Bradbury & Stamm Construction Co. v. Bureau of Revenue

MOISE, Justice (dissenting in part).

I concur with the opinion of the majority except insofar as it holds that crossappellee, Bradbury & Stamm Construetion Co., Inc., is entitled to interest at the reduced rate provided hy Chap. 195, N.M. S.L.1961, from and after the effective date of that act.

The disposition of the interest problem disregards totally the provisions of Art. IV, Sec. 34, of our Constitution, and follows decisions from jurisdictions which are in no sense restricted by a constitutional provision such as ours. Absent such a provision, I would agree that the result reached is supported by respectable authority. However, I can not reconcile the conclusion of the majority with what seems to me to be the plain language of Art. IV, Sec. 34. It reads as follows:

“No act of the legislature shall affect the right or remedy of either party, or change the rules of evidence or procedure, in any pending case.”

That the case was pending when Chap. 195, N.M.S.L.1961, became effective can not be questioned. The issue, then, is, was the “right or remedy” of Bradbury & Stamm “affected” when the interest rate was reduced from 6% to 2% ? The majority concludes that it was not because ordinarily a litigant is not entitled to interest against the government by virtue of its delay or default and a statute providing for interest creates no contract to pay interest, nor does it create any vested right in the taxpayer.

I agree that if we had no statute providing for the payment of interest, none would be due. I also agree that there is no contract to pay interest. However, to say that no vested right to interest was created in the taxpayer under the facts here being discussed is to beg the question.

It seems to me that when Bradbury & Stamm filed suit to recover the taxes paid under protest while the law provided for 6% interest, to say that no vested right resulted, is to totally disregard the constitutional proscription against changing the “right” of a litigant in a pending case. Possibly the right was not a vested one in the sense that the term is ordinarily used. However, that Bradbury & Stamm were entitled to 6% interest when they filed their suit is clear. The nature of the entitlement can not be altered by saying it was not a “vested right.” The constitutional provision quoted above prohibits any change of a right by legislative act after suit had been commenced. The “rights” of the parties became fixed with the filing of the suit and it is of no consequences that so long as no suit was filed the State could grant, alter or take away the right to collect interest. Once the State .became a party to a suit the constitutional provision applies with equal force to it as it does to any other party.

I see nothing in In re Hildebrand’s Estate, 57 N.M. 778 , 264 P.2d 674 , and the cases cited therein, which in any way detracts ' from the views expressed herein.

Oklahoma has a provision in its constitution which provides: “ * * * After suit has been commenced on any cause of action, the Legislature shall have no power to take away such cause of action, or destroy any existing defense to such suit.” Art. 5, Sec. 52, Okla.Const. The term “right or remedy” appearing in Art. IV, Sec. 34, of our Constitution, has the same general meaning and import as “cause of action” and “defense,” the terms used in the Oklahoma Constitution. In the case of Dowler v. State, 179 Okl. 532 , 66 P.2d 1081 , it was held that after suit was filed by a taxpayer, pursuant to statutory authority, to recover double the amount of money wrongfully expended by public officials from public funds, the legislature had no power to take away the cause of action. A contention that the provision of the constitution did not include suits brought under a penalty statute was specifically overruled.

It was pointed out in the Oklahoma decision that the cases relied on as authority for a contrary rule are either cases where no suit had been instituted before the law was changed, or from states having no provision in their constitutions such as their Art. 5, Sec. 52. The same is equally true here under our Art. IV, Sec. 34.

The case of State ex rel. Sparling v. Hitsman, 99 Mont. 521 , 44 P.2d 747 , is, to my mind, no support whatsover for the position of the majority. I see no similarity between the situation here present and a holding that penalty and interest provided to be paid by taxpayers on delinquent taxes are in the nature of a penalty and can be forgiven by the state as not being an “obligation or liability” due the state, and which the constitution provided could not be remitted or extinguished. The obligation here is from the state to the taxpayer — not the reverse, and we are not discussing whether there can be forgiveness of obligations, but rather whether rights present when a suit was filed can be changed by the legislature while the case is pending.

I would also make mention of the fact that I do not think any discussion of whether legislation should be given retroactive or prospective application is called for. The only problem to be resolved so far as this case is concerned is whether or not the 2% interest rate provided for in Chap. 195, N.M.S.L.1961, can be applied to a recovery by Bradbury & Stamm in a suit which had been filed before the act became effective. I think the answer must be in the negative. Since the majority has decided otherwise on this aspect of the case, I dissent. I would affirm the case without remand.

CARMODY, J., concurs.