author: Walker, J.:

text:
    State of Arkansas vs. Little Rock, Mississippi River and Texas Railway Company.
    1. Railroad Aid Bonds: Construction and effect of the statute, and Consti- ' tutional provisions, under which they were issued.

    The act providing for loaning the credit of the State to aid in the construction of railroads, was passed by the General Assembly the 21st of July, 1868, and, two days thereafter, each house, in pursuance of a concurrent resolution, adjourned to meet on the third Tuesday in November, 1868; and, pursuant to said resolution of adjournment, did meet on that day, and continued in session until the 10th day of April, 1869, when both houses adjourned sine die. Held:

      First — That, there being no special provision in the act as to when it should take effect, it did not become operative, or take effect as a law, for any purpose, until “ ninety days from the expiration of the session at which it was passed” (Art. 5, sec. 22, Const, of 1868); that the session of the General Assembly that passed the act, expired on the 10th day of April, 1869, when both houses adjourned sine die-, and that the act did not take effect until ninety days from that date.

      iSecond — That the election held on the 3d day of November, 1868, under the provisions of said act, to take the sense of the people on the question of loaning the credit of the State, as therein provided, was held before said act, or any provision of it, was in force, and was a nullity.
    ThirdsThat the “ consent of the people, expressed at the ballot-box,” required, by sec. 6 of Art. x of the Constitution, to authorize the loan of the credit of the State, as in said act provided, not having been obtained at an election held for that purpose in pursuance of law, the bonds of the State issued in pursuance of said act were issued without authority of law, and in contravention of the provision' of the Constitution, and created no liability on the part of the State, and are void in the hands of innocent holders.

      2. Legislation: Must be complete, etc.

    A legislative enactment must be complete in all its parts. It cannot take effect fbr one purpose, and not for another.
    3. --: Jownals of the Senate and House of Representatives.

    Effect of as evidence that an act was not passed in the manner required by the Constitution, discussed, but nothing decided.
    4. Estoppel:
    There can arise no estoppel to deny the existence of a law.
    5. Amendment:.
    A void enactment cannot be validated by subsequent amendments.
    APPEAL from PulasJci Circuit Court.
    Hon. J. W. Martin, Circuit Judge.

      PTenderson, Attorney General, for the State.

      C. W. Huntington, for appellee.

      B. O. Brown, for bondholders.
   Walker, J.:

This is an action of assumpsit, commenced-in Pulaski Circuit Court, and decided at its May term, 1877, upon the following agreed statement of facts :

The Little Rock, Pine Bluff and New Orleans RaiLoad Company was duly incorporated under an act of the General Assembly of the State of Arkansas, approved July 23, 1868, entitled 'An act to -provide for a general system of railroad incorporation.J ”

On the 10th day of March, 1869, the Little Rock, Pine Bluff and New Orleans Railroad Company, by its president, S. W. Mallory, addressed a communication to the Board of Railroad Commissioners for the State of Arkansas, the portions of which, material to this suit, are in the words and figures following, viz.i

APPLICATION FOR AID.

“ Little Rock, Pine Bliiee and New Orleans Railroad Company,

Little Rook, March 10, 1869.

“ To the Honorable Board of Railroad Commissioners for the State of Arkansas:

“ The undersigned, president of the Little Rock, Pine Bluff and New Orleans Railroad Company, respectfully represents that said railroad company desires to receive State bonds to the amount of $15,000 per mile for every mile of its road, in accordance with the provisions of the act making the loan of the State credit to the individual companies.

“ This company was incorporated under the act of July 23, 1868, authorizing the formation of railroad companies, for the purpose of building, maintaining and operating a railroad from the city of Little Rock to the southern boundary of the State, by way of Pine Bluff, together with a branch from Pine Bluff to Eunice, by way of Napoleon, making the aggregate length of main stem and branches about 260 miles.

“ The following is the organization of the company:

“Directors — G. R. Weeks, O. P. Snyder, S. W. Mallory, J. M. Lewis, J. E. Sickels.

“Officers — S. W. Mallory, president; George R. Weeks, treasurer; O. P. Snyder, secretary.

