Commercial Bank v. Hardy

53 So. 395 | Miss. | 1910

Anderson, -J.,

after stating the facts as above, delivered the opinion of the court.

It is contended on behalf of appellant, Commercial Bank of Brookhaven, that by virtue of the assignments to it by the tax collector and treasurer, above set out, and the payment by it, in consideration of such assignments, of the indebtedness due such officers by the Bank of Meadville, it is entitled to be subrogated to the preference given such tax collector and treasurer by Code 1906, § 3485. On the other hand, it is contended that the preference given by section 3485 is not assignable, and can only be enforced in favor of the officers to whom it is given, and that whatever rights the Commercial Bank of Brookhaven got by the assignments were lost, because the checks drawn by the tax collector and treasurer, in its favor, on the Bank of Mead-ville, were not presented for payment. In Fogg v. Bank of Friar’s Point, 80 Miss. 750, 32 South. 285, this court held that, under Code 1892, § 3077, (Code 1906, § 3485), funds deposited in bank by a tax-collector were trust funds, and, in case of an assignment by such bank for the benefit of creditors, the tax collector had a preference over other creditors to be.paid in full, although he had settled with the state' and county,'and the preference sought to be enforced was for his individual benefit, and that, by virtue of his having made settlement out of his own funds, he was entitled to be subrogated, as an individual, to his right as tax collector to the preference, and that he was required :to settle monthly, and if by such settlement his right to the preference-was destroyed the statute would be practically valueless, and that it was presumed that the bank as trustee did its ■duty by preserving the trust fund until all the other assets were ■exhausted, and “the trust moneys, so far as possible, are represented in the remaining assets of the bank.” And in Metcalf v. Bank, 89 Miss. 649, 41 South. 377, it was held that under this statute public moneys deposited by a tax collector were entitled to priority of payment over general creditors, in case of .an assignment by the bank for the benefit of creditors.

We find no fault with the principles announced in these cases. The statute in question was intended to provide for the security ■of the public funds. As against general creditors, it stamps a ■charge on all the assets of the bank for the prior payment of .such trust funds; and it is not required, in order to enforce sucli preference, that the very funds, either in their original or trans-muted form, be pointed out in the hands of the receiver. It is only necessary to show that the funds went into the bank. Tax ■collectors and treasurers are required to settle monthly, and if the preference given by this statute is not the subject of sale and assignment, in order to raise the necessary funds to make settlement, it is of little practical use. The officer has the legal title to the funds on deposit, as well as the right of priority of payment. What principle of law is violated by permitting him, in ■order to make such funds available, to sell and assign such title to another, substituting such other in his place ? There is none. It is not necessary for such authority to be given by statute, for under the common law one may transfer whatever right he has, which is the subject of sale and transfer, whether acquired by virtue of statute or common law. In Fogg v. Bank, supra, the -tax collector, who had replaced the' public funds with his own, .■and was held to be entitled to enforce the preference given by statute for his individual benefit, could have assigned his right to another, who would have been substituted to the same. The doctrine of subrogation by operation of law has no application to the facts here. The assignments and checks in question constituted a conventional subrogation. One paying the debt of another, though he has no interest to protect, may become subrogated to the rights and remedies of the creditor in respect to the debt so paid, by convention to that effect. 27 Am. & Eng. Ency. of Law (2d ed.), 256.

The appellant lost none of its rights by its failure to present the checks to the Bank of Meadyille for payment, drawn by the tax collector and treasurer in its favor, for the amount of their deposits. The authorities. relied on by counsel for appellees have no application to the facts. The assignments and cheeks together operated to transfer to appellant the deposits in the Bank of Meadville, with the right of priority of payment. It was not intended that the checks should be presented for payment according to the usual course of business, for the bank had suspended payment, and the parties knew they would not be honored.

The decree is reversed. Were it not for.uncertainty in the record as to the exact amount of the two claims involved, a decree would be entered here for appellant. Eor this reason alone the cause is remanded.

Reversed.