The Pecos Valley State Bank was incorporated under the banking laws of this state; its depositors being secured by the depositors' guaranty fund. In February, 1923, it was duly selected as the county depository of Reeves county and gave the bond required by law, which was approved. The bank became insolvent and was closed by the banking commissioner on January 28, 1924, since which date it has been in process of liquidation by that official. The appellee, Kiser, was sheriff and ex officio tax collector of said county during the years 1923 and 1924, and as such collector deposited to his credit in said bank, as tax collector, all taxes collected by him except the sum of $10,033.23 collected in the two or three days preceding the bank's failure.
This suit was brought by Kiser in his individual capacity against the bank, the banking commissioner, and the state banking board setting up that upon the date the bank closed he had on deposit with it the sum of $5,960. 81, which deposit it was sought to have established as secured by the depositors' guaranty fund. Upon trial without a jury he recovered judgment as prayed for. Separate findings and conclusions were not filed by the trial court. The material facts are undisputed.
It is not affirmatively shown that the Pecos Valley State Bank was the duly selected county depository prior to February, 1923, but Kiser testified he had been collecting taxes since the latter part of 1918 and placing *Page 412 all the money in that bank. At the time the bank closed he had two accounts therein, one in the name of E. B. Kiser, tax collector; and the other in the name of E. B. Kiser, state account. Upon the date the bank closed there was a balance of $35,300.93 to the credit of the first account and a balance of $3,529.13 to the credit of the other account. The total of these balances is $38,830.06. R. G. Middleton was appellee's deputy in charge of tax collections. He testified that as a rule he deposited the original tax collections in the name of E. B. Kiser, tax collector, and from time to time he would transfer from that account to the account of E. B. Kiser, state account, money which he had apportioned to the state, so that it would draw interest. The accounts mentioned were the only accounts maintained by Kiser, and it is shown that he deposited in the first-named account all other moneys belonging to him personally; in other words, he deposited to the credit of E. B. Kiser, tax collector, not only the taxes collected by him, but his personal funds accruing from other sources. It was shown that Kiser had accounted to the proper authorities for all tax collections, less his commissions, except $32,869.28. The way he undertook to show the amount due him personally was by deducting the last-mentioned sum from the balance in the depository at the time it was closed. That calculation left a balance of $5,960.78. He had no data by which he could otherwise determine how much of the balance in the depository belonged to him personally. Of the amount claimed by Kiser, $3,207.33 represents the commission upon tax collections allowed him by law. Of said $3,207.33 a portion thereof represents his commission upon January, 1924, tax collections.
The majority are of the opinion that appellee is clearly not entitled to have his commission upon the January collections established as a deposit secured by the guaranty fund for the reason that at the time the bank failed such commissions were public funds, interest bearing, and secured by the depository bond. We think this conclusion necessarily follows upon a consideration of our statutory provisions.
Article 486, R.S. 1911, as amended by chapter 45, Acts 38th Legislature, Regular Session, provides:
"That no deposit upon which interest is being paid or contracted to be paid, either directly or indirectly by said bank, its officers or stockholders to the depositor and no deposit secured in any way shall be insured under this chapter. * * * No deposit of public funds of any kind or character, whether interest bearing or not, deposited in a state bank, shall be insured under this chapter, by the term `public funds' as herein used, shall be meant, funds belonging to the state of Texas, to any county or political subdivision of the state, municipal corporation, road districts, school districts, drainage districts, levy districts or bonded district of any kind. Provided, however, that the defining of public funds herein shall not be exclusive, and any funds coming fairly under the definition of said terms shall not be protected under this chapter."
Article 2444 (Vernon's Ann.Civ.St. Supp. 1918), relating to county depositories, provides:
That it shall "be the duty of the tax collector of such county to deposit all taxes collected by him, or under his authority, for the state and such county and its various districts and other municipal subdivisions, in such depository or depositories, as soon as collected, pending the preparation of his report of such collections and settlement thereon, which shall bear interest on daily balances at the same rate as such depository or depositories have undertaken to pay for the use of county funds, and the interest accruing thereon shall be apportioned by the tax collector to the various funds earning the same. The bond of such county depository or depositories shall stand as security for all such funds. If the tax collector of such county shall fail or refuse to deposit tax money collected as herein required, he shall be liable to such depository or depositories for ten per cent. upon the amount not so deposited and shall in addition be liable to the state and county and its various districts and other municipal subdivisions for all sums which would have been earned had this provision been complied with, which interest may be recovered in a suit by the state."
