With due deference to the majority of the court I dissent from the conclusion arrived at. In my opinion the decision is not only unsound as a legal pronouncement but will be extremely hurtful to the public interest. The creation of a county depository is not the creation of an office, but is a public contract between the bank and the county on conditions prescribed by law, and the jurisdiction of the board of supervisors to make such contract is the exercise of a special and limited jurisdiction and power, and all the jurisdictional facts must appear in *Page 660 the order creating the depository before it becomes such. Ferguson v. Board of Sup'rs of Monroe County, 71 Miss. 524, 14 So. 81; Bolivar County v. Coleman et al., 71 Miss. 832, 15 So. 107.
The method of establishing a county depository is embraced in sections 4340 to 4348, inclusive, Code of 1930. In short, these sections prescribe for the money of a county to be deposited in a county depository if any bank in that county or in an adjoining county shall qualify according to law and contract, giving the securities required by statute to the board of supervisors of the county for the safekeeping of such funds. Section 4341, Code of 1930, Laws of 1926, chapter 248, requires the board of supervisors at the December meeting each year to give notice to all banks in their county that bids will be received at the January meeting following for the privilege of keeping the county funds or any part thereof, and a copy of this notice shall be mailed to each bank in the county and in adjoining counties, and at the January meeting the board shall receive bids or propositions for the privilege of keeping the money and becoming a depository. It is provided in the latter part of this section: "The bids or proposals shall designate the kind of security as authorized by law, which the banks propose to give as security for funds, and the board shall cause the county funds and all other funds in the hands of county treasurer to be deposited in the bank or banks proposing the best terms having in view the safety of such funds and the terms made with each depository shall remain in force for the current year and until new arrangements shall be made according to this chapter."
By the next section it is provided that, if no bid is made by any bank in the county or adjoining counties at the January meeting, the board of supervisors shall advertise at some subsequent meeting for a depository and select same, in the manner provided by law.
It is provided in section 4343: "Any county failing to secure a county depository by the advertisement to the *Page 661 banks of the county and of the adjoining counties, shall readvertise at any subsequent meeting of the board of supervisors, and as soon as possible for bids for a county depository; such notice shall be published once a week for three weeks in some newspaper published in the county, and in a daily newspaper in Jackson, Mississippi, and shall state that the proposal is open to any bank in the state, and that banks outside of the county shall have preference over county banks."
Section 4346 provides:
"Any bank in a county, or in an adjoining county where there is no bank in the county qualifying, may qualify as a county depository by placing on deposit with the county treasurer as security any of the following securities in an amount ten per cent greater than the maximum sum to be placed on deposit in such bank at any one time, to-wit:
"Mississippi registered and coupon state bonds, Yazoo and Mississippi Delta Levee District bonds, Mississippi Levee District bonds, county bonds and municipal bonds of counties and municipalities in Mississippi, state of Louisiana bonds, bonds of the city of New Orleans and state of Louisiana levee bonds, United States bonds, Mississippi drainage district bonds, bonds of any consolidated school district, or road district of this state, certificates of indebtedness and notes of the state of Mississippi which are legal, recognized binding obligations of said state of Mississippi, under the Constitution and laws thereof, when offered as security or surety bonds of any surety company authorized to do business in the state of Mississippi, but no bond shall be accepted as security except for its market value, and if at any time the securities which may be deposited shall depreciate in value, the board shall have the right to demand other and different security, and a failure on the part of the depository to deposit the additional security when demanded shall forfeit its rights as a depository, and all county funds in its hands shall be immediately returned to the county *Page 662 treasurer. The board of supervisors shall have the right to reject any and all bids where, in the opinion of the said board the security offered is not sufficient."
Section 4347 provides that, after a bank has in every respect complied with the law and shall have placed security as required in the hands of the county treasurer, the president and clerk of the board of supervisors shall issue to such depository a commission. The term of the commission shall be one year from its date.
Section 4348 provides the form of the commission to be issued to the bank, and recites, among other things, the following: "____ Bank of ____, having complied with all of the requirements of law, and having placed the following approved securities with the county treasurer, to-wit: [to be named in the commission], is hereby created and appointed a depository of the county of ____ for a term of one year, . . . and is hereby authorized and empowered to receive and disburse the funds of said county according to law and the rules of the board of supervisors [italics supplied]. . . ." It also provides that the bank shall not have on deposit at any time a sum exceeding the sum named in the commission, and provides that the depository agrees to account for the use of the county funds there kept on deposit and to pay interest thereon at the rate of and in the manner provided by law for the use of county funds.
