Court Opinion

ID: 3274486
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:43:02.955416+00
Date Added: 2024-06-11T13:48:07.165184
License: Public Domain

The sheriff was requested by the plaintiff a judgment creditor of the defendant *Page 792 
drainage district, to levy an execution on certain personal property of the district, and also upon certain real estate to which the district had acquired title by the sale of the lands to it for the nonpayment of the improvement district taxes due and delinquent thereon. The majority hold that the lands of the district may be levied upon and sold, except the right-of-way, but that, as the personal property may or may not be exempt, the sheriff did not act arbitrarily in demanding an indemnifying bond before levying upon it. This holding, in my view of the law, demonstrates the error into which the majority have fallen in holding that any part of the plaintiff's judgment may be collected through an ordinary execution at law.
If any of the district's property may be sold under an execution, all of it may be. No proper distinction may be made between the right to sell the personal property and the real estate.
The majority hold, in effect, that the personal property is exempt from a sale under execution if the use of that property is necessary to the operation of the district's affairs and the discharge of its functions as such. But, if so, why?
By 4274, Crawford  Moses' Digest it is provided that no property, real or personal, belonging to the State, or any county, city, town, borough or other public or municipal corporation shall be levied upon or sold by virtue of any execution.
Unless the drainage district is a corporation within the meaning of this section, its personal property, however indispensable to its business, is not exempt, and, if it is exempt, this is true only because it is such a corporation. But, if it is such a corporation, all of its property, both real and personal, is exempt from seizure and sale under an execution. It therefore appears illogical to say that the drainage district's real estate may be sold, but not its personal property, for if one class of *Page 793 
property is exempt from sale under execution, the other is also exempt.
The statute to which I have referred declares the public policy of the State to be that the administration of the affairs of a governmental agency shall not be disturbed by the levy of an execution upon its property. Such an agency is not exempt from the enforcement of payment of its debts and obligations, but this enforcement must be accomplished by other means than a sale of the agency's property under an execution. A receivership might be had, or the board of directors might be compelled by a mandamus to levy a larger per cent. of the betterments to be collected. Faulkner Lake Drainage Dist. v. Williams, 169 Ark. 592, 276 S.W. 604.
At 105 of the chapter on Executions, 23 C.J. p. 355, the law is stated to be that whether the property of a municipal or other public corporation is subject to execution to satisfy judgments recovered against them is to be determined by the usage and purposes for which the property is held, and that property held for public uses is not subject to levy and sale under execution against such corporations, and that the rule also applies to funds in the hands of a public officer, and that taxes due to such corporations cannot be seized under execution by a creditor. An apparent exception to the rule is stated to be that, where a corporation owns in its proprietary, as distinguished from its public or governmental capacity, property not useful or used for a public purpose but for quasi private purposes may be seized and sold under execution, precisely as similar property of individuals may be seized and sold, but that the question whether property held as public property is necessary for the public use is a political, rather than a judicial, question. The notes to this text cite numerous cases, a number of these being annotated cases which fully support the text.
In the response of the drainage district it is made to appear that the personal property upon which the sheriff is asked to levy the execution, while of small value, is *Page 794 
indispensable to the district. The drainage district in question is probably the largest in the State, and embraces practically half of Poinsett County, and has issued about five million dollars in bonds. The sheriff is asked to levy upon the office furniture of the district, which is not expensive and would bring only a nominal sum it sold at public sale, yet this furniture is shown to be necessary to protect the valuable records of the district and is indispensable to its officers in the performance of their duties. As a part of the plan to control the flood waters of the St. Francis River, which runs through the district, locks were constructed, and are maintained, and certain tools which the sheriff is asked to levy upon are shown to be necessary for the operation and maintenance of the locks, which were installed under the authority of the War Department of the United States Government, and if the district is deprived of these simple, but essential, tools, the locks may not be operated and the navigability of the river will be interfered with and the most serious complications will arise. It is shown also that other personal property upon which the sheriff is asked to levy the execution is also indispensable to the proper functioning of the district.
