McSurely v. McGrew
| Decision Date | 17 November 1908 |
| Citation | 118 N.W. 415,140 Iowa 163 |
| Parties | JAMES H. MCSURELY, Appellee, v. H. L. MCGREW ET AL., Appellants |
| Court | Iowa Supreme Court |
Appeal from Henry District Court.--HON. JAMES D. SMYTHE, Judge.
ACTION at law upon the official bond of H. L. McGrew, county treasurer, to recover the amount of certain money, lost through the failure of a bank in which county funds were deposited, without authority of the board of supervisors. Defendants rely upon a resolution of the board of supervisors exonerating the treasurer from liability and a curative act passed by the Legislature. The case was tried to the court resulting in a judgment for plaintiff, and defendants appeal.
Reversed.
Walker & McBeth and E. L. McCoid, for appellants.
J. C Mitchell and F. M. Hunter, for appellee.
H. L. McGrew was treasurer of Van Buren County, Iowa, from July, 1900, to January, 1907, and as such he gave the bond in suit, signed by his codefendants as sureties. One D. H. Moore was McGrew's immediate predecessor. At the January, 1899, session of the board of supervisors of Van Buren County a resolution was passed, authorizing said treasurer to deposit county funds in the bank of E. H. Skinner & Co, to an amount not exceeding $ 10,000 at any one time. January 12, 1899, the bank executed a bond to secure such deposits as required by law. Moore died during his incumbency of the office, and McGrew was appointed to fill the vacancy on or about July 7, 1900, and at the succeeding election in November was chosen by the electors to fill out the term. Since that he was re-elected for two full terms. After his appointment, and again after his election, he submitted to the board of supervisors and to the county attorney the question as to whether or not the previous bond given by the bank to Moore was sufficient, and as to whether or not he should obtain a new bond, and he was informed by both that he need not get a new bond, and that he had the right to make deposits in the bank under the previous resolution of the board. Pursuant to this advice he made deposits in the bank until November of the year 1904, when the bank went into voluntary bankruptcy. After the closing up of the estate in bankruptcy and receiving the dividends declared, there was still due and owing the county from the bank $ 2,091.09. By authority of the board the treasurer then brought action against the sureties on the bond given by the bank, and prosecuted the same to final judgment, which resulted in a finding that the sureties were not liable for the deposits made in the bank. On January 7, 1907, the treasurer, being about to retire from office, made a settlement with the board of supervisors, by the terms of which he was expressly released from all liability on account of the deposits made in the bank, and given a full receipt for all money and property coming into his hands as county treasurer, and his bond was discharged, and the sureties thereon released from any liability growing out of the deposits in the bank, or on account of the failure of said bank. Thereafter, and on January 16, 1907, plaintiff, who is a resident and taxpayer of Van Buren County, caused a notice to be served upon the board of supervisors that, unless they proceeded to forthwith collect the above-named balance from McGrew and the sureties on his bond, he (plaintiff) would, on behalf of himself and all other residents and taxpayers, institute an action against the treasurer and his sureties for the collection of the money for and on behalf of the county and the taxpayers thereof. The board taking no action, this suit was commenced by plaintiff on February 4, 1907, upon the official bond of the county treasurer to recover the amount lost through the failure of the bank of E. H. Skinner & Co., the petition alleging that the suit was brought on behalf of plaintiff and all other taxpayers of Van Buren County, for the benefit of the county.
On February 28, 1907, the Legislature passed a curative act, purporting to legalize the acts and resolutions of the board of supervisors in settling with McGrew and releasing and discharging his bond and the sureties thereon. The act also attempted to make void any action brought, or attempted to be brought, by any citizen of the county upon the treasurer's bond, declaring that the action should be without jurisdiction and void. See Acts 32d Gen. Assem. (Laws 1907, chapter 255, sections 1, 2). This act did not go into effect until March 7, 1907, which was some time after plaintiff had commenced this suit. The defendants rely upon the actions and resolutions of the board of supervisors of Van Buren County, and upon the so-called curative act of the Thirty-Second General Assembly. Plaintiff claims that the acts and resolutions of the board were without authority, and were and are null and void, and further says that the curative act is unconstitutional in that it deprived, or attempted to deprive, the county of certain vested rights, impaired the obligations of the treasurer's bond, granted McGrew special immunity not given to others in the same situation, and that the act is not general and uniform in its operation, and is therefore void. The trial court adopted plaintiff's theory of the case by overruling a demurrer to the reply, pleading the facts and conclusions above recited regarding the acts and resolutions of the board and the so-called curative act of the Legislature. The appeal challenges this ruling, and presents nothing but the effect of the acts and resolution of the board and of the legislative enactment. Something is said in the argument regarding plaintiff's right to sue, but no such question is presented by the record now before us, and it need not be considered on this appeal. Indeed the only question presented by the demurrer is the constitutionality of the legalizing act, and to that proposition we shall give our attention.
