39 Neb. 353 | Neb. | 1894
This is an application by the relator, the First National Bank of Crete, for a peremptory writ of mandamus to Joseph S. Bartley, state treasurer, to compel respondent to deposit with relator a portion of the moneys in the state treasury, according to the requirements of the act passed by the state legislature of 1891, entitled “An act to provide for the depositing of state and county funds in banks.” The petition charges, »in substance, .that on the 9 th day of January, 1894, the governor, attorney general, and secretary of state, in pursuance of the provisions of said act, designated the First National Bank of Crete as a state depository, and on said day said bank executed and delivered a bond conditioned as required by said law, which bond, and the sureties thereon, were duly accepted and approved by the proper officers; that only three other banks have complied with the provisions of said act of the legislature so as to entitle them to the deposit of state funds, and that the amount of the bonds furnished by each of said other banks was, and is, $100,000, so that the aggregate amount which the respondent is authorized at any time to have on deposit in all of said banks pursuant to said act is $150,000; that respondent has refused to deposit any of the moneys now in the state treasury with the relator, although requested so to do; that respondent, at the time of such demand and refusal, stated that all the moneys belonging to the state which he is empowered by said act to deposit were already deposited in the said several banks, except moneys belonging to the following funds: sinking, relief, permanent school, temporary school, permanent university, library, agricultural college endowment, normal school en
The first question in this case is one of construction to be given to the act above mentioned relating to the deposit of public moneys in banks. Was it the intention of the legislature to require all moneys coming into the state treasury to be deposited, or only a certain portion thereof? Sections 1 and 2 of said act, chapter 50, Laws of 1891, are in these words:
“Section 1. The state treasurer shall deposit, and at all times keep in deposit for safe keeping, in the state or national banks, or some of them doing business in the state, and of approved standing and responsibility, the amounts of money in his hands belonging to the several current funds in the state treasury, and any such bank may apply for the privilege of keeping on deposit such funds or some part thereof; all such deposits shall be subject to payment when demanded by the state treasurer on his check, and by all banks receiving and holding such deposits as aforesaid, shall be required to pay, and shall pay to the state for the privilege of holding any such deposit not less than three per cent per annum upon the amounts so deposited, as hereinafter provided, and subject also to such regulations as are imposed by law, and the rule adopted by the state treasurer for receiving and holding such deposits.
*356 “Sec. 2. The amount to be paid by any and all banks under the provisions of this act, for the privilege of keeping public funds on deposit, shall be computed on the average daily balances of the public moneys kept on deposit therewith, and shall be paid and credited to the state quarterly, on the first days of January, April, July, and October of each and every year, and the treasurer shall require every such depository to keep separate accounts of such several funds of the state as may be deposited, showing the name of each fund to which the same belongs and the amounts and sums paid to the state for the privilege of keeping the same on deposit as aforesaid, and to each of said funds respectively shall be credited directly to the account of the fund or funds so held on deposit, in proportion to the amount of such funds so held.”
By section 3 each bank designated as a depository under the act is required to give a bond for the safe keeping and payment of all deposits and the accretions thereof, conditioned that it will render each month to the state treasurer a statement, in duplicate, showing the several daily balances, and the amount of state moneys held by it during the month, the amount of the accretions thereof, how credited separately, and for the payment of the deposit and the accretions accruing thereon, upon the presentation of the check of the state treasurer, and also that such depository will faithfully discharge the trust and comply with the provisions of the act. The section further provides the form of the bond, names the officer with whom the same shall be deposited, and forbids the treasurer having on deposit in any bank, at one time, moneys exceeding one-half of the penalty of the bond.
Section 4 provides: “The making of profit, directly or indirectly, by the state treasurer, out of any money in the state treasury belonging to the state, the custody of which the state treasurer is charged with, by loaning, depositing, or otherwise using it, or depositing the same in
The next section prescribes the penalty for the willful failure or refusal of the state treasurer to comply with the provisions of the act.