It will be noted from a reading of section 4346, above set out in full, that the board of supervisors is required to pass upon the securities to be given by the bank to secure the county funds deposited with it, and it is provided therein that no bonds shall be accepted as security, except for the market value, and then provides: "And if at any time the securities which may be deposited shall depreciate in value, the board shall have the right to demand other and different security, and a failure on the part of the depository to deposit the additional security when demanded shall forfeit its rights as a depository, *Page 663 and all county funds in its hands shall be immediately returned to the county treasurer," and they are given the right to reject any and all bonds, where, in the opinion of the said board, the security is not sufficient. As the board of supervisors can only act by an order entered upon its minutes, the order approving the securities to be received and the recital of compliance as a condition precedent to becoming a depository of the securities named in the statute is essential, and no officer would be authorized, in the absence of the issuance of a commission, to deposit any funds in a depository where there was no such order on the minutes of the board. When the board has issued a commission to a bank as a depository, containing the statutory recitals contained in section 4318, an officer could then assume that the depository had regularly complied with all of the precedent conditions imposed by law and would be protected in so dealing with a depository, but before an officer should deposit public money in a bank he should at least demand the commission of the bank as a depository and see that it conformed to law, or else he should examine the minutes of the board of supervisors to see that all the precedent steps had been complied with.
It is a fundamental principal of law that an officer in dealing with public funds must safely keep them, or he must pay them over to some person or institution authorized by law to receive such funds. Where the statute points the source of information as to what is required to create a depository, as it does in the statute referred to, the officer should pursue the sources of information and learn from them whether he is authorized to pay the money to such depository. It cannot be contended with reason, I think, that the sheriff would have any protection whatever should the county auditor or chancery clerk issue a received warrant to pay money where the law did not authorize such person, officer, or bank to receive it. The sheriff could not pay out the *Page 664 public money intrusted to his custody to any person not authorized to receive it without being liable upon his bond therefor. In Powell v. Board of Sup'rs of Tunica County,107 Miss. 410, 65 So. 499, Ann. Cas. 1916B, 1262, the court, in the second syllabus to the opinion, held: "The selection of a bank does not complete its creation as a county depository. This is only accomplished by the depositing of the securities, which is followed by the issuance of a commission showing its qualification as a depository to receive and disburse funds in amount not exceeding a sum stated." At page 426 of the Mississippi Report, 65 So. 499, 501, in discussing this question, the court said: "The selection of a bank does not complete its creation as a county depository. This is only accomplished by the depositing of the securities, which is followed by the issuance of a commission showing its qualification as depository to receive and disburse funds in amount not exceeding a sum stated. The Bank of Tunica, elected county depository for all funds, only qualified for a definite amount. It is not a question of election but of qualification. A bank may be elected, and still never qualify by depositing the securities."
It will be seen that this court expressly held that the selection of the bank as a depository was not sufficient but that it only became depository when it had deposited the securities required of it and had a commission issued to it. In the present case there is no pretense that any securities were deposited as required by the statute, nor was there any commission issued as required by the statute. The only thing that did appear was that the county had selected a bank to be the depository when it qualified by placing the securities required by law to secure the county funds. The board undertook to delegate its function to the clerk to pass upon the sufficiency of the securities. In passing upon the sufficiency of the securities the board is exercising a judicial power which could not be delegated. As a legal proposition every officer *Page 665 and other person must be presumed to know the law, because every person must know the law at his peril. Not having deposited any securities, the bank did not become a depository either actual, legal, or de facto. In fact there can be no such thing in the strict meaning of the term as a de facto depository any more than there can be a de facto contract, because the whole matter is contractual. No duty as a depository can be imposed upon the bank until it has contracted to comply with the law. The duties imposed in the statute are contractual duties that are elements of a contract and not a police law or governmental regulation under the exercise of the police power. All the statutory provisions as to what shall be done after the contract is made, so far as the bank is concerned, are contractual. When the law has been complied with, and when the bank has become a depository, the bank is merely debtor to the county, the money deposited with the bank is the bank's money, and the bank is the debtor of the county. Robertson v. Bank, 116 Miss. 501, 77 So. 318; Sunflower county v. Bank, 136 Miss. 191, 101 So. 192. A bank which has not filed the securities required by law is not a legal depository. Bank of Commerce of Gulfport v. Gulfport, 117 Miss. 591, 78 So. 519, 521. In that opinion it was said, among other things: "It therefore follows that there was no bond as required by law given by the bank, and therefore the bank failed to qualify as a municipal depository. Since the bank did not become the legal municipal depository, then the city had the right to proceed under section 3485, Code of 1906."
