Board of Levee Com'rs for Yazoo Mississippi Delta v. Powell

• Decision Date: 12 April 1915
• Citation: 69 So. 215,109 Miss. 415
• Parties: BOARD OF LEVEE COM'RS FOR YAZOO MISSISSIPPI DELTA v. POWELL
• Court: Mississippi Supreme Court

69 So. 215

109 Miss. 415

BOARD OF LEVEE COM'RS FOR YAZOO MISSISSIPPI DELTA v. POWELL

Supreme Court of Mississippi

April 12, 1915

March 1915

APPEAL from the chancery court of Tunica county. HON. M. E. DENTON Chancellor.

On suggestion of error, sustained, decree of lower court reversed, demurrer to bill overruled and appellee granted thirty days to answer.

For former opinion see 68 So. 71.

Decree reversed, demurrer overruled.

Gary &amp Rice, for appellant.

We insist that the cases of Potter v. Fidelity & Deposit Company of Maryland, 101 Miss. 823, and Powell v Board of Supervisors of Tunica County, 65 So. 499, are not inconsistent with our contention. The Potter case is apparently the chief reliance of counsel in support of their position.

In the Potter case, as pointed out by us in our original brief, the court had an entirely different question before it for construction. Were the terms of the two depository laws the same, that is, the state depository law and the levee board depository law, we should be forced to concede, as we have conceded, on that condition, that we were asking the court for relief which had already been denied us under former decisions of this court. But, the levee board depository law has never been before this court for construction or interpretation and what has been said by this court in the two cases cited by counsel for appellee in construing the state and county depository laws was said with reference to the particular provisions of the statutes creating the relationships involved in those cases, or, more strictly speaking, authorizing the particular relationships involved therein. In our view, the construction by the court of these two wholly different legislative acts is not conclusive as to the issues here involved except in so far as the court has construed similar provisions of these acts. However, as to the part of the depository act relied upon by us in the case at bar, there is no similar provision in either the state or the county depository law.

In support of our position that the court had in mind the construction of the state depository law only in the Potter case and only decided that case on its construction of that particular statute we quote from the opinion of Chief Justice MAYES: "The Law of 1908, in intent and purpose, is the reverse of section 3485 of the Code in every particular, and intended to cover a different state of affairs. It is complete in itself and furnishes its own measure of legal rights. . . . Let us examine chapter 96 of the Laws of 1908 for a moment. The act is new to the law and complete in itself. It nowhere declares that the funds deposited in accordance with its terms shall be deemed 'trust funds.' The deposit is made by the sovereign power itself for the purpose of gain, with the intent that the funds shall be used by the depository as any other general funds. . . . The manner of dealing with these funds as authorized by the Law of 1908 is antagonistic to every idea of a trust fund."

On the other hand, we find that the depository law provided for the levee board by chapter 97 of the Laws of 1908, is not complete in itself and is not intended to furnish a complete scheme in itself for the security of the funds of the levee board but, by its express terms, the additional and potent savings clause was inserted and by direct terms the act refers back to and incorporates within the scheme of the legislature section 3485 of the Code of 1906. We again quote this clause as counsel have, in the main, declined to discuss its terms.

"It is further provided that the creating of this additional security and the acceptance of the collateral hereinbefore mentioned shall not be construed as waiving any rights, benefits or privileges conferred by law upon the commission in the matter of recovering public monies or trust funds from banks in which they may be deposited."

The act expressly declares that it is not complete in itself and that it does not furnish its own measure of legal right and expressly refers to the funds deposited as trust funds, and preserves their character as such trust funds.

Thus, we find all these features embraced in the act now before the court, and we find that it was upon the absence of these very features from the state depository act that the court based its holding in the Potter case. When the two acts are differentiated and distinguished we find the Potter case supports rather than refutes our argument.

Considering the act in the light of the legislative intent, it is evident that the purpose of the legislature was, First, to provide a method by which the funds of the levee board might be lawfully and safely let and be made revenue producing until such time as they might be called into use by the levee board. Second, to throw every safeguard around these funds and insure the return of same to the board.

To accomplish this second purpose it provided the particular security to be required under the act and, in addition, through an abundance of caution, perhaps, added as an additional safeguard the provision that the condition of the funds should still remain trust funds under section 3485 of the Code and the levee board should still have the rights and preferences applicable to the funds of the levee board under said section as enjoyed by it at the time of the enactment of the depository law. The act did not specify this section of the law but this was the only right or benefit that the board enjoyed at that time superior to any other creditor and this section must have been in consideration when this reference was made.

To express the idea differently, the legislature would seemingly have intended and expressed by the terms of this act the purpose to permit the creation of depositories for the levee board with the express reservation contained in the act that the creation of such depositories and the taking of this additional security should not impair any rights the levee board had to recover its funds provided such rights existed before the enactment of the depository law. That it might take this additional security but could not relax or relinquish any security it enjoyed at the time of the passage of this act.

Montgomery & Montgomery, for appellee.

Counsel complains of the language of the majority of the court, quoted on the second page of the suggestion of error, as follows: "Section 3485 was intended to protect funds which had gone out of the actual possession of the legal custodian and into a bank, not in the way provided by law, but in a manner which under the statute was unlawful."

We insist that the opinion of the court on this point is clearly correct, as will appear by reference to the authorities cited in our original brief, wherein we have reviewed all of the cases, from the early case of Shields v. Thomas, 71 Miss. 260, to the case of Powell v. Board of Supervisors of Tunica County, 65 So. 499.

It will be noted that in the first named case, Shields v. Thomas, supra, the court held, in discussing the general principle, independent of the statute, which had not been then enacted, that as to the general assets of the Bank of Greenville, the tax collector was not entitled to relief upon the facts stated in the petition, because it was not shown that the funds deposited by the tax collector at that time formed a part of the assets in any form.

It was to provide a relief for the public and a protection for trust funds which were deposited in a bank that section 3485 of the Code of 1906 was enacted. The law did not, theretofore, authorize a tax collector to deposit his funds in a bank, he was required to keep them safely and account for and pay them over at the proper time to the proper officials. Therefore, we entirely agree with the court and think that the majority opinion is manifestly correct in the part above quoted.

This is not a case in which the taxpayers of the levee district in question can possibly lose any part of their money. The board of levee commissioners, acting under authority of the law, have loaned this money to the Bank of Tunica. In doing so, they took the securities from that bank which the law provided for, and which the petition in this case shows are ample, perfect and more than complete for all of the money on deposit in the bank by the levee board at the time of its failure. This is a petition, not to collect money from this bank as a preference claim which could not be collected any other way, but praying that the chancellor shall take over four thousand dollars of this levee board's own bonds for the benefit of the receiver and that this receiver pay over to the levee board over seven thousand dollars of money on deposit which can be collected by the levee board itself, first: By the sale of the four thousand dollars of bonds and then, by resorting to its indemnity bonds in the sum of nine thousand dollars, which are shown to be perfectly solvent, and force the sureties on those bonds, who are surety companies, doing business in Mississippi, to make the levee board whole in its entire deposit. In other words, this petition asks that the court require the receiver to take the money of the general depositors and general creditors of the bank and pay it out to the levee board and then take the levee board's own bonds of four thousand dollars in lieu of part thereof and, after disposing of them, either the surety companies will be released from their liability for the balance, or the receiver would have to sue the surety companies.

We challenge the counsel to produce any law which sustains any such contention.

True it is that the depository law provides that "the creation of this additional security and the acceptance of the collateral hereinbefore mentioned, shall...