Receiver of Danby Bank v. State Treasurer , 39 Vt. 92 ( 1866 )

The opinion of the court was delivered by

Baerett, J.

For the purposes of this proceeding, we think it was proper for the receiver to institute it in the county of his personal residence. This is not a continuation, by way of supplement, of the original proceeding under the statute, in such a sense that the venue of that proceeding draws to'it and fixes the venue of this petition. Of course, then, the venue depends on the general provisions of the statute, and by them the receiver properly instituted the proceeding in the supreme court in and for Bennington county.

The several banks interested in the “ bank fund,” under the claim of the receiver, were notified of the petition, and they have appeared and been heard in an argument upon issues and questions made by their respective answers, as also has the treasurer. The court therefore not only feel at liberty, but, in view of the character of the case and of the interests connected therewith, it would seem to be a duty, to express opinions on some points beyond what would be necessary for the presept disposition of the" case by the order to be made.

The mode of creating the “ bank fund,” and of continuing and replenishing it, in connection with the purposes for which it was created, and the provisions for administering it, shows clearly that it was designed to be and remain perpetual, subject to the purposes and provisions of the law. The statute provides only two modes for appropriating and withdrawing money from that fund : one in payment of the debts of an insolvent bank ; the other, — in sec. 13 of the chapter on Banks in the Compiled Statutes, — in repayment to a bank, of which the charter has expired, its proportional share of said fund. Section 87 does not provide anything in relation to the appropriation of said fund, nor as to the rights of the banks in it. It provides that on giving a certain bond the bank shall thereafter be exempt from all payments required to be made to the “ bank fund,” “ and from all the provisions for the establishment, preservation and regulation of said fund.” The court regard this exemption as prospective, commencing with the giving of the required bond and continuing only so long as such bond shall be kept good. In other words, the bond provided for in the 87th section is a mere substitute for the liability and duty of the bank to pay in towards the “ bank fund ” for its creation or replenishment; and the giving of such bond has no effect upon the fund already accumulated, nor upon the right of the bank to draw out its proportionate share of it.

The exemption “from all the provisions for the establishment, preservation and regulation of the fund,” was designed to be only coextensive, in the time of its operation, and in respect to the subject matter on which it was to "operate, with the exemption from all ¡payments to said fund, required in said chapter to he made.

None of the banks, therefore, that had contributed to that fund, were entitled, by reason of having given the required bond, to withdraw what they had paid in towards that fund pursuant to the provisions of that chapter. The right to do so accrued only upon the expiration of the charters of the several banks respectively. The purpose of creating the fund was to provide a security for, and a means of paying the balance of the indebtedness of a bank that had become insolvent in excess of its property and effects. That balance would of course depend on the amount of its debts, and the amount of money to be realized from the property owned by it at the time it ceased to do business in consequence of its insolvency. In view of the purpose for which the fund was created, it seems plain that the fund must be chargeable for the balance of such debts as of the time when the bank ceased to do business by reason of its insolvency. The proceedings in the court of chancery, required by the law to be instituted upon the happening of such insolvency, are for the purpose of ascertaining the extent to which the fund is to be subjected, and to appropriate it accordingly. This being so, none of the banks that had contributed to the fund, now claimed by the receiver, were entitled to withdraw their contribution thereto, by reason of the expiration of their respective charters, unless it be the Vergennes Bank, for it stands confessed that none of their charters had expired at the time Danby Bank stopped business on account of being insolvent.

"Whether the charter of the Vergennes Bank is to be regarded as having expired at that time, and therefore said bank was entitled to have the money repaid, as it has been, it is not now necessary, nor perhaps important, that the court should express an opinion. The matter stands upon the peculiar provisions of the acts by which that bank has been kept on foot, and the course taken under those acts for continuing it, either as' the old bank extended, or as a new one, absorbing and standing in the place of the old one. It seems more appropriate to leave the decision of the question till it shall become necessary under some proceeding that shall raise the issue directly between the proper and necessary parties to it.

It is obvious from what has now been said, that, in the opinion of the court, it is the right of the receiver to have, and the duty of the treasurer to pay over to him so much of the “ bank fund ” as is now in the hands of the treasurer under the statute, charge^ by the order of the court of chancery. To this extent the court haVe no doubt that a peremptory writ should issue.