Counsel for the relator insists that it is the duty of the state treasurer to keep on deposit in the several banks designated as depositories all money received by him belonging to the state, while the respondent contends that the moneys belonging to what is commonly known as the “ general fund,” a fund created for the purpose of paying the salaries of the state officers and defraying the general expenses of the state government, are the only moneys to which the depository act applies. The principal controversy in the case is as to the meaning of the term “several current funds ” as used in the section first above quoted. The decisions of the courts of other states do not aid us in our investigation. In fact, we have been unable to find a law upon the statute book of any state, relating to the deposit of public moneys in banks, precisely like our own. In most of the states having a depository law the treasurer
It should be remembered that the moneys which come into the state treasury from time to time are, either by constitutional provision, or by legislative enactments, applicable to a variety of objects, and are divided into several separate and distinct funds, according to the sources from which they are derived and the uses to which the same may be devoted. We know at the time this law was enacted that
We do not entertain a doubt as to the sinking fund, relief fund — which is also a sinking fund, and the permanent educational funds, the moneys in each of which, counsel strenuously insist, are not “current funds” within the meaning of the law. The sinking and relief funds, now aggregating about a quarter of a million of dollars, consist of moneys derived from taxes levied for the purpose of paying the interest on outstanding bonds issued by the state, and for the purpose of paying the principal of said bonds when they become due. The moneys constituting these two funds are collected and paid into the treasury, from time to time, precisely the same as the taxes are collected and paid into the general fund. The interest on one set of the bonds is paid by the state treasurer annually and the other semi-annually.
The permanent school fund, permanent university, normal school endowment, and agricultural college endowment funds constitute the permanent educational funds of the state. The permanent school fund is composed of the proceeds of the sale of land by the state, and of the redemption of United States and state securities and county bonds
In respect to two of the other funds of the state treasury, the temporary school and temporary university, which aggregated at the close of ,the last year more than $360,000, it may be observed that the former is derived from a tax levied and collected at the same time as other state taxes for the support of the common schools of the state, together with the interest and rentals accruing from the sale and lease of school lands, and the interest received from the investments made for the benefit of the permanent school fund. The temporary university fund is supplied from a tax levied for the support of the state university, which is
There is no word or provision in the act we are discussing which directly in terms, or by fair implication, limits the operation thereof to the moneys of the state belonging to one fund more than another. On the contrary, the subject-matter of the act, and the obvious scope and purpose of its provisions, conclusively show it was the intention of the legislature that the statute should apply to all funds of the state alike. An examination of the provisions of the second and fourth sections of the law strengthens this conclusion. By the second section it is made the duty of every bank designated as a depository “to keep separate accounts of such several funds of the state as may be deposited, showing the name of the fund to which the same belongs and the amounts and sums paid to the state for the privilege of keeping the same on deposit as aforesaid, and to each of said funds respectively shall be credited directly to the account of the fund or funds so held oh deposit, in proportion to the amount of such fund as held.” There is no ambiguity in this provision. Plainer language could
This brings us to the consideration of another question, and that is, whether the act which we have been considering is unconstitutional in so far as it requires the deposit in banks the moneys in the treasury belonging to the several educational funds of the state. Section 9 of article 8 of the constitution of Nebraska reads as follows: “All funds belonging to the state for educational purposes, the interest and income whereof only are to be used, shall be deemed trust funds held by the state, and the state shall supply all losses thereof that may in any manner accrue, so that the same shall remain forever inviolate and undiminished; and shall not be invested or loaned excepten United State' or state securities, or registered county bonds of this state; and such funds, with the interest and income
As was said by Mr. Justice Miller in his opinion in Marine Bank v. Fulton Bank, 2 Wall. [U. S.], 256, “All deposits made with bankers may be divided into two classes, namely, those in which the bank becomes bailee of the depositor, the title to the thing deposited remaining with the latter, and that other kind of deposit of money peculiar to banking business, in which the depositor, for his own convenience, parts with the title to his money, and loans it to the banker, and the latter, in consideration of the loan of the money and the right to use it for his own profit, agrees to refund the same amount, or any part thereof, on demand.”
