{ "id": 8724848, "name": "Little Red River Levee District No. 2 v. Moore", "name_abbreviation": "Little Red River Levee District No. 2 v. Moore", "decision_date": "1939-02-06", "docket_number": "4-5353", "first_page": "945", "last_page": "951", "citations": [ { "type": "official", "cite": "197 Ark. 945" }, { "type": "parallel", "cite": "126 S.W.2d 605" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "251 S. W. 680", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "159 Ark. 218", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8720640 ], "opinion_index": 0, "case_paths": [ "/ark/159/0218-01" ] }, { "cite": "3 A. L. R. 1426", "category": "reporters:specialty", "reporter": "A.L.R.", "weight": 2, "opinion_index": 0 }, { "cite": "194 S. W. 870", "category": "reporters:state_regional", "reporter": "S.W.", "weight": 2, "opinion_index": 0 }, { "cite": "128 Ark 550", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1581870 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/128/0550-01" ] } ], "analysis": { "cardinality": 601, "char_count": 12827, "ocr_confidence": 0.528, "pagerank": { "raw": 2.3829715742021558e-07, "percentile": 0.7970261972802275 }, "sha256": "e1579a995591d1a92dc267854b354abc261f5025cfbc5a2b19a6ca0f4148b689", "simhash": "1:f274c5f1dbe4ed50", "word_count": 2189 }, "last_updated": "2023-07-14T22:44:13.530812+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Little Red River Levee District No. 2 v. Moore." ], "opinions": [ { "text": "GrieeiN Smith, C. J.\nMay 5, 1936, Little Red River Levee District'No. 2, and Jndsonia Drainage District of White County, sold to G. D. Moore the merchantable timber on lands of the two districts which overlapped. The lands were acquired by the districts through foreclosures of liens for betterments.\nMoore sold the oak timber to J. H. Dailey. The districts executed a joint release in Bailey\u2019s favor. The contract between Moore and the districts called for a cash payment of $250. An additional payment of $3,250 was. to be made on or before May 21,1936, and final payment, of $3,500 matured on or before November 21, 1936.\nAgreement between Moore and the districts recited: \u201cThe vendors expressly reserve and retain a vendor\u2019s, lien on all of said timber to secure the balance due on purchase money; and, if the vendee cuts, removes, or sells merchantable timber from said land to the extent, value and amount of $3,500 before said notes are paid, the excess shall be applied to the satisfaction of the balance-due. \u2019\nAnother provision is: \u201cAll timber not cnt and removed by the vendee within five years from the date hereof shall revert to and become the property of the vendors. After cutting the timber the vendee shall surrender one-fifth of the total acreage each year to the vendors, in tracts contiguous to each other, but, if he needs more time for cutting the timber on any specified tract, he may have additional time, not to exceed one year, upon paying state and county taxes due on the particular tracts which he elects to hold over.\u201d\nBefore either of the two larger installments was paid, Moore consummated his deal with Bailey. Acceptance by the district was evidenced in writing. Bailey\u2019s payment of $4,500 was made to appellants to apply on the Moore contract.\nIt is contended by appellants that the contract with Me ore gave him a maximum of five years within which to cut and remove the timber, but one-fifth was to be cut each year, and the land from which such timber was cut should be surrendered to the districts. If more tim\u00e9 were required, the vendee had the right of an additional year by paying the state and county taxes \u2018 \u2018 on the particular tracts which he elects to hold over.\u201d\nAppellees contend that, the land being property of the districts, it is not subject to state and county taxes while so held; therefore, they urge, the taxpaying provision of the contract is unenforcible.\nThe court sustained demurrers to the complaint as to all allegations except one charging appellees with cutting unmerchantable timber. This appeal is from the chancellor\u2019s action in holding that as to the contractual matters pressed by appellants, the complaint did not state a cause of action.\nIt is well settled that where improvement districts acquire lands under authority given to foreclose betterment liens, such, districts bold in tbeir governmental capacities'; and, during sucb possession, state and county taxes are not assessable. But tbe law is otherwise if the-use made of the property after it has been acquired is. other than that contemplated by the statute under which, the district was created.\nFirst. Time within which the timber was to be removed was five years. But provisions in the contract for surrender of one-fifth of the acreage \u201ceach year to the-vendors\u201d; or, in the alternative, to exercise the option of procuring additional time not to exceed one year-through payment of state and county taxes \u2018 \u2018 due on the-particular tracts,\u201d mean that the parties contemplated that one-fifth of the timber should be cut each year. Date of the contract was the time from which the privilege should run as to the first one-fifth. To procure additional time, payment of state and county taxes was-requisite.