In Perkins v. State, 130 Miss. 512, 94 So. 460, cited in the majority opinion, it was held that, where a bank, instead of giving the securities required by law, gave personal securities and received the public funds as though it was a depository, the sureties could not set up as a defense the illegality of the contract. What was said in that opinion was based upon the doctrine of *Page 666 estoppel by contract contained in the written bond which recited contractual stipulations, which, although not good under the statute, were good at common law. That case, as also the case of Bank of Commerce of Gulfport v. City of Gulfport, already cited, holds that, while it is not a legal depository, the bank and the sureties having received the deposit and having given a bond good as a common-law obligation could not set up the illegality of the contract of which it had secured the benefit.
By section 2914, Code of 1930, it is provided that all money deposited in a bank, or with any depository, by or for a tax collector, or other officer having the custody of public funds, state, county, municipal, levee board, road districts, drainage districts, or school districts, whether the same be deposited in the name of the officer, as an individual or as an officer, or in the name of any other person, is prima facie public money and a trust fund, and is not liable to be taken by the general creditors of the officer or by the creditors of the depository, and that whenever any corporation, doing a banking business, of whose property and banking business the banking examiner has taken possession, as provided by law, it shall be the duty of such banking examiner, or his agent in charge, out of the first money coming into his hands, to immediately pay to the tax collector, or other officer having the custody of such funds, the full amount thereof, as far as possible; and on failure to do so, the chancery court of the county where said corporation was doing business, or the chancellor thereof, in vacation, shall, on ten days' notice, require the payment of all, or such part thereof as is on hand, until the full amount due is paid, but it provides that nothing herein contained shall in any manner vary or affect the liability of such officer or his bondsmen.
By section 2915, Code of 1930, it is provided that any officer, state, county, municipal, or district, or any other custodian of public funds or property, who shall improperly *Page 667 withhold same from the state or county treasury or other authority, whose duty it is to receive same, or who shall fail to turn property over to the proper custodian, or who shall in any wise be in default as to any money or property held by him as a public official in this state, or in any other capacity as custodian of such funds or property, which may come into his hands by virtue of his official position, whether in the proper performance of his official duties, or otherwise, shall be liable on his bond for all cost of collection or recovery of money or property, including in such costs the commissions, if any, of the state tax collector or the Attorney-General, and all other costs connected therewith, and shall be liable on his official bond for all costs of recovery of such funds, including the commissions, if any, which may be due to the officer making the collection. The section then concludes: "It is the purpose of this section to preserve in its integrity the public funds and property in this state, and it shall be so construed that the commissions, if any, and fees of the attorney general and the state tax collector, and all other costs of collection must be borne by such derelict official or custodian."
By section 2889, Code of 1930, it is provided: "The bonds of all public officers shall be made payable to the state, and shall be put in suit in the name of the state for the use and benefit of any person injured by the breach thereof; and such bonds shall not be void on the first recovery, but may be put in suit from time to time by any party injured by the breach thereof, until the whole penalty shall be recovered."
By section 3341, Code of 1930, chapter 192, Laws of 1926, it is provided: "The sheriff of each county shall be tax collector therein, and at the time of giving bond as sheriff shall give bond as tax collector, with sureties as required by law, in a penalty equal to twenty-five per cent of the taxes assessed in the county the preceding year, however, in no event to exceed one hundred *Page 668 thousand dollars conditioned that he will in all things faithfully execute and perform all the duties of tax collector of his county to the best of his skill and ability so long as he shall continue in office; and he shall also take and file the oath of office of tax collector. In case of the failure of the sheriff to qualify as tax collector within the same time allowed for taking the oath of office, and giving bond as sheriff he shall thereby vacate the office of sheriff and the vacancy shall be filled according to law."
It will be seen from a reading of this section that the bond must be conditioned that he will in all things faithfully execute and perform all duties as tax collector of his county to the best of his ability.
