Billings County v. Federal Deposit Ins. Corp., Civil Action No. 561.
| Decision Date | 07 March 1947 |
| Docket Number | Civil Action No. 561. |
| Citation | 71 F. Supp. 696 |
| Parties | BILLINGS COUNTY, N. D., v. FEDERAL DEPOSIT INS. CORPORATION. |
| Court | U.S. District Court — District of North Dakota |
Mackoff, Kellogg & Muggli, of Dickinson, N. D., and Conmy & Conmy, of Fargo, N. D., for plaintiff.
James M. Kane, Sol., Federal Deposit Insurance Corp., and John L. Cecil, Counsel for Federal Deposit Insurance Corp., both of Chicago, Ill., and Herbert G. Nilles, of the firm of Nilles, Oehlert & Nilles, of Fargo, N.D., for defendant.
The plaintiff herein is a municipal corporation or political subdivision of the State of North Dakota. Included in the stipulation of facts filed by the parties, there is the following: "That the Court shall decide this action as though the county treasurer of Billings County had signed the claim filed by the county against the defendant, and as though the county treasurer was also a party plaintiff, in addition to Billings County.")
The defendant is a corporation created by the United States, the purpose of which was to insure the deposits of all banks which are entitled to the benefits of insurance under the law. Its creation, powers and limitations are contained in 12 U.S.C.A. § 264. In accordance with the provisions thereof, the defendant insured the deposits of the Stockmen's State Bank of Medora, North Dakota, which bank became insolvent, was closed and taken over for liquidation by the defendant on September 24, 1938.
This case involves the following accounts representing moneys on deposit in the Stockmen's State Bank of Medora at the time of its closing:
General open account, subject to
check entitled "Treasurer Billings
County" ....................... $4,306.72
Draft No. 34736, purchased by
Billings County from the Bank
and in transit at the date of
closing of the bank .......... $2,030.00
Certificate of Deposit No. 2080
deposited by "Billings County
Treasurer" ................... $3,500.00
Certificate of Deposit No. 2081
deposited by "Billings County
Treasurer" ................... $3,231.38
Certificate of Deposit No. 2104
deposited by "Billings County
Treasurer" ................... $4,200.00
Certificate of Deposit No. 2087
deposited by "Billings Co
Treas. Custodian" ............ $4,362.76
Certificate of Deposit No. 2111,
deposited by "Billings Co.
Treas. Custodian" ............ $4,378.54
Subsequent to the closing, dispute arose between the plaintiff and the defendant as to the plaintiff's right to recover under the provisions of 12 U.S.C.A. § 264, for the various deposits set forth above. Subsequently thereto, the defendant paid to the plaintiff an admitted deposit insurance liability of $5,000 (the maximum liability of the defendant for each insured deposit), with the understanding and agreement that the plaintiff was free to pursue the instant action herein in an attempt to establish the existence of two separately insured deposits.
It is the contention of the plaintiff that deposits represented by the five certificates of deposit numbered 2080, 2081, 2104, 2087 and 2111, were deposited by the plaintiff in a separate right and capacity from the deposit in the general checking account and the deposit claim based upon the outstanding draft in transit, and that accordingly the defendant owes an additional liability on the total of such certificates of deposit in the amount of an additional $5,000.
It is the contention of the defendant that all of the above-enumerated deposits were maintained in the Stockmen's State Bank of Medora by the county or its treasurer in the same capacity and the same right and that to the county's total deposits of $26,009.40 there should be applied the limitation of $5,000 maximum deposit insurance, as prescribed by 12 U.S.C.A. § 264, and that accordingly it owes no additional liability to the plaintiff.
The case is presented on a stipulation of facts, the deposition of the Billings County treasurer, admitted exhibits, and the pleadings of the parties. Oral argument was waived and the position of the respective parties is set forth in their various briefs.
