198 Iowa 692 | Iowa | 1924
— This appeal involves two actions which were consolidated for the purpose of trial and decree, and by stipulation were tried on the same evidence and “as an equity action.” The first ease noted in the caption was instituted by Buena Vista County, Iowa, and W. C. Skiff, as treasurer of said county, to enforce a claim of $22,576.78 in favor of the county against A. L. Whitney, receiver of the Marathon Savings Bank, an insolvent, and the petition was filed in a receivership proceeding as a petition and claim for preference. In this case the American Surety Company intervened.
The second ease noted in the caption was instituted by Buena Vista County, and W. C. Skiff as treasurer, as an action at law, against the American Surety Company, upon its depositary bond in the sum of $12,000, given to secure the county treasurer as to deposits of the county made through him in the Marathon Savings Bank. In this action both the receiver and the bank were made parties defendant.
This being true, the first question to determine is whether the claim of Buena Vista County for tax money deposited with the Marathon Savings Bank is a debt due the county. If the claim of the county constitutes a debt in a legal 1sense, then the receiver must pay such debt as a preferentjai claim, by virtue of the statute. Section 3825-a, Code Supplement, 1913. This statute provides the order of claims entitled to priority when the property of any person, company, or corporation is in the hands" of a receiver for distribution, and with the exception of taxes or other 'debts entitled to preference under the laws of the United States, “debts due or taxes assessed and levied for the benefit of .the state, county or other municipal corporation in this state”-are entitled to priority. This is a salutary statute. It is founded in wise policy, and is a recognition of the fact that the state must'endure and the functions of government must not cease. Consideration of what is expedient for the community is of vital concern.' It involves the doctrine of social self-defense. It arises from an inarticulate conviction, based on an instinctive
Section 1877 of the Code provides for the liquidation of insolvent banks by the distribution of the assets thereof “ratably * * * among the creditors thereof, giving preference in payment to depositors.” This section does not conflict with the terms of Section 3825-a, Code Supplement, 1913. In the latter statute the legislature contemplated and intended that certain claims should have priority over the claims of depositors and creditors, whether preferred or otherwise among themselves, and in fixing the order of priority, determined that the assets of any corporation in the hands of a receiver for distribution should be subject.to the payment of certain claims in a defined order of priority. Under this statute, debts due the county are entitled to preference over depositors or other creditors.
With this view of the situation, it is immaterial whether or not the claim of the county against the receiver is bottomed on a trust theory. There is but one primary question: Is a debt owing by the bank, and now owing by its receiver, in a fixed and liquidated amount? If so, it is entitled to statutory preference. The amount is not in dispute. Clearly, the county is the real party in interest. This is irrevocably established by the pleadings and the proof. In fact, no such question was raised in the trial court, and the ownership of the claim cannot tor the first time be raised on appeal. The court decreed that. the debt was owing to the county, and established its priority. The decree is res judicata as to the substantive rights of all persons interested in the subject-matter.
The undisputed record facts disclose that the moneys received by the appellant bank were recéived in payment of taxes to Buena Vista County. The moneys so received- consisted of cash and checks delivered to the flank by local taxpayers, who, upon making such payments, were given tax’ receipts by the
"We conclude from the existing relations that there existed a right of preference in favor of the county, and the decree entered by the trial court is — Affirmed.
Supplemental Opinion.
De Grape, J. — By reason of the emphasis placed by appellant on certain propositions in the petition for rehearing, and by reason of the public importance of the propositions involved, we feel that further opinion is justified. What was the legislative intent in the enactment of the statute giving preferential claims m favor of “state, county or other municipal corporation in this state?” Section 3825-a, Code Supplement, 1913. The statute is specific and explicit. In Lewis v. United States, 92 U. S. 618 (23 L. Ed. 513), it is said:
“Where the language of a statute is transparent, and its meaning clear, there is no room for the office of construction. There should be no construction where there is nothing-to construe. * * * Affirmative discussion, under such circumstances, is not unlike argument in support of a self-evident truth. The logic may mislead or confuse. It cannot strengthen the preexisting conviction.”
