Filer Highway District v. Shearer, 6050

• Decision Date: 03 March 1934
• Docket Number: 6050
• Citation: 30 P.2d 199,54 Idaho 201
• Parties: FILER HIGHWAY DISTRICT, a Body Politic and Corporate Within TWIN FALLS COUNTY, IDAHO, upon and Out of the Relation of W. F. ALWORTH, Respondent, v. RAY SHEARER, A. A. DAVIS, JOHN H. BLASS, and F. C. GRAVES, Appellants
• Court: Idaho Supreme Court

30 P.2d 199

54 Idaho 201

FILER HIGHWAY DISTRICT, a Body Politic and Corporate Within TWIN FALLS COUNTY, IDAHO, upon and Out of the Relation of W. F. ALWORTH, Respondent, v. RAY SHEARER, A. A. DAVIS, JOHN H. BLASS, and F. C. GRAVES, Appellants

No. 6050

Supreme Court of Idaho

March 3, 1934

HIGHWAY DISTRICTS-INVESTMENT OF FUNDS-LIMITATION OF ACTIONS-STATUTES-LEGISLATIVE INTENT.

1. Court must ascertain, if possible, legislative intent from whole act under construction, and give effect to such intent.

2. Act validating actions, obligations, contract, and liabilities of highway district prior to 1927 held not to validate unlawful purchase of land bank bonds by highway district with its sinking funds (Laws 1927, chap. 253; C. S., sec. 1490 et seq.; Laws 1925, chap. 119, p. 167).

3. Motion adopted by board of commissioners ratifying purchase by secretary of land bank bonds with sinking funds of highway district, and entry thereof in board's minutes which were not published, did not constitute notice to taxpayer so as to bar his action to recover funds from members of board more than three years thereafter (I. C. A., sec. 5-218, subds. 1 3, and secs. 39-1517, 39-1532).

APPEAL from the District Court of the Eleventh Judicial District of the State of Idaho, for Twin Falls County. Hon. Wm. A Babcock, Judge.

Action by Filer Highway District, plaintiff and respondent, on the relation of W. F. Alworth, to recover from Ray Shearer, A. A Davis, John H. Blass, J. G. Winkle, F. C. Graves and G. H Shearer, for the use and benefit of the district, certain sinking funds invested in bonds of the Pacific Coast Joint Stock Land Bank and Bankers Joint Stock Land Bank. Judgment for plaintiff. Affirmed.

Judgment affirmed, with costs to respondent.

Frank L. Stephan and J. H. Blandford, for Appellants.

The idea implied in the ratification of a municipal act performed without previous legislative authority is, that the retifying communicates authority, which relates back to and retrospectively vivifies and legalizes an act, whether void either by reason of informality or because in excess of authority conferred by law, as if the power had previously been given. Such a statute is of the same import as original authority. (Grenada County v. Brown, 112 U.S. 261, 5 S.Ct. 125, 28 L.Ed. 704; State v. Snyder, 30 Wyo. 287, 219 P. 735, 31 Wyo. 333, 225 P. 1102.)

Sweeley & Sweeley, for Respondent.

The legislature cannot, by retrospective act, impair vested rights. (Bauer v. North Ark., etc., 168 Ark. 220, 270 S.W. 533, 38 A. L. R. 1507; Merchants Nat. Bank v. Escondido Irr. Dist., 144 Cal. 329, 77 P. 937.)

The failure of an agent to discharge a duty arising out of the agency does not set the statute of limitations in motion until called to the attention of his principal, or until the principal knows, or with reasonable diligence might have known thereof. (Village of Mountainhome v. Elmore County, 9 Idaho 410, 75 P. 65; Blaine County v. Butte County, 45 Idaho 193, 198, 261 P. 338.)

HOLDEN, J. Budge, C. J., and Givens, Morgan and Wernette, JJ., concur.

OPINION

HOLDEN, J.

In 1927 Ray Shearer and A. A. Davis were, and still are, commissioners of respondent Highway District. And in 1927, and up until the first day of January, 1930, John H. Blass was a commissioner of said district. On the first day of January, 1930, J. G. Winkle succeeded Blass as a member of the Board of Commissioners of the district. And from May, 1925, up until April 1928, F. C. Graves was the secretary-treasurer of the district, and in April, 1928, H. W. Graves became and still is, secretary-treasurer of the respondent, and for many years the relator has been a resident within and a taxpayer of respondent Filer Highway District.

