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Independent School Dist. No. 1 v. Porter

Supreme Court of Idaho
Apr 26, 1928
266 P. 1098 (Idaho 1928)


No. 4848.

April 26, 1928.

APPEAL from the District Court of the Fifth Judicial District, for Bear Lake County. Hon. O.R. Baum, Judge.

Claim against insolvent bank. From judgment of district court affirming classification of commissioner of finance, claimant appeals. Affirmed.

Holden Coffin and Geraint Humphereys, for Appellant.

Public officers charged with the safekeeping of public funds have no authority to deposit money otherwise than in accordance with the statutory law of the state of Idaho, and any deposit otherwise than in accordance with the statute is illegal, and does not have the effect of creating any contract whatever between the depositing unit and the bank. ( State v. Thum, 6 Idaho 323, 55 P. 858; First National Bank v. C. Bunting Co., 7 Idaho 27, 59 P. 929, 1106; In re Bank of Nampa, 29 Idaho 166, 157 P. 1117.)

Jones, Pomeroy Jones, for Respondent.

A deposit of money in a bank, in the absence of evidence to the contrary, is presumed to be general, and the burden of proof is on the depositor to prove that it is a special deposit. ( Fralick v. Coeur d'Alene Bank Trust Co., 36 Idaho 108, 210 P. 586.)

In order that one claiming trust fund may impress trust on property of defunct bank to obtain priority he must trace such fund into hands of bank. ( United States National Bank v. D. W. Standrod Co., Bankers, 42 Idaho 711, 248 P. 16.)

At the close of business on August 11, 1924, the Bank of Montpelier suspended payment and was taken over by the commissioner of finance for liquidation. When the bank closed its doors there was on deposit in the name of Harold B. Hull, as treasurer of the school district, the sum of $9,783.48. The school district filed its claim to have its deposit allowed as a trust fund under subd. 2, sec. 13, chap. 42, of the Laws of 1921. The commissioner allowed the claim under subd. 3 thereof. From such allowance an appeal was prosecuted to the district court. A separate action was also prosecuted in the district court to have the amount of the district's deposit adjudged a trust fund and set off against certain warrants of the district in the hands of the bank. The causes were consolidated and tried together. From a judgment affirming the classification of the commissioner this appeal has been taken.

A careful consideration of the allegations contained in the verified application for the allowance of the claim, together with the stipulation, the exhibits and oral evidence, has convinced us that the trial court was amply justified in finding that the moneys were deposited and held in the bank in an open checking account; and that, by such deposit, the moneys became the property of the bank and were not held in trust for the district. Under the facts, the court properly classified the district's claim under subd. 3 as a debt due a depositor, such subdivision of the statute providing that:

". . . . All deposits of public funds of every kind or character (except those actually placed on special deposit under statutes providing therefor), including those of the United States, the State of Idaho, and every county, district, municipality, political subdivision or public corporation, of this state, whether secured or unsecured, or whether deposited in violation of law or otherwise, are included within the terms of this subdivision and take the same priority as debts due any other depositor; anything in the statutes of the State of Idaho to the contrary notwithstanding."

Under sec. 13, chap. 42, of the Laws of 1921, an offset is not allowed. ( Brown v. Porter, 42 Idaho 295, 245 P. 398.)

Judgment affirmed. Costs to respondent.

Givens, Taylor and T. Bailey Lee, JJ., concur.

Petition for rehearing denied.

Summaries of

Independent School Dist. No. 1 v. Porter

Supreme Court of Idaho
Apr 26, 1928
266 P. 1098 (Idaho 1928)
Case details for

Independent School Dist. No. 1 v. Porter

Case Details


Court:Supreme Court of Idaho

Date published: Apr 26, 1928


266 P. 1098 (Idaho 1928)
266 P. 1098

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