“The capital stock of the company is fixed at $27,000 for every mile of its road. Such preliminary examinations of the routes have been made as were necessary to enable the company to ascertain their approximate cost, and for their general direction. The accompanying map shows the country traversed by the proposed routes, and their terminal points. The subscription to the capital stock of the company amounts to the sum of $265,000. Had it been deemed important to the immediate interests of the company, or at all likely to influence the action of your board, this subscription might have been largely increased, but, guided by the judgment of the warmest .friends of the enterprise, the company determined to await the perfect restoration of public tranquility before making further effort in this direction. Enough, however, has been ascertained of local popular feeling regarding the enterprise, to place its success, if aided by the State, beyond all reasonable contingencies. The undersigned is now able to state that large individual, county and municipal subscriptions to the capital stock of the company are specifically promised, as well as liberal donations of lands contiguous to the routes. These, together with the proceeds of the first mortgage bonds of the company, to the amount of $10,000 per mile, which it is proposed to issue (the Board of Directors, by resolution, having authorized the issue of said bonds), will make an aggregate of resources which will reach the sum of $3,000,000. * * *

|_l.s.] “S. W. Mallory,

“President Little Eock, Pine Bluff and New Orleans Eailroad Company.”

Subsequently, to-wit, on the 15th day of March, 1869, the said Board of Eailroad Commissioners made an award of State aid in words and figures following, viz.:

“ Notification of Award of Aid, Office Board Eailroad Commissioners, Ark.,

Little Eock, March 15, 1869.

“ S. W. Mallory, president of the Little Eock, Pine Bluff and New Orleans Eailroad Company.

“ Sir : Having considered the application of the Little Eock, Pine Bluff and New Orleans Eailroad Company, made through you, its president, for a loan of the State credit, in pursuance of an act entitled £An act to aid in the construction of railroads/ approved July 21, 1868, and ratified, after being submitted, by the people, at a general election held November 3, 1868 (in accordance with section 6, Art. x, of the Constitution of the State), and, being satisfied that the construction of said line of railroad will be a public benefit, the application of said company for a loan of the State credit, to the amount of $15,000 per mile, for a distance of one hundred and twelve miles, is hereby approved, and said loan of the State credit is pledged and granted to said railroad company, and said railroad company shall be entitled to, and have a right to ask for, demand and receive the bonds of the State, hereinbefore declared to be pledged and granted, after complying with and fulfilling the terms and conditions of the above-named act.

‘ * Powell Cla yton,

“ Rob’t J. T. White,

“Benj. Thomas,

“Board of Railroad Commissioners.”

The following is an extract from the proceedings of said Board of Railroad Commissioners, upon application of said company, to-wit:

“ Executive Office,

“Little Rock, JUmcA 18, 1869.

Board of Railroad Commissioners met at the call of the president — all the members,present.

“ Commissioner Benjamin Thomas moved to take up the application of the Little Rock, Pine Bluff and New Orleans Railroad Company for State aid, which motion was adopted, and, after due consideration, the board consented to approve and grant said application for State aid, and for that portion of the road which lies between Pine Bluff and the State line, commencing at Pine Bluff and running southeasterly with the line of the road toward the State line, one hundred and twelve miles.

“ On motion of E. J. T. White, the board adjourned, to meet at the call of the president.

“ Powell Clayton, President.

“Benj. Thomas, Secretary.”

Subsequently, to-wit: On the 25th day of June, 1870, upon the application of said company, said Board of Eailroad Commissioners granted additional State aid to said company, to the extent of eight miles of the road, at the rate of $15,000 per mile; and, again, on the 16th day of March, 1871, upon a similar application, said Board of Eailroad Commissioners granted additional State aid to said company, to the extent of fifty additional miles of said road, at the rate of $15,000 per mile.

The amount of bonds issued by the State of Arkansas to the Little Eock, Pine Bluff and New Orleans Eailroad Company, under the aforesaid act of July 21, 1868, with the dates and amounts of each respective issue, is as follows, to-wit:

April 26, 1870....................................... $150,000

August 25, 1870.................................... 150,000

October 17,1870.................................... ,300,000

January 17, 1871.................................... 150,000

September 25, 1871................................. 450,000

Total issue...........................................$1,200,000

The State of Arkansas has paid from time to time, between the 1st day of April, 1871, and the 1st day of October, 1872, to the holders of the bonds issued in aid of the Little Eock, Pine Bluff and New Orleans Eailroad Company, the sum of $108,570, as interest upon said bonds, to recover which said sum of money so paid, with interest thereon, this action is brought against the present defendant corporation.

