Case Name: Miller, State Revenue Agent, v. Bank of Indianola et al.
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1926-03-08
Citations: 142 Miss. 799
Docket Number: No. 25479
Parties: Miller, State Revenue Agent, v. Bank of Indianola et al.
Judges: 
Reporter: Mississippi Reports
Volume: 142
Pages: 799–806

Head Matter:
Miller, State Revenue Agent, v. Bank of Indianola et al.
(Division B.
March 8, 1926.
Suggestion of Error Overruled April 5, 1926.)
[107 So. 548.
No. 25479.]
J. H. Simirall, for appellant.
Chapman, Moody & Johnson, for appellees.
Argued orally by J. H. Sumrail, for the appellant, and G. G. Moody, for the appellees.
Corpus Juris-Cyc References: Depositaries, 18CJ, p. 594, n. 29 New.

Opinion:
Ethridge, J.,
delivered the opinion of the court.
These suits were instituted by the state revenue agent by bill filed in the chancery court against the defendant banks. The bill charged in each case that, under the provisions of chapter Í74, Laws of 1922, each of said banks was liable for interest to Sunflower county at the rate of two per cent per annum on daily balances or amounts deposited in each of said banks as collections of the tax collector of Sunflower county for the period beginning April 1,1922, and ending June 30', 1924. The bill also demanded, in addition to the interest on such daily balances, the statutory penalty imposed under the said act at the rate of five per cent per month or fraction thereof where the interest was not paid as required in the act.
The bill attached as an exhibit thereto the accounts carried on the books of the respective banks, which book accounts did not show whether the deposits were tax collections or other collections, but the accounts were carried in the name of the sheriff as such, and in the name of the sheriff and tax collector as such, and prayed for a discovery as to the particular items carried on the books which were tax collections, and which were other than tax collections', and prayed for a judgment on the daily balances so shown under the terms of the statute, and also for the penalties embraced in the statute for default.
The sheriff was not made a party' to the suit. The defendants, the banks, separately answered, stating that they did not know which of the items shown on the books were for tax collections and which items were for other' funds in the hands of the sheriff as such, nor what items were the private funds of the sheriff individually. The banks denied liability, and denied knowledge of the law imposing liability for interest and for the statutory penalty prior to the time the agent of the revenue agent checked their .books and made demand therefor, and stated that they were unable to furnish the information sought to be discovered. Thereupon the representative of the state revenue agent who made the examination was introduced, and testified to examining' the books of the defendant banks, and as to what the daily balances were on the account as shown on the books including' all funds shown thereon. He stated that he could not say what part of said items were tax collections from said accounts and what items belonged to other accounts.
The sheriff was not introduced as a witness by either party. Neither was any person introduced who gave the checks and warrants shown on the books to the sheriff.
The revenue agent insisted that it was the duty of the banks to keep the tax collection funds separate from the other moneys received from the sheriff, and to keep account of the daily balances of the tax collections, and to turn them into the county quarterly as required by the statute; that ignorance of the existence of this statute was no defense; and that the doctrine of commingled goods or commingled funds was applicable to this case; and that the revenue agent, in default of the banks showing the correct amount of the tax collection deposited, was entitled to recover two per cent per annum on the daily balances on the entire amount carried in the name of the sheriff and tax collector, and for the penalties calculated on such amounts under the terms of the statute.
The chancellor dismissed the bill, from which judgment this appeal is prosecuted.
The officers of each of the banks testified that they knew that a large part of the deposits were tax collections, but that there were some other public funds deposited from time to time in the accounts, and that sometimes the sheriff had personal items deposited in said account. In our opinion, it was the duty of the banks to keep the funds covered by the statute in a separate account, where they knew the deposit was a public fund. Ignorance of the law cannot excuse any person dealing with the public funds. The banks, of course, did not have-to receive the funds under the statute, but, when they received public funds, knowing them to be public funds, they .were under the duty to ascertain what part of such funds were tax collections, and to keep them separate from other funds of the sheriff's account. They cannot escape the consequences of the statute by commingling the funds in such way, or keep such account, as will'not disclose to the proper officer of the state such funds, and escape liability. They are under the duty to show, when called on to account, the amount of money received, and the true daily balances of such account, and, if they commingle the funds in such manner that this cannot be ascertained from their books they must be able to point out and make a correct accounting, or, in default, they would be held liable for interest on the entire account. See Alexander v. Zeigler, 36 So. 536, 84 Miss. 560; First National Bank v. Henry, 49 So. 97, 159 Ala. 367; Rust Land & Lumber Co. v. Isom, 66 S. W. 434, 70 Ark. 99, 91 Am. St. Rep. 88; Kelly-Goodfellow Shoe Co. v. Sally, 89 S. W. 889, 114 Mo. App. 222; Stone v. Marshall Oil Co., 57 A. 183, 208 Pa. 85, 65 L. R. A. 218, 101 Am. St. Rep. 904; Mengal Box Co. v. Moore & McFerrin, 87 S. W. 415, 114 Tenn. 596, 4 Ann. Cas. 1047; Johnson v. Hooker (Tex. Civ. App.), 39 S. W. 406; Lance v. Butler, 47 S. E, 488, 135 N. C. 419; Edelhoff v. Horner-Miller Straw Goods Co., 39 A. 314, 86 Md. 595; Horne v. Hanson, 44 A. 292, 68 N. H. 201.
We think, therefore, the chancellor was in error, and the judgment will be reversed and the canse remanded for a new trial.
Reversed and remanded.