McSurely v. McGrewMcSurely v. McGrew
- Reporters:
- ,
- Before:
- Deemer
— H. L. McGrew was treasurer of Van Burén County, Iowa, from July, 1900, to January, 1907, and as such he gave the bond in suit, signed by his co-defendants as sureties. One D. H. Moore was McGrew’s immediate predecessor. At the January, 1899, session of the board of. supervisors of Van Burén County a resolution was passed, authorizing said treasurer to deposit county funds in the bank of E. H. Skinner & Co. to an amount *165not 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 liablp 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 frorti 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 Burén County, caused a notice to be served upon the board of supervisors that, unless they proceeded to forthwith col*166lect 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 thu. 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 Burén 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 he 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 Burén 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 *167the 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.
It is said that, in the matter of the application of revenues, the legislative conscience will not be interfered with by the courts, and that they may be diverted to the benefit of private individuals if the Legislature is so advised. Again it is said that the. power of a municipality to raise money by taxation is a political one, delegated by the Legislature, and that the fund, when collected, must necessarily be within the control of the Legislature. Auditor General v. O’Connor, 83 Mich. 464 (47 N. W. 443); Williams v. Eggleston, 170 U. S. 30.4 (18 Sup. Ct. 617, 42 L. Ed. 1047); Mt. Pleasant v. Beckwith, 100 U. S. 514 (25 L. Ed. 699). The Legislature undoubtedly had power, in the first instance, to absolve its county treasurer from liability when he deposited money in solvent banks; and, as no contract rights are involved, save as the statute created such rights, there seems to be no constitutional objection to passing a retroactive law which would operate upon past transactions. State ex rel. Bulkeley v. Williams, 68 Conn. 131 (35 Atl. 24, 421, 48 L. R. A. 478). The bond in suit, while a contract, was entered into between a dependent government and an officer thereof. The duties of such officer were prescribed by statute, and not by the terms of the bond, and these duties might at any time be changed without violating the terms of that instrument. Even after suit brought, the law may be changed, for there is no vested right to a particular decision. Windsor *170v. Des Moines, 110 Iowa, 175. See, as sustaining these views, Beecher v. Board of Supervisors, 50 Iowa, 538. That the Legislature has plenary power over all municipal corporations and their officers is too well settled to admit of argument. And it is just as well settled thát the same power exists as to public revenues. An interesting and. instructive case on this subject is found in 44 Ind. 524, entitled Lucas v. Board of Commissioners. The Supreme Court of Indiana held that an act of the Legislature, taking away from counties stock issued to them by a private corporation, in consideration of the proceeds of a certain tax, and giving the same to the taxpayers who had paid the tax, was not unconstitutional. This decision was affirmed by the Supreme Court of the United States upon appeal. See Board of Com’rs of Tippecanoe Co. v. Lucas et al., 93 U. S. 108 (23 L. Ed. 822). These cases contain a careful review of the authorities upon the subject, and are decisive of one of the main questions involved. See, also, Abbott on Municipal Corporations, sections 22, 84, 88, and cases cited.
