Opinion ID: 1471634
Heading Depth: 1
Heading Rank: 1

Heading: The Curative Act of February 23, 1920.

Text: Furthermore, the curative act of February, 1920, in our opinion, meets every objection raised by the would-be intervener as to the changes in the plans of the drainage district, and as to the Blytheville improvement. The general principle underlying curative acts was stated by the Supreme Court in Thomson v. Lee Co., Iowa, 3 Wall. 327, 331 (18 L. Ed. 177), as follows: If the Legislature possessed the power to authorize the act to be done, it could, by a retrospective act, cure the evils which existed, because the power thus conferred had been irregularly executed. Such acts are not uncommon in Arkansas. As stated above, this curative statute has been twice before the Supreme Court of Arkansas, and has been sustained and liberally construed to effect its evident purpose. In Chicago, etc., Co. v. Drainage District No. 17, supra, the court in its opinion said: This special act [original Drainage District Act] was amended at the extra session of the General Assembly of 1920 by an act (No. 305) approved February 23, 1920. The amendatory act enlarged the district and cured all defects in the proceedings leading up to the organization of the district, confirmed all judgments, assessments and contracts, and removed the limitation on the cost of the improvement and made all betterments bear interest at the rate of 6 per cent., and provided that interest on the bonds should not be considered as a part of the cost of the improvement and should be collected in addition to the benefits. Pursuant to the authority conferred by the amendatory act, plans were prepared to afford drainage to what is known as the Big Lake area, and certain other changes in the plans were made and benefits were reassessed. Bonds dated August 2, 1920, aggregating $2,300,000, were issued in addition to those previously issued. Taxes were levied on the changed and corrected benefits to take care of the principal and interest on both issues of bonds maturing after that date. It is one of the contentions of plaintiff in error that the assessment of benefits in the first instance disregarded the Big Lake area, and was therefore void; that the assessment of benefits after the plans were modified was in reference to the Big Lake area alone, and was therefore void; that there has never been any assessment of benefits on the entire lands of the district based upon the improvements considered as a unit. This contention fails to give full effect to the provisions of the act of February, 1920. That act had a two-fold character: It was not only a curative act, dealing with the past; but it was also an amendatory act, dealing with the future. As a curative act it healed whatever irregularities, if any, had taken place in reference to the first issue of bonds. As an amendatory act it authorized changes of plans and new assessments and readjusted assessments. Presumably the drainage district through its officers properly exercised this new power. If they did, there was an assessment of benefits on the entire lands of the district based upon the improvements considered as a unit. But even if the officers of the drainage district did not proceed under the curative and amendatory act of February, 1920, as above indicated, the bonds, both of the first and second issues, would not, because of such failure, be invalid in the hands of holders in due course. If the power to take the proper steps existed, irregularities in taking the steps would not be fatal to the validity of the bonds in the hands of holders in due course. The case of Thornton v. Road Imp. Dist. 1, 291 F. 518 (C. C. A. 8), is cited by plaintiff in error. That case did not involve the validity of bonds in the hands of holders in due course. It was a suit by taxpayers directly against the road improvement district for equitable relief against the enforcement of a grossly arbitrary, disproportionate, and excessive assessment of benefits. The principles governing such a suit are entirely different from those governing the case at bar. As to the Blytheville improvement, it is to be noted that the plans for this improvement were made by the drainage district long prior to the passage of the curative act of February, 1920. The General Assembly, therefore, had the facts before it when it passed the curative act. The language of that act is broad enough to include the Blytheville improvement. The only question that would seem to remain is whether the General Assembly had the power to ratify the making of the Blytheville improvement. Blytheville was within the drainage district. Its realty was assessed for benefits accruing from the general improvement in the drainage district. Doubtless the officers of the drainage district thought the improvement in Blytheville and the improvements outside bore some relation to each other. In ratifying the acts of the district, the General Assembly must have taken the same view. There is no showing in the proposed defense of the would-be intervener that such was not the case. Whether the amount spent for the Blytheville improvement was too great, whether the amount assessed against the Blytheville realty for benefits was too little, relate to mere matters of detail, which would not render the bonds invalid. We think that the facts set up in the proposed defense relative to the Blytheville improvement fall far short of showing that the officers of the drainage district had no power to issue bonds for the payment of the improvements planned, including the Blytheville improvement, and fall still farther short of showing that the General Assembly could not or did not grant such power to the drainage district. Our conclusions are that the recitals in the bonds, together with the curative part of the act of February, 1920, negative every contention of plaintiff in error as to the first issue of bonds, and fully establish their validity in the hands of holders in due course; that the provisions of the amendatory part of the act of February, 1920, and the recitals in the bonds of the second issue, meet every contention of plaintiff in error in regard to those bonds, and fully establish their validity in the hands of holders in due course. In the case of Town of Aurora v. Gates, 208 F. 101, this court, speaking by Circuit Judge Sanborn, said (page 104): A municipality or a quasi municipality may not, by the recitals or certificates in its bonds, estop itself from denying that it is without power to issue them when the laws are such that there can be no state of facts or of circumstances under which it would have authority to emit them. But, if the laws are such that there might under any state of facts or of circumstances be lawful power in the municipality or quasi municipality to issue its bonds, it may, by recitals therein, estop itself from denying that those facts or circumstances exist and that it has lawful power to send them forth, unless the Constitution or act under which the bonds are issued prescribes some public record as the test, and no such test was prescribed in this case, of the existence of some of those facts or circumstances citing many cases. And again (page 108): The recitals in municipal bonds by the officers or the representative body invested with power to perform a precedent condition and with authority to determine when that condition has been performed, that all the requirements of law necessary to authorize the issue of the bonds have been complied with, precludes inquiry, as against an innocent purchaser for value, whether or not the precedent condition had been performed before the bonds were issued  citing many cases. We think that the principles thus stated control the disposition of the case at bar. Having now considered the several defense sought to be interposed by the would-be intervener, and finding none of them valid defenses to the cause of action set up in the complaint, we conclude that the motion to intervene was rightly denied upon the merits. Order affirmed.