But it is claimed that, under the law, it should be held that the whole amount of that fund is in the hands of the treasurer, undiminished by the payments that have been made to the banks named of the proportions they had respectively contributed to said fund. The soundness of this claim depends on the real character in which the treasurer receives and holds the money which goes to constitute the “ bank fund.” If it be a receiving and holding of the money as the property of the state, the same as he receives and holds the money that is paid into the treasury by the collectors of taxes, that is to sáy, if it be money of the state, subject, indiscriminately with the money derived from taxation, to a special charge by a permanent general law, and an appropriation by virtue of such charge to the satisfaction thereof, then it would follow that the treasurer should pay over to the receiver, of the money in the treasury, indiscriminately to the full extent of money in his hands as treasurer, not exceeding the extent of such charge. But, in the opinion of the court, this is not the correct view to be taken of the subject. ¥e think the treasurer holds the money as a specific fund in which the state has no property. He is charged with special duties in ¡respect •to that fund, and becomes officially responsible for the proper discharge of those duties. Whether in virtue of his official responsibility, and his liability under his official bond to respond for his official defaults, the state sustains such a relation as to render it, in supposable cases, its duty to make good any deficiency in tbe “ bank fund,” tbe court are not called on to decide or express views. For present purposes it need only be added, that all the provisions of tbe statute upon tbe subject, preclude the idea of that fund being absorbed by the state as a part of its general assets, with only tbe duty on the part of the state to permit an equal amount to be taken from the treasury to answer the purposes of the statute as to that fund. The statute provides for an entire separation of the fund; for its investment by the treasurer ; for its recall by him or its re-. placement by the sale of securities which he has received by way of investment; and, moreover, it expressly declares that it shall be the property of the several banks that have contributed to its creation. There is no provision for the treasurer to supply any deficiency in that fund at any time, or for any purpose, by transferring the moneys of the state in his hands to the account of said fund. To supply the money to meet the charges upon the fund the only mode is by the sale of the securities, a collection of the loans, and a resort to further contributions by the banks, as provided in the statute. Hence it is obvious that, in order to warrant the treasurer to appropriate the money of the state to the purposes of the “bank fund,” special authority, by act of the legislature, would be necessary. The order, therefore, by mandamus should not require him to pay to the receiver any money of the state as distinguished from the “ bank fund.” In the opinion of the court, also, such order, should not require him to pay money of his own, on the score of his having subjected himself to liability for the deficit of that fund by reason of his having wrongfully paid it over to banks not entitled to have it. In the first place this is not the appropriate proceedings in which to make the issue and try the question of his liability on this score. In the next place the order can properly extend only to require him to do what it is his clear ministerial duty to do. That ministerial duty must be regarded as limited to thé paying over of the funds in his hands. Whether he may be liable to respond in damages for official or personal default, can properly be determined only by a different proceeding, and if so liable, tbe final remedy would be by process to enforce pecuniary satisfaction by payment of the adjudged damages.

But, in the present cace, a conclusive reason for limiting the order exists in the fact that the present treasurer has had nothing to do with the “ bank fund,” except to receive from a predecessor the sum now in his hands, and no more, and that predecessor, ( Hon. John B. Page, ) passed to the present treasurer, hll that he received from Ií. M. Bates, a former treasurer, except what he has paid to the receiver under the order of the chancellor. The amount of the fund, in the accumulation and disposition of it since 1854, and the present condition of it, are set forth in the answer of said John B. Page, which is adopted and supplemented by the present treasurer ; by which it appears that all the requirements made to the various banks that had contributed to the fund, were made by Mr. Bates while he was treasurer. John B. Page stands therefore clear of any ground or reason for imputing to him official fault or misjudgement in this respect; and, in view of the facts set forth in his answer constituting the reason for his withholding from the receiver the balance of the fund claimed by the Farmers’ Bank and the Bank of Poultney, there seems to be no ground for imputing to him any personal short coming in thus withholding that balance. The same remarks apply as well to the present treasurer.

It is therefore adjudged that á writ issue in due form, commanding John A. Page, treasurer of this state, to pay over, under the said order made by the chancellor, the sum of , being the amount of the “ bank fund” in his hands as treasurer, after deducting therefrom the sum paid, of to be paid, to their counsel by the said John A. and John B. Page, for the reasonable charges of such counsel, for appearing and answering in court to said petition, to be fixed and allowed by the chancellor by whom the original order upon the treasurer to pay over the bank fund to said receiver was made.