194 N.W. 385 | N.D. | 1923
Lead Opinion
This is an action to recover certain moneys belonging to Slope county, which were deposited by the defendant Douglas, as county treasurer, in the First State Bank and the Slope County Bank of Amidon. The action is against both the county treasurer and the State Bonding Fund, as surety on his official bond. By stipulation the ease was tried before the judge of the district court without a jury. A judgment was rendered in favor of the plaintiff for $24,5Y6.51 plus interest and costs. From this judgment the plaintiff appeals, assigning' error in the failure of the trial court to grant a judgment for the full amount of the bond, $50,000. The defendants also appeal, specifying as error the findings of the trial court to the effect that there was no settlement made with the board of county commissioners at the time of the retirement of the defendant Douglas as county treasurer, in finding that the defendant Douglas was unable to deliver to his successor, on May 1st at the expiration of his term, any of the money on deposit in
The undisputed facts are: Douglas was elected county treasurer of Slope county in November 1918, assuming charge of the office May 7, 1919, retiring two years later. He was bonded by the defendant State Bonding Fund in the sum of $50,000, the bond being in the usual form, conditioned for the faithful discharge of the duties of the office and the rendering of “a true account of all moneys and property of every kind that shall come into his hands as such officer and pay over and deliver the same according to law.” In January, 1919, the board of county commissioners designated the First State Bank and the Slope County Bank as county depositaries. They qualified by furnishing bonds as required. From time to time moneys were deposited in these banks and in the Bank of North Dakota after its organization in the summer of 1919. Section 7 of the Bank of North Dakota Act required, with certain qualifications immaterial here, the deposit of public funds in such bank. On December 2, 1920, an initiated law (North Dakota Laws 1921, p. 255) went into effect, amending the Bank of North Dakota Act (chapter 147, Laws of 1919) by excluding from the enumeration of the funds required to be deposited in such bank, county funds, among others likewise excluded; On March 8, 1921, an emergency act of the legislature was approved prescribing regulations under which public funds should be deposited (chapter 56, Laws of 1921). The banks hereinbefore mentioned did not comply with the requirements of this emergency measure by furnishing bond or in any other manner. Between the date of the taking effect of this law and the expiration of Douglas’ term of office in May, he deposited in the two banks named, $24,576.51. In addition to this, there were funds which had been deposited by him in these banks previous to March 8th, amounting to over $70,000. When Douglas’ term of office expired difficulty was experienced in turning over the office to his successor, one Johnson, who refused to receive the evidence of indebtedness of these banks as cash. Both banks were closed on or about June 3 0 th following.
The contentions on this appeal involve: (1) The liability of the defendants for moneys placed in the two banks in question on original deposit subsequent to the taking effect of the emergency law (March
Considering these questions in the order they are stated: Chapter 56 of the Laws of 1921, in prescribing the qualifications for deposi-taries of public funds, lays down certain definite requirements, principal of which is the furnishing of a bond. It expressly makes all state and national banks complying with the provisions of the act legal deposita-ries, but it forbids the deposit of money therein until a bond is furnished in an amount at least equal to the largest deposit that may at any time be in the depositary. Upon the record before us, it is clear that the banks in question had not complied with the law, and that during the period of their noncompliance, the treasurer deposited $24-,516.51. As to the amount so deposited, we deem it to be clear that the treasurer is liable personally.
The question as to the liability of the defendants for funds which the treasurer had previously deposited in these banks and which were not withdrawn and placed in a depositary qualified under the act which became effective on March 8th involves somewhat different considerations. The question is presented of the duty of the officer in circumstances created by the passage of the new law. In considering this question, it must be borne in mind that constructive notice of the passage of the emergency law wras conveyed to the officer and to his bondsmen, and the question must be decided uninfluenced by the hardship, if any, that may result through the failure of the officer to have known in fact of the passage of the act.
The first section of chapter 56, Session Laws of 1921, reads as follows:
“All state and national banks in the state of North Dakota complying with the provisions of this act, and the Bank of North Dakota are hereby declared to be legal depositaries of the public funds of the various towns, townships, school districts, cities and villages and the various treasurers of the said corporations shall deposit all funds in their custody in such banks.”
The condition of the legislation dealing with the subject consequent upon the passage of the initiated law was such that some doubt might well have existed as to whether there remained any legal requirements for depositaries of funds, other than those governing the Bank of North Dakota which continued to be tho^ depositary of the state and of its
There is nothing in this record to show that the demand funds in the two banks in question when the initiated law took effect, amounting to some $'70,000, could not have been promptly withdrawn and placed in a legal depositary had there been an attempt so to do. The banks were then open and continued to do business for more than three months thereafter. We cannot presume that the banks were insolvent on March 8th when the new depositary law took effect. See Schafer v. Olson, 24 N. D. 542, 43 L.R.A.(N.S.) 762, 139 N. W. 983, Ann. Cas. 1915C, 653.
The contention of the defendants to the effect that a complete settlement was had at the time of the transfer of the office from Douglas to Johnson in May finds little support in the record. The defendant Douglas admitted that at the time the office was transferred he took a receipt from his successor acknowledging “the receipt of $20,955.78 in assets by him considered good, and $55,058.35 in assets
Leaving wholly aside all question of the authority of the county commissioners to accept in settlement of the county treasurer’s account something other than cash or a credit in a legal depository, we think the evidence clearly establishes that the bank balances in question were not received as cash by the incoming treasurer and that there was no settlement with the county commissioners such as would release the retiring treasurer or his bondsmen from a liability to account for funds which had not been deposited as the law required.
The judgment in favor of the plaintiff is modified as to amount, and it is ordered that the plaintiff have judgment against the defendants for $50,000 plus interest and costs.
Rehearing
On petition for rehearing.
The defendant, State Bonding Fund, has petitioned for a rehearing. Among other things it is asserted that the defendant state bonding fund, if afforded an opportunity to do so, can produce certain additional evidence which will demonstrate its nonliability so far as concerns, moneys on deposit on and prior to March 8th, 1921. This court cannot, of course, entertain a motion for leave to introduce additional evidence. Such application should be presented to and determined by the trial court. And although this court expresses no opinion upon the merits of the proposed application, a majority of