*1 STATE, BROADWATER Use Benefit Respondents.
COUNTY, Appellant, ROSMAN et al., (No. 6,375.) (Submitted January February 1929. Decided
[274 850.] *2 Foot, Attorney General, Mr. Choate, L. A. Mr. I. W. Attorney General, appellant, brief; Assistant submitted argued Mr. Better, L. Attorney V. Assistant General, the cause orally. *3 he, Respondent, submitted brief and Mapes, A.
Mr. T. argued counsel, orally. cause Horsley, and Mr. Edward *4 opinion JUSTICE CALLAWAY delivered the MR. CHIEF of the court. brought by
This action was the state for the use and benefit Rosman, recover of Susan some- of Broadwater L. Fidelity Deposit & county treasurer, Company official the amount of Maryland, the bondsman her Toston Bank in the State credit treasurer, through the failure of the bank. Rosman, and lost judgment defendants and the The trial court rendered appealed. state treasurer Broadwater defendant Rosman was On and after March to March 1925.
from *5 Monday March, first 1924, (mountain at 12:00 o’clock noon time) deposit in deposit there was and remained the Toston Bank, bank, State hereafter called the to the credit county belonging the the $13,115.58 treasurer sum of Broad- county, county water which the treasurer term her prior deposited. office and April to that date had On 1924, the bank part deposit failed. No has ever been repaid county although the demand for thereof has position been Counsel made. for the state take that the deposit permitted the was in to remain the bank the without protection required law, indemnity by of an this bond as constituting duty. of the defendant a violation Rosman’s official county
Prior practice to 1908 had been it the state and public deposit treasurers as funds entrusted to them they pleased. paid well known interest It was banks put deposits, and that treasurers in their interest pockets. disposition The high to obtain rates of some- interest times deposit public caused treasurer in an a bank, consequent occasionally rinsafe public, with loss to the for was found were pro- treasurer’s bonds sufficient tection.
In if it was enacted that a treasurer should moneys any belonging state he to the with a bank require deposited, amount should a bond to be double (See. by approved commissioners. the board 1895.) section amended in 1903 include Code was Pol. moneys belonging county, “all to the and all other (Sec. paid Chap. Y, law directed to be to him.” Laws 1903, p. as 5; Nothing re-enacted sec. Rev. Codes about the interest. said adopted
In 1908 people section Article XII of creating depository board, the Constitution state which designate authority given power depositories “full with state all funds the hands of the treasurer shall may deposited, prescribed rate of interest at such When shall have been under law. direc- law, tion depository of said with the board and accordance any treasurer for loss on account shall not be liable elements occurring through damage or through other cause reason occasioned means other than ” * ** his own neglect, fraud, or conduct. dishonorable *6 supra In 1913 legislative 3003, assembly section amended (sec. Chap. 88, 1913, p. 389), Laws and the same was recognized re-enacted as section Rev. Codes the salutary provision, quoted features of the constitutional above, duty county and of each to de made treasurer posit public moneys possession all in his and under his control subject such county, solvent bank banks or located his to supervision, national or state county as the com board of missioners designate, should and no other. The banks were required to interest on all sums so at the rate of not than per per annum, less and one-half two centum payable quarterly. required The treasurer was take such to security the board might “pre as commissioners scribe, approve and fully deem and necessary sufficient safety prompt insure the and deposits such all ’’ demand. In legislative 1923 assembly amendment added to the quoted “together sentence last the words with the interest specific thereon,” provisions and made more respecting bonds required and securities be from the banks. Personal bonds permitted stipulated were but it “that all personal such accompanied by bonds must be sworn a statement of the re- sources and liabilities of each of the sureties thereon.” It duty was made the of the board of county commissioners, upon acceptance approval and of bonds securities, or complete entry upon make minute thereof the record of their proceedings. prescribed It was “all deposits such shall subject be withdrawal the treasurer in such amounts may necessary time, from time to deposit and no of funds permitted made, any shall be remain in bank, until security deposits approved for such shall have been first by * #* of county
board commissioners and delivered to the ’’ ‘‘ treasurer. The section concluded: "Wheremoneys shall have been deposited in accordance provisions with the of this Act the treasurer shall not be liable for any loss on account deposit may through damage elements, occur by the or for other cause or reason through means occasioned other neglect, than his own fraud or dishonorable conduct.” (Chap. 89, 1923, p. 237.) Laws
Under subsequent the terms of statutes the longer treasurer is permitted no funds where pleases. may desig he He only them in a bank nated county commissioners, board of requiring first indemnity an prescribed security, or other which must accepted approved by the board. If he otherwise, unlawfully (Yellowstone County he so does v. First Savings Bank, & Trust 596), complies liable his If official bond. he with the law and lost he is not In such liable. cases he is liable *7 only through neglect, his own fraud dishonorable or conduct. (See County Missoula v. Mont. 271 Pac. Lochrie, of 710; State ex rel. Rankin v. Madison State Bank, 77 Mont. 498, 251 548.) Pac.
