State v. Rubey

• Decision Date: 30 April 1883
• Citation: 77 Mo. 610
• Parties: THE STATE, Appellant, v. RUBEY.
• Court: Missouri Supreme Court

77 Mo. 610

THE STATE, Appellant,

v.RUBEY.

Supreme Court of Missouri.

April Term, 1883.

Appeal from Adair Circuit Court.--HON. ANDREW ELLISON, Judge.

AFFIRMED.

Ben. Eli Guthrie and James Ellison for appellant.

If the money deposited in the Savings Bank, is the money of the State, there can be no question that plaintiff should recover in this action, and is entitled to payment in full before all other creditors of said bank. Acts 1881, 35; R. S. 1879, § 184; 1 Kent 262; R. S. U. S., §§ 3466, 5101; Bayne v. U. S., 93 U. S. 642; Beaston v. Bank, 12 Pet. 134; U. S. v. Fisher, 2 Cr. 358.

It is the conceded rule of the distribution of insolvent estates, that the sovereign is entitled to priority of payment. 1 Kent (10 Ed.) 269; State v. Rodgers, 2 H. & McH. 198; Robinson v. Bank, 18 Ga. 96; Comm. v. Lewis, 6 Binn. 266; Jones v. Jones, 1 Bland Ch. 443; Murray v. Ridley, 3 H. & McH. 171; Hoke v. Henderson, 3 Dev. 12; Smith v. State, 5 Gill 45; Green's Estate, 4 Md. Ch. 349; Orem v. Wrightson, 57 Md. 34; State v. Bank, 6 Gill & J. 205. Missouri, both in her legislature and in her courts, has always recognized and enforced this principle. R. S. 1845, p. 90, § 1; R. S. 1855, p. 151, § 1; R. S. 1865, p. 501, § 1; State v. Rowse, 49 Mo. 586; Parks v. State, 7 Mo. 194. The rights of the government are always held paramount to those of the citizen. Hawthorn v. St. Louis, 11 Mo. 59; Fortune v. St. Louis, 23 Mo. 239; 1 Dillon Munic. Corp., §§ 64, 65; R. S. 1879, §§ 2344, 2519.

Of the moneys deposited, the county revenues are certainly the State's property. They are collected “to defray the expenses” of the county. R. S., § 6798. The county is simply a political division of the State, and all government therein is the State's government. Reardon v. St. Louis Co., 36 Mo. 561; Ray Co. v. Bentley, 49 Mo. 242; Swineford v. Franklin Co., 73 Mo. 279; Barton Co. v. Walser, 47 Mo. 201; Cedar Co. v. Johnson, 50 Mo. 227. This fund for “current county expenses,” cannot be reached by the judgment of the creditor of the county, until all ordinary current expenses are provided for: Because the government must be carried on, the public must be secure, though the individual may suffer. Grant v. Davenport, 36 Iowa 401; Coffin v. Davenport, 26 Iowa 515; Iowa R. R. Co. v. County of Sac, 39 Iowa 134; French v. Burlington, 42 Iowa 618; Von Hoffman v. Quincy, 4 Wall. 549; Comm. v. Lancaster Co., 6 Binn. 5; Comm. v. Philadelphia Co., 1 Whart. 1; s. c., 2 Whart. 289; High on Extr. Leg. Rem., § 352. Our legislature fully recognizes this doctrine. R. S., § 5370; State v. Macon Co. Ct., 68 Mo. 46. It is the State's money. State v. St. Louis Co. Ct., 34 Mo. 570; Hamilton v. St. Louis Co. Ct., 15 Mo. 3; St. Louis v. Shields, 52 Mo. 351. Conner v. Bent, 1 Mo. 235; 1 Dillon Munic. Corp., (2 Ed.) §§ 34, 35, 39; Meriwether v. Garrett, 102 U. S. 472; Supervisors v. Springfield, 63 Ill. 66; People v. Power, 25 Ill. 187; County of Richmond v. Lawrence, 12 Ill. 1. The county revenue is assessed and collected by the same officers, extended on the same books, on the same property, has the same liens, rights, remedies and penalties for its collection as what, for sake of distinction, is termed the State revenue. R. S. 1879, §§ 6658, 6663, 6733, 6744, 6789, 6804, 6805, 6831, 6832, 6833. The county revenue, while handled and disbursed by what, for the sake of distinction, are called county officers, is applied and disbursed for State purposes only, and cannot, under the law, be converted to any other purposes. State v. Macon Co. Ct., 68 Mo. 29, 48; Meriwether v. Garrett, supra; R. S., §§ 6818 to 6823, 6579, 6590, 4102, 4125, 4127.

So, also, the school funds belong primarily to the State. Marion Co. v. Moffett, 15 Mo. 604; Holt Co. v. Harmon, 59 Mo. 170; Jasper Co. v. Shanks, 61 Mo. 332; Township v. Boyd, 58 Mo. 276; State v. New Madrid Co. Ct., 51 Mo. 82; Washington Co. v. Boyd, 64 Mo. 183, Johnson Co. v. Gilkeson, 70 Mo. 645; Const. Mo. 1875, art. 11, § 1; art. 9, § 1; R. S., chap. 150; R. S., § 7090.

It follows that whoever owes any of these funds is debtor to the State; that the distribution thereof into the hands of different custodians, is simply a matter of a manifestly proper public policy, for safety, convenience and economy of administration. Hence, the State is entitled to sue. Keokuk v. Lane, 31 Iowa 119; Brocchus v. Morgan, 5 Cent. L. J. 53; Van Alen v. Am. Nat. Bank, 52 N. Y. 1; Bunting v. Hicks, 2 Dev. & B. Eq. 130; s. c., 32 Am. Dec. 699; State v. Bank, 45 Mo. 528. And the State having the right to recover, and the defendant being insolvent, she is entitled to priority of payment and first satisfaction in full, by the common law as above stated and by the statute. Acts 1881, p. 35.

