Bank Of Norman Park v. Colquitt County, (No. 7255.)

• Decision Date: 11 December 1929
• Docket Number: (No. 7255.)
• Citation: Bank Of Norman Park v. Colquitt County, 169 Ga. 534, 150 S.E. 841 (Ga. 1929)
• Parties: BANK OF NORMAN PARK . v. COLQUITT COUNTY et al.
• Court: Georgia Supreme Court

169 Ga. 534

150 S.E. 841

BANK OF NORMAN PARK .

v.COLQUITT COUNTY et al.

(No. 7255.)

Supreme Court of Georgia.

Dec. 11, 1929.

(Syllabus by the Court.)

Error from Superior Court, Colquitt County; W. E. Thomas, Judge.

Action by W. A-Chastain against the Bank of Norman Park, etc., In which Colquitt County was made partyplaintiff.Judgment for plaintiffs, and defendant brings error.Affirmed.

On December 22, 1922, W. E. Dyke, as treasurer of Colquitt county, with the consent of the board of county commissioners, deposited in the Bank of Norman Park funds of said county, amounting to $11,000.Said sum has remained on deposit in said bank continuously since that date.On January 1, 1925, W. A. Chastain succeeded Dyke as treasurer.At the time said deposit was made said bank executed and delivered to Dyke its bond to indemnify him as such treasurer against loss by reason of said deposit, and this bond was signed by the directors of said bank as sureties.At the time said deposit was made and said bond was executed, the cashier of said bank assured Dyke as treasurer, and the sureties on said bond, that, in the event of the insolvency of said bank, the law gave priority of payment to the county, and that such debt would be paid in full before any dividends would be paid to common depositors.The law in force at the date of said deposit was the act of August 16, 1919, creating the banking department of this state.Ga. Laws 1919, pp. 135, 159.By section 19 of article 7 of said act, debts due counties for deposits of county funds were entitled to priority of payment over debts due other depositors.The assurance of said bank and the above provision of said law were within the contemplation of the parties when said deposit was made, and thus became a part of the contract of deposit.On November 23, 1928, said bank became insolvent, and its assets were taken In charge by the superintendent of banks for the purpose of liquidation.On December 17, 1928, Chastain, as treasurer, filed with said superintendent the claim of said county for $11,000 so deposited with said bank, and asked to have that sum paid under the priority in favor of counties, as fixed by the act of 1919.Said claim was disallowed by said superintendent as a preferred claim, but allowed as a deposit, to be paid as other depositors of said bank.The superintendent thus disregarded the rank of said claim as fixed by said act, and refused it priority under and by virtue of section 5 of the act of August 25, 1927(Ga. Laws 1927, pp. 195, 199), which act does not grant priority to debts due counties.

Chastain, as treasurer, filed suit against said bank, to recover judgment for the amount of said deposit, and to have the same paid according to the priority of payments fixed by said act of 1919.In his petition he set up the facts hereinbefore recited; and further alleged that the act of August 25, 1927, is unconstitutional and void as it respects said deposit and the claim so filed, for the reason that it impairs the obligation of the contract under which the funds of the county were deposited; is retroactive, and violates article 1, § 10, par. 1, of the Constitution of the United States; and further violates article 1, § 3, par. 2, of the Constitution of this state, which prohibits the passage of any law impairing the obligations of contracts.Petitioner prayed for judgment against the bank for Said sum of $11,000, and that the judgment be declared a lien upon the assets of said bank superior to debts due other depositors.Colquitt county, without objection, was made a partyplaintiff.The defendant, ' through the superintendent of banks, demurred to the petition, upon the ground that it set forth no cause of action, as it affirmatively appears from its allegations that petitioner was not entitled to priority of payment of its deposit, and that under the law neither counties nor county officials are entitled to priority in the payment of money belonging to counties out of the assets of an insolvent bank.The court overruled the demurrer, and the defendant excepted.

Park & Strozier, of Macon, for plaintiff in error.

P. Q. Bryan and W. G. Martin, both of Moultrie, for defendants in error.

HINES, J.(after stating the foregoing facts).Under the law as it stood when this deposit was made the county's claim for money deposited in this bank ranks second in order of payment.Ga. Laws 1919, pp. 135, 159, art. 7, § 19;8 Park's CodeSupp. 1922, § 2268 (s).By the act of August 25, 1927, the Legislature made a material change in the priority of payment of claims against an insolvent bank and wiped out the priority granted to counties for debts due them by such banks.Ga. Laws 1927, pp. 195, 199, § 5.It is insisted by the county that this act does not apply to this claim...