\nSecond. While Bailey\u2019s contract contains language-expressive of absolute release by the districts, there is a. declaration that he, his heirs and assigns, shall hold, \u201cwith all the rights and privileges granted unto the said G. D. Moore in the original contract of sale and purchase-hereinabove described.\u201d\nThe construction placed upon Moore\u2019s contract attaches to 'Bailey.\nMoore\u2019s partner was D. E. Benton. Moore and Benton sold timber to R. P. Moore and B. Johnson & Sons,, but these transactions are not pertinent other than for the purpose of identifying the parties.\nThe construction we have given the contract seems-to have been the' one adopted by th\u00e9 parties* for in reply to a letter -written to Moore by appellants\u2019 attorney, there ivas a reply from. 'Benton, on behalf of the partnership of Moore and Benton; stating that the taxes would be paid.\nIn Robinson v. Indiana & Arkansas Lumber & Mfg. Co., 128 Ark 550, 194 S. W. 870, 3 A. L. R. 1426, Mr. Justice -Hart, after stating that the St. Francis Levee District, was a g\"ua.s-\u00bf-eorp oration to which certain governmental powers had been delegated, said: \u201cThe correctness of the chancellor\u2019s holding depends upon whether the lands were acquired by the levee district in its proprietary capacity or in the exercise of its functions as a governmental agency. In the former, case the lands would not be exempt and in the latter case they would be exempt, from taxation. The distinction, we think, has been recognized in our previous decisions relating to the question.\u201d It was then stated that [the lands] \u201cwere not held for any purpose of gain or as an income-producing property,\u201d and, therefore, the proprietary attributes did not attach.\n\u2022 By Act No. 146 of 1905, timber sold as such, without conveyance of the land upon which it is grown, is taxable as personal property, and this is true whether such timber has been cut, or not. In the instant case the timber in question became personal property for purposes of taxation when the contract was signed in May, 1936.\nA provision of the contract following the direction for application of the \u201cexcess\u201d is: \u201cAnd to the end that the vendors may know the amount of all sales made by the vendee, he shall furnish them duplicate invoices and bills of lading, statements of receipts and disbursements, and on demand shall exhibit his books for inspection, and examination by agents and representatives of the vendee.\u201d\nThe \u201cRelease of Lien\u201d executed hy appellants May 23, 1936, contained the following language: . . . \u201cdo hereby grant, sell, quit-claim and release unto the said J. H. Bailey\u201d [here followed description of acreage], and then: \u201cTo have and to hold the same unto the said J. H. Bailey, and unto his heirs and assigns, with all the rights and privileges granted unto the said G. D. Moore in the original contract of sale and purchase hereinabove described.\u201d\nRobinson v. Indiana & Arkansas Lumber & Mfg. Co., 128 Ark. 550, 194 S. W. 870; 3 A. L. R. 1426; Kelley Trust Company v. Lundell Land & Lumber Co., 159 Ark. 218, 251 S. W. 680.\nReference is again made to the opinion written by Mr. Justice-Hakt in Robinson v. Indiana & Arkansas Lumber Company, where an: exhaustive review of several cases was made and the distinction drawn between the status of guasi-corporations functioning as governmental agencies, and activities of such agencies serving in a. proprietary capacity.\nJune 18, 1937, the attorney for appellants wrote G. D. Moore: \u201cBy reference to the contract of sale and purchase of timber between the districts and Mr. Moore, dated May 5, 1936, it appears that it is. required of the purchaser to surrender one-fifth of the acreage each year or pay an additional sum equal to the state and county taxes. Accordingly, we will thank you to furnish us a correct description of th\u00e9 lands you wish to surrender, or else arrange to pay the required additional amount.\u201d [Note \u2014 This letter was addressed to G. D\u201e Moore and D. E. Benton jointly],\nJune 22, 1937, Mr. Benton wrote: \u201cIn reply to yours of recent date, we have decided to pay the state and county tax on the one-fifth-of the timber that G. D. Moore purchased from Little Red River .District. I will look after this in the near future.\u201d [The letter was written on stationery of Benton & Moore, \u201cD. E. Benton, President; G. D. Moore, Secretary\u201d].\nAct 146 of 1906 appears as \u00a7 13599 of Pope\u2019s Digest: \u201cHereafter all timber in this state which has been sold separately and apart from the land on which it stands shall be classed as personal property, and shall be subject to taxation as such. And the said timber interests shall be assessed and ithe taxes collected thereon in the county where said timber is located.