Kuck v. De Witt County

39 S.W.2d 840
CourtTexas Commission of Appeals
DecidedJune 10, 1931
DocketNo. 1466—5703
StatusPublished

This text of 39 S.W.2d 840 (Kuck v. De Witt County) is published on Counsel Stack Legal Research, covering Texas Commission of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kuck v. De Witt County, 39 S.W.2d 840 (Tex. Super. Ct. 1931).

Opinion

CRITZ, J.

It seems from the record of this case that in Eebruary, 1927, the commissioners’ court of De Witt county, Tex., selected the First State Bank of Westhoff, in such county, as its general depository for all funds of the county, except its school funds, as provided and required by article 2544, et seq. R. C. S. of Texas, 1925. The bond of such bank was fixed at $249,900. On March 16, 1927, the bond of the above bank was duly approved by the commissioners’ court. It was also approved by the state comptroller on March 24, 1927. This bond was signed by the bank as principal and by L. A. Walker, Philip Wel-hausen, M. O. Driscoll, B. H. Traybig, D. J. Shall, G. A. Lowrence, and K. E. Carson as sureties. This bond was executed under the provisions of article 2547, R. C. S. of Texas, 1925, as a general county depository bond.

Later, on January 5, 1928, the above bank filed with the county another bond in the principal sum of $100,000. This bond was approved by the county on the same date. It was never approved by the state comptroller. So far as shown by the record, there was no ■order entered in the minutes, of the commissioners’ court requiring this second bond, and there is no record as to when, how, or why it was< required, except the statements contained in the bond itself, and the order ap[841]*841proving same. The material parts of the second bond read as follows:

“The conditions of the foregoing obligation are such that whereas the above bound principal, First State Bank of Westhoff, West-hoff, Texas, is the duly authorized, bonded and acting County Depository, and further security has been required of said Bank as such Depository, to cover additional moneys, contemplated to be deposited with said Bank.
“Now, therefore, if the above bounded First State Bank of Westhoff, Texas, shall faithfully do and perform all the duties and obligations devolving on it by law as the county depository of DeWitt County, and shall upon presentation, pay checks drawn on it by the County Treasurer of DeWitt County, Texas, Shall faithfully keep and account for all funds belonging to the county which are deposited with it and all other funds deposited with it under the requirements of Chapter II, Acts of the Thirty-fifth Legislature passed at its Kegular Session, and shall pay the interest at the time and at the rate hereinabove stipulated; and shall at the expiration of 'the term for- which it has been chosen turn over to its successor all the funds, property, and other things of value coming into its hands as such depository, then and in that event this obligation is to be and become null and void, otherwise to remain in full force and effect.”

The order of the commissioners’ court approving the above second bond is dated January 5, 1928, and according to the record, is, in substance, as follows: “ * * * It is ordered by the Court that the bond of The First State Bank of Westhoff be approved, said bond is additional to the original bond filed and is to cover additional amounts on deposit in the bank, and to be deposited in the bank during the current year, from the sale of district road bonds and from any other sources.”

This second bond was signed by the bank as principal and by Philip Welhausen, M. C. Driscoll, E. Hagens, L. A. Walker, E. Hertz, E. H. G-erdes, Louis Poth, Eilert Kuck, and D. J. Shall.

It will be noted that some of the sureties on both bonds are the same. Also it seems that Hertz, a surety only on the second bond, was sued, but dismissed from the case on account of bankruptcy.

At the time the new bond was executed, the various funds of the county on deposit in the depository bank amounted to $252,-932.22. Wé are not apprised by the record what these funds consisted of. At the time the bank failed, and was taken over by the banking department for liquidation, there was on deposit in the various county and district funds the sum of $153,584.05. Of this sum $54,573.70 belonged to the county as a whole, and the balance belonged, in various sums, to the road districts Nos. 1, 2, 3, 4, 5, 7, and 8, and drainage district No. 1. From the foregoing it will be observed that at the time •the new bond was filed and approved, the county had on deposit with the depository bank a sum in excess of its general depository bond in the amount of $3,032.22. Also it is shown by the undisputed record and the opinion of the Court óf Civil Appeals that between the date of the approval of the new bond and the closing of the'depository bank, the county deposited in the bank further sums amounting to about $266,000, and withdrew funds amounting to $366,000, thus resulting in a net reduction of the amount on deposit at the time the bank closed of about $100,000. That is to say, the county had on deposit in the bank at the time it closed about $100,000 less than it had on deposit when the new bond was given. Also, it is conclusively shown that the funds were all deposited at all times in one general county account, and were never allocated in the bank to any special county or district fund.

On final trial in the district court, the county recovered judgment as follows:

(a) Against the bank as principal, and James Shaw as banking commissioner, and against Philip Welhausen, L. A. Walker, M. C. Driscoll, B. H. Traybig, D. J. Shall, G. A. Lowrence, K. F. Carson, E. Hagens, E. H. Gerdes, Louis Poth, and Eilert Kuck, as sureties, for $109,000. This judgment made proper safeguards with reference to the liability of the banking commissioner in his official capacity.

(b) Against the bank as principal, and the banking commissioner, and also against Philip Welhausen, L. A. Walker, H. C. Dris-coll, B. H. Traybig, D. J. Shall, G. A. Low-renee, and K. F. Carson, as sureties, for $53,-584.05. This part of the judgment also properly safeguards the judgment against the banking commissioner.

The above judgment was affirmed by the Court of Civil Appeals. 23 S.W.(2d) 411.

As we interpret the above judgment, its result is that all sureties who signed both bonds were held for the entire sum the county had in the bank when it closed, while those who signed the second bond only, were only held to the extent of the second bond. In other words, the trial court held all sureties who signed both bonds up to $100,000, and held the sureties on the first bond for the additional sum of $53,584.05, the balance due by the bank to the county. We here call attention to the fact that the Court of Civil Appeals inadvertently says: “Judgment was rendered, upon a trial before the court without a jury, in favor of the county against the principal for all of said amounts, and against the sureties upon the second bond for $100,-000, the amount thereof, and against the sure[842]*842ties on- the Original bond for the balance of •$53,000.”

A reading of the opinion of the Court of Civil Appeals discloses that the effect of its ruling- is to hold that the new $100,000 bond is not, strictly speaking, a statutory bond at all, but additional security taken by the county to secure all of its deposité in the depository bank. . In this connection, the Court of Civil Appeals holds that the mere fact that the law prescribes certain methods by which county depositories shall secure county funds does not, as a matter of law, make a contract between the county and the bank, which secures the county deposits in a manner other than that prescribed by law, unenforceable between the parties.

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Related

Carson v. De Witt County
23 S.W.2d 411 (Court of Appeals of Texas, 1929)
Sullivan v. City of Galveston
34 S.W.2d 808 (Texas Commission of Appeals, 1931)

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Bluebook (online)
39 S.W.2d 840, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kuck-v-de-witt-county-texcommnapp-1931.