W. B. Worthen Co. v. Kavanaugh, 295 U.S. 56 (1935)

W. B. Worthen Co. v. Kavanaugh

No. 556

Argued March 7, 1935
Decided April 1, 1935
295 U.S. 56

APPEAL FROM THE SUPREME COURT OF ARKANSAS

Syllabus

Several years after negotiable bonds secured by a mortgage of benefit assessments had been issued by a municipal improvement district, statutes were passed which greatly diminished the remedies for their security provided by law at the time of their issuance, viz: the time within which an assessment might be foreclosed and the assessed land sold for default in payment of the assessment was enlarged from approximately 65 days to at least 2 1/ years, and it might be much longer; provisions for adding a penalty of 20%, as well as costs and attorneys’ fees, were altered by omitting the costs and attorneys’ fees and reducing the penalty to 3%; a provision allowing the purchaser at foreclosure sale to go into possession upon confirmation of the sale and keep the rents and profits during the years allowed for redemption was repealed, so that the possession of the delinquent owner might remain for another four years unaffected by the sale. The mortgagee was thus left for at least 6 1/2 years without an effective remedy, and there would be no enforceable obligation in the meantime to pay installments of principal or even accruing coupons. Held in violation of the contract clause of the Constitution. Home Bldg. & Loan Assn. v. Blaisdell, 290 U.S. 398, distinguished; W. B. Worthen Co. v. Thomas, 292 U.S. 426, followed. P. 60.

189 Ark. 723, 75 S.W.2d 62, reversed.

Appeal from the affirmance of a decree in a suit to foreclose benefit assessments on the lots in a public improvement district. The assessments were mortgaged as security for negotiable bonds issued by the Improvement District to pay for the improvements, and the suit was brought by the mortgage trustee and some of the bondholders. The decree appealed from was limited by recent statutes which were attacked as unconstitutional.