Shanks, Auditor v. Board of Education

• Citation: 221 Ky. 470
• Parties: Shanks, Auditor, et al. v. Board of Education of City of Winchester.
• Decision Date: 21 October 1927
• Court: United States State Supreme Court — District of Kentucky

221 Ky. 470

Shanks, Auditor, et al. v. Board of Education of City of Winchester.

Court of Appeals of Kentucky.

Decided October 21, 1927.

1. Escheat. — Commonwealth has no vested rights in escheated property beyond control of Legislature, since latter may deal with property that shall escheat or that theretofore has escheated so long as it remains intact, and may determine to what political subdivision such property shall go.

2. Statutes. — Statutes will not be given retroactive operation unless such interpretation is required by express command or a necessary and unavoidable implication.

3. Escheat. — Acts 1920, c. 14, section 22. (now Ky. Stat. section 3587a-22), dealing with such property "as from any cause shall escheat," will not be given retroactive operation, since such language shows legislative purpose to make statute prospective only.

4. Escheat. — Where action to escheat property was commenced but final judgment of escheat had not been rendered when Acts 1920, c. 14, section 22 (now Ky. Stat. section 3587a-22) was enacted, providing that escheated property should vest in board of education for use and benefit of public schools, property escheated after act became law vested in board of education.

5. Statutes. — Acts 1920, c. 14, section 22 (now Ky. Stat. section 3587a-22), providing that escheated property shall vest in board of education for use and benefit of public schools, held not unconstitutional as being special legislation contrary to the Constitution, section 60, and section 59, subsection 29.

Appeal from Franklin Circuit Court.

JOHN H. GARDNER for appellants.

FRANK E. DAUGHERTY, Attorney General, and CHAS. F. CREAL, Assistant Attorney General, for appellee.

OPINION OF THE COURT BY CHIEF JUSTICE CLAY.

Affirming.

In the year 1919 the commonwealth of Kentucky brought suit in the Clark circuit court against the Clark County National Bank, a corporation, to escheat certain property, on the ground that the bank had owned and held the property for more than five years next before the filing of the petition, and that the same was not necessary or property for carrying on its legitimate business. On the final hearing the prayer of the petition was denied and the petition was dismissed. On appeal it was held that the property should be escheated, and the judgment was reversed and the cause remanded to the Clark circuit court for proceedings in conformity to the opinion. Commonwealth v. Clark County National Bank, 187 Ky. 151, 219 S.W. 175. After a petition for rehearing was overruled the case was taken to the Supreme Court of the United States on writ of error. While the cause was pending in that court it was compromised by an agreed order entered in the Clark circuit court. Pursuant to the terms of this order the auditor conveyed to the bank all the right, title, and interest of the commonwealth to the property involved, and the bank paid to the commonwealth the sum of $7,500, of which $3,000 was to go to the escheat agent and his attorneys, and the remaining $4,500 was paid into the state treasury.

In 1920, and during the pendency of the cause in the Supreme Court of the United States, the Legislature passed an act relating to schools in cities of the fourth class. Chapter 14, Acts 1920. Section 22 of that act, now section 3587a-22, Kentucky Statutes, contains the following provision:

"So much property in the school district as from any cause shall escheat to the commonwealth of Kentucky shall vest in the board for the use and benefit of the public schools in said district."

This action was brought by the board of education of the city of Winchester against the auditor to compel him to draw his warrant in favor of the board for the sum of $4,500 or so much of the proceeds of the escheated property as was paid into the state treasury. The auditor's demurrer to the petition having been overruled, he declined to plead further, and judgment was rendered granting the relief prayed. The auditor appeals.

It is suggested on behalf of the commonwealth that the property in question escheated when suit was brought, and that to apply the statute in such a case would impair the vested rights of the commonwealth. It must not be overlooked that escheated property is subject to the control of the lawmaking power, and it may determine to what political subdivision such property shall go; there being no constitutional provision in the way it may deal with property that shall escheat, or that theretofore has...