Article 7610b, relating to the collection of taxes, reads:
"Provided that except as to compensation due such tax collector as shown by his approved reports, tax money deposited in county depositories shall be paid by such depositories only to treasurers entitled to receive the same, on checks drawn by such tax collector, in favor of such treasurer."
Article 7618 provides:
"At the end of each month the collector of taxes shall, on forms to be furnished by the comptroller of public accounts, make an itemized report under oath to the comptroller, showing each and every item of ad valorem, poll and occupation taxes collected by him during said month, accompanied by a summarized statement showing full disposition of all state taxes collected. Provided, however, that said itemized reports for the months of December and January of each year may not be made for twenty-five (25) days after the end of such months if same cannot be completed by the end of such respective months.
"2. He shall present such report, together with the tax receipt stubs, to the county clerk, who shall, within two days, compare said report with said stubs, and if same agree in every particular as regards names, dates and amounts, he (the clerk) shall certify to its correctness. * * *
"3. The collector of taxes shall then immediately forward his reports so certified to the comptroller, and shall pay over to the state treasurer all moneys collected by him for the state during said month, excepting such *Page 413 amounts as he is allowed by law to pay in his county, reserving only his commissions on the total amount collected." * * *
Article 7619 (Vernon's Sayles' Ann.Civ.St. 1914) provides:
"The collector of taxes shall at the end of each month make like reports to the commissioners' court of all the collections made for the county, conforming as far as applicable and in like manner to the requirements as to the collection and report of taxes collected for the state. The county clerk shall likewise, within two days after the presentation of said report by the collector, examine said report and stubs, and certify to their correctness as regards names, dates and amounts; for which examination and certificate he shall be paid by the collector of taxes fifty cents each month, which amount shall be allowed to the collector by the commissioners' court.
"2. The clerk shall file said report intended for the commissioners' court, together with the tax receipt stubs, in his office for the next regular meeting of the commissioners' court.
"3. The collector of taxes shall immediately pay over to the county treasurer all taxes collected for the county during said month, after reserving his commissions for collecting the same, and take receipts therefor, and file with the county clerk."
Under article 2444, it is the duty of the collector to deposit "all taxes" collected, as soon as collected, in the depository pending the preparation of his report of such collections and settlement thereon which shall bear interest and are secured by the depository bond. This article negatives the idea that the collector may deduct his commission upon taxes as he collects the same and thereby invest the same with the character of private funds of his own. That article, together with articles 7610b, 7618, and 7619, plainly imply that his commissions may not be deducted by him nor paid to him by the depository until his reports of state and county tax collections have been approved by the proper authorities. The report of the January, 1924, collections, could not have been made at the time the bank closed.
We are therefore of the opinion that no part of such January collections were appellee's private funds when the bank closed; that such collections were public funds, secured by the depository bond and interest bearing. They were for that reason not secured by the depositors' guaranty fund.
The balance of the money claimed by appellee represented private funds obtained from other sources and deposited by him in the bank to the credit of E. B. Kiser, tax collector, as heretofore indicated; also commissions upon taxes collected prior to January, 1924, which had been reported and approved. The view of the majority with respect to this portion of the money sued for is as follows: The private funds thus deposited presents an improper commingling thereof with the public fund. We do not think the private funds thus deposited were secured to the appellee by the depository bond, or that they were properly interest bearing under the contract of the depository. In this connection it should be noted, too, that Kiser testified without contradiction that he had not been paid any interest on the money claimed by him. His effort to establish these deposits of private funds as secured by the depositors' guaranty fund is not to be rejected upon the theory alone that he was secured in these deposits by the depository bond, or that the depository had paid or contracted to pay him interest thereon.
As to the commissions upon collections earned and approved prior to January, 1924, these ceased to be secured to him by the bond and became noninterest bearing upon the approval of his reports. So far as we are advised, the law does not expressly provide for the segregation thereof and withdrawal from the public fund, but it certainly did not contemplate that such commissions should remain commingled with the public fund. In our opinion there is implied authority for the collector to withdraw from the depository commissions thus earned and approved. Indeed, it is his duty to do so, for it is obviously improper for private funds to ever be commingled or to be permitted to remain commingled with a public fund.
