Washington County v. Weiser National Bank

• Decision Date: 17 February 1927
• Citation: 43 Idaho 600,255 P. 310
• Parties: WASHINGTON COUNTY, STATE OF IDAHO, a Municipal Corporation, Appellant, v. THE WEISER NATIONAL BANK, a Corporation, et al., Respondents
• Court: Idaho Supreme Court

255 P. 310

43 Idaho 600

WASHINGTON COUNTY, STATE OF IDAHO, a Municipal Corporation, Appellant, v. THE WEISER NATIONAL BANK, a Corporation, et al., Respondents

Supreme Court of Idaho

February 17, 1927

DEPOSITORIES-PUBLIC DEPOSITORY BOND-WITHDRAWAL OF SURETY-EFFECT ON LIABILITY OF REMAINING SURETIES-BOND COVERING ALL COUNTY FUNDS HELD BY DEPOSITORY-SCOPE.

1. Under Laws 1921, chap. 256, secs. 20, 21, relative to surety on public depository bond withdrawing therefrom, considered in connection with bond providing for withdrawal of sureties therefrom by giving 90 days' notice, the bond will be deemed canceled only in so far as surety is concerned who has complied with provisions of law in regard to termination of suretyship, and such notice of cancelation will not terminate liability of other sureties as fixed by C. S., sec. 446.

2. Under Laws 1921, chap. 256, sec. 14, withdrawal from public depository bond of one or more sureties in accordance with sections 20 and 21 did not relieve the remaining sureties from their several liability thereunder on failure of treasurer to withdraw funds from depository as provided by section 32.

3. Depository bond covering all county funds held by depository protects all moneys coming into hands of treasurer and deposited with bank which it was his duty to receive under C S., sec. 3562, except as to funds deposited in public administrator's account, and notwithstanding that certain of moneys were paid to treasurer by reason of taxes levied by units other than county, since such moneys so received by county treasurer automatically go into funds in treasury of county for which treasurer is required to account.

APPEAL from the District Court of the Seventh Judicial District, for Washington County. Hon. T. Bailey Lee, Presiding Judge.

Action to recover on a depository bond signed by defendants as principal and sureties. Judgment for defendants. Reversed.

Judgment reversed. Costs awarded to appellant.

Frank D. Ryan and Oppenheim & Lampert, for Appellant.

The public depository act was designed to protect the funds of all political subdivisions and municipalities in the state of Idaho having taxing powers. (Sec. 2, chap. 256, Sess. Laws 1921.)

Funds in the hands of the county treasurer are county funds within the meaning of the depository act. (Spartley v Board, 56 Kan. 272, 43 P. 232; Thatcher v. County Commrs., 13 Kan. 182; Myers v. Board, 60 Kan 189, 56 P. 11; Commissioners v. Craft, 6 Kan. 145; Marquette Co. v. Treasurer of Ishpeming, 49 Mich. 244, 13 N.W. 609; Marquette County v. Ward, 50 Mich. 174, 15 N.W. 70; Fidelity Deposit Co. of Maryland v. Wilkinson County, 109 Miss. 879, 69 So. 865.)

Funds deposited by a tax collector in a county depository are protected by the depository bond, being county funds. (Secs. 6 and 24, chap. 256, Sess. Laws 1921; C. S., secs. 3245, 3325; Bennett v. Bank of Commerce, 220 F. 950.)

The withdrawal or release of a surety from a depository bond does not affect the bonds as to the remaining sureties or alter their liabilities. (City of Pocatello v. Fargo, 41 Idaho 432, 242 P. 297; Board of Com. of Hennepin Co. v. State Bank, 64 Minn. 180, 66 N.W. 143; Maryland Casualty Co. v. Pacific County, 245 F. 831; State v. United States F. & G. Co., 81 Kan. 660, 106 P. 1040, 26 L. R. A., N. S., 865; C. S., sec. 446; Board of Com. of St. Louis Co. v. Security Bank of Duluth, 75 Minn. 174, 77 N.W. 815; 21 R. C. L. 1051.)

"The modern rule is in accord with the doctrine of the equity courts that the release of a surety discharges his cosureties from liability only to the extent of the proportion of which the discharged surety could have been held to contribute to them." (Notes, Ann. Cas. 1917B, p. 1184, and cases cited; L. R. A. 1918E, 97; Stearns on Suretyship, 3d ed., 170, 171.)

James Harris, George Donart and Morgan & Smith, for Respondents.

The liability of sureties on a depository bond cannot be extended by doubtful construction or application. (City of Pocatello v. Fargo (on rehearing), 41 Idaho 454, 242 P. 297.)

A depository bond, such as the one involved in this case, written pursuant to Idaho Sess. Laws 1921, chap. 256, p. 562, sec. 17, protects only money belonging to the county and not funds held by the county treasurer by virtue of his office, which makes him treasurer of common school districts. (State v. Crook County Bank of Prineville, 104 Ore. 495, 208 P. 749; Sess. Laws 1921, chap. 256, secs. 4, 5, 6, 7, 8, 11, 13, 17; p. 566, sec. 24; p. 442, sec. 35, and p. 457, sec. 55; C. S., sec. 3585.)