On the 25th day of April, 1870, the Little Rock, Pine Bluff and New Orleans Railroad Company, duly executed and delivered to one Benjamin A. Earnham and David B. Sickles, as trustees, and caused to be recorded, June 25, 1870, a certain mortgage, or deed of trust, upon the railroad, franchises and property of said company, to secure the payment of certain bonds which said company proposed to issue and negotiate, amounting in the aggregate to the sum of $1,200,000. A copy of said mortgage, or deed of trust, is herewith filed, marked “Exhibit A,” and is made a part of this agreed statement of facts.

The Little Rock, Pine Bluff and New Orleans Railroad Company subsequently issued all the bonds authorized to be issued under the aforesaid mortgage, or deed of trust, but failing to pay the interest upon said bonds, as the same became due and payable, and otherwise to comply with the terms and conditions of said mortgage, a suit was instituted in the Circuit Court of the United States for the Eastern District of Arkansas, on the-day of March, 1875, for the foreclosure of said mortgage, or deed of trust, and a sale of the property and franchises therein described, and such proceedings were had in said suit that on the -day of December, 1875, all the railroad, properties and franchises, in said mortgage deed described, were duly and legally sold under and by virtue of a decree of said Circuit Court of the United States, which said sale was duly confirmed by the order and decree of said court, on said--day of December 1875. The purchasers at said sale became and organized a corporation by the name of the Little Rock, Mississippi River and Texas Railway, under and by virtue of an act of the General Assembly of the State of Arkansas, approved December 9, 1874, and entitled “An act supplementary to an act entitled ‘An act to provide for a general system of railroad incorporation/ approved July 23, 1868.” Said last named corporation is the defendant in the present action.

At the general election of the State of Arkansas, held on the 3d day of November, 1868, for the election of State and County officers, a majority of the electors voting at that election voted for railroads,” as appears by the returns of said election, on file in the office of the Secretary of State of the State of Arkansas.

The Constitution of the State of Arkansas, adopted in the year 1868, as well as the statute laws of said State, and the Journals of the General Assembly for the year 1868, may be referred to by either party to this suit.

If, upon the foregoing statement of facts, the court shall be of the opinion that the defendant corporation is liable in any form of action or proceeding, or by any process, for the sums of money, so as aforesaid paid by the State for interest, judgment is to be rendered in favor of the State, for the sums so paid with interest thereon from the respective dates of payment, at the rate of six per centum per annum, which judgment may be paid or satisfied in the manner provided in section 7, of the aforesaid act of July 21, 1868, for the payment of the annual tax therein specified.

Upon this agreed statement of facts, and after argument of counsel, the Circuit Court found that the law arising on said agreed statement of facts is in favor of the defendant; that the act of July 21, 1868, to authorize State aid to be granted in the construction of railroads was never, in fact, constitutionally passed; that the money paid by the State in the redemption of coupons attached to said State aid bonds so issued and delivered to the Little Rock, Pine Bluff and New Orleans Railroad, did not become a specific lien on the franchises of the existing company, as against the rights of those claiming under the mortgage deed of April 25, 1870; nor a valid claim against the defendant company, which purchased under said mortgage; and rendered judgment thereon in favor of the defendant.

Plaintiff moved for a new trial, and assigned the following as causes for granting the same:

First — The court erred in finding for the defendant on the agreed statement of facts.

Second — The court erred in declaring the act of July 21, 1868, “To aid in the construction of railroads,” void.

Third — The court erred in failing to give judgment for plaintiff, even admitting the act aforesaid to have been void.

Fourth — The court erred in refusing to find for the State, on the agreed statement of facts, as defendant corporation succeeded to all the rights, but took the legal liabilities, chargeable upon the Little Rock, Pine Bluff and New Orleans Railroad, which is the present company’s line of road.

The Circuit Court overruled the motion for a new trial. Plaintiff excepted, and has brought the case before this court on appeal.

The case has been argued with much ability on behalf of the State, of the railway company, and by counsel who have been permitted to appear on behalf of the bondholders.

The plaintiff contends that the bonds of the State, issued to aid in the construction of the Little Rock, Pine Bluff and New Orleans Railroad, under provisions of an act, approved July 21, 1868, to which coupons for interest were attached, $108,570 of which she has paid, were a charge upon the road, and that the Little Rock, Mississippi River and Texas Railway Company, which succeeded by purchase to the franchises and property of the Little Rock, Pine Bluff and New Orleans Railroad Company, is liable to the State for the coupons so taken up by her.

