Court Opinion

ID: 8508648
Source: CourtListenerOpinion
Date Created: 2022-11-23 08:34:19.320386+00
Date Added: 2024-06-11T16:51:00.731909
License: Public Domain

WILSON, J.
This is a suit in mandamus to compel the defendant, who is the treasurer of the Eaton school district, to deposit the school funds in the bank named by the board as the official depository.
The defendant answers that the depository was designated under the provisions of Rev. Stat. 3968 (Lan. 6440), and that the law is unconstitutional. A demurrer is interposed to the answer raising the question. The ground upon which it is claimed the law is unconstitutional is that it requires the bank named as the depository to “give a good and sufficient bond of some approved security company.”
The decision of the court in State v. Robins, 71 Ohio St. 273, holding Rev. Stat. 3446c (Lan. 5851), as amended April 20th, 1904 (97 O. L. 182) known as the Craft’s Law, to be'unconstitutional, is relied upon. The purposes of the law, as it is said by Davis, J., m the opinion of the court, was to make security by security companies exclusive and compulsory for the benefit of the security companies, and not to subserve the public welfare. Such a purpose, the Supreme Court holds, is viola-tive of the constitution, because it unnecessarily interferes with the right of contract.
*63That cannot be said of the law which is challenged here. • Its purpose is to establish a depository; for school funds, under certain named restrictions, for the benefit of the public
The boards of education are authorized to designate as the depository the bank offering at a competitive bidding the highest rate of interest, in no case less than two per cent; the deposit shall not exceed the paid-up capital stock of the bank, and shall not exceed three hundred thousand dollars; the bank shall give a good and sufficient bond of some approved guaranty company in a sum at least equal to the amount deposited.
It is obvious that the primary purpose of the law is to obtain a revenue from the idle moneys of the school boards. The provisions for security are incidental merely.
Two days before the passage of the school code, of which this section is a part, the legislature had enacted what is known as the Craft’s Law, now held to be unconstitutional. If that law had been valid, as the legislature must have assumed that it was, no other kind of security would have been lawful. Revised Statutes 3968 (Lan. 6440) simply followed its provisions, the purpose being to require a good and sufficient lawful bond.
It is the duty of the court to uphold the law establishing a depository for the benefit of the public if it can be done. In order that it may be done and that the deposit may be secured by a lawful bond, the court is authorized, we think, to regard the words designating the character of the security as directory merely and not vital to the purposes of the statute.
It cannot be said, if the legislature had known it could not so direct as to the character of the security, it would not have passed the act. The demurrer to the answer will be sustained, and a peremptory writ may issue forthwith at the costs of the defendant.
Dustin and Sullivan, JJ., concur.