138 Iowa 167 | Iowa | 1908
On January 4, 1904, pursuant to previous election, H. C. Byars became treasurer of Fremont county, succeeding H. E. Hawley, tbe retiring treasurer. Hawley had, during his term of office, deposited county funds in the Fremont County Bank, apd these funds were secured by a bond similar to the one upon which this action is bottomed; one of the sureties upon this bond having signed the previous one. Plaintiff’s board of supervisors made a settlement with the retiring treasurer, Hawley, and found that he had on deposit in the Fremont County Bank on January 5, 1904, a balance of $1,095.99. Hawley thereupon made his check for that amount to Byars, his successor, and upon the 7th of that month, and after the bond in suit was given, Byars turned his check back into the bank receiving credit therefor, and later made deposits amounting to $686.70. The treasurer drew out all but $1,348.89 of the amount of these deposits, and, owing to financial difficulties of the bank, was unable to get this balance. Failing to get it, this action was brought, which resulted in a judgment for plaintiff in the sum of $167.20. Plaintiff contends upon this appeal that it should have had judgment for the balance of the funds deposited in the bank, or in any event for the sum of $1,000, by reason of facts hereafter to appear. Many defenses were interposed, most of which must be considered upon this appeal. Among other things it is contended (1) that the bond was and is invalid because the plaintiff’s board of supervisors had not selected and designated the Fremont County Bank as a depository at the time the bond was executed or when the check was deposited by Byars; (2) that
It appears that in January of the year 1898 the board of supervisors passed a resolution authorizing the county treasurer to deposit county funds to any amount not exceeding $25,000 with such bank or banks in the county as he might designate, upon compliance with section 1457 of the Code. And in April of the year 1900 the Eremont County Bank, with McDonald, Penn and others, executed a bond similar to the one in suit whereby they undertook to save Hawley, the then treasurer of the county, harmless from loss by reason of any deposit he might make in the said bank. This bond was for $10,000, and it was approved in May of the year 1900. The bond in suit was executed January 5, 1904, and bears the approval of Byars, treasurer, and of the chairman of the board of supervisors, each of date of January 5, 1904. It is in the penal sum of $2,000, and is conditioned as follows: “ The conditions of this obligation are such that, if the said Eremont County Bank, as depository of public funds, shall properly account and pay over on proper demand all public money which may be deposited with the said Eremont County Bank by H. C. Byars, as treasurer of Eremont county, and shall hold the said treasurer harmless from all loss by reason of all deposits which he may make with the said Fremont County Bank, then this obligation to be void and of no effect; otherwise, to remain in full force and virtue in law.” The board of supervisors of plaintiff county also passed a resolution on the 6th day of January, 1904, expressly approving the bond in suit. We also find the
In addition to the Hawley check, Byars, treasurer, made the following deposits: May 23d, 1904, $52.18; May 24th, $34.52; July 11th, $600. The items $34.52 and $52.18 represent the taxes of McDonald, cashier of the bank for which the treasurer was given credit on the books of the bank without any money passing through his hands. The county treasurer, Byars, as we have said, drew out all but $1,349.89 of the total amount which it is claimed was deposited in the bank. The trial court evidently charged the defendants with the amount of the $600 deposit, and gave them credit for the amount actually drawn out by the treasurer. Sections 1461, 1456 and 1457 of the Code of 1897 as amended read as follows:
When a county treasurer goes out of office, he shall make a full and complete settlement with the board of supervisors, and deliver up all books, papers, moneys, and all other property pertaining to the office, to his successor, taking his receipt therefor. The board of supervisors shall make a statement of State dues to the Auditor of State, showing all charges against the treasurer during his term of office, and all credits made, the delinquent taxes and other unfinished business charged over to his successor, and the amount of money paid over to his successor, showing to what year and to what account the amount so paid over belongs. It shall also see that the books of’the treasurer are correctly balanced, before passed into the possession and control of the treasurer elect.
If the State treasurer or any county treasurer, by him*171 self or through another, discounts auditor’s warrants either directly or indirectly, he shall upon conviction be fined in any sum not exceeding one thousand dollars.
A county treasurer shall be liable to a like fine for loaning out, or in any manner using for private purposes, state, county, or other funds in his hands, except that when permitted by the board of supervisors by resolution entered of record he may deposit such funds in any bank or banks in the State, to any amount fixed by such resolution; and the county may receive such rate of interest on the money so deposited as may be agreed upon by the treasurer, board of supervisors, and the bank; but before such deposit is made such bank shall file a bond with sureties, to be approved by the treasurer and the board of supervisors, in double the maximum amount permitted to be deposited, conditioned to hold the treasurer harmless from all loss by reason of such deposit or deposits. Said bond shall be filed with the county auditor and action may be brought thereon either by the treasurer or the county, as the board of supervisors may elect. And the State treasurer shall be liable to a fine of not more than ten thousand dollars for a like misdemeanor. But nothing done under the provisions of this section shall alter or affect the liability of the treasurer or the sureties on his official bonds.
