City of Maryville v. Farmers Trust Co.

ON MOTION FOR REHEARING. Respondent's counsel point out that the time deposit was originally made several years before the issuance of the certificate dated December 10, 1929; that the original certificate was renewed each six months thereafter, the last of which was made on December 10, 1929; that during all of that time plaintiff's treasurer was also secretary of the trust company; that the collector continuously for a period of several years collected revenue of the city which he deposited in the trust company in the name of the city treasurer; that he also collected revenue which he deposited to his account as collector and twice each month transferred that fund to the account of the city treasurer in the trust company; that the city collector attended to making all of said deposits; that the treasurer knew that the several certificates were issued but did not expressly assent or dissent to any of the transactions.

From these facts it is argued that the treasurer "had complete control of the deposit." The uncontradicted evidence is that the time deposit never was charged to the account of the treasurer. The treasurer testified: "I had nothing to do with it at all." The collector caused the original certificate to be renewed many times. Evidently at the time of renewal he produced and endorsed the certificate theretofore issued. It thus appears the collector had complete control of the deposit. It could not be claimed that the treasurer or the sureties on his bond could be held liable for the $2500 except on the theory that the treasurer participated in the wrongful disposition of the fund.

It is also argued that inasmuch as the deposit was renewed from time to time and the collector attended to making deposits to his account and to the account of the treasurer, the city adopted a course of dealing and is estopped to deny the existence of contractual relation empowering the trust company to act as depositary. We are cited to cases which it is said support this contention. The opinion upon which defendant mainly relies is the case of North Missouri Trust Company v. Cantley, 39 S.W.2d 415. In that case the school board at a regular meeting ordered the funds of the district deposited in a trust company and interest was agreed upon. A bond was given, "a valid and enforceable one, and was so recognized by the bonding company itself. . . . In other words the trust company was at least a de facto depositary."

In this case there was no attempt to comply with the law in the selection of a depositary. No bond was required, no order made selecting the trust company. The individual collector chose, in legal effect, to loan the funds of the municipality to the trust company. His act was in plain violation of an express statute and no course of dealing no matter how long continued would estop the municipality from asserting that the act of its official was unlawful.

"If such corporation go beyond its delegated powers, its acts are void. If it pass ordinances which go beyond such delegated powers, the ordinances are void and bind no one. The city, being a public agency, can and should plead that its acts were ultravires and void, and bind no one. This because the real party is the general public and not the officials who have been derelict in duty when the unlawful act was committed." [Peters v. City of St. Louis, 125 S.W. 1134.]

The motion for rehearing is overruled. Boyer, C., concurs.