Opinion
No. 30803.
December 11, 1933.
TAXATION.
Statute requiring selection of special depository for sheriff's and tax collector's funds being inapplicable to counties having regular county depository, sheriff depositing public funds in county depository held not liable to state tax collector for loss on depository's insolvency (Laws 1932, chapter 215).
ON SUGGESTION OF ERROR. (Division B. March 19, 1934.) [153 So. 523. No. 30803.]1. TAXATION.
Statute which, having authorized selection of emergency county depository, relieves collector from liability after depositing tax funds in county depository, held applicable to counties having regular depository as well as counties selecting emergency depository (Laws 1932, chapter 215).
2. TAXATION.
Statute providing that collector "shall" deposit tax funds in county depository held mandatory (Laws 1932, chapter 215, section 3).
3. TAXATION.
Collector may lawfully deposit tax collections daily in county depository and subsequently transfer collections to proper funds, and as to such deposits, he is protected against liability on depository's insolvency (Laws 1932, chapter 215, section 3).
APPEAL from Chancery Court of Greene County.
May, Sanders, McLaurin Byrd, of Jackson, for appellant.
Our contention is that chapter 215 of the Acts of 1932 is an act passed for the purpose set out in the title of the act, which is to provide for an additional method of selecting county depositories.
In the instant case, the board of supervisors of Greene county had already selected a depository, and they were operating under the provisions of the Code of 1930, requiring boards of supervisors to designate depositories for county funds, but nothing in the Code of 1930 required the board of supervisors to designate depositories for sheriff's funds, and the record shows that the board of supervisors of Greene county passed only one order with reference to the selection of a county depository, and that was on January 4, 1932, in which they designated the Bank of Leakesville as the depository for the county funds, making no reference whatever to the sheriff and tax collector's funds. Certainly the provisions of chapter 215, approved January 29, 1932, cannot be held to be retroactive so as to apply to the order of the board of supervisors made on January 4, 1932.
The bank, in entering into the contract with the county, bid for the county funds, and did not bid for the sheriff's funds, and if chapter 215 is to be held to apply to the bank of Leakesville in this case, then the Legislature, by legislative act, amended a contract already entered into. This would be clearly unconstitutional and beyond the power of the Legislature.
By the very provisions of section 1 of the act it applies only to counties where no depositories were selected on or before the first Monday of January, 1932.
In the cases of Brown v. Lester, 13 S. M. 392; Baugher v. Lane, 40 Miss. 493; Griffin v. Miss. Levee Com., 71 Miss. 767; Adams v. Lee, 72 Miss. 281, and Arnold v. State, 77 Miss. 463, the court had before it the question of the liability of the collecting officer, and the universal holding of the court was that the sheriff or tax collector is liable for the loss of all money, except that which is lost by reason of the act of God or of the public enemy.
We insist that there is no statute, outside of chapter 215 of the Laws of 1932, which we contend and which this court has held does not apply in the instant case, which relieves the sheriff and his bond from liability to account for money in the possession of the sheriff, or collected by the sheriff. We have searched in vain for any authority holding that a deposit of public money in a bank, which has also qualified as a depository for certain money, relieves a depositor of liability.
J. Morgan Stevens, of Jackson, amicus curiae.
The tax collector should not be held insurer of public funds which by law he is required to deposit in a place expressly authorized by law.
We respectfully submit that the authorities holding that officers are insurers originated under pioneer conditions where there were no adequate banking facilities or ways and means for safeguarding public money, and at a time when the state was not interested in deriving the benefit of interest on public deposits. Furthermore, they brought about hard and harsh results. Fundamentally, there is no sound reason why an officer should have any higher degree of responsibility than trustees, guardians and administrators handling trust funds, and if they deal with the funds of the public, as a reasonably prudent man would deal with his own money, it would appear they have done all that equity and sound reasoning should require.
Overton County v. Copeland, 31 L.R.A. 844; Ex parte Morris and Johnson, 19 L.Ed. 799.
