Court Opinion

ID: 6738905
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:32.513703+00
Date Added: 2024-06-11T16:01:53.711719
License: Public Domain

Grace, J.
(dissenting). Appeal from the judgment of the district court of Burleigh county, North Dakota, W. L. Nuessle, Judge.
A concise statement of the facts in this case will clearly present the issues involved therein. The Des Moines Mutual Hail & Cyclone Insurance Association is a mutual hail insurance company organized under the laws of the state of Iowa, and has its principal office in the city of Des Moines in that state. It desired to do business in the state of North Dakota. In pursuance of § 4896, Compiled Laws 1913, in the month of March, 1913, it deposited with the treasurer of the state of North Dakota, one Mr. John Steen, the sum of $25,000 in money to secure losses occurring under its policy contracts for hail insurance made by it in the state of North Dakota. Mr. Steen became treasurer of the state of North Dakota about January 1, 1915. Between Jan-*308nary 6, 1915, and April 14, 1916, he, as state treasurer, deposited in different banks in the state of North Dakota the said $25,000 and received from them certificates of deposit which drew interest at the rate of 4 per cent per annum. It is conceded that such banks were theretofore designated as legal depositaries. There had accrued as interest on such deposits in such banks until the 14th day of April, 1916, the sum of $1,250. On the last-mentioned date, the insurance company withdrew from the state and received the $25,000 which it had deposited with the state treasurer as aforesaid. It was repaid to it. The sum of $1,250 interest above referred to was received by John Steen as state treasurer, but the same has not been by him paid in to the state treasury of the state of North Dakota. The insurance company claims the $1,250 interest item belongs to it, and that it is entitled to a judgment for that amount against John Steen personally and against him as treasurer of the state of North Dakota and against the state of North Dakota. Mr. Steen claims that he personally is entitled to the $1,250 interest money; that neither the state nor the insurance company is entitled thereto. The state of North Dakota maintains that the money, the right to which is in dispute, is not the property of the insurance company nor the property of John Steen personally, but that it belonged to the state of North Dakota; that it is entitled to a judgment against John Steen for the full amount of $1,250. In this connection the state contends that the insurance company is not entitled to recover anything in this action. The foregoing are all the material facts, and as such are conceded by all the parties to the controversy.
When the matter came on for determination in the trial court, the plaintiff made a motion for judgment on the pleadings. The granting of this motion was strenuously opposed by both the state and Mr. Steen. The court, however, granted the motion of the plaintiff and awarded it judgment on' the pleadings against John Steen personally and as treasurer of the state of North Dakota and the state of North Dakota in the sum of $1,250. The complaint is substantially in accordance with the facts we have outlined; also the answer and cross complaint of the defendant state of North Dakota and the defendant Steen contain allegations of fact largely similar to that of the complaint, the principal difference being that each of the contending parties claims the right to the $1,250. The issue presented is: Who is lawfully en*309titled to the $1,250 interest which had been earned as aforesaid? Upon a thorough consideration of the matters involved in this case and of the pleadings, we are convinced that the trial court was in error in ordering judgment on the pleadings in favor of the plaintiff. We are of the opinion that this clearly appears from a thorough analysis of the law and the facts which ai’e presented in this case.
In order to properly determine that the trial court was in error in granting plaintiff judgment on the pleadings, it will be necessary to examine the entire case as if it were here presented on its merits and in the light of the conceded facts. Section 4896, so far as applicable to this case, is as follows: “No mutual insurance company hereafter organized under the laws of this state or now or hereafter organized under the laws of any state or country, shall engage in the business of hail insurance in this state without first depositing and thereafter keeping on deposit with the treasurer of this state the sum of $25,000 in money, or in lieu thereof bonds of this state or of the United States of the par value of $25,000.”
This section was amended by the legislature in 1915 by the enactment of chapter 174, Laws of 1915, permitting the deposit of bonds or first mortgages upon lands in North Dakota in lieu of the cash deposit. We think it must be clear that, in depositing cash under § 4896, it could not have been contemplated either by the company so depositing or the state that the company should receive or the state pay any interest thereon. This more clearly appears when we consider that that section was .amended so as to permit the depositing of additional securities in lieu of cash and in lieu of securities other than those mentioned in the § 4896.
