The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1897-01-28


having been made on account OF funds
deposited during the current term,
and hence, as such payments exceed
the amount deposited, the condition of
the bond has been satisfied. Here in
our opinion is the fallacy in the coun-
sells argument. The cases cited by
them in support of their position were
on official bonds where the principal
was mere custodian of public funds,
which he was bound to keep intact
and to pay over to the government or
municipality whose officer he was,
which continued during all the time,
to be the owner of the money. He
could not use it for any other purpose
without violation of duty. Hence he
had no more right to use public mon
eys which came into his official custo-
dy during one term to discharge his
liability on account of an embezzle-
ment committed by him during the
previous term, than he hai to use it to
pay any other debt which he owed.
To pay such defalcation out of accru
ing receipts during subsequent term
would be fraud upon the sureties for
such term. The money in the hands
of such an official is not his money,
but the money Of the public.
"But the relations of bank to the
county and to the funds deposited
with it under this statute are entirely
different. The relation between the
bank and the county is that of debtor
and creditor, the same as between it
and any other depositor. The money
deposited does not remain the proper
ty of the county but becomes the pro-
perty of the bank, which it has right
to lend or use in any other way it sees
fit. This right is implied from the
fact, if nothing else, that the bank is
to pay interest on money. When the
bank pays out money on the check or
draft of the county it is using its own
money and not that OF the county. In
other words, it is merely paying its
debt with it's own fluids. It is never
in default until payment is demanded
by the county aud refused. If bank
is designated as depository for two
or more successive terms, while the
term is, as respects liability of the
sureties on the different bonds, deem
ed divided into different terms, yet as
between the bank and the county
there is the uninterrupted relation of
debtor and creditor during the whole
time on one continuous account.
When payments are made en- that ac-
count the sureties have no right either
in law or equity to control the appro-
priation of them or to require that
they shall be applied on deposits
made under their bond.
''In their last analysis, the facts, &C.
cording to their legal effect, are that,
upon mutual current account, the
bank has, during the term of this
bond, made payments, with its own
money, on it's indebtedness to the
county amounting in aggregate to
more than the amount of the new in
debtedness which it has contracted on
the same account during the same
time.
"Money with which such payments
are made is the money of the bank
which it may apply as it chooses; and
this being so, then, by a parity o1
reasoning, if it is paid generally with.
out any express stipulation or arrange
ment between it and the county, the
law will apply it on the account &C
cording to the priority of time; thai
is the first item on the debit side o1
the account is discharged or reduced
by the first item on the credit side
There is nothing in the facts to take
the case out of this general rule as tc
the application of payments. The re-
> suit is that the $5,34l79 due on the
account at the end of the first tern
, has been fully discharged by the sub
sequent payments and the balance o.
$3.64274 due when the bank failed is
5 properly referable and chargeable te
; moneys deposited during the seconc
term for which the defendants are liza
BILE on their bond. Hence the cour
erred in directing verdict in thei
favor Order reversed and new tria
| ordered
ength.-Latest u. S. Govt Report.
.