Desiring deposit county bank, to secure the of moneys the general banking which carried on a business at Toston and subject examination, January, in state as it had preceding years, done a number of filed with the board indemnity county recited, of commissioners an alia, inter that whereas the treasurer had or deposit moneys was about to with bank her in credit statute, required with indemnity accordance she an bond. The condition of the bond “that if the said Toston State sureties, Bank, either or or said or of them shall well and truly indemnify save harmless the and said Susan L. Rosman Treasurer, in office, her successors County as and the County Montana, Broadwater, and State of all of loss and dam- from age every moneys of kind reason such of as made, bank, heretofore or hereafter in or with said between (mountain time), twelve o’clock noon pres- date these ents, March, Monday and the first twelve o’clock (mountain noon time), shall, if principal and the said herein requested, whenever render a full account unto said County Treasurer, her successor office or Board County public Commissioners of said all deposit received County it for to the credit of said Treas- urer, successor, or her any, and for all if interest, credited daily deposits, during balances of all such herein aforesaid, stated as if principal said all shall at times during the presents, demand, promptly continuance of these office, over County to the said Treasurer, her successor in or representative other County Broadwater, State of Montana, lawfully properly same, entitled to receive the all such are on with the said bank to the County credit Treasurer, of said successor, including or her interest, any, if daily credited on deposits, balances all if principal the said shall promptly pay honor and checks, drafts, demand such or other written upon it, orders duly signed by County issued and the said Treasurer, or her office, successor in unless such shall be restrained or prohibited judicial process, competent legal authority— obligation then this otherwise, shall null and void; it shall and remain full force and virtue.” If we ascertain what contemplates the law we must assume that the contract was entered into within contemplation. applicable part statute is as much a of the bond as if expressly (Home written into it. State Bank Swartz, 72
By import the clear statute no of funds shall *8 permitted made, remain, nor in a bank unless the same protected by bond security a or other approved by the board county of commissioners.
In this lawfully case the deposit county treasurer could not accepted funds the bank before the bond was approved board; equally and it is clear that under the terms lawfully deposit county the bond she not any could therein- March, 12:00 Monday after o’clock noon on the first permit 1924. Does lawfully it follow that she could county money to remain the bank after hour under the terms question answered, yes, bond? If this duty follows that it was the of the treasurer to withdraw money from Monday bank 12:00 before noon of first March, indemnity unless on or before that hour another bond fully necessary security, other “deemed sufficient and deposits prompt payment insure the on demand” all required approved duty If her the board. it was money to withdraw the and she did not do so and the lost, foregoing her she is liable on bond. The is a con- problem crete illustration of the now before the court and aids determining it. right The period bank and its sureties had limit the during liability agreed which their should attach. bank The indemnify damage every the treasurer from all loss and kind January reason of made between noon of 3, 1924, and, noon requested, of March whenever render full public account to the treasurer for all funds on any, interest, her and for if on credit all credited daily balances, “during aforesaid.” herein stated as deposits made, bank only The made itself and for liable thereon, during time stated as aforesaid. interest accrued difficulty language im- So much is clear. arises over mediately following “aforesaid”: “and if the word said prin-| cipal shall pres- at all times continuance of these ents, demand, promptly over to the said treas- * * * SUch urer all are on with said treasurer, successor, bank of said or her to the credit interest, any, daily including if credited balances * * * meaning “during What is the the continuance presents”? of these
217 give interpreted to tbe A effect contract must be so as to the at time parties mutual intention of the it existed lawful. contracting, so far as the same ascertainable (Sec. 1921.) contract is 7527, Rev. Codes The whole if reason give every part, be together, taken so as effect to interpret the other. ably practicable, helping each clause (Sec. 7532, Id.) interpretation
“In the our of this contract we must call to aid elementary parties certain rules. The intention of the pursued (Sec. Codes, 1921.) 10520, to be if possible. Rev. gathered agreement, This intention is to from be the entire particular disjointed phrases parts from words or (Stockton Savings Purvis, it. 112 Society & Loan Cal. 236, Rep. 561.) subject-matter 53 44 210, Am. St. Pac. ‘The purposes of the contract and the of its are material execution to the parties ascertainment the intention and the meaning used, they ascertained, when the terms are they (6 prevail.’ L., 836.) 226, p. must R. sec. It must C. interpreted give so as to effect intention parties (Ferry Forquer, contracting. at the & Co. v. 642, 193.) 336, A. R. 202 The Pac. contract L. beginning end, must be viewed from and all its terms must pass may modify, limit, for review; one clause or illuminate (6 L., 838.)” 227, p. (Lee the other. R. C. sec. v. Lee Gold Co., Mining 71 Mont.
