GA Code § 50-17-58 (2021)
2021 Georgia Code|Title 50 - State Government|Chapter 17 - State Debt, Investment, and Depositories|Article 3 - State Depositories|§ 50-17-58. Execution of Bonds by Depositories

 Depositories, before entering upon the discharge of their duties, by their proper officers, shall execute bonds, with good and sufficient securities, to be fixed and approved by the Governor. The bonds shall be conditioned for the faithful performance of all such duties as shall be required of them by law and for a faithful accounting for the money or effects that may come into their hands during their continuance in office. The bonds shall be filed and recorded in the Governor's office and copies thereof, certified by one of the Governor's secretaries under the seal of the executive department, shall be received in evidence in lieu of the original in any of the courts; and the bonds shall have the same binding force and effect as public officers' bonds and, in case of default, shall be enforced in like manner. In determining the amount of the bond to be given by a depository under this Code section, the Governor shall fix the same as to make it not less than the amount of money to be entrusted to the depository; and in no case shall a larger amount of money be deposited in any depository than the amount of the bond; and the Governor, at any time, may require additional bond, if necessary, to cover fully the amount deposited or intended to be deposited in such bank. The board, in its discretion, may waive the requirement of such bond as to demand deposits in a depository.   (Ga. L. 1878-79, p. 88, § 4; Code 1882, § 943d; Civil Code 1895, § 985; Ga. L. 1903, p. 32, § 1; Civil Code 1910, § 1252; Code 1933, § 100-104; Ga. L. 1971, p. 553, § 3; Ga. L. 1973, p. 149, § 3.)   Cross references.   - Official bonds generally, T. 45, C. 4.   JUDICIAL DECISIONS   Effect of insolvency at date of bond.    - While it is the duty of the Governor to use discretion in selecting a chartered solvent bank of good standing and credit as a state depository, the very object of requiring a bond is to guarantee the solvency of the bank, and one who becomes a surety on such bond cannot be discharged on the ground that the bank was insolvent. Mathis v. Morgan, 72 Ga. 517, 53 Am. R. 847 (1884).   Liability of surety.    - One who became a surety on the bond of a bank as a state depository cannot free itself from liability thereon on the ground that the Governor selected the bank as a solvent bank, and published the bank as one of the depositories, and that the surety was induced to become such by this fact, though the bank was not solvent at the time of the bank's selection, and the giving of the bond by the bank. Mathis v. Morgan, 72 Ga. 517, 53 Am. R. 847 (1884).   Surety liable despite Governor's representations.    - When one who signed the bond of a bank as a state depository resided in the city where the bank was located, and had opportunity to investigate as to the condition of the bank before signing the bond, but did sign and enabled the bank to receive money belonging to the state, that person could not be relieved from responsibility on the ground of false representations made by the Governor. Mathis v. Morgan, 72 Ga. 517, 53 Am. R. 847 (1884).   Liability for subsequent forgery.    - It was the duty of the president of the bank to make the bond and furnish the sureties thereon, and having executed the bond as president, and signed the bond as surety individually, the president could not be relieved from liability because the name of one of the sureties which the president furnished, and which appeared on the bond after the president signed, was forged, and not signed by such surety. Colquitt v. Simpson & Ledbetter, 72 Ga. 501 (1884).   Purchasers charged with notice of suretyship.    - When purchasers of property from one who was the president of a bank knew of the president's position, the law charged the purchasers with notice that the bank was a state depository and was required to give bond and security; this was sufficient to put the purchasers on inquiry whether their vendor was not personaly one of the sureties which one had, as president, to procure, and the purchasers were not purchasers without notice of the state's lien. Colquitt v. Simpson & Ledbetter, 72 Ga. 501 (1884).   Purchasers subrogated to surety's defenses.    - Purchasers of property from president of a bank, who were charged with notice that the president was a surety, were subrogated to the president's position, and could make no defense which the president could not make. Colquitt v. Simpson & Ledbetter, 72 Ga. 501 (1884).   Governor's power regarding depository default.    - Upon default of depository, the Governor may issue execution at once, in like manner, as against a defaulting treasurer (now director of the Office of Treasury and Fiscal Services). Seay v. Bank of Rome, 66 Ga. 609 (1881).   State priority for assets of insolvent depository.    - State has the right of priority of payment out of the assets of an insolvent state bank which prior to insolvency was a state depository as against individual depositors and creditors. Seay v. Bank of Rome, 66 Ga. 609 (1881); Central Bank & Trust Corp. v. State, 139 Ga. 54, 76 S.E. 587 (1912).   State school's deposited funds.    - Funds arising partly from oil inspection fees, and partly from private donations, which had been turned over to and were in the hands of trustees of a school of agriculture, and were deposited by the treasurer of the board of trustees in the treasurer's own name, as such, in a bank which was a state depository, and which failed, did not constitute such a debt due to the state as created a lien in its favor under the law in reference to state depositories. Knight v. State, 137 Ga. 537, 73 S.E. 825 (1912).   