Court Opinion

ID: 3543041
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:54:32.883118+00
Date Added: 2024-06-11T13:55:27.701046
License: Public Domain

I concur. The purpose of the statute governing this case, the reasons for its *Page 97 
enactment, and its application to particular cases, have been discussed in State v. Rosman, supra, County of Missoula v.Lochrie, supra, and State ex rel. Rankin v. Madison StateBank, 77 Mont. 498, 251 P. 548, and need not be repeated.
The duty to see that public funds deposited in a bank are fully protected is, in the first instance, with the depository board, which in this case was the city council. As we said inState v. Rosman, by the clear import of the statute, no deposit of funds shall be made, nor be permitted to remain in a bank, unless the same is protected by a bond or security approved by the depository board. Unfortunately, it seems to me, the statute does not prescribe in definite terms, as I think it should, that the bond shall in all cases equal or exceed the amount deposited, and, in view of the language employed in the statute, that requirement cannot be implied, as is demonstrated in City of Missoula v. Dick, supra. On the contrary, the depository board is given power to prescribe the amount of security to be required. The statute requires the depository board to designate a solvent bank and to require from the bank such security as the board prescribes. Thereupon, it would seem, the treasurer, unless limited by the order of the board, may legally deposit public money therein without restraint so long as the security furnished by the bank is unimpaired. In the MadisonState Bank Case, this court, speaking through Mr. Justice Matthews, said: "The intent and purpose of the legislature, in passing the Act, was clearly to insure the safety of public moneys, by requiring the treasurer to deposit such moneys only in solvent banks, designated by the board of county commissioners as meeting the requirements of the statute and satisfying the board, by the furnishing of such security as the board might prescribe and deem fully sufficient, and only after such security has been approved by the board, and in effect requiring the withdrawal of the funds if thereafter the security furnished became, in the judgment of the board, valueless or insufficient."
If the security fails, as where the bond expires, the treasurer is no longer protected, and is liable if he permits the public *Page 98 
funds to remain in the bank. And where the bond is about to expire it is the duty of the treasurer to withdraw the moneys before the contingency occurs. (State v. Rosman, supra.)
In the case at bar two minute entries only are shown relating to the requirement of security for the deposit of public moneys in banks. On November 30, 1923, a motion was carried "that banks be required to put up surety or personal bonds to secure deposits of city funds." On December 4, 1923, this appears: "The matter of allowing the banks to put municipal and government bonds in place of surety bonds to protect city deposits was again brought up. Moved by Ald. Covert, seconded by Ald. Berryman, that the treasurer be directed to place city funds in such banks as have bonds up, as provided by law. Motion carried." When this last motion was carried, it appears that surety bonds aggregating $20,000 had been given by Yegen Bros., Bankers, and approved by the council, and these continued in effect until after the bank closed. On January 4, 1924, the bond of the Continental Casualty Company for $7,500 was given and approved. No further action by the council appears. It was the duty of the council to require further security if it deemed that action necessary. No restriction as to the amount to be deposited with the Yegens was made. Whether the other banks had given more ample security for deposits does not appear. The treasurer was required to deposit the public funds in her charge only in designated banks. If the security furnished by other banks was no greater in proportion to the amount deposited than was that furnished by the Yegens, it would seem the treasurer might deposit with any of the banks, in effect declared solvent by the council, without being charged with neglect of duty in making the deposits in a greater amount than the security. The fact remains that the Yegen bank was a designated depository, that bonds to the extent of $27,500 were approved, and that no limit was placed upon the treasurer as to the amount she should deposit *Page 99 
with that bank. It is true that she thought she had sufficient bonds to cover the entire deposit; but did not the council bear the greater duty of knowing what bonds it had required and approved? It was the duty of the council to require security which it deemed "fully sufficient and necessary to insure the safety and prompt payment of all deposits." It appears it did not require security enough. Upon the whole case it does not seem to me the treasurer can be held guilty of neglect in depositing sums in excess of the securities accepted and approved by the council.