Delta County Levee Imp. Dist. No. 2 v. Leonard

• Decision Date: 25 October 1977
• Docket Number: No. 8447,8447
• Citation: 559 S.W.2d 387
• Parties: DELTA COUNTY LEVEE IMPROVEMENT DISTRICT NO. 2, et al., Appellants, v. Obie P. LEONARD, Jr., et al., Appellees.
• Court: Texas Court of Appeals

Page 387

559 S.W.2d 387

DELTA COUNTY LEVEE IMPROVEMENT DISTRICT NO. 2, et al., Appellants,

v. Obie P. LEONARD, Jr., et al., Appellees.

No. 8447.

Court of Civil Appeals of Texas, Texarkana.

Oct. 25, 1977.

Rehearing Denied Nov. 22, 1977.

Hardy Moore, Paris, for appellants.

Gene Dozier, Kleber C. Miller & Co., Fort Worth, for appellees.

RAY, Justice.

This is an appeal from a judgment rendered pursuant to the mandate issued by the Texas Supreme Court on a prior appeal directing the issuance of a writ of mandamus in order to effect the collection of three judgments against Delta County Levee Improvement District No. 2.

The mandamus directed the appellants to raise funds to extinguish the judgment debts owed to the appellees. The debts are the result of default on bonds sold in 1919 to finance proposed projects of the Delta County Levee Improvement District. Appellees are the assignees of judgment liens secured when the district defaulted on the bonds. The appellants are the Delta County Levee Improvement District No. 2, its supervisors and the Delta County Commissioner's Court.

Action was initiated by the appellees to collect on the judgment liens. Mandamus was sought to compel the appellants to levy and assess new taxes and collect delinquent taxes to raise the necessary funds.

The continuing validity of the appellees' claims was established in prior appeals to this Court and to the Supreme Court of Texas. Leonard v. Delta County Levee Improvement Dist. No. 2, 507 S.W.2d 333 (Tex.Civ.App. Texarkana 1974), aff'd 516 S.W.2d 911 (Tex.1975), cert. denied, 423 U.S. 829, 96 S.Ct. 48, 46 L.Ed.2d 46 (1975). Upon remand of the case the trial court directed the clerk to issue a writ of mandamus. From that order the appellants have perfected this appeal.

The appellees assert that all of the appellants' points of error were overruled in the prior appeal of this case, and that the law of the case doctrine precludes further consideration of those points. The application of the law of the case doctrine constitutes a threshold issue for this appeal.

This Court had occasion to apply the doctrine most recently in Dessommes v. Dessommes, 543 S.W.2d 165, 169 (Tex.Civ.App. Texarkana 1976, writ ref'd n. r. e.). The law of the case was said to be established when a question of law is determined in an appeal to a court of last resort, and to be controlling in all subsequent stages including retrial and subsequent appeal. See generally 4 Tex.Jur.2d, Rev., Part 2, Appeal & Error Civil Cases, Sec. 997, p. 730.

The various jurisdictions have been noted to differ on the application of the doctrine to points which were not necessarily involved in the former appeal or which would have been, but were not raised there. 5 Am.Jur.2d, Appeal and Error, Sec. 752, p. 196.

In Texas, the doctrine of the law of the case has been held inapplicable to questions of law that were not decided by the appellate court on the prior appeal. Magnolia Park Co. v. Tinsley, 96 Tex. 364, 73 S.W. 5 (1903); 4 Tex.Jur.2d, Rev., Part 2, Appeal & Error Civil Cases, Sec. 1004, p. 738.

The prior appeal of the instant case was concerned only with the possible legal justification for an order of mandamus which had been refused by the trial court. At issue was whether or not there was a valid, enforceable obligation owed the appellees for which mandamus of the appellants would lie. This Court and the Supreme Court of Texas both answered in the affirmative and the case was remanded to the trial court.

The present appeal concerns the validity of the mandamus as directed to be issued by order of the trial court after the remand of the case. The asserted flaws in the mandamus were not considered in the prior appeal because the order directing the mandamus to be issued was not then in being. This conclusion is unaffected by the fact that the issues now before this Court may have been foreshadowed by the briefs of the parties in the prior appeal. The order for the mandamus not being viable at that time, any shortcomings it might have had when finally decreed were not ripe for consideration.

This Court must proceed then to rule on the merits of the appellants' points of error. At issue is how, not whether, the appellees will be paid.

The appellants' first point of error complains of the order of the trial court that taxes be levied, assessed and collected from 1919 to date. The appellants assert the application of Article 7336f, Tex.Rev.Civ.Stat.Ann. (Supp. 1976-1977), which bars the collection of ad valorem taxes which became delinquent prior to December 31, 1939.

The collection of these delinquent taxes was coupled by the trial court with the assessment of new taxes in a complex order aimed at retiring the debt by the year 1982. The order requires that new taxes retire 20% of the debt each year beginning in 1978, but allows any proceeds received from the collection of delinquent taxes to be credited against the amount to be raised the following year.

The delinquent taxes in the instant case date back to the time of the creation of the District in 1919. When the sale of construction and maintenance bonds was authorized, so was the levying of a tax to pay the interest on the bonds and to provide a sinking fund for their retirement at maturity.

The appellees assert that assessment of these taxes was part of the contractual obligation between its assignors and the appellants. Cited as authority is Edwards v. Kearzey, 96 U.S. 793, 24 L.Ed. 793 (1877), which holds that the remedy subsisting when a contract is made is part of its obligation. Insofar as Article 7336f impairs that obligation, the appellees contend that the statute is in violation of the contract clause of the U. S. Constitution, article I, Sec. 10.

The appellants respond that Article 7336f has no effect on the obligation to pay off the bonds, but merely changes the remedy by which payment can be sought by narrowing the scope of taxable years. Permissible changes of remedy have often been distinguished from prohibited impairments of obligation. Aikens v. Kingsberry, 247 U.S. 484, 38 S.Ct. 558, 62 L.Ed. 1226 (1918); Simmons v. City of El Paso, 320 F.2d 541 (5th Cir. 1963), rev'd on other grounds, 379 U.S. 497, 85 S.Ct. 577, 13 L.Ed.2d 446 (1965); Paschal v. Perez, 7 Tex. 348, 365 (1851); and see generally 8A Texas Digest, Constitutional Law, k169. The basis of this distinction lies largely in reasonableness unguided by definitive rules. 16 Am.Jur.2d, Constitutional Law, Sec. 456, p. 810. A total or substantial impairment of remedy will be held to have a corresponding impairment of obligations. 3 Corbin On Contracts, Sec. 551, p. 200. A change in remedy which leaves adequate and substantial alternative remedies will be upheld. 12 Tex.Jur.2d, Constitutional Law, Sec. 128, pp. 475, 476; Lingo Lumber Co. v. Hayes, 64 S.W.2d 835 (Tex.Civ.App. Dallas 1933, no writ). If the value of the contract has not been diminished, then its obligation has not been impaired. Dallas County Levee Improvement Dist. No. 6 v. Rugel, 36 S.W.2d 188, 189 (Tex.Com.App.1931, jdgmt. adopted).

Texas authorities most nearly on point have held that when an act of the state legislature authorizing a bond issue creates or authorizes the creation of a certain fund for the bonds' payment, such provision of the act cannot be repealed without the substitution of something of equal efficacy. City of Aransas Pass v. Keeling, 112 Tex. 339, 247 S.W. 818, 821 (1923); City of Austin v. Cahill, 99 Tex. 172, 88 S.W. 542 (1905). The constitutional issue is not what the...