State ex rel. Wm. L. Moose, Attorney General v. Kansas City & Memphis Railway & Bridge Company

• Decision Date: 16 November 1914
• Docket Number: 243
• Citation: 174 S.W. 248,117 Ark. 606
• Parties: STATE ex rel. WM. L. MOOSE, ATTORNEY GENERAL v. KANSAS CITY & MEMPHIS RAILWAY & BRIDGE COMPANY
• Court: Arkansas Supreme Court

174 S.W. 248

117 Ark. 606

STATE ex rel. WM. L. MOOSE, ATTORNEY GENERAL v. KANSAS CITY & MEMPHIS RAILWAY & BRIDGE COMPANY

No. 243

Supreme Court of Arkansas

November 16, 1914

[Copyrighted Material Omitted]

Appeal from Crittenden Chancery Court; John M. Rose, Special Chancellor; reversed.

STATEMENT BY THE COURT.

March 1, 1887, the Arkansas General Assembly passed an act to provide for the collection of overdue taxes from corporations doing business in the State. Acts of 1887, p. 33; Kirby's Digest, § § 7204 to 7213, inclusive. It was amended by an act of May 30, 1911, as to the compensation to be paid to counsel employed to assist the Attorney General. Acts of 1911, p. 324. The title of that act was "An act to amend section 7204 of Kirby's Digest of the Statutes of Arkansas, which provides for the collection of overdue taxes form corporations." It divided the original section into sections 1 and 2, the latter section containing the amendment. Section 3 repealed conflicting laws and put the act into effect from the time of its passage. The first section of the act, section 7204, was further amended by the act of March 12, 1913, which is entitled "An act to amend section 1 of Act No. 354 of the Acts of 1911, approved May 30, 1911." Section 2 repealed all laws in conflict and added an emergency clause. Acts of 1913, p. 724. Section 7204, as amended, with the words added by the amendment in italics and those omitted from the original section in brackets, reads as follows:

"Where the Attorney General is satisfied from his own investigation or it is made to appear to him by the statement in writing of any reputable taxpayer of the State, that in consequence of the failure from any cause to assess and levy taxes, or because of any pretended assessment and levy of taxes upon any basis of valuation other than the true value in money of any property hereinafter mentioned or because of any inadequate or insufficient valuation or assessment of such property, or under- valuation thereof, or from any other cause, that there are overdue and unpaid taxes owing to the State, or any county or municipal corporation, or road district, or school district, by any corporation, (or) upon any property now in this State which belonged to any corporation at the time such taxes should have been properly assessed and paid, that it shall become his duty to at once institute a suit or suits in chancery in the name of the State of Arkansas, for the collection of the same in any county in which the corporation owing such taxes may be found, or in any county in which any part of such property as may have escaped the payment in whole or in part of the taxes as aforesaid may be situated, in which suit or suites the corporation owing such taxes, or any corporation (or person) claiming an interest in any such property as may have escaped taxation as aforesaid, shall be made a party defendant, and the Governor is authorized to employ any attorneys that may be necessary to assist the Attorney General in such suits provided, that this act shall be construed as retrospective as well as prospective in operation."

Section 7205 provides for constructive service where actual service can not be had.

Section 7206 provides that the complaint shall describe as nearly as may be the property on which said taxes have accrued, and that the State, counties, school districts and municipal corporations aforesaid shall have a lien on said property from the passage of this act, for the payment of said overdue taxes, to be enforced by suit as herein provided.

Section 7207 provides that upon final hearing the court shall determine the amount of said State, county, school district and municipal taxes, and the penalty and costs due on the same, if any, and to whom said taxes are payable, and shall decree payment thereof accordingly; that when for any reason any of the property has not been assessed, the court shall refer the matter of such assessment to the county assessor who shall make his assessment for the past year or years mentioned in the order of reference, and return the same into court; and provides for a like reference of the assessment of delinquent railroad property to the proper officer or commissioners who shall report their assessment to the court, and that the court shall have power to hear testimony and to change said assessment as justice and equity may require.

Section 7208 provides for the rendition of a decree declaring and enforcing the lien for such taxes by a sale of the property; and in case of a railroad, the lien shall be decreed against the whole line of the road, including the main line and sidetracks, switches, turnouts, improvements, stations, structures, rights-of-way, embankments, tunnels, cuts, ties, trestles, bridges, and all lands in the State belonging to such corporations; and that the taxes shall be paid within three months after rendition of decree, with a penalty of ten per cent per annum after default.