The treasurer of Billings County, under the law of the State of North Dakota, is the custodian of all of the county's general funds and also the custodian of various sinking funds created for the payment of bonds of taxing districts within the county, such as school districts, villages, townships, etc., including the county itself as a taxing district. As treasurer, he maintained checking accounts in the Stockmen's State Bank of Medora and the Bank of North Dakota in Bismarck. All funds which came into his hands were deposited by him in one or the other of these two general checking accounts.
In 1921, Billings County, as a taxing district, issued certain bonds, being obligations of Billings County. Tax assessments which were earmarked to pay such bonds were received by the county treasurer in his capacity as custodian and deposited by him in one or the other of the two general checking accounts. Thereafter, he would purchase certificates of deposit from the Stockmen's State Bank of Medora for amounts representing the moneys collected by him for the purpose of refunding the 1921 bond issue. In such manner he attempted to separate the moneys to be used for the refunding of the bonds from other funds of the county. As the certificates of deposit became due, he would have them renewed by the Stockmen's State Bank of Medora, so that as of the time of the closing of the bank the five certificates of deposit above enumerated represented money set aside and earmarked as money to be used by the county for refunding or paying the 1921 bond issue as such bonds became due and payable, and the amount in the general checking account represented other or general funds of Billings County.
Chapter 21 of the North Dakota Revised Code of 1943 provides the purposes for and the manner in which municipalities may borrow money, issue bonds and raise funds in payment thereof. A county, such as the plaintiff, is a municipality within the meaning thereof. After setting forth the methods and limitations of borrowing money, issuing bonds and raising the funds with which to pay such bonds, the chapter provides as follows:
* * *" (Emphasis supplied.)
* * *" (Emphasis supplied.)
(Emphasis supplied.)
A county is a "municipality" within the purview of the foregoing statutes. Section 21-0301, North Dakota Revised Code of 1943. It will be noted from Section 21-0341, supra, that when the county treasurer is custodian of any sinking fund "he shall retain the same in a separate special fund maintained as a sinking and interest fund for the bonds of such taxing district."
The record indicates that it was the practice to first deposit such funds in the general checking account, comingling them with other moneys of the county. Such practice is questionable under the statute but does not lessen the existence of the fact. Thereafter the treasurer did do what was contemplated by Section 21-0341, by drawing a check on the general checking account and purchasing certificates of deposit, thereby retaining the same "in a separate fund." His testimony is to the effect that each time he purchased a certificate of deposit he advised the cashier of the bank that the moneys with which he purchased the certificates of deposit "belonged to the interest and sinking fund for the bond issue of 1921 Funding Bonds,"...
To continue reading
Request your trial
-
DeLorenzo v. Federal Deposit Insurance Corporation
...v. Casady, 106 F.2d 784 (10th Cir. 1939); Phair v. Federal Deposit Ins. Corp., 74 F.Supp. 693 (D.N.J.1947); Billings County v. Federal Deposit Ins. Corp., 71 F.Supp. 696 (D.N.D.1947), modified on other grounds, 168 F.2d 452 (8th Cir. 1948). This conclusion is supported by a pamphlet publish......
-
United States v. Pressnell
...logically cannot be the determining factor as to whether or not such immunity should be extended." Billings County v. Federal Deposit Insurance Corp., D.C.N.D. (1947), 71 F. Supp. 696, 703. The rule of governmental immunity "* * * is based, not upon any antiquated theory of divine right of ......
-
Federal Deposit Ins. Corp. v. Billings County, 13629.
...two insured deposits. The case was tried to the court, which determined that the County had two such deposits, each in excess of $5,000. 71 F.Supp. 696. Judgment was entered on May 13, 1947, against the Corporation for $6,782.89, made up as follows: $5,000, the unpaid liability of the Corpo......
-
Bulasky v. Federal Deposit Insurance Corp., 21233A
...four accounts at any time. None of the accounts was impressed with trust or other separate status. Cf. Billings County v. Federal Deposit Insurance Corp., 71 F.Supp. 696 (D.N.D.1947). In Phair v. Federal Deposit Insurance Corp., 74 F.Supp. 693 (D.N.J.1947), it was held that the segregation ......