Morgan Construction Co. v. Pitts

McCulloch, C. J. The General Assembly of 1919, by special statute, created a road improvement district in Garland County designated as Southwest Arkansas Eoad Improvement District No. 1. Authority was conferred by the statute upon the commissioners of the district to construct the improvement described, and for that purpose to employ engineers and let a contract for the construction. Pursuant to the terms of the statute, appellants, a copartnership under the style of Morgan Construction Company, entered into a contract with the commissioners of the district for the construction of the improvement. But the General Assembly of 1921 (Special Acts 1921, p. 334) repealed the former statute creating the district, and provided for winding up the affairs of the district by a receivership in the chancery court of Garland County. The statute provides that all claims against the district shall, be adjusted upon the same being filed within ninety, days after the passage of the statute, and that when the indebtedness of the district is thus adjusted, assessments shall be levied upon the real property in the district to raise the funds to pay the indebtedness. Appellants presented a claim after the expiration of ninety days from the passage of the statute, and the court refused to allow the same — sustained a demurrer and dismissed the plea. The statute required, as before stated, the filing of all claims within ninety days. This is a reasonable provision, and the court was correct in refusing to allow a claim not filed within the time specified. The statute does not authorize the allowance of any claim, except those filed within .the time allowed. It is contended that the statute abolishing the district constitutes an impairment of the obligation of the contract between appellant and the district, and for that reason is void. The abolishment of the district before the performance of an executory contract for the construction of an improvement was, in effect, a breach of the contract — . a refusal, in other words, to perform the contract — but' it did not impair the obligation, for the reason that ample and reasonable provision was made for the discharge of the obligations of all contracts by the payment thereof" when presented in accordance with the terms of the statute. There is a distinction between the breach of a contract and the impairment of the obligation of a contract, and where the State enacted a statute which had the effect of annulling or breaking the contract, but contained a provision for payment of the obligation, it does not constitute an impairment of the obligation of the contract. Caldwell v. Donaghey, 108 Ark. 60; Morgan Engineering Co. v. Cache River Drainage District, 115 Ark. 437. It does not appear from the abstract of the record whether the claim of appellants was based upon earned compensation under the contract, or for damages on account of the breach of the contract, but it is unimportant to discuss that feature, for the reason that, whatever the nature of the claim is, the statute required that it must be presented within ninety days, which was not done, and this was a reasonable provision for discharge of the obligations and constituted no impairment of the obligation of any contract. Affirmed.