Mead v. Eagerton, 3 Div. 581

• Citation: 50 So.2d 253,255 Ala. 66
• Decision Date: 25 January 1951
• Docket Number: 3 Div. 581
• Parties: MEAD v. EAGERTON, State Public Accounts et al.
• Court: Supreme Court of Alabama

Page 253

50 So.2d 253

255 Ala. 66

MEAD v. EAGERTON, State Public Accounts et al.

3 Div. 581.

Supreme Court of Alabama.

Jan. 25, 1951.

Henry C. Meader, of Montgomery, Frank E. Spain, of Birmingham, Willis V. Bell, Jr., of Montgomery, and John P. Ansley, of Birmingham, for appellant.

A. A. Carmichael, Atty. Gen., and M. Roland Nachman, Jr., Asst. Atty. Gen., for appellees.

FOSTER, Justice.

This bill was filed by a taxpayer seeking an injunction, temporary and permanent, against appellees who are the chief examiner of public accounts, the state treasurer, the state comptroller and the state auditor. The prayer for the injunction is as follows: 'Restraining and enjoining the respondents, Ralph P. Eagerton, as chief examiner of public accounts of the State of Alabama, John Brandon, as treasurer of the State of Alabama, John Graves, as comptroller of the State of Alabama, and Dan Thomas, as auditor of the State of Alabama, and each of them from using or attempting to use, paying or attempting to pay, any money that has accrued to or that is in the funds of the department of examiners of public accounts in the treasury of the State of Alabama for the purpose of acquiring the official bond of Ralph P. Eagerton as chief examiner of public accounts, from the state surety insurance fund, or for using or for paying out any other money in their possession or under their control for such purpose, or issuing any warrants therefor.'

A demurrer to the bill and the prayer for temporary injunction were set down for hearing on August 2, 1950. A decree was rendered on that submission August 3, 1950, in which the demurrer was sustained, and another decree or order denying the motion for a temporary injunction was rendered. An appeal was taken from both decrees: both being appealable. Title 7, sections 755, 1057.

The equity of the bill goes to the validity and effect of the Alabama statute contained in Article 2, Title 28, sections 329 to 338, Code. The substance of that statute may be stated as follows: section 329 sets up a fund in the state treasury to be known as the state surety insurance fund, for the purpose of insuring the state or any and all counties or municipalities in said state against loss of moneys belonging to the state, counties or municipalities on account of certain conduct of such officers.

Section 330 requires the director of finance to determine the total amount of the bonds required to be given by state and county officers, including all officers named in section 329, and the amount of premiums charged for the same.

Section 331 makes the premium charged to be based on commercial rates as of August 1, 1935 by surety companies; and that all such premiums shall be paid to the department of inance at the time of executing the bond by the appropriate state department and by the county treasurers, respectively.

Section 332 directs the disposition of the premium money, and that it 'shall constitute a sinking fund and surplus, which shall be subject to the requisition of the director of finance, with the approval of the governor, for the payment of the losses herein provided'.

Section 333 provides that 'The fund of one hundred thousand dollars transferred from the state insurance fund to the state security insurance fund shall be available only' in case the losses shall exceed the premiums collected. The original Act approved September 7, 1935, General Acts 1935, page 782, carried an appropriation of $100,000.00 from the state insurance fund to the state insurance fund.

Section 334 provides that in event such sinking fund shall reach $500,000.00, the surplus shall be used to reimburse the state insurance fund on account of said appropriation.

Section 335 gives authority to the director of finance and governor to make rules and regulations necessary for the proper and full performance of the Act.

Section 336 provides that the department of finance shall be provided the form of the bonds for execution and shall execute the bonds for the state of Alabama.

Section 337 provides that any person or governmental agency may sue the officer in the county of the officer's residence, and if a judgment is rendered for plaintiff, the state comptroller shall issue a warrant for the same on the certificate of the clerk of the court, which shall be paid by the treasurer from said fund so created.

Section 338 provides that article of the Code shall not be effective except upon a proclamation by the governor so declaring. That was also a feature of the original act.

The bill alleges that the governor made such proclamation on November 25, 1949. That up to that date the Act of 1935, supra, and Code sections, supra, remained suspended and inoperative on the statute books from September 1935 to November 1949 (fourteen years), and that four governors served in that period. That the governor so proclaiming in November 1949 acted solely in his discretion and found and recited no facts upon which it was based.

