State v. Grand Forks Cnty., 6740.

• Decision Date: 04 December 1941
• Docket Number: No. 6740.,6740.
• Citation: 71 N.D. 355,300 N.W. 827
• Parties: STATE v. GRAND FORKS COUNTY.
• Court: North Dakota Supreme Court

71 N.D. 355

300 N.W. 827

STATE

v.GRAND FORKS COUNTY.

No. 6740.

Supreme Court of North Dakota.

Nov. 22, 1941.

Rehearing Denied Dec. 4, 1941.

Syllabus by the Court.

1. A county treasurer, in collecting taxes and rentals of school lands for the state, does not act as the agent of the county but as an individual designated by his official name to collect for the state. Sections 2156 and 326, C.L. 1913.

2. Statutes directing county treasurers to collect taxes and school land rentals for the state and providing for remittance thereof to the state treasurer contemplate that county treasurers shall, after collection, hold such funds as individuals in their official capacity subject to the orders of designated state officers.

3. An allegation in an answer that a county treasurer deposited funds belonging to the state in a depositary for public funds does not warrant an implication that such funds were deposited in the name of the county.

4. Statute which declares that each county shall be responsible for all state taxes levied imposes a condition of potential liability or accountability and a county's duty to account for state taxes may be met by a showing that the county officers have adhered strictly to the statutory directions of the State Legislature and have acted with honesty, prudence and diligence.

5. Where a county treasurer was required by state statute, under a penalty of a misdemeanor, to deposit the proceeds of state tax collections in a depositary for public funds and was exempted from all liability for losses resulting from the failure of such depositary, an answer by a county, in a suit brought by the State to recover state taxes collected by the county's treasurer, alleging that such taxes had been deposited by the treasurer in a duly designated depositary for public funds and had been lost through the insolvency of the depositary, stated a sufficient accounting for the state taxes collected and a defense to the action.

Appeal from District Court, Grand Forks County; P. G. Swenson, Judge.

Action by the State of North Dakota against Grand Forks County, a quasi municipal corporation, to recover taxes collected by defendant and also school land rentals which defendant had failed to pay to the state treasurer. From an order overruling plaintiff's demurrer to defendant's answer, plaintiff appeals.

Affirmed.

Alvin C. Strutz, Atty. Gen., and P. O. Sathre and C. E. Brace, Asst. Attys. Gen., for plaintiff and appellant.

Milton Moskau, State's Atty., and W. B. Arnold and Dan Letnes, Asst. State's Attys., all of Grand Forks, for defendant and respondent.

BURKE, Judge.

The complaint in this case sets forth two causes of action. For its first cause of action the plaintiff State alleged that the officers of the defendant County, in March, 1933, had collected $18,711.07 of general taxes due to the State and had failed, after proper demand to remit to the State Treasurer the full amount thereof. For its second cause of action the plaintiff alleged that the officers of the defendant had collected school land rentals belonging to the State in the sum of $705, and had failed to pay to the State Treasurer the full amount of such rentals. Judgment was demanded for an unpaid balance upon each cause of action. In its answer to both causes of action, the defendant County admitted the collection, by the County Treasurer, of the sums set forth in plaintiff's complaint, alleging that the collections had been made during the month of February and the first three days of March, 1933, and that the proceeds thereof had been deposited in the First National Bank of Grand Forks, a duly designated and bonded depositary for public funds. The defendant alleged further that such depositary bank had been closed by the Executive Order of the President of the United States on March 4, 1933, and thereafter had gone into receivership without reopening for business; that as a result of the closing of the depositary bank, the amount of such collections, which still remained unpaid, had become “unavailable” and, under the provisions of section 2183, C.L.1913, the liability of the County therefor had ended. Defendant also alleged that the County Treasurer had made such collections as the agent of the State and demanded judgment for the dismissal of the action. Plaintiff demurred to defendant's answer. The trial court overruled the demurrer and this appeal is from the order overruling the demurrer.

Questions of statutory construction are presented. The statutes which are involved are as follows:

Section 2156, C.L.1913: “The county treasurer shall be the receiver and collector of all taxes extended upon the tax lists of the county, whether levied for state, county, city, town, school, poor, bridge, road or other purposes, notwithstanding anything in the charter of any city, or town, or in any other act heretofore passed to the contrary, including the special taxes of local improvements in cities as provided for by law, * * *.”

Section 2183, C.L.1913: “Each county is responsible to the state for the full amount of tax levied for state purposes, excepting such amounts as are certified to be unavailable, double or erroneous assessments as hereinafter provided. If any county treasurer proves to be a defaulter to any amount of state revenue, such amount shall be made up to the state within the next three coming years by additional levies in such manner in annual amounts as the board of commissioners may direct. In such case the county can have recourse to the official bond of the treasurer for indemnity.”

Section 3255, C.L.1913: “The state auditor shall immediately after receiving the statement provided for in the preceding section draw and deliver to the state treasurer an order on each county treasurer for the amount so certified as collected for the state, and charge the state treasurer with the same, giving the county credit for the amount and sending to the county auditor of each county a duplicate of such order or draft.”

Section 3256, C.L.1913: “The state treasurer shall notify each county treasurer of the amount of such draft or order and designate the manner in which the money shall be forwarded to him, and upon receipt of the same shall forward such draft or order to the county treasurer with his endorsement, and such draft or order shall be the county treasurer's receipt for the amount stated. All funds collected by or in the hands of the treasurer of any county in this state shall be promptly remitted by such county treasurer without expense to the state, and at the risk of the county treasurer, for which the county treasurer shall be allowed his actual expenses by the board of county commissioners.”

Section 326, C.L.1913, as amended by Chapter 229 Laws of North Dakota 1931:

“The lessee of any land mentioned in this article or his executors, administrators, or assigns shall pay to the County Treasurer of the County in which such lands lie any and all amounts that may become due from time to time upon such leases * * *.

All moneys received by each County Treasurer under the provisions of this article shall at all times be held by him subject to the order and direction of the State Treasurer and the Board of University and School Lands, and on the first day of each month or within fifteen days thereafter, the County Treasurer of each county shall make report to the Commissioner of University and School Lands of all moneys so collected by him during the next preceding calendar month * * *.”

Section 714a3, 1925 Supplement to C.L. 1913: “All funds of public corporations, and all funds of the state and of state institutions, as defined herein, shall be deposited in the Bank of North Dakota or in banks which have been duly designated as depositories of public funds as provided in this act. The treasurer of public corporations and the state of North Dakota and all persons by law...