433|
|Potassium chloride (KCl)||2.364|
|Ferrous carbonate (FeCO2)||0.251|
|Hydrogen sulphide (H2S)||1.591|
|Free carbon dioxide (CO2)||5.914|
Besides the above, a trace of calcium phosphate and small amounts of strontium sulphate, sodium bromide and sodium borate were present.
This is one of the few deep weels in the State in which the water is not excessively charged with common salt. It has but a slight odor of hydrogen sulphide, though bluish-black flakes of iron sulphide are abundant in the stone receptacle. The taste is a sweetish saline and quite agreeable. In the circulars sent out by the proprietors, this water is advertised as being "unexcelled as an eliminator of diseased conditions of the system and as a blood purifier and remedy" for 38 named diseases. It is piped to the "Mineral Springs Hotel" near the center of the town, and is also shipped, bringing $2.50 per case of 24 quart bottles.
However, the Lithia Springs Company went bankrupt, and their $17,000 bottling plant was sold to the United Brethren church for $5,500.
An active Ladies' Aid organization led the mammoth task of converting the factory into a house of worship. It was a labor of love that continued for 43 years. A balcony was built to increase the seating capacity. Classrooms were partitioned for use as a Sunday School. Stained glass windows were installed. A large addition was eventually added to supply additional classroom space and a minister's study.
IN RE PAOLI LITHIA SPRINGS HOTEL CO.
5 F.2d 902 (1925)
In re PAOLI LITHIA SPRINGS HOTEL CO.
RATTS (two cases).
Nos. 3407, 3408.
Circuit Court of Appeals, Seventh Circuit.
March 19, 1925.
Rehearing Denied May 14, 1925.
Harry N. Weinberg and Theodore E. Rein, both of Chicago, Ill.,
James A. Ross, of Indianapolis, Ind., for appellee.
Before ALSCHULER, EVANS, and PAGE, Circuit Judges.
PAGE, Circuit Judge
No. 3407 is an appeal from an order of the District Court, allowing the claim of Mary T. Smith as a secured claim against the Paoli Lithia Springs Hotel Company, an Indiana corporation, in bankruptcy. In No. 3408 appellant was refused allowance of his claim as a secured claim, because the court held he was not entitled to the benefit of collateral, securing a note set out herein and paid by him as indorser.
No. 3407. The Smith claim was allowed as a secured claim because claimant owned a debt, secured by a mortgage to one Boyd on property purchased by bankrupt subject thereto. Irwin and Bainum, president and secretary, respectively, of bankrupt, and also two of its directors, secured a release of that mortgage from Boyd, another director, 10 days after they, acting for bankrupt, agreed in writing to take the property subject to the mortgage, and 10 days after they had been told that Boyd did not hold it, but that it was then held by one Judge Paine. It had been assigned a year before by Boyd to Paine, but Boyd was in feeble health and had probably forgotten the assignment. He is now dead. Securing the release was an act of bad faith and a fraud upon the rights of Mrs. Smith, who was not at fault.
No. 3408. By special authority from bankrupt's board of five directors, in a regular meeting authorizing them so to do, Irwin, president, and Bainum, secretary, executed a deed of trust to the Paoli State Bank, as trustee, on bankrupt's property, and executed and delivered to the trustee $500,000 in bonds, secured by the trust deed, so that the bonds might be delivered to Binkley & Bund, who had purchased them under an agreement also authorized by the board at the same meeting. Binkley & Bund never took or paid for a single bond.
Irwin, president, Wham, vice president, and Bainum, secretary and treasurer, three of the directors, without in any way being authorized so to do, executed in the name of bankrupt, and tried to sell in Chicago, a note for $55,000; but even after Ayers, vice president of Binkley & Bund, had procured its indorsement by appellant, it could not be sold. Irwin and Wham attended what the bankers said was a meeting of Wham's creditors, who were trying to force payment by him of about $30,000, which he owed them. Wham and Irwin falsely represented to the bankers that bankrupt owned Wham $20,000, when in fact it owed him but $3,500. They made an arrangement there, which was later consummated at Indianapolis, whereby the bankers took the note and credited bankrupt with $35,000, and applied $20,000 in payment of Wham's debts to them. Of the $35,000, $7,500 was given Binkley & Bund, apparently as a gratuity, and $3,000 to appellant for his indorsement. The note reads:
Paoli, Indiana, October 22, 1921.
On or before February 10, 1922, we promise to pay to ourselves or order at fifty-five thousand and no/100 dollars, for value received, with interest at the rate of seven (7) per cent. per annum, after which date, having deposited as collateral security first mortgage bonds of the Paoli Lithia Springs Hotel Company in number and amount as per schedule hereto attached, and marked Exhibit A. Said bonds are now on deposit with the Continental & Commercial National Bank of Chicago, Illinois, and in case of default in the payment of this note at maturity we hereby authorize the trustee named in said bond issue to deliver said bonds to the legal holder hereof. The right is hereby expressly reserved to withdraw any or all of the bonds herein referred to upon payment to the Continental & Commercial National Bank of 87½ per cent. of the par value of said bonds so withdrawn, together with accrued interest thereon; but all payments so made and received by the Continental & Commercial National Bank shall be forthwith remitted by the trustee to the legal holder hereof until the payment of this note is made in full, together with accrued interest thereon. We hereby give the said legal holder authority to sell all and any part thereof, on the maturity of this note, or any time thereafter, at public or private sale, at their discretion, without advertising the same, or giving us any notice, and to apply so much of the proceeds thereof to the payment of this note as may be necessary to pay the same, with all interest due thereon, and also to the payment of all expenses attending the sale of said bonds, and in case the proceeds of the sale of the said bonds shall not cover the principal, interest, and expenses, we promise to pay the deficiency forthwith after such sale.