The decisions are quite uniform to the effect that where money deposited in a bank is passed generally to the credit of the depositor, the relation of debtor and creditor is thereby created, and the transaction, although called a “deposit,” is nevertheless in substance and legal effect a loan, and this though it is payable on demand. (Commercial Bank of Albany v. Hughes, 17 Wend. [N. Y.], 100; Perley v. County of Muskegon, 32 Mich., 132; State v. Executor of Buttles, 3 O. St., 309; Ætna Nat. Bank v. Fourth Nat. Bank, 46 N. Y., 82; Lowry v. Polk County, 51 Ia., 50; Long v. Emsley, 57 Ia., 11; In re Franklin Bank, 1 Paige Ch. [N. Y.], 249; Wray v. Tuskegee Ins. Co., 34
In Foley v. Hill, 2 H. L. Cases [Eng.], 28, Lord Chancellor Cottenham said: “ Money when paid into a bank ceases altogether to be the money of the principal. It is then the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him when he is asked for it. The money paid into the banker’s is money known by the principal to be placed there for the purpose of being under the control of the banker; it is then the banker’s money; he is known to deal with it as his own; he makes what profit of it he can, which profit he retains to himself, paying back only the principal, according to the custom of bankers in some places, or the principal and a small rate of interest, according to the custom of bankers in other places. The money placed in the custody of a banker is, to all intents and purposes, the money of the banker, to do with it as he pleases; he is guilty of no breach of trust in employing it; he is not answerable to the principal if he puts it into jeopardy, if he engages in a hazardous speculation; he is not bound to keep it or deal with it as the property of his principal, but he is, of course, answerable for the amount, because he has contracted, having received that money, to repay to the principal, when demanded, a sum equivalent to that paid into his hands. That has been the subject of discussion in various cases, and that has been established to be the relative situation of banker and customer. That being established to be the relative situations of banker and customer, the banker is not an agent or factor, but he is a debtor.”
The Ohio case was this: The Ohio canal fund commissioners deposited with the Columbus Insurance Company $100,000 of the money and funds of the state, belonging to the canal fund, and in consideration of which the company gave a bond, signed by various persons, to repay the
In State v. Keim, 8 Neb., 63, this court held that the deposit of state moneys by a state treasurer in a bank was a loan in its legal effect. This case was cited with approval in First Nat. Bank of South Bend v. Gandy, 11 Neb., 431.
It is urged that the Nebraska eases cited do not apply to the questions here at issue, since at the time they arose no law was in existence which required the deposit of public funds in banks, while now the treasurer is not only authorized to deposit them for safe keeping, but he is expressly commanded to do so. We are unable to see the force of the argument. The fact that the legislature has enacted that state moneys shall be deposited in banks does not make the placing of the funds therein any the less a loan than had they been deposited without sanction of law. On the contrary, it would seem that the two cases decided by our own court are the more valuable as precedents for our now holding that such a transaction amounts in law to a loan, since we have a statute which authorizes the deposit of public funds, and in every ease of deposit, this statute enters into and forms a part of the contract.
Connecticut has a statute which declares that where the real estate of a married woman has been sold and the proceeds thereof “secured or invested in her name, or in the name of a trustee for her benefit, the same shall * * * not be liable to be taken on execution for the debts or liabilities of her husband.” The supreme court of that state, in Jennings v. Davis, 31 Conn., 134, held that where the money received by the. wife from the sale of her lands is deposited in her name in a bank, it is invested within the meaning of the statute. Sanford, J., in deliv
The conclusion is irresistible that the framers of the law under review contemplated that the moneys deposited in pursuance of the provisions thereof should be retained by the bank receiving the same for an indefinite period of time and be used and loaned by it as its own, the bank being under obligation to repay the amount so deposited on the presentation of the check of the state treasurer. There is no room for doubt that where money is deposited under this act, the bank receiving the same is not a bailee, which would be the case if the title to the money remained in the state after the same was received by the bank. Prior to the adoption of the present statute there existed in this state no law authorizing or requiring the deposit of public funds in banks. It was, however, generally understood that each
We have not considered, nor do we now determine, whether the relator has such an interest as entitles it to maintain the action, since its right to do so has not been raised or argued by counsel. As the state at large is directly interested in the enforcement of the depository law, the attorney general could, and doubtless it is his duty to, institute proceedings to compel the depositing of the funds in the banks designated as depositories; and perhaps a bank which has complied with the law might do so, at least in case the attorney general should refuse to appear and file the application. As it is important to the public interests that the real questions involved in this controversy should be determined and set at rest, we have thought it necessary
Writ allowed.