First Nat. Bank v. C. Bunting & Co.

• Decision Date: 27 January 1900
• Citation: 59 P. 929,7 Idaho 27
• Parties: FIRST NATIONAL BANK OF POCATELLO v. C. BUNTING & CO., BANKERS, C. E. THUM, RECEIVER, BINGHAM, CUSTER AND FREMONT COUNTIES. INTERVENERS
• Court: Idaho Supreme Court

59 P. 929

7 Idaho 27

FIRST NATIONAL BANK OF POCATELLO v. C. BUNTING & CO., BANKERS, C. E. THUM, RECEIVER, BINGHAM, CUSTER AND FREMONT COUNTIES. INTERVENERS

Supreme Court of Idaho

January 27, 1900

PUBLIC MONEYS-DEPOSIT IN BANK, TRUST FUNDS-RECEIVERS.-Public moneys deposited in a bank in violation of law are trust funds, do not become the property or assets of such bank, and remain trust funds with title in the true owner after the appointment of a receiver and insolvency of the bank. State v. Thum, 6 Idaho 323, 55 P. 858, affirmed.

ESTOPPEL.-A county whose funds have been unlawfully deposited in a bank is not estopped from claiming such funds as a trust fund, by reason of its treasurer having received a pro rata payment thereon in common with general creditors.

RIGHT OF RECEIVERS TO APPEAL-COSTS.-A receiver has no right to appeal from an order or judgment made in the action in which he is appointed, without permission of the court appointing him, when he has no personal interest in such order or judgment, and, if he does so, the appeals should be dismissed at his personal cost, and without cost to the estate in his hands.

(Syllabus by the court.)

APPEAL from District Court, Bingham County.

Judgment affirmed, with costs to respondents, and remittitur issued.

E. E Chalmers, for Appellant.

The moneys in question were never a trust fund, and were never in a condition to be claimed or established as a trust fund, and the court, therefore, erred in ordering them paid in preference to the claims of the other general creditors of said bank, said moneys having been on general deposit in said bank, the relation of debtor and creditor, only, existed between said bank and these respective respondents. (See Janin v. London, etc. Bank, 92 Cal. 14, 27 Am. St Rep. 82, 27 P. 1100; State v. Buttles, 3 Ohio St. 309; Bank of Marysville v. Windischmuhlhauser etc. Co., 50 Ohio St. 151, 40 Am. St. Rep. 660, 33 N.E. 1054; Henry v. Martin, 88 Wis. 367, 60 N.W. 263; McLain v. Wallace, 103 Ind. 562, 5 N.E. 911; Alston v. State, 92 Ala. 124, 9 South, 732; State v. Keim, 8 Neb. 63; State v. Bartley, 39 Neb. 353, 58 N.W. 172-176; State v. Mechanics' etc. Inst., 1 Am. & Eng. Corp. Cas. 573; Balbach v. Frelinghuysen, 15 F. 675; 5 Thompson on Corporations, secs. 7098, 7101; Story on Bailments, Bennett's ed., sec. 88; Ruffin v. Board of County Commrs., 69 N.C. 498, 509; Brahm v. Adkins, 77 Ill. 263; Keene v. Collier, 1 Met. (Ky.) 415; Multnomah County v. Bank, 61 F. 914; State v. Foster, 5 Wyo. 199, 63 Am. St. Rep. 47, 38 P. 926; Mutual Acc. Assn. v. Jacobs, 141 Ill. 261, 33 Am. St. Rep. 302, 31 N.E. 414; National Bank v. Graham, 100 U.S. 699-703; Shute v. Hinman, 34 Ore. 578, 56 P. 412, 58 P. 882.) The respondents having made their election and received and accepted the dividend declared by the receiver of the insolvent corporation, are estopped to assert the claims here made or to claim the money as a trust fund. (Bigelow on Estoppel, 562-579; Perry on Trusts, 371; Hanly v. Kelly, 62 Cal. 155; McAdow v. Black, 4 Mont. 475, 1 P. 751; Denver etc. Co. v. Middaugh, 12 Colo. 434, 13 Am. St. Rep. 234, 21 P. 565; Brundage v. Home Sav. etc. Assn., 11 Wash. 277, 39 P. 666; Boulder etc. Ditch Co. v. Lower Boulder Ditch Co., 22 Colo. 115, 43 P. 540; Scholey v. Rew, 23 Wall. 331, 23 L. ed. 99; Crook v. Bank of Barraboo, 83 Wis. 31, 35 Am. St. Rep. 17, 52 N.W. 1131; Wood v. Bullard, 151 Mass. 324, 25 N.E. 67, 7 L. R. A. 304; Zimmermann v. Lebo, 151 Pa. 345, 24 A. 1082. 17 L. R. A. 536; Burhans v. School Dist. 1 of Canton, 24 A.D. 429, 48 N.Y.S. 702; Watkins v. National Bank of Lawrence, 51 Kan. 254, 32 P. 914; Chapman v. Forsythe, 2 How. 202, 11 L. ed. 236; Clay v. Smith, 3 Pet. 411, 7 L. ed. 723.) Estoppel may be invoked against a county. (Leavenworth Co. v. Barnes, 94 U.S. 70, 24 L. ed. 63.)

