1 Ohio App. 140 | Ohio Ct. App. | 1913
These cases arise upon intervening petitions seeking priority of certain public funds as special deposits.
The public funds involved in the intervening petitions are:
First: County funds of Greene county in the sum of $5,383.71.
Third: Funds of the treasurer of section 16, etc., of Bath township, in the sum of $721.87.
The Bank of Osborn, an incorporated banking company located in the village of Osborn, Greene county, Ohio, was on June 18, 1913, closed by the state banking department and is in process of liquidation. There \vere at the time the bank closed sufficient funds on hand to liquidate the claims represented by the intervening petitions.
The question in issue is: Were the funds deposited under such circumstances as to constitute them special deposits and entitled to preference, or were they merely general deposits?
In the consideration of the status of public funds in the hands of a public treasurer we may start with the proposition that such treasurer, under the clearly established law of this state, is a mere custodian of the funds and has no authority by virtue of his office to loan or invest them. Eshelby v. The Cincinnati Board of Education, 66 Ohio St., 71.
The preservation of the public funds has, under the policy of our state, been the subject of special care, and to uphold a transfer of title and an investment of the public moneys a clear legislative expression and a compliance with the prescribed conditions in all of its material features is required.
Where a bank receives from the treasurer public moneys known by it to be such it succeeds prima facie merely to the treasurer’s possessory title and as quasi trustee for the safe-keeping of such funds,
In respect to the township funds we find there was no attempt to comply with the depositary act. These funds were deposited solely upon the authority of the treasurer. The claim that this fund was deposited generally is founded upon the proviso of Section 12875, General Code, as follows:
“The provisions of section 12873 shall not make it unlawful for the treasurer of a township, municipal corporation, board of education or cemetery association to deposit public money with a person, firm, company or corporation organized and doing a banking business under the laws of this state or of the United States, but the deposit of such funds in such bank shall not release such treasurer from liability for loss which may occur thereby.”
This proviso is a part of a criminal act of a very drastic nature designed to safeguard the public funds. The proviso was intended to except the deposit of certain public funds in certain banks from the operation of the criminal statute. It was not intended to enlarge th,e authority of the treasurer over the funds nor to authorize more than a deposit for safe-keeping.
The village funds were also deposited by the village treasurer upon his sole authority. It is, however, claimed that his sureties knew or after-wards discovered and acquiesced in the deposit of the funds so as to bring the case within the scope of Section 4294, General Code, which provides:
We do not stop to decide whether subsequent knowledge and acquiescence of the sureties is, within the meaning of the statute, the equivalent of prior assent. We hold that Section 4294 is consistent with and is intended only to legalize special deposits. Like Section 12875, the civil liability of the treasurer upon his bond is retained, and there is nothing to warrant the inference that the treasurer’s duty or authority over the. trust funds was to be vitally changed. The treasurer had no authority to convert the funds to his own use and it follows that he had no authority to authorize another to do so.
It is true that Section 4294 contains the provision that all profits upon deposits shall inure to the benefit of the fund. This was intended, in our judgment, not as a license but as a precaution. There were undoubtedly cases when profits on deposits were allowed and paid public treasurers, and the legislature by this provision intended to fix the public policy with reference thereto. As a part of
The funds in controversy and sought to be declared as special deposits represent taxes collected by a deputy treasurer in Bath township on June 13th at Fairfield, and on June 14th at Osborn. The villages are both in Bath township and a short distance apart. The collections were made under authority of the following sections of the Code:
“Section 2746. When, in his opinion, necessary, the county treasurer may open not to exceed one office in each township for the receiving of taxes. Such office shall be in a city or village in which is located a bank of deposit. The treasurer, his deputy or clerks, may attend at such office and receive taxes on any day or days prior to the twentieth day of June and the twentieth day of December of each year. They may remove from the county treasury to the place of collection records necessary for the receiving of taxes upon the day or days so fixed for that purpose.”
There is a contention that the deputy treasurer was not authorized to open books or receive taxes in the village of Fairfield because of its having no local bank of deposit. But we find no substance in that objection. All the taxes collected there as well as at Osborn were actually deposited in the Osborn bank on the day of their payment, and it remains now to ascertain their status.
The Bank of Osborn was a bank of deposit within the meaning of Section 2748, and, therefore, capable of receiving this fund for transportation.
It is also claimed to be a county depositary with the right to receive funds in that capacity. If the funds were received for transportation, whether a special bond was given or not, the deposit would be special and entitled to preference.
■ On the contrary, if the funds were lawfully deposited in the bank as county depositary and as an interest-bearing deposit, the bank had a right to commingle and use the funds for profit, thus creating' a general deposit.
First: That the deputy treasurer was authorized only to deposit the tax collections for transportation, and
Second: That the funds so collected were not subject to deposit in the official depositary.
The deputy treasurer was duly authorized to represent his principal. The treasurer, therefore, who made the collection of taxes was authorized to deposit it. There is no statutory requirement, express or implied, that collections under Section 2746 were first to be transported to the county treasury and then to a depositary, nor can we conceive of any necessity or consideration of public policy requiring such formality. The authority for transportation is general and may authorize a transportation to a depositary as well as to the county treasury.
We are, therefore, inclined to adopt a practical construction of these statutes and hold that the funds might be delivered directly to the county depositary and the process completed by a proper system of bookkeeping.
Upon the question whether these funds were subject to deposit in an official depositary we hold they are included in the clause “undivided tax funds” used in Section 2737, General Code, and, therefore, subject to deposit in a county depositary.
This inference arising from the circumstances is confirmed by the testimony of the deputy treasurer, who made the deposits, as follows:
“Q. How did you come to do that of your own volition? [Referring to the deposit in the Osborn bank.] A. It had been the custom. It is one of our legal depositaries, and if it hadn’t been I would have taken a certificate of deposit and deposited it when I came home for the purpose of transportation. We do that at othér places— Cedarville, Bowersville and Jamestown.”
This brings us to the consideration of the regularity of the designation and qualification of the Osborn bank as a county depositary.
The resolution authorizing bids under the depositary law fixed the period at two years instead of three. This, however, was not a vital error. The designation of depositaries thereunder would be good for two years and until a new depositary— temporary or permanent — was designated to take the funds.
The act of April 11, 1911 (102 O. L., 59), Section 2715, General Code, took effect a few days before the depositaries were designated. This
It does not appear that the commissioners expressly designated any of the depositary banks as active or inactive. The call for bids was general and it does not appear that any stipulation in this respect was contained in the bids or in the resolution of acceptance by the commissioners.
The Bank of Osborn, not being located at the county seat, was only eligible as an inactive depositary, and the presumption of regularity of official proceedings justifies the inference from the making and acceptance of its bid that the Osborn bank was intended as an inactive depositary, and the record may be construed as the equivalent of such designation.
So far as is shown in the evidence the deposits, and especially those in controversy, were of a character to be properly deposited in an inactive depositary.
The bond given by the Osborn bank qualifying it as depositary was in proper form and duly accepted. The designation and qualification of the Osborn bank as such depositary and the deposit of said county funds therein as a public depositary, as an interest-bearing fund, constitute the same a general and not a special deposit.
' It, therefore, follows that the intervening petitions of the treasurer of section 16, Bath township, and of the village of Fairfield should be sustained, and that of Greene county should be dismissed.
Judgment accordingly.