Court Opinion

ID: 3828982
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:00:56.373057+00
Date Added: 2024-06-11T14:13:58.829376
License: Public Domain

After considering this case further on rehearing, I concur in the result of the majority that the judgment must be reversed, with directions to enter judgment in favor of defendant city.
The question here is one of weighing the equities between the plaintiffs and the city under the rules announced in the former opinion (164 Okla. 167, 23 P.2d 373). I think there this court simply said that if the city has been unjustly enriched, the plintiffs' equities are superior, but, on the other hand, if the revenues were raised by the city for the payment of the coupons and were embezzled by Hammer rather than returned to the city, one of two innocent persons must suffer and it must be the plaintiffs.
The trial court found that at the time. Hammer used the funds of the bank to pay the obligations of the city, the funds levied for such purpose during the two fiscal years in which the interest coupons became payable had not been collected, and therefore concluded that the revenues raised by the city for such purpose could not have been embezzled or misappropriated by Hammer at the time he paid the semiannual interest installments. But a showing that funds levied for the fiscal years in which the interest payments become due had not been collected before the payment of such installments does not result in unjust enrichment of the city and render plaintiff's equities superior. It is established that tax levies for sinking fund purposes had been made for many years prior to the fiscal years involved herein and that taxes had been collected and deposited in the bank. A sinking fund continues from year to year, and where there is a balance on hand in the fund at the close of the year, it must be carried over into the next fiscal year and is available for any purpose for which that fund may be used. McMahan v. Board of Education of Oklahoma City (1930) 142 Okla. 110, 285 P. 953. This money was embezzled by Hammer and not returned to the city. From what was said in the former opinion, this would be an end to the matter, — the city has not been unjustly enriched, but rather two innocent parties have suffered by the fraud of a third, and the plaintiffs must bear the loss.
This rule is not without reason here. It appears from the circumstances that Hammer embezzled the money by withdrawing it from the sinking fund account in the bank and converting it to his own, use. He conceals the withdrawals from the city by exhibiting to the city officials a bogus ledger sheet showing no such withdrawals. It is only by reason of being an officer of the bank that he could cover up his crime. Had he simply been treasurer when he withdrew the money and embezzled it to his own use, the true statement of the bank would have reflected the withdrawals. At best, the equities are equal, and plaintiffs must do more than show equal equities; they must show superior equities. 60 C. J. 708, sec. 20.
My disagreement with the majority opinion goes to the theory upon which I understand it to be based. Defendant is there held entitled to prevail on the theory that the bank still owes the city as a general depositor a greater sum than was paid on the city's behalf with the bank's money. This was based upon the premise that the bank is bound by the bogus ledger sheet exhibited by Hammer to the city official showing that the money had not been withdrawn from the sinking fund account in the bank. Actually the money had been withdrawn by one having authority to do so, and the debtor-creditor relation pertaining to general depositors in the bank no longer existed. In the absence of actual knowledge that Hammer was appropriating it to his own use, the bank had no authority to refuse payment on his checks. New Amsterdam Casualty Co. v. First Nat. Bank of Oklahoma City (1931) 154 Okla. 74, 6 P.2d 779. The evidence shows that the bogus ledger sheet was used by Hammer as an individual, not as agent of the bank, as is the view of the majority.