Court Opinion

ID: 3267157
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:35:31.519359+00
Date Added: 2024-06-11T13:00:47.622506
License: Public Domain

This appeal brings into question the constitutionality of act 278 of the General Acts of 1933. The trial court held the act constitutional and valid, and this appeal is prosecuted therefrom.
Act 278 of 1933, in effect, provides: Section 1 amends 5673 of Crawford  Moses' Digest by giving to property owners, within the district, 90 days in which to make payment of past-due assessments instead of 30 *Page 739 
days, as provided in 5673 of Crawford  Moses' Digest; also it reduces the penalty for nonpayment from 20 per cent. to 3 per cent.
Section 2 of said act gives to property owners six months in which to answer the complaint, after suit is instituted, instead of 5 days, as provided in 5678 of Crawford  Moses' Digest.
Section 3 of said act gives to nonresident landowners six months after publication of notice to file answer, instead of fifteen days, as provided in 5679 of Crawford Moses' Digest.
Section 4 of said act gives to the chancery court wherein the suit is pending, power to grant to the property owner twelve months in which to pay the judgment or decree rendered, instead of ten days, as provided in 5684 of Crawford  Moses' Digest.
Section 5 of said act is the emergency clause, and directly repeals 5686, 5687, 5688 and 5689 of Crawford Moses' Digest. The sections of Crawford  Moses' Digest directly repealed by said act are to the following effect: 5686 provides for the advancement of all causes pending in the Supreme Court wherein the foreclosure of assessments of benefits are involved. Section 5687 of Crawford  Moses' Digest gives to any aggrieved owner appealing only twenty days in which to file an authenticated transcript of the proceedings. Section 5688 of Crawford  Moses' Digest restricts the record on appeal to such matters as may affect the property of the one so appealing. Section 5689, Crawford  Moses' Digest, restricts the right of appeal to those who perfect the transcript of the record within twenty days from the date of rendition of file decree.
The contention urged is that act 278 of 1933 violates 17 of article 2 of the Arkansas Constitution of 1874 and 10 of article 1 of the Constitution of the United States, which sections provide against impairment of contract. Stated another way, appellant contends that the State Legislature is without authority to amend or repeal the sections of the digest referred to for the reason *Page 740 
that they were the law at the time the district bonds were issued and sold.
In considering the important question here presented, it is necessary that we take into consideration the economic conditions existing in this State at the time act 278 of 1933 was enacted. The conditions sought to be alleviated should be considered as a part of the enactment itself. At the time of the enactment, Arkansas was in the midst of the worst depression any member of this court has ever experienced. Thousands of home owners in the State were without employment, and the bare necessities of life, because thereof, were denied them and their families. All real property in this State was without market value, the net result being that in many instances a five or ten thousand dollar home was sacrificed at public sale for from ten per cent. to twenty-five per cent. of its intrinsic value. The charitable spirit of the members of the Legislature must be commended by all, as the gravity of the question considered by them cannot be gainsaid or denied.
It must be remembered that all political power is inherent in the people, and the State Legislature has the absolute right to invoke this power in all cases except in such as may be prohibited by constitutional mandate. Section 1 of article 2 of the Arkansas Constitution of 1874 provides: "All political power is inherent in the people, and government is instituted for their protection, security and benefit; and they have the right to alter, reform or abolish same in such manner as they may think proper." Section 22 of the same article provides: "The right of property is before and higher than any constitutional sanction." It will thus be seen that, by constitutional mandate, all political power in this State is reserved in the people, except such as may be expressly prohibited by constitutional mandate.
In the State v. Chester Ashley, 1 Ark. 513, this court expressly held: "A State Legislature can exercise all power that is not expressly or impliedly prohibited by the Constitution; for whatever powers are not limited or restricted they inherently possess as a portion of the sovereignty of the State." *Page 741 
The constitutional doctrine thus announced has been consistently followed by this court up to the present time. Bush v. Martineau, 174 Ark. 214, 295 S.W. 9. All legislative enactments are presumed to be constitutional and valid until it is otherwise made to appear. Patterson v. Temple,27 Ark. 202.
"Neither should a statute be declared unconstitutional unless there is a clear incompatibility between the act and the Constitution." Eason v. State, 11 Ark. 481.
"All doubts should be resolved in favor of the constitutionality of a statute." Duke v. State, 56 Ark. 485,20 S.W. 600; Graham v. Nix, 102 Ark. 277, 144 S.W. 214.
It is the long established policy of this court to declare no act of the Legislature unconstitutional save with greatest caution. State v. Moore, 76 Ark. 179,88 S.W. 929.
