946 DICKINSON V. MINGEA. [191 DICKINSON V: MINGEA. • " 4-4066 . Opinion delivered Decemlier.9,1935. 1. CONSTITUTIONAL LAW—JURISDICTION 'OF EQUITY.—The LegiSlature is without power to add to; limit or abridge the jurisdiction conferred by the Constitution .on -chancery courts 'or circuit courts acting as such, but has pow , er to regulate the exercise of their jurisdiction. • 2. MUNICIPAL CORPORATIONS—COLLECTION OF IMPROVEMENT TAXES.— • Acts 1933, No. 79, relating to municipal and certain other improvement districts, abolishing receiverships for collection of improvement district taxes and substituting a remedy by mandamus or mandatory injunction against the officers of such districts, held not invalid as an abridgment of jurisdiction of courts of equity. • • 3. MUNICIPAL CORPORATIONS — COLLECTION OF IMPROVEMENT TAXES.— thider Acts 1933, No. 79, its provisions may be invoked by .the
ARK. DICKINSID:N v. MINGEA. 947 holder of any bond of a .municipal improvement district .which .has defaulted in the payment of interest or principal thereof: 4. MUNICIPAL CORPORATIONS—APPROPRIATION OF ' IMPROVEMENT TAXES. —Under Acts 1929, No. 64, § 22, providing that municiPal improvement district taxes collected should first .be applied after payment Of cost„ to payment of overdue interest, held that an order was void which direeted, the purchase 'of bonds not due at 50 per . cent. discoUnt frem taxes collected:leaving overdue filter-.est unpaid. . 5. MUNICIPAL CORPORATIONSAPPROPRIATION OF IMPROVEMENT TAXES. --7 Acts. 1929, No. 64,'§ 22, providing that receivers of municipal improvement districts, after payment of cost, should apply taxes collected to payment of overdue interest 'and then to payMent ko rata of the district's bonds due and 'payable, held not affected 'by Acts 1933, No. 79, abolishing the remedy of receivership ,for collection of such taxes' and stibstituting the . reni . edy- of man-damus or mandatory , injunction against the officers of the.district. 6. - CONSTITUTIONAL , LAW—OBLIGATION OF CONTRACT.—The Legislature is authOriZed . to enact legiSlatiOn which merely affects the reniedY existing*at the time of the v executiorr of the Contract, Provided it does nof affect the substance of the contract. 7. CONSTITUT/ONAL LAVVr—CHANGE OF REMEDY,ACts 1933, No 79, abolishing receivership for collecting municipal improvement district taxes_and substituting the remedy by mandamus or mandatorY injunction against the officers of the districts held not , to impair' the obligation of the districts to the bondholders thereof. 8. COURTS—OPINION OF FEDERAL COURT.—The opinion of a Federal Circuit, Court of ApPeals upon, a Federal question is highly persuasive on this court, though not conclusive. • Appeal:from Grant* ' Chancery *Court ; Sam W. (1.arL ratt, Chancellor ; reversed. • - Suit by W. A. Mingea against Waterworks Improvement District of Sheridan, Ark:,* wherein Glynne Coilk Dickinson intervened and prosecuted -an appeal froM' an adverse decree. * Miles & Amsler, for appellant: • • -.S. ,I. Reid and. Rowell, Rowell & Dickey, for •appel-: lees. • • . SMITH, J. 'Waterworks Improvement -District . No. 1 of the incorporated town. of Sheridan was created ,by an ordinance of the town council on July 2, 1930. .;The ordinance was passed . pursuant to, and in conformity with, the laws of the State, authorizing that,action. Coupon bonds, which .the ordinance authorized, were issued totaling $75,000 with, interest at . 5 .per cent, per annum,
948 DICKINSON V. MINGEA. [191 payable semi-annually. To guarantee the payment of th . ese bo . nds and the . inte . rest thereon, 4. *age of the betterment. aSsessinents was made. One of thcactS of the . General Assembly, pursliant to which the bond issuuwaS authorized (and in ferce When the . bonds . Were sold and delivered) was act , N. 9. 64 of the Acts of 1929 (vol. 1, Acts 1929, page 241). .This was an act entitled "An act to simplify the system . of organizing and administering- improvement districts "in cities and tOWns." Section 22 of the act proVides . that, "if . any bond ca:.:interest coupon on any. bond . issued. ,by , any slid' improvement district is not paid within sixty days after its maturity, .it shall be the- duty 'of the chancery court, on application of the trustee for the bondholders- or of the holder of any Such bond or .