I. Remembering that this action was commenced before the curative act became effective, it is apparent, we think, that the second section thereof is unconstitutional and beyond the power of the Legislature. After action is brought it is certainly beyond the power of the Legislature to declare that action void and the court in which it is pending without jurisdiction. Such matters are purely judicial, and not legislative, and under our three-department system of government it is inadvisable for one to assume the powers, duties, or responsibilities of the other. When action is once commenced the question of jurisdiction is purely a judicial one, and the Legislature should not attempt to usurp the functions of the judiciary by such an act as is now under consideration. These principles are so fundamental as scarcely to need the citation of authorities in their support. But see, Kilbourn v. Thompson, 103 U.S. 168 (26 L.Ed. 377); Dickerson v. Acosta, 15 Fla. 614; Parmelee v. Lawrence, 48 Ill. 331; Wanser v. Hoos, 60 N.J.L. 482 (38 A. 449, 64 Am. St. Rep. 600); O'Conner v. Warner, 4 Watts & Serg. 223; Gough v. Pratt, 9 Md. 526; State v. Carr, 129 Ind. 44 (28 N.E. 88, 13 L. R. A. 177, 28 Am. St. Rep. 163); Felix v. Board, 62 Kan. 832 (62 P. 667, 84 Am. St. Rep. 424); Penn v. Wheeling Co., 59 U.S. 460, 18 HOW 460 (15 L.Ed. 449), and Com. v. New Bedford, 2 Gray 339. If the defense were bottomed upon the second section of the curative act alone, it manifestly would be without merit. We may eliminate the second section of the act in question as clearly unconstitutional.
II. The case must turn upon the acts and resolutions of the board of supervisors and the effect of the so-called curative act in so far as it attempts to validate these proceedings. It is practically admitted that the county treasurer had no right to make the bank deposits he did, and we are of opinion that the board of supervisors was without power to pass a resolution discharging the treasurer's bond and releasing his sureties. But it is contended that there was enough doubt about the matter to justify the curative act, and that, whether this be so or not, the Legislature had power to cure any defects in the resolution and acts of the board, and that, even had there been no resolution, the Legislature had the authority to relieve McGrew from responsibility. This is predicated upon the thought that the Legislature has plenary power over counties and their officers; that no contract rights were impaired, and no vested rights taken away. If nothing but private rights were involved, it is manifest that the act could not be sustained. But the matters involved here are public, and the county of Van Buren is the real party in interest. A county, while a body corporate under our law, is a subdivision of the State, created for administrative and other public purposes, owes its creation to the State, and is subject at all times to legislative control and change. No citizen has any vested right in or to its revenues. These may be changed, diverted to other uses, or taken away, and no one may complain on the theory that his interests have been affected or any contract rights destroyed. The Legislature might have permitted the deposit of county funds in banks and absolved the county officers from any liability on account of such deposits. Neither the county nor any of the inhabitants thereof had any vested interest in the funds coming into the county treasurer's hands. County of Richland v. Lawrence, 12 Ill. 1; Bailey v. New York, 3 Hill 531 (38 Am. Dec. 669); Pennie v. Reis, 132 U.S. 464 (10 S.Ct. 149, 33 L.Ed. 426); Sangamon County Board of Supervisors v. City of Springfield, 63 Ill. 66; People v. Power, 25 Ill. 187; Blanding v. Burr, 13 Cal. 343; Creighton v. San Francisco, 42 Cal. 446.
It is said that, in the matter of the application of revenues, the...
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