State ex rel. Kopriva v. Larson

• Decision Date: 27 June 1922
• Citation: 48 N.D. 1144,189 N.W. 626
• Parties: STATE ex rel. KOPRIVA, County Auditor, v. LARSON et al.
• Court: North Dakota Supreme Court

48 N.D. 1144

189 N.W. 626

STATE ex rel.KOPRIVA, County Auditor,

v.LARSON et al.

Supreme Court of North Dakota.

June 5, 1922.

Rehearing Denied June 27, 1922.

Syllabus by the Court.

A national bank, acting as a legal depositary and depository of county funds, occupies a position quasi official in its character.

Mandamus is an appropriate remedy against a former county treasurer and a bank, acting as a legal depositary, to compel the payment of public funds placed upon time deposit.

The county auditor, by reason of the connection of his duties, is a proper person to appear as relator in such proceedings.

Section 7 of chapter 147, Laws 1919 (Bank of North Dakota Act), and article 11 of chapter 42 of the Political Code (sections 3315-3329, Comp. Laws 1913), are construed, and it is held that the powers of county commissioners to designate legal depositaries and to direct the placing of county funds upon time deposit were not repealed by said section 7.

County commissioners must act as a board, and through action taken at proper meetings.

Section 3319, Comp. Laws 1913, construed, and it is held, that county commissioners have no authority to direct a time deposit of county funds for a longer period than one year.

Where a former county treasurer, shortly before the expiration of his term of office, deposited approximately $166,000 of county funds upon time deposit in various banks of the county, without the formal consent or direction of the county commissioners, and where thereafter the county commissioners, by formal resolution, set apart $50,000 of such moneys upon time deposit in a sinking fund, which amount, pursuant to certificates of deposit, did not become due for more than one year thereafter, it is held that the disposition of such public moneys by the county treasurer was unauthorized, and that the county commissioners had no authority to place public funds upon time deposit for a longer period than one year.

Appeal from District Court, Burke County; Lowe, Judge.

Mandamus proceeding by the State of North Dakota, on the relation of C. J. Kopriva, County Auditor of Burke County, against Lawrence Larson and the First National Bank of Bowbells, N. D. Writ awarded, and the defendants appeal. Affirmed subject to the right of the defendant bank to make full payment and to the right of the county commissioners to exercise their powers.

Birdzell, C. J., and Christianson, J., dissenting.

Palda & Aaker, of Minot, for appellants.

E. R. Sinkler, of Minot, for respondent.

Statement.

BRONSON, J.

This is one of several proceedings brought against a former county treasurer and a national bank. Through mandamus, the relator seeks to compel the payment of county funds by the defendant Larson, a former treasurer of Burke county, and, by the defendant bank, a depository of county funds upon time deposit.

The relator, as county auditor, has instituted this proceeding upon instructions received from the state auditor, pursuant to section 3359, C. L. 1913, which, in such case, imposes upon the auditor the duty to institute suit, where a county treasurer has failed to pay over all money with which he may stand charged. The record is long; the exhibits voluminous. No attempt will be made herein to state money figures with exactitude as if upon an accounting. Such facts only are stated which are deemed sufficient for understanding the legal questions raised, involved, and deemed determinative in this proceeding. These facts are as follows: The defendant Larson was the county treasurer of Burke county for two terms ending on May 7, 1921, when J. R. Jensen, his successor, assumed the office. The county funds of Burke county consisted of moneys that it possessed for itself, or that it had collected for, and owed the state, or townships, school districts, cities, and villages in the county. In April, 1921, county funds were deposited either upon open account or upon time deposit in various banks of the county, including the defendant bank. Shortly before the expiration of the defendant's term of office, a meeting of the bankers in the county was held, together with the defendant Larson and the county commissioners, or some of them. The banks, theretofore designated as legal depositories, agreed to pay 6 per cent. per annum upon county funds placed with them upon time deposit. The bankers brought with them blank certificates of deposit. The defendant Larson, with the verbal consent of the county commissioners, or some of them, as it appears, agreed to place county funds upon time certificates of deposit in such banks. Accordingly, on April 28, 1921, or thereabouts, the defendant Larson placed upon time deposits about $166,000 of county funds. For such funds certificates of deposit were issued, bearing 6 per cent. interest per annum, and falling due, respectively, in intermittent periods from July 1, 1921, until December 1, 1922. The defendant bank issued certificates of deposit as follows: No. 2616, dated April 28, 1921, due August 1, 1921, for $2,000. No. 2617, dated April 28, 1921, due Oct. 1, 1921, for $2,000. No. 2618, dated April 28, 1921, due Dec. 1, 1922, for $5,000. No. 2619, dated April 28, 1921, due Dec. 1, 1922, for $5,000. No. 2620, dated April 28, 1921, due Dec. 1, 1922, for $5,000. No. 2621, dated April 28, 1921, due Oct. 29, 1921, for $2,000.

