State v. Rubey

¶1P. Trammel, treasurer of Macon county, deposited in the Macon County Savings Bank, from time to time, between November 2nd, 1880, and February 15th, 1882, certain county and township funds, lawfully in his possession as such treasurer, which were entered on thé books-of the bank to the credit of “ P. Trammel, Treasurer;” and on the last mentioned date, the balance so held by said bank amounted to $39,522.84. On the said 15th day of February the bank failed, and made an assignment for the benefit of all its creditors. Thereupon a claim for said balance was presented in the name of the State to the assignee, and an allowance thereof demanded, as a preferred claim under the provisions of the act of February 11th, 1881. That act is as follows:

¶2Section 1. Whenever any person indebted to the State of Missouri is insolvent, or whenever the estate of any deceased debtor in the hands of the executors or ad*616ministrators is insufficient to pay all the debts due from the deceased, the debts due to the State of Missouri shall be first satisfied; and the priority hereby established shall extend as well to cases in which a debtor not having sufficient property to pay all his debts makes a voluntary assignment thereof, or in which tbe estate and effects of an absconding, concealed or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed; Provided, That nothing in this act contained shall be construed to interfere with the priority of the United States as secured by law, or the payment of the expenses of the last sickness, wages of servants, demands for medicine and medical attendance, during the last sickness of the deceased, nor funeral expenses.

¶3Section 2. Every executor, administrator, assignee or other person, who pays any debt due by the person or estate for whom or for which he acts before he satisfies and pays the debts due to the State of Missouri from such person or estate, shall become answerable in his own person and estate for the debts so due to the State of Missouri, or for so much thereof as may remain due and unpaid.

¶4Section 8. Whenever the principal in any bond given to the State of Missouri is insolvent, or whenever such principal being deceased, his estate and effects which come to the hands of his executor, administrator or assignee, are insufficient for the payment of his debts, and in either of such cases, any surety on the bond, or the executor, administrator or assignee of such surety, pays to the State of Missouri the money due upon such bond, said surety, his executor, administrator or assignee shall have the like priority for the recovery and receipt of the moneys out of the estate and effects of such insolvent or deceased principal as is secured to the State of Missouri, and may bring and maintain a suit upon the bond in law or equity in his own name for the recovery of all moneys paid thereon.

¶5The assignee refused to allow the claim presented as a preferred claim due to the State, but allowed the same in *617the name of P. Trammel, Treasurer, for $39,522.84, payable pro rata out of the bank assets, as other non-preferred claims, and this action of the assignee was affirmed by the circuit court. The questions presented are as to the right of the State to maintain this proceeding, and to claim priority of payment under the provisions of the act of 1881, above quoted.

¶61. county and acuoifbvtbestate It was decided in the ease of the State ex rel. Township, etc., v. Powell, 67 Mo. 395, that the treasurer of a school township is liable on his official bond for school funds deposited in bank and lost throngi the foiC and insolvency of the bank, although he was not guilty of any want of care or prudence in failing to ascertain its financial condition; that when he deposited the school money in his hands to his credit as trustee and treasurer, the bank simply became indebted to him in his official capacity, and he took the risk of being able to collect the money when he should require it. This decision was affirmed in State ex rel. Mississippi Co. v. Moore, 74 Mo. 413, in which case it appeared that funds of the county were lost by reason of a deposit thereof by the county treasurer in a bank which failed. In both of these cases the suit was on the bond of the officer. This proceeding is instituted by the State against the assignee of the depositary to recover county and township funds deposited by the officer.

¶7The State has an undoubted right to dispose of the revenues collected under its authority for county and township purposes, as it may see proper, when such disposition does not impair the obligation of some contract; but having once provided by law how such revenues shall be disposed of, no other or different disposition can be made of the same, except by the exercise of the legislative power of the State. Under the laws now in force, the funds in question here belong to the county and the townships, and the State has no right to sue for the recovery of such funds except in actions brought to the use of the county, on the *618bonds of officers, which are by law required to be given to-the State for the use of the county. State ex rel. Saline Co. v. Sappington, 68 Mo. 454. Where the action is not on a. bond given to the State, the suit should be brought' in the name of the county. Lafayette Co. v. Hixon, 69 Mo. 581; and in counties where the township organization law is m force, in the name of the township.

