299 F. 705 (9th Cir. 1924), 4208, Bramwell v. United States Fidelity & Guaranty Co.

Docket Nº:4208.
Citation:299 F. 705
Party Name:BRAMWELL, Superintendent of Banks, v. UNITED STATES FIDELITY & GUARANTY CO.
Case Date:June 30, 1924
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 705

299 F. 705 (9th Cir. 1924)

BRAMWELL, Superintendent of Banks,

v.

UNITED STATES FIDELITY & GUARANTY CO.

No. 4208.

United States Court of Appeals, Ninth Circuit.

June 30, 1924

The superintendent of the Klamath Indian reservation had on deposit with the First State & Savings Bank of Klamath Falls, Or., $96,000, which had come into his possession as such superintendent; the same being individual Indian moneys and tribal funds of the agency. The bank, with the appellee herein as surety, executed to the United States a bond to secure the payment of said deposits. On January 28, 1922, the bank had become insolvent, and by resolution of its board of directors its assets were turned over to the superintendent of banks of the state of Oregon, who took possession for liquidation. The appellee, as the surety on the bond, paid to the superintendent of the Indian reservation a sum of money equal to the amount so deposited by him, and the latter executed an instrument assigning all claim and interest of the United States to the appellee. The appellee filed its claim for reimbursement with the superintendent of banks of the state of Oregon. The claim was rejected as a preference claim, but was allowed as an unpreferred claim against the assets of the bank. The appellee thereupon brought its suit in the court below to enforce its claim of preference. A trial on the pleadings and the evidence resulted in a decree in favor of the appellee, declaring it entitled to the payment of $96,932.30, with interest, out of the assets of the bank in preference to unsecured and unpreferred creditors and depositors.

Page 706

Bowerman & Kavanaugh, of Portland, Or., and H. C. Merryman, of Klamath Falls, Or., for appellant.

Dey, Hampson & Nelson, and George L. Buland, all of Portland, Or., for appellee.

Before GILBERT, ROSS, and RUDKIN, Circuit Judges.

GILBERT, Circuit Judge (after stating the facts as above).

The appellant contends that the court below erroneously ruled that the deposit of the moneys by the superintendent created a debt due to the United States from the bank, and erred in deciding that the bank was insolvent within the meaning of section 3466 of the Revised Statutes (Comp. St. Sec. 6372), and that it was error to decree to the appellee priority in the payment of its claim over unsecured and unpreferred creditors and depositors.

Notwithstanding that the money on deposit with the bank stood in the name of the Indian agent and was held for the use and benefit of the Indians as their property, there can be no question but that it represented a debt due from the bank to the United States. This is recognized in the terms of the bond which was given to secure its payment, and it is the generally accepted doctrine as to all moneys held by officers of the United States in trust for the use and benefit of the Indians. The United States, under its treaty with the Klamath Indians, was the guardian of the Indians on the reservation. United States v. Humason (C.C.) 8 Fed. 71; United States v. Fidelity Trust Co., 121 F. 766, 58 C.C.A. 42; United States v. Comet Oil & Gas Co. (C.C.) 187 F. 674; United States v. Gray, 201 F. 291, 119 C.C.A. 529; Watson v. United States (C.C.A.) 263 F. 700; Central Nat. Bank of Tulsa v. United States (C.C.A.) 283 F. 368; United States v. State of Oklahoma, 261 U.S. 253, 43 Sup.Ct. 295, 67 L.Ed. 638.

Section 3466 of the Revised Statutes (Comp. St. Sec. 6372) provides as follows:

'Whenever any person indebted to the United States is insolvent, * * * the debts due to the United States shall be first satisfied; and the priority hereby established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which...

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