N. H. Clark, for Bingham and Fremont Counties.

"The treasurer and other officers of Bingham, Custer and Fremont counties have been accustomed to keep the county funds of their respective counties on deposit in defendant's bank, and at the time of the appointment of said receiver they each had a large sum of money on deposit there." Now as to this state of facts there is no contention but what these were public funds deposited in the bank belonging to the respective counties. And that the money was on deposit there at the time said receiver was appointed. We submit that said public moneys were a trust fund. (See State v. Thum, 6 Idaho 323, 55 P. 858, causes there cited.) If the said counties had received said dividends and the county commissioners, with full knowledge of such receipt had ratified the action of their treasurer in receiving said moneys, that this would not by ratification make such deposit a general deposit or estop the county from claiming it as a trust fund. A corporation cannot, by ratification, do that which is ultra vires which they could not have done in the first instance. A corporation is not estopped to claim that an act done, if without the authority of law, is ultra vires. (Dunbar v. Board of Commrs. of Canyon Co., 5 Idaho 407, 49 P. 409; De Mill v. Moffatt, 49 Mich. 125, 13 N.W. 387; Guichard v. Brande, 57 Wis. 534, 15 N.W. 764.)

W. E. Borah, for Custer County.

The first contention made by appellant is that the moneys in question, being deposited by general deposit, could not constitute a trust fund, or, in other words, that by reason of said general deposit, the relation of debtor and creditor arose between the bank and the county. This is the same question precisely, every phase of which was passed upon in the state case. In other words, it simply raises the question as to the status of these moneys when deposited, which question has been settled by the decision already referred to. While the counsel for appellant do not so state in their brief, we assume from the line of authorities cited that they will ask the court to change that decision. But as the same cases are cited, with some three or four additional authorities, which were cited in the state case and there reviewed, we will not burden the brief with a review of appellant's citations here. Suffice it to say that under our statutes many of the authorities cited are without any application and the matter has been put at rest in our own supreme court. (State v. Thum, 6 Idaho 323, 55 P. 858.) There is a long line of authorities supporting this opinion. (Farmers' Bank v. King, 57 Pa. 202, 98 Am. Dec. 215; Independent Dist. of Boyer v. King, 80 Iowa 497, 45 N.W. 909; State v. Midland Bank, 52 Neb. 1, 66 Am. St. Rep. 484, 71 N.W. 1011; Kimmel v. Dickson, 5 S. Dak. 221, 49 Am. St. Rep. 869, 58 N.W. 561, 25 L. R. A. 309; Hubbard v. Manufacturing Co., 53 Kan. 637, 36 P. 1053, 37 P. 625; Ryan v. Phillips, 3 Kan. App. 704, 44 P. 909; City v. Jordan, 55 Kan. 124, 39 P. 1030; Wolffe v. State, 79 Ala. 201, 58 Am. Rep. 590; First Nat. Bank v. Hummell, 14 Colo. 259, 20 Am. St. Rep. 257, 23 P. 986; Winslow v. Harriman Co. (Tenn.), 42 S.W. 698; Baker v. Bank, 100 N.Y. 31, 53 Am. Rep. 150, 2 N.E. 452; Burnett v. Bank, 38 Mich. 630; Boone on Banking, sec, 62.) There is no principle of estoppel in this case, as an estoppel is based upon the fact that a party has at one time so acted or asserted a claim that to permit him to act or assert to the contrary at another time would injure another party--that is, that it would in effect be a fraud upon the other party. (Herman on Estoppel, 6; Leonard v. Insurance Co., 97 Ind. 299; Yates v. Hurd, 8 Colo. 343, 8 P. 579.) The doctrine of estoppel does not apply to contracts which are forbidden by law or contrary to public policy. (Franklin Nat. Bank v. Whitehead, 149 Ind. 560, 63 Am. St. Rep. 302, 49 N.E. 592, 39 L. R. A. 725; Hibbard v. Chicago, 173 Ill. 91, 50 N.E. 256, 40 L. R. A. 621.) The following authorities will be found to sustain the rule that public agents stand in a different position to that of private agents and that the courts and all persons must take notice of their powers and be governed by them: Whitehead v. United States, 93 U.S. 882; Lee v. Munroe, 7 Cranch, 366; Story on Agency, sec. 307; State v. Hays, 52 Mo. 578; Meachem on Public Officers, sec. 843; Cook County v. Chicago, 158 Ill. 524, 42 N.E. 67.)

QUARLES, J. Huston, C. J., and Sullivan, J., concur.

OPINION

QUARLES, J.

This action was commenced by the First National Bank of Pocatello a corporation, plaintiff, against C. Bunting & Co., bankers, a corporation, defendant, to recover a debt due from the defendant to the plaintiff. The defendant corporation being insolvent, C. E. Thum was appointed the court's receiver, to take charge of the assets of said defendant corporation, which, after qualifying, he proceeded to do. The state of Idaho intervened, alleging that said receiver took charge of, and was in possession, as receiver, of, certain moneys owned by the state, and withheld and refused to pay same to the state, and demanded an order directing said receiver to pay over to the state treasurer the said moneys of the state before distribution among the creditors of the said insolvent. The district court decided the contention against the state, and the state appealed to this court. Upon said appeal we held that public money deposited by a public officer in a bank becomes a trust fund, and not part of the estate of the bank, and in case of the insolvency of the bank its receiver must treat such fund as the property of the true owner, and that creditors of such bank were not to share pro rata in public money deposited in such bank. (See State v. Thum, 6 Idaho 323, 55 P. 858.) After the said decision, the respondents here, Bingham county, Custer county, and Fremont county, each intervened in this action, claiming, each for itself, that public money belonging to it was deposited with ...