• C . o . upop • s oVe • rdue, tO apPoint a . reeei'ver tO .. eolleet the taxes of . said. district." This section further provides . that. the •proceeds of the taxes and• collections - made by the receiver . "shall be applied, after payment of co -Sts, first, to overdue interest; . and then td the pdyinent 'pro; ratiz of all bonds issadd by . Said board WhiCh . .are then due and payable.' It is further provided that the receiver may . be .directed to institute •suits •to foreclose the •lien of . saidtaxes on saidland; and a suit so brought by said receiver shall be conducted in all matters as suits . by the board,. and with like . effect ;.and the decrees and deeds therein shall have . -the . same •resumption in their . fayor,-with a proviso that .w_hen . all uverdue principal: and interest .ha s . been the receiver shall be discharged and the management of the affairs of the.district resumed by the board of commissioners. , On February 2, 1935, W: A. Mingeafiled a coMplaint in the chancery court of Grant County, in whieh-the town of Sheridan is located, alleging that he was the owner of $1,000 of the bonds issued by the improvement 'district, upon which default in paying interest thereon had' been made for a period • of more than 60 days before the filing of the complaint. He prayed that, for the benefit o f himself and of all other bondholders Who desire to be made parties, a receiver be appointed to take over the affairs and the assets 'of the • improvement diStrict, • with direc-
ARK.] DICKINSON V. ' MINGEA. 949 tions to the TeceiVer to collect taxes due the district, and to foreclose the lien for the delinquent taxes. • Op the 8 a . me day the iMpTOVement diStriet entered its appearance, ; and an order 'WAS made -appeinting reCeivers Who- were 'direoted, after taking Oath and . e y ing . Volid,16 take 'possession of the records and 'asset§ Of the diStriet and' to Collect taXeF3- and institute 81.-dt§ as prayed:: The coMinissioners of thc district were • restrained from • fut-tiler action' except to comply with . the 'order' -by delivery to- the receivers; after their qualification,' of the' assets and recOrds of the 'diS-triet: : • On ',Tithe 15; 1935; a day of the . terth of theichancery court, 'a petition waS - filed . by 'the receivers, alleging; that they had been offered nine bonds of the district in denOth-inations of $1,000 each' due and payable on the firstday of SePtember, 1946,1947 and 1948.. On:the same day-the receivers " were- , authorized 'and -ordered •and directed: f o pay• fifty cents , on the dollar fiat 'for 'said nine bonds Of the said district for $1;000 . each• 'with all the interest coupons attached thereto, said payment- to be made out of the• funds now in the• hands Of the Teceivers, and they are directed to take credit for' stich • expenditures in accordance with the • order." - • 'On July 10, 1935, Glynne Cook Dickinson filed aPeti-tion for leave to. intervene. She alleged her . ownerShip of bonds Nos. 10; 11 and .12, which mature September 1; 1935; and of bonds •NOS.13; 14 and 15, which'mature Sep-tember 1, 1936: ' , She averred default in the payment of the intereSt -thereon since MaTeli1, 1933. -She alleged the suit was collusive and was . filed , by the plaintiff, "Mingea, "for the purpose of deterring and preventing other bond-holders from pursuing any aPpropriate ' remedies. which they might have against said •district forthe enforcement of its valid obligatiOns.';'. It was averred also , that the appointment of the receivers was- void,aS heing in conflict with the provisions- of act No. 79 'of:the Acts:Of •the •General AsseMbly .Of 1933. (Acts 1933; ' -page 230).. A demurrer te this pleading Wa's -• • filed; and An answer also, in which collusion was denied 'and 'the • act• 79 afofe: said was alleged•to be (iblitraTy . : to the COnstitution of this
950 DictuNsoN v. MINGEA. [191 State and contrary to , the Constitution of the United States. • . The court heard testimony upon the intervention on July . 29, 1935, and. in .the _course . of the hearing .it was agreed, that . `.`theSe men; who sold . the bonds . sold them in good; faith to the receivers ". at a price which..was thought fair to . the property . owners, and dfter that action h4a been approved by the • court. ". After hearing the testimony, whieh we think it unnecessary to yecite, the court . declined to discharge the receivers or to compel them to otherwise account for . the -money which they had paid for the honds, , and this appeal is.from that decree. . Section . 1 of. act . 