Summary
observing that the "interpretative effort is at an end" when the text "conveys a meaning which is clear, unequivocal and definite"
Summary of this case from State ex rel. Fire Rock, Ltd. v. Ohio Dep't of CommerceOpinion
No. 73-255
Decided December 5, 1973.
Uniform Depository Act — Investment of interim moneys — Statutory construction — R.C. 135.14(C) — Deposit of public moneys — R.C. 135.09 — "Award" construed — R.C. 135.08 — Application for interim deposits — "Deposit" construed.
Under R.C. 135.14(C), each deposit or redeposit of interim funds takes place pursuant to a separate interim deposit award, which deposit may be rejected by the eligible institution.
APPEAL from the Court of Appeals for Hamilton County.
This action was instituted in the Court of Common Pleas of Hamilton County by The Provident Bank, Cincinnati, Ohio, as a declaratory judgment action to construe the rights and obligations arising out of an agreement entered into by the parties, under which Provident Bank, appellant herein, was to be a depository for county interim funds under the control of the Board of County Commissioners of Hamilton County.
The parties are in agreement as to the facts of the case. On June 21, 1971, all eligible financial institutions in Hamilton County were notified by the board of the availability of interim funds for deposit during a two-year period, beginning August 24, 1971, estimated to be a maximum of $35,000,000. The institutions were requested to submit proposals to be designated depositories for interim funds, specifying the maximum amount of funds desired and the amount of interest they would pay.
On July 16, 1971, Provident made its application, pursuant to R.C. 135.08, to be designated a depository for the interim funds of the county, and offered to accept a maximum deposit of $35,000,000 for the two-year period. Provident offered to pay interest on such funds deposited with it at an annual rate of 6.262 percent on deposits held for six months to one year. This proposal specified that all such deposits would be made and held subject to the terms of R.C. Chapter 135, the Uniform Depository Act. On August 11, 1971, the board adopted a resolution naming Provident the depository of county interim funds for the two-year period.
The proposal reads, in pertinent part:
"The Provident Bank, located in and doing business in Hamilton County, Ohio, being a bank incorporated under the laws of Ohio and having `capital funds' as shown in its latest financial statement, which bidder has attached hereto, does hereby make application to be named as depository for the interim deposits of Hamilton County, Ohio in a maximum amount of thirty-five million dollars ($35,000,000) for a two (2) year period beginning August 24, 1971, all such deposits to be made and held pursuant to all terms, limitations, and conditions contained in Chapter 135, Ohio Revised Code, pertaining to the deposit of interim public funds.
"In consideration of the deposit and use of all or any part of such funds, the bank proposes to pay the following rates of interest:
"Up to $ _____ held for 30 to 90 days — _____ %;
"Up to $35,000,000.00 held for 90 days to 6 months — 5.635%;
"Up to $35,000,000.00 held for 6 months to 1 year — 6.262%.
"Interest shall be computed and paid on a 360 days cycle."
On August 20, 1971, the parties entered into an "Agreement for the Deposit of Interim Moneys." The board's position throughout the present controversy has been that this Agreement represented an award to Provident of $23,000,000 for a period of two years. Pursuant to the Agreement, the sum of $23,000,000 was deposited by the board with Provident, which deposit was evidenced by a six-month certificate of deposit maturing on February 20, 1972, and bearing interest at the rate 6.262 percent per annum as agreed. At the time of maturity of the certificate the board advised Provident that it wished to have the certificate renewed or re-issued on the same terms, i. e., for six months at 6.262 percent, contending that the Agreement of August 20 required the bank to do so. This, Provident declined to do, taking the position that neither the Agreement nor R.C. 135.14(C) required it to re-issue the certificate at the initial interest rate of 6.262 percent; that market conditions then prevailing dicated that such a certificate could feasibly be offered only at a substantially lower rate of interest. Provident did offer to continue paying 6.262 percent on the interim funds of the county which it held on deposit until May 8, 1972, but on that date the parties were still in disagreement. Provident then advised the board that henceforth it would pay no interest on county interim funds of which it was an unwilling depository.
The material part of the Agreement stated that the county did
"* * * accept such proposal and did designate The Provident Bank as depository for the moneys of said county in any sum not to exceed twenty-three million dollars ($23,000,000.00), for a period of two (2) years, beginning August 24, 1971 * * *."
The Court of Common Pleas entered judgment for appellees, and that judgment was affirmed by the Court of Appeals.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Messrs. Keating, Muething Klekamp, Mr. Louis F. Gilligan and Mr. Gary P. Kreider, for appellant.
Mr. Simon L. Leis, Jr., prosecuting attorney, and Mr. Arthur M. Ney, for appellee.
In this case, the court is asked to determine whether the term of the award of interim funds was for the entire two-year designation period, or whether the term of the award was limited to the six-months term of the instrument evidencing the deposit executed subsequent to that award. Stated another way, we must decide whether the term of the award of the interim deposit must be for "not less than thirty days nor more than one year," the minimum and maximum maturities decreed by R.C. 135.09 for deposits of interim funds.
For the reasons set forth below, we find that the term, "interim deposit," necessarily relates to the periodic offer of interim moneys by a political subdivision to a bank for deposit; that R.C. 135.09 limits the term of an "award" of interim moneys to a minimum of thirty days and a maximum of one year; and that Provident was correct in maintaining that R.C. 135.14(C) granted it the right to refuse to renew or re-issue the certificate of deposit which matured on February 20, 1972. Accordingly, the judgment of the Court of Appeals must be reversed.
