City of South Sioux City v. Mullins
| Decision Date | 20 October 1933 |
| Docket Number | 28594 |
| Citation | 250 N.W. 549,125 Neb. 410 |
| Parties | CITY OF SOUTH SIOUX CITY, APPELLANT, v. WILLIAM H. MULLINS ET AL., APPELLEES |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Dakota county: MARK J. RYAN JUDGE. Reversed.
REVERSED.
Syllabus by the Court.
1. Under section 4324, Comp. St. 1922, and under section 17-515 Comp. St. 1929, a treasurer of a city of the second class is not authorized to deposit city funds in any bank which has not been designated by the city council as a depository.
2. The treasurer of a city of the second class is liable on his official bond for the loss of city funds deposited by him in a bank not duly designated by the city council as a depository.
Appeal from District Court, Dakota County; Ryan, Judge.
Action by the City of South Sioux City, in the county of Dakota and state of Nebraska, against William H. Mullins, also known as W. H. Mullins, and another. From a judgment dismissing the petition, plaintiff appeals.
Judgment reversed, and cause remanded for a new trial.
W. V. Steuteville, for appellant.
Gaines, McGilton, McLaughlin & Gaines and George W. Leamer, contra.
Heard before GOSS, C. J., ROSE, GOOD, DAY and PAINE, JJ., and SHEPHERD, District Judge.
Plaintiff, a city of the second class, sued its treasurer and his surety on his official bond for $ 15,000 and interest, alleged to have been deposited by him and lost in the failure of the Bank of South Sioux City, a bank not designated by plaintiff as a depository. Upon trial to the district judge, the petition was dismissed and plaintiff appealed.
Most of the evidence was stipulated. Mullins was elected city treasurer at the April election in 1926 and has been reelected every two years. On April 26, 1926, he filed his bond in the penal sum of $ 15,000, with Fidelity & Deposit Company of Maryland as surety, to cover his term of two years beginning June 3, 1926. The condition of the bond:
"The condition of the above obligation is such that if the said W. H. Mullins, shall render a true account of his office, and of the doings therein to the proper authority, when required thereby, or by law; and shall properly pay over to the person or officers entitled thereto all money which may come into his hands by virtue of his said office; and shall faithfully account for all the balances of money remaining in his hands at the termination of his office; and shall hereafter exercise all reasonable diligence and care in the preservation and lawful disposal of all money, books, papers, securities, or other property appertaining to his said office, and deliver them to his successor, or to any person authorized to receive the same; if he shall faithfully and impartially, without fear, favor, fraud, or oppression, discharge all other duties now or hereafter required of his office by law, then this bond to be void; otherwise in full force and effect."
When the treasurer's term of office began, on June 3, 1926, the Bank of South Sioux City was in the hands of, and had been operated by, the guaranty fund commission since about March 19, 1925. It continued to be so operated as a going concern until December 24, 1927, when it was placed in the hands of a receiver. When the guaranty fund commission took over the bank, it had on deposit $ 14,581.25 of city deposits; when the commission ceased to operate it and turned it over to the receiver, it had $ 31,064.75 such deposits. The district court allowed claims in the above amount and ordered the commission to pay them. It paid dividends sufficient to reduce the claims to $ 24,684.80 and accrued interest. No further sums have been paid.
No application was ever made by said bank to the city for the privilege of keeping any funds of the city. No bank was ever designated by the city council as a depository of the city money. While the bond was in force the bank paid the city 2 per cent. on the money on deposit.
Each month the treasurer made a written report to the council, showing all receipts and disbursements, indicating the source of the receipts and their allocation to various funds, and, on the disbursement side, showing the warrants paid. He also included in his report deposit slips showing all money deposited in the bank of South Sioux City. It is due him to say that nothing in the evidence reflects upon his personal or official honor.
The defendants appear to seek to have the cause considered as if plaintiff were asking a recovery solely on the ground of the common-law negligence of the treasurer in depositing funds in a bank which failed. It is true that in three of the eight separate...
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