United States Fidelity & Guaranty Co. v. First State Bank of Shaw

• Decision Date: 04 November 1912
• Docket Number: 15,874
• Citation: 103 Miss. 91,60 So. 47
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. FIRST STATE BANK OF SHAW
• Court: Mississippi Supreme Court

60 So. 47

103 Miss. 91

UNITED STATES FIDELITY & GUARANTY CO. v. FIRST STATE BANK OF SHAW

No. 15,874

Supreme Court of Mississippi

November 4, 1912

APPEAL from the chancery court of Bolivar county, HON. M. E. DENTON chancellor.

Suit by the United States Fidelity & Guaranty Company, surety of John L. Gills, treasurer of the drainage commissioners of Bolivar county, by virtue of his office as treasurer of the county against the First State Bank of Shaw, of which W. J. Hardee was appointed receiver, to be subrogated to the rights of the drainage commissioners. From a decree sustaining a demurrer to the bill of complainant, the United States Fidelity &amp Guaranty Company appeals.

The facts are fully stated in the opinion of the court.

Affirmed.

Wm. M Hall, for appellant.

The basis of appellee's contention, which the court adopted, is that section 3485 specifies what funds are trust funds, and drainage funds are not specified-- expressio unius est exclusio alterius. This, I submit, is a surprising misconception of the language of the statute.

The section in question is as follows: "3485 (3077). Public moneys are trust funds. All money deposited in bank or with any other depository, by or for a tax collector or other officer having the custody of public funds, state, county, municipal, or levee board, whether the same be deposited in the name of the officer as an individual or as an officer, or in the name of any other person, is prima facie public money and a trust fund, and is not liable to be taken by general creditors of the officer or by the creditors of the depository."

County funds are specified, and my contention is that drainage funds are county funds. They are raised for a county purpose, towit, the drainage of some district of the county needing drainage. Chap. 39, Code 1906. They are raised by assessment on lands in the particular district of the county (Sec. 1868), or by sale of bonds based on assessment of lands in the particular district of the county (Sec. 1709). They are turned into the county treasury (Sec. 1704). The county tax collector collects the delinquent assessments (Sec. 1703). (See particularly Chap. 191, Acts 1910.) They are as much county funds as funds for separate school districts of the county, not municipalities, which the county treasurer also handles (Sec. 4531).

What else need there be to constitute these funds, county funds?

But appellee points out sections 1697 and 1707, and says that these drainage districts are constituted corporate entities with power to contract and be contracted with and to sue and to be sued in their corporate names. True, but that does not mean that they are anything more than mere corporate agencies, for the more prompt and efficient carrying out of a laudable and beneficient public county work. The board of supervisors appoint the commissioners (sec. 1682), fill vacancies (sec. 1719), and the commissioners report to them (sees. 1715 and 1709). This indicates the county's interest and control.

The state of Mississippi carries out part of its educational scheme through corporate agencies. The University of Mississippi is a distinct entity--a corporation (Chap. 146, Code); so is the Agricultural and Mechanical College (Chap. 3, Code), and the Industrial Institute and College (Chap. 66). State funds are set aside for the support and maintenance of these institutions, and are subject to the disposal of the board of trustees, but these funds undoubtedly remain state funds, consecrated to the particular state work.

Appellee contends that these drainage districts are more than county agencies or institutions, because a drainage district may not lie wholly within one county. The idea is that this puts the drainage districts in the same category with the levee board, which the legislature thought necessary to specifically mention in section 3485.

If it be true, as suggested, that a drainage district lying partly in one county and partly in another, is not a county agency or institution, but an entity like the levee board, it is not to be understood how that fact could militate against my theory so far as a drainage district lying wholly within one county is concerned; and we are concerned here only with a district of that character--a drainage district of Bolivar county.

We might, therefore, pretermit further consideration of this contention, but we think that theory is not consistent with the provisions of the drainage chapter, and that it might be well to point out these.