And "a statute will not be declared unconstitutional unless no doubt exists on the question." Stillwell v. Jackson, 77 Ark. 250, 93 S.W. 71.
There is a line of demarcation between the inherent reserved rights of the people and those prohibited by constitutional mandate. The question always arises upon which side of the line the enactment may fall. The question should be approached with the gravest consideration, and all cases bearing on the question should be most seriously considered. Section 10 of article 1 of the Constitution of the United States and 17 of art. 2 of this State's Constitution should not be considered as all inclusive. The dignity of these provisions rises no higher than the reserve power in the people.
From the synopsis of the act herein given, it necessarily appears that act 278 of 1933 affects only the remedy in the enforcement of contracts, and has nothing to do with the contract itself. Therefore the question narrows down to one of remedy. The rule seems to be well settled, by all American decisions on the subject, that the remedy of enforcing contracts in existence at the time of its execution cannot be taken away by subsequent legislation. On the other hand, subsequent legislation affecting the remedy only which leaves a valid remedy *Page 742 
in effect does not impair the obligations of contract, and is therefore valid. In re Sturges v. Crowninshield, 4 Wheat. 122. In the case just referred to, the Supreme Court of the United States, on the question here under consideration, said: "The distinction between the obligation of a contract and the remedy given by the Legislature to enforce that obligation, has been taken at the bar, and exists in the nature of things. Without impairing the obligation of the contract, the remedy may certainly be modified as the wisdom of the nation shall direct."
The same court, in Von Hoffman v. City of Quincy, 4 Wall. 535, said: "It is competent for the States to change the form of the remedy, or to modify it otherwise, as they may see fit, provided no substantial right secured by the contract is thereby impaired. No attempt has been made to fix definitely the line between alterations of the remedy, which are to be deemed legitimate, and those which, under the form of modifying the remedy, impair substantial rights."
In Antoni v. Greenhow, 107 U.S. 769, 2 S. Ct. 91, the Supreme Court of the United States said: "In all such cases the question becomes therefore one of reasonableness, and of that the Legislature is primarily the judge."
A number of decisions of the Supreme Court of the United States are urged upon us as decisive of the question here presented. Among them are Bronson v. Kinzie, 1 How. 311. The act there under consideration required the property to be appraised and to bring not less than two-thirds of its appraised value upon sale. Act 278 of 1933 has no such requirement. This is entirely sufficient to differentiate the Bronson case from the one here under consideration. McCracken v. Hayward, 2 How. 608; Lessee v. Ewing, 3 How. 707, and Howard v. Bugbee, 24 How. 461, may be likewise differentiated. In Penniman's case, 103 U.S. 714, the Supreme Court of the United States drew the line of demarcation as follows: "The general doctrine of this court on the subject may be thus stated: in modes of proceeding and forms to enforce the contract the Legislature has the control, *Page 743 
and may enlarge, limit or alter them, provided it does not deny a remedy or so embarrass it with conditions or restrictions as seriously to impair the value of the right."
The Supreme Court of the United States seems to be unalterably committed to the rule that all sovereign States retain a measure of control over remedial process and legislation, and to safeguard the vital interests of its people. Jackson v. Lamphire, 3 Pet. 280; Hawkings v. Barney, 5 Pet. 451; Railroad Co. v. Hecht, 95 U.S. 168; South Carolina v. Gillord, 106 U.S. 433; Louisiana v. New Orleans, 102 U.S. 203; Red River Valley Bank v. Craig, 181 U.S. 548, 21 S. Ct. 703; Security Savings Bank v. California, 263 U.S. 282, 44 S. Ct. 108. The same court is also committed to the doctrine that the mere modification of existing remedies for enforcing contracts is not the controlling question. Stephenson v. Binford, 287 U.S. 251,53 S. Ct. 181.
All such contracts and legislation must be read in the light of the retained sovereignty of the State. Home Building  Loan Ass'n v. Blaisdell, 290 U.S. 398,54 S. Ct. 231.
Moreover, the Supreme Court of the United States is committed to the doctrine that the constitutional provision against impairment of contracts was not impaired by an amendment of the State Constitution which puts an end to a lottery theretofore authorized by the State Legislature. Stone v. Mississippi, 101 U.S. 814. To the same effect is Douglas v. Kentucky, 168 U.S. 488, 18 S. Ct. 199, and New Orleans v. Houston, 119 U.S. 265, 7 S. Ct. 198.