Unless it was intended that the bond should terminate 3, 1924, noon, given
on March reason at what can be deposits limiting might the time within which be made deposits only Interest date? on to run that to that date. upon If interest was to cease that date would seem that contemplated parties should not remain agreed bank bank after that date. and its The sureties the bank would and the interest If except is no time thereon, demand. there limit limitations, (sec. runs from demand statute of “during 1921), the words why Bev. Codes continuance of presents”? these Either the time within demand which a might noon, made is limited to March or there limitations, limit, is no words except the statute of and the “during pure presents” are sur- continuance of these plusage. provision respecting of such demand
checks, signed by drafts written orders the treas- significant. undoubtedly urer is It relates to usual course the by of business on with depository carried a treasurer a bank. Note that the amount of is not fixed. It was contem- deposit change interest, might daily. plated that the accruing only to prior 3, daily March is on balances. credited implied clearly payment checks, Is drafts that this prior written orders must be on demand made to March 3, 1924, at noon? provision
If the during “at all times the continuance presents” “during these does not mean the time herein stated means as aforesaid” but that principal any the is bound demand, eight years, time within on promptly pay over moneys the deposit, treasurer the it also the means that upon principal promptly pay shall honor and demand such checks, upon it, by drafts or other written the orders issued during period treasurer that of time. 255,
In Murphy, 487, O’Brien 175 78 Rep. v. Mass. Am. St. 284, said: general 56 N. the court “The that, E. rule is where specifying recital in bond there a the the time prescribed duty performed by is to be the principal, and the general words the condition are and indefinite to the as liable, surety is to general which the words recital, will be limited surety construed as and the will for the only specified. be held liable time therein It fair presume parties contemplation in only that had a lia specified bility in Sur., for the time the recital. (Brandt, sec. 166; Arlington Merricke, 403; Liverpool v. Saund. Water ” (9 40.) 6 East, C. J. Atkinson, works counsel, and submitted have examined authorities We similar find a many others, but not do we case Bank, except in First National Jenkins v. from the rehearing struck where a the court in doubt as suit, being
opinion bond discussion a dis respecting it, to the correctness of what had been said subject complaint missing saying “sufficiency of the challenged properly be was not in the trial court and is not fore appeal.” us on this
We are forced is not to conclude that the bond before us continuing one, not demand as the treasurer did before noon to her credit March the sureties cannot be held. may argued It right had treasurer up with the bank moment of the last period prescribed bond, necessarily in the a reasonable time repayment. must be argument allowed demand But this policy cannot be the clear tenable view of of the statute: charged knowledge the treasurer was with of the expiration *11 bond, be held diligence of the and must at least to reasonable depositing public the funds. It would be foolish for a deposit money knowing treasurer to 11:50 M. at A. the bond expire having 12 M., no would at additional bond or other deposit. security protect available to the Construing parts together all of the the contract the con phrase clusion seems irresistible that the “during the continu though presents,” inaptly, equivalent ance of these used phrase immediately precedes “during the which it: the time words, phrase, as aforesaid.” In other the “during stated the presents” “during continuance of these means the life of this “during (See agreement,” of the term this bond.” Bartels Davis, sustaining 34 85 Pac. As further v. measure, States & these views in some see United G. F. Co. v. 122 Bonding 142; Co., American Fidelity Okl. & 643; Deposit Cleburne, 296 Fed. City County Co. v. of Pacific 234 Fed. Surety Co., Illinois 97. v.
Much placed leading reliance defendants the case of United F. & Fla. City Pensacola, States G. Co. 357, Ann. 1916B, 1236, Cas. in which court South. the continuing deposi that liability held there was the under tary reasoning bond under The the court consideration. appeals us, applicable but is not case bar. the quite The bonds are The the dissimilar. condition of bond faithfully there considered was the bank “shall account during moneys” deposited by city for and pay over all the period contemplated specified the in the bond. lia The bility merely in that case was to insure the city deposits during completed of its period, but over all received the bank during city obligation period, the stated and this continued though expired during the time had which deposits could be obligation made under the bond; “whereas, in the instant ease, face, the life of the bond is fixed on its view express stipulation reasonably the bond it cannot be liability would period contended extend an indefinite protection would under the operation until plaintiffs saw fit to (Pacific County withdraw them.” Surely Co., v. Illinois supra.) judgment is reversed and the cause is remanded to the
district court of with Broadwater directions enter judgment with prayer plaintiff’s in accordance com- plaint. Remittitur forthwith.
Mr. Justice Galen and Mr. Justice Ford concur. (sitting place HONORABLE WILLIAM POORMAN H. ANGSTMAN, disqualified): of MR. JUSTICE continuing think is a as to I bond one made *12 Monday prior March, 1924, first to the twelve o’clock noon. being disqualified, not hear did Matthews,
Mr. Justice argument part foregoing no takes decision.