The Little Rock, Mississippi River and Texas Railway Company deny their liability to pay these coupons upon the grounds:

First — That the bonds were issued without authority of law, and are null and void.

Second — That if valid, the bonds were not a lien upon the road and its property, to secure the payment of the bonds or the coupons attached, but .that the only right which the State has is to sequestrate the income and revenues of the company.

The main question to be determined is as to the validity of the bonds to which the coupons (the payment of which is the object of this action) were attached; because, if. the bonds are void, the coupons for the payment of interest are also void. Our first inquiry, therefore, will be directed to the questions: Are the bonds valid ? Had the State of Arkansas -power, through her Executive department, to issue them?

It may be as well at once to dissipate the assumption, too frequently but thoughtlessly indulged, that the power of a State, through its Legislative department, is omnipotent. Such is not the case. There is, so to speak, a power behind the throne — a sovereignty higher than State sovereignty. To the people in their sovereignty belong the rights of eminent domain and of taxation. They may delegate these rights to a sovereign State, or they may retain them to be exercised through the law-making power, upon terms prescribed by the State Constitution.

There is no subject which has been held more sacred by the people than that of taxation; none that has been guarded with more vigilance, nor for the preservation of which greater sacrifices and perils have been incurred. Influenced by this feeling, the people of Arkansas, when they framed their Constitution of 1868, ordained, section 6, Art. x, “The credit of the State or counties shall never be loaned for any purpose without the consent of the people expressed through the ballot-box.”

The ground of objection to the validity of the bonds is, that the State attempted, by legislative enactment, to loan its credit to Little Rock, Pine Bluff and New Orleans Railroad Company, without first having obtained the consent of the people of the State by a majority vote at the ballot-box. Whether such consent had, or had not, been given before the act of July 21st, 1868, under which the bonds to aid in the construction of the road were issued, and whether the act was', or not, in force at the time, it is alleged, a vote was taken on the 3d of November, 1868, at which such consent was given by a majority vote, present the most important questions for our consideration.

The 12th section of the act of July 21st, 1868, provides that “at the next general election, to be holden under the provision of sec. 3, Art. xv, of the Constitution of this State, the proper officers having charge of such election shall open a poll as in other cases, take and receive the ballots of the electors qualified to vote for officers at such election, for and against this act, and in compliance with sec. 6, Art. x, of the Constitution ; such ballots to contain the words 'For Railroads/ or,'Against Railroads/ and if it appears that a majority so voting have voted for railroads, this act shall immediately become operative and have full force, and all laws heretofore passed for loaning the credit of this State in aid of railroads shall cease and be void; but if a majority shall be found to have voted against railroads, this act shall be void and of no effect.”

It appears, from the journals of the legislature, which are made part of the evidence in this case, that the legislature took a recess, or adjourned, from the 23d of July, till the 17th of November of that year, and continued in session until the 10th of April, 1869, at which time it finally adjourned, the whole time, from the commencement of the session to its adjournment, being, in fact, but one session.

No provision was made by the act of July 21st, 1868, declaring the time when it should take effect, and where such is the ease, by Art. v, sec. 22 of the Constitution, it is ordained that No public act shall take effect, or be in force, until ninety days from the expiration of the session at which the same was passed;” and, consequently, the act did not take effect, and was not in force, until ninety days after the 10th of April, 1869 ; so that, in fact, on the 3d of November, 1868, ten months before the act took effect, when, it is claimed, that an election was held and a majority vote taken in favor of railroads, the act authorizing the same was notin force; and if not, then the election was held without authority of law, and was void.

In so holding, we are sustained by several decisions to which we will refer:

In the case of Wheeler v. Chubbuch, 16 Ill., 361, the question presented for the consideration of the court was, as to the time when an act of the legislature of Illinois took effect. The act was to prevent sheep and swine from running at large in Henry, Will, Livingston and Lake Counties, approved January 29, 1853. The act provided, “ that from and after the 1st day of March next, it shall not be lawful for any person, or persons, possessor, or possessors of any sheep and swine, to allow them to run at large within said counties.”

