Court Opinion

ID: 3423149
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:50:48.576631+00
Date Added: 2024-06-11T13:54:09.682032
License: Public Domain

DISSENTING OPINION.
If we give full effect to the reasoning and holding in Harris
v. Randolph County Bank (1901), 157 Ind. 120, 60 N.E. 1025, the reasoning and result of the majority opinion are correct. It seems that the necessary import of Harris v. Randolph CountyBank, supra, is that a bank may pledge its assets as security for the repayment of deposits and regardless of whether the deposits are made by a public depositor or by a private individual. The aforesaid case also stands for the proposition that insolvency of a bank at the time a deposit is made is immaterial. I agree with the majority opinion that the section of our public depository law authorizing public officials to accept certain types of security for deposits does not in any way increase or decrease the power of banks in the matter of securing deposits and I believe that a bank has no *Page 316 
more power to pledge its assets to secure a public deposit than it has to secure a private deposit. While I am inclined to the view that it is contrary to public policy as expressed in various statutes regulating the conduct of banks and as determined by experience within the common knowledge for a bank to use its assets to guarantee deposits even when solvent, I have no doubt that it is contrary to such public policy to use its assets, either directly or indirectly, to guarantee deposits at a time when the bank is insolvent. The trial court found as a fact that the Crothersville State Bank was insolvent at the time that the transaction involved in this case took place. In view of the positive prohibitions against the receipt of deposits by banks in state of insolvency it would seem that any contract entered into by officers of a bank for the purpose of obtaining deposits would be invalid. Especially would this seem to be true when, as in the instant case, the directors of the bank, who are charged with the knowledge of insolvency of the bank, entered into a contract with themselves to pledge assets of the bank to indemnify themselves against loss as sureties on a bond to a public depositor for the purpose of inducing the public depositor to make deposits at a time when the bank was insolvent.