Court Opinion

ID: 7813016
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:14:59.223712+00
Date Added: 2024-06-11T16:30:31.527293
License: Public Domain

Hart, J., (dissenting). My dissent in this case is upon the ground that there was. a legislative assessment of benefits which is. shown by clear and convincing evidence to be palpably arbitrary and in plain abuse of legislative power and that this question was not an issue, either in the former suit in the State chancery court or in the Federal court sitting in chancery. The doctrine of res judicata rests upon the principle that parties .ought not to be permitted to litigate the same issue twice. In Dawson v. Parham, 55 Ark. 286, the court in effect said that, to render a judgment conclusive, it must appear by the record of the prior suit that the particular matter sought to be concluded was necessarily tried or determined, or it must be shown by extrinsic evidence, consistent with the record, that the judgment necessarily involves the determination of the matter. Again, in the case of Pulaski County v. Hill, 97 Ark 450, the court said: “The true test of whether or not a particular point, question or right has been concluded by a former suit and judgment is whether such point, question or right was distinctly put in issue, or should have been put in issue, and was directly determined by such former suit and judgment. It is true that the judgment is also conclusive of ‘all matters properly belonging to the subject of the controversy and within the scope of the issues.’ It is not the recovery, but the matter actually alleged by the parties and upon, which the recovery proceeds, which- creates the estoppel, and the judgment does not conclude rights or matters which were -not put in issue, and which it was-not necessary -to put in issue in the suit.” ■ - In the application of this well established rule to the facts of this case I do not think that-it -can be said -that the suit -of Kennedy and other taxpayers against -the commissioners of the road improvement' district in the chancery court can be said to be a decision of the issue raised in the case before us. The complaint in that case attacked the assessment of benefits on the ground that all the lands in the district were arbitrarily assessed at the same amount per acre without regard to value or distance from the highway, or the benefits which the particular tracts will receive from the' construction of the highway. The complaint alleges' that the lands of the plaintiffs are far removed from the highway and are benefited very little, if any, by the improvement. The complaint further alleges that the farms in the district were assessed much higher, according to the value of th¿ benefits received, than -the lots in the town of Mineral Springs. Thus it will be seen that the assessment of benefits is attacked on the ground that a" wrong basis for assessing benefits was adopted in the first place. That is to say, that the zone system of assessing benefits as adopted by the commissioners was arbitrary and discriminatory. It will also be seen that while the assessment of benefits was attacked on the ground that other irregularities and discriminations in the assessment of benefits were made, nowhere is the assessment attacked oil the ground that the assessment as a whole was so unreasonably high that it resulted in a confiscation of the lands of the district. In fact, the assessment of benefits in that case' was attacked on the theory that it ' was - an assessment of benefits made by a subordinate body appointed.1 by the Legislature for that purpose, and was therefore subject to attack for irregularities, and also for adopting a wrong basis of assessment. In the case before us, none of these grounds of attack are relied upon. The complaint recognized that act No. 13, approved February 3, 1920, confirms the assessment of benefits made by the board under the original act and adopts the .assessment of benefits made by the board as a legislative assessment of benefits. This the Legislature had the right to do under our former decisions. This court has held that, because the Legislature could in the first place have levied the assessment itself, subject only to the right of the assessed landowners to have an arbitrary abuse of that power reviewed by the courts, it can adopt as correct the assessment made by a board created for that purpose and treat the act of adoption as a reassessment of the lands by the Legislature. Coffman v. St. Francis Drain. Dist., 83 Ark. 54, and Sudberry v. Graves, 83 Ark. 344. The special act referred to as confirming the assessment of benefits made- by the commissioners concludes with the following: “And the same in all respects ratified and confirmed, and declared to be the assessment of the district until the board orders a reassessment.” The Supreme Court of the United State also lays down the rule that the Legislature may itself fix the basis of assessment and that its action cannot be assailed under the Constitution unless it is palpably arbitrary and a plain abuse of power. Houck v. Little River District, 239 U. S. 254. The issue of whether the assessment of benefits made by the Legislature was palpably arbitrary and largely in excess of the local benefits was not raised or determined in the Kennedy suit. Kennedy and othei taxpayers joining with him in the suit had the right to bring it and to control the allegations of the complaint. They were bound for the costs in the case if they lost, and had a right to select the grounds upon which they would attack the assessment of benefits. They proceeded upon the theory that the assessment of benefits was made by a board appointed for that purpose, and they had a right to attack it- as made by a board of assessors. Hunt, on the other hand, believed that act No. 13, confirming the assessment of benefits, made it a legislative assessment, and that it could be only attacked upon the ground that it was a plain abuse of legislative