State ex rel. First Nat. Bank of Crete v. Bartley

• Decision Date: 20 February 1894
• Citation: 39 Neb. 353,58 N.W. 172
• Parties: STATE EX REL. FIRST NAT. BANK OF CRETE v. BARTLEY, STATE TREASURER.
• Court: Nebraska Supreme Court

39 Neb. 353

58 N.W. 172

STATE EX REL. FIRST NAT. BANK OF CRETE

v.BARTLEY, STATE TREASURER.

Supreme Court of Nebraska.

Feb. 20, 1894.

Syllabus by the Court.

1. In construing a statute, effect must be given, if possible, to every word, clause, and sentence therein. In other words, a statute should be so construed as to make all its parts harmonize with each other, and render them consistent with its general scope and object.

2. The term “several current funds.” as employed in section 1 of the act of the legislature of 1891, entitled “An act to provide for the depositing of state and county funds in banks,” construed to mean all the moneys belonging to the state, in the possession or under the control of the state treasurer.

3. The subject-matter of said act, and the obvious scope and purpose of its many provisions, leave no room for doubt that the legislature intended the statute should apply alike to each of the different funds of the state treasury.

4. Where money is deposited in a bank on an open account, subject to check of the depositor, and not received as a special deposit,--the bank agreeing to pay interest on the money,--the transaction, although called a “deposit,” is in substance and legal effect, a loan. State v. Keim, 8 Neb. 63, followed.

5. Under section 9, art. 8, of the state constitution, moneys belonging to the several permanent educational funds of the state cannot be “invested or loaned except on United States or state securities, or registered county bonds.”

6. The depositing in banks of public funds under the provisions of the depository law constitutes a loan and investment of the moneys so deposited.

7. Held, that the said law, in so far as it requires the depositing of the moneys belonging to the permanent educational funds of the state in banks, contravenes section 9, art. 8, of the constitution, and said law is inoperative as to said funds.

Original application, on the relation of the First National Bank of Crete, for mandamus to Joseph S. Bartley, state treasurer. Granted.Jas. W. Dawes, for relator.

Geo. H. Hastings, Atty. Gen., and John H. Ames, for respondent.

NORVAL, C. J.

This is an application by the relator, the First National Bank of Crete, for a peremptory writ of mandamus to Joseph S. Bartley, state treasurer, to compel respondent to deposit with relator a portion of the moneys in the state treasury, according to the requirements of the act passed by the state legislature of 1891, entitled “An act to provide for the depositing of state and county funds in banks.” The petition charges, in substance, that on the 9th day of January, 1894, the governor, attorney general, and secretary of state, in pursuance of the provisions of said act, designated the First National Bank of Crete as a state depository, and on said day said bank executed and delivered a bond conditioned as required by said law, which bond, and the sureties thereon, were duly accepted and approved by the proper officers; that only three other banks have complied with the provisions of said act of the legislature, so as to entitle them to the deposit of state funds, and that the amount of the bonds furnished by each of said other banks was and is $100,000, so that the aggregate amount which the respondent is authorized at any time to have on deposit in all of said banks, pursuant to said act, is $150,000; that respondent has refused to deposit any of the moneys now in the state treasury with the relator, although requested so to do; that respondent, at the time of such demand and refusal, stated that all the moneys belonging to the state, which he is empowered by said act to deposit, were already deposited in the said several banks, except moneys belonging to the following funds: Sinking, relief, permanent school, temporary school, permanent university, library, agricultural college endowment, normal school endowment, temporary university, normal school interest, and saline. The petition further charges that respondent refuses to deposit in relator's bank any of the money belonging to either of the above-enumerated funds, although the amount in his possession, and belonging to any one of said funds, added to the amount on deposit by said treasurer with the said other banks, exceeds in the aggregate the sum of $150,000, and that the sole reason given by the respondent for his refusal to deposit in the bank of the relator any of the moneys in the above-mentioned funds was and is that none of said moneys are “current funds,” within the meaning of the said depository law. The cause was submitted on a general demurrer to the petition.

