Title: Rundquist v. O'LEARY

State: kansas

Issuer: Kansas Supreme Court

Document:

184 Kan. 496 (1959)
337 P.2d 1017
CARL R. RUNDQUIST, Treasurer of Saline County, Kansas, Appellant,
v.
J.A. O'LEARY, Bank Commissioner of the State of Kansas; and G.W. LINDLEY, Receiver of the Smolan State Bank, Smolan, Kansas, Appellees.
No. 41,258

Supreme Court of Kansas.
Opinion filed April 11, 1959.
Raymond E. Haggart, of Salina, argued the cause and was on the briefs for the appellant.
Robert B. Berkley, of Salina, and C.V. Beck, of Emporia, argued the cause and were on the briefs for the appellee.
The opinion of the court was delivered by
ROBB, J.:
This is an appeal from an order of the trial court sustaining defendants' motion to quash an alternative writ of mandamus previously allowed. The writ required defendants to pay to plaintiff a thirty per cent dividend amounting to $59,174.03 or show cause for not complying.
Plaintiff, as county treasurer, had on deposit to his credit in the Smolan State Bank $197,246.78 of county funds prior to February *497 16, 1956, when that bank became insolvent and ceased to do business.
On February 21, 1956, G.W. Lindley was appointed receiver by R.B. Medlin, then bank commissioner of the state of Kansas, now deceased. (J.A. O'Leary, his successor as commissioner, has been substituted as a defendant.)
The deposit had been made pursuant to G.S. 1949, 9-1402, which authorizes such deposits and provides for security in one of several manners including (1) a personal bond in double the amount which may be on deposit at any time; (2) a corporate surety bond of some surety corporation authorized to do business in this state in an amount equal to that on deposit at any given time; or (3) a depository bank may deposit for depositor's benefit securities in the amount of seventy per cent of such total deposits consisting of bonds of the United States, or those fully guaranteed by it, federal land bank bonds, bonds of the state of Kansas, or general obligation bonds of a municipal, or quasi-municipal corportion. Under the provisions of G.S. 1949, 9-1405, the latter plan was adopted and treasury notes, bonds, certificates of indebtedness and municipal bonds having a market value of $145,705.40 on November 30, 1956, were deposited in the National Bank of America, Salina, which also holds accumulated interest of $4,685.30 paid on the securities at the time of filing the motion for and issuance of the alternative writ.
Plaintiff filed his claim for the full amount of $197,246.78. Defendants declared a first liquidating dividend of thirty per cent and paid that dividend on November 30, 1956, to depositors other than plaintiff and plaintiff subsequently obtained an alternative writ of mandamus from the Shawnee county district court directing defendants to pay plaintiff the dividend in the sum of $59,174.03 or show cause for noncompliance.
Defendants filed their motion to quash the alternative writ of mandamus for the reason that neither the writ nor motion therefor stated facts entitling plaintiff thereto.
The trial court sustained this motion to quash with a memorandum opinion which in pertinent part reads:
The trial court, pursuant to the above memorandum opinion, sustained defendants' motion to quash the alternative writ from which order plaintiff brings the instant appeal.
The parties contend the appeal poses two questions but the questions merge into one and that is  for what amount, if any, may plaintiff file a claim to determine his participation in the thirty per cent dividend already declared and in any dividends to be declared in the future?
Mention should perhaps be made that securities are on deposit in the National Bank of America, Salina, a depository, and joint custody receipts therefor are held by the defendant receiver and plaintiff (G.S. 1949, 9-1405) but we will not discuss that subject since the parties have not seen fit to do so. Quite apparent, too, is the fact that plaintiff, under G.S. 1949, 9-1402, had plenty of opportunity to have the deposit fully secured by either of two other *499 methods but instead he chose the one which secured only seventy per cent of the deposit and he cannot now be heard to complain about the results of his choice.
No issue is raised regarding disposal of the abovementioned securities and since the only show of control over them by plaintiff is his request to have the accrued interest applied as additional security for his deposit, we shall refer to the securities only where necessary in determining the question before us.
No authority is cited, nor has our limited research yielded any, that states a depositor of public funds, such as we have here, should be afforded any advantage over any other secured depositor or claimant. The legislature apparently foresaw the occurrence of the failure of a depository of public funds of the county as is evidenced by G.S. 1949, 19-2635, which provides a buffer for loss of county funds in a defunct depository bank as follows:
The thought that a county has no superior privileges except as provided by statute is to a limited extent covered in Bachman-Wise Motor Co. v. Comanche County, 143 Kan. 346, 54 P.2d 965. There the county in an action involving the distribution of the assets of a partnership initially failed to ask for priority as a preferred creditor and none was granted although it did make a belated request therefor. Such request was denied by the trial court and this court affirmed that judgment.
In one of our early decisions dealing with contingent and secured claims (National Bank v. Branch, 57 Kan. 27, 45 Pac. 88) the syllabus, in pertinent part, reads:
The opinion in the above case included the following statement:
We may add, too, that equity would not permit acceptance of the last-mentioned plan because it would work a distinct hardship on claimants not protected by similar liens on particular securities who had only dividends to look to for any satisfaction of their claims.
The rule in the Branch case was cited with approval and applied in Investment Co. v. National Bank, 58 Kan. 414, 418, 49 Pac. 521, and in Bank v. State, 8 K.A. 468, 54 Pac. 510, a case similar to our instant case, both the Branch and Investment Company cases were referred to, the rule was repeated, approved and applied. The rule in the Branch and Investment Company cases was referred to and discussed in Bolman v. Commercial National Bank, 173 Kan. 155, 161, et seq., 244 P.2d 1175, but it was not there applied because the facts of the Bolman case were distinguishable from the Branch and Investment Company cases.
This brings us to plaintiff's contention that the accrued interest on the securities should be added to the securities pledged on his deposit but here again no provision was made for such application when the deposit was made and the securities were pledged and in view of all we have heretofore said, we conclude, in the absence of any statutory authority otherwise, that plaintiff cannot now claim such preference on behalf of the county.
The trial court was correct in its reasoning and conclusions in the memorandum opinion as well as in its resulting equitable order. No good purpose will be served by a discussion of other matters raised by the parties.
The judgment is affirmed.