power. Thus it will be seen that the point of attack made by him in no sense depends upon the proof made in the Kennedy case, and the issues in the two cases are wholly distinct. Each one, as a property owner in the district, had a right to attack the assessment of benefits from his own viewpoint, and, where' separate and distinct grounds were relied on, it does not seem to me that Hunt and the other landowners joining with him in the present suit should be concluded by the decree in the Kennedy suit based upon entirely different grounds and a wholly distinct and separate cause of action. Again, it is said that the suit by the bondholders in the Federal court concludes the plaintiffs in the present case. Now the commissioners in the present case brought suit against delinquent lands to collect the assessment of benefits against the land. This suit was filed on the 23rd day of June, 1923. On October 4, 1923, J. M. Hunt and other landowners in the district filed a eomulaint' in equity against the commissioners of the district' in which they attacked the assessment of benefits as being a legislative assessment of benefits and as'being so excessive as to be arbitrary and’ a plain abuse of legislative powers. These two suits, were consolidated for the purpose of trial. The suit in the Federal court was decided on October 22, 1923, and recites that it is heard only as to the first bond issue. Judgment was rendered against the'road district for the amount of interest due, and a receiver was appointed to collect assessments in satisfaction thereof. The present suit by the commissioners of the road district to collect the assessments against the lands was pending at the time the suit in the Federal court was decided. Before that suit was decided, J. M. Hunt and other landowners in the district had filed a suit in the State court contesting the assessment of benefits made by the Legislature on the ground that it was arbitrary, and this suit was pending when the suit in the Federal court was determined. Therefore I do not think that the decision in the Federal, court concludes the landowners in the case before us. Moreover, the pleadings in this case show that the decree in the Kennedy case alone is relied on to sup- ■ port the plea of res judicata. The suit in the Federal court is only pleaded by way of equitable estoppel. It does not seem to me that the adjudication in the Federal court that the commissioners have made default in the payment of interest of the first issue of bonds and the appointment of a receiver to collect the unpaid assessments ought to conclude the landowners from raising the point that the assessment of benefits is arbitrary and for that reason beyond the power of the Legislature to make. In the majority opinion it is said"that, if the contention of the landowners should be allowed to stand, “then indeed the only security upon which the bonds were issued and sold and the money furnished to make such improvements would be as flickering and insubstantial as the borealis race.” A sufficient answer to this is that courts ought to be as zealous to protect the rights of the landowners as those of the bondholders. Section 22 of our Bill of Rights provides that the right of property is before and higher than any constitutional sanction, and that private property shall not be taken, appropriated, or damaged for public use, without just .compensation therefor. We have repeatedly held that local assessments rest upon local benefits, and that whenever a local assessment is not grounded upon and measured by the extent of the particular benefit, it is pro tanto a taking of private property for public use without any provision for compensation. In discussing the question of legislative assessments in Coffman v. St. Francis Drainage District, 83 Ark. 54, this court quoted from a former decision the following: “But the power of the Legislature in these matters is not unlimited. There is a point beyond which the legislative department, even when exerting the power of taxation, may not go consistently with the citizen’s right of property. As already indicated, the principle underlying special assessments to meet the cost of public improvement is that the property upon which they are imposed is peculiarly benefited, and therefore the owners do not, in fact, pay anything in excess of what they receive by reason of such improvement. But the guaranties for the protection of private property would be seriously impaired if it were established, as a rule of constitutional law, that the imposition by the Legislature upon particular private property of the entire cost of a public improvement, irrespective of any peculiar benefits accruing to the owner from such improvement, could not be questioned by him in the courts of the country. ’ ’ This brings me to a discussion of the evidence which shows ¡that the legislative assessment was arbitrary. According to the evidence adduced in favor of the landowners, three persons went to the taxbooks and made a list of the real property in the district. They took the taxbooks of the lands in the district and a map of the district and made an appraisement, of the value of each tract of land and also its kind and character. The tabulation as made set out the valuation of each tract of land and the improvements on it. According; to the compilation shown by this exhibit, there were 22,099 swamp and waste acres, of the value Of $72,718; 4,160 acres of woodland that'can be cultivated, at the value of $20,010; 1,410 acres of pasture land of the value of $5,640; 10,780 acres in cultivation, at the value of $182,505; 38,499' acres in all, with a value of $280,873, and a value of improvements of $77,050; with a total value for all lands and all improvements of $357,923. The persons who- made this compilation testified that they were familiar with each tract of land in the improvement district. Their testimony was corroborated by that of other landowners-. The total assessment of benefits