125 Neb. 410 | Neb. | 1933
Plaintiff, a city of the second class, sued its treasurer and his surety on his official bond for $15,000 and interest, alleged to have been deposited by him and lost in the failure of the Bank of South Sioux City, a bank not designated by plaintiff as a depository. Upon trial to the district judge, the petition was dismissed and plaintiff appealed.
Most of the evidence was stipulated. Mullins was elected city treasurer at the April election in 1926 and has been reelected every two years. On April 26, 1926, he filed his bond in the penal sum of $15,000, with Fidelity & Deposit Company of Maryland as surety, to cover his term of two years beginning June 3, 1926. The condition of the bond:
“The condition of the above obligation is such that if the said W. H. Mullins, shall render a true account of
When the treasurer’s term of office began, on June 3, 1926, the Bank of South Sioux City was in the hands of, and had been operated by, the guaranty fund commission since about March 19, 1925. It continued to be so operated as a going concern until December 24, 1927, when it was placed in the hands of a receiver. When the guaranty fund commission took over the bank, it had on deposit $14,581.25 of city deposits; when the commission ceased to operate it and turned it over to the receiver, it had $31,064.75 such deposits. The district court allowed claims in the above amount and ordered the commission to pay them. It paid dividends sufficient to reduce the claims to $24,684.80 and accrued interest. No further sums have been paid.
No application was ever made by said bank to the city for the privilege of keeping any funds of the city. No bank was ever designated by the city council as a depository of the city money. While the bond was in force the bank paid the city 2 per cent, on the money on deposit.
Each month the treasurer made a written report to the council, showing all receipts and disbursements, indicating the source of the receipts and their allocation to
The defendants appear to seek to have the cause considered as if plaintiff were asking a recovery solely on the ground of the commonrlaw negligence of the treasurer in depositing funds in a bank which failed. It is true that in three of the eight separate specifications of the petition, alleging the manner in which the treasurer breached the conditions of his bond, it speaks of his negligence in depositing the money in the bank or in failing to withdraw it therefrom when he knew or ought to have known the bank was unsafe and insolvent; yet in four of the specifications the issue was tendered flatly charging a breach upon his plain failure to restore the funds of the city. The eighth and last specification is as follows:
“That said William H. Mullins was negligent in depositing and keeping on deposit the funds of said city in a bank which had not been designated as a depository by the city council of the city of South Sioux City.”
The issues tendered by the last five specifications were met by a general denial by the surety. The treasurer alleged that the city council knew the money was deposited in this bank and demanded the interest on said funds. The proofs showed (1) that the treasurer had officially received and had failed to restore to plaintiff a sum largely in excess of the amount prayed, and (2) that the city had never formally approved or designated the bank as a depository of its' funds. The question for the district court and for this court is a question of law. Under the facts stated, was the bank a designated depository of the funds within the meaning of the statute?
When the term of the treasurer began on June 3, 1926, the section of the statute relating to deposit of money in a bank by a treasurer of a city of the second class
We recently had before us a case where the same section was considered and so do not think it necessary to quote the pertinent language of the statute. The case is that of State v. Bank of Otoe, ante, p. 383. We there held that, under section 17-515, Comp. St. 1929, a village treasurer is not authorized to deposit funds in any bank which has not been designated by the board of trustees as a depository. In support we cited Massachusetts Bonding & Ins. Co. v. Steele, ante, p. 7, considering a statute almost identical save that it applied to county treasurers, and Shambaugh v. City Bank of Elm Creek, 118 Neb. 817, 65 A. L. R. 804. The annotation beginning on page 811 indicates that it is the generally accepted rule that custom or usage does not so enlarge a public officer’s statutory powers as to enable him to perform his duties in a manner other than that prescribed by statute.
Deciding the case involving the Bank of Otoe and a school district treasurer, with ' respect to whom the statute is in similar terms, we decided that such a treasurer is not authorized to deposit school funds in a bank not designated by the school board. State v. Bank of Otoe, p. 414, post.
The city council knew that the treasurer kept his official funds in the bank. That was proved by the stipulation as to his reports being accompanied by his deposit slips, but that is ineffective to prove that the bank made application and that the council designated the bank as a de
Under the authorities cited in this opinion and under section 4324, Comp. St- 1922, and under section 17-515, Comp. St. 1929, a treasurer of a city of the second class is not authorized to deposit city funds in any bank which has not been designated by the city council as a depository. Such a treasurer and his surety on his official bond are liable for such funds so deposited and lost through the failure of the bank in which they were deposited without the bank being designated by the city council as a depository.
The judgment of the district court is reversed and the cause remanded for a new trial, in harmony with the views expressed in this opinion.
Reversed.