There is much to be said in favor of the proposition that the bond was valid when given, and that defendants are estopped from insisting that the Fremont County Bank was not properly selected as a county depository under the statute quoted. Were it not for the peculiar language of this statute we should have no difficulty in so finding. The language of this enactment is peculiar, and perhaps it should be so read as to treat the depositing of county funds in a bank as the equivalent of a loan such as prohibited by law. But there is much force in the suggestion that defendants are estopped from saying that the defendant bank was not properly selected as a depository in accordance with section 1457 of the Code as amended. Under somewhat similar statutes sureties have been held estopped in other jurisdictions from making such a plea as is here relied upon. State v. Bates, 36 Vt. 387; Board v. State Bank, 64 Minn. 180 (66 N. W. 143); People v. Evans, 29 Cal. 430; Board v. Gray, 61 Minn. 242 (63 N. W. 635) ; Board v. Loan &
Knew H. E. Hawley, county treasurer, while he was treasurer of Fremont County. Upon the 7th day of January, 1904, H. C. Byars, treasurer, presented to me a check drawn by H. E. Hawley, treasurer. I did not pay the check. Why, of course, if they had insisted on payment of it I might possibly have arranged it; but just on the spur of the moment I do not think I could have paid the check. I think there has been no time since May 3, 1904, that I had the means in my own name and right to pay the check.*175 Did not have it in cash May 3d. The bank did not have the moneys or credits in its own right January 7, 1904, to take up the check. Q. Now, I want you to state, Mr. McDonald, if all of your property of every description, on the 7th day of January,. 1904, was not heavily mortgaged? A. So far as my recollection of what I had, it was. Q. You had some abstract books and they were mortgaged? A. Yes, sir. Q. Tell the court whether or not the mortgage took the abstract books. A. Yes, sir. Q. State whether or not your bank building at that time was mortgaged. A. Yes, sir; Chas. Magel had a mortgage on the bank building for $2,500. That mortgage did not take the building. I gave a deed to secure a second mortgage on the bank. Owed a bank at Des Moines $2,500. I am a brother-in-law to the defendants A.- Y. Penn and O. J. Edsen. We married sisters. I was in the banking business in 1904 receiving deposits from anybody that would come there and deposit with me. Was advertising myself as a banker. Continued in the banking business at Sidney, Iowa, until November 1, 1906. Received deposits from January, 1904, to November 1, 1906, at said bank.
He further testified as shown by the record:
Q. Now, has there been any time since that time, Mr. McDonald, prior to the 3d day of May, 1904, that you have the means in your own name and in your own right to pay that check [$1,095.99]? A. Prior to that time? Q. Prior to May 3, 1904, at'any time between the 7th of January, 1904, and the 3d day of May, 1904? A. No, sir, I think not. Q. Did you have it on the 3d day of May ? A. Not in eash. Q. Did you have, on the 7th day of January, 1904, any moneys or credits in your own right sufficient to pay and take up that check, or did the Fremont County Bank have it ? A. No, sir. Q. State whether or not the Fremont County Bank at any time between the 7th day of January, 1904, and the 3d day of May, 1904, in its own right and own name, have any funds with which to meet and take care of this check ? A. No, sir; all of my property on the 7th day of January, 1904, was heavily mortgaged so far as my recollection goes. My bank building was mortgaged — the mortgage took the bank building — which indebtedness existed prior to January 1, 1904. Magel had a mortgage of*176 twenty-five hundred, and there was a second mortgage, and the bank building went to pay the second mortgage. I also owed a bank in Des Moines twenty-five hundred dollars. Q. Has there been any time, Mr. McDonald, since the 7th day of January, 1904, that the Fremont County Bank, or yourself, with funds belonging to yourself or the bank, could have paid or taken up this check of Mr. Hawley for $1,095.99 ? A. No, sir.
Is this sufficient to show that the bank was insolvent and the money lost to the county before May 3, 1904 ? We think not. The bank at that time was a going concern. So far as shown it had never down to that date refused to pay any checks drawn upon it. Indeed the cashier said that he could have paid on January 7th, if the money had been demanded. No checks were dishonored so far as shown until some time in the year 1905, and,these were not dishonored in law. The cashier simply pleaded for time, and was granted it, upon payment of $50 upon a $350 check. The bank continued in business meeting its obligations in one way or another for more than a year after that time. Indeed, it paid the county treasurer or honored his checks to the amount of $433.80 after the deposits were made. The deposits were not special but general, and upon these county deposits the bank was simply a debtor to the county or to the treasurer. So long as it was able to pay its debts and continue in business the money was not lost to the county, but for all practical purposes was still in the bank. The bank did not become insolvent until it was unable to pay its debts in the usual and ordinary way, and the testimony shows that this did not occur until the year 1905. So that defendants became liable on their bond to the extent of $1,000 from May 3, 1904. At that time there was on deposit the amounts heretofore stated. This was reduced by payments from time to time until the balance in May, 1906, was $1,344.89. The bank refused payment of this balance May 14, 1906. The testimony shows that all payments made by the bank were after May 3, 1904., Our conclusion on this branch of the
The judgment should have been for $1,000, with 6 per cent, interest from May 14, 1906.
The judgment must be, and it is, reversed.