Kelley v. Moab State Bank

• Decision Date: 07 November 1924
• Docket Number: 4073
• Citation: 230 P. 566,64 Utah 290
• Court: Utah Supreme Court
• Parties: KELLY, County Treasurer of Grand County, v. MOAB STATE BANK et al

230 P. 566

64 Utah 290

KELLY, County Treasurer of Grand County, v. MOAB STATE BANK et al

No. 4073

Supreme Court of Utah

November 7, 1924

Appeal from District Court, Seventh District, Grand County; Dilworth Woolley, Judge.

Action by Charles Kelley, as County Treasurer of Grand County against the Moab State Bank and others. From an adverse judgment, plaintiff appeals.

AFFIRMED IN PART, and REVERSED and remanded with directions.

C. A Robertson, of Moab, and Cheney, Jensen, Holman, & Stephens of Salt Lake City, for appellant.

Knox Patterson, of Price, for respondents.

GEO. S. BARKER, District Judge. WEBER, C. J., and GIDEON, THURMAN, and FRICK, JJ., concur. CHERRY, J., being disqualified, did not participate.

OPINION

GEO. S. BARKER, District Judge.

Plaintiff, Charles Kelley, as county treasurer of Grand county, state of Utah (appellant), sued the defendant the Moab State Bank, a corporation, and the defendants W. D. Hammond, as administrator of the estate of F. B. Hammond, deceased, and W. E. Gordon, R. Lee Kirk, Andrew Somerville, J. P. Miller, and D. F. Densel (respondents), as sureties, on a depository bond, to recover judgment for the sum of $ 22,445, public funds of Grand county, deposited by plaintiff with defendant bank subsequent to the giving by said bank of said bond. The bond is set out in the complaint, and is as follows:

"Depositary Bond Covering Deposits,

"State of Utah.

"Know all men by these presents, that we, the Moab State Bank, principal, and F. B. Hammond, R. Lee Kirk, J. P. Miller, W. E. Gordon and Andrew Somerville, D. F. Densel, as sureties, are held and firmly bound unto Charles Kelley, treasurer of Grand county, Utah, and his successor in office, in the sum of twenty-five thousand dollars, for the payment of which well and truly to be made, the said principal hereby binds itself, its successors and assigns, and the said sureties bind themselves, their heirs, executors, administrators and assigns, jointly and severally, firmly by these presents.

"The conditions of this obligation are such that:

"Whereas the said principal, Moab State Bank, has applied for the funds in the hands of the treasurer of Grand county, Utah, to be deposited in said bank, the amount whereof shall be subject to withdrawal or diminution by the said treasurer as the requirements of Grand county shall demand, and the amount may be increased or decreased as the said treasurer may determine. Now, therefore, if the said Moab State Bank, shall at the beginning of each and every month, render to the said treasurer, a statement, in duplicate, showing the daily balance of the county's moneys, held by it during the month preceding, and how the same has been credited, and shall well and truly keep all said sums of money so deposited, or to be deposited, as aforesaid, subject at all times to the check and order of said treasurer, as aforesaid, and shall pay over the same and any part thereof, upon the check or written order of the said treasurer, and to his successor in office as shall be by him demanded, and shall in all respects, save and keep Grand county, Utah, and the said Charles Kelley, or his successor in office, harmless and indemnified for and by reason of making said deposit, or deposits, then this obligation shall be void and of no effect, otherwise to be and remain in full force and virtue:

"Provided, that if the said sureties shall so elect, this bond may be canceled at any time by giving sixty days' notice in writing to the said treasurer and to the person authorized by law to approve such bond, such notice to be accompanied by a sworn statement of all facts and setting forth the reason in connection with such request for cancellation, and this bond shall be deemed canceled at the end of said sixty days, the said sureties remaining liable for all or any acts covered by this bond which may have been committed by the said Moab State Bank up to and including the date of expiration of said sixty days' notice."

The complaint alleges in substance that during all of the times therein mentioned the plaintiff was and now is the duly elected, qualified, and acting county treasurer of Grand county, state of Utah, and that during all of said time the defendant the Moab State Bank was and now is a corporation, organized and existing under the banking laws of the state of Utah, and engaged in business at Moab, Grand county, in this state. It is then alleged that for the purpose of procuring public funds then and thereafter to be in the custody of the plaintiff, to be deposited with said the Moab State Bank, and to secure the repayment thereof to the plaintiff, the said bank, as principal, and the said other defendants, as sureties, made, executed, and delivered to plaintiff their depository bond in writing; same being the bond hereinbefore set out.

