Kirk v. Douglass

• Citation: 3 S.E.2d 536,190 S.C. 495
• Decision Date: 16 June 1939
• Docket Number: 14903.
• Parties: KIRK v. DOUGLASS, Sheriff.
• Court: United States State Supreme Court of South Carolina

3 S.E.2d 536

190 S.C. 495

KIRK v. DOUGLASS, Sheriff.

No. 14903.

Supreme Court of South Carolina

June 16, 1939

Samuel Want, Sam Rogol, and James Verner, all of Darlington, for appellant.

George K. Laney, J. E. Leppard, and C. L. Hunley, all of Chesterfield, for respondent.

FISHBURNE Justice.

This suit in equity was brought by the plaintiff, as the owner and holder of certain serial bonds of the face value of six thousand dollars, issued by Chesterfield County on April 1 1936, on behalf of himself and on behalf of all other owners of the same issue of bonds who may come into the cause and contribute to the prosecution of the action. The plaintiff prays for an order directing the defendant, F S. Douglass, as sheriff of Chesterfield County, to proceed with the enforcement of tax executions in his hands, in accordance with the provisions of the general laws of the state of South Carolina, and that the alleged special law approved May 9, 1938, known as Act No. 937 (Acts 1938, Page 1872), providing for the collection of delinquent taxes in Chesterfield County in five equal, successive, annual installments, commencing January 1, 1939, be declared unconstitutional. A demurrer to the complaint was sustained by a formal order and judgment entered for the defendant from which the plaintiff has appealed. The correctness of the ruling sustaining the demurrer can be determined only by examining the allegations of the complaint.

The complaint alleges, among other things, that the appellant purchased the bonds in question (a portion of an issue of $520,000 known as "Refunding Bonds," upon the covenant of Chesterfield County that payment of the principal and interest would be provided for by the levy and assessment each year of a tax sufficient to cover the same; that it was represented that the assets of the county to support the said issue of bonds included over $700,000 in delinquent taxes; that in the county supply bill for the year 1938, provision for the payment of interest on the series of bonds, of which the appellant owns a part, was made by the appropriation of a specified amount to be derived out of delinquent tax collections, and that a specific tax levy was imposed in a millage sufficient, with the appropriation of delinquent tax collections, to cover the requirements for debt service; that accordingly, in order that the interest on the bonds in question might be provided for, it was essential that the delinquent tax collections and the specific tax levy both be available; that the April 1, 1938, coupons on the appellant's bonds were not paid when the same fell due because of lack of funds, although they were later paid, but without any compensation for the delay; that by reason of the matters further set forth in the complaint the county will not have the funds with which to pay the October 1, 1938, coupons when the same mature.

The complaint then charges that the Legislature enacted a law (Acts 1938, Page 1872) providing for the collection of delinquent taxes in Chesterfield County in five equal, successive, annual installments, commencing January 1, 1939, thereby in effect prohibiting the sheriff of Chesterfield County from collecting delinquent taxes during the year 1938, or prior to January 1, 1939, under the general law; and it is alleged that the respondent sheriff has given obedience to said statute, and has failed and refused to enforce payment of delinquent tax executions, and will continue to refrain from enforcing them.

It is further alleged "that in the appropriation bill for Chesterfield County for the year 1938, the amount necessary to pay the principal and interest on the above described issue of bonds is stated to be Twenty Five Thousand Five Hundred ($25,500.00) Dollars, and the total amount necessary to pay all of the principal and interest of the bonded indebtedness of the county which will accrue during the year 1938 is stated to be Sixty Two Thousand One Hundred ($62,100.00) Dollars; that to pay said amount of Sixty Two Thousand One Hundred ($62,100.00) Dollars, Forty Thousand ($40,000.00) Dollars is appropriated out of monies to be collected from delinquent taxes during the fiscal year beginning July 1st, 1938; that, however, by reason of the enactment of the aforementioned statute no such amount of delinquent taxes can be reasonably expected to be collected, since by said statute delinquent taxpayers are specifically advised that they are not required to pay any delinquent taxes prior to January 1st, 1939, and that no penalty will accrue if they delay payment until then, and that at such time they will be enabled to divide their delinquent tax obligations into five annual payments; and the plaintiff is informed and believes that it clearly appears from the records of the sheriff of Chesterfield County that except under pressure by the sheriff within the provisions of the general law of the state relating to the collection of delinquent taxes, no substantial amount thereof can be or will be collected by him prior to January 1st, 1939."

It is charged in the complaint that the aforesaid Act is unconstitutional, in that it is a special law applying only to Chesterfield County in a case already covered by the general laws of the state. And it is further charged that the Act violates the provisions of the Constitution of the United States and the Constitution of South Carolina (U. S. Constitution, Sec. 10, Art. I, U.S.C.A.; S. C. Constitution, 1895, Sec. 8, Art. 1), in that it impairs a contractual obligation of Chesterfield County to the appellant and other bondholders in respect to the security and provisions for the payment of the bonds.

It is alleged that the appellant has no adequate remedy at law, and the complaint prays for general relief, and for the costs of the action.

At the time of the issuance and sale of the bonds in question on April 1, 1936, as shown by the complaint, the general laws of the state of South Carolina required the sheriff of Chesterfield County to collect delinquent taxes by the levy of executions therefor, which executions were required to be turned over to the sheriff by the treasurer of the county on April 15th following the close of the calendar year for which said taxes were assessed and levied, and to sell the property upon which the taxes were so assessed and levied, in the event that such tax executions were not paid.

It is provided in Section 10, Article I of the Constitution of the United States, that no state shall pass any law "impairing the Obligation of Contracts," and in Section 8, Article I of the Constitution of this state, that the Legislature shall not pass any "law impairing the obligation of contracts." The language of the two Constitutions in this respect is identical. Any law which impairs the obligation of a contract is prohibited. The question, however, as to whether or not a law impairs the obligation of a particular contract is not always of easy solution. The provisions of the Constitutions quoted have given rise to prolific litigation, and in its varied applications has been the...