Johnson v. Kersh Lake Drainage District

The majority opinion discovers a new method whereby old debts may be discharged without payment, even in cases where there is no *Page 754 question of limitations in favor of the debtor, or imputation of laches against the creditor. I, therefore, dissent.

I think it unimportant whether there was collusion in the rendition of the decree which is pleaded as res adjudicata. It suffices to say that the majority opinion opens wide the door for such collusion and affords easy opportunity to defeat the collection of substantial parts of an improvement district's obligations.

Of the innumerable improvement districts, of various kinds, which have been organized throughout the state it is doubtful whether in any instance the property owners were required to discharge the betterments assessed against their lands in a single payment. Certainly the rule is to distribute these payments, of betterments over a period of years, and when this is done numerous cases have held that interest may be charged upon these betterments. These cases are all to the effect that the interest charge does not operate to increase the betterments, but is a charge made for the indulgence of extension of time in paying the betterments. Among other cases so holding are the following: Oliver v. Whittaker,122 Ark. 291, 183 S.W. 201; Pfeifer v. Bertig,141 Ark. 531, 217 S.W. 791; Skillern v. White River Levee District, 139 Ark. 4, 212 S.W. 90; Massey v. Ark. Mo. Highway District, 163 Ark. 63, 259 S.W. 387; Griffin v. Little Red River Levee District, 157 Ark. 590,249 S.W. 16; Faulkner Drainage District v. Williams, 169 Ark. 592,276 S.W. 604; Chicago Mill Lbr. Co. v. Drainage District No. 17, 172 Ark. 1059, 291 S.W. 810.

Act 467 of the General Acts of 1919, p. 343, provides that "Where assessments of benefits have been made in drainage districts organized either under general or special acts, the property owner shall have the right to pay such assessments in full within sixty days after the passage of this act, but if he does not avail himself of this privilege, the assessment of benefit shall bear interest at the rate of six (6%) per cent. per annum, and shall be payable only in installments as levied. The interest need not be computed until necessary to be sure that the *Page 755 collections have not exceeded the total amount of benefits and interest; or the interest may be first collected."

The circumstance that the statute making the benefits bear interest was passed after the district was organized, and the benefits assessed is not of controlling importance. The decisions of the United States Circuit Court of Appeals of this circuit in the cases cited in the majority opinion involved the very taxes here sought to be collected.

That the statute above quoted is applicable to the instant case very clearly appears from the opinion of this court in the case of Benton v. Nowlin, 187 Ark. 738,62 S.W.2d 16. The theory upon which interest may be collected on deferred payments of installments of betterments was so thoroughly considered by the late Justice BUTLER in the case just cited that it would be a work of supererogation to pursue the question further.

Most — if not all — of the improvements constructed in this state, under our various improvement district statutes, have been paid for by the issuance of certificates of indebtedness or of bonds, the maturities of which are so distributed that they may be paid with the annual collection of installments of betterments.

Now, it may or may not be necessary to collect interest on these betterments; but the right to do so is unquestioned. The collection of this interest may be required to pay the district's obligations; but the majority opinion permits that right to be defeated. It is only required that the commissioners permit themselves to be sued, and for the showing to be made that property owners have paid their original assessments without paying the interest thereon. The commissioners of the districts, who are usually large property owners, are under the temptation to make no defense, as they profit, along with other property owners, in being relieved of proportionate liability for interest, and this relief may be awarded under the majority opinion, although the real parties in interest may be in profound ignorance of the suit until the right of appeal has been lost. This is the effect of the majority opinion, and I am constrained to dissent, and am *Page 756 authorized to say that Justices McHANEY and BAKER concur in the views here expressed.