Daniel v. Citizens & Southern Nat. Bank
| Decision Date | 09 May 1936 |
| Docket Number | 11353. |
| Citation | 185 S.E. 696,182 Ga. 384 |
| Parties | DANIEL v. CITIZENS & SOUTHERN NAT. BANK et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. The law contained in the Code of 1933, § 40-206, requires the Governor, when he shall have trustworthy information that the state treasurer is insane, or has absconded, or grossly neglects his duties, or is guilty of conduct plainly violative of his duties, or demeans himself in office to the hazard of the public funds, to suspend the state treasurer and to report his reasons for such suspension to the General Assembly. The suspension shall continue until the Legislature shall otherwise direct. A suspension of the state treasurer by the Governor under the law is not a removal or tantamount to a removal from office. The order of suspension does not require to give it validity, notice, or hearing, nor is it necessary for the order to disclose the evidence upon which it issues.
2. The remedy to review and correct any error that may grow out of the exercise of the duty of suspension imposed upon the Governor is reserved unto and conferred upon the General Assembly. Therefore the order of the Governor suspending the state treasurerer under the law is not subject to the review and control of the courts.
3. Whenever the state treasurer shall be suspended, the Governor under the law (Code, § 40-207) must appoint some suitable person to discharge the duties of the office until the suspended official shall be restored by law of his successor elected and qualified. The appointee, upon his qualification and commission, becomes pro tempore the de jure state treasurer empowered to perform all the functions of the office, and the public dealing with him as such is fully protected.
4. A state depository having state funds on deposit when the state treasurer is suspended and another is appointed to the office pending the suspension may discharge its obligation to the state by accounting for the funds to the appointee. In such case an interpleader will not lie on behalf of the state depository to determine to whom it shall pay the money whether to the suspended officer or to the appointee. The law is clear that the appointee is entitled to receive the funds.
5. Where an interpleader will not lie, a cross-petition on the part of one of the defendants against another in the interpleader will not be entertained in the case to try an issue between the defendants.
Error from Superior Court, Fulton County; John D. Humphries, Edgar E. Pomeroy, Virlyn B. Moore, Judges.
Interpleader suit by the Citizens & Southern National Bank against J. B Daniel and George B. Hamilton and others, wherein George B Hamilton filed a cross-petition against defendant J. B Daniel. To review an adverse judgment, defendant J. B. Daniel brings error.
Reversed.
On February 24, 1936, the Governor of the state, by Executive Order, suspended George B. Hamilton, the treasurer of the state, and appointed in his stead J. B. Daniel, as treasurer the order of suspension being as follows:
"Executive Department, Atlanta.
By the Governor:
Whereas it appears from trustworthy information that the treasurer of the State of Georgia, George B. Hamilton, grossly neglects his duties, and is guilty of conduct plainly violative of his duties, and demeans himself in office to the hazard of the public funds and credit of the State:
It is therefore ordered, by virtue of the authority vested in the Governor of the State of Georgia by the laws of said State, that the said George B. Hamilton, be and he is hereby suspended from office as Treasurer of the State of Georgia, effective instanter.
Ordered further, that J. B. Daniel be and he is hereby appointed to discharge the duties of the office of Treasurer of the State of Georgia until the said George B. Hamilton shall be restored by law or his successor elected and qualified.
Ordered further that the said George B. Hamilton shall forthwith deliver to the said J. B. Daniel, upon his taking the oath of office and qualifying under this order of appointment, the official seal of his office, and all the books, deposits, bonds, property, money, papers, and documents, and any funds that he holds as trustee by virtue of his having been Treasurer of Georgia, pertaining to the office of Treasurer of the State of Georgia.
By the Governor:
Carlton Mobley, Secretary Executive Department."
Thereupon Daniel qualified as treasurer, was commissioned as such, and assumed the duties of the office under the appointment. Hamilton did not acquiesce in this order of suspension. He notified the Citizens & Southern National Bank, a state depository holding funds of the state, that he was, by virtue of his office as state treasurer, entitled to the funds, and that no one else had any right to check on same.
