Miller Levee Dist. No. 2 v. Evers

• Decision Date: 11 March 1940
• Docket Number: No. 4-5820.,4-5820.
• Citation: Miller Levee Dist. No. 2 v. Evers, 137 S.W.2d 915 (Ark. 1940)
• Parties: MILLER LEVEE DIST. NO. 2 v. EVERS, Tax Collector.
• Court: Arkansas Supreme Court

Page 915

137 S.W.2d 915

MILLER LEVEE DIST. NO. 2 v. EVERS, Tax Collector.

No. 4-5820.

Supreme Court of Arkansas.

March 11, 1940.

Dissenting Opinion March 18, 1940.

Appeal from Miller Chancery Court; A. P. Steel, Chancellor.

Action by Miller Levee District No. 2 against Jewel Evers, Tax Collector, for a writ of mandamus to compel defendant to deliver the delinquent list of lands on which levee taxes were due for the year 1938, payable in 1939, and file same so that foreclosure proceedings might be had thereon. From a judgment of dismissal, plaintiff appeals.

Judgment reversed with directions.

Henry Moore, Jr., of Texarkana, for appellant.

Dick Huie, of Arkadelphia, for appellee.

BAKER, Justice.

The appellant states the controversy upon this appeal as follows: "The real matter at issue in this cause is the constitutionality of Act 163 passed by the General Assembly of the State of Arkansas during the year 1939. Said act changes the date when the delinquent list shall be delivered by the collector to the chancery clerk of the county as set forth in Act 534 of the year 1921, from the second Monday in June to the 15th day of October and changes the date when 6 per cent. interest accrues on delinquent taxes from April 10th to October 1st."

Attention is called to Act 534 of 1921, which requires taxes upon the assessment in all levee and drainage districts to be paid on or before the 10th day of April of each year, and the collector to make return of or report all delinquencies by the second Monday in June each year. The change from provisions of Act 69 of 1911, a local act forming appellant district, was deemed immaterial and the district without contest, proceeded thereafter yielding obedience to said Act. In this case the semi-annual interest of Miller Levee District No. 2 and bonds of the said district became due in certain amounts upon June 1st of each year. The extension of the time of payment of taxes under Act No. 163 of 1939 has delayed final collections until October 1st, and for that reason it is alleged the district was unable to collect taxes and meet the maturities upon bonds and interest due on June 1st, 1939, and according to the usual course of things such default will occur each year thereafter if Act 163 of 1939 be held effectual to authorize such delays in such payments.

Our attention is called to the fact that since no penalty can attach until there is actual delinquency, it must be held that taxpayers naturally will not make payment until time fixed by law as applicable to such situations. The complaint in this case set up these facts and alleged that by reason of the passage of Act 163 enacted by the General Assembly of 1939, the date that the collector should file a list of lands delinquent for non-payment of levee taxes, was extended from the 10th day of April until the 1st of October of each year; that by reason thereof, since no interest can be charged until there is delinquency, the district would lose the interest from the 10th day of April until the 1st day of October, though the district would have to continue to pay interest during this period upon the bonds issued by it. Operating under such act and under such conditions, there would ordinarily be expected not only a delinquency but most probably a default on the part of the district in meeting its maturing interest on bond payments. The expected actually happened and there was a default. A further resulting effect of defaulting payments of bonds would be seriously to impair the credit of a levee district and make it unable to comply with the contractual obligations entered into by it as evidenced by the issuance and sale of its bonds. In this suit the levee district prayed the court to declare Act 163 aforesaid to be in contravention of the contract clause of the Constitution of the State of Arkansas (article 2, § 17) and of the United States (Const. art. 1, § 10) and to hold the same null and void and of no effect.

Plaintiff further prayed for a writ of mandamus to compel Jewel Evers, the tax collector, to deliver the delinquent list of lands upon which levee taxes were due for the year 1938, payable in 1939, which were not paid on or before April 10th, 1939, and file same so that foreclosure proceedings might be had thereon. Such were the anticipated effects of this legislation as pleaded.