Reason and authority support the view that in any case where the officer has placed funds in a depository expressly authorized or required by law and qualified in obedience that law, that then the officer is no longer strictly responsible for any loss occasioned by the failure of the legally approved depository.
The county depository here was liable for all public funds deposited in it, whether distributed or undistributed among the various funds.
Sec. 4341, Code of 1930; 65 A.L.R. 798. J.W. Backstrom, of Leakesville, for appellees.
It is not contended by the appellant that the appellee was in any way negligent, or failed to do anything that was required of him to do. The evidence is that he was diligent in that he made inquiry of the proper authorities if the Bank of Leakesville had properly qualified as the county depository and had up sufficient security, and was advised by this authority that the Bank of Leakesville had qualified as the county depository, and had up sufficient security to not only cover the county funds but sufficient to cover the tax collector's account.
In the case at bar the Bank of Leakesville, being the legal qualified depository of Greene county, Mississippi, is a quasi public officer.
Miller v. Batson, 134 So. 567.
Appellant does not contend, nor can he successfully contend that appellee, Sowell, was required to do more than he did do in this case.
The Legislature under its police power certainly has the right by a legislative act and amend a contract between public officers or between the different departments or officers of the county, and especially where the public interest may be involved.
Noble State Bank v. Haskell et al., 219 U.S. 104, 155 L.Ed. 112, 31 S.C. 186; 22 Okla. 48, 97 P. 590; Shallenberger v. First State Bank, 219 U.S. 114, 55 L.Ed. 117, 31 S.C. 189, 172 Fed. 999; Bank of Oxford v. Love, 111 Miss. 699, 72 So. 133, 8 A.L.R. 894, 250 U.S. 603, 63 L.Ed. 1165; Kent v. Love, 106 So. 772; Love, Superintendent of Banks v. Mangum, 135 So. 223, 160 Miss. 590; Abie State Bank v. Weaver, Governor of Nebraska, 282 U.S. 765, 51 S.C. 252.
This act violates no constitutional provision. The tax collector did in this case what the law required and what he understood to be the law, and the judgment of the lower court should be affirmed.
It is the clear meaning of the statute that the counties that had already designated a depository as required by law, on or before the first Monday of January, the funds of the tax collector automatically became secured, and there was nothing for the board of supervisors to do in such counties, but in counties where a depository had not been designated, then it was the duty of the board of supervisors to select a depository into which the tax collector could deposit his funds.
Appellee Sowell, having been duly elected, became the qualified and acting sheriff and tax collector in and for the county of Greene for the constitutional term beginning on the first Monday in January, 1932. On that day the Bank of Leakesville became the duly selected and qualified depository for said county, and so continued until the 10th day of March, 1932, when it closed its doors and went into the hands of the state banking department for liquidation.
During the interval of time aforesaid, appellee sheriff and tax collector deposited in said county depository the public funds collected by him, and at the time of the failure of said bank there was on deposit, of such funds so deposited by appellee as sheriff and tax collector, a balance of more than three thousand dollars. This balance was admitted by the banking department to be trust funds payable by way of preference, but has not been paid promptly because of the delay incident to bank liquidations. The state tax collector sued the sheriff and tax collector for said balance, with penalties, contending that the sheriff and tax collector was not protected by his depositing in the county depository, but that a special depository must be selected for the funds of the sheriff and tax collector under chapter 215, Laws 1932.
The chapter just mentioned does not apply to counties where there is a regular county depository, duly selected and qualified under the general depository laws. Chapter 215, Laws 1932, was an emergency act. At the time of its passage, many banks had failed and numbers of counties were without banks within their borders. Sheriffs and tax collectors were experiencing extreme difficulty in procuring bonds in surety companies because of the want of regular county depositories. An appeal was made by them to the Legislature, and chapter 215, Laws 1932, was the result; and the opening sentence of its first section plainly discloses its purpose and application, namely, that it should be availed of "in any county in this state where no depository or depositories were selected and qualified, as provided by law, on or before the first Monday of January, 1932," etc. The county of Greene was not in the class covered by the act, and the deposit by appellee in the regular county depository of that county afforded him full protection against this suit.
