Slope Cnty. v. Douglas
| Decision Date | 07 July 1923 |
| Citation | 194 N.W. 385,49 N.D. 1026 |
| Parties | SLOPE COUNTY et al. v. DOUGLAS et al. |
| Court | North Dakota Supreme Court |
OPINION TEXT STARTS HERE
Syllabus by the Court.
Chapter 56 of the Session Laws of 1921, providing for legal depositaries of public funds, is construed and held to require the deposit of all funds in the custody of the various treasurers of municipal corporations in public depositaries qualifying under the act.
Where, at the time of the taking effect of the depositary law (chapter 56, Laws of 1921), public funds were on demand deposit in banks which did not meet the requirements of the law, and where the deposit was allowed to remain in the noncomplying banks until they failed three months afterward, the treasurer and his bondsmen are liable for the loss sustained.
The evidence is examined and held to show that there was no settlement had between the county treasurer and the county commissioners or between the county treasurer and his successor in office on the basis of the unauthorized deposits being accepted as cash.
Appeal from District Court, Slope County; Thomas H. Pugh, Judge.
Action by Slope County and O. F. Metcalf, as Auditor thereof, against J. S. Douglas and another. From a judgment for plaintiffs, both parties appeal. Modified and affirmed.William Langer, of Bismarck, and C. P. Brownlee, State's Atty., of Amidon, for plaintiffs.
George F. Shafer, Atty. Gen., and Charles Simon, Asst. Atty. Gen., for defendant State Bonding Fund.
T. B. Torkelson, of Bowman, for defendant Douglas.
This is an action to recover certain moneys belonging to Slope county, which were deposited by the defendant Douglas, as county treasurer, in the First State Bank and the Slope County Bank of Amidon. The action is against both the county treasurer and the state bonding fund, as surety on his official bond. By stipulation the case was tried before the judge of the district court without a jury. A judgment was rendered in favor of the plaintiff for $24,576.51, plus interest and costs. From this judgment the plaintiff appeals, assigning error in the failure of the trial court to grant a judgment for the full amount of the bond, $50,000. The defendants also appeal, specifying as error the findings of the trial court to the effect that there was no settlement made with the board of county commissioners at the time of the retirement of the defendant Douglas as county treasurer, in finding that the defendant Douglas was unable to deliver to his successor, on May 1st, at the expiration of his term, any of the money on deposit in either the First State Bank or the Slope County Bank; and in holding the defendants to be liable for moneys deposited in the banks mentioned subsequent to March 8, 1921.
[1] The undisputed facts are: Douglas was elected county treasurer of Slope county in November, 1918, assuming charge of the office May 7, 1919, retiring two years later. He was bonded by the defendant state bonding fund in the sum of $50,000, the bond being in the usual form, conditioned for the faithful discharge of the duties of the office and the rendering of “a true account of all moneys and property of every kind that shall come into his hands as such officer and pay over and deliver the same according to law.” In January, 1919, the board of county commissioners designated the First State Bank and the Slope County Bank as county depositaries. They qualified by furnishing bonds as required. From time to time moneys were deposited in these banks and in the Bank of North Dakota after its organization in the summer of 1919. Section 7 of the Bank of North Dakota Act required, with certain qualifications immaterial here, the deposit of public funds in such bank. On December 2, 1920, an initiated law (Laws of North Dakota for 1921, p. 255) went into effect, amending the Bank of North Dakota Act (chapter 147, Laws of 1919) by excluding from the enumeration of the funds required to be deposited in such bank, county funds, among others likewise excluded. On March 8, 1921, an emergency act of the Legislature was approved prescribing regulations under which public funds should be deposited (chapter 56, Laws of 1921). The banks hereinbefore mentioned did not comply with the requirements of this emergency measure by furnishing bond or in any other manner. Between the date of the taking effect of this law and the expiration of Douglas' term of office in May, he deposited in the two banks named, $24,576.51. In addition to this, there were funds which had been deposited by him in these banks previous to March 8th, amounting to over $70,000. When Douglas' term of office expired, difficulty was experienced in turning over the office to his successor, one Johnson, who refused to receive the evidences of indebtedness of these banks as cash. Both banks were closed on or about June 10th following.
The contentions on this appeal involve: (1) The liability of the defendants for moneys placed in the two banks in question on original deposit subsequent to the taking effect of the emergency law, March 8, 1921. (2) The liability of the defendants for funds which the treasurer kept on deposit in the same banks after the taking effect of this law which prescribed the qualifications for depositaries. (3) Whether or not the liability, if any, is qualified by the circumstances in connection with the transfer of the office from Douglas to Johnson on or about May 1st.
Considering these questions in the order they are stated: Chapter 56 of the Laws of 1921, in prescribing the qualifications for depositaries of public funds, lays down certain definite requirements, principal of which is the furnishing of a bond. It expressly makes all state and national banks complying with the provisions of the act legal depositaries, but it forbids the deposit of money therein until a bond is furnished in an amount at least equal to the largest deposit that may at any time be in the depository. Upon the record before us, it is clear that the banks in question had not complied with the law, and that, during the period of their noncompliance, the treasurer deposited $24,576.51. As to the amount so deposited, we deem it to be clear that the treasurer is liable personally.
[2] The question as to the liability of the defendants for funds which the treasurer had previously deposited in these banks, and which were not withdrawn and placed in a depositary qualified under the act which became effective on March 8th, involves somewhat different considerations. The question is presented of the duty of the officer in circumstances created by the passage of the new law. In considering this question, it must be borne in mind that constructive notice of the passage of the emergency law was conveyed to the officer and to his bondsmen, and the question must...
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Mchenry County, North Dakota, a Municipal Corporation v. The Northern Trust Company of Fargo, a Corp.
... ... the provisions of the new law, the act would have been ... unlawful. Slope County v. Douglas, 49 N.D. 1026, 194 ... N.W. 385, 386. Surely, on the facts in this record, no ... ...
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Mchenry Cnty. v. N. Trust Co. of Fargo
...Had deposits been made in that bank notwithstanding the provisions of the new law, the act would have been unlawful. Slope Co. v. Douglas (N. D.) 194 N. W. 385, 386. Surely, on the facts in this record, no rule of law or principle of justice supports the proposition that there can be impose......
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Olsness v. Baird
...and a judgment obtained for the full amount of the bond, which judgment, with interest and costs, amounted to $ 56,954.51. (See 49 N.D. 1026, 194 N.W. 385.) This was paid the State Bonding Fund. The banks in question have failed and their assets are in possession of the defendant Baird, as ......
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Olsness v. Baird
...fund, and a judgment obtained for the full amount of the bond, which judgment, with interest and costs, amounted to $56,954.51. See 194 N. W. 385. This was paid by the state bonding fund. The banks in question have failed and their assets are in possession of the defendant Baird, as receive......