Town of Samson v. Perry

• Decision Date: 02 February 1927
• Docket Number: No. 4804.,4804.
• Citation: 17 F.2d 1
• Parties: TOWN OF SAMSON et al. v. PERRY.
• Court: U.S. Court of Appeals — Fifth Circuit

17 F.2d 1 (1927)

TOWN OF SAMSON et al. v. PERRY.

No. 4804.

Circuit Court of Appeals, Fifth Circuit.

February 2, 1927.

Wm. O. Mulkey, of Geneva, Ala., for plaintiffs in error.

O. S. Lewis, of Dothan, Ala., for defendant in error.

Before WALKER, BRYAN, and FOSTER, Circuit Judges.

WALKER, Circuit Judge.

This suit was brought in 1925 to secure the enforcement of a judgment recovered by the defendant in error against the plaintiff in error, the town of Samson, an Alabama municipal corporation, on bonds issued by that corporation in February, 1909. When those bonds were issued, the Alabama law required property to be assessed for taxation at the fair cash market value of such property, and under the Constitution of that state the town of Samson cannot levy a higher rate of taxation in any year on property situated therein than one-half of 1 per centum of the "value of such property as assessed for state taxation during the preceding year." Code of Alabama 1907, § 2152; Constitution of Alabama, § 216. An act of the Alabama Legislature, passed in 1911, provides that "the taxable property within this state shall be assessed, for the purpose of taxation, at 60 per cent. of its fair and reasonable cash value." Acts Ala. 1911, p. 185. The validity of this act under the Alabama Constitution was sustained. State v. Birmingham So. Ry. Co., 182 Ala. 475, 62 So. 77, Ann. Cas. 1915D, 436.

The just-mentioned case did not involve the question of the validity or effect of the act mentioned as to a contract of a municipal corporation entered into prior to the enactment of that statute. The funds raised by the Town of Samson by levying a tax of one-half of 1 per cent. on 60 per cent. of the actual cash value of the taxable property in that town are used and needed for governmental purposes. The effect of the decree appealed from was to require the levy for the year 1925, and for each succeeding year until the judgment mentioned shall be fully paid, of a tax of one-half of 1 per cent. on the 40 per cent. of the value of property situated in the town, which, as a result of a compliance with the above-mentioned act, was not, prior to the decree, subjected to municipal taxation.

The above-mentioned act of 1911 restricted the municipality's power to tax by making the subject of taxation 60 per cent. of the cash value of taxable property, instead of 100 per cent. of such value, which before was the subject of taxation. A result was to exempt from taxation 40 per cent. of what previously was taxable. As to the antecedent debts of the municipality, the act creating such exemption is invalid under section 10, article 1, of the Constitution, forbidding a state to pass any Law impairing the obligation of contracts. Bank of Minden v. Clement, 256 U. S. 126, 41 S. Ct. 408, 65 L. Ed. 857. We do...