Mitchell v. Bank of Ava

• Decision Date: 19 October 1933
• Docket Number: No. 32655.,32655.
• Citation: 65 S.W.2d 99
• Parties: MITCHELL, County Treasurer, et al. v. BANK OF AVA.
• Court: Missouri Supreme Court

65 S.W.2d 99

MITCHELL, County Treasurer, et al. v. BANK OF AVA.

No. 32655.

Supreme Court of Missouri, Division No. 1.

October 19, 1933.

Appeal from Circuit Court, Douglas County; Robert L. Gideon, Judge.

Proceeding by Willis H. Mitchell, Treasurer of Douglas County, and another, against the Bank of Ava, a corporation, in charge of S. L. Cantley, Commissioner of Finance of the State of Missouri, to have a claim given priority. The preference was denied, and the County appeals.

Affirmed.

See, also, 65 S.W.(2d) 104.

Moore & Moore, of Ozark, for appellants.

Farrington & Curtis, Paul W. Barrett, and Chas. M. Farrington, all of Springfield, for respondent.

FERGUSON, Commissioner.

The Bank of Ava, in Douglas county, which on May 10, 1929, had been selected by the county court as depositary of one-third of all the funds of that county, was closed on October 23, 1930, and its "affairs and assets" placed under the control of the commissioner of finance for liquidation. On that date Douglas county had on deposit with the bank, and to its credit, a balance of $15,278.45. Of this amount the county claimed a preference as to $3,941.54 and following the procedure prescribed by statute brought this proceeding in the name of Willis H. Mitchell, treasurer of Douglas county, and Douglas county, seeking to have the claim for $3,941.54 given priority of payment out of the assets of the bank. The preference was denied by the circuit court, and the county brings this appeal.

A statement of the uncontroverted facts upon which the county bases its claim to a preference, together with citation of and reference to applicable statutes, follows.

Pursuant to the statutory requirements and formalities, sections 12184-12186, R. S. 1929 (Mo. St. Ann. §§ 12184-12186, pp. 6455-6458), due compliance therewith having been made, the county court of Douglas county at its regular May term, 1929, and on the 10th day of May, by order of record, selected the Bank of Ava, Citizens' Bank of Ava, and People's Bank of Ava, each as depositary of one-third of the funds of Douglas county for the ensuing statutory term, said banks to pay the county interest at the rate of 3½ per cent. monthly on daily balances. Section 12187, R. S. 1929 (Mo. St. Ann. § 12187, p. 6459), provides: "Within ten days after the selection of depositaries, it shall be the duty of each successful bidder to execute a bond payable to the county, to be approved by the county court and filed in the office of the clerk thereof, with not less than five solvent sureties, who shall own unencumbered real estate in this state of as great value as the amount of said bond, or with a surety or trust company authorized by the laws of this state to execute bonds as surety * * * and said bond shall be conditioned for the faithful performance of all the duties and obligations devolving by law upon said depositary and for the payment upon presentation of all checks drawn upon said depositary by the proper officers of said county or any township whenever any funds shall be in said depositary, and that all interest will be paid promptly, and that all said funds shall be faithfully kept and accounted for according to law."

The statute, section 12185 (Mo. St. Ann. § 12185, p. 6457), requires that the proposal or bid made by a bank to become depositary for county funds shall be accompanied by a certified check in a proportionate sum therein specified, and then provides that, "upon his failure to give the bond required by law, the amount of said certified check shall go to the county as liquidated damages, and the court may order the county clerk to readvertise for bids." We find further reference to the certified check in section 12186 (Mo. St. Ann. § 12186, p. 6458): "The county clerk shall, in opening the bids, return the certified checks deposited with him to the banks whose bids were rejected, and on approval of the bonds of the successful bidder or bidders return the certified check or checks respectively to the bank or banks whose bid or bids are accepted." Neither of the three banks so selected as depositaries on May 10, 1929, filed its depositary bond within 10 days thereafter as directed by section 12187, nor for failure to do so did the county court, as authorized by section 12185, declare the amount of the certified checks deposited forfeited to the county as liquidated damages and order a readvertisement for bids. The three depositary bonds were not filed until August 7, 1929, on which date each bank filed its bond. The bonds were on the same date examined, "found to be in proper form and sufficient amounts," and approved by the county court, as appears by its order of record. It appears that the defendant, Bank of Ava, had been a legally designated and acting county depositary under a depositary contract for the statutory term next preceding May 10, 1929, and on that date was indebted to the county for a balance of county funds deposited during such preceding term, and then standing to the credit of the county, in the amount of $9,166.88. Following the action of the county court of May 10, in selecting the defendant, Bank of Ava, as a depositary of one-third of all county funds for the ensuing statutory term, the county treasurer continued to make deposits of county funds with defendant bank, presumably one-third of all such funds, and the bank to pay the county interest on daily balances at the rate fixed by its bid or proposal of May 10th. From May 10th to the date of the filing and approval of the bond, August 7th, the treasurer deposited county funds with defendant bank in an aggregate amount of $3,941.54, for which the preference is asked. During the same period the county, by its treasurer, drew checks against its account in this bank, which were paid, in the aggregate amount of $5,220.96. The county court has filed suit against the sureties on the bond asking judgment thereon for $15,278.45, the full amount of the balance to the credit of the county with the bank at the time the bank was closed, alleging that the sureties are liable under the obligation of the bond in such amount. That suit was filed after this claim for preference as to $3,941.54 of such amount was filed. As we understand, no trial of that cause has been had, and same remains pending, as appellants state in their brief, subject to the disposition of this claim and another suit now pending in this court on appeal involving a right of set-off by the county as to a certain amount.

The county and county treasurer having been joined as claimants and plaintiffs are the appellants, but we shall hereinafter refer to the claim as made by the county, since under the statute (section 12188 [Mo. St. Ann. § 12188, p. 6461]), the county itself and not the county treasurer is the depositor. Boone County v. Cantley, 330 Mo. 911, 51 S.W.(2d) 56.

The contention of the county is that the deposits, aggregating $3,941.54, made in the period from May 10, 1929, to the date of the filing and approval of the depositary bond on August 7, the bank not having qualified as a depositary, were necessarily received by the bank with full knowledge that it had not complied with the essential statutory requirements to constitute it a legal depositary, and such deposits were therefore impressed with a trust and received and held by the bank as trust funds entitling the county to a preference in the amount thereof; that upon the filing of the bond the status of legal depositary was established and thereafter existed; that the deposits thereafter made were legal deposits being received in the capacity of depositary and apparently that the bond only covered and secured such deposits as were made after its filing and approval. As to the doctrine or rule of appropriation of payments, the county points out that, on May 10, the balance on deposit in the account and to the credit of the county with defendant bank was $9,166.88; that thereafter, and to August 7, county funds aggregating $3,941.54 were deposited, and during the same period withdrawals aggregating $5,220.96 were made, and such withdrawals under the rule of appropriation of payments must be considered as being paid out of the balance of $9,166.88 shown to the credit...