(after stating the facts). I. ' The first question is whether or not the chancery court under the act could allow iclaims arising under contracts made with the directors of the drainage district for work done of a permanent nature as contemplated by the improvement district in advance of an assessment of benefits.
In Kirst v. Street Improvement District No. 120, 86 Ark. 1-8, we said: “Special assessments for local improvements find their only justification in the peculiar and special benefits which, such improvements bestow upon the particular property assessed. Any exaction in excess of the special benefits is, to the extent of such excess, a taking of property without compensation.” See also Coffman v. St. Francis Drainage District, 83 Ark. 54; St. Louis S. W. Ry. Co. v. Board of Directors, etc., 81 Ark. 562. See, also, Cribbs v. Benedict, 64 Ark. 555-61; Alexander v. Bd. of Directors Crawford County Levee District, 97 Ark. 322; Board of Directors Crawford County Levee District v. Dunbar, 107 Ark. 285-290.
In the recent case of Cherry v. Bowman, 106 Ark. 39, the board of directors of an improvement district in a city entered into a contract for the work to be done contemplated by the improvement district 'before there was an assessment of the benefits. It was sought in that case to restrain the board from proceeding to carry out the terms of the contract. In that case we held that there was no inhibition against letting the contract for the improvement before the assessments had been made. The basis of the refusal to grant the injunction prayed was expressed as follows:
‘ ‘ There is no- showing or contention that the contractor is about to proceed or threatens to proceed with the execution of his ¡contract Ibefore those matters herein mentioned are determined, and which must be determined before his contract becomes binding on the district. ’ ’ One of the matters mentioned as being necessary to determine before the contract became binding on the district was “that the cost shall not exceed the benefits.”
The statute creating the Fourche Drainage District provides that the -assessment books prepared by the assessors shall show the value of the lands without the improvements contemplated by the act, and the estimated increased value by reason of such improvements.” The law, therefore, ¡creating the -drainage district put into any contract which its directors might make for the improvements contemplated by the act, the provision that there should be an assessment -of benefits before any contract can be entered into that would be binding on the district or the land- -of the property owners included therein. Cherry v. Bowman, supra, is authority for holding that whi-le a tentative contract might be entered into for the improvement contemplated in advance of the assessment of benefits, yet such contract could not be performed- -or consummated by doing the work contemplated and would not be operative and 'binding on the district or the lands included therein, until there had been an assessment of benefits.
In Fellows v. McHaney, 113 Ark. 363, 168 S. W. 1099, speaking of act of 1913 repealing the act creating the drainage district, we said: “By this act of 1913, the-Legislature ascertained and declared that the assessment previously made was a proper one, and validated it, and its action in- so doing is beyond judicial review, in the absence of a-Showing that the assessment so validated was arbitrarily made, regardless of benefit, or a -showing that no benefit could possibly accrue -from the improvement sought to be made to the property sought 'to be taxed. In that ease there were no allegations that the “lands would not have been benefited at -all by the improvements ” the contention .simply .being that “the assessment as validated by the Legislature was unequal and unjust. ' But in the ease at bar, it was alleged and proved that the cast of the improvement contemplated by the district would exceed the value of the benefits returned by the board of assessors as finally equalized under the act by such board sitting as a board of equalization.
The amount for which the act creating the district authorized a bond issue was $150,000. The directors soon after the creation of the district issued a statement in the form of a letter to the land owners in which they set forth that the engineers estimated that the work could be done for $150,000, and it was estimated that the total cost to the property owners would be about one per cent of the assessed value. The above letter was circulated before the board had final plans drawn for the work. The work under these final plans was. estimated to cost over $1,500,000. The board entered into contracts •amounting to $1,000,000, and work had been .done and debts created under these contracts to the amount of over $100,000 before the assessment of benefits contemplated by the act was completed, which occurred January 22, 1913. This final assessment of the total benefits, according to the testimony of the assessors which is not challenged or controverted, showed that the benefits would be 'less than the estimated cost of the work to be done. The estimated cost of the work to be done did not include interest on the bonds which the statute provides shall run from ten to twenty years, nor did it include the cost of maintenance.