On March 2, 1936, the bank was given the following notice from the Governor:
Atlanta, March 2, 1936.
Hon. H. Lane Young, Executive Vice-President,
Citizens and Southern National Bank, Atlanta, Ga.
My dear Mr. Young: Code Section 100-103 (1251) provides that the Governor shall make contracts with the different banks for interest on deposits of State funds. You have in the Citizens and Southern National Bank approximately $484,352.44, deposited by the State Treasurer. Checks payable to different school units of the State have been issued by J. B. Daniel, State Treasurer, against these funds, in the amount of $97,016.65. The legal rate of interest in Georgia is 7% without a contract or as much as 8% by contract.
If your bank wishes to hold these funds of the State of Georgia, interest will be assessed from this date at 7% per annum.
I am forwarding the State Treasurer, Mr. J. B. Daniel, a copy of this order, and am requesting him to collect interest at 7% per annum on the deposits of the State in the Citizens and Southern National Bank of Atlanta, from date. Mr. J. B. Daniel is the legally appointed Treasurer of the State of Georgia. He has given bond as required by law, and has taken the oath of office, and is now performing the duties of the State Treasurer.
In the event counsel for your bank advises you not to accept checks from J. B. Daniel as State Treasurer, I respectfully call your attention to section 40-305 (159) of the Code of Georgia. This section reads as follows: 'The Governor shall have power to engage the services of any competent person for the discharge of any duty required by the laws, and essential to the interests of the State, or necessary, in an emergency, to preserve the property or funds of the State.' Under the authority in this section I hereby appoint and designate Carlton Mobley to act under the authority of this section to receive from your bank all funds of the State of Georgia, if you do not wish to continue to hold the funds of the State of Georgia and pay 7% interest from date.
If you plan to honor the checks drawn by the State Treasurer payable to the schools, deduct that amount and turn the balance over to the designated agent.
Mr. Mobley's receipt will be ample protection for your bank.
Thereafter on March 3, 1936, the bank brought an equitable petition in Fulton superior court against Hamilton, Daniel, and Mobley, alleging the foregoing facts, and further alleging that it was a state depository appointed and qualified under the statute providing therefor; that it had on deposit a specified sum of state money, and had deposited with the state securities, described in the petition, as security for the performance of its obligations as a state depository; and that on the 24th day of February, 1936, the Governor of Georgia issued an executive order purporting to suspend George B. Hamilton as state treasurer and purporting to appoint J. B. Daniel to discharge the duties of the office. A copy of this Executive Order was attached as an exhibit. The petitioner recited the receipt by it of a telegram from George B. Hamilton, asserting his contention that his suspension from office was illegal, and warning the bank not to honor any checks on state funds except checks signed by him. The telegram further recited that the securities deposited by each bank had been placed in a bank vault to which none but Hamilton had access. The petition further recited the receipt of a letter from the Governor, dated March 2, 1936, a copy of which was attached to each petition, the letter in substance reciting the amount on deposit in the bank to the credit of the state, and the fact that checks had been drawn thereon by J. B. Daniel, state treasurer, payable to the school units of the state of Georgia; and stating that if the bank wished to hold the funds of the state, interest would be assessed at 7 per cent. from the date of the Governor's letter. The letter advised the bank that in the event its counsel advised it not to honor the checks of J. B. Daniel as state treasurer, Carlton Mobley was appointed the agent of the state to receive the state's funds from the bank pursuant to section 40-305 of the Code of 1933, and that Mobley would receipt the bank accordingly. The petition alleged that the bank claimed no interest for itself in the funds on deposit; that the checks drawn by Daniel had not been presented, but the bank apprehended that such checks would be presented, and that it would be forced to decide at its peril whether to honor such checks. The petition further alleged that the General Assembly of Georgia had enacted no appropriation bill for the year 1936, and recited the provision of the Constitution of Georgia that no sum shall be paid out of the state treasury...
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