The bill does not allege that any rules and regulations have been made as required by section 335, supra. That Eagerton, as chief examiner of public accounts, is proposing and arranging to cancel his official bond on or before October 1, 1950, and to execute his official bond with the state surety insurance fund. That the Act is in violation of the Constitution in the respects which we will discuss; also that section 331 is vague, uncertain and its intent cannot be ascertained and given effect, and that it is unenforceable and void.

Motion to Dismiss Appeal.

The first matter called to our attention on this appeal is the motion to dismiss the appeal because the question involved is alleged to have become moot. The situation which it is claimed renders the question moot is as follows: The motion to dismiss alleges that application was made to this Court to restrain the conduct sought to be enjoined pending the appeal. This Court denied said motion. It then alleges that thereafter appellee Eagerton, as chief examiner of public accounts, acquired an official bond with the state surety insurance fund; that Graves, as comptroller, drew a warrant for $62.50, the amount of the premium payable to the department of finance and the state surety insurance fund and charged it to the department of examiner of public accounts. Thereafter that appellees have performed the acts sought to be enjoined, and no further controversy exists between the parties to this cause.

This contention needs separate consideration in respect to the appeal from the separate decrees of the trial court. But there are certain principles of law which should be noted as applicable to them both.

The principle is thoroughly well settled, apparently without conflicting authority, that after service of notice of a bill in equity, which seeks a prohibitive injunction against respondents, but no temporary injunction is issued, and the respondents do the act sought to be enjoined, they do so at the peril of an injunction being ordered on the final hearing, for it is within the power of the court, finally holding that an injunction was proper, to compel a restoration of the status quo.

In Jones v. Securities and Exchange Comm., 298 U.S. 1, 56 S.Ct. 654, 658, 80 L.Ed. 1015, the court observed: 'The conclusion to be drawn from all the cases is that after a defendant has been notified of the pendency of a suit seeking an injunction against him, even though a temporary injunction be not granted, he acts at his peril and subject to the power of the court to restore the status, wholly irrespective of the merits as they may be ultimately decided. 1 High on Injunctions (4th Ed.) § 5(a).'

It was held in Texas & New Orleans R. Co. v. Northside Belt Rwy. Co., 276 U.S. 475, 48 S.Ct. 361, 72 L.Ed. 661, where a defendant, with notice of filing of a bill for injunction, proceeds to complete the act sought to be enjoined, the court may by mandatory injunction compel a restoration of the status quo. See, also, Tucker v. Howard, 128 Mass. 361, 363; Town of Platteville v. Galena & So. Wis. R. R. Co., 43 Wis. 493, 506-507.

'Although injunction ordinarily issues to prevent future acts rather than to remedy what is past, a defendant who proceeds to do the things complained of after suit to enjoin them has been filed and notice thereof given to him cannot defeat the injunction on the ground that the acts sought to be restrained have already been done, for he acts at his peril in such case, and subject to the power of the court to restore the status. The court may award complainant damages or compensation for acts done by defendant pending suit to restrain them.' 28 Am.Jur. section 6, page 200. See to the same effect section 6, page 200. See to the same effect: 43 C.J.S. Injunctions, § 5, page 411, note 37; 32 Corpus Juris 24, Section 6; Turney v. Shriver, 269 Ill. 164, 109 N.E. 708; New Haven Clock Co. v. Kochersperger, 175 Ill. 383, 51 N.E. 629; Thornton v. Schobe, 79 Colo. 25, 243 P. 617; Werner v. Norden, 87 Colo. 339, 287 P. 644; State of Oklahoma ex rel. Tharel v. Board of Com'rs, 188 Okl. 184, 107 P.2d 542; Smith v. Graham, 161 App.Div. 803, 147 N.Y.S. 773.

The principle has been applied to analogous situations. In Walling, Adm'r, v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 65 S.Ct. 1242, 89 L.Ed. 1705, it was held while voluntary discontinuance of alleged illegal activity does not operate to remove a case from the ambit of judicial power, it may justify the court's refusal to enjoin future activity of such nature when it is combined with a bona fide intention to comply with the law and not to resume the wrongful acts. See, Hecht v. Bowles, Price Adm'r, 321 U.S. 321, 64 S.Ct. 587, 88 L.Ed. 754.

In our case of Vaughn v. Brue, 245 Ala. 107, 16 So.2d 17, 19, 150 A.L.R. 668, we held that though title of a stranger purchasing at judicial sale under erroneous judgment will not be defeated or impaired by subsequent reversal of judgment, a party to the suit who...