Paoli Lithia Springs Hotel Company,
By W. C. Irwin, President.
By Chas. A. Bainum, Treasurer.
Due February 10th, 1922.
[$11 in canceled documentary stamps.]
Endorsed on back:
Paoli Lithia Hotel Company,
By W. C. Irwin, President.
By Chas. A. Bainum, Treasurer.
Binkley & Bund, Inc.
By J. W. Rankin, President and Treasurer.
Iroquois Trust Company,
By R. M. Ayers, President.
By J. W. Rankin, Treasurer.
W. C. Irwin.
Chas. A. Bainum.
J. W. Rankin.
R. M. Ayers.
H. W. Jeffery.
The trustee, on a written order, as its cashier testified, from Irwin and Bainum, directed the Chicago bank, where it left the bonds for safe-keeping, to turn the bonds over to the holders of the note. No such order is in the record. All questions on the evidence must be resolved against appellant, because there was much evidence before the referee and the District Court not presented here. Upon payment of the note by appellant, as indorser, the bonds were delivered to him. He was not a witness.
The bankers knew Irwin, Wham, and Bainum were officers and directors of bankrupt, and investigated bankrupt's property at Indianapolis. They asked what the minutes of its meeting showed, but never examined them, although they seemed to know they were important. The by-laws provided for an executive committee of four members. Only three, the directors above named, were appointed. What the committee's powers were does not appear, and the three never pretended to act as such. The treasurer made a report, after the loan, that was approved by the directors; but whether others than the three in question were present does not appear, and the report as submitted did not honestly reflect the transaction.
1. The note and the collateral agreement therewith are two contracts, not one.
2. Appellant did not buy the note, but paid it as an indorser. He was, as to the collateral, only subrogated to the rights of the holders to whom the note was negotiated, and his rights thereto are measured by their rights. 2 Williston on Contracts, § 1265, p. 2302; Ætna Life Ins. Co. v. Middleport, 124 U.S. 534, 8 S.Ct. 625, 31 L. Ed. 537; Hunningsen v. U. S. Fidelity & Guaranty Co., 208 U.S. 404, 28 S.Ct. 389, 52 L. Ed. 547; Ph?nix Ins. Co. v. Erie Transportation Co., 117 U.S. 312, 6 S.Ct. 750, 29 L. Ed. 873.
3. The Supreme Court of Indiana has stated the general rule as to the powers of presidents of corporations to be: "That the office of president of a private corporation of itself confers no power on the incumbent to bind the corporation or control its property. His powers as agent must come by delegation from the corporation through the board of directors, formally and directly granted, or implied from its habit or custom of doing business." Wainwright v. Roots Co., 176 Ind. 682, 686, 97 N. E. 8, 9, and cases cited. The Wainwright Case concerned a manufacturing corporation, and there would seem to be greater reason to apply even a stricter rule to the officers of bankrupt, a voluntary nontrading hotel corporation.
St. Vincent College v. Hallett, 201 F. 471, 119 C. C. A. 647 (7th C. C. A.); In re Continental Engine Co., 234 F. 58, 148 C. C. A. 74 (7th C. C. A.).
4. It is said that the acts upon which appellant relies were the acts of a majority of the board of directors, and therefore binding on bankrupt. It does appear that Irwin, president, Wham, vice president, and Bainum, secretary and treasurer, were three of the five directors; but as there is no record authorizing their acts, even if they are to be considered as acting as directors, we must look solely to what they did. In the Wainwright Case, supra, the court said: "The general rule seems to be that where the contract between a corporation and one of its directors is made on the part of the company by a majority of the directors acting for its interests, honestly and in good faith, and with full knowledge of the matter, or by another independent agent with authority to act for it, such contract is not even voidable, except for unfairness or fraud, for the presence of which courts will closely scrutinize the contract."
Irwin and Wham, in falsely representing to the bankers that the debt of bankrupt to Wham was nearly six times as large as it actually was, were not dealing fairly as directors or officers. Wham, in taking bankrupt's money to pay his debts, defrauded the corporation. His act was no less a fraud because the bankers believed what Wham and Irwin said about the amount of bankrupt's debt to Wham. When they took bankrupt's money to pay the debt of bankrupt's agent to themselves, they took at their peril. They were not innocent purchasers, and the unfaithful servant could not bind the master. Bank v. Nichols & Shepard Co., 223 Ill. 41, 79 N. E. 38, 7 L. R. A. 752; Campbell v. Balcomb, 183 F. 766, 106 C. C. A. 474 (7th C. C. A.); Am. Nat. Bank v. Miller, 229 U.S. 517, 33 S.Ct. 883, 57 L. Ed. 1310; 2 Corpus Juris, 868, § 549. No course of dealing by Irwin and Bainum existed from which authority in them to bind bankrupt might be presumed. The only other act by them, pertaining to a loan, was specially authorized by the board of directors and ratified by the stockholders. The note was not the note of bankrupt, and the purchasers of the note had, and appellant has, no right to enforce collection of the collateral.
It is also to be noted that the provisions of the trust deed, under which appellant is claiming, are sufficient notice to him that, without some special authority, neither the trustee nor Irwin and Bainum had any power to hypothecate the bonds.
The orders in Nos. 3407 and 3408 are both affirmed.
[From Leagle, Inc.]