79 , of the Acts , of. , 1933 reads as follows : • "Section . . Hereafter all taxes-in municipal, bridge, subu6an and Yoad maintenance improvement districts shall be collected at the time and. in; the manner and. by the , officers specified ;the • statutes creating them,.. or under which they were organized, and the duty to-properly extend and collect such: taxes ,may he *enforced by a mandamus, or .by • a. mandatory injunction in equity, at the :instance of any landowner in the district, .the trustee in any deed of trust securing the bonds .of. the district, the holder . of any. bond as to -which the district has defaulted in the payment of interest or principal,. or .any other . creditor of the district, , The remedies .herein .provided for .shall be : exclusive; and all laws.providing :for or authorizing the appointment , of a receiver 'for , any . such district, are hereby repealed, : and no court _shall appoint a receiver to collect municipal, .bridge,. suburban .or, road maintenance district . taNes." The provisions:of a similar act were involVed in the recent case- of 'Rodgers -v. Carson Lake Road-Improvement District No. 6, ante p. 112, in • which case it was prdyed that receivers -for a road improvement district be discharged upon the' authority of act No. 46; passed at the same session of the . General Assembly of identical import as act 79. except that the former applied -only to Jevee, drainage and road improvementdistricts, whereas act 79 applies to municipal, bridge, suburban and. road mainte-
ARK.] DICKINSON V. ' MINGEA: 951 nanc.e districts.- In 'the decree from which • that . appeal came, the chancellor had discharged' the receivers of the road • imp r rovement district upon the 'authority ef -act 46, hut we held that the , act was not-retroactive in its Operation, 'and did not apply to receivers appointed before the act -became effective; as waS true in that case, and for that reason we declined to pass upon the -constitutionality of act 46 or its effect, if constitntional. We . did,' however, review .the ancient jurisdictiOn of chancery cOurts in the matier of appointing receivers, and . We said • "f . The LegiSlatUre • Is without power to add th, limit or abridge 'the jUriSdiction 'Conferred en chancery courts or circuit courts acting as such by the Constitntien 'of this State"; but it'wds' there . also said that it had never been held'that the Legislattre waS withOnt poWer to' regnlate the exercise' of the jurisdietion. We there' queted from the case of Marvell-v . . State,. 127 Ark. 595, 193' S. W: 259, as follows : • " The act in ' question has not cOnferred upon : the chancery courts Of this' State any additional: ItThas merely prescribed' a 'new condition npon whiCh this ancient jurisdictio'n may' be eXercised. Theact is reinedial'in its nature, 'and, while the Legislatnre cannot 'eiilarge Or restrict the jurisdiction of Chaneery . .courts; it is entirely within the province' of the Legislature tO preseribe the proCedure for the exef-CiAe of this . jurisdiction and to' prescribe' neW 'conditions under whic • h that 'jurisdiction inat be exercised.' The chaneery courtshave not been dePrived of their -jurisdiction in regard to improvement' districts, and neither act 46 nor act 79 nianifeStS such intention. The -provisions- bf these acts, even- to their preamble, are identical except as to the desiznation of the kinds of improvement districts to which they respectively' relate. • There aPpears in he preamble tO each of these acts the following paragraph "Whereas the collectiOn 'officers 'provided "by law can *Alba iinprovement' distrid taxes more expeditiously . and at less eXPense than receivers, if they are made to 'discharge their duties." The significance of the . phrase "if they (the comthissioners of the district)' 'are made to discharge their duties'' . is •not
952 DIGIUNSON, V. MIN -GEA: [191 to .be overlooked. The verb- "made" -as. here employed means to require. or compel.: But how are:the commissioners to be'''made" to discharge their. duties l . Section 1,, above quoted, answers "by mandamus or by a mandatory injunction in equity." There is therefore no abridgment of the court's jurisdiction. The commissioners become receiyers in effect-in that they becOme .subject to the jurisdiction of the court. Tbe commissioners would thereafter report to and be , supervised by . the .court just as a receiver wotild be to the end that they were."made" to 4i.Scharge the . dtities imPosed upon. thein by law. The receivers cOnla do nO More than to 'follow:And be governed . hy the . law. , . " • Section 22 of act.,64 of . the Acts . of 1929 above re-. ferred. to, designates-the persons.who might apply to the chancery :court for . the, appointment of •areceiver for municipal improvement districts. This sect io p n rovide§ that thoapplication may be made, by the," trustees for,the bondholders," -or _``.the holder.of . any ,bond or coupons Overdue," Act 7 , 9, supra, Proviaes that its , provisions may be inyoked,"at the. instance of any landowner in the dis-, tyict, the trustees,in any : deed of, trust securing the bonds of,thp.Clistrict, the , owner of any bond,as to which . the, district, has defaulted in the payment: of interest or principal, or any: other creditor .of the districts." It appears therefore that, the provisions of the latter act are more comprehensive than those of the: earlier ,one in enumerating the creditors who may , mako application to the court for . the.Assistance which the Legislature provides to en-foree . the payment of debts due theni. In this connection it may be said that §. 22 of act 64, supra, provides how the receivers are authorized to disburse the district's revenues-which shall come into their hands. It•is provided that , they "shall be applied after payment of cost first to overdue interest and then to payment pro rata of all bonds issued hy said board, which are then due and payable." • - The order of the court directing the receivers who -had beeo appointed to purchase bonds. not then due at a great discount was a wise thing to do, if authorized by