Catron, judge, when considering the time when the act took effect, said : The question is, as to whether the law took effect and became in force before the expiration of the sixty days from and after the close of the session at which it was passed. We think it did not. The 23d section, Art. 3. Constitution, declares: And no public act of the General Assembly shall take effect, or be in force, until the expiration of sixty days from the end of Ihe session, at which the same may be passed: unless, in case of emergency, the legislature shall otherwise direct. * * * * But such direction must be made in clear, distinct, and unequivocal provisions; and cannot be helped out by any sort of intendment, or implication. * * * * In order to take an act out of the Constitutional provision, the legislature must direct that the act, as a whole and entirety, shall take effect at a different time; and it is not sufficient that certain parts of it might have a construction which would, taken separately, give those parts effect at an earlier period.”

In the case of The Board of Supervisors of Iroquois County v. Keady et al., reported in 34 Ill., 293, the question as to when an act of the legislature took effect, again came before the same court, in which Mr. Justice Beckwith, who delivered the opinion of the court, said: The 5th section of Art. 7 of the Constitution, provides that no county seat shall be removed until the point to which it is proposed to be removed shall be fixed by law, and a majority of the voters of the county shall have voted in favor of a removal to such point. This provision contemplates the passage of a law authorizing an election to be held, and prescribes the time and place where it shall take place, the manner in which it shall be conducted, and the results made known, without which the proceedings would be those of an unauthorized assembly. Before the passage of the act of February, 1863, there was no law authorizing such an election to be held by the voters of Iroquois County. An election was held on the 16th of April, 1863, and if the act mentioned had not then become a law, it is evident that no such vote has been given in favor of the removal of the county site as the Constitution provides. Sec. 3, Art. 3, declares' that no public act of the General Assembly shall take effect, or be in force, until the expiration of sixty days from the end of the session at which the same is passed, unless so expressly declared by the legislature. The session of the General Assembly which passed the act, had not terminated when the election was held, and the act could not have become a law until after the expiration of sixty days from the end of the session, without the express declaration of the legislature to that effect.

In the case of The City of St. Louis v. Alexander et al., 23 Mo., 483, where a vote was taken and subscription made to the stock of a railroad company, by the county of St. Louis, during the time which intervened between the passage of the act, and the time when it went into effect, it was insisted that the subscription was legal; but the court said (a full bench not being present) : “ It was, in our opinion, illegal for the County Court to subscribe for stock under this act without taking the previous necessary step, to present the question to the voters of the county; and the act must be in force before such step could lawfully be taken.”

In the cases above cited, all the material questions presented in the case now under consideration were brought in review. They all hold, that a vote of the people, expressive of their assent to be taxed, must be taken under authority of law, before the legislature can enact a valid law to bind the people of the State to pay debts contracted under it.

Our Constitution expressly denies that the credit of the State shall ever be loaned for any purpose, without the consent of the people thereto expressed at the ballot box. The right to legislate upon the subject is dependent upon this consent, as a condition precedent to its exercise. The Constitution, in this respect, as in most others, is a limitation upon legislative power. Without providing any mode of ascertaining the popular will, it cannot execute itself, nor can the people, in their sovereign capacity, assemble and make a declaration of assent, because, under all the several departments to which the powers of government are distributed, the means of giving effect to them are required to be under the sanction of law. So distinctly held in the case above cited.

Mr. Justice Wagner, in the case of St. Joe Railroad v. Buchanan County Court, remarked that: “The Constitution, except when special provision is made for that purpose, does not enforce itself. It defines certain powers; but to make them operative, legislation is necessary.”

The authorities upon this point are numerous and clear, and we do not understand counsel as contending that, in order to give effect to this constitutional provision, legislation is not necessary; nor that it is not also necessary, before the passage of an act which provides for loaning the credit of the State for railroad purposes, that the qualified voters of a State, should assent to the passage.of a law by a majority vote. But they contend that if a majority so voting, vote for railroad, the law becomes operative and is in force. But if this be true, and the law is to take . effect as soon as the vote is counted and the fact ascertained, it was certainly not in force before that, time; nor when the polls were opened, the votes taken, and the count made, because all these acts must precede the ascertainment of the result, which calls the act into existence; and as a consequence, at the time when the election was held and the vote taken, there was no law in force; no legal obligation upon any one to make a correct and fair return of the result, which is sometimes found to be so important in the due administration of the law. So that this construction is unavailing, or, if well taken, we are unable to conceive how a legislative enactment, which of necessity must be complete, can be made to take effect for one purpose and not for another.