In his testimony, the defendant Larson stated that the reasons for so doing were that there was no immediate use for such county funds, and that the county would thereby secure a higher rate of interest. The defendant, upon the surrender of his office, delivered the certificates of deposit to his successor, who refused to receive them, and demanded the money therefor. Demand was also made upon the county commissioners that suit be commenced against the former county treasurer.

On July 8, 1921, the county commissioners adopted the following resolution:

“The following named banks of Burke county, North Dakota, are designated as depositaries to receive deposits to create a sinking fund to retire the seed and feed bond of $125,000.00 due April 1, 1926, to which certificates of deposits have been issued as follows, as there is now over fifty thousand dollars ($50,000.00) in the said seed and feed grain fund:

+----------------------------------------------------------------+
                ¦Name of Bank.                    ¦Date.  ¦Due.   ¦Amount.  ¦Int.¦
                +---------------------------------+-------+-------+---------+----¦
                ¦First National Bank, Bowbells    ¦4-28-21¦12-1-22¦$6,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦Burke County State Bank, Bowbells¦4-28-21¦12-1-22¦$5,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦Farmers' State Bank, Columbus    ¦4-28-21¦12-1-22¦$5,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦Farmers' State Bank. Battleview  ¦4-28-21¦12-1-22¦$2,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦First State Bank, Coteau         ¦4-28-21¦12-1-22¦$3,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦Citizens' State Bank, Flaxton    ¦4-28-21¦12-1-22¦$3,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦First Bank of Flaxton            ¦4-28-21¦12-1-22¦$2,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦First State Bank, Lignite        ¦4-28-21¦12-1-22¦$3,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦Portal State Bank, Portal        ¦4-28-21¦12-1-22¦$4,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦First International Bank, Portal ¦4-28-21¦12-1-22¦$2,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦State Bank, Powers Lake          ¦4-28-21¦12-1-22¦$6,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦First State Bank, Powers Lake    ¦4-28-21¦12-1-22¦$6,000.00¦6%  ¦
                +---------------------------------+-------+-------+---------+----¦
                ¦First State Bank, Northgate      ¦4-28-21¦12-1-22¦$3,000.00¦6%  ¦
                +----------------------------------------------------------------+
                

It appears that there was then something over $50,000 in the seed and feed fund, the same being the unexpended proceeds of a seed and feed county loan negotiated by the county in March, 1921. The county auditor, accordingly, on July 21, 1921, instituted proceedings against the former county treasurer and the banks. The petition for the writ alleges many of the facts above stated, that the petitioner has no adequate remedy at law, and that the county will be unable to pay obligations to the state and other political subdivisions and to carry out its various governmental functions without registering warrants, unless a writ issue. The defendant interposed a demurrer, a motion to quash and an answer wherein is alleged the legality of the time deposits made. Trial was had commencing July 25, 1921. The testimony taken was made applicable to all of the cases instituted. The trial court overruled the demurrer and motion to quash. The present county treasurer testified that, on May 7, 1921, there were over $32,000 in registered warrants; that since that time $76,000 in registered warrants, had been issued; that on April 20, 1921, there were due the political subdivisions of the county about $109,000. The defendant Larson testified that, on April 15, 1921, there were due the state about $26,000 for hail insurance moneys; that when he left office there were, exclusive of the certificates of deposits, about $145,000, consisting of $66,000, seed and feed moneys, and, the balance, other moneys. The present county treasurer testified that, on June 1, 1921, there were due the state from Burke county about $65,000; that then there were warrants outstanding amounting to over $109,000.00, of which $92,000 had been registered; that his cash on hand then was about $4,000...