While it is true that chapter 39, Code 1906 (secs. 1684 and 1685) seems to contemplate the organization of drainage districts lying in more than one county, it is exceedingly doubtful whether it contemplates ousting the county of the control of its integral parts of such district and funds arising therefrom. Now, sections 1687, 1688 and 1689 provide how the landowners may petition the chancery court and the court shall refer the same to the drainage commissioners of the county to investigate. Section 1690 provides for an oath to be taken by the commissioners, to make a faithful investigation and report to the court. Section 1689 refers to these commissioners as the county commissioners. So the commissioners are those selected by the board of supervisors or elected by the people under section 1682. There is nothing here, I confess, to militate against the idea that the commissioners from each county constituting the proposed district, might be constituted one board. But suppose the district is organized as provided by section 1697, and the board of commissioners start to raise funds for their work--how do they proceed? Section 1698 provides for assessment of the lands affected, and sections 1700-1703 for hearing of objections. Here the control of the chancery court seems to end. So, to whom now does the law refer the commissioners? Section 1709 provides for raising funds by sale of bonds and refers them to the board of supervisors. To what board? Necessarily of each county, as no one board would have jurisdiction of lands over the entire district. When the money is in hand, to whom shall it be turned over for safe-keeping? Section 1704 furnishes the answer: County treasurer to be district treasurer. Treasurer of which county? If it be answered, treasurer of the county in which the district is organized, then we call attention to the fact that the corporation does not appear to be organized or have its domicile in any particular county of the district. Note further the language of section 1704: "The treasurer of each county shall be treasurer," etc. The tax collector of each county collects the assessments of lands in his own county. (Sec. 1703.) These collections he turns over to the county treasurer. (Acts 1910, p. 191.) Next, the law requires the commissioners to report annually, showing the amount of money levied for main district purposes, amount of orders issued, to whom payable, amount of money on hand, etc. To whom is report made? Not to the chancery court, because the statute does not say so and its control of the commissioners seems to end when the assessment is confirmed. (Sec. 1702.) In fact, the jurisdiction conferred on the chancery court seems to be for the purpose of condemnation and when the award is made and confirmed its jurisdiction seems to be ended. Then it must be that the report is to be made to the board of supervisors. But to the board of what county? There could be no reason in making report to one board, because that board would have no control and voice in matters relative to lands in another county. Section 1709 seems to contemplate that the board of supervisors has control of the assessments and levies to pay the bonds on hand in their respective counties involved in the drainage district. So, it follows that the report is to the board of supervisors in each county, and it must also follow that the law contemplates preserving the integrity of each county's part of such a drainage district and the funds collected therein.

While these considerations demonstrate the correctness of our contention, we do not believe all that should be necessary to include that these funds are county funds and trust funds, not liable to be taken by creditors of the depository. We submit the fact that those funds were and are committed by law to the custody of the county treasurer and he is made responsible for their safe-keeping as for other county funds, is alone sufficient. This must be so, otherwise we should have the curious anomaly of certain public funds in his hands, trust funds and therefore not liable to be taken, and other public funds, which it is equally important to protect, not trust funds with no good reason to assign for the distinction.

The laws do not operate so unequally, and no construction should be adopted which would render it unequal in its operation.

Again, it would seem that the funds collected by the county tax collectors, under section 1703, would, by express language of section 3485, be trust funds and not liable to be taken, yet the same funds paid into the hands of the county treasurer for account of the drainage district, would not be. That would not do.

It was evidently the purpose of the legislature to declare all public funds trust funds, no matter how handled or deposited to the end that they be not liable to be taken by the creditors of the custodian or by the creditors of the depository, but be, at all events, safe for the public purpose for which they were raised. It also must have been the effort of the legislature to adopt general expressions so as to include them all, no matter to whom committed. Note the fact that the statute does not say, "All moneys deposited in bank or with any other depository by or for a tax collector or...