Court Opinion

ID: 3807446
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:47:29.19473+00
Date Added: 2024-06-11T07:38:03.816440
License: Public Domain

Joseph Mays, plaintiff in error, instituted an action in replevin to recover Liberty Bonds in the district court of Creek county. The Honorable Frank Mathews, being assigned as judge on November 19, 1928, rendered judgment in favor of the board of county commissioners of Creek county and Ralph H. Blake, county treasurer of said county, defendants in error, denying relief to said plaintiff in error.
This court, on February 2, 1932, in an opinion by Vice Chief Justice Clark, reversed the action of the trial court. A petition for rehearing was filed, and thereafter the cause was set down for oral argument. Thereafter, Tomerlin  Chandler, Troy Shelton, and Richard W. Fowler filed a brief amici curiae in support of the petition for rehearing. Nowlin, Spielman 
Thomas and the Attorney General filed separately a brief amicus curiae.
On January 7, 1933, I filed a dissenting opinion to the majority opinion. This court, subsequent thereto, has granted a rehearing, and delivered its majority opinion written by Mr. Justice Swindall on May 16, 1933. I desire to specially concur in this majority opinion, and incorporate herein the views which I heretofore expressed in my dissenting opinion.
It appears that Joseph Mays filed 39 Liberty Bonds of the par value of $1,000 each, with the First National Bank of Bristow for safekeeping. The cashier of said and thereafter, in March 1, 1927, took said bonds to the office of the county treasurer of Creek county and asked for a county deposit. The First National Bank of Bristow had been designated by the board of county commissioners as a county depository. The county treasurer gave said cashier, as a representative of said bank, a deposit of county funds equal to the value of said bonds, to wit, $39,000, and accepted said bonds as collateral security for said deposit. The bank failed in April, 1928, and at that time the county had on deposit in said bank $54,000 of county funds, and the county treasurer held $54,500 in bonds, including the bonds of Joseph Mays. The bonds were negotiable, payable to bearer. They were not the property of the bank.
Plaintiff in error insists that the county treasurer was not a holder in due course; that the First National Bank of Bristow was not authorized under the laws of Oklahoma to pledge the bonds in question as security for a county deposit; that chapter 99, Session Laws 1925, and chapter 88, Session Laws 1925, should be considered together, and that the word "county" should be impliedly read into section 4144, C. O. S. 1921, as named by said chapter 99, Session Laws 1925.
It is contended by the Attorney General that chapter 99, Oklahoma Session Laws 1925, is not applicable to the security pledged by a bank to secure county deposits; that said chapter is a general statute, while chapter 88, Oklahoma Session Laws 1925, is a special statute, and the special statute should be held to be the governing statute, and in support thereof, cites Maryland Casualty Co. v. Board of Commissioners, 128 Okla. 58,260 P. 1112; also, that chapter 99 is applicable only to state banks; that the state is without authority to provide that a national bank cannot pledge its assets to secure its deposits, or that it can only pledge its assets with the unanimous consent of its heard of directors; that said bonds were negotiable, and that the county was a holder in due course.
A reading of chapter 99, Session Laws 1925, shows that the Legislature did not make the proviso in reference to the pleading of the assets of said bank as security applicable either to state or county deposits. It specifically provides, to wit:
"No bank, banker or bank official shall give preference to any depositor or creditor by pledging the assets of the bank as collateral security or by selling or transferring any of the assets of any insolvent bank in consideration of any deposit in such bank: provided, any bank, by the unanimous consent of its board of directors expressed by resolution duly entered in the minute book of such bank, may pledge the assets of such bank as security for township, city, town, school district, benevolent or fraternal association funds deposited in such bank in all cases *Page 239 
where no surety bond is given to secure deposits. * * *"
Said chapter, requiring the unanimous consent of the board of directors of the bank before pledging securities to secure public deposits, is not applicable to state or county deposits. This provision was not effective until the enactment of chapter 40, Session Laws 1931. This was the legislative construction placed upon said chapter; otherwise there was no necessity for the enactment of said chapter 40, Session Laws 1931.
In the Maryland Casualty Co. Case, supra, this court held that section 4144, C. O. S. 1921, was a general statute, and section 5727, C. O. S. 1921, was a special statute. Chapter 99, S. L. 1925, is an amendment to section 4144. Chapter 88, Session Laws 1925, is an amendment to section 5727. Both acts were passed by the same Legislature. Chapter 88, Oklahoma Session Laws 1925, contains substantially the same language as found in section 5727, C. O. S. 1921, supra. Chapter 88 relates to the pledging of assets to secure county deposits. Chapter 99 makes no provision for county deposits and operates on the subjects therein embraced. The two acts should be construed together, but the proviso in the general act is not inconsistent with the special act because the proviso makes no reference to county deposits. The opinion in this case conflicts with the case of Maryland Casualty Company v. Board of Com'rs, supra.
Section 24, title 12, Banks and Banking, U.S. Code Annotated, provides that national banks shall be authorized to exercise by its board of directors, or its duly authorized officers and agents, subject to law, all such incidental powers that shall be necessary to carry on the business of banking, etc. Burrowes v. Nimocks, County Treas., 35 F.2d 152, is authority for the proposition that the national bank is authorized under its general powers to pledge its assets to secure the county deposits, and that the active vice president, as managing officer of the bank, had authority without special authorization to obtain a loan to the bank and to pledge the notes which it held as security for the loan without the special authority from the board of directors. National banks are instrumentalities of the federal government, and their affairs cannot be frustrated by state laws. Section 4144. C. O. S. 1921, as amended, has no application to national banks, which are federal agencies. Section 4144 was designed to protect the bank and its creditors, and was not intended to limit public depositories or the power and duty of public officers. It has no application to national banks.
The bank officials took the special deposit without a compliance with section 4144, but this does not make the transaction illegal and void. The bank could not be heard to urge nonliability because it received the benefits of said transaction. The most that could be urged was that the act of the bank cashier was ultra vires, but this plea would not be available to the bank after it had received the benefits of this transaction. It was not incumbent upon the county treasurer to prove that the resolution was adopted. If he was acting in good faith, and there is no evidence or insinuation to the contrary, he had the right to presume integrity on the part of the bank officers. First National Bank of Kiowa v. Mee,126 Okla. 265, 259 P. 523.
The bonds were negotiable. It is my opinion that it was not the duty of the county treasurer to investigate whether or not the cashier of the national bank had the unanimous consent of the board of directors of the bank to pledge the security in question to secure the county deposit of said bank. There is nothing to indicate that the county did not take the bonds before maturity for value, in good faith, and without notice of any defect in the bank's title to said bonds. Such being the case, the county is a holder in due course, and is entitled against the real owner to a lien on the bonds to the extent of the county's deposits. This entitles the county to possession of the bonds.