There was a demurrer by the tax collector to this complaint which was sustained by the trial court and plaintiff, refusing to plead further, the action was dismissed and from this decree of the chancery court, we have this appeal. Since the demurrer admitted the facts pleaded we have felt at liberty to state as actual facts such anticipated results now brought forward by brief. We do not think it necessary that there be a declaration that said Act 163 of 1939 is invalid as argued by appellant to accomplish the result appellant desires, that is, the right to perform its contract made by the district with the bondholders in the execution and delivery of its bonds.

Ordinarily suits of this character are brought and prosecuted by bondholders who challenge such legislation as working an impairment of the obligation of the contract. However, we think any party to the contract may rightfully insist upon its performance, and that any legislative effort to change substantially any of the essential provisions of the contract should not patiently be considered. Unforeseen economic conditions sometimes warrant change or even substitution of remedies for the protection of those who may be oppressed and such mutations may promote the general welfare.

Therefore, we approach our task in full recognition that there is a well grounded doctrine that every legislative act is clothed with a presumption of legality, if reasonably susceptible of an interpretation, free from constitutional inhibition. Accordingly appellant insists that if contract be treated as amended conformably to Act 163 of 1939, there will hereafter each year be a loss of about $900 and a default in interest and bonds maturing in June.

The appellee in this case relies upon a line of authorities which distinguishes between the impairment of the contractual obligation and a change in the remedies in existence at the time the contract was made and contends that there is no fixed or vested right in remedial legislation. Like most platitudes this position is a safe and sane one, unless followed to the ultimate conclusion, in which event the result would be as disastrous as the destruction of a part of the contractual obligation. Legislation which provides a change of remedies has been upheld and the new legislation substituted therefor calling for the change or new remedy not less effectual than the old, has ordinarily been accepted, but not always so.

Appellee frankly comments upon the decision of the Home Building & Loan Association v. Blaisdell, 290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 413, 88 A.L.R. 1481, and says that "it constitutes the most liberal interpretation ever made of the contract clause".

Since the foregoing opinion was written at a time of general distress throughout the world it perhaps may well be doubted if such an opinion would now be possible in any of the appellate courts of the United States. There were many conditions prevailing at that period that most likely will never happen again or will there ever be a necessity, such as then prevailed, to justify the great volume of remedial and relief legislation of that particular period.

Following the same line of authority seeking to create the same kind of general relief, our own legislature offered several relief measures, the validity of which was challenged in the case of W. B. Worthen Company et al. v. Kavanaugh, 295 U.S. 56, 55 S.Ct. 555, 79 L.Ed. 1298, 97 A.L.R. 905. The effect of this legislation is fully set out in the cited opinion. The questioned legislation had to do almost exclusively with the remedy. There was only an effort to delay the enforcement of obligations until a more opportune time, wherein property owners might become able to pay. Certainly in that legislation the same condition prevailed under which appellee now takes refuge when he says, quoting: "In all such cases the question becomes, therefore, one of reasonableness, and of that the legislature is primarily the judge." Sturges v. Crowninshield, 4 Wheat. 122, 200, 4 L.Ed. 529, 550.

So thought our own legislature and this court when it rendered its opinion which was later reversed on appeal to the Supreme Court of the United States. We now quote from the decision of the United States Court in its decision of this particular case involving legislation of this state, which affected the remedy as was then held. "To know the obligation of a contract we look to the laws in force at its making [citing cases]." W. B. Worthen Co. v. Kavanaugh, supra [295 U.S. 56, 55 S.Ct. 556, 79 L.Ed. 1298, 97 A.L.R. 905].

Before we leave that pertinent remark of the highest court of our land, we make another application of it in the matters we now consider. The levee district involved in this suit was created by Act 69 of 1911. Turning to Section 6 of that Act we find, "if the levee taxes as assessed are not paid by the tenth day of April of each year, a penalty of twenty-five per cent (25%) shall at once attach for said delinquency * * * and interest on [said tax] from the tenth day of April of the year in which default in payment is made, at the rate of six per cent (6%) per annum."

Attention is called to Section 15 of the said Act, which provides that the collector of Miller County shall make annual settlements with the treasurer of the levee board on the last Monday of April each year, and at such times shall also turn over to said treasurer the tax books showing such taxes as have been paid and such as are delinquent.

We are again cited to a part of Section 32 of the said Act wherein it is made the duty of the levee board and all officers charged with...