The county of Cass brings this action to recover from defendants as sureties for Lee State Bank, a depository of the county funds. The conditions of the bond are as follows:
"Now, therefore, the condition of this obligation is such that if the said Lee State Bank shall as said depository receive the moneys turned over to it by the treasurer of said county and shall receipt for the same and shall hold same subject to the order of said treasurer and shall pay same over on such order and shall protect the said county of Cass against loss from the insolvency of said bank and against loss from any and all causes as to such funds so deposited, and that said bank shall keep an accurate account of said funds so deposited, and shall pay to the said county treasurer of said county two per cent. per annum interest on the daily balances of such treasurer as such, then the above obligation to be void, otherwise to be and remain in full force."
By reading the provisions of 1 Comp. Laws 1929, 1194, into the bond, County of Oakland v. Central West Casualty Co.,266 Mich. 438, and considering the evidence submitted at the trial, it appears that the bond was for the calendar years 1931 and 1932. At the end of this period the balance in the county's commercial account was $1,044.55 and in the savings account $17,058.32.
The Lee State Bank and four others filed with the county clerk, in October, 1932, a bid agreeing to pay interest for the next two ensuing years at one per cent. per annum, and stated therein *Page 497
"We will furnish no bond for such deposits in compliance with Act No. 40, Pub. Acts 1932 (1st Ex. Sess.)."
No action was taken on this bid until the adjourned annual meeting January 9, 1933, when the supervisors by resolution instructed the clerk and treasurer to divide funds as equally as possible among the five bidding banks. A new county treasurer took office on January 1, 1933, and he deposited certain funds with the Lee State Bank and withdrew others. Following the closing of the banks of the State by proclamation of the governor, this bank on July 6, 1933, offered a plan to resume business, whereupon the county filed its bill of complaint asking that a review be had of the proposed plan, that a determination be made by the court on the county's claim and that the court decree said claim to be paid in full.
Following the decree in favor of the county, in a sum not important here, certain payments were made to the county and bank certificates issued for the balance of the fund found to be due. The county then brought the instant suit; stipulations were executed as to the effect of the chancery action, a jury was waived and the court filed its opinion, rendering verdict against the three defendants for $8,404, such sum being the entire balance due from the bank in the chancery proceedings. Judgment was entered for this amount which, with interest, amounted to $8,658.86.
Appellants contend that the liability under the bond terminated December 31, 1932, and they are not liable for any money on deposit thereafter, the county having had a reasonable opportunity to draw out all of its moneys before the bank was closed by the governor's proclamation on February 14, 1933. *Page 498 They also urge that the notice contained in the bid of October, 1932, terminated and canceled the bond. We held inLawrence v. American Surety Co. of New York, 263 Mich. 586, 603 (88 A.L.R. 535):
"The surety continues liable for deposits made during the life of the bond although not demanded until after its expiration, at least for a reasonable time."
Also, see cases there cited.
The record shows a demand on February 11, 1933. With the statute read into the bond, we have a case exactly in point with United States Fidelity Guaranty Co. v. City ofPensacola, 68 Fla. 357 (67 So. 87, Ann. Cas. 1916 B, 1236), cited in the Lawrence opinion, from which we quote the following:
"The obligation was not merely to insure or secure the payment of warrants drawn by the city on its deposits during the contemplated period, but to pay over all moneys received on deposit with the bank from the city during the stated period. The obligation to pay over all moneys deposited during the contemplated period continued though the time had expired during which deposits could be made under the protection of the bond. * * * Rendering a statement of funds on hand is not an accounting for or a paying over of the funds under the provisions of the bond. * * *
"In effect the obligation of the defendant is that the bank 'shall faithfully account for and pay over all moneys which may be deposited with it' by the city from the date of the bond to November 13, 1913; and this obligation continues after November 1, 1913, until all the moneys deposited to November 1, 1913, by the city with the bank have been 'faithfully accounted for and paid over,' or until the obligation *Page 499 is extinguished by the parties or by operation of law."
Our computation of the moneys covered by the bond is taken from the record and the supplemental statement of bank payments filed by defendant at the request of the court. The balance on hand December 31, 1932, totaling $18,102.87 should be credited with a withdrawal by the county on February 2, of $7,033.61, and the payment by the bank after reorganization on December 18, 1933, of $5,662.56, making a total credit of $12,696.17, leaving a balance due for which the sureties are liable of $5,406.70. We have not overlooked the additional amount of $26.52 paid by the bank but as this is interest allowed it should not be credited on the sureties' obligation.
The judgment heretofore entered should be modified to the extent of the difference between the foregoing amount and the verdict rendered by the court of $8,404, reducing the judgment by $2,997.30. Because of this reduction, when the judgment is paid, the participation certificates received by plaintiff in settlement of the chancery case should be assigned to defendants, but only in the reduced amount. Except as otherwise modified, the judgment heretofore entered should be affirmed. Appellants should have costs of this court because of the modification of the judgment. *Page 500