Burton v. Harris

• Decision Date: 09 June 1941
• Docket Number: No. 4-6363.,4-6363.
• Citation: 152 S.W.2d 529
• Parties: BURTON v. HARRIS et al., Commissioner of Cypress Drainage Dist. of Perry and Conway Counties (OATES et al., Interveners).
• Court: Arkansas Supreme Court

Page 529

152 S.W.2d 529

BURTON v. HARRIS et al., Commissioner of Cypress Drainage Dist. of Perry and Conway Counties (OATES et al., Interveners).

No. 4-6363.

Supreme Court of Arkansas.

June 9, 1941.

Rehearing Denied July 14, 1941.

Appeal from Perry Chancery Court; J. E. Chambers, Chancellor.

Suit in equity by Serena Burton against John S. Harris and others, Commissioners of Cypress Drainage District of Perry and Conway Counties, to avoid an issue of district bonds so far as it exceeded legally assessed benefits, in which O. O. Oates and another intervened. Decree for defendants, and plaintiff appeals.

Affirmed.

Walter G. Riddick, of Little Rock, and J. M. Willemin, of Perryville, for appellant.

Rose, Loughborough, Dobyns & House, of Little Rock, for appellees.

GRIFFIN SMITH, Chief Justice.

Cypress Creek Drainage District of Perry and Conway Counties, embracing approximately 18,000 acres, was formed by a judgment of the Perry circuit court December 4, 1916, pursuant to the provisions of Act 279 of 1909 and amendments. The objective was drainage of certain swampy lands north of the town of Perry, and plans called for a main canal with designated laterals.

Nearly fifty landowners filed exceptions to assessments. Some protestants were of opinion their lands were not benefited. Others thought assessments too high. Some adjustments were made.¹ There was an appeal to this court. Oates et al. v. Cypress Creek Drainage District, 135 Ark. 149, 205 S.W. 293.

Bonds aggregating $110,000 were sold in three issues. The first bear date of April 1, 1918 — $63,000. The second issue (July 2, 1919) was for $17,000, and the third (March 1, 1920) amounted to $30,000.

Appellant, and intervener O. O. Oates, are landowners. Appellees² are the district's commissioners. Juliet Sharp Benecke, another intervener, is owner of bonds of the first issue.

Lands now owned by Serena Burton were determined by the commissioners to have been benefited $200. An assessment was accordingly made, payment, inclusive of principal and interest, to be over a period of twenty-two years.³

Appellant and her predecessors in title paid assessments inclusive of those extended for 1937, but appellant is delinquent for 1938 and 1939.⁴

The third issue of bonds was under authority of Act 138, approved February 18, 1920.⁵ Section 1 of the Act is printed in the margin.⁶

It is conceded that bonds issued in April, 1918, and those issued July, 1919, are valid; but avoidance of the issue of March 1, 1920, is sought, insofar as it exceeds what is termed the legally assessed benefits. Effect of the Act of 1920 was to increase from $200 to $300 appellant's assessed benefits for the years subsequent to 1920.

Appellant's arguments are grouped under three subdivisions: (1) The act is void because not within the Governor's call of December 9, 1919, for the special session of January 26, 1920. (2) Act No. 138 is arbitrary and capricious, and therefore void. It amounts to a taking of property without due process and without compensation. (3) There is no such thing as a bona fide holder for value of a municipal bond in the sense that the expression is used in the law merchant, and this being true, neither the district nor its taxpayers can be estopped to assert invalidity of Act 138.

First. The extraordinary session of 1920 was called "For the purpose of enacting laws establishing special or local road, bridge, drainage and levee improvement districts and school districts, and conferring special powers thereon, and amending and curing defects in existing special or local laws for the same, and ratifying, confirming and validating special or local improvement districts organized under general laws or special or local laws, and enlarging the powers thereof, and to enact such laws as will permit the completion, reconstruction or extension of waterwork systems and other improvement districts in cities or towns".

It is argued that art. 6, § 19, of the Constitution,⁷ expressly limits subjects of legislation to those enumerated in the call unless business for which the Assembly was convened has been disposed of and thereafter, by two-thirds vote, the session has been extended. Jones v. State, 154 Ark. 288, 242 S.W. 377. The 1920 Special Session was not extended; therefore, appellant insists, the subject matter embraced within Act 138 was alien to the emergencies listed by the Governor. We think authority for the statute was found in that part of the call authorizing the General Assembly to ratify, confirm, and validate special or local improvement districts and to enlarge the powers thereof.