In the opinion of the majority, the action of the collector in thus commingling his private funds with the public fund in the depository and permitting his commissions upon collections prior to January, 1924, to remain commingled with such fund, precludes recovery against the guaranty fund for two reasons:
(1) All money to the credit of the tax collector in his official capacity in the county depository is prima facie a public fund and is subject to the payment of all tax collections due by the collector to the state and county, and the payment thereof is secured to the state and county by the depository bond. The facts in this case afford an apt illustration in support of this view. At the time the bank failed Kiser had on deposit in three other banks tax collections to the amount of $10,033.23, which he had not had time to place in the depository. This money had been collected in the two or three days prior to the failure of the depository while upon a tax collection tour over the county. He had placed it temporarily in those banks for safekeeping until he could transfer it to the depository. After the failure of the depository he remitted these collections to the proper authorities. If, for any reason, these collections had not been so remitted, we are of the opinion that the money in the depository claimed by Kiser as his private fund was subject to the payment thereof, and the fund claimed by Kiser to that extent was a public fund deposit within the meaning of article 486, R.S. In the contingency instanced, if suits had been brought by the state and *Page 414 county for said $10,033.23 against the collector, the depository, and the sureties upon its bond, we do not think the depository and its sureties could have defended upon the ground that any part of the deposit to the credit of Kiser, tax collector, was his private fund and they were accountable to Kiser therefor and not to the state and county. When the bank failed on January 28, every dollar now claimed by Kiser then to his credit in the depository as tax collector represented and took the place of the $10,033.23 which he then had on deposit in other banks. Upon the date the bank failed, Kiser, as shown, had collected for the month of January taxes amounting to considerably more than the total amount then to his credit as tax collector in the depository. In our opinion the entire amount then to his credit in the depository was therefore a fund to which the state and county could rightfully look for the payment of all the taxes thus collected. If so, it was a public fund representing taxes collected and secured by the depository bond.
(2) The only obligations secured by the depositors' guaranty fund are noninterest bearing and otherwise unsecured deposits. In Kidder v. Hall,113 Tex. 49, 251 S.W. 497, Chief Justice Cureton said:
"A depositor is one who delivers to or leaves with a bank money, or checks or drafts the commercial equivalent of money, subject to his order, and by virtue of which action the title to the money passes to the bank."
In support of this definition, Lankford v. Schroeder, 47 Okla. 279,147 P. 1049, L.R.A. 1915F, 623, was cited, in which the court said:
"That the plaintiff was not a depositor entitled to payment of his claim out of assets in the hands of the bank commissioner or out of the state guaranty fund we think is clear. A depositor who is protected from loss by a failing bank is one who takes his money or its equivalent and places it, or causes it to be placed, in the bank to his credit, subject to his right to check it out or withdraw it from the bank at will."
We have no doubt that when private funds of a tax collector, by inadvertence, or otherwise, have been improperly commingling with tax collections deposited in the depository, the depository may lawfully return the same to the collector. Authority to correct errors of that kind is necessarily implied. Commissions due the collector as shown by his approved reports may also be paid by the depository to the collector. Article 7610b. But it is wholly inadmissible to say that a fund to the credit of a tax collector in his official capacity is subject to his order within the meaning of the term as used in Kidder v. Hall.
Such a fund is in no wise an ordinary checking account or otherwise subject to his order. His control over the fund to his credit in his official capacity was limited. He could pay it only to the state and county treasurers, and withdraw from the same the portion to which he personally was entitled. It was not subject to his order in the ordinary meaning of that term, and, under the ruling in Kidder v. Hall, we think no part of it was secured by the depositors' guaranty fund. While by no means directly in point, the following authorities, we think, support this view of the effect of the ruling in Kidder v. Hall. Chapman v. Tyler County (Tex.Civ.App.) 259 S.W. 301, and Austin v. Avant, 277 S.W. 409, recently decided by this court.
For the reasons indicated, the court, in the opinion of the majority, erred in establishing the plaintiff's demand as secured by the depositors' guaranty fund. The judgment will be reversed and rendered in conformity with this ruling.
Reversed and rendered.