Court Opinion

ID: 3398653
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:08:57.473801+00
Date Added: 2024-06-11T14:02:58.830616
License: Public Domain

I have carefully considered the authorities cited in the majority opinion in this case, but am unable to reach the conclusion that the application of Section 7 of Article X of the Constitution as amended by ratification at the election of November 6, 1934, to the levy of taxes for the payment of debt service per se violates the provision of the Federal Constitution prohibiting any State to enact laws which impair the obligations of contracts. Article I, Section 10.
It appears to me that the obligation of the contract is not impaired by the exempting of the homestead property described in amended Section 7 of Article X of the State Constitution, except in cases where it can be shown that the application of the exemption amendment will deprive the contract holder of the method or means of enforcing his contract which was, before the adoption of the constiuttional amendment, available to him.
Stated another way, it appears to me that if there remains in a taxing district sufficient taxable property upon which lawful tax may be levied to meet the obligation of the contract, then the obligation is not impaired.
If the enactment of a law which makes less valuable an existing contract is per se invalid, then it must follow that *Page 765 
wherever a legislative Act has authorized the issuing of bonds by any taxing unit in a stated limited amount and that taxing unit has issued such bonds, any legislative Act passed thereafter authorizing additional bonds to be issued by such taxing unit would be invalid, because it necessarily follows that the issuing of additional bonds will place a larger tax burden on the taxing district and thereby depreciate the value of the original bond issue.
The only difference between the application of the provision of amended Section 7 of Article X and the authorization of additional bonds after a limited bond issue has been authorized is that under the provisions of amended Section 7 of Article X the tax levy must be increased on that part of the property remaining taxable in the district, while under such legislative enactments the tax burden must be increased on all the property in the district.
The record in this case does not show that the application of amended Section 7 of Article X of the Constitution will deprive the relators of any means or method heretofore enjoyed by the relators for the enforcement of the contract.
The record shows that the contract has already been breached at a time when all property was available for taxation. Therefore, the breach cannot be charged to the application of the homestead exemption.
When the amendment was submitted to the electors, most of whom we will take judicial knowledge were taxpayers, it may be well assumed that the great majority of such taxpayers and electors voted to place the necessary additional tax on non-exempt property, to supply whatever should be necessary to make up for the loss occasioned by the authorized home exemption.
The reports of the State Auditor on file in the office of the Governor, of which we may take judicial cognizance, *Page 766 
disclose that the total outstanding bonded indebtedness as of November 6, 1934, of counties, special road districts, special school districts, drainage and other special districts and municipalities of the State amounts to $486,478,000.00 and that the total defaulted interest on such bonds amounts to $40,301,664.00, or a total of $526,728,142.00.
The report also shows that "the aggregate amount which homestead exempt property will be taxed annually to meet this proportion of debt service on obligations issued prior to November 6, 1934, is estimated to be only $8,772,778.12." This based on a valuation for county and district purposes of $142,171,915.00 and on a valuation for municipal purposes $208,497,052.00. The total assessed valuation of all property in the State for State and county purposes for the year 1934 as shown by the reports in the office of the State Comptroller was $499,372,925.00.
From these figures it will be seen that the property sought to be exempt under amended Section 7 of Article X of the Constitution represents only a small fraction of the total taxable property in the State, especially when we bear in mind the fact that in the above stated total State valuation is not included valuations for special taxing districts or municipalities.
I think the view herein expressed is supported by opinion and judgment in the case of Arkansas Southern Ry. Co., et al., v. La. and Ark. Ry. Co., 218 U.S. 431, 54 L. Ed 1097, in which the United States Supreme Court, speaking through Mr. Justice HOLMES, said:
"No doubt a State might limit its control over the power of a municipal body to tax by authorizing it to make contracts on the faith of its existing powers (Wolf v. New Orleans, 103 U.S. 358, 26 L. Ed. 395; Louisiana, ex rel. Hubert, v. New Orleans,215 U.S. 170, 54 L. Ed. 144, 30 *Page 767 
Sup. Ct. Rep. 40), although, unless it did limit itself with a certain distinctness of implication, a subordinate body would contract subject, not paramount to the power of the State (Manigault v. Springs, 199 U.S. 473, 480, 50 L. Ed. 274, 278, 26 Sup. Ct. Rep. 127; Knoxville Water Co. v. Knoxville,189 U.S. 434, 438, 47 L. Ed. 887, 891, 23 Sup. Ct. Rep. 531). But there is no such limitation by the State and no contract by the parish that implies it. An authority given by the State to promise and levy a tax in future years on the taxable property in the parish does not purport to limit the power of the State to say what property shall be taxable when the time comes — at least, by general regulations not aimed at aiding an evasion of the promise it has allowed. A vote by a parish to pay 5 mills on all the taxable property within its boundaries refers on its face to a determination by the sovereign as to what that property shall be. See Arkansas Southern R. Co. v. Wilson, 118 La. 395, 401, 42 So. 2d 976. The notion that the statute and the vote, separately or together, precluded the State from erecting a jail that should be free from such claims, is untenable on its face. The same reasoning allows the State to go further, as it has done. We agree with the Supreme Court that it did not transgress the Constitution of the United States."
I think that all the contracts of bonded indebtedness existing on and prior to November 6, 1934, were entered into subject to the power of the State to amend its Constitution so as to make reasonable exemptions of property from the burden of taxation whether for future operating expenses or for the payment of debt service to discharge obligations theretofore existing and that by the adoption of amended Section 7 of Article X of the Constitution only this much has been accomplished and that the bondholders involved *Page 768 
in this case have been left with an adequate remedy to require the levy of a sufficient tax on non-exempt property to meet the obligation of their contracts.