BONEBRAKE HARDWARE CO. v. MILLER

BONEBRAKE HARDWARE CO. v. MILLER
1937 OK 516
72 P.2d 351
181 Okla. 4
Case Number: 27654
Decided: 09/28/1937
Supreme Court of Oklahoma

Bonebrake Hardware Co.
v.
Miller

Syllabus by the Court.

¶0 1. MUNICIPAL CORPORATIONS--Law Existing When Municipal Bonds Issued as Part of Contract--Obligation not to Be Impaired by Change in Law.
The law existing at the time of the issuance of municipal bonds, and under the authority of which they are issued, enters into and becomes a part of the contract in such a way that the obligation of the contract cannot thereafter be in any way impaired, or its fulfillment hampered or obstructed, by a change in the law.
2. SAME--SPECIAL IMPROVEMENT BONDS--Acts Waiving and Canceling Penalty and Interest on Delinquent Installments on Special Assessments Held Invalid as Impairing Obligation of Contract.
Certain special improvement bonds were issued by the city of El Reno, pursuant to the provisions of chapter 173, Session Laws 1923 (11 Okl.St.Ann. § 81 et seq.). Section 25 of that act (11 Okl.St.Ann. § 105) provides for the payment of 12 per cent. interest on delinquent installments on special assessments and provides for the application of said interest to payment of the bonds and interest coupons. Substantial sums due upon the bonds were outstanding and unpaid. Held, that section 4, art. 15, c. 66, Session Laws 1935 (68 Okl.St.Ann. § 201 note) providing that "All penalties, interest and costs that have accrued on unpaid special assessment taxes levied and assessed for the year 1932 and all prior years are hereby waived, canceled and released," is violative of section 15, article 2, of the Constitution, as impairing the obligation of a contract, and is invalid and ineffective.

Appeal from District Court, Canadian County; Lucius Babcock, Judge.

Action by the Bonebrake Hardware Company against W. J. B. Miller, as Treasurer of Canadian County, Okl. Judgment for the defendant, and the plaintiff appeals.

J. A. Rinehart, of El Reno, for plaintiff in error.
S. T. Roberson, Co. Atty., Lucius Babcock, Jr., Asst. Co. Atty., and J. N. Roberson, all of El Reno, for defendant in error.

HURST, Justice.

¶1 This case involves the constitutionality of section 4, art. 15, c. 66, Sess.Laws 1935 (68 Okl.St.Ann. § 201 note) providing: "All penalties, interest and costs that have accrued on unpaid special assessment taxes levied and assessed for the year 1932 and all prior years are hereby waived, canceled, and released." The case arose under the following circumstances: The plaintiff, Bonebrake Hardware Company, owner of four lots in the city of El Reno, against which special assessment taxes had been levied to pay street improvement bonds assessed against a certain district in said city. The bonds mature in 1938, and a substantial part of the bonds were unpaid and the fund raised to pay the bonds and interest was delinquent several hundred dollars. The bonds were issued pursuant to the charter provisions of the city of El Reno and chapter 173, Sess.Laws 1923 (11 Okl.St.Ann. § 81 et seq.), and they draw interest at the rate of 6 per cent. per annum until maturity and interest at the rate of 10 per cent. per annum after maturity. The plaintiff was delinquent in paying special assessment taxes against his property, and interest, penalties and costs to the amount of $417.11 had accrued on such delinquent taxes. After the enactment of section 4, art. 15, c. 66, Sess.Laws 1935 (68 Okl.St.Ann. § 201 note), the plaintiff tendered the principal amount of the delinquent taxes without interest, penalties, and costs, but the county treasurer refused to accept the same, and thereupon the plaintiff paid the tax with the interest, penalties, and costs under protest and filed this action to recover the same. The defendant defended on the ground that the said section 4, art. 15, c. 66, Sess.Laws 1935 (68 Okl.St.Ann. § 201 note), is unconstitutional and violates section 15, art. 2, and section 53, art. 5, of the Constitution of Oklahoma, and art. 1, § 10, of the United States Constitution. The city of El Reno, owner of some of the improvement bonds in question, intervened and filed an answer denying that the plaintiff was entitled to any relief. The case was tried on an agreed statement of facts, stating substantially the foregoing facts. Judgment was rendered for the defendant, and from that judgment this appeal was taken.

¶2 The question involved in this case was decided adversely to the contentions of the plaintiff in Straughn v. Berry (1937) 179 Okl. 364, 65 P. (2d) 1203, where it was held that section 4, art. 15, c. 66, Sess.Laws 1935 (68 Okl.St.Ann. § 201 note), is unconstitutional. We adhere to the rules stated in that decision.

¶3 Judgment affirmed.