Nor is there place found in our system of laws and policy of public administration for the doctrine that public revenues coming into the hands of receiving or disbursing officers become the property of such officers; they becoming the absolute debtors of the State simply, and the State losing all interest, right and claim in and to such revenue. R. S., §§ 1326, 1327; State v. Clarkson, 59 Mo. 149; State v. Flint, 62 Mo. 393; R. S., §§ 6802, 6820, 1331; Cumberland v. Pennell, 69 Me. 357; s. c., 31 Am. Rep. 284; R. S., §§ 5378, 6741, 6795, 6796, 6780, 6782, 6822, 6823; U. S. v. Thomas, 15 Wall. 337.

A general deposit of money in a bank is a loan. The bank becomes the owner of the money and the debtor of the depositor, and he is simply a creditor of the bank. The bank is borrower; the depositor is loaner. Morse on Banks, (2 Ed.) p. 28; Matter of Franklin Bank, 19 Am. Dec. 413, and note 478. Trammel by an attempted general deposit of the funds in his hands, would have committed a felony. R. S. 1879, §§ 2326, 1327. The bank acquired no title as against the State, county or anybody else having title. Felony can confer no title. The bank knew the felony, and was particeps criminis. State v. Hays, 52 Mo. 578.

Dysart & Mitchell and Charles P. Hess for respondent.

The funds mentioned in plaintiff's petition are not State funds, and the State would have no right of action in respect to said funds, even if it were admitted that they had been misappropriated. It has been the policy of this State, since the adoption of the constitution of 1875, to keep the State revenue proper separate and distinct from county and other corporate revenues. The State can only tax for State purposes, and is prohibited from imposing taxes upon counties, cities, towns and other municipal corporations; and, in fact, has adopted the most complete and radical system of corporate autonomy of any State in the Union. Const. 1875, art. 10, §§ 1, 8, 10, 11, 15, 17, 19, 20; also art. 4, § 43; R. S. 1879, §§ 6658, 6663, 6733, 6750, 6769, 6780, 6781, 6782, 6891. As to duties of State officers respecting State revenue. Chap. 164, p. 1478, and art. 2 of said chap., p. 1493; R. S., §§ 5366, 7131, 5378, 7021, 7031, 7434, 7103, 7106. Township organization prevails in Macon county, and a reference to the constitution and laws passed thereunder show that large and important powers and privileges have been conferred upon counties, townships, school districts, central or special school districts, cities and towns. They are invested with the power of self-government; with the powers and privileges of corporations; to acquire, hold and sell property; to sue and be sued. A similar policy prevails in Michigan. Perley v. Muskegon Co., 32 Mich. 132. In that state the state cannot sue for county revenue illegally disposed of by the county court. Att'y Gen. v. Moliter, 26 Mich. 444. The constitution forbids this State to loan its credit or contract debts, etc. But allows counties and other municipalities, under certain restrictions to create debts, and to levy taxes for their payment. Art. 4, § 44, et seq;art. 10, § 12; art. 9, § 19. Such debts are not the debts of the State, nor are the taxes raised for their payment the money of the State.

When Trammel, as county treasurer, received the county moneys and the township school funds, he became a debtor to said county and school townships, and was liable upon his bond to account for and pay the same at all events. He had the right to deposit it in the Macon Savings Bank, but took the risk of its being on hand when required for disbursement, and when so deposited, he became the sole creditor of said bank. State v. Powell, 67 Mo. 395; State v. Moore, 74 Mo. 413; Perley v. Muskegon,32 Mich. 132; Swartwout v. Mechanics' Bank, 5 Denio 555; Inhab., etc., v. Bell, 9 Met. 499; R. S. 1879, § 1328; New Const. 1875, art. 10, § 17; Thompson v. Tp. Trustees, 30 Ill. 99; State v. Harper, 6 Ohio St. 607; Halbut v. Martin Co., 22 Ind. 125; Inhab., etc., v. Hazzard, 12 Cush. 112; U. S. v. Prescott, 3 How. 578; Supervisors v. Dorr, 25 Wend. 440; Comm. v. Comley,3 Pa. St. 372.

The State has no right of priority for its claims against an insolvent by the common law. Such right rests exclusively on statutes, and such statutes, being in derogation of common right, will be strictly construed. Freeholders, etc., v. State Bank, 29 N. J. Eq. 268; s. c., 30 N. J. Eq. 311, 339; 1 Kent Com., side p. 247; 8 Cent. L. J. 62; State v. Harris, 2 Bailey 598; Commissioners v. Greenwood, 1 Dess. Eq. 449; Keckley v. Keckley, 2 Hill Ch. 256; Anderson v. State, 23 Miss. 459. The priority of the State, when granted by statute, is confined to debts of the State, where the State had a right of action in its own right. Bank v. Gibbs, 3 McCord 377; Field v. Wheatley, 1 Sneed 351.

HOUGH, C. J.

P. Trammel, treasurer of Macon county, deposited in the Macon County Savings Bank, from time to time, between November 2nd, 1880, and February 15th, 1882, certain county and township funds, lawfully in his possession as such treasurer, which were entered on the books of the bank to the credit of “P. Trammel, Treasurer;” and on the last mentioned date, the balance so held by said bank amounted to $39,522.84. On the said 15th day of February the...