(1-2-3) Such were the affairs of the district when the Legislature passed the repealing act validating the assessment. But this act could not and did not validate the unauthorized contracts into which the board had entered and the claims for amounts which had accrued under these contracts. But as we have seen in the case at bar, it is alleged, and the uncontroverted proof shows, that the estimated cost of the improvement contemplated exceeded the benefits. Such being the case, the Legisla.-ture itse'lf ‘liad, no power to authorize the chancery court to allow claims for permanent work done under contracts with the hoard of directors of the drainage district. To subject the lands of the drainage district to the payment of such claims would he taking of private property for public use without compensation. Where the uncontro-verted facts show, as they do here, that the* estimated cost of the improvement contemplated exceeds the benefits to he derived therefrom, an act of the Legislature validating an assessment for such improvement would .he arbitrary and unconstitutional. Peay v. City of Little Rock, 32 Ark. 31-39; Coffman v. St. Francis Drainage District, 83 Ark. 54; Kirst v. Street Improvement District, 86 Ark. 1.
(4-5-6) The contracts made for permanent work to be done in advance of the assessment of 'benefits, and the claims arising thereunder for work done, were premature and void, and under the facts of this record are not bind-, ing upon the lands of the drainage district. The land owners of the improvement district were not estopped from setting up the invalidity of the contracts made with the board of directors for permanent work. The districts were created by acts of the Legislature and the duties of its directors were defined. The act creating the district, as amended, provided for the improvement contemplated to be made without the consent of the owners of property in the district; and the proceedings under the statute were, therefore, in invitum, so far as the property owners were concerned. The property owners were not called upon to protest against the making of the proposed improvement, for they had a right to assume that the board of directors would comply with the Constitution and statute and not provide for an improvement, the cost of which would exceed the actual benefit to their property, and .until the assessment of benefits had been made, they could not know that the cost of the improvement would exceed the benefits. In entering upon contracts for permanent work and having the same executed in advance of an assessment of benefits, tiie directors Were usurping functions f oreign to their powers under the statute creating the improvement district. In Newport v. Railway Co., 58 Ark. 275, it is said “the doctrine of equitable estoppel has no place in a ease where usurped powers have been exercised by municipal officers”; and in Watkins v. Griffith, 59 Ark. 344-361, the court quotes the above and also from Mulligan v. Smith, 59 Cal. 233, as follows: “It was the duty of those who were authorized to exercise powers which might bind the real propertyof defendant to see that the provisions of the statute under which they 'acted were complied with. ’ ’ In the recent case of Cherry v. Bowman, supra, we again recognize the doctrine that there can be no estoppel in the contractor’s favor if the subsequent proceedings in the creation of 'an improvement district fail to warrant the action previously taken. Here, as we have seen, the proceedings of the directors 'in having the permanent work done in advance of the assessment of benefits were wholly unauthorized.
II. 'To sustain the act of the Legislature, we must presume that the word “claims” as used was intended to mean only such claims' as were valid under the law creating the drainage district. No others will be binding on the owners of real property in the district. .
What claims were valid?
(7-8-9) In the recent case of Board of Directors v. Dunbar, supra, we held that where an improvement district is dissolved or dismembered “the Legislature may, in order to provide for payment of expenses incurred in initiating or forwarding the improvement, authorize an assessment based on the benefits which were .anticipated, ’ ’ and in Davis v. Chicot County Drainage District et al., 166 S. W. 170, 112 Ark. 357, where an improvement district was dissolved, we said: ‘ ‘ The tight of the Legislature to apportion the preliminary expense of a dismembered improvement district in proportion to the anticipated or prospective benefits is asserted in. the case of Board of Directors v. Dunbar, supra.” According to these cases, Where' a local improvement district has been created for the purpose of benefiting the real property included therein, it is in the power of the Legislature, if it abolishes such district, to provide for the preliminary expenses, that is, those expenses that have been incurred in the formation of the district, and in all such proceedings as were necessary, and as were had, in determining the feasibility of the improvement contemplated. Anticipated benefits,- though never realized, will justify an .allowance for the preliminary expenses incurred in determining whether the .contemplated improvement can be made at ia cost not to exceed the benefit finally .assessed. Under the terms “preliminary expenses” would be included the cost incurred in litigation to determine whether or not the act creating the district was valid, and ¡attorney’s 'fees as counsel to the board in the preliminary work of organization, etc.; such costs .as expenses for maps, plats, surveys of land .and for engineering expenses in preparing the plans and specifications. In other words, ail expenses incident to the investigation by' which it is sought to determine whether the value ¡of the benefits to the lands by the improvement contemplated would exceed the cost of such improvement and thereby warrant its completion.
