Des Moines Mutual Hail & Cyclone Insurance v. Steen

Bikdzell, J.

(concurring specially). I concur in the affirmance of the judgment appealed from. As the other opinions filed do not state the basic reason which has led the writer to this conclusion, a brief statement is deemed necessary. Mr. Justice Grace, in his dissenting opinion, has made it clear that the interest on the deposit did not become the property of the officer under whose direction the money was placed on deposit, and it seems to me that his claim is in no wise strengthened by the fact that he went beyond any duty imposed upon him by statute and incurred (personal risk in so handling the money. Neither, in my opinion, is it strengthened by the fact that he acted reasonably in so doing. In so far as the acts of the officer were official they were the acts of the state and in so far as they were unofficial they were wholly unauthorized, either by the plaintiff or by the state, and could not, therefore, afford a basis for a personal claim.

The ownership of the fund, then, resolves to a question between the plaintiff and the state of North Dakota, and this question in turn depends upon the legal relationship which arose upon the making of the deposit. If the money were advanced upon the general credit of the state, as a depositor deposits money in a bank, it would be perfectly clear that the relation of debtor and creditor would exist from the time the deposit was made, and that the plaintiff would have no claim to any increment that should accrue prior to the termination of its license to do business in the state. But this is not a general deposit on the credit of the state; it is a special deposit which the state holds as trustee for certain purposes, and the legal relationship between the state and the depositor in these circumstances is that of trustee and cestui que trust. In other words, the state holds the fund in trust for the payment of claims, and upon the termination of the right of the plaintiff to do business, and upon its withdrawal after payment of claims in trust for the plaintiff. It seems that this trust relation is expressly recognized by § 4901, Compiled Laws of 1913, which reads:. “Any insurance company which has made such deposit, or the commissioner of insurance in the name of the state, or any person entitled to-*307the benefit of such deposit, may at any time institute in the district court of Burleigh county legal proceedings against this state and other parties properly joined therein to enforce, administer or terminate the trust created by such deposit. The process in such suits shall be served upon the insurance commissioner of this state, who shall appear and answer in its behalf, and he and the treasurer of this state shall perform such orders and decrees as the court may make therein.”

It will be seen that this statute recognizes the right of an insurance company to bring proceedings against the state to secure the administration or termination of the “trust created by such deposit.” This, to my mind, is a recognition of the obligation of the state to act with respect to this fund simply as a trustee, and when the state acts as a trustee it necessarily incurs all of the obligations of a private trustee. It is elementary that a private trustee cannot enrich himself out of the trust estate, and that he is not entitled to any increment or interest arising out of an unauthorized use of the trust property. Comp. Laws 1913, §§ 6282 and 6292. -This principle applies as well to the state as a trustee, and is conclusive against its claim.

Were it not for the recognition of the trust relationship assumed by the state, it would seem to me that the right of the insurance company would be measured by the statute, § 4899, Compiled Laws of 1913, which authorizes the withdrawal of the deposit, as indicated in the dissenting opinion.