We reaffirm that the conceded sum established as a claim against the receiver in favor of Buena Vista County is a debt, within the purview of the statute. The receiver is a mere stakeholder. The county is the real party in interest. No one questions the constitutional right of our legislature to give prefer
“There is no escape in reason from the conclusion that by adopting the common law Montana a rl opted the prerogative rule of priority of public debts. That the law may not have been heretofore invoked is not considered important. Many laws, statutory as well as common, are quiescent for years, but are not thereby repealed or abrogated.” American Bonding Co. v. Reynolds, 203 Fed. 356.
See, also, United States Fid. & Guar. Co. v. Rainey, 120 Tenn. 357 (113 S. W. 397); State v. Madison State Bank (Mont.), 218 Pac. 652; Central Bank & Trust Corp. v. State, 139 Ga. 54 (76 S. E. 587). The numerical weight of authority supports the proposition that the statutory priority of public debts is simply declaratory of the common law. As said in Marshall v. People of New York, 254 U. S. 380:
“The priority was not limited to amounts due for taxes, but extended alike to all debts due the state, e. g., to amounts due on a general deposit of state funds in a bank. This priority has been enforced by the courts of New York under a great variety of circumstances. * * * It has been enforced as a right, and not as a rule of administration. This priority arose and exists independently of any statute. The legislature has never, in terms, limited its scope; and the courts have rejected as unsound every contention made that some statute before them had, by implication, effected a repeal or abridgment of the priority. The only changes of the right made by’ statute have been by way of enlarging its scope in certain cases.”
See, also, Booth v. State, 131 Ga. 750 (63 S. E. 502); Orem v. Wrightson, 51 Md. 34 (34 Am. Rep. 286); In re Niederstein, 138 N. Y. Supp. 952; Booth v. Miller, 237 Pa. 297 (85 Atl. 457); State v. Foster, 29 L. R. A. 226, 228, with note; United States v. State Bank of North Carolina, 6 Peters (U. S.) 29 (8 L. Ed. 308).
In In re Western Implement Co., 166 Fed. 576, it was held that money due the state for binding twine manufactured by the state in its penitentiary is a debt owing the’ state, entitled to preference under the statute of Minnesota giving a priority to debts due the state. Under the statute of Massachusetts, a municipal corporation is entitled to preference for debts owing such corporation; and the language of the act is quite similar to the Iowa statute. Bent v. Inhabitants of Hubbardston, 138 Mass. 99. See, also, State v. Bell, 64 Minn. 400; American Sur. Co. of New York v. Pearson, 146 Minn. 342.
It is to be observed that Section 3825-a by its very language applies to all corporations; but the proposition is advanced by appellant that the banking act (Code Section 1877) regulates the administration of insolvent banking corporations and the distribution of their assets. In other words, it is contended that the banking act, of which Section 1877 is a part, is a code in itself. We perceive no valid reason for holding that a bank of the character of' appellant is not within the general law. If a municipal corporation has lost its right to a prefer
The Federal law governing insolvent national banks and the interpretation thereof by the Supreme Court of the United States cannot be of aid in the solution of the problem before us. The National Banking Act constitutes by itself a complete system for the establishment and government of national banks. It is a separate code by itself, neither limited nor enlarged by other statutory provisions with respect to the settlement of demands against insolvents or their estates. It contains full provisions for security against possible loss for moneys deposited, and, as said by the Supreme Court of the United States:
“It would seem only equitable that the government should call for such security, and, if it prove insufficient, take the position of other creditors in the distribution of the assets of the bank in ease of its failure. The framers of the.banking law evidently so regarded the matter.” Cook County Nat. Bank v. United States, 107 U. S. 445 (27 L. Ed. 537).
The Federal law provides for the distribution of the entire assets of the bank, giving no preference to any claim, except for moneys to reimburse the United States for advances in redeeming the notes. Any sum remaining* after the payment of
“These provisions.could not be carried out if the United States were entitled to priority in the payment of a demand not arising from advances to redeem the circulating notes. ’ ’
It results, then, that the provisions of the National Bank Act withdraw insolvent national banks from the class of insolvent persons, out of whose estates demands of the United States are to be paid in preference to the claims of other creditors. Such a conclusion cannot be drawn from the intent or content of the banking law of Iowa, and consequently, reasoning by analogy gives no support to appellant’s contention.
We adhere to the principles announced in our former opinion, and the petition for rehearing is denied.