Board of Improvement of Waterworks Improvement District No. 22 v. Southwestern Gas & Electric Co

• Decision Date: 08 November 1915
• Docket Number: 212
• Citation: 180 S.W. 764,121 Ark. 105
• Parties: BOARD OF IMPROVEMENT OF WATERWORKS IMPROVEMENT DISTRICT No. 22, v. SOUTHWESTERN GAS & ELECTRIC CO
• Court: Arkansas Supreme Court

180 S.W. 764

121 Ark. 105

BOARD OF IMPROVEMENT OF WATERWORKS IMPROVEMENT DISTRICT No. 22, v. SOUTHWESTERN GAS & ELECTRIC CO

No. 212

Supreme Court of Arkansas

November 8, 1915

Appeal from Miller Chancery Court; James D. Shaver, Chancellor reversed.

Decree reversed, and complaint dismissed.

Frank S. Quinn, for appellant.

1. Plaintiff's property being within the district, the presumption is conclusive that benefit will result, unless there is fraud or demonstrable mistake. 52 Ark. 107; 81 Ark 208; 84 Ark. 257.

Fraud and demonstrable mistake can only occur when assessments are levied on lands in disregard of benefits and by reason of manifest prejudice against the owner or in total disregard of his rights. 98 Ark. 543, 550.

2. An assessment based upon a percentage of the value of the property in an improvement district is not an arbitrary or discriminatory assessment, but is, on the contrary, a benefit assessment.

The act of the assessors in fixing upon this particular assessment was a legislative determination on the question as much so as if the assessment had been made by the Legislature itself. 81 Ark. 208; 98 Ark. 543; 125 U.S. 345.

This court has upheld assessments of benefits based upon the assessed value of the property in the districts, and such an assessment is not arbitrary nor discriminatory, but a benefit assessment. 69 Ark. 68; 77 Ark. 383; 81 Ark. 562; 97 Ark 322, 330, 331; 103 Ark. 127; 108 Ark. 419; 100 Ark. 366.

3. The court will only undertake to correct abuses in the assessment. If plaintiff's assessment is excessive, which is not conceded, that fact is not sufficient reason for the court to declare the whole assessment invalid. 97 Ark. 334; 99 Ark. 508.

No brief filed for appellee Southwestern Gas & Electric Co.

E. B Kinsworthy, R. E. Wiley and T. D. Crawford, for appellee St. Louis, Iron Mountain & Southern Railway Company.

The testimony of the assessors shows that they adopted an erroneous and improper method which failed to establish a uniform system of assessment of benefits. They have undertaken to levy upon all of the real property of the city a blanket assessment of 20 per cent of the value as shown by the county assessor's books, and have done so, not upon any finding that each lot and parcel of land will receive a special and particular benefit in that amount, but, in many instances, have considered the general benefits which will accrue to the community by the establishment of an adequate water supply. Assessments can not be levied for general benefits. 2 Page & Jones, Taxation by Assessment, § 654; Id. § 11; 30 Ind. 77; Cooley, Const. Lim. § 698; 64 Ark. 560.

It is necessary under the statute to assess the value of the benefits accruing to each lot, block, parcel and railroad tracks and rights-of-way by reason of the improvement. Kirby's Dig., § 5677, as amended by Acts 1907, pp. 402, 1023.

An assessment without reference to benefits is void. 32 So. 610, 133 Ala. 587.

A rule of assessment not applied uniformly will be set aside. 49 N.W. 139. And a uniform assessment, arbitrarily imposed by lot on all property affected in the some way by a public improvement, will not be sustained if the advantages to the lots vary. 42 A. 773. See also, 27 N.J.L. 214; 138 Ia. 67, 115 N.W. 582; 113 N.W. 38; 48 Ark. 251; 32 Ark. 31; 49 Ark. 202.

Gaughan & Sifford, for appellee St. Louis Southwestern Railway Company.

Counsel adopt the foregoing brief and submit additional argument, but cite no authorities.

OPINION

MCCULLOCH, C. J.