Of course, under the guise of legislative control, a private citizen can not be deprived of any of his rights against a municipal corporation. They are as sacred as if they existed against a private one. But the municipality itself can not complain of any act of the Legislature diminishing its revenues, amending its charter, or even dissolving it entirely. It may, of course, acquire certain proprietary or private rights, not held by the public in general of which it can not be deprived. See Sinking Fund Cases, 99 U. S. 700 (25 L. Ed. 496); Mayor v. R. R. Co., 32 N. Y. 261; Webb v. Mayor, 64 How. Prac. (N. Y.) 10; People v. O’Brien, 111 N. Y. 1 (18 N. E. 692, 2 L. R. A. 255, 7 Am. St. Rep. 684); Montpelier v. Montpelier, 29 Vt. 12 (67 Am. Dec. 748), and State ex rel. White v. Barker, 116 Iowa, 96. But this rule, or rather exception to the general rule, seems to apply only *171to property reduced to possession, or held in trust for the inhabitants of the territory as distinct from the people as a whole. It does not apply to executory contracts, or to provisions concerning funds or revenues. City, county, and township funds are subject to legislative control. Richland Co. v. Lawrence Co., 12 Ill. 1; Youngs v. Hall, 9 Nev. 212; People v. Fields, 58 N. Y. 491; Home Ins. Co. v. City Council, 93 U. S. 116 (23 L. Ed. 825); Indianapolis Co. v. Indianapolis, 50 Ind. 215. The action in the instant ease is upon a bond given by the county treasurer to secure public funds raised through a power delegated by the Legislature to the municipality — a fund which had been lost without the fault of the official — and the remedy which the county had on that bond was in no sense a vested right. The liability was created by act of the Legislature, and doubtless would not have existed at common law, and in so far as the inhabitants of the county are concerned that remedy may be taken away. Doubtless the Legislature could not have impaired the obligation of defendant’s bond in such a way as to deprive him of any of his rights thereunder, but there was no such contract between the state and the municipality or the inhabitants thereof, with reference to the defendant’s liability on the bond, as comes within the constitutional limitation. Hence the Legislature had the power, by proper enactment, to relieve defendant of his liability under the bond, a liability which was created primarily by the Legislature, and which, in so far as the State and the various subdivisions thereof are concerned, may be changed at pleasure. There seems to be no doubt about the legislative power over the funds and revenues of a quasi municipal corporation.
The next question relates to the manner whereby that power may be executed. The act in question, denominated a legalizing one, undertakes, after reciting the facts with reference to the matter as set forth in the statement of this case, enumerated at length in the preamble, to vali*172date everything done hy the hoard of supervisors as if fully and in every re‘spect authorized by law. In form it is a curative or healing act; and it is argued by appellee that in this form it is unconstitutional, because not a healing act, but one of substantive legislation, unauthorized because special, not uniform in its operation, and granting special immunities contrary to the express limitations of the Constitution.
The difficulty with the act, viewing it from the standpoint of a healing one, is to find the powetf of the Legis*173la ture to authorize the board of supervisors of Yan Burén County to do the acts and pass the resolutions which were attempted to be cured. Within its field the Legislature is supreme. The first section of the act now before us is purely legislative in character. It is neither executive nor judicial, and the Legislature has plenary power in its field subject only to constitutional limitations or prohibitions. Its power is not a delegated one, but supreme within its proper sphere. Hence it may exercise all powers not forbidden by the Constitrition of the State, or delegated by the people to’ the general government, or prohibited by the Constitution of the United States. McMillan v. Boyles, supra.
There is. no express statute against a private appropriation as such, except it be to a corporation, although there may be implied prohibitions, based upon the thought that taxation can not be justified for private purposes only. The defendant McGrew, as we have already said, was not given an appropriation, nor did he receive any benefit from the money lost by the bank. He is.to be held, if at all, as a county official, and the question in its last analysis is his liability as such. This thought seems to have escaped the Indiana ’court in its latest pronouncement upon the subject. One of the eases of that court may be explained and justified, perhaps, upon the theory ’that the officer had made good the loss by paying the same into the treasury, and was asking for a private appropriation, which had to be made up through a levy and collection of taxes for his special benefit. Our own case of Hanson v. Vernon, 27 Iowa, 28, has something upon this subject. It does not appear from the pleadings in the case, or from the act in question, that there is to be any taxation of the property of Van Burén County for the private benefit of defendant, McGrew. The Legislature in its wisdom simply concluded that, according to the ordinary principles of just and fair dealing, it was. not wise to have McGrew stand the loss due to the failure of the Skinner Bank. Conceding the right of review of such legislation by the courts, it does not appear that its conclusion was so baseless as to justify our interference. No special immunity was granted McGrew, as that term is used in our Constitution. Conceding arguendo that it was an immunity, it does not appear *178that there were any others in the same situation who would be excluded from the benefits of such an act. Mount v. State, 90 Ind. 29 (46 Am. Rep. 192), and New Orleans v. Clark, 95 U. S. 644 (24 L. Ed. 521) contain much in support of this position.
We discover no ground for disturbing the act, and the result is that the trial court was in error in overruling the demurrer, and its judgment must be, and it is, reversed.