The whole act must be perfect in all its parts, before it leaves the legislative department. And unless by an express declaration in the act itself as to the time when it is to take effect, under the express provisions of the Constitution, it does not go into effect, and is inoperative as a law, until ninety days after the adjournment of the session at which the law was passed.

The remarks of Mr. Williams, special judge, in the case of Whitehead v. Wells, that a law did not take effect until ninety days after its passage, was inadvertently made and escaped the attention of the court when the opinion was delivered, and must be considered as qualified to conform to this opinion.

Mr. Cooly, Const. Lim., page 117, remarks that it is not always essential that, to be a complete statute, it must take effect as a law at the time it leaves the hands of the legislative department ; but its taking effect may depend upon a subsequent-event.

It is true that the time when the statute is to take effect, may be made to depend upon subsequent events; but the necessary events in this case, to give force to the statute, must necessarily be precedent to the time of holding the election, not subsequent to it. At the time, therefore, that the law took effect, no vote had been taken at the ballot box, and, consequently, no power to legislate upon the subject of loaning the credit of the State.

In addition to this ground of objection to the validity of the act granting State aid, it is urged as an additional ground that the act of 21st July, 1868, was not read three times on three several days, in the two houses of the Legislature, as required by the provisions of the Constitution, and that for this reason, also, the bonds are void.

Art. "V, section 21, Constitution, declares that every bill and joint resolution shall be read three times, on different days, in each house, before the final passage thereof, unless two-thirds of the house, where the same is pending, shall dispense with the rules.

It appears from House Journal, 1868, p. 480, July 20, on motion of Mr. Benjamin, substitute for Senate bill No. 49, an “Act to aid in the construction of railroads,” was read first time.

Same day, on motion of Mr. Johnson, the rules were suspended and the bill read second time.

On the same day, after several amendments, on motion of Mr. Johnson, the bill was read the third time and put upon its final passage, and passed ; pp. 481-2.

No suspension of the rules for the third reading appears.

On the same day the bill was reported to the senate, house amendment was concurred in,” the bill read a third time and passed. Senate Journal, p. 246. No suspension of the rules shown.

Thus it appears that the substitute bill was not read on three several days, in either house, nor does it appear that the rules were suspended by a two-thirds vote. The act was, therefore, passed, it would seem, in violation of the Constitution.

In the cases of The Town of South Ottawa v. Perkins, and The Board of Supervisors of Kendall County v. Post, decided by the Supreme Court of the United States, reported in the Central Law Journal, vol. 4, p. 442, the question of the validity of an act of the Legislature of the State of Illinois was considered at great length, and Mr. Justice Bradley, who delivered the opinion of the majority of the court, said: “As early as 1853, it was decided in Spangler v. Jacoby, 14 Ill., 299, that it was competent to show from the journals of either branch of the Legislature that a particular act was not passed in the mode prescribed by the Constitution, and thus defeat its operation altogether. The Constitution requires each house to keep a journal, and dedares that certain facts, made essential to the passage of a law, shall be stated therein. If those facts are not set forth, the conclusion is that they did not transpire. The journal is made up under the immediate direction of the house, and is presumed to contain a full and complete history of its proceedings. If a certain act received the constitutional assent of the body, it will so appear on the face of the journal. And when a contest arises as to whether the act passed, the journal may be appealed to, to settle it. It is the evidence of the action of the house, and by it the act must stand or fall.”

The bill was enrolled, signed by the speaker of the house and president of the senate, and approved by the governor. It was passed in 1857, had been on the statute book thirteen years, and under it, the inhabitants of South Ottawa voted to subscribe stock to the railroad company, and authorized the issuance of bonds to pay its subscription. The journals did not show that the act had passed.

It was held that the journals might be used as evidence to prove this fact, and the bonds were held to be void, even in the hands of innocent purchasers.

In the case before us, it affirmatively appears that the bill passed three readings, in the house, in one day, and on the same day. was passed in the senate, and on the next day received the approval of the governor.

This is a strong case, and leaves no margin for presumption in favor of the regularity of the proceedings. It is much stronger than that of English v. Oliver, reported in 28 Ark. Rep., p. 320, in which it was held that presumption of the regularity of the proceedings might be indulged where nothing to the contrary appeared. Whilst in this case, no presumption in favor of the regularity of the proceedings can be indulged, as the question is one of no ordinary importance, and as we may well rely upon the other ground of objection, with regard to which the authorities are clear, we will decline to express any positive opinion with regard to the invalidity of the act of the legislature, because not read the number of times, on different days, as required by the Constitution.

