Opinion ID: 1672216
Heading Depth: 1
Heading Rank: 6

Heading: whether the barring of claims on the bonds by the statute of limitations violates the bondholders' due process under the fourteenth amendment to the united states constitution.

Text: The Appellants next argue to this Court that the State violated their due process rights under the United States Constitution by passing an amendment to the Mississippi Constitution of 1869 in 1875. This amendment prohibited payment on the Union Bank and Planters' Bank bonds while the bondholders had five years remaining under the statute of limitations in which to enforce their right to payment on the bonds by the State of Mississippi. The Appellants assert that a state cannot take away an existing right by shortening the statute of limitations to a time that has already run with respect to that right. Chapman v. Board of County Commissioners, 107 U.S. 348, 358, 2 S.Ct. 62, 70-71, 27 L.Ed. 378 (1883). Further, the Appellants cite an earlier decision by this Court, where it held: A statute of limitations, which attempts to bar a debt without giving a reasonable time within which the right may be preserved, is violative of the contract clause (article I § 10, cl. 1), as well as the due process clause of the Federal Constitution (Amendment 14), and of the like provisions in our state Constitution. Bell v. Union & Planters' Bank & Trust Co., 158 Miss. 486, 130 So. 486, 487 (1930). While correctly stating the rule of law, the appellants again misread the amendment to the Mississippi Constitution. The amendment is void of any language that prohibited the bondholders from bringing suit to protect their rights or to attack the constitutionality of such an amendment. Although the amendment was passed with five years remaining in which to bring suit, it did not prohibit the bondholders from so doing. Alternatively, if the amendment did prohibit the bondholders from bringing suit, the bondholders come before this Court stating the State did not give reasonable time to preserve their rights. This argument, too, is without merit. The bondholders were placed on notice that the State was repudiating the bonds in 1841 when the governor made his recommendation that the State stop payment. Further notice was given when the Legislature, in 1842, passed a resolution that repudiated the Union bonds. The Legislature, in 1852, submitted a referendum to the people of Mississippi for a vote to be taxed to pay the bonds. This vote defeated a proposed tax to pay the bonds. In 1875 the governor signed a bill proposing an amendment to the Constitution of Mississippi to repudiate the bonds. In November of that same year during the general election, an amendment was adopted that did repudiate the bonds. In November of 1890, the same amendment was incorporated as section 258 of the Mississippi Constitution of 1890. At no time during these acts by the State, which should have put the bondholders on actual notice, but at the very least constructive notice, did the bondholders bring suit. It was not until 1993, one hundred and twenty years after the seven-year statute of limitations went into effect, before the bondholders asserted their rights in claiming payment owed by the State. The bondholders assert that traditional notions of fair play and substantial justice were violated when the State passed the amendment that prohibited payment on the bonds. Thus, violating their due process rights. The Court finds this argument without merit. The bondholders knew of the State's actions and of the statutory time period. The bondholders failed to bring suit because they read the amendment as prohibiting such a suit, while it only prohibited payment. The bondholders successfully filed suit in 1993 under the same laws in effect at the time the statute of limitations expired. If they were prohibited in 1875, likewise they were prohibited in 1993. The bondholders were not denied their day in court in 1993, nor would they have been in 1875 or 1880. The statute of limitations expired in 1880. The bondholders' due process rights were not violated by the passing of the amendment to the Constitution of Mississippi of 1869 in 1875, which was later Section 258 of the Mississippi Constitution of 1890.