ARK.] DICKINTON v. *MINGEA. 953 law." But it Was not.' The -th..der was contrarY to the provisions of the section above quoted . which requires 'that overdue interest shall first be paid after the paynient of cOst. It was erroi- thei-efore not to . apply the money which Came into • the receivers' hands derived from . the collection of taxes in that manner. In this connection it may ba said that this Provision of § 22 of act 64 was . unaffected by . aet 79; and provi: sions must be fellowed by the commiS . Siohers whOse districts•are;being supervised by the &Ruth. . It is verY earnestly insisted thai act 79 impairs the obligations of the contract pursuant to which the bonds were issued and sold by depriving the owners ,of the bonds of a remedy 'existing at the tinie of the sale . to en.- force their payment and therefore violates both the State and Federal . Constitntions. We think, • hOWever, that it sufficiently appears that the act 79, 'as we haVe construed it, is hot open'to this objection. 'We haVe frequently and recently had occasion to consider when and under what conditions the obligatiOns of a contract'. had been 'impaired. The most recent of these . cases is that of Worthen v. Delinquent Lands, 189 Ark. 723, 75 S. W. (2d) 62, which waS reviewed by the .Supreme Court of the' United States hi a case reported' nhder . the Style . Of •Worthen Kavanaugh, 295'U. S. 50, 55 S. Ct.. 555, 79 L. ed. 638, 97 A. L. R. 905. -Certain legislation passeq by the General Assembly of thiS'State was . there held inValid as inipair-ing contractual obligations,' but that legislation 'was utterly 'unlike the : act 79. • That"Case,. as 'well a ah innumerable nnmber of ethers,..recognizes the pomiCt fo enact legislation which merely affect§ the tehiedy exist-itig at the time 'Of the execntiOn Of the Contract for its enforcement without affecting the substance of the con'- tract itself. The case of Gibbs v. Zimmerman, 290 U. S. 326, involved the constitutionality of a statute of the State of South Carolina. The statute repealed a law providing for the appointment of receivers for insolvent banks, but also provided that the Governor of the State should appoint a conservator to take over and to liquidate such
954 DICKINSON /7 . MINGEA. [191 banks. In the attack upon this legislation, it Was insisted that the legislation was void in that it deprived creditors of the right to thoappointment of a receiver who should proceed to enforce.the.stockholders' statutory liability to depositors. In upholding the validity of the legislation, Mr. justice ROBERTS, .speaking • for the court, • said `.But, although. a vested cause of action. , is property and is protected from arbitrary interference . (Pritchard v..Norton, 10 . 6 11.- S. 124, 132), the appellant has no property, in the constitutional sense, in any particular form of remedy; all that he is guaranteed by the Fourteenth 'Amendment 18 the preservation ot his Substantial right to redress by some effective procedure. , " ()Citing casek.) , The case of Drainage District No. 2 y. ' Mercantile-Commercial. Bank and Trust Co., 69 Fed. (2d) ;138, is exactly in point. The question there involved was. the constittitiomilitY 'of act 46 , of 1933, snpra, which, aS had been said, is of Identical purport 'As . act 79. pussed , at the same sesSion et the. General AsSembly. _The opinion . by the ' Court 'of APpealS of this circuit is . not conclusive on Us, but it is highly persUasive. State v.. Meek,, 127 Ark. 349, 192 S. W. 202. It announces the conclusion,. in whiCh we concur; that ; the remedies provided by these .. .acts, 46 and 79, cannot be said to be , either inadequate or'unava.il-lug A petition for certiorari was denied in this case by the*Supreme Courfof **United State s ' . 293 , 1J. S. 566. We_conclude therefore that the court below was in error in appointing . the receivers and in not dis.charging the receivers as .prayed, and also in . approving the purchase of , the bonds as herein . stated. , The decree 'of the court below will , thereforobe reversed, and the .cause remanded for further proceedings , in accordance with this opinion.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.