amounts to $706,711.20. The record shows that the road is about seventeen and a half miles long and extends from Mineral Springs, a small -town in Howard County, in a southwesterly direction to a point where the public road crosses Little River in Sevier County. There are no large towns in the district. The district has received $120,000 in Federal aid. There have been two bond issues. The first was for $380,000 and the second was for $250,000. All of this money, except $19,000, which the district lost by reason of a bank failure, has been expended one way and another in making this improvement. Thus it will be seen that the proposed cost of the road is about $40,000 per mile. The road is not a link in any important highway system. The improved road does not even begin or end at one of the county seats of Howard and Sevier counties. The record also shows that two loan companies which had been making farm loans in the territory embraced in the road improvement district withdrew from this territory because of the excessive assessment of benefits made by the commissioners of the road improvement district. It is also shown that there is no sale for even the best farm lands in the district. . Several witnesses testified that their farms had depreciated in value greatly on account of being placed in the improvement district. The owners offered their farms for sale and were not able to get anything near as much as they could before the district was organized. The lower price was due entirely to the fact of the excessive taxes levied upon the lands by the road districts. The evidence is clear, unequivocal and decisive that the assessment of benefits is so unreasonably high as to make it plain that the Legislature abused its power. The evidence clearly shows that the assessment of benefits is so excessive as to render it very doubtful whether the lands to be benefited will suffice to pay the assessments against them. To enforce their collection would be the exercise of arbitrary power by the Legislature, instead of the assessment of benefits against the lands. In discussing the question in Allen v. Drew, 44 Vt. 174, Judge Bedfield, speaking for the court, said: “We have no doubt that a local assessment may so transcend the limits of equality and reason, that its exaction would cease to be a tax, or contribution to a common burden, and become extortion and confiscation. In that case, it would be the duty of the court to protect the citizen. ’ ’ Finally, it is insisted that the landowners are concluded from maintaining this action by the doctrine of equitable estoppel; and this I consider the most difficult question in the case. To support this plea it is claimed that they knew that the road was being constructed and that many, of the landowners paid the first assessment on- their property. In this connection it may be stated that Hunt and others have not paid any assessments on their lands. It is true that many of the landowners did pay the first assessment; but they did this because the collectors of taxes refused to receive the State and county taxes unless the landowners would also pay these local assessments. At that time this court had not decided that the landowners had a right to pay the State and county taxes and refuse to pay local assessments. Thus it will be seen that this first payment made .by the landowners was in effect a payment made under protest, and no estoppel should be grounded upon it. The second and third installments of interest were paid by the commissioners taking part of the money which they had 'borrowed and paying the interest on the bonds. The landowners did not lmow that they were doing this. The district was created by a special act, and the notice required by the Constitution as to local or special bills was not given or exhibited to the Legislature. Since the landowners have received actual notice of the passage of the act, they have, by suit and otherwise, protested in every way possible against the construction of the improvement. One of the commissioners of the district stated that the attorneys for the bondholders were also the Little Bock attorneys for the district. It is true that the district also had' a local attorney; but the knowledge of the 'attorneys for the district, who were also attorneys for the bondholders, must be imputed to the latter. Bank of Hoxie v. Meriwether, ante, p. 39. The attorneys for the district necessarily acquired knowledge of all the proceedings with regard to the construction of the improvement. -They must have known that the landowners were bitterly opposed to the project on account of its excessive cost. They knew the length of the road, and the fact that it was not a part of any highway system. They knew the number of acres of land in the district and the amount of the assessment of benefits. . It is a -significant fact that two loan companies engaged in making private farm loans in the territory comprising the road district withdrew from it as soon as they learned the amount of the assessment of 'benefits and that the road would be constructed under the act. Their agents testified that they did this because the road taxes were so high that, instead of the value of the lands being increased by the construction of the road, their value would be decreased thereby to such an extent that they would not longer be security for the private loans. These things and other matters which necessarily came to the knowledge of their attorneys, who are also attorneys for the district, put them on notice that the assessment o£ benefits was arbitrary and a plain abuse of legislative power. Therefore I am of the opinion that there is no ground of equitable estoppel against the landowners. The result of my views is that the assessment of benefits as made by the Legislature amounts to a virtual confiscation of the lands in the district, and, on that account, should be declared void, and a new assessment ordered to 'be made under the provisions of the original act.