1. Priority allowed
2. Priority disallowed
3. Trust fund
1. Priority allowed
Statute impresses on assets of failed state bank a first lien for depositors and holders of exchange. State ex rel. Sorensen v. State Bank of Omaha, 128 Neb. 148, 258 N.W. 260 (1934).
By use of term "otherwise secured" Legislature intended to exclude from participation in the lien only such depositors as take security for their deposits and in some degree deplete the assets of the bank. State ex rel. Sorensen v. Bank of Campbell, 125 Neb. 485, 251 N.W. 101 (1933).
Priority of lien hereunder fixed by status at time of adjudication of insolvency. Wells v. Farmers State Bank of Overton, 124 Neb. 386, 246 N.W. 714 (1933).
A judgment lien upon the guaranty fund was created by allowance of claim for deposits, and Legislature could not transfer assets of the guaranty fund subject to such lien to depositors' final settlement fund. Bliss v. Bryan, 123 Neb. 461, 243 N.W. 625 (1932).
Payee of draft drawn by bank becoming insolvent before draft paid is holder of exchange hereunder and entitled to payment as a depositor. State ex rel. Sorensen v. First State Bank of Alliance, 123 Neb. 23, 241 N.W. 783 (1932).
Proceeds of forged notes fraudulently endorsed and negotiated by payee may become deposit, chargeable upon guaranty fund, in bank operated and controlled by him. State ex rel. Spillman v. Dunbar State Bank, 120 Neb. 325, 232 N.W. 578 (1930).
County deposit, not protected by bank depository bond, held not otherwise secured, and therefore entitled to priority. State ex rel. Spillman v. Dunbar State Bank, 119 Neb. 335, 228 N.W. 868 (1930).
Renewal of certificate held by officer did not effect loan to bank and was, therefore, entitled to priority. State ex rel. Spillman v. Citizens State Bank of Potter, 117 Neb. 358, 220 N.W. 593 (1928).
Bank paying drafts drawn upon it by correspondent bank which fails is subrogated to rights of original holders of the drafts, and entitled to priority under this section. Nebraska Nat. Bank v. Bruning, 114 Neb. 719, 209 N.W. 510 (1926).
Deposits by bank officer, as trustee, of trust funds raised to assist bank as well as another corporation with which officer is connected, although erroneously credited to officer individually, are entitled to priority. State ex rel. Davis v. Exchange Bank of Ogallala, 114 Neb. 664, 209 N.W. 249 (1926).
Notes discounted by solvent bank for another, and credited to the latter, constitute deposit entitled to priority. State ex rel. Davis v. Newcastle State Bank, 114 Neb. 389, 207 N.W. 683 (1926).
Deposit of own money by stockholder, who does nothing to effect loan to bank from any source is entitled to priority; otherwise, where he deposits money borrowed from another to assist bank. State ex rel. Davis v. Farmers State Bank, 113 Neb. 348, 203 N.W. 572 (1925).
Certificate of deposit issued in payment for negotiable paper in good faith sold to bank by stockholder without fraud or collusion is entitled to priority. State ex rel. Davis v. Farmers State Bank of Allen, 113 Neb. 82, 201 N.W. 893 (1925).
Certificates of deposit are not deprived of priority, although excessive interest paid thereon, where bank officer agrees individually to pay the excess and holder had no knowledge that bank paid it. State ex rel. Davis v. Farmers State Bank of Benedict, 112 Neb. 474, 199 N.W. 839 (1924).
Entire county deposit, although in excess of fifty percent of bank's capital as limited by general revenue statute, is entitled to priority. State ex rel. Davis v. Peoples State Bank of Anselmo, 111 Neb. 126, 196 N.W. 912 (1923), opinion vacated 111 Neb. 136, 198 N.W. 1018 (1924).
Good faith deposit subject to check, drawing interest not exceeding statutory rate, is entitled to priority. Central State Bank v. Farmers State Bank, 101 Neb. 210, 162 N.W. 637 (1917).
United States held entitled to priority over depositors as to postal funds. Bliss v. United States, 44 F.2d 909 (8th Cir. 1930).
2. Priority disallowed
Sureties who are liable on bond given to secure deposit of village in bank which becomes insolvent, and recoup part of their loss by selling bonds given them by the bank for their protection, are not entitled to preferred claim against assets of bank. Shumway v. Department of Banking, 130 Neb. 491, 265 N.W. 553 (1936), opinion withdrawn 131 Neb. 246, 267 N.W. 469 (1936).
Municipal funds deposited in state bank and protected by depository bond, premium of which is paid by bank, becomes, on failure of bank, a deposit "otherwise secured" within the statute, and precludes municipality from obtaining preference or participating in distribution of assets on par with unsecured creditors. State ex rel. Sorensen v. South Omaha State Bank, 129 Neb. 43, 260 N.W. 278 (1935).
Deposit of city funds in state bank is "otherwise secured" where city requires bank to give depository bond and pay premium therefor. State ex rel. Sorensen v. State Bank of Omaha, 125 Neb. 492, 251 N.W. 99 (1933).
Insolvent bank may not prefer a depositor by exchange of note and mortgage taken from its assets for depositor's certificate of deposit. Luikart v. Hunt, 124 Neb. 642, 247 N.W. 790 (1933).
City exacting security for deposits is to be classified as "otherwise secured" under this section and is not entitled to share as preferred creditor in assets of bank and depositor's final settlement fund, and city's claim as to unsecured balance of deposits should be allowed as general claim only. State ex rel. Sorensen v. First State Bank of Alliance, 122 Neb. 109, 239 N.W. 646 (1931).
