Case ID: ohio-law-abs_6/html/0386-01.html
Source: Caselaw Access Project
Author: {"author": "MARSHALL, CJ.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

FIDELITY & CAS CO. v. UN. SAV. BANK CO.
    Ohio Supreme Court.
    No. 21025.
    Decided June 20, 1928.
    Error to Jefferson Appeals.
    Judgment Affirmed.
    126. BANKS AND BANKING — 1104 Statutes.
    1. Legislature alone has authority to empower public official to make deposit of state funds in banking institution and provide terms and conditions of such deposit.
    2. Deposit made under authority of 321 GC., et seq., creates relation of borrower and lender between depositary and state.
    3. Such deposit gives state no priority of funds of such bank in event of insolvency.
    4. Such deposit not exercise of sovereignty. Government acting in proprietary capacity.
   MARSHALL, CJ.

1. The legislature alone has authority to empower a public official to make a deposit of state funds in a banking institution and to provide the terms and conditions of such deposit.

2. The legislature has made provision for deposit of state funds in Sections 321 et seq., General Code, and a deposit when made under authority of those sections creates the relation of borrower and lender between such depositary and the state.

3. Sections 321 et seq., General Code, neither expressly nor impliedly give to the state priority of payment out of the funds of such banking institution in the event of insolvency.

4. A deposit of state funds in a depositary under authority of Sections 321 et seq., General Code, is not an exercise of sovereignty but on the other hand in such a transaction the government is acting in its proprietary capacity.

(Day, Allen, Kinkade, Robinson, Jones and Matthias, JJ., concur.)