United States Fidelity & Guaranty Co. v. Anderson

• Decision Date: 06 March 1928
• Docket Number: 1399
• Citation: 38 Wyo. 88,264 P. 1030
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. ANDERSON [*]
• Court: Wyoming Supreme Court

264 P. 1030

38 Wyo. 88

UNITED STATES FIDELITY & GUARANTY CO. v. ANDERSON ^[*]

No. 1399

Supreme Court of Wyoming

March 6, 1928

APPEAL from District Court, Goshen County; CYRUS O. BROWN, Judge.

Action by the United States Fidelity & Guaranty Company against Rosalie J. Anderson, as Treasurer of Goshen County, in which Burdett Kelly, receiver of the Torrington National Bank intervened. From a judgment for intervener, plaintiff appeals.

Affirmed.

Gillette & Clark, J. M. Roushar and L. J. Williams, for appellant.

The Guaranty Company having paid the debt of its principal, is subrogated to all the remedies and securities of a creditor the warrants were pledged for the whole deposit; the collateral security was authorized by Section 2968 C. S.; they may be taken under the depository law to secure not only that portion of the deposit in excess of 90% of surety bonds but to secure the whole deposit, 2959 C. S. The depositor had the option of three remedies: first, after the last dividend, to collect the remainder of the debt from either the warrants or the bonds, Knaffi v. Co., (Tenn.) 182 S.W. 655; second, sell warrants and apply the proceeds upon the amount of her deposit, collecting the balance from the Surety Company, Secs. 2954-2959 C. S.; or, third, realize the full amount of her deposit from the bond, 32 Cyc. 97-99. The Guaranty Company was surety for the entire debt; the Guaranty Company has paid the full debt for which it was surety, and having done so, is subrogated to the security remaining in the hands of the creditor, Board v. Co., (La.) 66 So. 748; Casualty Co. v. Fouts, 11 Fed. (2nd) 71; Insurance Co. v. Guaranty Co., 99 N.Y.S. 833. The provisions of the statute must be read in the agreement, 18 C. J. 59; Reed v. People, (Wyo.) 242 P. 319; 9 C. J. 34; the provisions of the Depository Act are mandatory, Surety Co. v. Morris, (Wyo.) 241 P. 1063; Black & Yates v. Lumber Co., (Wyo.) 231 P. 398; and must be read into bonds executed thereunder, Surety Co. v. Board, (Ind.) 117 N.E. 860; Davis v. Bank, (La.) 99 So. 207; Davis v. Bank, (La.) 99 So. 210; Gregg v. Hinkle, (N. Mex.) 224 P. 1025. When a statute provides a duty and a contract is made pursuant thereto, the statute becomes a part of the contract, Guilford Co. v. Halladay, (N. C.) 100 S.E. 597; N. P. R. Co. v. Wall, 241 U.S. 523; Bank v. Bank, 43 S.Ct. 651; People v. Surety Co., 211 N.Y. 107, 105 N.E. 99; Greek-American Co. v. Co., (Ala.) 58 So. 994. Whatever is included in the depository agreement, not required by law, must be read out of it; and whatever is not expressed but ought to have been incorporated, must be read as if inserted into it, Macready v. Schenck, 6 So. 517; Gill v. Paysee, (Nev.) 226 P. 302; State v. Nutter, (W. Va.) 30 S.E. 67; Crawford v. Co., (Ark.) 134 S.W. 951; Lowe v. City, (Okla.) 44 P. 198; Farnsworth v. Hagelin, 300 F. 993. A surety is entitled to subrogation, 37 Cyc. 402-417; Bonding Co. v. Bank, (Md.) 55 A. 396; Maryland Co. v. Repass, 253 F. 328; Surety Co. v. Linder, (Ia.) 137 P. 499. The rule is sustained by a multitude of cases; See Nelson v. Webster, 68 L.R.A. 513 and note. The judgment below was contrary to the law. The word "act" as used in the first section, refers to the whole act, Wright v. Trans. Co., 30 F. 688; the proviso in the first section is intended to apply to the whole act.

Reid & More, and J. L. Sawyer, for respondents.

The warrants were pledged merely to cover excess deposits; the agreement so recites, Chap. 94, L. 1909, provided for securing excess deposits; the same rule of interpretation applies as to other contracts of a similar nature, 18 C. J. 586. The amendment should be construed to give effect to the latest expressed intention of the Legislature, 36 Cyc. 1130. State v. Burr, (N. D.) 113 N.W. 705; People v. Dobbins, (Cal.) 14 P. 860; State v. Courtney, (Mont.) 71 P. 308. A proviso in an act repugnant to the purview thereof is not void, but stands as the last expression of the legislative will, 36 Cyc. 1130. The Guaranty Company was not surety for the same debt that was secured by the warrants; the liability of surety cannot be extended by doubtful construction, 18 C. J. 587; U.S. F. & G. v. County, 145 F. 144. The intent of the Depository Act is to protect public funds; it was not intended that a limitation on the liability of the surety to an amount less than the penalty of its bond, Gregg v. Hinkle, (N. Mex.) 224 P. 1025; Smith v. Arnold, (Ky.) 175 S.W. 983. The judgment below is supported by law and the evidence.