Execution provides state with lien on all property of depository.    - From the date of the execution of the bond of a state depository the state has a lien on its property for the amount thereof, and the lien of the state is not limited to such property of the depository as may be reached by levy and sale, but extends to all the property, including choses in action. Seay v. Bank of Rome, 66 Ga. 609 (1881); Standard Accident Ins. Co. v. Luther Williams Bank & Trust Co., 45 Ga. App. 831, 166 S.E. 260 (1932), rev'd on other grounds, 178 Ga. 446, 173 S.E. 672 (1934).    Depository's bond is lien on property of principal and sureties from the bond's date. Fidelity & Deposit Co. v. Howard, 67 F.2d 961 (5th Cir. 1933), aff'd sub nom. Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 54 S. Ct. 848, 78 L. Ed. 1425 (1934).   State acquires lien on all assets.    - State acquires a lien on all of the assets of a depository bank, both those at the time of the execution of the bond and those subsequently acquired. Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 54 S. Ct. 848, 78 L. Ed. 1425 (1934).   Lien does not apply to certain assets.    - Lien arising under this section from giving of bond by national bank designated as depository for state funds does not apply to money paid out and stocks, bonds, and notes transferred from the bank in the course of business. Fidelity & Deposit Co. v. Howard, 67 F.2d 961 (5th Cir. 1933), aff'd sub nom. Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 54 S. Ct. 848, 78 L. Ed. 1425 (1934).   Lien effective in case of insolvency and receivership.    - Lien arising under this section from giving of bond by national bank designated as depository of state funds is effective in case of insolvency, notwithstanding, 12 U.S.C. § 91, prohibiting preferences made in view of insolvency, and 12 U.S.C. § 194, requiring the payment of ratable dividends to creditors, since these statutes do not affect liens validly existing against the bank's property before receivership. Fidelity & Deposit Co. v. Howard, 67 F.2d 961 (5th Cir. 1933), aff'd sub nom. Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 54 S. Ct. 848, 78 L. Ed. 1425 (1934).   National bank lien does not contravene federal law.    - Creation of lien by national bank designated as depository of state funds by giving of bond under this section is not in contravention of federal law. Fidelity & Deposit Co. v. Howard, 67 F.2d 961 (5th Cir. 1933), aff'd sub nom. Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 54 S. Ct. 848, 78 L. Ed. 1425 (1934).   Subjection of national bank to state law.    - While a national bank is subject to state law unless that law interferes with the purposes of its creation, or destroys its efficiency, or is in conflict with some paramount federal law, it is quite possible that the legislature might attempt to impose, under the conditions of the bond, a duty which the bank would be without authority to undertake; and to that extent the contract would be unenforceable. Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 54 S. Ct. 848, 78 L. Ed. 1425 (1934).    Cited in Gormley v. Board of Comm'rs of Rds. & Revenues, 178 Ga. 439, 173 S.E. 667 (1934).   OPINIONS OF THE ATTORNEY GENERAL   Return of collateral when bond requirement waived.    - When the State Depository Board acted to waive the bond requirement for a particular depository, it would be appropriate for the Department of Human Resources to return any collateral held as security for demand deposits in that depository; in other words, former Code 1933, §§ 100-104 and 100-106 (see O.C.G.A. §§ 50-17-53 and50-17-58) did not require the return of collateral, but rather the action of the State Depository Board is required. 1971 Op. Att'y Gen. No. 71-112.   Procedures applicable when deposit exceeds bond.    - Former Code 1933, § 100-108 (see O.C.G.A. § 50-17-59) did not in any way authorize the Treasurer (now director of the Office of Treasury and Fiscal Services) to make a deposit in excess of the bond or other authorized security for a ten-day period; it instead provided for a grace period of ten days within which the treasurer (now director of the Office of Treasury and Fiscal Services), whenever a deposit through accumulation of interest or otherwise grew beyond the amount of the bond, must either withdraw the excess or obtain additional bond (or authorized security) from the depository; this applied to all state funds including former Code 1933, §§ 100-104 and 100-111 and Ga. L. 1960, p. 1144, § 4 (see O.C.G.A. §§ 50-17-58,50-17-62, and50-17-63). 1971 Op. Att'y Gen. No. 71-65.    State depositories must provide security  in the form of a bond or a bond and certain enumerated securities in a sum equal to the amount of money to be deposited with such depository; however, it is noted that the guarantee of the Federal Deposit Insurance Corporation shall be accepted as collateral to the extent authorized by federal law. 1968 Op. Att'y Gen. No. 68-61.   Inconsistent laws superseded or repealed.    - To the extent that former Code 1933, § 89-812 (see O.C.G.A. §§ 34-8-81 and45-8-13) or any other prior laws were irreconcilably inconsistent with Ga. L. 1971, p. 553, §§ 3 and 4 (see O.C.G.A. §§ 50-17-53 and50-17-58), those laws were superseded or repealed by implication. 1971 Op. Att'y Gen. No. 71-112.   RESEARCH REFERENCES   Am. Jur. 2d.   - 63C Am. Jur. 2d, Public Funds, § 15 et seq.   C.J.S.   - 26B C.J.S., Depositaries, § 76.   ALR.    - Validity and construction of provisions of depositary's statutory bond in conflict with, or in addition to, condition prescribed by the statute, 88 A.L.R. 547.    Validity, construction, and effect of cancellation provision in public depository's bond, 88 A.L.R. 645.    Depository's bond as covering deposits made before its execution, 98 A.L.R. 1312.