It is next argued by counsel for plaintiff, that the railroad company, having. received the bonds and disposed of them, is estopped from denying their validity.

The numerous authorities cited by counsel in support of this position, would sustain them under ordinary issues between parties contracting, but not where the contract is void for want of power to contract. The party is never estopped from denying the existence of a law, hut the effect of estoppel is to deny the existence of that, which, if u.ndenied, has force and effect. That which is void in law is, in law, nothing, whether denied or admitted. If there is no contract, there can be no estoppel.

In the case of The Town of South Ottawa v. Perkins, above cited, Mr. Justice Bradley, when considering this question, said: There can be no estoppel in the way of ascertaining the existence of a law. That which purports to be a law of a State is a law, or it is not a law, according as the truth of the fact may be, and not according to the shifting circumstances of parties. It would be an intolerable state of things if a document, purporting to be an act of the legislature, could thus be a law in one case and for one party, and not a law in another case and for another party; a law to-day and not a law to-morrow ; a law in one place, and not a law in another in the same State. And whether it be a law or not a law, is a judicial question to be settled and determined by the courts and judges. The doctrine of estoppel is totally inadmissible in the case.”

Nor can the fact that, under a misapprehension of the character and invalidity of the act of July 21st, 1868, the State subsequently passed a law in amendment of it, affect the question. This question came before the Supreme Court of the United States, and was disposed of in the opinion above referred to. Mr. Justice Bradley says: Thus far, we have not adverted to the argument attempted to be drawn by the defendants from the fact that the act in question was referred to in two subsequent acts of the legislature. The legislature, in 1869, could not give validity to a void act passed in 1857. The most that can be said is, that in referring to the act of 1857, the legislature'inadvertently supposed that it had been passed. Not only courts, butoindividuals, are bound to know the law, and cannot be heard to plead ignorance of it. The holder of the bonds can claim no indulgence on this score, and can take no advantage from the allegation, that he is a bona fide purchaser, without notice. He will be precluded from doing so on another ground, the want of legislative authority, in fact, in the town to issue the bonds in question.

Judge Dillon, in his work on corporations, paragraph 419, says: “ Where the authority to act is solely conferred by statute, which is, in effect, the letter of attorney of the officer, all persons must, at their peril, see that the act of the agent on which he relies, is within the power under which the agent acts ; and this salutary and sound doctrine seems to be recognized by the Supreme Court of the United States in its most recent judgments. Accordingly, the bonds issued in violation of an express statute, or Constitution, are void, though in the hands of innocent holders for value.” And the same author, paragraph'426, says: “It maybe remarked, in conclusion, that this general survey cf the adjudications shows some difference of opinion (chiefly in cases involving the rights of innocent holders of negotiable municipal securities), respecting the evidence of the compliance with conditions, and as to what will estop the municipality from showing a non-compliance in fact with such conditions. Yet, aside from these differences, the courts all agree that such a corporation may successfully defend against the bonds, in whosesoever hands they may be, if its officers or agents, who. assumed to issue them, had no power to do so. The officers of such corporations possess no general power to bind them, and have no power except such as the legislature confers. If the statute authorizes such a corporation to issue its bonds only when tire measure is sanctioned by a majority of the voters, bonds issued without such sanction (either in fact or according to the decision of some authorized body or tribunal), or when voted to one corporation, and issued to another, are void, into- whosesoever hands they may come. This is a sound and true rule of law on this subject, and the one which has had the almost uniform approval of the State courts in this country, and has recently received the high sanction of the Supreme Court of the United States.” The author, keeping in mind all the while, the distinction between the want of power to issue the bonds, and irregularities in the exercise of the power.

Mr. Justice Field, in Marsh v. Fulton County, 10 Wallace, 676, most clearly and forcibly draws the distinction between the want of special power to contract, and the general power to contract. He says: “ But it is earnestly contended that the plaintiff was an innocent purchaser of the bonds, without notice of their invalidity. If such Avere the fact, Ave' do not perceive how it could affect the liability of the county of Fulton. This is not a case Avhere the party executing the instrument possessed a general capacity to contract, and where the instruments might, for such reason, be taken Avithout special inquiry into their validity. It is a case where the power to contract never existed — Avhere the instruments might, with equal authority, have been issued by any other citizen of the county. It is a case, too, where the holder was bound to look to the action of the officers of the county, and ascertain whether the law had been so far followed by them as to justify the issue of the bonds. The authority to contract, must exist before any protection as an innocent purchaser can be claimed by the holder.”

