Board of Levee Com'rs v. Powell

Stevens, J., delivered the opinion of the court. It is earnestly suggested that the court erred in its opinion affirming this cause. The case was decided by a divided bench, and the* opinions of the different members of the court, with a full statement of the facts, will be found in 68 So. 71. It is with some feeling of reluctance that we upset or withdraw a former opinion of the court, but the construction placed upon chapter- 97, Laws 1908, by a majority of the court as now constituted impels a change of the majority opinion and the sustaining- of the suggestion of error. The rights of the parties hereto are based on statute, and the conclusions to be reached are — 423 — controlled by construction of the statutes here presented for review. We here adopt the views expressed in the dissenting opinion, and hold that the funds of the levee board on deposit in the Bank of Tunica, and now involved in this proceeding, are trust funds and under the protection of section 3485, Code 1906, as construed by numerous decisions of this court. The cases fully construing section 3485 are fully cited by Smith, C. J., in his concurring opinion heretofore rendered in this case. It is conceded that any funds of the levee board deposited in a bank before the enactment of the depository law (chapter 97, Laws 1908) would have been trust funds and a preference claim. As said by Reed, J., in Powell v. Board of Supervisors of Tunica County, 65 So. 499: “It is beyond question in this state that, independent of the depository law, a county has a preference claim against all assets of the bank for public'funds on deposit therein, and that such funds are trust funds for which this preference is given.” Fogg v. Bank, 80 Miss. 750, 32 So. 285; Metcalfe v. Bank, 89 Miss. 649, 41 So. 377; Green v. Cole, 98 Miss. 67, 54 So. 65; Potter v. Fidelity Deposit Co., 101 Miss. 823, 58 So. 713. What is here said by Judge Reed with reference to the funds of a county applies with equal force to the funds of the levee board. Under the ruling in Green v. Cole, supra, the levee commissioners would have a lien on any assets of the bank, including its real estate, in event there was not sufficient money of the banking institution to satisfy the preference claim. The question is then presented whether the enactment of the levee board depository law deprives the levee commissioners in this case of the protection afforded by section 3485 of the Code. The determination of the question hinges solely upon the proper construction of chapter 97, Laws 1908, providing for the deposit by the treasurer of the — 424 — board of co3u.missiori.ers in a bank or banks to be selected and designated in the manner provided by the act in question. The right of the state in its sovereign capacity to prescribe the conditions upon which a bank should become a depository for the levee funds is conceded. The legislature, in the exercise of this right, provides for the security to be demanded, even to the extent of providing that ‘ ‘ the stockholders of all banks qualifying as depositories under this act are hereby made liable for any loss sustained,” and then expressly provides : “That the creating of this additional security and the acceptance of the collateral hereinbefore mentioned shall not be construed as waiving any rights, benefits or privileges conferred by law upon the commission in the matter of recovering public moneys or trust funds from banks in which they may be deposited.” The language here employed by the legislature must be construed Í31 the light of the adjudications of this court in reference to the older statute (section 3485), which alone at that time measured the right of the levee board to recover “public moneys or trust funds from banks in which they may be deposited.” The lawmakers then knew that the levee board had a preference claim for any of its funds deposited by its treasurer in any bank or banks. Its purpose in enacting chapter 97, Laws 1908, was not only to provide a means whereby the board might derive some benefit from the use of the public funds, but also to provide for the safe-keeping of the levee funds. As said by Reed, J., in Powell v. Board of Supervisors of Tunica County, supra: “The very purpose of the legislature, by the enactment of the law for the establishment of county depositories, was to provide for the safe-keeping of the county funds.” A different construction in the case just referred to was placed on the county depository law, but the stat — 425 — nte in that case is also different from the statute now before ns. The court in the Powell v. Board of Supervisors Case further says: “We do not see in the present law (chapter 194 of the Acts of 1912) providing for the establishment of a county depository anything inconsistent with the provisions of section 3485 of the Code- of 1906. . . . Such funds, when secured in such depository, do not need to bé protected by section 3485.” The court in that case does proceed to hold, however, that: “When the full amount for which the bank is qualified has been reached, then any other funds will be received into the bank, not in its capacity as a depository, but simply as a bank which is not a county depository receiving public funds. Such excess funds will come under the protection of section 3485. . . . They are trust funds, and are not liable to be taken by the creditors of the depository.” We do not take issue with the complete holding of this court, either 'in that case or in the case of Potter v. Fidelity & Deposit Company, 101 Miss. 823, 58 So. 713. The court in the Potter Case was construing still another and separate statute, chapter 96, Laws 1908, providing for a state depository, and it is significant that Mates, C. J., remarks, in the course of his opinion, as follows: “Let us examine chapter 96 of the Laws of 1908 for a moment. The act is new to the law and complete in itself. It nowhere declares that the funds deposited in accordance with its provisions shall be deemed ‘trust funds.’ ” The inference to be deduced from this language of Judge Mayes is clear. He meant clearly to state that, if the act there in review had enacted that the state funds deposited in accordance with its provisions should still be treated as trust funds within the meaning of — 426 — section 3485, then a different result might he reached. The draftsman of the levee board depository law certainly had in mind the very point now raised, viz., that the enactment of the law should not operate as a waiver on the part of the levee board of any of the rights, benefits, or privileges then provided by law for the recovery of such funds from insolvent banks in which they might be deposited. This, in fact, is the express language of the statute. It means this very thing. It cannot mean anything else. Section 3485', Code 1906, first appeared as section 3077, Code 1892, enacted for the first time by and with the adoption of the Code of 1892. The enactment of this statute recognized the growing practice of public officers to deposit public funds in banks, and the possible mischief and damage to the public interest by the failure of banks having public moneys on deposit. The lawmakers saw the hazard to which these funds were exposed, and meant to provide, and did expressly provide, that the public moneys belonging to the state, county, municipality, or levee board should, when deposited in' any bank, be regarded and treated as “trust funds,” not liable to be taken by the general creditors of the bank or by the creditors of the officers making the deposit. At that time the public officers charged with the duty of keeping public funds were held to be insurers of the safety of these funds. Notwithstanding this, the legislature was providing further and additional security. It is now contended that section 3485 applies only when the funds in question are deposited in a manner which under the statute was unlawful; in other words, it is contended by counsel in this case that before the enactment of the present depository law it was unlawful for the treasurer of the levee board to deposit his funds in any bank, and that the old statute can in no wise apply now, because the legislature has provided a lawful place for depositing the levee funds. This, in — 427 — our judgment, is simply an effort to reason away the statute, and in the face of the statute. It has never been unlawful in Mississippi for a public officer to deposit public funds in a bank; no more so than it has been unlawful for him to deposit such funds under the floor of his dwelling house. On the contrary, the enactment of section 3485 recognized the growing custom of officers to make use of banking establishments; and the first pronouncement of this court in Fogg v. Bank, supra, does not characterize such a deposit as unlawful, but,on the contrary, the court, through Terral, J., says that: “The bank received it (the deposit) as a trust fund nolens volens, and the principles of equity relating to trusts fully apply to it. ’ ’ And again: “It is a trust fund from its nature and character, . . . as well as bv the express declaration of section 3077.” The lawmakers, by section 979, Code 1906*, in reference to county treasurers, by requiring in the alternative “a certified statement of deposit in a solvent bank in the state, verified by the oath of an officer thereof,” recognized the common practice of depositing county funds in banks. In fact, the very enactment of all the depository laws in our state was induced by the growing custom of permitting banks to handle the public funds in such way as to swell their deposit accounts and to profit thereby. It is true that the selection and designation of a depository under the law in question followed by deposit of public funds therein creates the relationship of debtor and creditor. At-the same time any such deposits are by law payable upon demand, and the failure to pay any lawful warrant not in excess of the deposit is a breach of the bond required of the depository, and authorizes the sale of the securities pledged; in other words, the depository must always be ready to return either the specific deposit or its equiva — 428 — lent in money. Any bank proposing to qualify accepts the business with all of the restrictions and requirements of the law; it accepts the position cum onere. The rights of the parties hereto being statutory, this case is clearly distinguished from the Potter Case, in 101 Miss. 823, 58 So. 713, supra., as well as the Powell Case, in 65 So. 499, supra, both of which were based upon statutes requiring and justifying a different construction from that placed upon the language of the statute now in question. The court, in effect, in each of those cases, held that the state and county, by selecting a depository under the acts in question, waived the benefits of section 3485, because neither of those acts dtf*dared that the funds would still be trust funds or protected by the statute then in existence. The draftsman of the levee depository law, however, had a vision of the construction the courts might place on the statutes, and incorporated in the instant statute an express reservation that all rights guaranteed the levee board by the law as then existing should not be- waived. If it be said that the result of the present holding is to afford greater security for the levee funds than for the state and county funds, then we answer that' the lawmakers gave us separate statutes for the state, county, and levee board, and with the wisdom of the law or the differences in the statute, as this court has time and again announced, we have nothing to do. Let the decree of the lower court be reversed, the demurrer to the bill overruled, and appellee granted thirty days to answer after receipt of mandate by clerk of the court below. Reversed and overruled. Smith, C. J., adheres to the views expressed by Judge Reed and himself on the former hearing of this cause.