¶82. state pun vs: action for. But if the funds in question were specifically the revenues of the State, as contradistinguished from the revenues. of tiie coun1N and were required by law to be paid into the State treasury, to be disbursed for the support of the State government proper, no action could be maintained by the State even against the official custodian of such funds, until he had made default in the payment thereof to the State treasurer, as required by law. No such default appears in this record. The conceded insolvency of the county treasurer, will not, of itself, give a right 'of action; there must be an actual default in payment as provided by law. The treasurer may meet his obligations to the State notwithstanding his insolvency.1 It certainly cannot be seriously contended that the State may sue a depositary of the county treasurer to recover money wrongfully withheld from the treasurer by such depositary before the State has any right of action against the treasurer.- If such action could be maintained, and the State should reeover, the money recovered, if not then due to the State, would have to be again placed in the hands of the treasurer who is entitled to the custody thereof,, until required by law to pay it to the State, and the treasurer could again deposit it, and perhaps render another action by the State necessary, to again restore it to the custody of the officer. The exercise of such a guardianship as this over State and county officials charged with the duty of collecting the public revenues, would manifestly be absurd.

¶9*6193. state funds deposited in bank,*618Furthermore, the State does not sustain the relation of creditor to the depositary of the officer. By the decisions *619ab°Ye cited, the officer is the creditor, and the hank is the debtor of the officer, and the officer alone can maintain an action to recover funds deposited by him. In all ordinary cases, the State must rely upon the bond of the officer, and has no right to pursue the defaulting depositaries of the officer, except by way of garnishment on execution against the officer. In case, however, of fraudulent collusion between the officer and the depositary, it may be that the State would have a right in equity to pursue the funds of the State in the hands of the fraudulent possessor, in the event of the insolvency of the officer and his sureties, but, even then, not as a preferred creditor under the act of 1881.

¶104. -. That act was never intended to authorize a proceeding like the present. The 3rd section of the act, which provides that when the sureties of an insolvent principal in any bond given to the State, shall pay the amount due upon such bond, they shall have the same priority against such insolvent principal, or his estate, as is secured to the State, and also a right of action on the bond, makes it evident, we think, that the legislature never contemplated giving any priority to the State in the assets or estates of persons who might be indebted to such insolvent principals; and that, for the very simple reason that such principals themselves have no such priority.

¶115 _. «loan_ mgout.” But notwithstanding the decisions heretofore cited, it is urged on behalf of the State that Trammel had no right to make a general deposit of the county revenues held by him, for the reason that such deposit amounted to a loan of the money to the bank, which is, by section 1327 of the Revised Statutes, declared to be a felony, and that the bank, therefore, could not in law become a debtor to Trammel on account of said funds, and the same are not subject to the demands of the creditors of the bank, but must be restored to the plaintiff as the real owner thereof. The right of the State to the funds in question has already been passed upon. As to the other *620point: It is doubtless true that every general deposit is so far, in effect, a loan, as to create the relation of debtor and creditor between the bank and the officer; (Morse on Banking, 28;) but, we are not, therefore, inclined to hold that general deposits in bank by'county and State officials, other than the State treasurer, whose duties in this regard are prescribed by the constitution, are within the inhibition of section 1327, supra.

¶12That section is as follows : “ No such officer, agent or servant,” (State, county or city official,) “ shall loan out, with or without interest, any money or valuable security, received by him or which may be in his possession or keeping, or over which he may have supervision, care or control, by virtue of his office, agency or service; and any such officer, agent or servant so loaning such money or valuable security, on conviction thereof by indictment, shall be punished by imprisonment in the penitentiary not less than two years, or by a fine not less than $500.” Section 1328 provides that when any such officer shall make any contract with any person or corporation, by which he is to receive any benefit or advantage from the deposit with such person or corporation of funds in his hands as such officer, such agreement, as to such officer, shall be null and void, but the State may sue for and recover all such benefit or advantage, as would by the terms of the contract have accrued to the officer. Section 1329 provides that any officer who shall make any such contract as is described in section 1328, or who shall receive any benefit or advantage from any deposit by him of funds held by him as such officer, shall be punished by imprisonment in the penitentiary, or by fine not less than $500.

¶13These sections were all enacted at the same time, and appear for the first time in the revision of 1855, and when construed together manifestly indicate a purpose on the part of the legislature to discriminate between a deposit in bank for safety and convenience, and an ordinary loan. Section 1327 punishes the making of all loans, whether *621made for profit or not, and section 1329 punishes, not the making of a deposit simply, but the making of a deposit with a view to profit on the part of the officer. The object of sections 1328 and 1329 is to' compel the officer to look alone to the security of the funds in selecting a depositary, and not to his own emolument, and these sections impliedly sanction deposits when they are not made in ' violation of their provisions.

¶14The judgment of the circuit court will, therefore, be affirmed.