Section 4897 is as follows: “Said money or securities so deposited shall be and remain in the hands of the treasurer of this state as a .fund to secure the payment of all losses occurring under all policies or contracts for hail insurance, made by such company in this state, or covering property situated within the state. And the treasurer of this state shall not permit said deposit or any part thereof to be withdrawn by said company from his custody except as hereinafter provided.”
Section 4900 is as follows': “So long as any deposit required by this article is kept good, and the depositing company is solvent, the state treasurer may permit the company to collect the interest on the secur*310ities so deposited, and from time to time to withdraw any such securities on depositing with him others of the value and character required by this article.”
' It is clear from the foregoing sections that a foreign hail insurance company desiring to do business in the state of North Dakota would first be required to comply with the laws of the state of North Dakota relative thereto before it could be admitted to do business within the state. In its compliance with such laws, it would be dealing with the state. The contract would be between the state of North Dakota in its sovereign capacity and plaintiff. The sovereign power, the state, speaking through its law contracts that the plaintiff may transact its business within the state upon the deposit of $25,000 with the state treasurer as a fund to secure the payment of losses in the manner prescribed in § 4897, and upon otherwise complying with the law relative thereto.
It will be noticed from the examination of § 4899, Compiled Laws 1913, what the requirements are, and in what manner they must be complied with, when the foreign hail insurance corporation desires to cease the transaction of business within the state, after having made deposit above required and after having entered on the doing of its business within the state. When the company which has complied with these requirements ceases to do business within the state, and withdraws from the same, and such withdrawal is in accordance with the requirements of law relative thereto, it is entitled to receive back $25,000, or its deposit theretofore made. The insurance company in this case, in all the proceedings and steps by it taken to comply with the law and come into the state of North Dakota to do business, is dealing with the state of North Dakota, and in relinquishing its right to do business within the state and in its legal withdrawal from the state by compliance with all the laws of the state of North Dakota relative thereto, it is also dealing with the sovereign power of the state of North Dakota. The state of North Dakota exercises its sovereign powers not directly, but by and through well-defined agencies. The sovereign powers which are exercised by the state are many and varied, and are exercised through various departments of state, such as state treasurer, state auditor, state superintendent of public instruction, etc. Such officials are placed in those positions by the electorate of the state *311for a certain, period of time fixed by law, and for that time to them is delegated certain authority and power to be exercised by them for and on behalf of the state, by and through their respective departments of state. When so acting, while within the scope of their duties as defined by law, or when performing such duties as are incident to their department, whether such duties are defined by law or not, they are representing and acting for the state only. In the discharge of such duties within the scope of their authority, their acts are not personal, but official. They are but the instrumentalities by and through which the state functions. In the exercise of authority and power delegated to them, and in the execution of their respective duties within the scope of their authority, they have no personality other than an official one. In other words, in the execution of their respective duties, they act officially for and on behalf of the state, and not personally for and on behalf of themselves.
In the case at bar, when the $25,000 was received and deposited, it was received by the state through the treasury department, and when it was paid to the state treasurer, he received it for the state, and such reception was a part of his official duties. He received it not in his individual, but in his official, capacity. After the $25,000 was received into the state treasury, whatever Mr. Steen did in the way of taking care of said money and in keeping it safely, or in depositing it with banks which had been designated as legal depositaries and receiving therefor interest-bearing certificates of deposit, was done by him while acting in his official capacity as the treasurer of the state of North Dakota for and on behalf of the state. No other reasonable deduction can be drawn from the facts in the case and from the law of the case as found in the sections above quoted. Those sections are the law of this case. All of Mr. Steen’s acts thus being official acts within the line of his duty as state treasurer, it is clear that he as an individual or as state treasurer is not entitled to receive as his own, any of the accrued interest upon such certificates of deposit.
