111 Neb. 117 | Neb. | 1923
In an action, styled State of Nebraska, ex rel. Clarence A. Davis, Attorney General, v. Farmers State Bank of Halsey, Nebraska, hereinafter designated the Nebraska Bank, a receiver was duly appointed who was proceeding to wind up the affairs of the Nebraska bank in the manner provided by law.
■ Five banks, the Commercial Savings Bank of Des Moines, Iowa, hereinafter called the Des Moines Bank, the Farmers Exchange bank of Grafton, Iowa, hereinafter referred to as the Grafton Bank, the Farmers and Merchants Savings Bank of Manley, Iowa, hereinafter called the Manley Bank,
The trial court found, and entered judgment accordingly, that the interveners respectively were purchasers of their several claims in due course, and that the several certificates of deposit were general obligations of the Nebraska Bank, but denied the several interveners recourse to the guaranty fund for payment of their respective certificates. From this judgment each of the interveners named have separately appealed.
All of the certificates referred to were issued by the Nebraska Bank, and properly signed. The Des Moines Bank is the owner and holder of certificates Nos. 23, 24, and 25, each for $1,000. The Grafton Bank is the owner and holder of certificate No. 31 for $1,000. The- Manley Bank is the owner and holder of certificates Nos. 40 and 41, each for $1,000. The Nora Springs Bank is the owner and holder of certificates Nos. 26, 27, 28, and 32, each for $1,000. The Texas Bank is the owner and holder of certificates Nos. 51, 53, 54, 55, and 56, each for $1,000.
The important question presented by this appeal is whether resort may be had to the guaranty fund for the payment of the several certificates.
The record shows that the Nebraska Bank was a duly organized state bank with a capital stock of $10,000, and was conducting a banking business at Halsey, Nebraska. Sometime prior to May 29, 1919, R. Earle Capron, a resident of Minneapolis, Minnesota, acquired 53 shares of the capital stock in the Nebraska Bank, and arranged with E. N. Dion, a young man without banking experience, to
Each of the five appellants insists that because the certificates of deposit are negotiable instruments, and were acquired by the respective holders in due course, therefore they are entitled to recourse to the guaranty fund for ultimate payment.
In this contention we think the appellants fail to distinguish between the liability of the maker of a negotiable instrument, which rests upon the law pertaining to negotiable paper, and the liability of the guaranty fund, which is purely statutory. The circumstances under which the guaranty fund may be liable are entirely apart from the law pertaining to negotiable paper. A holder of a certificate of deposit in a bank who seeks to hold the guaranty fund liable for its payment must show that the transaction leading up to the issuance of the certificate was such that the law holds the guaranty 'fund liable for its payment. The mere fact that a certificate recites on its face that a certain sum has been deposited, or that officers of the bank may have stated that the deposit is protected by the guaranty law, does not make the guaranty fund liable for payment, if in fact a deposit has; not been made, as that term is understood in the guaranty law. The banks have nothing to do with the guaranty fund as such. It is a fund raised by assessments against all state banks, administered by officers of the state to protect deposits in banks. Section 8033, Comp. St. 1922, relating to the guaranty fund, provides in substance that claims of depositors for deposits shall have priority over all other claims, with certain exceptions not necessary to be noted; and where the cash in the hands of the receiver available for the payment of depositors is insufficient to pay such claims, the court having jurisdiction of
We come now to consider the transactions which led up to the issuance of the certificates to Capron on May 31, 1919, and to Ridings on June 5, 1919.
As before stated, within two days after Capron' became president of the bank, he presented to the bank, through
As was said in the lams case, supra: “The act creating the depositors’ guaranty fund was intended by the legislature to be a shield of protection against loss to those who in good faith deposit their money in state banks in compliance with the terms of the statute. Unless its provisions are fairly construed and impartially enforced, this salutary law might become a destructive sword in the hands of unscrupulous persons having unlawful' designs on the depositors’ guaranty fund.”
Referring now to the transactions out of which certificates Nos. 40 and 41, held by the Manley Bank, and certificates Nos. 51, 53, 54, 55, and 56, held by the Texas Bank, were issued, there is no pretext that anything was ever put into the bank for their issuance, except for certificates Nos. 51 and 53, which will be considered later. The certificates were issued to Ridings upon the claim on his part' that they would be sold and the money placed in the bank to bolster up the cash reserve of the bank. It needs no argument to show that such a transaction is illegal, and that the certificates of deposit so issued cannot be regarded as deposits within the protection of the guaranty law. But, it is argued, as to certificates Nos. 51 and 53, that the bank received $1,980 in payment therefor, and that they should be protected by the guaranty law. The record shows that some ten days after the certificates were issued the bank received $1,980 for certificates Nos. 51 and 53. This fact, however, would not render the certificates deposits within the protection of the guaranty act. Reduced to its simplest terms, the transaction would be this: The bank receives $1,980 and issues therefor two certificates of deposit for $1,000 each, bearing interest at 5 per cent. The effect of such a transaction would be to enable the holder to obtain a greater rate of interest on his certificate than* 5 per cent., which is prohibited by law. In principle the transaction is within the rule announced in the lams case, heretofore cited.
The argument is made by appellants that, they being
Other suggestions have been made in the brief which we do not deem it necessary to answer, but which have been considered.
From an examination of the record in the light of the principles of law' which must be applied, we are satisfied that the present holders of the certificates are not entitled to recourse to the guaranty fund for their payment. They were issued in violation of law, and cannot be considered as deposits within the meaning of that term as used in the guaranty law.
We conclude that the judgment of the trial court was right in every particular, and it is, therefore,
Affirmed.