Court Opinion

ID: 3803238
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:44:51.724046+00
Date Added: 2024-06-11T07:37:53.120680
License: Public Domain

I concurred in the original opinion filed herein on February 1, 1927, but upon consideration of the petition for rehearing and re-examination of the authorities cited by defendant in error I am of the opinion that the rehearing should be granted and this cause affirmed upon authority of the cases hereinafter cited.
The question involved in this case is whether or not the assets of the depositors' guaranty fund in possession of the Bank Commissioner are subject to ad valorem taxes. In determining this question, it is necessary to decide whether or not such assets so held by the Bank Commissioner are a state fund. Under our law, if they are a state fund and, as such, property of the state, they are not subject to taxation, and the opinion herein so holds. The opinion, however, holds that such funds belong to the various banks, and the Bank Commissioner merely holds same as a trustee, and the same are therefore not a state fund and are subject to taxation. In our judgment, this holding is in conflict with former holdings of this court as follows:
In State v. Cockrell, 27 Okla. 639, 112 P. 1000, the State Examiner and Inspector demanded the right to examine and inspect the assets of the Columbia Bank  Trust Company, which failed in 1909 and was taken over by the Bank Commissioner, the contention there being that said assets in the hands of the Bank Commissioner were a fund of the state, and therefore subject *Page 277 
to examination by the State Examiner and Inspector under the following provision of our statutes:
"The Examiner and Inspector shall examine the books and accounts of state officers whose duties it is to collect or disburse funds of the state or under its management at least once each year."
This case squarely presented the question as to whether or not the depositors' guaranty fund was "funds of the state," and in passing on this question, this court used the following language:
"That the depositors' guaranty fund, and the funds of a failed bank in the hands of a Bank Commissioner for the purpose of reimbursing the depositors' guaranty fund, is as much a fund of the state as the common school fund is also true. The depositors' guaranty fund act was sustained by this court on the theory of the reserved power of the state to alter and amend charters of state banking corporations for the public welfare. See Noble State Bank v. Haskell, 22 Okla. 78,97 P. 595, which is in harmony with Ozan Lumber Co. v. Biddie,87 Ark. 587, 113 S.W. 796; New York Central  H. R. R. Co. v. Williams, 92 N.E. (N.Y. Ct. App.): 404; and Hammond Packing Co. v. Ark., 212 U.S. 320. This power exercised for the public welfare by the legislative act which causes to be levied the assessment 'against the capital stock of each and every bank or trust company organized or existing under the laws of this state * * * equal to five per centum of its average daily deposits during its continuance in business as a banking corporation,' for the purpose of protecting the depositors of such banks (sec. 3, art. 2, ch. 5, pp. 121-123, Sess. Laws 1909), is the same as that which levies, or causes to be levied, a tax upon the people and property within the state for the maintenance and support of the common schools and educational institutions. The title of such depositors' guaranty fund vests in the state just as much so as the common school lands, or the proceeds of the sale of the same, and the taxes levied and collected for the maintenance and support of said schools, all of which are held in trust by the state for a specific purpose."
This case was decided in 1910, and has been consistently cited and followed since that time.
The next case wherein this question was involved was Lovett v. Lankford, 47 Okla. 12, 145 P. 767. In that case the depositors of a failed bank at Sapulpa sought by mandamus to require the Bank Commissioner and the Banking Board to allow a certain claim. It was contended on behalf of the Bank Commissioner and Banking Board that the suit was one against the state, and therefore could not be maintained without the consent of the state. On the other hand, it was contended that the assets of the bank did not belong to the state and this suit was therefore not a suit against the state, but merely a suit against officers discharging a ministerial duty and that the state neither lost nor gained as the result of this litigation. This court held it was a suit against the state and quoted the language above set out from the Cockrell Case, and further quoted from the Cockrell Case, supra, as follows:
"The State Bank Commissioner or the Banking Department is a part of the Executive Department of the state and is entrusted with the receipt, custody, and disbursement of funds of failed banks."
Adding:
"If defendants in error may be considered executive officers of the state, and in performing their duties in administering the law under consideration do so as such officers, and the property intrusted to their control and management by the law is property owned by the state or property in which the state has a substantial interest, then it can hardly be questioned that this suit, in effect, is against the state."
This case was decided in 1914.
The next case in which this question was raised was Lankford v. Schroeder, 47 Okla. 279, 147 P. 1049, decided in 1515. In this action, Schroeder, a depositor in a failed bank, brought suit against Lankford, as Bank Commissioner, for recovery of a deposit, and the defense was again interposed that the Bank Commissioner could not be sued, as the funds in his hands were state funds, and a suit against him was therefore a suit against the state. This court sustained this contention and again reaffirmed the rule laid down in the Cockrell Case, citing and quoting therefrom and also citing and quoting from the case of Lovett v. Lankford, supra; syllabus paragraphs 4 and 5 of said case, page 280, being as follows:
"The State Banking Board and the State Bank Commissioner constitute a part of the executive department of the state government, and cannot be sued without the state's consent. * * *
"The state guaranty fund is the property of the state as much as ad valorem taxes collected for the state's maintenance, and the state has a first lien on assets of a failed bank in the hands of the State Bank Commissioner to secure reimbursement of the guaranty fund for sums paid therefrom to the depositors of such bank, and no suit can be maintained by a creditor of the bank against the Bank Commissioner for the application *Page 278 
of such assets or guaranty fund to the payment of his claim."
This question also found its way into the Supreme Court of the United States in the case of Lankford v. Platt Iron Works,235 U.S. 461, and Farish v. State Banking Board of Oklahoma,235 U.S. 498. In the Platt Iron Works Case, the Supreme Court of the United States cited and quoted from State v. Cockrell as follows:
"In State v. Cockrell, 112 Pac. Rep. 1000, the Supreme Court of Oklahoma had occasion to define the duties of State Examiner and Inspector. It decided that the office was constituted by the Constitution of the state and was independent of the control of the Governor, and passing upon the authority of the Examiner and Inspector over the accounts of the Bank Commissioner, it decided that 'the funds and assets' of an insolvent bank are 'under the management of the state,' and 'that the depositors' guaranty fund and the funds of a failed bank in the hands of a Bank Commissioner for the purpose of reimbursing the depositors' guaranty fund is as much a fund of the state as the common school fund.' "
In State Banking Board v. Oklahoma Bankers' Trust Co.,49 Okla. 72, 151 P. 566; National Surety Co. v. State Banking Board, 49 Okla. 184; 152 P. 389; State Banking Board v. Oklahoma Bankers' Trust Co., 63 Okla. 260, 164 P. 660, the same rule was announced and the cases above referred to were cited and followed. It seems, therefore, that this rule has become a settled rule of practice and of property in the administration of insolvent banks in this state and has been recognized and followed by the Supreme Court of the United States, and in our judgment should be followed in the instant case.
Numerous other cases have been called to our attention which hold the statute of limitations does not run against the state in actions on promissory notes held by the State Bank Commissioner as a part of the assets of an insolvent bank. This on the theory that the same is a state fund and the statute of limitations does not run against the state. Following these authorities, I am forced to the conclusion that this property, having been purchased by the Bank Commissioner at foreclosure sale, under the admitted facts herein, became a part of the depositors' guaranty fund of the state of Oklahoma and, as such, property of the state, and therefore exempt from taxation under the provisions of section 6 of art. 10 of the Constitution, and the judgment of the district court of Logan county in so holding should be affirmed.
I am authorized to state that Justice PHELPS, who also concurred in the original opinion herein, upon reconsideration, dissents therefrom, and concurs in the views herein expressed.