459: 26 Am. St. Rep. 870, and note; Hart v. Citizens' Ins. Co., 86 Wis. 77; 39 Am. St. Rep. 877; but others hold that it does not commence to run until the loss has been ascertained and established, and the right to bring an action exists. Two valuable cases on this question, in which the authorities are collected and weighed, are Hart v. Citizens' Ins. Co., 86 Wis. 77; 39 Am. St. Rep. 877; Sample v. London etc. Fire Ins. Co., 46 S. C. 491; 57 Am. St. Rep. 701.

INSURANCE-CONSTRUCTION OF CONTRACT.-In construing contracts of insurance, the intention of the parties must govern, which is to be ascertained from the terms and conditions of the contract: Note to German Fire Ins. Co. v. Roost, 60 Am. St. Rep. 715.

STATE V. FOSTER.

[5 WYOMING, 199.]

COMMON LAW-EXISTENCE OF, IN WYOMING.-The common law is in force in the state of Wyoming only to the extent that it has been adopted by statute.

ASSIGNMENT FOR BENEFIT OF CREDITORS-TITLEPRIORITY-CLAIM OF STATE OR COUNTY.-A general assignment for the benefit of creditors passes the title of the property assigned to the assignee, free of any preference or priority of claim on the part of the state, or a county thereof. If the state or county had any preference, the assignment defeats it.

STATES-DEBTS - PREFERENCE OR PRIORITY. — A CONSTITUTIONAL PROVISION that no liability or obligation owned or held by the state, or any of its municipalities, shall be extinguished, except by payment thereof into the proper treasury, gives no preference or priority to the state, or a municipality thereof, over a citizen, in the payment of debts, owed by a common debtor. It has no reference to the question of such preference or priority.

ASSIGNMENT FOR BENEFIT OF CREDITORS-DEBT DUE STATE OR COUNTY-RELEASE OF, BY PARTIAL PAYMENT.-A partial payment, out of an insolvent estate, of a debt due to a state or county, cannot operate as a release of the unpaid portion of the debt, as provided by the assignment law, where the constitution expressly forbids the extinction of such a debt, except by payment into the proper treasury.

OFFICERS - CUSTODY

OF PUBLIC FUNDS. — STATE AND COUNTY TREASURERS are simply custodians of public funds coming into their hands by virtue of their office, and such funds remain, at all times, public moneys while in their official possession, or in the hands of their depositaries.

OFFICERS TREASURERS-DEPOSITARY OF PUBLIC MONEYS AS A QUASI TRUSTEE.-If a state or county treasurer deposits public money, in his custody, with a bank, which keeps accounts with the respective treasurers as such, the banker, having knowledge of the trust character of the funds, becomes a quasi trustee, as he stands in the shoes of the depositing treas

urers.

TRUSTS-ASSIGNMENT OF PUBLIC MONEYS FOR BENEFIT OF CREDITORS-ACTION TO RECOVER.-Moneys re

ceived by either a state or county treasurer are considered as public moneys, and, in case they are deposited with a banker, who afterward makes an assignment for the benefit of creditors, the state or county may maintain an action to have such moneys impressed with a trust, and recover the property, if it can be traced and identified.

FOR

TRUSTS ASSIGNMENT OF PUBLIC MONEYS BENEFIT OF CREDITORS.-IN FOLLOWING TRUST FUNDS, they must first be traced to the estate of the trustee or quasi trustee, and the corpus of the funds must be found. Hence, if public moneys received by a state or county treasurer, and deposited by him with a banker, who afterward assigns for the benefit of creditors, are found to be on general, and not special, deposit, thus being thrown into the mass of the funds of the bank, and applied generally to the payment of debts, so that they can be traced no further than into the insolvent assignor's possession, and into his estate, the state or county can recover nothing but the amount of moneys on hand at the time of the assignment.

TRUSTS-REMEDY WHERE TRUST FUNDS ARE INTERMINGLED, OR DISSIPATED.-If trust moneys are mingled with those of the trustee, the trust may be impressed upon such fund or property with which it is mingled, but if it appears that the trust moneys are dissipated or lost, there is no fund to impress with the trust, and the sole remedy of the beneficiary is a proceeding against the trustee personally.

TRUSTS-PAYMENTS-TRUST

FUND-PRESUMPTION. A trustee is presumed to have paid out his own moneys and to have kept those belonging to the trust, and this presumption is applied if there is any money on hand at the time the trust is sought to be enforced. Hence, if public moneys received by a state or county treasurer are deposited by him with a banker, who afterward assigns for the benefit of creditors, and most of the trust funds are found to be gone, what remains in the vaults of the bank, at the time of the assignment, as well as deposits made elsewhere, will be presumed to be trust funds, but the presumption does not apply to loans made before the assignment, and which pass by it to the assignee.

Action by the state, against Foster, who was an assignee for the benefit of the creditors of Thomas A. Kent, to impress a trust upon the insolvent's estate in the hands of the assignee, for the purpose of recovering certain public moneys deposited with Kent, as a banker, by the state treasurer. The board of commissioners of Laramie county also brought a similar action on account of public moneys deposited with the insolvent, as a banker, by the treasurer of that county. The questions involved were reserved for the decision of the supreme court. Charles N. Potter, attorney general, and Joel F. Vaile, for the state.

J. A. Van Orsdel, A. C. Campbell, and Frank H. Clark, for the county.

Baird & Churchill, and Lacey & Van Devanter, for the defendant.

