Manawatu Herald. FRIDAY, APRIL 26, 1889. THE COUNTY FUND ACCOUNT.

Manawatu Herald, Volume VII, Issue 262, 26 April 1889, Page 2

Manawatu Herald. FRIDAY, APRIL 26, 1889. THE COUNTY FUND ACCOUNT.

It has been a matter for much dispute, from time to time, in this district, as to what revenue formed the County Fund Account, and as to the security that was offered to other districts if they merged theirrevenues and district iuto a county. We have always contended, and have been upheld by the highest authorities, that c -■: cry penny that the county collected for themselves had to b« a© cepted as being a portion of the 0 unty Fund, and it was on this view of the ca>e, that the awards were made iv the separation of the Horowhehua County and the Foxtoo Borough from th^ Manawatu County. Previous to the separation of the Borough, at the time that the Sandon and Carnarvon Road Board were urged to merge into the county, we warned the ratepayers that their rates, being levied as " separate rates," and collected by the county, would inevitably become part of the County Fund, and therefore liab c for any indebtedness due by the county. Yet in the face of section 188 of the Counties Act, 1886, the canvassers for signatures for merging, authoritatively stated that the rates could be placed to a separate account at the Bank, and be safe from all interference. Actually, as we have just stated, they were not safe, when the settlement of accounts took place with the Borough, and for all the statements to the contrary, they are no more safe today, from the claims of the county creditor. At the present moment at the County's bankers there no doubt appears different accounts in the books, but all are operated upon by one set of signatures and one class of cheque, the only alteiation being a written indication on the face, as to the account to be debited. For argument sake we will take it that what the ! county authorities chose to consider j . the •■" County Fund Account," stands overdrawn, aud that a 'separate " Sandon and < arnarvon" account is in credit, it being a farther understanding that the overdrawn account is not to be debited with interest, if the " separate " account is in funds sufficient to cover the same, or only for so muob as may be the balance between the debit and credit side of the two accounts. Now if this be so, and we believe we are correct in stating that this is the true account of the agreement between the Bank and the County, will it ever be able to be argued by the County, that the Bank has not aright to treat the whole assets lying at the Bank, as being simply county property? and if the oyerdroft has to be called up, dud the county could not comply by the date fixed, that the Bank could not use; the whole of the sums lying at credit in any of the accounts opened by the county for that purpose ? This is what we have co often pointed out, but the ratepayers were willing to accept the statement that the simple opening of a different named account, by the one body, efficiently secured them. We think it only right, therefore, to draw attention to the important decision }'ust delivered by Mr Justice Wiliams in the Supreme Court at InIvsretrgiUiathsMMoithsßuk off

Zealand t. Wilson, Taineft Co. £L™ J 3 * 86 the def endantß claimed * 30 ? 0 damages, owing to the Bank having dishonored their cheques on a trust account, whioh was in credit, though their ordinary account was overdrawn, and the Bank sued for the recovery of the overdraft. Mr Justice Williams in summing Up said, that, the issues were very simple, viz., was theft}, as the defendants alleged, an agreement between the parties that No. 3 or «11 wool accounts should be a trust account for the protection of the firms wool clients, if the jury thought such an agreement bad been made, then there was only the assessment of damages to consider. Both parties deposed that the account was a trust one, and that they expected cheques drawn on it to be paid, althongh the open account was in debt. The bank manager, on the other hand, stated that he never understood the account in the nature of a trust, and produced the firm's letter in which they asked for the^ opening of an account, and in which no mention was made of a trust. His Honor said that if the agreement had not been made the firm could not succeed, as the bank was entitled to treat all their client's accounts as one. even if kept in different cities, and could refuse to honor cheques if the aggregate of their client's deposits showed a debit. Id this case the defendants had power to enter into an agreemeut for a trust, which, however, appears not to have been done, but the whole of the decision puts most plainly what the position of the county account is, as by the Counties Act it is most imperatively laid down, that all " rates made are levied as provided by this Act, or any other Act incorporated therewith," shall be carried to an account to be called "The County Fund Account." Though power is given to levy "separate" rates, which are to be spent for the purposes raised, yet being " rates made and levied under this Act," their proper destination is the County Fund Account, so that there is no power on the part of the county to arrange speoially with the bank for a " trust " account, as the " ordinary " County Fund Account could not be treated as one. Therefore the bank, by the decision quoted, is entitled to treat all their cient's accounts as one, and could refuse to honor cheques if the aggregate' of their client's deposits showed a debit. Thus, with one. blow, shattering the fanciful security that tempted the ratepayers of the old Highway Board to merge, and pay their rates into a debt <aden body.