State ex rel. Sorensen v. First State Bank of Alliance
| Decision Date | 10 February 1932 |
| Docket Number | 28139 |
| Citation | 240 N.W. 747,122 Neb. 502 |
| Parties | STATE, EX REL. C. A. SORENSEN, ATTORNEY GENERAL, APPELLEE, v. FIRST STATE BANK OF ALLIANCE: NATIONAL SURETY COMPANY, INTERVENER, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Box Butte county: EARL L. MEYER JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
1. Pursuant to the provisions of section 77-2506, Comp. St 1929, county treasurers are authorized to deposit county funds in banks only as a general and not as a special deposit, and are required to take as security for such deposits a pledge of assets of the banks or a depository bond.
2. A state bank, receiving a deposit of county funds, pursuant to the provisions of section 77-2506, Comp. St. 1929, and securing such deposit by the pledge of assets and the giving of depository bond, does not hold such deposit as a trust fund.
3. Where a county deposits its funds in a state bank and exacts as security therefor a pledge of some of the bank's assets, and also exacts a depository bond as further security, such deposit is one otherwise secured and is not entitled to share a lien on the assets of the bank on an equality with depositors in a class not otherwise secured.
4. " Where the language of a statute is plain and unambiguous and its meaning clear and unmistakable, there is no room for construction, and the courts are not permitted to search for its meaning beyond the statute itself." 25 R.C.L. 957, § 213.
5. " The legislature has power to make reasonable classifications of persons and objects for the purposes of legislation affecting diversely the different classes." State v. First State Bank, 122 Neb. 109, 239 N.W. 646.
6. " Legislative classification of depositors in state banks for the purpose of determining priority of claims in the event of insolvency held valid." State v. First State Bank, 122 Neb. 109, 239 N.W. 646.
7. Section 8-1,102, Comp. St. 1929, violates neither the state Constitution prohibiting special and class legislation nor the Fourteenth Amendment to the Federal Constitution, guaranteeing equal protection of the laws.
Appeal from District Court, Box Butte County; Meyer, Judge.
Proceedings by the State, on the relation of C. A. Sorensen, Attorney General, against the First State Bank of Alliance, wherein the National Surety Company intervened. From a judgment classifying the claim of intervener against defendant, an insolvent state bank, as a general rather than a preferred claim, intervener appeals.
Affirmed.
See, also, 239 N.W. 646.
Crofoot, Fraser, Connolly & Stryker, for appellant.
F. C. Radke, Barlow Nye, M. Craft Radke and C. M. Skiles, contra.
Howell, Tunison & Joyner, amici curiae.
Heard before GOSS, C. J., ROSE, DEAN, GOOD, EBERLY, DAY and PAINE, JJ.
From a judgment of the district court, classifying the claim of intervener against defendant, an insolvent state bank, as a general rather than a preferred claim, intervener has appealed. There is no controverted issue of fact. Only questions of law are involved.
The defendant bank became insolvent and was placed in the hands of a receiver in February, 1930. At the time the bank became insolvent Box Butte county had on deposit in the bank $ 28,961.67. The bank had secured this deposit by the pledge of $ 10,000 in liberty bonds and three depository bonds, one of which, for $ 8,500, was furnished by intervener. The liberty bonds have been sold and applied on the amount of the deposit. Intervener has paid to the county the amount of the bond and has taken from the county an assignment of its deposit account to the extent of $ 8,500. Intervener filed with the receiver its claim, based on the assignment, asking its allowance as preferred, first, as a trust fund and preferred over claims of depositors, and, in the event the court does not so allow it, that it be classified as a valid preferred depositors' claim.
Intervener contends that county funds, derived from the collection of taxes, are trust funds in the hands of the county treasurer; that a bank receiving same for deposit, with such knowledge, must account for the same as trust funds, and that claims for such trust funds are entitled to payment before the payment of claims of other depositors. In support of this contention, intervener cites section 77-2506, Comp. St. 1929, which, in part, provides that the "county treasurer of each and every county in the state of Nebraska shall deposit, and at all times keep on deposit for safe-keeping in the state, national or private banks doing business in the county, and of approved and responsible standing, the amount of moneys in his hands collected and held by him as such county treasurer." The statute also provides for the payment of interest by the bank upon funds so deposited. It is argued that the words "for safe-keeping" indicate a purpose to make it a special deposit or bailment, and that the identical funds shall be kept and preserved and returned or paid out on warrants issued by the county.
Of what value would a deposit be to a bank if it could not use the same and loan money so deposited? By what process of reasoning can it be supposed that any bank would pay interest upon a special deposit which it was not permitted to use but was required to keep separate and apart from other funds of the bank and be liable therefor without any compensation for the safe-keeping of the fund? The question answers itself. Moreover, intervener in its brief makes this statement: "That the interveners, by executing and delivering their depository bonds to Box Butte county, preserved the assets of the defendant bank by causing Box Butte county to keep on deposit in the bank large sums which were vital to the actual continuance of the bank." How could such funds be vital to the continuance of the bank if it had no use of them? Furthermore, in Shambaugh v. City Bank of Elm Creek, 118 Neb. 817, 226 N.W. 460, speaking of the authority of county treasurers to make deposits in banks, it is held: "Under the terms of the statutes referred to, general deposits alone are authorized to be made in county depositories by county treasurers, and such, the evidence discloses, were made in the instant case." Clearly, the statute authorizes the county treasurer to place the county funds in his hands in depository banks on general deposit and provides for taking security therefor. The title to the moneys or other credits deposited passes to the bank and may be used by it as other funds deposited in the bank. It follows that the bank did not hold the deposit as a trust fund, and the court properly so determined.
Intervener contends that, as assignee of the county, it was subrogated to the latter's rights and was entitled to have its claim classified as that of a depositor, notwithstanding the provisions of section 8-1,102, Comp. St. 1929. That section, in part, provides: "The claims of depositors, for deposits, not otherwise secured, * * * shall have priority over all other claims, except federal, state, county and municipal taxes, and subject to such taxes, shall at the time of the closing of a bank be a first lien on all the assets of the banking corporation from which they are due and thus under receivership." Prior to the amendment of the statute in 1925 it read: "The claims of depositors, for deposits, * * * shall have priority," etc. Intervener makes this contention: "That part of paragraph 8-1,102, Comp. St. Neb. 1929, 'not otherwise secured' was intended to cover a situation where a bank has deposited some of its securities as collateral to secure a deposit as distinguished from the depositor having security from an outside source; and also to cover a situation where a bonding company takes collateral from the bank to protect itself, or the assets of the bank are reduced by the pledging of securities with the bonding company, to induce it to execute a depository bond." It is argued that the words "not otherwise secured" were intended solely for the protection of the guaranty fund (now the depositors' final settlement fund).
We do not think the contention sound. It was the intention of the legislature, as expressed in plain language to classify deposits into two classes, those secured and those unsecured. A deposit in a state bank secured otherwise than by the bank pledging its securities or giving a depository bond is not here involved nor decided. The words "not otherwise secured" were inserted in the statute after numerous holdings by this court to the effect that, where a surety...
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