Funds of a school district, or other municipality of which the county treasurer is treasurer by virtue of his office, are not county funds (Drainage Dist. No. 2 of Ada County v. Ada County, 38 Idaho 778, 226 P. 290.)

A depository bond, such as that sued upon in this action, does not protect funds in the hands of the tax collector. (Idaho Sess. Laws 1921, chap. 256, p. 562, sec. 17; C. S., sec. 3325.)

"While an act must be construed as of the date of its passage, subsequent legislation may be considered in determining the intent of the prior enactment." (Empire Voting Machine Co. v. City of Chicago, 267 F. 162; State v. Clausen, 63 Wash. 535, 116 P. 7; 2 Sutherland on Statutory Construction, 2d ed., par. 476; Cape Girardeau County Court v. Hill, 118 U.S. 68, 6 S.Ct. 951, 30 L.Ed. 73; Drainage Dist. No. 2 v. Ada County, 38 Idaho 778, 226 P. 290.)

A depository bond is not an official bond. (State v. American Bank & Trust Co., 75 Mont. 369, 243 P. 1093; Colquitt v. Simpson & Ledbetter, 72 Ga. 501; Henry County v. Salmon, 201 Mo. 136, 100 S.W. 20; Barrett v. Stoddard County, 246 Mo. 501, 152 S.W. 43; Compton v. Marengo County Bank, 203 Ala. 129, 82 So. 159.)

The release of one surety from a depository bond releases all sureties and cancels the bond. (Cochise County v. Ritter, 3 Ariz. 208, 73 P. 448; People v. Buster, 11 Cal. 215; Sess. Laws 1921, chap. 256, p. 564, sec. 20, and p. 568, sec. 32; United States v. Clamp, 292 F. 317; Spencer v. Houghton, 68 Cal. 82, 8 P. 679; Stone-Ordean-Wells Co. v. Taylor, 139 Minn. 432, 166 N.W. 1069; Wilkinson v. Conley, 133 Ga. 518, 66 S.E. 372; Jones v. Whitehead, 4 Ga. 397; Walsh v. Miller, 51 Ohio 462, 38 N.E. 381.)

BUDGE, J. Hartson, D. J., WM. E. LEE, C. J., and GIVENS, J., concurring. TAYLOR, J., Dissenting.

OPINION

BUDGE, J.

This action was instituted by appellant to recover from respondent the sum of $ 137,866.32, together with interest, upon a depository bond executed by respondent Weiser National Bank as principal and some fifty-nine individuals as sureties. The maximum amount for which each of the sureties became obligated was less than the amount of the bond.

The bond recited, in so far as material herein, that the Weiser National Bank had made application to be designated as a depository and to receive on deposit a part of the funds in the treasury of Washington County and agreed to pay interest on the same, and that if the bank should at the beginning of each and every month render to the treasurer and the auditor of Washington County a statement showing the daily balance of the moneys of said county held by it during the month next preceding and the interest thereon, and should well and truly keep the sums of money deposited and interest thereon subject at all times to the check and order of the treasurer and pay over the same and any part thereof upon the check or written demand of the treasurer and his successor in office, as demanded, and should in all respects save and keep the county and treasurer thereof harmless and indemnified for and by reason of making said deposit or deposits, then the obligation to be void and of no effect, otherwise to be and to remain in full force and virtue; provided, that if the said "surety" should so elect "they" might cancel the bond at any time by giving 90 days' notice thereof in writing to the principal, the supervising board of Washington County, its treasurer and auditor and the county auditor, accompanied by a sworn statement setting forth all the facts connected with and the reasons for such cancelation, and that the bond should be deemed canceled at the expiration of said 90 days but should remain in full force and effect until the expiration of said period.

In pursuance of the designation of respondent bank as depository and approval of the bond by the board of county commissioners of appellant county, the county treasurer made deposits in the bank of funds which had come into his hands as treasurer, ex-officio tax collector and ex-officio public administrator. Thereafter, on June 21, 1924, the bank suspended business, at which time various sums were standing on its records to the credit of the county treasurer in different accounts and representing moneys which he had received and deposited as belonging to Washington County and other taxing units within the county, and as public administrator, as follows: Treasurer of Washington County Account; Treasurer of Washington County Savings Account; Tax Collector's Account; County Treasurer's Special Account; Public Administrator's Account.

Upon the trial of the action it was contended by respondents that the evidence introduced by appellant did not disclose what if any, portion of the money deposited under the Treasurer of Washington County Account belonged to Washington County and was deposited under the terms and conditions of the bond, and that the evidence conclusively showed that deposits to three other accounts in the name of the county treasurer, viz., Treasurer of Washington County Special Account, Tax Collector's Account, and Public Administrator's Account, were moneys not protected by the terms and conditions of the bond, and a motion was made to withdraw from the consideration of the...