Straughn v. Berry
| Decision Date | 09 March 1937 |
| Docket Number | 27378. |
| Parties | STRAUGHN, County Treasurer, v. BERRY et al. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
1. The law existing at the time of the issuance of municipal bonds and under the authority of which they are issued, enters into and becomes a part of the contract in such a way that the obligation of the contract cannot thereafter be in any way impaired, or its fulfillment hampered or obstructed, by a change in the law.
2. Certain special improvement bonds were issued by the city of Stillwater pursuant to the provisions of chapter 173, Session Laws 1923. Section 25 of that Act (11 Okl.St.Ann. § 105) provides for the payment of 12 per cent. interest on delinquent installments on special assessments and provides for the application of said interest to payment of the bonds and interest coupons. Substantial sums due upon the bonds were outstanding and unpaid. Held, that section 4 article 15, chapter 66, Session Laws 1935, providing that "All penalties interest and costs that have accrued on unpaid special assessment taxes levied and assessed for the year 1932 and all prior years are hereby waived, canceled and released," is violative of section 15, article 2 of the Constitution, as impairing the obligation of a contract, and is invalid and ineffective.
Appeal from District Court, Payne County; Henry W. Hoel, Judge.
Action by Thomas E. Berry and another against Harold W. Straughn County Treasurer of Payne County. Judgment for plaintiffs and defendant appeals.
Reversed and remanded, with directions.
Leon J. York, Co. Atty., of Stillwater, for plaintiff in error.
John W. Whipple, of Stillwater, for defendants in error.
This is an appeal from a judgment of the district court of Payne county wherein the court ordered Harold W. Straughn, County Treasurer of Payne County, hereinafter referred to as defendant, to accept payment of certain delinquent special assessments levied and assessed against certain real property in the city of Stillwater for the year 1932 and prior years without requiring payment of interest and penalties accrued thereon. The property owners, Thomas E. Berry and Sam M. Myers, Jr., will be hereinafter referred to as plaintiffs.
The cause was tried upon a stipulation of facts. It was stipulated that plaintiffs were the owners of certain vacant unimproved city lots in the city of Stillwater, located in Street Improvement Districts No. 31 and 57; that said real estate was liable for the payment of certain special assessments levied against it as a portion of the cost of improving the adjacent streets; that installments for the year 1924 to 1935, inclusive, were unpaid. It was further stipulated:
"That said plaintiffs desire to pay said paving assessments, together with the delinquent ad valorm taxes on said real estate, together with penalties and redemption fees as provided by law, but that said County Treasurer refuses to receive payment of said special assessments unless there is also paid penalties thereon from the delinquent date thereof.
That it is the contention of said plaintiffs that all penalties, interests and costs which have accrued on said unpaid special assessment taxes for the year 1932 and all prior years, have been waived, cancelled, and released and that said special assessments for the year 1932 and all prior years, not having been paid on or before December 1, 1935, at a rate of 12% per annum as provided by section 4 of article 15 of chapter 66, Session Laws of 1935.
It is stipulated and agreed by and between the parties hereto that there are outstanding and unpaid the sum of $8,347.57 in street improvement bonds assessed against street improvement District No. 57 and $1,000.00 in street improvement bonds assessed against street improvement district No. 31; which bonds are now held and owned by persons unknown to the parties hereto.
It is the contention of the County Treasurer that he has no right and that it is not his duty to accept payment of special assessment taxes in those cases where there are outstanding and unpaid street improvement bonds against any paving district unless the penalty thereon is paid in full from the delinquent date of each of said installments.
It is also stipulated and agreed by and between the parties hereto that plaintiffs have heretofore tendered to the defendant, Harold W. Straughn, County Treasurer of Payne County, Oklahoma, all of the assessments heretofore referred to the sum of $2,362.99, less penalties attached thereto, and said defendant has refused to accept payment of same."
When the districts were created and the bonds were issued, chapter 173, Session Laws 1923, was in effect. Section 25 of said act (section 6236, O.S.1931 [11 Okl.St.Ann. § 105]) in part provides:
On February 8, 1935, article 15, chapter 66, Session Laws 1935, became effective. Section 4 of that act provides:
It is the contention of plaintiffs that the above-quoted section is effective to waive and release the interest and penalties accumulated upon the assessments involved herein and that it was the duty of the county treasurer to accept payment of the principal amounts due without requiring payment of said interest and penalties, while defendant contends that said section is unconstitutional.
It has been held that laws existing at the time of the issuance of municipal bonds and under the authority of which they are issued enter into and become a part of the contract in such a way that the obligation of the contract cannot thereafter be in any way impaired, or its fulfillment hampered or obstructed by a change in the law. McGrath v. Oklahoma City, 156 Okl. 34, 9 P.2d 711; Nelson v. Pitts, 126 Okl. 191, 259 P. 533, 53 A.L.R. 1137; Moore v. Otis (C.C.A.8th) 275 F. 747. In the case of Brown-Crummer Inv. Co. v. City of Miami (D.C.) 40 F. (2d) 508, 509 complainant, as the holder of certain special assessment bonds issued on public improvement districts by the city of Miami, Okl., sought to enforce the application of certain funds collected as...
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