The only remaining question to be considered in this case is: Which of the two remaining parties is entitled to receive the $1,250 interest money, the state or the insurance company? It is conceded the insurance company has received back the full amount of money which it deposited with the state treasurer. That is all it is entitled to receive *312back. That is all tbe law above referred to states it shall receive back. When tbe state received tbe $25,000, tbe only obligation wbicb it entered into with tbe insurance company was to return it to tbe insurance company when it withdrew from tbe state in accordance with the provisions of law. The state was under no obligations to place tbe money at interest; it was under obligation to keep it safely for tbe purposes for wbicb it was deposited with tbe state, during the time tbe insurance company was doing business within tbe state, and when it withdrew, to refund tbe money to it in accordance with tbe law above stated. It is true that if tbe insurance company bad deposited bonds or first real estate mortgages of tbe character required by law instead of tbe money, tbe state treasurer could permit tbe insurance company to collect the interest on tbe security so deposited, but in doing so, tbe treasurer would be but complying with tbe requirements of law, and bad tbe company deposited bonds or mortgages in lieu of money, it would have been part of tbe contract under tbe law that tbe insurance company bad a right to tbe interest wbicb accrued upon such bonds during tbe time they were deposited with tbe state. Tbe company bad tbe right under the law to deposit securities instead of cash, and, in that event, tbe treasurer could have permitted it to collect tbe interest on such securities so deposited, all of wbicb makes it clear that a deposit of cash under § 4896 does not entitle tbe company to receive any interest on such deposit. In this case, however, bonds or mortgages were not deposited, and it does not follow because tbe company would be entitled to receive tbe interest on them if they bad been deposited, that it is equally entitled to receive any interest wbicb bad accrued on tbe money wbicb was placed on deposit by tbe state in its legal depositaries. Tbe law does not say tbe company is entitled to receive any interest on money when so deposited, and this being true, it is entitled to recover none. It complied with tbe law and deposited tbe money. It was admitted into tbe state for tbe purpose of transacting its business therein. It became tbe duty of tbe state to safeguard such money. It did so by depositing it in legally designated depositaries of tbe state. Tbe state assumed tbe risk and burden of keeping said money safely after it bad been once received bv it into tbe state treasury; to safeguard it by placing it in legal depositaries theretofore designated by proper authority, and when such money was deposited in such legally designated depositaries tbe state treasurer *313was not liable oñ his bond if any part of the same became lost through the failure or bankruptcy of any of the depositaries. In such ease, the state would be the loser. Comp. Laws 1913, § 372. No doubt the state, to minimize its risk, distributed the money among many depositaries, as will be seen from the list of depositaries -which are shown by the records in this case.
The state was to the trouble and expense of placing it in its depositaries. It had assumed the risk of safely keeping the money to secure it for the purposes for which it was deposited, and to return it to the insurance company under the conditions specified in the law relative thereto. Under the law is assumed no other duty toward the plaintiff. The state cannot be held to he under obligations to perform any other duty than that specified in the law as found in the sections above set forth. All other obligations it was under by reason of said law have been wholly performed by the state. There is no other law applicable to this case. That law was enacted for the purpose, and with the intent to set forth and fix the duty and obligation of such corporations as the plaintiff, which desire to be admitted to do business within the state, and also sets forth the corresponding duties and obligations of the state to such corporations. The plaintiff having, in a proper manner as required by law relative thereto, withdrawn from the state, the state was under no other obligations than those it assumed in the law; that is, to return to the plaintiff the amount deposited subject to the requirements of § 4899, above referred to. It must also be borne in mind that the admission of the plaintiff within this state to do business and all the proceedings had with reference to its admission, the payment of the money into the state treasury and thereafter the state keeping and safeguarding it in the manner above set forth, were all done for the plaintiff’s interest in the furtherance of its business. The state, as such, would receive no benefit other than what had incidentally accrued to it in the safeguarding of the $25,000 by placing it upon deposit as we have seen, and upon which deposit had accrued the interest in dispute, and which the law does not provide shall be returned to the plaintiff. The state has complied with all its obligations to the plaintiff, and should be and is under no further liability to it. We have examined all the authorities cited in the case, but we are fully convinced that the law which must govern this case is that of our statute above set forth.