In State v. Lee, 72 Miss. 281, 16 So. 243, the court held: "Public officers are insurers of the safety of public money coming into their hands by virtue of their office, and are liable, in all cases, for its loss, unless caused by the act of God, or the public enemy" — citing Griffin v. Board of Mississippi Levee Commissioners, 71 Miss. 767, 15 So. 107. In this case the finance committee of the city had directed and authorized Lee to pay the money into a bank rather than to turn it over to the municipal treasury, and in accordance with this direction and authority he did deposit the money into the bank instead of the treasury. The finance committee in an order written and signed by it provided, among other things: "And whereas, said John M. Lee says he is ready and offers to turn over said amounts to the treasurer (?) of said city of Greenville, now, we, J.H. Wynn, mayor, and J.P. Finley, O.M. Blanton, and W.E. Hunt, councilmen and members of the finance committee of said city of Greenville, desire that said Lee do not turn over said money to the treasurer, and do hereby authorize him to retain possession of same until we make demand for it. The object of this instrument is to relieve said Lee and his bondsmen of *Page 669 responsibility only in the event of the failure of any or all of said depositories during the existence of this trust." In the course of the opinion the court said: "The law pointed out to the collector what should be done with the money, and neither the sureties on the treasurer's bond, nor the mayor and the finance committee of the city, could lawfully direct him not to do so. However solvent the banks may have been, or may have been believed to be, there was no law and no ordinance of the city by which they were recognized as legal depositaries of the public funds. The responsibility of the collector and the sureties upon his official bond is the security contemplated and provided by the law for the safety of the public moneys. This security could not be waived, or something else substituted for it, unless by some authority clearly given by law. In the agreement of facts it is stated: `The said Wynn in his official capacity as mayor, and the said Finley, Blanton, and Hunt in their official capacity as councilmen,' etc., ordered the collector not to pay over the money to the treasurer, and directed it to be kept in the banks, and agreed to discharge the collector and his sureties from liability if it should be lost by reason of the insolvency of the banks. We do not understand that anything more is meant by this statement than that the mayor and councilmen professed and attempted to act officially, and did so act, if, in the opinion of the court, they had authority to do so; for of course, if the mayor and finance committee, having authority, executed the writing shown in the agreed facts, there is nothing in the case for decision. That this construction is the construction given to the agreement of facts is made evident by the further statement that nothing appears on the minutes of the council in reference thereto. We are therefore of the opinion that the collector and the sureties on his bond are liable, and, under the agreement, a judgment will be entered accordingly." *Page 670
The court also said in that opinion: "The questions presented by the record are two: (1) Was the tax collector discharged from liability by reason of the mere fact of his having deposited the money of the city in a bank of good credit, where it was lost without his fault? (2) If this be decided against the appellees, then the question is whether the collector is discharged by reason of the action of the mayor and finance committee of the city. But little need be said upon either question. The decisions upon the first question are conflicting, but the better view, in our opinion, is that the public officers are insurers, instead of bailees, of the funds which come into their hands by virtue of their office, and are absolutely responsible unless excused by the act of God or the public enemy. The conflicting authorities are noted in Throop, Pub. Off., p. 238 et seq. In this state the question has recently been decided. Griffin v. Levee Commissioners, 71 Miss. 767, 15 So. 107."
In Griffin v. Board of Mississippi Levee Commissioners,71 Miss. 767, 15 So. 107, it was held in the second syllabus: "In a suit on the bond of a tax-collector for taxes collected and not paid over, it is no defense that the collector was not furnished with a safe, and that, for safe-keeping until the time of settlement should arrive, he deposited the money in a bank which was considered entirely solvent, but which subsequently failed, whereby the money was lost." In the concluding paragraph of the opinion in this case, the court said: "The demurrer to the plea in bar was also rightly sustained. The idea that the tax collector may make a general deposit of public money in bank, and thereby absolve himself from liability to pay over as he is by law required to do, is so utterly unreasonable as to need no combating. Like all others depositing funds in bank, the tax collector took the risks involved in so doing. The state looks to its officer, and the officer must look to his unreliable or unfaithful banker." *Page 671
In these cases our court adopted that line of authorities which held that a public officer is an insurer of the money placed in his hands, and that he can only escape liability therefor by paying it to the party authorized by law to receive it, or else by an act of God or the public enemy. As pointed out in the opinions cited, there are two lines of authority upon the proposition, one of which holds the officer to be an insurer of public funds; the other which holds him not liable where he in good faith and under reasonable circumstances deposited the money in the bank or in a depository deemed solvent and safe at the time of the deposit. Of course, our own decisions are controlling in such matters, and it is the policy of our law to make those intrusted with the public funds belonging to the state and counties strictly accountable therefor. Under the holding of the majority it is possible, and in view of the many recent bank failures probable, that, if this remains a law, the public funds will be dissipated by careless, negligent, and irresponsible officers dealing with unsafe and insolvent banks, and the operation of the various governmental activities so essential to the public welfare seriously crippled and greatly impaired. There is no necessity to indulge an officer in a negligent course of conduct such as the record in the case before us shows. The simplest diligence on his part would have disclosed to him, if he did not know, that the bank had not qualified as the depository. Had he acted with prudence and diligence, as he is required to do by law, the money would never have been lost. In my opinion the authorities cited in the majority opinion to sustain its conclusion do not do so. *Page 672