The same court has many times held that the respective States retain adequate power to protect the public health and the public safety. Fertilizing Co. v. Hyde Park, 97 U.S. 659; Chicago, B.  Q. Rd. Co. v. Nebraska,170 U.S. 57, 18 S. Ct. 513; Texas  N. O. R. Co. v. Miller.221 U.S. 408, 31 S. Ct. 534; Atlantic Coast Line R. Co. v. Goldsboro, 232 U.S. 548, 34 S. Ct. 364. Again, in Manigault v. Springs, 199 U.S. 473, 26 S. Ct. 127, that court held that the economic interest of the State may justify the exercise of its continuing and dominant protective *Page 744 
power, notwithstanding interference with contracts. The statute there in question was sustained upon the ground that private interests were subservient to the public right. Continuing, the court there said: "It is the settled law of this court that the interdiction of statutes impairing the obligation of contracts does not prevent the State from exercising such powers as are vested in it for the promotion of the common weal, or are necessary for the general good of the public, though contracts previously entered into between individuals may thereby be affected. This power, which, in its various ramifications, is known as the police power, is an exercise of the sovereign right of the government to protect the lives, health, morals, comfort and general welfare of the people, and is paramount to any rights under contracts between individuals."
All doubts heretofore existing in reference to the retained protective power of the several states was recently removed by the decisions of the Supreme Court of the United States in the following cases: Block v. Hirsh,265 U.S. 135, 41 S. Ct. 458; Marcus Browning Holding Co. v. Feldman, 256 U.S. 170, 41 S. Ct. 465; Edgar A. Levy Leasing Co. v. Siegel, 258 U.S. 242, 42 S. Ct. 289; and Home Building  Loan Ass'n v. Blaisdell, supra.
In the Blaisdell case, supra, the Supreme Court of the United States upheld the constitutionality of a Minnesota statute which gave to property owners relief during the present emergency. The attack was made there as here that the Minnesota statute impaired the obligations of contract. The act was upheld, however, upon the expressed theory that it fell within the reserved power of the State to protect its people from disaster. The court there said: "Undoubtedly, whatever is reserved of State power must be consistent with the fair intent of the constitutional limitation of that power. The reserved power cannot be construed so as to destroy the limitation, nor is the limitation to be construed to destroy the reserved power in its essential aspects. They must be construed in harmony with each other. This principle precludes a construction which would permit the State to adopt as *Page 745 
its policy the repudiation of debts or the destruction of contracts or the denial of means to enforce them. But it does not follow that conditions may not arise in which a temporary restraint of enforcement may not be consistent with the spirit and purpose of the constitutional provision and thus be found to be within the range of the reserved power of the State to protect the vital interests of the community. It cannot be maintained that the constitutional prohibition should be so construed as to prevent limited and temporary interpositions with respect to the enforcement of contracts if made necessary by a great public calamity such as fire, flood, or earthquake."
Act 278 of 1933 comes within the spirit and letter of the Minnesota statute and the holding of the Supreme Court of the United States upholding it. The court there held that, since the Minnesota statute affected the remedy only and gave to the mortgagee the rents and profits accruing during the statutory delay, it took from the mortgagee no substantial right.
It is true that act 278 does not, in terms, give the mortgagee rents and profits accruing from the property during the pendency of the suit, but this right may be invoked by the mortgagee under other legislation in this State.
Chapter 150, Crawford  Moses' Digest, vests full power and authority in the chancery courts of the State to appoint receivers in all equitable proceedings, when it is shown that the trust property is in danger of being lost, removed or materially injured, or that the conditions of the trust have been broken and the property is probably insufficient to discharge the mortgage debt. Thus it will be seen that the mortgagee, by invoking the provisions of chapter 150 of Crawford  Moses' Digest, has the legal status of a mortgagee under the Minnesota statute.
Our attention has been directed to Adams v. Spillyards,187 Ark. 641, 61 S.W.2d 686, as sustaining the contention that the act under consideration is unconstitutional and void. Such is not the effect of the case referred to. Section 1 of the act there under consideration reads as follows: *Page 746 
"In any foreclosure, in any court in the State of Arkansas in which real estate is involved, the real estate securing the loan sought to be foreclosed shall be considered to be the value of the loan made, irrespective of the amount which may be realized from the sale of such real property."
Certainly there is no analogy between the acts in question. A mere comparison will convince any one of the many differentiations.
Since the Legislature is primarily the judge as to when it becomes necessary to exercise the sovereign right of the State for the protection of its people; and, since the act in question impairs no contractual right existing between the parties other than to affect the remedy, and this to no substantial extent, we are unwilling to hold that the Legislature was without power to enact the legislation in question.
The chancellor's views conforming to the reasons here expressed, his decree will in all things be affirmed.