R.C. Chapter 135 governs the investment of public moneys held by the state and its political subdivisions. The Act designates three types of deposits which can be made. "Interim deposits," the type involved in the instant case, are defined in R.C. 135.01(F) as deposits of:
"* * * public moneys in the treasury of the state or any subdivision after the award of inactive deposits has been made * * *, which moneys are in excess of the aggregate amount of the inactive deposits as estimated by the governing board prior to the period of designation and which the treasurer or governing board finds should not be deposited as active or inactive deposits for the reason that such moneys will not be needed for immediate use but will be needed before the end of the period of designation."
Once it has been determined that interim moneys exist, the statutory process for the deposit of those moneys is triggered, culminating in the actual deposit pursuant to R.C. 135.09 and 135.14. The issue before us centers on the meaning of the statutory language at the final stage of the deposit process, particularly R.C. 135.14(C), as it relates to the right of an eligible institution to refuse to accept an interim deposit following an award of interim moneys.
It is the contention of Provident that such an award occurs when the treasurer or governing board of the political subdivision makes the decision to place an interim deposit with a designated depository. Provident contends that the board's attempt to renew the certificate of deposit which matured on February 20, 1972, was a second "award" of interim moneys for deposit, and that, at that time, it had a right to refuse to accept the deposit.
At this juncture, we turn our attention to the Agreement for the "Deposit of Interim Moneys" entered into by the parties on August 20, 1971, on which the board relies so heavily. Parenthetically, we note that such a written agreement is not required by R.C. 135.09. Following the statutory guide for the handling of interim moneys, it is to be noted that the award of moneys must be made subsequent to the designation of a depository — the award preceding the deposit. The board takes the position that the August 20, 1971, Agreement controls the present case by reciting in its terms an award to Provident of $23,000,000 for a term of two years. Upon closer inspection, however, it is clear that that Agreement does no such thing. The only effect of that document, beyond detailing the collateral to be put up by the bank for the deposit, was to reduce from $35,000,000 to $23,000,000 the maximum amount of county funds which could be deposited with Provident during the two-year period beginning on August 24, 1971. The board's reliance upon the Agreement to buttress its claim of an "award" of the sum for two years is misplaced.
Turning to R.C. Chapter 135, and specifically R.C. 135.09 and 135.14(C), it becomes evident that the board made one award to Provident for six months, and that its attempt to renew the certificate of deposit was, in effect, an attempt to make a second award of the same sum.
There is no lack of general rules to guide the court in its effort to ascertain the meaning of the statutes before it. The principles of statutory construction are given exhaustive treatment in 50 Ohio Jurisprudence 2d, 129 to 310, Sections 160 to 327. It is a cardinal rule that a court must first look to the language of the statute itself to determine the legislative intent. See, e.g., Katz v. Department of Liquor Control (1957), 166 Ohio St. 229. If that inquiry reveals that the statute conveys a meaning which is clear, unequivocal and definite, at that point the interpretative effort is at an end, and the statute must be applied accordingly. Sears v. Weimer (1944), 143 Ohio St. 312.
"Where the language itself clearly expresses the legislative intent, the courts need look no further." Katz, supra, at 231.
Turning to the statutory language we are asked to interpret R.C. 135.14(C), which provides that:
"* * * The award of interim deposits shall be made in accordance with Section 135.09 of the Revised Code and the treasurer or the governing board shall determine the periods for which such interim deposits are to be made and shall award such interim deposits for such periods, provided, that any eligible institution receiving an interim deposit award may, upon notification that said award has been made, decline to accept said interim deposit * * *."
The words "award" and "deposit" are central to an understanding of the statute. "Award" is defined in Black's Law Dictionary (Rev. 4 Ed.) as: "The decision or determination rendered by arbitrators or commissioners, or other private or extrajudicial deciders, upon a controversy submitted to them * * *." The same source defines "deposit" as "the act of placing or lodging money in the custody of a bank or banker * * *." Thus, the word "award," as it apears in R.C. 135.09 and 135.14(C), refers to a determination by the treasurer or governing board that interim moneys are to be placed with a particular institution and held in a particular form. The "deposit" is the physical placement of the funds, and it is that act which the recipient bank is empowered to decline pursuant to R.C. 135.14(C).
The board contends further that the period for which interim deposits are awarded is two years, pursuant to R.C. 135.12, and that the thirty-day-to-one-year instruments evidencing such deposits are merely the form dictated by R.C. 135.09. Stated another way, we are asked by the board to find that the six-month certificate involved here does not reflect a deposit complete in itself, but rather reflects the form the "deposit" of interim funds was to assume for one-fourth of its life. We find this a strained interpretation of the statute, which we cannot accept.
Returning to R.C. 135.14(C), quoted above, and reading it in conjunction with the first sentence of R.C. 135.09, it is clear that what is contemplated is the periodic deposit of such interim funds as they become available during a two-year period. Consequently, from time to time during this two-year period of designation the treasurer or governing board may make more than one determination to place interim funds in the designated depository for particular maturity periods. Upon notification of the award, whether it be an original or subsequent award, the designated institution is granted the right to decline the deposit. This court finds this to be the right granted the financial institution by R.C. 135.14(C), and that Provident correctly interpreted the law in exercising its statutory prerogative.
It should be noted that this right to decline a deposit exactly parallels the right given the treasurer or governing board by R.C. 135.09 to request new bids for interim deposits when it feels that prevailing market interest rates so dictate, so that neither party will find itself bound in the handling of public moneys to an unrealistic rate of return due to fluctuating market forces during the two-year period of designation.
For the foregoing reasons, the judgment of the Court of Appeals is reversed.
Judgment reversed.
O'NEILL, C.J., HERBERT, CORRIGAN, STERN and W. BROWN, JJ., concur.
CELEBREZZE, J., dissents.