The first question in this case is one of construction to be given to the act above mentioned, relating to the deposit of public moneys in banks. Was it the intention of the legislature to require all moneys coming into the state treasury to be deposited, or only a certain portion thereof?

Sections 1 and 2 of said act (chapter 50, Laws 1891) are in these words: “Section 1. The state treasurer shall deposit, and at all times keep in deposit for safe keeping, in the state or national banks, or some of them doing business in the state, and of approved standing and responsibility, the amounts of money in his hands belonging to the several current funds in the state treasury, and any such bank may apply for the privilege of keeping on deposit such funds or some part thereof; all such deposits shall be subject to payment when demanded by the state treasurer on his check and all banks receiving and holding such deposits as aforesaid, shall be required to pay, and shall pay to the state for the privilege of holding any such deposit not less than 3 per cent. per annum upon the amounts so deposited, as hereinbefore provided, and subject also to such regulations as are imposed by law and the rule adopted by the state treasurer for receiving and holding such deposits. Sec. 2. The amount to be paid by any and all banks under the provisions of this act for the privilege of keeping public funds on deposit shall be computed on the average daily balances of the public moneys kept on deposit therewith, and shall be paid and credited to the state quarterly on the first days of January, April, July and October of each and every year, and the treasurer shall require every such depository to keep separate accounts of such several funds of the state as may be deposited, showing the name of each fund to which the same belongs and the amounts and sums paid to the state for the privilege of keeping the same on deposit as aforesaid, and to each of said funds respectively shall be credited directly to the account of the fund or funds so held on deposit, in proportion to the amount of such funds so held.” By section 3, each bank designated as a depository under the act is required to give a bond for the safe-keeping and payment of all deposits, and the accretions thereof, conditioned that it will render each month to the state treasurer a statement, in duplicate, showing the several daily balances, and the amount of state moneys held by it during the month, the amount of the accretions thereof, how credited separately, and for the payment of the deposit, and the accretions accruing thereon, upon the presentation of the check of the state treasurer, and also that such depositary will faithfully discharge the trust and comply with the provisions of the act. The section further provides the form of the bond, names the officer with which the same shall be deposited, and forbids the treasurer having on deposit in any bank, at one time, moneys exceeding one-half of the penalty of the bond. Section 4 provides that “the making of profit, directly or indirectly, by the state treasurer, out of any money in the state treasury belonging to the state, the custody of which the state treasurer is charged with, by loaning, depositing, or otherwise using it, or depositing the same in any manner, or the removal by the state treasurer, or by his consent, of such moneys, or a part thereof, out of the vault of the treasurer's department, or any legal depository of the same, except for the payment of warrants legally drawn or for the purpose of depositing the same in the banks selected as depositories under the provisions of this act, shall be deemed guilty of felony, and on conviction thereof shall be subjected to punishment in the state penitentiary for the term of not more than two years, or a fine not exceeding five thousand ($5,000) dollars, and shall also be liable under and upon his official bond for all profits realized from such unlawful using of such funds. And it is hereby made the duty of the state treasurer to use all reasonable and proper means to secure to the state the best terms for the depositing of the money belonging to the state, consistent with the safe keeping and prompt payment of the funds of the state when demanded.” The next section prescribed the penalty for the willful failure or refusal of the state treasurer to comply with the provisions of the act.

Counsel for the relator insists that it is the duty of the state treasurer to keep on deposit in the several banks designated as depositories all money received by him belonging to the state, while the respondent contends that the moneys belonging to what is commonly known as the “general fund”--a fund created for the purpose of paying the salaries of the state officers, and defraying the general expenses of the state government--are the only moneys to which the depository act applies. The principal controversy in the case is as to the meaning of the term “several current funds,” as used in the section first above quoted. The decisions of the courts of other states do not aid us in our investigation. In fact, we have been unable to find a law upon the statute book of any state, relating to the deposit of public moneys in banks, precisely like our own. In most of the states having a depository law, the treasurer is either required by express...