In Sloan's Improvement Districts in Arkansas it is said, at 17 of this excellent work, that improvement districts, whether municipal or non-municipal, are usually regarded as public quasi corporations, and at 28 of the same work it is said that public policy forbids that the funds of public corporations or agencies should be diverted by garnishment from the purposes for which they were collected.
In the case of Goyer Co. v. Williamson, 107 Ark. 189,154 S.W. 525, it was said: "The levee board was one created for public purposes and given certain powers and required to perform certain duties for the public good and was an agency for the government in fact for such purposes, and, as such, was not subject to garnishment at law. Upon the transfer of the suit to equity, *Page 795 
however, the allegations of the insolvency of the contractors and that appellee was without remedy at law, he could have subjected the funds in the hands of the levee board due the contractors to the payment of his debt within the doctrine heretofore announced in Plummer v. School District, 90 Ark. 236, 118 S.W. 1011." The doctrine of that case was reaffirmed in the cases of Sallee v. Bank of Corning, 134 Ark. 115, 203 S.W. 276, and Bayou Meto Drainage Dist. v. Chapline, 143 Ark. 453,220 S.W. 807.
The same public policy which inhibits the seizure of funds of an improvement district under garnishment would appear to inhibit their seizure under an execution at law.
The lands of the district are funds of the district in legal effect. The district acquired these lands through the sale thereof to it for the nonpayment of the taxes due on the lands. They therefore represent taxes due the district.
In the case of Chicago Mill  Lbr. Co. v. Drainage Dist. No. 17, 172 Ark. 1059, 291 S.W. 810, the delinquency in tax payments were so great that it became necessary to levy a larger per cent. of the assessed betterments to enable the district to meet its maturing obligations of bonds and interest thereon, and certain taxpayers who were not delinquent resisted this action upon the ground that it constituted a discrimination against them, in that they were thereby required to pay an undue proportion of their assessed betterments. But in refusing to sustain that contention we said: "The contention of appellant, expressed in its second request, that the levy of the proposed rate would result in requiring it and other landowners who had paid and who continued to pay their taxes to bear a greater proportionate burden than that imposed upon the lands which were allowed to go delinquent, is answered in the Rowland case, supra, [170 Ark. 1168, 282 S.W. 990] and in that of Arkansas-Louisiana Highway Imp. Dist. v. *Page 796 
Pickens, 169 Ark. 603, 276 S.W. 355. It was pointed out in those cases that the lien of the district continued until the taxes were paid or until the lands themselves were acquired by the district through sales for the nonpayment of the taxes, and that, when the delinquent taxes were paid, they became available and should be used in paying the obligations of the district, and further that, if the lands were sold to the district and not redeemed, then the entire value of the lands to be realized by a sale thereof would be available for this purpose. So that, while a delay would be entailed in obtaining and applying revenues from the delinquent lands, these revenues would finally be obtained and applied, and thus no unequal burden would be imposed."
It would hardly be contended that taxes collected from lands in the district on deposit in the bank to the credit of the district could be levied upon by any process from a court of law. Yet in legal effect this is the character of the lands upon which the judgment creditor here seeks to have an execution levied. These lands represent axes not yet converted into money, but the authority to so convert them by selling them exists and is imposed upon the directors of the drainage district by the Acts of the General Assembly under which the district is performing the functions for which it was created.
The taxes of the district, which are represented, in part, by the lands sold for the nonpayment of taxes, have been pledged to the holders of the bonds of the district, and the judgment creditor in the instant case should not, by this proceeding, be given this preference over the holders of those obligations of the district. Kochtitzky v. Mercantile Trust Co., 16 F.2d 227; Canal Const. Co. v. Federal Life Ins. Co., 21 F.2d 928.
The execution should not therefore be awarded, and I respectfully dissent from the judgment ordering it done. *Page 797