Road Improvement Districts Nos. 3, 4, and 5 were created in Washington county by a special act of the General Assembly of 1919, Act 529, Vol. 2, Road Laws, p. 2034. At the Special Session which convened January 26, 1920,⁸ an amendatory statute was enacted. Acts 1920, Ex.Sess., Act 302. By the amendment it was sought to cure irregularities; also to amend §§ 6, 8, and 27 of the creative Act of 1919. In an opinion written by Chief Justice McCulloch, the subject was held to have been within purview of the call. McKee v. English, 147 Ark. 449, 228 S.W. 43.

At the extraordinary session of January 26, 1920, a statute affecting road improvement districts in Woodruff county was enacted. No. 183. Betterments levied on lands in Improvement District No. 2 of the Northern District of the county were set aside. It was directed that territory within the district should be embraced within "and made a part of the hereinafter created Road Improvement District Number 16 of the Northern District of Woodruff County". There was a legislative finding that District No. 16 (not then in existence) had been benefited by the preliminary work, estimates, and surveys made on account of District No. 2, and that District No. 16 should assume payment of such obligations, * * * and assessments are hereby authorized to cover the payment of said benefits by said hereinafter created District No. 16".

Validity of the act was questioned on several grounds, one being that it was not within the Governor's call. In an opinion written by Chief Justice McCulloch⁹ upholding the act, it was said: "The fact that the statute incidentally amends, or even abolishes, another local district, does not hamper the power of the Legislature in creating a new district * * *."

It was then pointed out that the General Assembly, under the Constitution and proclamation of the Governor (having power to pass special laws establishing local districts) possessed also the power to abolish other districts or to embrace them within the limits of designated districts, and [this] is "a necessary incident to the exercise of the power conferred". It was held that the case of Jones v. State, supra, had no application. Mr. Justice Hart (later Chief Justice) dissented in the Jones case. In Sims v. Weldon, 165 Ark. 13, 263 S.W. 42, 43 (opinion also by Chief Justice McCulloch) it was said:

"We feel constrained to add our approval to the statement of the law made in the dissenting opinion in [Jones v. State], that [art. 6, § 19] of the constitution merely requires the Governor `to confine legislation to particular subjects, and not to restrict the details springing out of the subjects enumerated in the call'. * * * Legislation must be confined to the general purposes specified in the proclamation. Much latitude is allowed for the specification by the Governor in his proclamation, but the purposes of legislation must be definitely specified, either broadly or in detail".¹⁰

In the call here questioned it was intended — and this intent is in express language — to authorize the General Assembly to enlarge powers of special or local improvement districts. Defects were to be "amended and cured" in existing special or local drainage and levee improvement districts. Under authority of the cases cited, enactment of the legislation adding fifty per cent. to existing betterments in Cypress Drainage District was not unauthorized.

Second. Was the purpose achieved by act 138 arbitrary and capricious? Appellant concedes that the General Assembly has power to levy, directly, an assessment of benefits, and agrees that this authority is subordinate only to the right of a landowner to have an abuse of power judicially reviewed.¹¹ We are reminded that the Legislature, in the first instance — when the district was created — delegated to designated officials the power to assess betterments, and that to assure equal justice courts were empowered to hear complaints of dissatisfied property owners.

The appeal "by about 40 property owners and the Chicago, Rock Island & Pacific Railway Company" from judgment of the Perry circuit court (Oates v. Cypress Creek Drainage District, supra) was decided by this court July 1, 1918. The circuit court had reduced the railroad company's assessment from $10,000 to $4,500, and "many reductions" were made as to assessments of individuals. The opinion contains the following statements: "As we understand the evidence in this case, the assessors adopted a uniform basis for making the assessment on all the lands. * * For example, they ascertained that the total benefit to accrue to the lands in the town of Perry would be $10,000. * * * Likewise they ascertained that the total benefit to accrue to the lands in the country would be $72,800. * * * A total assessment of the entire benefit to the whole property was entirely feasible and practical and an apportionment of the benefits on any basis was unnecessary".

In effect, appellant argues that here was a judicial finding, made under processes provided by the General Assembly, that benefits to the property did not exceed $82,800; yet, it is argued, the lawmaking body arbitrarily and capriciously directed the county clerks of Perry and Conway counties to extend increases of fifty per cent. against each assessment. Uniform holdings of this court have been that any amount exacted in excess of...