Where bonds left with bank for safekeeping were sold and proceeds converted by bank officers, certificates of deposit being substituted therefor without the owner's knowledge or authority, claim was not entitled to priority, because the money or its equivalent was not shown to have been placed in or at the command of the bank, and therefore no deposit was created. State ex rel. Spillman v. Dunbar State Bank, 119 Neb. 763, 230 N.W. 687 (1930).
Stockholder who procures and places in bank money to meet pressing demand or to replenish reserve, not for his own use or convenience, is not depositor entitled to priority. State ex rel. Spillman v. Farmers State Bank of Wolbach, 117 Neb. 448, 220 N.W. 569 (1928); State ex rel. Spillman v. Citizens State Bank of Potter, 117 Neb. 358, 220 N.W. 593 (1928); State ex rel. Spillman v. Security State Bank of Eddyville, 116 Neb. 521, 218 N.W. 408 (1928); State ex rel. Spillman v. Farmers State Bank of Dix, 115 Neb. 574, 214 N.W. 4 (1927); State ex rel. Spillman v. Atlas Bank of Neligh, 114 Neb. 646, 209 N.W. 333 (1926).
Stockholder depositing liberty bonds which bank wrongfully converts, who later accepts certificate of deposit therefor, knowing bank to be insolvent, is not protected. State ex rel. Spillman v. Atlas Bank of Neligh, 114 Neb. 650, 209 N.W. 334 (1926).
Promissory note, secured by worthless third mortgage is not money or equivalent entitling deposit to priority, and subsequent holder of assigned certificate is not innocent purchaser. State ex rel. Davis v. Kilgore State Bank, 113 Neb. 772, 205 N.W. 297 (1925).
Where officers of bank converted their stock into ostensible deposits by series of questionable transactions, claim was not entitled to priority. State ex rel. Davis v. Farmers State Bank of Winside, 112 Neb. 380, 199 N.W. 812 (1924).
Where certificates of deposit are issued to officer to negotiate for replenishing cash reserve, and the bank receives nothing at time of issuance, the claim is not entitled to priority. State ex rel. Davis v. Farmers State Bank of Halsey, 111 Neb. 117, 196 N.W. 908 (1923).
Where certificate of deposit is issued with understanding that bank will pay bonus in addition to statutory interest, the transaction amounts to a loan of funds not entitled to priority of payment. Iams v. Farmers State Bank, 101 Neb. 778, 165 N.W. 145 (1917).
No preference or priority for the claims of the state against insolvent banks is provided except claims for taxes. City of Lincoln, Neb. v. Ricketts, 84 F.2d 795 (8th Cir. 1936).
3. Trust fund
Fund created by delivery of notes by stockholders to bank to cover contingent reserve was an asset of bank upon which the statutory lien of this section attached upon closing of bank, and was not a trust fund reclaimable by the stockholders. Jorgenson v. Department of Banking, 136 Neb. 1, 284 N.W. 747 (1939).
Basis for giving trust fund priority over depositors under this section is that trust fund does not constitute assets of the bank, but is really property of the claimant held by the bank as trustee. State ex rel. Sorensen v. Citizens Bank of Stuart, 124 Neb. 575, 248 N.W. 82 (1933).
Statute is not applicable to claim based upon trust fund unlawfully converted by bank as trustee. State ex rel. Sorensen v. Farmers State Bank of Polk, 121 Neb. 532, 237 N.W. 857 (1931), 82 A.L.R. 7 (1931).
Contract for liquidation of bank did not violate this section. Department of Banking v. Walker, 131 Neb. 732, 269 N.W. 907 (1936).
Statute does not apply to fund unlawfully converted by the bank as trustee to its own use. State ex rel. Sorensen v. Citizens Bank of Stuart, 124 Neb. 717, 247 N.W. 427 (1933).
Statutory lien hereunder does not foreclose constitutional powers of equity court to direct a disposition of bank assets in contravention thereof. State ex rel. Sorensen v. Nebraska State Bank, 124 Neb. 449, 247 N.W. 31 (1933).
This section violates neither state constitutional prohibition of special and class legislation (Art. III, sec. 18) nor the 14th amendment to federal Constitution, equal protection clause. State ex rel. Sorensen v. First State Bank of Alliance, 122 Neb. 502, 240 N.W. 747 (1932), 79 A.L.R. 576 (1932).
This section was intended to prevent state banks from securing deposits, by the pledging of assets, except in the cases specified where pledging is authorized. Bliss v. Pathfinder Irrigation District, 122 Neb. 203, 240 N.W. 291 (1932).
Priority of unsecured deposits fixed by status at time of actual closing of bank when court adjudges it insolvent and orders liquidation. State ex rel. Sorensen v. Thurston State Bank, 121 Neb. 407, 237 N.W. 293 (1931).
Under this and other sections cited, the Department of Banking is vested with general supervision and control of state banks with authority to do all things reasonably necessary for protection of depositors therein. Brownell v. Adams, 121 Neb. 304, 236 N.W. 750 (1931).
This section gives to depositors of a failed bank a lien only on the assets of the bank. State ex rel. Spillman v. Citizens State Bank of Royal, 118 Neb. 337, 224 N.W. 868 (1929).
This section is referred to as showing that some form of deposits was contemplated as an integral part of the business of banks. Gamble v. Daniel, 39 F.2d 451 (8th Cir. 1930), appeal dismissed 281 U.S. 705 (1930).