In re Blalock

Citation31 F.2d 612
Decision Date03 January 1929
Docket NumberNo. 13008.,13008.
PartiesIn re BLALOCK et al.
CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia

Spalding, MacDougald & Sibley and John A. Sibley, both of Atlanta, Ga., for Atlanta & Lowry Nat. Bank.

Sam L. Olive, of Atlanta, Ga., for Georgia State Highway Commission.

J. W. Culpepper, of Fayetteville, Ga., for Fayette County.

Hugh Howell, of Atlanta, Ga., for trustee.

BARRETT, District Judge.

By act of the General Assembly of Georgia of 1915 (Georgia Laws 1915, p. 233) the office of county treasurer of Fayette county, Georgia, was abolished after the 1st day of January, 1917. The further pertinent provisions of the said act are as follows:

"* * * The commissioners of roads and revenues of said Fayette county shall by a majority vote taken among themselves, select some bank, banks, or bankers in said county to act as depository or depositories and disbursing agent or agents of and for the public funds of said county."

"* * * No such bank shall be allowed to act as such depository and disbursing agent, until it shall have given a bond, payable to said commissioners, with the securities to be by them approved, conditioned for the faithful performance of all the duties pertaining to said appointment. * * * The property of such bank or bankers as well as the security or securities on such bond shall be bound from the time of the execution thereof, for the payment of any and all liability arising from the breach of said bond."

"* * * All said depositories and disbursing agents shall be liable both civilly and criminally just as county treasurers are liable, for any nonfeasance or malfeasance of duty."

Sections 2, 4, 10.

The Bank of Fayetteville was a partnership composed originally of S. T. & A. O. Blalock, and which upon the death of S. T. Blalock in 1918 had been conducted by A. O. Blalock, individually and as surviving partner and executor of S. T. Blalock. On September 7, 1927, a petition in bankruptcy was filed against the said partnership, resulting in an adjudication.

On January 8, 1925, the commissioners of roads and revenues of Fayette county made the Bank of Fayetteville a county depository and a bond was given in accordance with the terms of the aforesaid act. At the time of the bankruptcy the county had on deposit in such bank $47,448.30. Commencing in 1922 the Bank of Fayetteville had an account with the Atlanta & Lowry National Bank, and such business relationship continued until the bankruptcy. As security for the loans which were made to the Bank of Fayetteville by the Atlanta & Lowry National Bank, notes, accounts, choses in action, and mortgages on various pieces of real estate were indorsed, transferred, and executed. At the time of the filing of the petition in bankruptcy the state highway department had on deposit with the Bank of Fayetteville $14,205.79.

The questions to be considered come before the court through the report of a special master. Other issues were considered and determined by the said master, but there are only two for determination by this court: First, Fayette county claims a lien on all the property, real and personal, including choses in action, owned or acquired by the bankrupts and their sureties after the execution of the bond. The Atlanta & Lowry National Bank claims that its title or lien, whichever it may be, acquired on the property pledged with it as security, is superior to that of the county to the extent of the indebtedness thus secured. Second, the state highway department claims that, as a department of the sovereign state of Georgia, it is entitled to prevail as a preferred creditor by virtue of the state's prerogative right of preference. This right is denied by the county and by the Atlanta & Lowry National Bank.

1. The determination of the issue between the county of Fayette, hereafter called county, and the Atlanta & Lowry National Bank, hereafter called Atlanta Bank, depends upon the real meaning of the act of 1915; or, stated within even narrower limits, it depends upon the meaning of this language in the act: "The property of such bank or bankers as well as the security or securities on such bond shall be bound from the time of the execution thereof, for the payment of any and all liability arising from the breach of said bond." Section 4.

The county claims that this language is equivalent to declaring that it had a lien on all of the property of the bank and its securities from the time of the execution of the bond. The Atlanta Bank does not contest this view; that is, that the language is equivalent to declaring a lien. While there might, in the absence of other legislation, be doubt as to giving this effect to such language, we find a legislative declaration to the effect that the language in the statute is equivalent to the declaration of a lien. In the Acts of the General Assembly of 1890-91, p. 104 (embodied in sections 1241 through 1245 of Park's Code of Georgia of 1914), it is declared in section 1244: "Nothing in preceding three sections shall be construed to affect the validity or force of the lien of any such bond from the date thereof as between the parties thereto." The bonds in question are those of "county treasurers," "tax collectors," and "tax receivers."

