Opinion
Department One
Appeal from a judgment of the Superior Court of Sacramento County. Matt. F. Johnson, Judge.
COUNSEL:
Naphtaly, Freidenrich & Ackerman, for Appellant.
W. F. Fitzgerald, Attorney General, and W. H. Anderson, Assistant Attorney General, for Respondent.
JUDGES: Britt, C. Belcher, C., and Searls, C., concurred. Garoutte, J., Harrison, J., Van Fleet, J.
OPINION
BRITT, Judge
The law of this state relating to the office of insurance commissioner provides, among other things, for the collection by the commissioner of certain fees and assessments from persons and corporations engaged in the business of insurance, and that he shall "pay monthly into the state treasury whatever amounts may be received and collected by him." (Pol. Code, sec. 606.) Appellant held said office from April 1, 1890, to April 1, 1894; it was his custom to make remittance of his official collections to the state treasurer once a [49 P. 136] month, and at intermediate times he deposited the same in the Pacific Bank, an incorporated commercial bank in the city of San Francisco, then of good financial repute and standing. Toward the close of June, 1893, when appellant's receipts in virtue of his office during that month amounted to about two thousand three hundred dollars, which had been deposited as aforesaid from day to day, the bank failed, and ceased to do business and refused repayment of such deposits.
This action is prosecuted against the commissioner, on the complaint of the state controller, to recover the amount collected by the former in said month of June, with certain penalties for failure to pay over the same. (Pol. Code, sec. 437.) In his answer, defendant alleged most of the facts above stated, with various other matters, and also "that he deposited said moneys in the Pacific Bank as the agent of the state of California, and not upon his individual account; and that he is neither morally nor legally liable for, nor had he anything to do with, the failure of the said Pacific Bank to pay to its depositors the money deposited therein by them." The superior court gave judgment for plaintiff on the pleadings.
Counsel differ as to whether the answer shows that the deposits were placed to the credit of defendant individually or as a public officer; and the question is of importance in the case, (Estate of Arguello , 97 Cal. 196), if defendant was permitted by law to make an ordinary deposit of the funds in bank at all. But, in our opinion, he was not. If such deposits are allowed, the title to the money passes to the bank, and the transaction is nothing more or less than a loan, with a special provision implied that repayment shall be made as demanded by the checks of the depositor. (Janin v. London etc. Bank , 92 Cal. 14; 27 Am. St. Rep. 82; Yarnell v. Los Angeles , 87 Cal. 603, 608; Boone on Banking, secs. 39-41.) By the provisions of section 424 of the Penal Code, each officer of this state charged with the receipt, safekeeping, transfer, etc., of public moneys, who either. .. . 2. Loans the same or any portion thereof,. .. . or, 3. Fails to keep the same in his possession until disbursed or paid out by authority of law; or, 4. Unlawfully deposits the same, or any portion thereof, in any bank, or with any banker or other person. .. . is punishable by imprisonment, etc. The moneys deposited by defendant in this instance were undoubtedly public moneys (Pen. Code, sec. 426); and such deposits were made in contravention of the spirit, if not the letter also, of each of the said subdivisions of section 424, and were thus unlawful. (Civ. Code, sec. 1667.) It may be answered that subdivision 4 contains an implied recognition of deposits in a bank which may be lawful; so it does, but for the purposes of a case like the present, at least, that subdivision should be understood in connection with the preceding prohibition of loans generally; it is not probable that the legislature intended to allow loans by way of general deposit in banks while forbidding all others. Yarnell v. Los Angeles , 87 Cal. 603, tends strongly to confirm the views we entertain of the present case.
The judgment should be affirmed.
For the reasons given in the foregoing opinion the judgment is affirmed.