Bliss v. Mason
| Decision Date | 02 July 1931 |
| Docket Number | 27803 |
| Citation | 237 N.W. 581,121 Neb. 484 |
| Parties | CLARENCE G. BLISS, RECEIVER, APPELLANT, v. WILLIAM F. MASON ET AL., APPELLEES |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Sherman county: BRUNO O HOSTETLER, JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
It is not contrary to public policy in Nebraska for a state bank designated as a depository of county funds, to pledge sufficient of its assets to reasonably secure repayment of county deposits in such depository bank.
The specification in section 77-2506, Comp. St. 1929, of certain assets which a bank may pledge to secure repayment of deposits of public funds, was not intended as a limitation of the pledging power of the bank, but for the greater security of the public funds.
A state bank, designated as a county depository, may lawfully pledge sufficient of its assets to protect from loss sureties on its depository bond to the county.
Section 77-2601, Comp. St. 1929, authorizes a state bank to contract for indemnity of sureties on a depository bond given by such bank to secure deposit of public funds.
Appeal from District Court, Sherman County; Hostetler, Judge.
Action by Clarence G. Bliss, receiver of the Bank of Ashton, Ashton, Nebraska, against William F. Mason and others. Judgment for defendants, and plaintiff appeals.
Affirmed.
W. H. Line, Lamont L. Stephens and C. M. Skiles, for appellant.
W. A. Prince and R. H. Mathew, contra.
Heard before GOSS, C. J., ROSE, DEAN, GOOD, EBERLY, DAY and PAINE, JJ.
This is an action for conversion of certain bonds. Defendants denied conversion. A trial to the court resulted in a judgment for defendants. Plaintiff has appealed.
The facts are not in dispute. Defendants signed, as sureties, a county depository bond for the Bank of Ashton, running to Sherman county. At the time this bond was executed it was agreed that the bank would indemnify the sureties against loss by the deposit of bonds or other assets of the bank. Pursuant to this agreement, the bonds, alleged to have been converted, were pledged to protect defendants from loss by reason of their liability on the depository bond. Later the bank failed, and at the time the county had on deposit in the bank a considerable sum which the defendants caused to be repaid to the county. Thereafter the bonds in question were sold for their full value to reimburse defendants. From the sale defendants realized a sum slightly in excess of the amount paid to the county. The defendants offered to account for and pay over to the plaintiff such excess.
The vital question presented by the appeal is: May a state bank, duly designated as a depository of county funds, make a valid pledge of any of its assets to indemnify against loss sureties on a county depository bond?
Plaintiff contends that the pledge of securities to defendants to indemnify them against loss was an act ultra vires, unlawful, and against public policy; that, unless given authority specifically or by necessary implication, a bank may not pledge its assets to secure a deposit of public funds; that, when authority is given by statute to pledge specified assets, it may only pledge such as the statute authorizes, and that the pledge of another kind of assets is unlawful; and further contends that there is no Nebraska statute permitting a state bank to pledge its assets to secure county deposits, or to indemnify sureties on a depository bond.
Plaintiff cites and relies upon a number of decisions, made by the courts of other states, all of which we have examined. Several of them are based upon the construction of a particular statute of the state in which the decision was made, and such statutes are different from those in Nebraska, and are, therefore, not in point. A few of these authorities, however, support plaintiff's contention. The great majority of the courts, and, we think, the great weight of authority, holds to a contrary view, namely, that a state bank, designated as a depository, may, in the absence of a statute prohibiting it, pledge its assets to secure the deposit of public funds. Among the cases so holding are: Williams v. Hall, 30 Ariz. 581, 249 P. 755; Williams v. Earhart, 34 Ariz. 565, 273 P. 728; McFerson v. National Surety Co., 72 Colo. 482, 212 P. 489; First American Bank & Trust Co. v. Town of Palm Beach, 96 Fla. 247, 117 So. 900; Richards v. Osceola Bank, 79 Iowa 707, 45 N.W. 294; Andrew v. Odebolt Savings Bank, 203 Iowa 1335, 214 N.W. 559; United States Fidelity & Guaranty Co. v. Village of Bassfield, 148 Miss. 109, 114 So. 26; Consolidated School District v. Citizens Savings Bank, 223 Mo.App. 940, 21 S.W.2d 781; Ainsworth v. Kruger, 80 Mont. 468, 260 P. 1055; Page Trust Co. v. Rose, 192 N.C. 673, 135 S.E. 795; ...
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