Court Opinion

ID: 5145056
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:25:01.649364+00
Date Added: 2024-06-11T08:24:43.449180
License: Public Domain

I am now convinced that the judgment of the trial court in this case is in error. The petition for rehearing should be granted and opinion promulgated reversing said judgment. However, the reversal should be on grounds other than those relied upon by plaintiff in error, as more particularly set out herein.
Defendant is the owner of the property in question within the meaning of the applicable provisions of Constitution and statute. The right of plaintiff to recover depends on the constitutionality of provisions of House Bill 77 of the 16th Legislature, 18 O.S. 1941 §§ 86[18-86] and 86a to 861, inclusive, ch. 46, art. 1, S. L. 1937.
The Attorney General has filed a brief amicus curiae in support of the judgment. He suggests the constitutionality of the Act of the Legislature is brought in question, but the Attorney General does not discuss the constitutionality of the statute, supra. Nevertheless, that is a matter of paramount. public concern. This court, in the interest of the public right, may determine the issue of constitutionality, as a necessity.
Section 2, art. 22 of the Constitution provides:
"No corporation shall be created or licensed in this State for the purpose of buying, acquiring, trading, or dealing in real estate other than real estate located in incorporated cities and towns and as additions thereto; nor shall any corporation doing business in this State buy, acquire, trade, or deal in real estate for any purpose except such as may be located in such towns and cities and as additions to such towns and cities, and further except such as shall be necessary and proper for carrying on the business for which it was chartered or licensed; . . . Provided, however, that corporations shall not be precluded from taking mortgages on real estate to secure loans or debts, or from acquiring title thereto upon foreclosure of such mortgages or in the collection of debts, conditioned that such corporation or corporations shall not hold such real estate for a longer period than seven years after acquiring such title; . . ."
The above provision of the Constitution recognized the public evil of corporate ownership of rural real estate not essential to the business of corporations. The Constitution provides a remedy for that which by its terms was deemed evil. Wolfe v. State ex rel. Presson, 163 Okla. 180, 21 P.2d 1067.
The Legislature, soon after State-hood, recognized the existence of the same evil and gave cognizance to the constitutional provision. The Legislature enacted appropriate statutes which became sections 1636, 9751, 9752, and 9754, O.S. 1931. By these legislative 299 *Page 299 
provisions a method of escheat was established for real estate owned or held by corporations in violation of the Constitution. The statutes provided a procedure for the enforcement of an escheat.
But section 14 of H.B. 77, supra, expressly repealed sections 1636, 9751, 9752, and 9754, O.S. 1931. Substantially all of the provisions of section 2, art. 22, Constitution, were included in 18 O.S. 1941 § 81[18-81]. Further prohibition was made against disposition or encumbrance of land so acquired; a conveyance in no way should be made of such land to another corporation; and by H. B. 77, supra, 18 O.S. 1941 §§ 86[18-86], 86a to 86c, inclusive, restrictions upon the ownership of real estate by corporations were imposed. These restrictions are substantially as provided in section 2, art. 22, Constitution. But instead of providing for escheat of the real estate held in violation of said constitutional provision, the act, 18 O.S. 1941 § 86d[18-86d], provided in part:
"After the passage and approval of this Act, every corporation taking title to or holding real estate, either in its own name or in the name of an agent or trustee who holds the same for the use and benefit of the corporation, in violation of Sections 1, 2, 3, and 4 of this Act, shall be subject, in addition to the other penalties herein provided, to the following penalties, based upon the assessed value of such real estate fixed for the purpose of levying the ad valorem taxes which last became due and payable preceding the date of the accrual of any such penalty, for each year or fraction thereof during which said real estate is held in violation of this Act, as follows, to wit: For the first year one per centum (1 %) of the assessed value; second year, two per centum (2%) thereof; third year, three per centum (3%) thereof; fourth year, four per centum (4%) thereof; fifth year, five per centum (5%) thereof; sixth year, six per centum (6%) thereof; and each year thereafter, six per centum (6%) of the assessed value.
"No corporation shall be subject to more than one penalty, for each calendar year, for each tract of real estate held in violation of the provisions of this Act.
"The penalties above provided, when collected by the County Attorney as hereinafter provided, shall be immediately paid over to the Commissioners of the Land Office, who shall credit same to the Permanent School Fund."
Sections 86f and 86g provided, upon notice, for collection of the penalties by the county attorney. If collection were made without suit, the county attorney would receive 15% as a fee; if collection were made as result of suit, the county attorney's fee was fixed at 25% and at not less than $100. This is the statute under which this action was commenced.
Title 18 O.S. 1941, from section 1 to section 186, inclusive, was repealed by section 248. Title 18, ch. A, S. L. 1947. But similar provisions were enacted within sections 22 to 25, inclusive of ch. A.
Section 20 of the Act provides that no corporation of any sort shall, "except as herein provided" own, hold, or take any real estate located in this state, outside of any incorporated city or town or any addition. Subsection (4) of subdivision b of the section provides that nothing in this act shall be construed as prohibiting the owning, holding, or taking of any real estate, acquired by a corporation upon the foreclosure of any real estate mortgage held by such corporation, or acquired in the collection of any loan or debt due such corporation, "except as hereinafter provided". Subdivision c of the section provides that any real estate located in this state, outside of any incorporated city or town or any addition, acquired by any corporation by mortgage foreclosure or in the collection of any debt, as provided in subsec. b(4), shall be sold and disposed of within seven years from said acquisition. It is then"otherwise provided" in section 23 of the act, that any corporation owning or holding any real estate in violation of sections 20 and 21 *Page 300 
of the act, shall, in addition to the other penalties provided by the act, be required to pay for each year or fraction thereof during which such title or interest is unlawfully owned or held: (1) For the first year, 1% of the assessed value of such real estate unlawfully owned or held; (2) for the second year, 2% thereof; and so on up to the sixth year, and thereafter, 6% for each year.
It is clear that by the repeal of the statutes providing for escheat and enactment of sections 5, 7, 8, and 9 of the 1937 Act, and the subsequent repeal thereof, and enactment of section 23, Title 18, art. 1, ch. A, S. L. 1947, the intention and effect were and are to permit or license any corporation to acquire real estate upon foreclosure of a mortgage held by it, or in the collection of a debt, and to own and hold such rural real estate longer than seven years. This is in violation of section 2, art. 22, Constitution. By payment of the penalty of from 1% to 6% of the assessed value thereof, such a corporation is sought to be licensed to violate the Constitution. Corporations acquiring title in foreclosure of a mortgage or in collection of debts secure only a conditional title. The condition is based upon the sale or disposition of the real estate thus acquired, within seven years.
The act is clearly beyond the competence of the Legislature. The act is unenforceable. It is void.
Sections 5, 7, 8, and 9 of art. 1, ch. 46, S.L. 1937, as enacted, in force when this action was commenced, were unconstitutional. Plaintiff was not entitled to recover. I respectfully dissent to the order denying petition for rehearing.