Ralls County v. Commissioner of Finance
Decision Date | 06 December 1933 |
Citation | 66 S.W.2d 115,334 Mo. 167 |
Parties | Ralls County, Appellant, v. The Commissioner of Finance of Missouri, in Charge of the Liquidation of the Farmers and Merchants Bank of Center |
Court | Missouri Supreme Court |
Appeal from Ralls Circuit Court; Hon. Chas. T. Hays, Judge.
Affirmed.
W W. Crockett and Mahan, Mahan & Fuller for appellant.
(1) The defendant, bank at the day it closed was either holding the funds of Ralls County as a legally constituted depository or in violation of the statutes governing depositories, in which case the law creates a trust by operation of the law. Art. 9 Chap. 85, R. S. 1929; Secs. 9362, 12184-12189, R. S. 1929; School District of Cameron v. Cameron Trust Co., 51 S.W.2d 1025; Consolidated School Dist. No. 4 v. Citizens Sav. Bank, 21 S.W.2d 788, and cases cited under Point 4. (2) The designation by the county court of the defendant bank as a depository did not create such bank a legal depository until bond was given and approved by the court. Art. 9, Chap 85, R. S. 1929; Everton Special Road Dist. v. Bank of Everton, 55 S.W.2d 336; Clearmont School Dist. v. Jackson Bank, 37 S.W.2d 1006; Boone County v. Cantley, 51 S.W.2d 56, and cases cited under Point 4. (3) The officers of the county handling public funds are agents of limited powers. Their permitting the money of the county to remain in the bank not a legally constituted depository was in contravention of the statutes. Harrison Township v. Peoples State Bank of Bronaugh, 46 S.W.2d 165, and cases cited under Point 4. (4) The holding of the funds by the defendant bank after July 3, 1931, and the bank's failure to execute bond under the new designation amounted in law to the redeposit of the funds after the expiration of its term as a legal depository. Huntsville Trust Co. v. Noel, 321 Mo. 758, 12 S.W.2d 754; White, County Treasurer, v. Greenlee, 49 S.W.2d 132; School Dist. of Cameron v. Cameron Trust Co., 51 S.W.2d 1025; Aurora School Dist. v. Bank of Aurora, 52 S.W.2d 484; City of Aurora v. Bank of Aurora, 52 S.W.2d 496; Consolidated School Dist. No. 5 New Madrid Co. v. Parma Bank, 52 S.W.2d 425; State ex rel. Becker v. Farmers Exchange Bank of Gallatin, 56 S.W.2d 129; State v. Page Bank of St. Louis County, 14 S.W.2d 600; Macon v. Farmers' Trust Co., 21 S.W.2d 644.
Drake Watson for respondent.
(1) Receipt of the county money by the Farmers & Merchants Bank after it had legally qualified as a county depository, was lawful and the relation of debtor and creditor existed from then on. The county deposits thereupon became merged in the general assets of the bank. Henry County v. Salmon, 201 Mo. 136; State v. Pate, 268 Mo. 431; Board of County Comrs, of Redwood v. Citizens Bank of Redwood, 67 Minn. 236; Boone County v. Cantley, 51 S.W.2d 56; City of Aurora v. Bank of Aurora, 52 S.W.2d 496; In re Holland Banking Co., 313 Mo. 307, 281 S.W. 702. (2) The authority and scope of dealing by and of the county in selecting county depositories and handling county money and funds is controlled by the legislatively established policy. In re Holland Banking Co., 281 S.W. 702, 313 Mo. 307; First American Bank & Trust Co. v. Town of Palm Beach, 96 Fla. 247, 117 So. 900; Boone County v. Cantley, 51 S.W.2d 56; Sec. 12188, R. S. 1929; Phoenix Trust Co. v. Holt, 279 S.W. 714, 312 Mo. 563; Paul v. Draper, 158 Mo. 197; Roalestone v. Natl. Bank of Commerce, 252 S.W. 394, 299 Mo. 57; Dexter v. McDonald, 95 S.W. 359, 196 Mo. 373; Thompson v. Lindsey, 145 S.W. 472, 242 Mo. 53; Leslie v. Carter, 144 S.W. 797, 240 Mo. 552; Troll v. St. Louis, 168 S.W. 167, 257 Mo. 626.
Frank, P. J. All concur except Hays, J., not sitting.
Action by Ralls County to establish a preferred claim against the Farmers and Merchants Bank of Center Missouri. The Commissioner of Finance in charge of the liquidation of the bank allowed the claim in the sum of $ 24,500 as a common claim. The circuit court denied a preference and claimant appealed.
The cause was tried on the following agreed statement of facts:
The sole issue in the case is the character of the deposit. If the deposits made by the bank were lawful, general deposits, the title to the money deposited passed to the bank, and the relation of the county to the bank was that of a general creditor. On the other hand, if the deposits were unlawful, title to the money deposited did not pass to the bank, but the fund, in the hands of the bank, is a trust fund, and the county is entitled to a preference. A proper determination of these questions settles the case.
Article IX. Chapter 85, Revised Statutes 1929, makes it the mandatory duty of the county court to select depositaries in which the funds of the county shall be deposited, and provides in detail how such depositaries shall be selected and qualified. Section 12184 of said article makes it the duty of the county court of each county in the State, at the May Term thereof, in the year 1909, and every two years thereafter to advertise for bids and receive proposals from banking corporations, associations or individual bankers in such county as may desire to be selected as depositaries of the funds of said county. Section 12185 provides procedure for bidders. Section 12186 relates to opening of bids, etc. Section 12187 provides the character and kind of bonds to be given by county depositaries. Section 12188 provides for the approval of bonds tendered by selected depositaries, and for the transfer of county funds to the selected and qualified depositaries.
A county has no lawful right to deposit county funds except in a...
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