It is further alleged in the complaint that the plaintiff accepted and approved said bond, and thereafter at divers dates upon the faith and credit thereof did deposit with said bank the public funds of Grand county, in his custody, in various sums, upon the terms that said bank would pay to the plaintiff on all funds so deposited at the rate of 2 percent. per annum; that on the 8th day of January, 1921, there had been deposited with said bank by the plaintiff public funds of said county, and there was due and owing the said plaintiff on account thereof, by said bank, the sum of $ 22,445, no part of which had been withdrawn by the plaintiff, and no part of which had been paid out by said bank upon the order of or for the use and benefit of plaintiff or said Grand county; that at various times on and between the 8th day of January, 1921, and the 9th day of June, 1921, the plaintiff has made demand of said bank for the payment to plaintiff of the sum so deposited, and that the plaintiff has drawn in due form of law his orders, warrants, and checks upon said bank for said moneys so deposited, but that the said bank has neglected and refused to pay the same or any part thereof, and that there remains due, payable, and unpaid to plaintiff, on account of said deposits, with said bank, the sum of $ 22,445, together with legal interest thereon from the 8th day of January, 1921, all of which said bank has failed, neglected, and refused to pay and still refuses.

It is then alleged in the complaint that the said F. B. Hammond died intestate at Salt Lake City, Salt Lake county, Utah, on the 3d day of May, being at the time of his death a resident of Grand county, Utah; that on the 3d day of September, 1919, after due proceedings had therein, letters of administration upon the estate of said F. B. Hammond, deceased, were issued by the district court of Grand county, Utah, to the defendant W. D. Hammond, who thereupon qualified as such and entered upon the discharge of his duties; and that said letters of administration have not been revoked.

The defendant W. D. Hammond, as administrator of the estate of F. B. Hammond, deceased, demurred to the complaint, both generally and specially, alleging as special grounds that it cannot be ascertained from the complaint whether or not the plaintiff has ever presented his claim to the administrator of the estate of F. B. Hammond, deceased, for allowance, and whether or not the same was allowed or rejected; nor can it be ascertained therefrom just how much the plaintiff claims this defendant owes him. The demurrer was sustained by the trial court, and the complaint was not thereafter amended.

It appears from the record that the defendant D. F. Densel was duly and regularly served with summons, but that the said defendant Densel failed to answer or otherwise plead to the plaintiff's complaint.

The defendant the Moab State Bank filed its separate answer to the plaintiff's complaint.

The defendants Gordon, Kirk, Somerville, and Miller likewise filed their separate answer to the complaint. So far as is deemed material to a determination of this appeal, among other things these defendants alleged as a further defense to plaintiff's complaint:

"That by mutual agreement between these defendants and said plaintiff and said plaintiff and said Moab State Bank, and by operation of law, the said bond so executed on the 1st day of February, 1917, for the then term of said plaintiff as said county treasurer of Grand county, expired with the termination of the said term, of office of said plaintiff, to wit, on the first Monday in January, 1919; that the said depository bond then and there became null and void for all purposes, except for a reasonable time to allow for the election and qualification of a successor in office to the said plaintiff; that, as aforesaid, the plaintiff was thereafter twice elected to succeed himself as treasurer of Grand county, state of Utah, and in view of the aforementioned premises, such reasonable time for the election and qualification of such successor in office expired long prior to the filing and commencement of this action by the said plaintiff.

"That by virtue of the termination of the term of office of the said plaintiff as said county treasurer, on the first Monday of January, 1919, and by reason of the election and qualification of the said plaintiff to succeed himself as the county treasurer of said Grand county, for the term beginning the first Monday in January, 1919, the said depository bond pleaded in paragraph 3 of said complaint was released canceled, and became null, void, and of no further force or effect, because of the change in the obligee named in said bond by reason of the said election and qualification of said plaintiff to succeed himself as county treasurer of Grand county, as aforesaid.

"That by virtue of the premises aforesaid, the said depository bond pleaded in paragraph 3 of said...