It is the statutory duty of the county treasurer to make daily deposits of all funds in his hands.
It is the county treasurer's statutory duty to pay warrants by county treasurer's checks or drafts.
In this transaction the Ardmore bank did not act as depository for the county, but exchanged its cashier's check made to Lewis for a cashier's check payable to the county treasurer, thus eliminating the identification of county funds from the instrument.
The Ardmore Bank was informed that the county treasurer wanted a check record — that he did not get. The Ardmore bank was informed that the transaction, including the issuance of cashier's check to Lewis, was for the purpose of paying a third party, *Page 83 Lewis. That performance was without authority of law, for no holder of warrants could be paid in that manner.
It should be borne in mind that no delivery of warrants by the purported holder was provided, but the county treasurer informed the bank that he was securing the issuance of the cashier's check for the purpose of paying Lewis, who held county warrants. What was there to prevent Lewis, in event he actually held county warrants, which he did not, from receiving the pay for them and negotiating them also? Who will say that reliance upon a stranger's honesty to the extent here involved is not negligence?
The fact remains that the regular and lawful mode of cashing county warrants is presentation of same to the county treasurer, whose duty it is to issue a county treasurer's check therefor to be paid by the county depository. The bank was charged with knowledge of the law that Haynie, county treasurer, proposed and by the aid of the bank performed a purported but false payment unauthorized by law. This, in my judgment, constituted negligence on the part of the bank. This court, regardless of the fact that plaintiff below was an insurer for hire, should not stamp with approval such acts on the part of any bank, for it opens the way for future financial disasters in the wrecking of government by unworthy officials, aided by the carelessnes of outside persons or agencies.
Section 5727, C. O. S. 1921, makes it the duty of the county treasurer of all counties to deposit all of the funds and moneys of whatsoever kind that shall come into his possession by virtue of his office as county treasurer in some one or more banks located in the county and designated by the board of county commissioners as county depositories.
The Ardmore bank must have known that these were county funds, contrary to finding of fact No. 2 by the trial court, for the simple reason that the Oklahoma City cashier's checks were drawn to Haynie, county treasurer. The Ardmore bank must have known that the county treasurer was violating section 5727, supra, in not depositing that day nor for four days theretofore the funds represented by the cashier's check for the reason that the agreed statement of facts shows that Haynie secured the cashier's check on April 12th and did not deposit it at all, but exchanged it With defendant bank on April 17th.
By section 5727, C. O. S. 1921, amended S. L. 1925, ch. 88, p. 138, sec. 1, this defendant bank, which was a county depository and charged as it was with knowledge of the law heretofore cited, under which it was the duty of the county treasurer to make daily deposits of all county funds coming into his hands, was bonded with the condition only that it would pay the deposit which by law was required to be made daily "promptly" and "on a check or draft of the treasurer of such county." It could not lawfully aid in the payment of any claim against the county nor pay to the county any fund on deposit except on check or draft of the treasurer. While this fund was not on deposit, the law will presume that done which ought to have been done, which the law demands shall be done, especially where the failure so to do is a felony. (Section 2, ch. 88, S. L. 1925, supra.)
Section 5732, C. O. S. 1921, provides that all checks or drafts of the treasurer of such county upon the bank holding public money shall show upon their face for what purpose they were drawn and a duplicate of said check or draft shall be attached to the warrant voucher or order so paid.
Nevertheless, as was said in the companion case concerning the Oklahoma City bank's liability:
"* * It remained for the Ardmore bank to convert the cashier's check into an instrument not subject to identification as county funds." New Amsterdam Cas. Co. v. First Nat. Bank, 144 Okla. 180, 289 P. 749.
That aided the misappropriation — that constituted negligence under the law, for the bank was charged with notice that such a transaction was irregular and apart from the due course, for it has been repeatedly held by this court that all who deal with agents of municipalities do so with knowledge of the limitations of such agents' authority.
Section 5931, C. O. S. 1921, provides that it is the duty of the county treasurer to receive all money belonging to the county, but that:
"All moneys received by him for the use of the countyshall be paid by him only on the warrants of the board ofcounty commissioners, drawn according to law. * * *"
I am of the opinion that the county treasurer is not authorized by section 5930, C. O. S. 1921, nor any other statute to pay cash or the equivalent of cash to anyone except a county depository or fiscal agency, and then only upon the safeguards otherwise provided by law.
The security of public funds is requisite to the safety of the state. *Page 84
Note. — See under (1) 22 R. C. L. 223; R. C. L. Perm. Supp. p. 5190. (2) annotation in 59 A. L. R. 1052; 3 R. C. L. 519; R. C. L. Perm. Supp. p. 817; R. C. L. Pocket Part, title "Banks," § 149. (3) 3 R. C. L. 549; R. C. L. Perm. Supp. p. 835; R. C. L. Pocket Part, title "Banks," § 177.