204 GROESBECK, C. J. These actions were brought in the district court for Laramie county and by that court were reserved to this court for decision upon certain important and difficult questions arising in them. They were consolidated in the trial court for the purposes of argument and determination and are so considered here, as they present substantially the same questions. The relief sought is of an equitable nature, to impress a trust in favor of the state of Wyoming and the county of Laramie to the amount of certain public funds by the respective treasurers of the state and county deposited in the banking house of Thomas A. Kent, an insolvent debtor, at Cheyenne, in this state, upon the estate of such insolvent in the hands of the defendant as assignee. The court below entered findings of fact in each case, which disclosed the following important facts: The assignor, Thomas A. Kent, was engaged in a general banking business prior to his assignment. While doing business as a banker, he received deposits from the treasurer of each of the plaintiffs, all of which were placed to the credit of such treasurer, as treasurer, and which were from time to time checked upon. At the time of the assignment, there was a balance due upon the account with the treasurer of the state of Wyoming in the sum of $56,454.70, 205 and a balance due to the treasurer of the county of Laramie in the sum of $16,153.98. The balance in favor of the state treasurer were funds belonging to the state of Wyoming, and the balance in favor of the treasurer of Laramie county was the property of said county, and these moneys had been received by said Kent with knowledge of such ownership.

Neither of the treasurers had authority to deposit any of the funds with said Kent, as banker, unless such authority is to be presumed by reason of the fact that for at least eighteen years last past the treasurers, both of the territory and the state, with the knowledge of the people and of the officials of the state, had been accustomed to deposit the funds of the territory and of the state in the manner that the funds in question were deposited; and that in like manner, for the same period of time, the treasurers of Laramie county, with the knowledge of the people and officials of the county, had likewise deposited the county funds in the custody of such treasurers, as such, with bankers in the same manner as was done in the present instance. The moneys belonging to each of the plaintiffs and all other moneys of said Kent, as banker, were paid out to depositors on checks in the ordinary course of business, excepting that there

AM. ST. REP., VOL. LXIII.-4

remained in the vaults at the bank at the time of the assignment the sum of $2,058.72 in cash, and also on deposit in other banks the sum of $1,684.32. None of the real and personal property assigned by the said Kent to the defendant, as assignee, was either bought or paid for subsequent to any of the deposits of the public funds by either of the plaintiffs with the said Kent. Loans were made by him aggregating about $15,000, while the greater part of said public moneys were on deposit in the said bank, but at the time when each of the said loans were made, said Kent, as banker, had, after deducting the amount of said loans, in cash, a sum largely in excess of the aggregate due to both of the plaintiffs. None of the money of either of the plaintiffs came into the hands of the defendant, unless the moneys remaining in the vaults of the bank and on deposit with other bankers are presumed to be moneys of plaintiffs, and the estate that came to his hands 206 has not been increased by said moneys, or their use in paying debts by the insolvent.

Upon these findings, the court made the following order reserving the causes for decision to this court: "And the court and the judge thereof does now, after due consideration, believe and find that important and difficult questions arise in this action, which render it both proper and necessary that this cause should be reserved and sent to the supreme court for its decision upon such important and difficult questions. And the court and the judge thereof believe and find that the said important and difficult questions arising in this action are as follows:

"1. Do the facts that the treasurer of the plaintiff deposited the public funds of the plaintiff with T. A. Kent, banker, in the manner above found, and with no authority except as above found, and that said Kent, as banker, paid out the sums upon checks of his depositors in the ordinary course of business, said depositors being creditors to the amounts of the checks so drawn, and that said Kent thereafter, being insolvent, made and executed a general assignment for the benefit of all his creditors, under the assignment law of the state of Wyoming, entitle the plaintiff to a lien upon, and a prior payment out of, any of the assets in the hands of the defendant as assignee for the benefit of the creditors of the said Kent as against said defendant as assignee, and as against the general creditors of said assigned estate, said assigned estate being insolvent to the extent above found? 2. If question number 1 shall be answered in the affirmative, against which particular assets is the plaintiff entitled to such lien, and out of which particular assets is the plaintiff entitled to such prior payment?"

After the submission of the questions to this court, a reargu ment was ordered upon the question of the priority or preference of payment of the state and the county of Laramie, and able and exhaustive arguments were made upon this question. Owing to the limited time within which the delicate questions to be disposed of must be determined, caused 207 by an impending change in the personnel of this court, the discussion of the points involved will, of necessity, be limited, but it is desirable that a speedy determination of the matters presented by the district court should be had owing to the reason above assigned, the magnitude of the case, the importance of the questions involved, and the necessity of facilitating the settlement of the estate of the insolvent.

1. It is urged with great force that under the common law and the constitution of this state, the state and the county of Laramie have a preference or priority of payment over the general creditors of the insolvent debtor in the distribution of his estate in the hands of his assignee by a deed of assignment executed by the debtor in trust for all his creditors without preference or priority, under the provisions of the voluntary assignment statute of this state: Sess. Laws 1890, c. 51. It is asserted that the state of Wyoming and her municipality, the county of Laramie, as a subdivision thereof for certain governmental purposes, has succeeded to the prerogative of the British sovereign, that his debt should be preferred to that of his subject, and that this prerogative has become to the states of the American republic an attribute and incident of sovereignty. Two familiar maxims are quoted as the quintessence of the British law: "Quando jus domini regis et subditi insimul concurrunt, jus regis praeferri debit," and "Thesaurus regis est vinculum pacis et bellorum nervus." These maxims, it is said, should apply to the state, and her revenues should be protected with as much solicitude as those of the British king, as though her treasury may not be the "bond of peace and the sinew of wars," yet she stands in the attitude parens patriae, charged as she is directly through her municipal subdivisions with the government of the people; in the enforcement of the law and the rights of her citizen through her tribunals of justice; in the maintenance of the public order and the execution of the laws; in the education of the young; in the support of the indigent; in the work of internal improvement, and in the various agencies of government that the state controls in the interest of her citizens.

As liens are created by her positive 208 statute upon