Commencing in the latter part of the year 1926, at meetings of the board, Commissioners Shearer, Davis and Blass discussed the matter of investing certain of the sinking funds of the district in the bonds of the Pacific Coast Joint Stock Land Bank and Bankers Joint Stock Land Bank, it appearing that during the last meeting of the board in December, 1926, the above-named Shearer, Davis and Blass, gave secretary-treasurer F. C. Graves oral instructions to purchase some of the bonds of the said Pacific Coast Joint Stock Land Bank, as well as some of the bonds of the said Bankers Joint Stock Land Bank, from the sinking funds of the district, and accordingly, later and on or about January 18, 1927, the said secretary-treasurer invested the sum of $ 5,163.89 (sinking funds) in five bonds of the Pacific Coast Joint Stock Land Bank, and thereafter and on or about March 14, 1927, secretary-treasurer F. C. Graves invested the further sum of $ 7,200.28 (sinking funds) in seven bonds of the Bankers Joint Stock Land Bank, making a total investment of $ 12,364.17. After the sinking funds of the district had been so invested, pursuant to oral instructions, and on April 9, 1927, a motion appears to have been adopted by the board, which motion reads as follows:

"Motion made and carried that the action of the secretary in purchasing $ 12,364.17 worth of joint stock and land bank bonds, pursuant to instruction of the board, be and is hereby ratified."

Following the investment of the sinking funds, the Bankers Joint Stock Land Bank went into liquidation, with the result that the district was paid the sum of $ 5,596.25, on account of the purchase of said bonds, leaving a balance of $ 3,604.03, and on the date of the trial of this case, the said bonds of the Pacific Coast Joint Stock Land Bank had a market value of $ 2,000.

October 1, 1930, the relator wrote the following letter:

"From W. F. Alworth

in behalf of the Filer Highway District

"To

The Filer Highway District Trustees,

"Gentlemen:

"Having examined the records of the District, I find that some twelve thousand ($ 12,000) dollars of the sinking funds, of the District, have been invested in violation of the law governing such investments, and consequently, the District is about to suffer a loss.

"I therefore, in behalf of the Filer Highway District, hereby, formally, demand that the said funds be restored to the District Treasury,

"Respectfully yours,

"(Signed) W. F. ALWORTH."

January 17, 1931, the sinking funds so invested not having been restored to the district treasury, the relator commenced this action in the name and for the use and benefit of the respondent district, against Ray Shearer, A. A. Davis, John H. Blass, J. G. Winkle, F. C. Graves and G. H. Shearer, to recover the sinking funds so invested in said bonds. The case was tried to the court, sitting without a jury. After respondent rested, upon motion, the court dismissed G. H. Shearer and also dismissed J. G. Winkle so far as respondent's alleged case of damages against him was concerned. Judgment was rendered in favor of respondent and against the remaining defendants, to wit, Ray Shearer, A. A. Davis, John H. Blass and F. C. Graves for the sum of $ 12,145.87, it being also adjudged and decreed that the said bonds of the said Pacific Coast Joint Stock Land Bank be sold and the proceeds of the sale applied to the payment of said last-mentioned sum, pro tanto, from which judgment the said last-named persons appeal.

The 1925 session of the legislature passed an act, approved March 4, 1925, reading as follows:

"An Act relating to the investment of sinking funds. Be it enacted by the Legislature of the State of Idaho: Section 1. The treasurer of the State of Idaho, the City Council or City Commission of every city, the Board of Trustees of every village, the Board of County Commissioners of every county, the Board of Trustees of every school district, the Board of Commissioners of every drainage district, the Board of Directors of every irrigation district, and the officials of every other political subdivision in the State of Idaho, whenever there is in any sinking fund, now existing or hereafter created by authority of the laws of the state, an amount in excess of the requirements to pay bonds maturing within the current year, shall, so far as practicable, invest the same in interest-bearing general obligation bonds or treasury certificates lawfully issued by the United States of America, the State of Idaho, or any city, village, county, or school district in the State of Idaho. The State of any political division thereof may purchase for the sinking fund any bonds originally issued or assumed by it and keep the same alive in the sinking fund and resell the same, or any other investments of the sinking funds, when it may be deemed advisable to make more advantageous investments or to provide means for the redemption of maturing bonds. Approved March 4, 1925."

And the 1927 session of the legislature passed an act, approved March 14, 1927, reading as follows:

"An Act amending Chapter 66, title 11 of the Compiled Statutes of Idaho by adding thereto a new section denominated section 1505 A, validating the actions, obligations, contracts and liabilities of Highway Districts heretofore entered into or incurred and conferring power on such districts to levy and collect taxes to meet their obligations and liabilities. Be it Enacted by the Legislature of the State of Idaho:

"Sec. 1. That Chapter 66, Title 11 of the Compiled Statutes of Idaho, is hereby amended by adding thereto a new section denominated Section 1505 A, to read as follows:

"'Sec. 1505 A. The Contracts, obligations and liabilities of highway districts heretofore entered into or incurred are hereby ratified and confirmed and every judgment in favor of such district is ratified and confirmed as the right and property of such district, and every highway district is hereby granted the power to levy and collect such taxes as may be necessary to defray all...