The whole of the territory of the City of Texarkana, Arkansas has been duly organized into an improvement district for the purpose of "acquiring, constructing and equipping a water plant and system" for supplying water to the inhabitants of the city. A majority of the owners in value of real property in the district petitioned the city council favoring the improvement, and after the board of improvement had been appointed and plans had been formed and estimates of the cost thereof made and filed with the city council, a board of assessors was appointed who assessed the benefits to real property in the district. The assessors determined that "every lot, block and parcel of land in said district is equally benefited in proportion to its value," and that said benefits would equal 20 per cent. of the assessed value of real property in the district. In other words, the board of assessors made a horizontal assessment of 20 per centum of the value of the real property in the district as assessed for State and county taxes.

Within thirty days after the publication of the ordinance of the city council levying the assessments as fixed by the board of assessors, the appellee, Southwestern Gas & Electric Company, instituted this action in the chancery court of Miller County to invalidate the assessment of benefits on the ground that the same was arbitrary and illegal. The allegations of the complaint attacking the method of assessment are that "said assessments of benefits are arbitrary, unjust and have not been imposed upon the property of persons specially and peculiarly benefited in the enhancement of the value of their property proportionately to the proposed expenditure of money collected on said assessments but on the contrary many owners of property within said district will suffer pecuniary loss thereby, and especially this plaintiff; and are arbitrary, unjust, discriminatory and not uniform in this: The City of Texarkana, Arkansas, extends over a large irregular territory, and the property embraced therein is of different classes and conditions, and of greatly variant character and uses, and in the actual and taxable value thereof." It is further alleged that no part of appellee's property requires water service and will not be benefited in any manner by said proposed improvement, and that its market value will not and could not be enhanced in value in any sum whatever by reason thereof.

The answer of the board of improvement contains a denial that the assessments of benefits are arbitrary or that they were fixed upon the wrong basis or that appellee's property would receive no benefit from the improvement. Subsequently the St. Louis, Iron Mountain & Southern Railway Company and the St. Louis Southwestern Railway Company each filed an action similar to the one instituted by appellee Texarkana Gas & Electric Company, and the three causes were heard upon substantially the same record. There was introduced in evidence the depositions of two of the assessors showing in detail their method of arriving at the assessment of benefits; and there were depositions of other witnesses, principally engineers connected with the plaintiffs in each of the cases, detailing the condition of the properties of the plaintiffs and estimates of the benefit, if any, to be derived from the construction of the waterworks contemplated in the improvement.

The chancellor decided "that the said board of assessors proceeded upon an illegal and erroneous theory with reference to making their assessment *** in that said assessment was made by adopting as a basis 20 per cent. of the assessed value of the real property in said district as it appears upon the tax books of Miller County, Arkansas, and without reference to actual benefits accruing to each lot and block of land in said city; and that said board of assessors did not make said assessments upon the basis of benefits to the owners of property in said city, *** and that the defendants should be enjoined from in any manner attempting to collect said assessment."

It is not altogether clear from the language of the decree in expressing the conclusions of the chancellor whether he meant to hold, as a matter of law, that assessments could not be made on the percentage basis, as was done by the assessors in this case; or whether it is merely a finding from the facts that the assessment fixed on that basis did not result in an actual assessment of benefits, and that it constituted an arbitrary assessment without reference to the real benefits to be derived from the improvement. If the chancellor meant to hold that the assessors could not, even after giving due consideration to all the elements which go to make up the benefits to be derived from the stated improvements, make an assessment which resulted practically in a percentage of the value according to the assessment of taxes for State and county purposes, he was in error, for there is no sound reason why that method may not be adopted if that basis of assessment results in arriving at the real benefits from the improvement. If however, a basis of that kind is adopted arbitrarily and without any relation to the real benefits to be derived, it is invalid and should be set aside. We have decided in numerous cases that a legislative ascertainment that benefits from a local improvement accrue in proportion to the value of the property affected will be respected unless it be demonstrated to a certainty that a mistake has been made. St. L. S.W. Ry. Co. v Board of Directors, 81 Ark. 562, 99 S.W. 843; Alexander v. Board of Directors of Crawford County Levee District, 97 Ark. 322, 134 S.W. 618; Salmon v. Board of Directors, 100 Ark. 366, 140 S.W. 585. The plan for assessing benefits under the statute in force prior to the year 1899, contemplated the adoption of the assessment made by the county assessor as a basis of valuation and authorized the levying of assessment of benefits based on that value. That method was upheld by this court in K. C. P. & G. Ry. Co. v. Water Works Improvement District of Siloam...