Luter v. Pulaski County Hospital Ass'n.

• Decision Date: 19 January 1931
• Docket Number: No. 91.,91.
• Citation: 182 Ark. 1099,34 S.W.2d 770
• Parties: LUTER v. PULASKI COUNTY HOSPITAL ASS'N.
• Court: Arkansas Supreme Court

Page 770

34 S.W.2d 770

182 Ark. 1099

LUTER v. PULASKI COUNTY HOSPITAL ASS'N.

No. 91.

Supreme Court of Arkansas.

January 19, 1931.

Appeal from Pulaski Chancery Court; Frank H. Dodge, Chancellor.

Suit by J. W. Luter against the Pulaski County Hospital Association. From a decree dismissing the complaint, plaintiff appeals.

Reversed and remanded, with directions.

Robert J. Brown, Jr., of Little Rock, for appellant.

Rose, Hemingway, Cantrell & Loughborough, of Little Rock, for appellee.

SMITH, J.

The complaint filed by appellant, a taxpayer of Pulaski county, alleges: "That the Pulaski County Hospital Association is a * * * corporation * * * under the laws of the State of Arkansas, * * * and, as such corporation, it proposes to build and finance a hospital by the sale of interest bearing bonds, * * * which hospital it proposes to sell to Pulaski county, Arkansas, which sale will carry with it the assumption by said county of the said interest bearing bonds. * * *" The cost of the construction of the hospital will be about $600,000, a sum larger than the county can pay out of a single year's revenue, but the county can pay for the hospital by meeting the annual bond maturities, thus distributing the payment of the cost of the hospital over a period of years. The plaintiff alleges this proposed contract is violative of the Constitution and laws of the state, and prays that it be enjoined. His demurrer to the answer, which alleged the ability of the county to pay for the construction of the hospital by distributing its cost over a period of years, was overruled, and, as he stood on his demurrer to the answer, the complaint was dismissed, and he has appealed.

At the 1923 session of the General Assembly, an Amendment to the Constitution was proposed to be voted on as Amendment No. 11 (see General Acts 1923, p. 797). The amendment was adopted at the ensuing general election (Brickhouse v. Hill, 167 Ark. 513, 268 S. W. 865), and it has since been commonly referred to as Amendment No. 11, and has been so designated in the numerous cases which construe or refer to it. The correct number of the amendment, according to Applegate's Constitution of Arkansas, Annotated, page 219, is No. 8, and it will be referred to herein by that number.

This amendment was designed to amend section 4 of article 12 of the Constitution by adding three paragraphs thereto, the first of which reads as follows:

"The fiscal affairs of counties, cities and incorporated towns shall be conducted on a sound financial basis, and no county court or levying board or agent of any county shall make or authorize any contract or make any allowance for any purpose whatsoever in excess of the revenue from all sources for the fiscal year in which said contract or allowance is made; nor shall any county judge, county clerk, or any other county officer, sign or issue any scrip warrant or make any allowance in excess of the revenue from all sources for the current fiscal year; nor shall any city council, board of aldermen, board of public affairs, or commissioners, of any city of the first or second class, or any incorporated town, enter into any contract or make any allowance for any purpose whatsoever, or authorize the issuance of any contract or warrants, scrip or other evidence of indebtedness in excess of the revenue for such city or town for the current fiscal year; nor shall any mayor, city clerk, or recorder, or any other officer or officers, however designated, of any city of the first or second class or incorporated town, sign or issue any scrip, warrant or other certificate of indebtedness in excess of the revenue from all sources for the current fiscal year."

A literal reading of the language quoted would compel the conclusion that the governmental agencies named were prohibited from contracting obligations of any character in any fiscal year in excess of the revenues for that year. In other words, they must pay as they go, and can go only so far as they pay, and are not to make or authorize any contract, or make any allowance, for any purpose whatsoever in excess of the revenue from all sources for the fiscal year in which said contract or allowance is made.

We have had frequent occasion to construe this amendment. Kirk v. High, 169 Ark 152, 273 S. W. 389, 392, 41 A. L. R. 782; Babb v. El Dorado, 170 Ark. 10, 278 S. W. 649; Jewett v. Norris, 170 Ark. 71, 278 S. W. 652; Nelson v. Walker, 170 Ark. 170, 279 S. W. 11; Airheart v. Winfree, 170 Ark. 1126, 282 S. W. 963; Martin v. State ex rel. Saline County, 171 Ark. 576, 286 S. W. 873; McGregor v. Miller, 173 Ark. 459, 293 S. W. 30; Independence County v. Lester, 173 Ark. 796, 293 S. W. 743; Dixie Culvert Mfg. Co. v. Perry County, 174 Ark. 107, 294 S. W. 381; Lybrand v. Wafford, 174 Ark. 298, 296 S. W. 729; Ivy v. Edwards, 174 Ark. 1167, 298 S. W. 1006; Polk County v. Mena Star Co., 175 Ark. 76, 298 S. W. 1002; Lake v. Tatum, 175 Ark. 90, 1 S.W.(2d) 554; Jackson v. Madison County, 175 Ark. 826, 300 S. W. 924; Hagler v. Arkansas County, 176 Ark. 115, 2 S.W.(2d) 5; Campbell v. High, 176 Ark. 222, 2 S.W.(2d) 1101; Miller v. State to Use of Woodruff County, 176 Ark. 889, 1 S.W.(2d) 998; Norman v. Blair, 177 Ark. 649, 7 S.W.(2d) 328; Kleiner v. Parker, 177 Ark. 671, 8 S.W.(2d) 434; Chesnutt v. Yates, 177 Ark. 894, 9 S.W.(2d) 37; Dixie Culvert Mfg. Co. v. Perry County, 178 Ark. 454, 12 S.W.(2d) 10; Carter v. Cain, 179 Ark. 79, 14 S.W.(2d) 250.

The first of these cases, that reported under the style of Kirk v. High, was a consolidated case involving appeals from Lonoke and Nevada counties. In the Lonoke county case it was proposed to build a courthouse, and in the Nevada county case a jail, and it was conceded that neither county could proceed if the amendment were given a literal interpretation, for the reason that the revenues of the counties were insufficient to pay the construction cost of the proposed buildings in a single year.

The construction of the amendment, in view of the practical problem presented, gave us the greatest concern, and, as appears from the report of the case, three opinions were written.

The present Chief Justice was of the opinion that courthouses and jails were absolutely necessary in the administration of the state government, and that the amendment was not designed to take away the powers of counties to repair and erect courthouses and jails which were possessed before its adoption. Judge McCulloch, the then Chief Justice, construed the amendment literally, and expressed the view, in a...