The law as to the bond of the county treasurer is found in section 572 of such Code, and provides: "When any official bond is executed by any county treasurer, or any person acting as such, the property of said treasurer, or any person so acting, as well as the security or securities on said bond, shall be bound from the time of the execution thereof, for the payment of any and all liability arising from the breach of said bond." And as to the bonds of collectors and receivers provision is found in section 1190 thereof: "The property of collectors, receivers, and of their sureties, is bound, from the execution of their bonds, for the payment of taxes collected and the discharge of their duties." In neither of these is the word "lien" used.

The county contends that the issue is conclusively determined in its favor by the Supreme Court of Georgia in the case of Seay v. Bank of Rome, 66 Ga. 609. There is no question that the language of such decision is sufficient to justify such conclusion, for in the second headnote, which is amply supported from the opinion, is this statement: "(a) The lien of the state is not limited to such property of the depository as may be reached by levy and sale, but extends to all the property, including choses in action," if the issue were raised under conditions similar to those in the Seay Case. The controlling question here is: Did the General Assembly intend to create a lien, not only upon the real estate and physical personal property of the bankrupt from the time of the execution of the bond to the county, but also upon its choses in action and upon the very money which was handled over its counter, both in the hands of innocent purchasers for value?

This court recognizes that it has no power of legislation; that, if the language is plain, the fact of a hardship resulting is not justification for giving any but the natural meaning to the language; but, on the other hand, the real intention of the General Assembly should always be sought; and if "giving a literal interpretation to the words will lead to such unreasonable, unjust or absurd consequences as to compel a conviction that they could not have been intended by the legislature" (25 R. C. L. p. 959), or "where the literal construction of an act will produce results so extraordinary and unjust that they cannot be deemed to have been within the legislative intent, the general language of the act must be restricted so as to accomplish the general intent and declared purpose of the act" (25 R. C. L. p. 971), or "a consideration of the whole legislation, or of the circumstances surrounding its enactment or of the absurd results which follow from giving such broad meaning to the words, makes it unreasonable to believe that the legislator intended to include the particular case" (25 R. C. L. p. 973), then the court should interpret the statute according to its real rather than its apparently literal meaning.

The principles thus cited are sustained by authority as well as common sense, but in no place have I found a more satisfactory statement of these principles than that by Judge Hines in the consideration of this very act in Blalock v. State, 166 Ga. 465, on page 470, 143 S. E. 426, 428: "In the interpretation of a statute the courts must look diligently for the intention of the General Assembly. Penal Code, § 1. This is the cardinal rule in the construction of statutes, and the intention when ascertained must be carried into effect. Erwin v. Moore, 15 Ga. 361. The construction must square with common sense and sound reasoning."

The primary purpose of this act was to escape the expense of a county treasurer and to select a bank or banks which could "keep the money," as was its regular business, and could pay out the money as a disbursing agent as effectively as a county treasurer could do, for in the nature of things he must use a bank wherein to deposit the money, and which bank must pay out the money on his order. Is it credible that the county would have selected an agent, which to be safe and effective must be able to continue to function, and at the same time by the very terms and conditions of its selection deal to it a fatal blow? What is the business of a bank?...

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4 cases
  • In re Shear, 14435.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • January 31, 1956
    ...the power to legislate. See: United States v. Goldenberg, 168 U.S. 95, 18 S.Ct. 3, 42 L.Ed. 394; Koster v. Turchi, 173 F.2d 605; In re Blalock, D.C., 31 F.2d 612, and Braffith v. People of Virgin Islands, 3 Cir., 26 F.2d 646. The legislative department alone has the duty of making the laws,......
  • United States v. Brandt, Crim. No. 21076.
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Northern District of Ohio
    • July 29, 1955
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    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • January 28, 1929
  • State v. Parramore, 20254
    • United States
    • Supreme Court of Georgia
    • November 7, 1958
    ...He may alien or encumber his estate or use it in any way which his convenience or interest may dictate.' In the case of In re Blalock, D.C., 31 F.2d 612, 616, Judge Barrett, the author of the opinion, considering the principle of law we now have under consideration Said: 'Can it be possible......

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