#### STATE OF NORTH CAROLINA on the Relation of J. A. SUMMRELL v. CAROLINA-VIRGINIA RACING ASSOCIATION, INC., and the CURRITUCK COUNTY RACING COMMISSION.

(Filed 22 September, 1954.)

1. Constitutional Law § 20b—

Tbe mere fact that a state court overrules its previous decision on a question of state law does not constitute a denial of due process under tbe Fourteenth Amendment to tbe Constitution of tbe United States.

2. Constitutional Law § 25—

A contract imposes no binding obligations if its validity is dependent upon tbe provisions of an unconstitutional statute. Constitution of tbe United States, Art. I, sec. 10.

S. Same—

Tbe Federal Constitutional protection of tbe obligations of contracts against state action is directed only against impairment by legislation and not by judgments of courts. Constitution of tbe United States, Art. I, sec. 10.

Appeal by defendant Carolina-Virginia Racing Association, Inc., from *Paul, S. J.,*April 4th. Special Term, 1954, of Cubjehtucic.

At Spring Term, 1954, in *S. v. Felton,*239 N.C. 575, 80 S.E. 2d 625, it was held that Oh. 541, Session Laws of 1949, was in violation of designated provisions of the Constitution of North Carolina. The constitutional question having been so decided, this cause, *Summrell v. Pacing*Asso., 239 N.C. 591, 80 S.E. 2d 638, then before this Court, was remanded for further proceedings.

Defendant Association conducted gambling operations on its premises under a system of pari-mutuel betting on dog races. It is so alleged in its pleadings and so stated in stipulation set out in the record. Its contention is that such conduct was lawful because authorized by franchise from the Currituck County Racing Commission granted under the 1949 Currituck Act. And because of said Act, it contends that Gr.S. 19-1, *et seq.,*general statutes providing that premises used for gambling operations constitute a nuisance, are inapplicable. In the decisions cited above, this Court held adversely to these contentions. The provisions of the 1949 Currituck Act, the actions taken in pursuance of its terms and the operations of defendant Association thereunder are fully stated in these decisions:

In Currituck Superior Court, April 4th Special Term, 1954, defendant Association tendered judgment providing for dismissal of the action and for costs. The court below denied motion for such judgment and exception was duly taken. Thereupon, the court below signed and entered *615judgment in favor of plaintiff in conformity with tbe provisions of G.S. 19-1, *et seq.*Defendant Association excepted and appealed.

Tbe assignments of error are to tbe effect tbat tbe failure of tbe court below to sign tbe judgment tendered by defendant Association and tbe judgment as signed and entered constituted a violation of defendant Association’s rights under tbe Constitution of tbe United States in tbat tbe obligations of its contract rights are impaired thereby and in tbat it is deprived of its property without due process of law. This position was asserted in a pleading bled 4 April, 1954, bearing tbe caption, “Answer to Petition for Judgment.”

• *Frarüc B. Ay cock, Jr., for plaintiff relator, appellee.*

*J ohn G. Dawson, J ohn B. McMullan, and Lucas, Band & Ro.se for defendants, appellants.*

Bobbitt, J.

In addition to its appeal to this Court, defendant Association instituted an action in the federal district court to enjoin enforcement of tbe judgment of tbe court below and to restrain State law enforcement officers from enforcing tbe provisions of tbe State anti-gambling statutes against operations conducted at its dog track. Tbe district court having denied its application for an interlocutory injunction, defendant Association appealed. In its decision of 20 July, 1954, tbe United States Court of Appeals for tbe Fourth Circuit, opinion by *Barker, Chief Judge,*affirmed tbe order denying tbe application for interlocutory injunction with directions to tbe district court to dismiss tbe bill for want of equity. *Racing*Asso. *v. Cahoon, et al.,*214 F. 2d 830.

Defendant Association, in its brief, in relation to its position tbat tbe judgment constitutes a taking of its property without due process of law, contends tbat tbe constitutionality of tbe 1949 Currituck Act was not before this Court for decision in *Summrell v. Racing Asso.,*239 N.C. 591, 80 S.E. 2d 638. Decision of tbe constitutional question upon tbe former appeal, which defendant Association suggests was done, is said to constitute such a departure from prior decisions of this Court as to constitute a denial of due process. Tbe contention is without merit.

Upon tbe former appeal, this Court considered carefully all the cases now cited. With reference to *Amick v. Lancaster,*228 N.C. 157, 44 S.E. 2d 733, stressed by defendant Association, this Court, for reasons then stated, expressed tbe view tbat tbe authority of tbat decision in relation to tbe facts in this cause was at least open to question. Be tbat as it may, tbe constitutional question was not determined on the former appeal in this cause. It was decided in *S. v. Felton,*239 N.C. 575, 80 S.E. 2d 625. Tbe 1949 Currituck Act having been declared unconstitutional in tbe *Felton case,*defendant Association could not rely further upon its pro*616visions as a defense in this cause. It should be noted that counsel for defendants herein were permitted to appear *amici curiae,*in the *Felton case*and did participate orally and by brief in the argument of the constitutional question.

If the defendant Association’s contention is that the decision in *S. v. Felton, supra,*constituted a departure from previous decisions of this Court, the obvious answer is that we do not so regard it. But even if there were such departure, the contention is without merit; for, as pointed out by *Parker, Chief Judge,*in *Racing Asso. v. Cahoon, et al., supra,*with- citation of authority, the mere fact that a state court overrules its previous decisions on a question of state law does not constitute a denial of due process under the Fourteenth Amendment to the Constitution of the United States.

Defendant Association contends further that its operations were conducted under a franchise granted to it on or about 11 May, 1949, by Currituck County Racing Commission, an agency of the State of North Carolina, and that the judgment impairs the obligation of such contract and of its corporate charter in violation of Art. I, sec. 10, of the Constitution of the United States. Again, the answers to such contention are given by *Parker, Chief Judge,*in *Racing Asso. v. Cahoon, et al., supra,*with citation of authority: first, a purported contract imposes no binding obligations if its validity is dependent upon the provisions of an unconstitutional statute; and second, the provision of Art. I, sec. 10, of the Federal Constitution, protecting the obligations of contracts against state action, is directed only against impairment by legislation and not by judgments of courts.

It appears that defendant Association has made large expenditures in the purchase and establishment of its dog racing premises and its parimutuel apparati. It appears also that its operations during the five seasons, 1949-1953, prior to the presentation and decision of the constitutional question, were quite profitable. It continues as owner of the real property. The record does not disclose whether defendant Association or another became purchaser of the personalty when sold by the commissioner under the judgment. While the delay in the presentation of the constitutional question to this Court for decision would seem to be without legal significance, the records in this cause and in the *Felton case*and companion cases leave the impression that defendant Association was neither alert nor cooperative in any effort to obtain an early decision on the constitutionality of the 1949 Currituck Act.

For the reasons stated the judgment of the court below is

Affirmed.