Buena Vista Cnty. v. Marathon Sav. Bank (In re Marathon Sav. Bank.)

• Court: Iowa Supreme Court
• Writing for the Court: DE GRAFF
• Citation: Buena Vista Cnty. v. Marathon Sav. Bank (In re Marathon Sav. Bank.), 198 Iowa 692, 200 N.W. 199 (Iowa 1924)
• Decision Date: 17 October 1924
• Docket Number: No. 35355.,35355.
• Parties: IN RE MARATHON SAV. BANK. BUENA VISTA COUNTY ET AL. v. MARATHON SAV. BANK ET AL. (AMERICAN SURETY CO. OF NEW YORK, INTERVENER.) BUENA VISTA COUNTY ET AL. v. MARATHON SAV. BANK ET AL.

198 Iowa 692

200 N.W. 199

IN RE MARATHON SAV. BANK.

BUENA VISTA COUNTY ET AL.

v.MARATHON SAV. BANK ET AL. (AMERICAN SURETY CO. OF NEW YORK, INTERVENER.)

BUENA VISTA COUNTY ET AL.

v.MARATHON SAV. BANK ET AL.

No. 35355.

Supreme Court of Iowa.

Oct. 17, 1924.

Appeal from District Court, Buena Vista County; James Deland, Judge.

Supplemental opinion on rehearing. Former opinion (196 N. W. 729) adhered to, and petition for rehearing denied.Heald, Cook & Heald, of Spencer, and Kelleher & Mitchell, of Fort Dodge, for appellants.

Helsell & Helsell, of Fort Dodge, and Bailie & Edson, of Storm Lake (Stipp, Perry, Bannister & Starzinger, of Des Moines, of counsel), for appellees.

DE GRAFF, J.

By reason of the emphasis placed by appellant on certain propositions in the petition for rehearing, and by reason of the public importance of the propositions involved, we feel that further opinion is justified. What was the legislative intent in the enactment of the statute giving preferential claims in favor of “state, county, or other municipal corporation in this state”? Section 3825a, Code Supp. 1913. The statute is specific and explicit. In Lewis v. United States, 92 U. S. 618, 23 L. Ed. 513, it is said:

“Where the language of a statute is transparent, and its meaning clear, there is no room for the office of construction. There should be no construction where there is nothing to construe. * * * Affirmative discussion, under such circumstances, is not unlike argument in support of a self-evident truth. The logic may mislead or confuse. It cannot strengthen the pre-existing conviction.”

[1] We reaffirm that the conceded sum established as a claim against the receiver in favor of Buena Vista county is a debt within the purview of the statute. The receiver is a mere stakeholder. The county is the real party in interest. No one questions the constitutional right of our Legislature to give preference to claims as defined by Code Supp. 1913, § 3825a. In the absence of statute, the right of priority of debts due the state would exist as a prerogative derived from the common law. Our statute is simply declaratory of the common law which affirms that, when the title of the king conflicts with the title of the subject, the former shall be preferred. “There is no escape in reason from the conclusion that by adopting the common law Montana adopted the prerogative rule of priority of public debts. That the law may not have been heretofore invoked is not considered important. Many laws, statutory as well as common, are quiescent for years, but are not thereby repealed or abrogated.” American Bonding Co. v. Reynolds (D. C.) 203 Fed. 356. See also, U. S. Fidelity & Guaranty Co. v. Rainey, 120 Tenn. 357, 113 S. W. 397; State v. Madison Bank (Mont.) 219 Pac. 652; Central Bank and Trust Co. v. State, 139 Ga. 54, 76 S. E. 587.

The numerical weight of authority supports the proposition that the statutory priority of public debts is simply declaratory of the common law. As said in Marshall v. New York, 254 U. S. 380, 41 Sup. Ct. 143, 65 L. Ed. 315:

“The priority was not limited to amounts due for taxes, but extended alike to all debts due to the state, e. g., to amounts due on a general deposit of state funds in a bank. * * * This priority has been enforced by the courts of New York under a great variety of circumstances. * * * It has been enforced as a right and not as a rule of administration. This priority arose and exists independently of any statute. The Legislature has never, in terms, limited its scope; and the courts have rejected as unsound every contention made that some statute before them for construction had, by implication, effected a repeal or abridgement of the priority. The only changes of the right made by statute have been by way of enlarging its scope in certain cases.”

See, also, Booth v. State, 131 Ga. 750, 63 S. E. 502;Orem v. Wrightson, 51 Md. 34, 34 Am. Rep. 286;In re Niederstein, 154 App. Div. 238, 138 N. Y. Supp. 952;Booth v. Miller, 237 Pa. 297, 85 Atl. 457;State v. Foster, 5 Wyo. 199, 38 Pac. 926, 29 L. R. A. 228 (with note), 63 Am. St. Rep. 47;U. S. v. State Bank of North Carolina, 6 Pet. 29, 8 L. Ed. 308.

[2] Our statute, therefore, simply affirms the common-law rule and the language is general and comprehensive. There is found no limitation, express or implied, in its terms, and no rule of construction would justify this court in fixing a limit to the terms which the Legislature has seen fit to adopt. The word “debt” must be given its ordinary meaning and the manifest intent of the Legislature in enacting the law. It has been the subject of legal definition. Warner v. Cammack, 37 Iowa, 642;Stanhope v. Swafford, 77 Iowa, 594, 42 N. W. 450;Jewell v. Nuhn, 173 Iowa, 112, 155 N. W. 174, Ann. Cas. 1918D, 356. The form of indebtedness is immaterial, and it may be legal or equitable. No discrimination is made by the statute which has for its object the public good, and therefore the statute is to be liberally construed. Beaston v. Farmers' Bank of Delaware, 37 U. S. (12 Pet.) 134, 9 L. Ed. 1017;In re Carnegie Trust Co., 206 N. Y. 390, 99 N. E. 1096, 46 L. R. A. (N. S.) 260;State v. First Nat. Bank of Las Cruces, 22 N. M. 661, 167 Pac. 3, L. R. A. 1918A, 394. Having determined that there is a debt, and that it is due a municipal corporation, we are bound to place it in the class which the Legislature has declared shall be entitled to preference. Lockwood v. Lockwood, 68 S. C. 328, 47 S. E. 441.

In re Western Implement Co. (D. C.) 166 Fed. 576, it was held that money due the state for binding twine manufactured by the state in its penitentiary is a debt owing the state, entitled to preference under the statute of Minnesota giving a priority to debts due the state. Under the statute of Massachusetts a municipal corporation is entitled to preference for debts owing such corporation, and the language of the act is quite similar to the Iowa statute. Bent v. Inhabitants of Hubbartston, 138 Mass. 99. See, also, State v. Bell, 64 Minn. 400, 67 N. W. 212;American Surety Co. of New York v. Pearson, 146 Minn. 342, 178 N. W. 817.

[3] It is to be observed that section 3825a by its very language applies to all corporations; but the proposition is advanced by appellant that the Banking Act (section 1877) regulates the administration of insolvent banking corporations, and the distribution of their assets. In other words, it is contended that the Banking Act, of which section 1877 is a part, is a code in itself. We perceive no valid reason for holding that a bank of the character of appellant is not within the general law. If a municipal corporation has lost its right to a preference under the instant facts, it must be attributed to...