\u201d", "type": "majority", "author": "GrieeiN Smith, C. J." }, { "text": "ON REHEARING\nThe improvement districts sold all the merchantable timber to Moore. The contract of sale required him to surrender one-fifth of the acreage each year, or as consideration for holding an additional year, to pay the state and county taxes due on each one-fifth so held over. With consent of the districts, Moore sold the oak timber to Bailey. Bailey received from the districts a release of all claims for any part of the purchase money remaining unpaid by Moore as against the oak timber. Thereafter the districts could enforce payment of unpaid purchase money due by Moore only against the timber other than oak. But the oak had been purchased by Bailey \u2018 \u2018. . . with all the rights and privileges granted unto the said G. D. Moore in the original contract of sale and purchase.\u201d\nWhat were these rights and privileges? They included the right to cut and remove the timber within five years \u2014 one-fifth each year \u2014 and the land from which such one-fifth was annually cut should be surrendered to the districts. Additional cutting time was provided for, but this extension could be secured only by paying \u201cthe state and county taxes due\u201d on the lands which otherwise would have revert\u00e9d. No extensions beyond these times were given Bailey. The districts had only released, as against the oak timber, the right to enforce payment of the balance due on purchase price of all the timber. While the oak was fully paid for, the right to cut and remove it was referable to Moore\u2019s contract.\nThe contract to pay state and county taxes \u201cdue\u201d upon election of the purchaser to hold the .several one-fifths for an additional year was entered into under the mistaken belief that the districts would be required to pay such taxes, or that they would be cumulative charges against purchasers of the fee if and when the districts sold. Hence, the contract required the purchaser to pay the \u201cstate and county taxes due\u201d upon any land which might have been, but which through election had not been, surrendered.\n\u25a0 It is true the law provides that upon sale of timber it shall he classed as personal property and shall be subject to taxation as such. 'But it does not appear that .the timber was so assessed. When it shall be assesed the purchasers (because they are owners) must pay such taxes. But they must pay something more if they elect not to surrender a fifth of the land each year, as the .original contract of s\u00e1le provides.\nIt is also true, as appellees insist, that state .and county taxes are not payable upon lands owned by the improvement districts which they acquired in consequence of sales for delinquent taxes. This is true because the districts hold the lands in their governmental capacities, and while so owned they are not subject to state and county taxes; nor are such taxes cumulative and chargeable to subsequent purchasers.\nIn view of the mutual mistakes of the parties as to the law governing payment of the state and county taxes, there was a failure of consideration for that part of the contract relating to extension of time for cutting the timber. But the contract is severable. The timber might have been cut one-fifth each year, without time grants. While the districts, had they not insisted upon collection of the tax equivalents, could not have been compelled to extend the time, they may not deny the privilege, in view of their insistence that the money be paid to them. Nor can the timber purchasers be required to make the payments. In the alternative, however, they should have the right to make the tender from time to time, and if they elect so to do, the districts will be required to accept.\nThere may be practical difficulties in determining what proportions of the tax equivalents should be paid by Bailey, who owns only the oak timber, and what parts should be paid by Moore, who owns the remainder; but this is a problem they must adjust.\nThe decree is reversed and the cause remanded, with directions to allow Moore and Bailey, or either of them, six months from the date of this opinion in which' to pay the tax equivalents on so much of the land as was subject to the holdover privilege of the contract. It is so ordered.\nPope\u2019s Digest, \u00a7 13599.", "type": "rehearing", "author": null } ], "attorneys": [ "Gulbert L. Pearce, for appellant.", "Herbert Moody and Brundidge & Neely, for appellee." ], "corrections": "", "head_matter": "Little Red River Levee District No. 2 v. Moore.\n4-5353\n126 S. W. 2d 605\nOpinion delivered February 6, 1939.\nGulbert L. Pearce, for appellant.\nHerbert Moody and Brundidge & Neely, for appellee." }, "file_name": "0945-01", "first_page_order": 961, "last_page_order": 967 }