(10) It follows that the ¡act under review should be construed as intending to .provide for the payment, out of the assessment returned ¡on the lands in the district, of the preliminary expenses incurred in the creation of the drainage district, and in ascertaining the feasibility of the proposed improvement. As thus construed, it is a valid act.
(11-12) III. The assessed value of the anticipated benefits, which the Legislature has validated for the purpose of paying the preliminary expenses incurred, forms the basis upon which the special tax must be levied to pay these expenses. The Four che Drainage District was one entire project which included, in order to carry out the improvement contemplated, the building of levees and the digging of canals, ditches, etc. The preliminary expenses incurred were in determining the feasibility of the entire scheme, considering ¡all the -work that was necessary to he done in order to consummate it. To meet the constitutional requirement of equality land uniformity, these preliminary expenses must hear equally upon all lands included in the drainage 'district in proportion to the value of the anticipated benefits assessed against these lands. Shibley v. Fort Smith & Van Buren District, 96 Ark. 417. For the purposes of the assessment of the value of anticipated benefits- and the levy of the tax based on such assessment to pay preliminary expenses, all of the lands included in the drainage district embracing the lands in the levee 'district must be regarded as similarly situated. The assessment was made upon the lands included in the levee district not for the purpose of ascertaining the feasibility of budding levees in that .district independent of the improvement contemplated by the drainage .district, but the assessment was made upon these lands because they were included in, and were a part of the drainage district, and the building of the levees was an essential part of the improvement contemplated by the 'creation of the drainage district.
(13) So far as the scheme of the Founche Drainage District is concerned, the lands in the levee district were also included within the drainage district and stood in the same .relation to the drainage district as. all the other lands embraced in the drainage district; the lands were assessed for the improvement contemplated by the drainage district considered as a completed project and the assessment was made because they were the lands of the drainage district and without reference to their being .also included in a separate levee district. The expenses incurred were incident to the determination of the feasibility of the project contemplated by the drainage district land not for any purpose connected with the creation of the levee district considered separate and apart from the drainage district.
No .authority can be found in the act abolishing the drainage district for the levy of an extra assessment of 20 per cent upon 'the lands included in that portion of the drainage 'district known as the Four ¿he Levee District. The levy of the special tax must be in the same proportion according to the value of the assessed benefits upon all the lands included in the drainage district, without regard to the fact of their being also included within the levee district. 'The levy of this extra assessment is in conflict with the provisions of our Constitution and statutes requiring uniformity 'and equality in taxation. To validate this extra assessment on that portion of the 'lands in the drainage district included within the levee district would be tantamount to exempting the lands in the drainage district outside of the territory embraced in the levee district of their just and equal proportion of the tas, land requiring the particular lands in the levee district to bear an unequal burden. This can not be done. See Davis, as Collector, v. Gaines, 48 Ark. 370; Town of Monticello v. Banks, 48 Ark. 251.
The preliminary expenses that were incurred were for the common benefit of all the property included in the drainage district, .and all of this property must share alike in the payment of the expenses. See Board v. Dunbar, 107 Ark., supra.
(14) The improvement that was contemplated can not be .arbitrarily divided into sections so as to prevent the assessment from being uniform upon .all the property designated in the district according to the basis of the value of anticipated benefits from the improvements. See 2 Page & Jones, Taxation by Assessment, § 688.
IV. The decree of the court was based upon a misconception of the power conferred upon' it by the statute under review abolishing the drainage district, and was erroneous insofar as it allowed indiscriminately, claims .arising out of contracts for permanent work, and claims for preliminary expenses, and in ordering the levy of an extra tax of 20 per cent upon, the lands in the levee district in addition do the tax of 10 per cent upon all the lands in the drainage district.
The decree is, therefore, reversed and the cause is remanded with directions to ascertain from this record, and other testimony if necessary, the claims for preliminary expenses, .and to' .allow these claims; .and also to allow the claims of the trust companies or others whose money was furnished to pay the claims for preliminary expenses to the extent and for the amounts only of such preliminary expenses; .and to disallow and dismiss all claims for permanent work, .and for such other .and further proceedings looking to the adjustment and payment of the claims allowed as may (be necessary and not inconsistent with, this opinion.
Hart and Smith, JJ., dissenting.