Affirmed.
ON SUGGESTION OF ERROR.
It was the main contention, and the only contention to which argument was directed, by appellant in the original consideration of this case, "that the sheriff and tax collector was not protected by his depositing in the county depository, but that a special depository must be selected for the funds of the sheriff and tax collector under chapter 215, Laws 1932." We so understood the argument of appellant, and the able and discriminating attorney for appellee so understood it, the opening statement of his brief in response to the brief of appellant being as follows: "The only proposition raised by appellant upon which he asks this court to reverse the decision of the chancellor, is that the board of supervisors did not after the passage of chapter 215, Laws 1932, designate specifically, by an order spread on its minutes, a depository for the tax collector's account."
In our written opinion ruling adversely to the stated contention of appellant, and holding that chapter 215, Laws 1932, had no application so far as concerned the point relied upon by appellant, the opinion inadvertently carried language which would apparently commit us to the proposition that the chapter had no application in any respect or in any other feature so far as concerns a county where there was a regular county depository. But such a construction of the statute as that last mentioned would not be correct, for section 3, in particular of chapter 215, Laws 1932, applies to counties having a regular county depository, as well as to counties selecting an emergency depository under that chapter.
Certainly it would not be, and was not, the purpose of the Legislature to place the tax collectors in those counties having a regular county depository, selected in the ordinary manner upon bids, at any disadvantage as compared with tax collectors in counties wherein a tax collector's emergency depository was selected under the chapter mentioned. And this is made fairly clear by said section 3, which reads as follows:
"That upon the selection of any county depository, either upon bids therefor or by designation of the board of supervisors or the state superintendent of banks and such designated bank becoming qualified as required by law, the tax collector of such county or counties shall deposit all funds collected therein and thereafter make a transfer to the several accounts and funds as now required by law of him in making his settlements; and, upon so depositing such funds when collected, the tax collector shall thereupon be relieved and discharged from further liability therefor excepting for such amounts as the tax collector may withdraw or cause to be withdrawn from his account or accounts and to which he is not legally entitled."
Thus it is to be observed that by express language that section is made to include counties where the depository has been selected upon bids therefor, and that, of course, means the regular or ordinary county depository, and the language is further that "the tax collector of such county . . . shall deposit all funds collected therein and thereafter make a transfer to the several accounts and funds as now required by law of him in making his settlements." The record before us shows that the regular county depository here had furnished security in an amount sufficient to cover the sheriff and tax collector's deposits as well as the funds already distributed, but we intimate nothing in that matter as to whether the sheriff and tax collector is under any duty to see to it that said security is sufficient.
There are many accounts or funds to which the taxes collected in the county, by the tax collector thereof, are to be distributed. In some of the larger counties there are more than one hundred of such different accounts or funds. It would be a physical impossibility, with a clerical force of reasonable size, during the months of the heavier collection of taxes, for the tax collector and the county auditor to figure out the distribution at the end of each day for the collections made that day, and hence the reasonable provision that the tax collector shall make his deposits "and thereafter make transfer to the several accounts and funds."
The sheriff and tax collector is required by the absolute mandate of the statute to deposit in the county depository all public funds collected by him. He is given no option, no means to take care of himself other than that so furnished. The result is that it is lawful for the tax collector to make his daily deposits of his tax collections in the county depository to his credit as sheriff and tax collector; and if thereafter, on or before the dates fixed by law to make his settlements, he transfer the said collections to the several funds and accounts, duly observing the several requirements of the law in performing that duty, he and his bondsmen are protected as to the deposits thus made, and in respect to which the due date for distribution and settlement has not arrived, as is the case here. The facts supported by the testimony when viewed in the light of the decree of the chancellor show that the sheriff and tax collector in this case made his settlements and distributions at the time and substantially in the manner prescribed by law, and he is therefore not liable for the funds deposited in the regular county depository, but not transferred or distributed, there having been no default on his part in that regard.
Suggestion of error overruled.