Section 7209 provides that the sale shall be made in the same manner as other sales in foreclosure of liens in chancery, and with like effect, and for a distribution of the funds owing the State, counties, etc., entitled thereto.

Section 7210 gives all parties interested in the property the right to redeem within one year from date of sale, by paying into court the amount of the decree and penalty on same, at the rate of 25 per cent per annum.

Section 7211 provides for the execution of deed to purchaser if no redemption is made.

Section 7212 gives precedence to the suites and limits time for taking appeal to thirty days from date of the decree.

Section 7213 provides that the decree in the suit shall be for all taxes due the State, and to the counties, cities and other political subdivisions of the State, and that it shall not be confined to the taxes due in the county in which the suit is brought.

Prior to the passage of the act of 1913, the State, on the relation of the Attorney General, filed a suit in the chancery court of Critterden County, against the Kansas City & Memphis Railway & Bridge Company to collect back taxes on its railroad and bridge property, alleging that it had not been adequately assessed for the years 1893 to 1910, inclusive.

A general demurrer to the complaint was sustained and the decree dismissing the action was affirmed by this court. State ex rel. Atty. Genl. v. K. C. & M. R. & B. Co., 106 Ark. 248.

It was held that the statute only gave the State a remedy by way of review by the courts where the assessing boards or officers had proceeded on the wrong basis of valuation, in omitting some property or element of value, or in adopting the wrong basis of estimating value, and that it did not authorize a review whereby a mistake had been made in assessing value of property too low. The amendatory act of 1913 was passed shortly afterward, and the present suit was filed in the same chancery court against the same defendant, to recover the back taxes on the same property for the years 1893 to 1912, inclusive.

The complaint alleges that the defendant is a railroad corporation organized under the laws of Arkansas; that in 1892 it built a railroad and a bridge across the Mississippi River opposite Memphis, Tennessee; that one-half of said property is situated in Crittenden County, Arkansas, in School District No. 8, and Road District No. 1; that the defendant now owns and has always owned said property in fee, and that it was subject to taxation in said county; that it was assessed in each of said years for taxation at less than one-sixth of its actual and true value; that the assessments upon which the defendant has paid taxes for each of said years has been upon an inadequate and insufficient valuation and upon an undervaluation thereof, and that there were overdue taxes owing by the defendant on said property of not less than $ 800,000. Prayer for decree ascertaining the true amount of taxes which should have been paid and for the recovery thereof.

A general demurrer to the complaint was sustained and the cause dismissed. Plaintiff appealed.

Cause reversed and remanded.

Wm. L. Moose, Attorney General, and A. B. Shafer and C. H. Trimble, Special Counsel, for appellant.

Rose, Hemingway, Cantrell, Loughborough & Miles, W. J. Orr, Moore, Smith & Moore and W. F. Evans, for appellee.

MCGILL, Special J., WOOD, J., dissents. SMITH, J., disqualified.

OPINION

MCGILL, Special J., (after stating the facts).

The first contention in support of the demurrer to the complaint is that the act of 1913 should be so construed as to limit its retrospective effect to that feature of the amendment which restricts the remedy to property owned by a corporation at the time of the passage of the amendatory act, and, if not so limited, so as to confine its retrospective operation to the period between the passage of the act of 1911 and the act of 1913.

The established rule is that all statutes are to be construed as having only a prospective operation, unless the purpose and intention of the Legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used. 36 Cyc. 1203; Fayetteville B. & L. Assn. v. Bowlin, 63 Ark. 573, 39 S.W. 1046; Beavers v. Myar, 68 Ark. 333, 58 S.W. 40; Ely v. Holton, 15 N.Y. 595; N. Y. & O. M. R. R. Co. v. VanHorn, 57 N.Y. 473; Chew Heong v. United States, 112 U.S. 536; Shreveport v. Cole, 129 U.S. 36, 32 L.Ed. 589, 9 S.Ct. 210; City Ry. Co. v. Citizen's St. R. R. Co., 166 U.S. 557, 41 L.Ed. 1114, 17 S.Ct. 653.

In the act of 1913 the purpose and intention of the Legislature that it should have a retrospective effect is expressly declared. But because it does not specify that it is to apply to each separate provision, and on the...