BURGESS, District Judge. BLUME, Ch. J., and KIMBALL, J., concur.

OPINION

BURGESS, District Judge.

The United States Fidelity and Guaranty Company brought an action in the District Court of Goshen County against the Treasurer of that county to compel the delivery to it of certain town and school district warrants held by the treasurer. The Receiver of the Torrington National Bank, an insolvent national banking corporation, thereupon intervened and filed an answer asserting a right in himself to the possession of said warrants. The judgment below was in favor of the receiver and the Guaranty Company has appealed.

The facts are undisputed. In substance they are that on April 26, 1921, the Torrington National Bank, as principal, and the Guaranty Company, as surety, executed and delivered, pursuant to Chapter 183 of the Wyoming 1920 Compiled Statutes relating to the deposit of public moneys, their bond to said county in the sum of $ 5000, conditioned, in effect, that the bank would pay over to the Treasurer of the County, upon demand, public moneys deposited with it by him; that in April, 1923, the bank executed and delivered to Goshen County the following collateral deposit agreement:

"COLLATERAL DEPOSIT AGREEMENT KNOW ALL MEN BY THESE PRESENTS:

That the Torrington National Bank of Torrington, Wyoming, in order to secure Goshen County, Wyoming, against loss on account of deposit of the County funds in said Bank temporarily and in excess of the amount for which said bank is bonded to said county as provided by Chapter 183, Wyoming Compiled Statutes 1920, does hereby assign to Goshen County, Wyoming the collateral deposited herewith, a schedule of which is annexed hereto, marked "Exhibit A" and identified by the signature of the Cashier of said Bank and of the County Treasurer of Goshen County, Wyoming. The condition of this deposit is:

That said bank shall and will safely keep and pay over to the County Treasurer of Goshen County, Wyoming, or her authorized deputy, on her check, order or demand, all money which may come into the possession of said bank under and by virtue of the provisions of Chapter 183, Wyoming Compiled Statutes 1920, together with all interest accruing thereon as in said Chapter provided, and in case of default on the part of said bank under the foregoing conditions, Goshen County, Wyoming, shall have full power and authority to sell as hereinafter provided said securities or so much thereof as may be necessary to realize the full amount of the funds of said County so deposited in said bank, together with the interest thereon.

If the sale be made of said collateral or any part thereof as hereinabove provided, the same may be had at public or private sale whenever there shall be a failure or refusal of said bank to pay the said funds or any part thereof, upon the demand or order of said County Treasurer or her authorized deputy on said bank. Notice of said sale shall be given by publication in a newspaper published at Torrington, Wyoming, once each week for five consecutive weeks, and the Chairman of the Board of County Commissioners and the County Clerk of Goshen County, Wyoming, shall transfer any collateral thus sold to the purchaser, and thereupon the absolute ownership thereof shall vest in the purchaser or purchasers upon payment of the purchase money to the County Treasurer. Should there be any surplus after paying the amount due, the County and the expenses of sale, it shall be paid to said bank.

IN WITNESS WHEREOF, etc."

The collateral referred to in said agreement consisted of town and school district warrants amounting to $ 3312.96 to obtain the possession of which the Guaranty Company brought this suit.

The bank closed its doors in January, 1924, at which time the county treasurer had on deposit with it the sum of $ 4630.33. This the Guaranty Company, as surety on the bond given by the bank, was compelled to pay and did pay, and thereupon demanded of the Treasurer the warrants above mentioned.

The basis of the claim of the Guaranty Company is that under both the collateral deposit agreement set forth above, and under the statutes of this state, the warrants secured the same deposits as were secured by the bond, and having paid to the County the debt of its principal, namely, the Bank, the Guaranty Company is subrogated to the rights of the county to the warrants.

The vital question in the case is, did the bond and the collateral deposit agreement secure the same deposits? and calls for a construction of Section 2954 of the Wyoming 1920 Compiled Statutes relating to the pledging of collateral as security for public deposits.

This section originally appeared as Section 6, Chapter 30, of the 1907 Session Laws. In 1909 it was amended and re-enacted so as to read as follows:

Section 1. "That Section 6 of Chapter 30 of the Session Laws of Wyoming of 1907 be amended and re-enacted so as to read as follows:

Section 6. "Any such depository may, instead of such bond in an approved surety company, furnish, as security for such deposit, or deposits, United States Government bonds, or state bonds of this State,...