The bonds were held void in the hands of a bona fide purchaser for want of authority in the county to issue them. And so in this ease, Ave must hold that the bonds of the State of Arkansas, issued by the Governor of the State, her agent, are void even in tbe hands of innocent purchasers, because the authority to contract did not exist at the time the bonds were issued. It is the lack of power to sell, and not the abuse of power in making the sale, which renders the sale void. And upon this distinction as to contracts entered into by the State authorities without power to contract, and that other class of cases, where the power to contract existed, but may have been abused, we rest our decision.

In the first class of cases, it is no repudiation of a contract to deny its payment, because, not being a contract, there can be no repudiation of it. But in the second class, where the power does exist but has been abused, if the bonds passed into innocent hands for a valuable consideration, an obligation may rest upon the State to pay them, and it would be repudiation to refuse payment. States, as well as all other parties who act through agents, lawfully appointed and acting within the pale of their authority, are bound by the acts -of such agents, even though they may be prejudicial to the interest of the party conferring the power to contract.

The question of lien upon the road and its effects need not'be considered.

We must hold'the bonds utterly void. The State is not responsible for them, and, as a' consequence, has no debt to be secured by lien, nor has the State any claim upon the road for the coupons paid by her. The road is not responsible for them, and is under no obligation to redeem the coupons of void bonds. To pay them was an act of folly on' the part of the State.

Finding no error in the judgment and decision of the Circuit Court, the same is, in all things, affirmed, with costs.


source: Caselaw Access Project

author: Harrison, J.:

license: Public Domain

text:
    Whelan vs. Edwards.
    Right or action:
    The distributees of an estate, or their assignee, cannot maintain an action to recover a legacy or other chose in action due the intestate: The right of action is in the administrator.
    APPEAL from Chicot Circuit Court in Chancery.
    Hon. T. E. Sorrels, Circuit Judge.

      I). II Reynolds, for appellant.

      Rose, contra.

   Harrison, J.:

John Whelan filed his complaint in equity against Wakeman W. Edwards, as executor of Patrick Noonan, and William H. Sutton, William A. Rotan and William D. Hill — the sureties on his bond — alleging that the said Patrick Noonan died in November, 1862, leaving a will, by which, after bequeathing to his brother, David Noonan, $2,000, and devising to his nephew, John Noonan, his lands in the State of Texas, he gave and devised the residue of his estate, both real and personal, to his two infant sons, Henry and Patrick, and appointed the said Wakeman W. Edwards executor thereof. That said Edwards proved the will and qualified as executor and the said Sutton, Rotan and Hill were the sureties in his bond, which was in the sum of $45,000, and on the 14th day of December, 1870, his final account current was confirmed by the Probate Court, and he was discharged.

That the said Edwards had wasted the estate, and committed gross frauds, which were specifically stated, in the execution of his trust, and the legatees, who, if the estate had been faithfully administered, would have received several thousand dollars, had received nothing from the testator’s personal estate.

That Patrick Noonan, the son, died in 1864, at the age of two years, leaving as his next of kin his brother Henry Noonan, and Henry Noonan died in 1866, at the age of six, leaving as his next of kin his three sisters of the half blood on the maternal side, Mary Daily, since intermarried with Moses Graham, Elizabeth Daily, since intermarried with Jonathan Graham, and Margaret Daily.

And that Moses Graham amd wife, Jonathan Graham and wife, and Margaret Daily, had sold and transferred their interest in the estate to the plaintiff.

And praying that the account current of Edwards might be opened and re-stated in accordance with the true facts and justice of the case, and that the defendants be decreed to pay the plaintiff the amount that might be found due.

Edwards and Sutton were constructively summoned, but did not appear. Rotan and Hill demurred to the complaint, as not stating facts sufficient to constitute a cause of action; their demurrer was sustained, and the complaint was dismissed. The plaintiff appealed.

The administrator only, and not the distributees of either Patrick Noonan or Plenry Noonan, could maintain an action for his legacy, or in regard to his interest in the testator’s estate.

This doctrine, that the next of kin, or distributees of a deceased person’s estate, cannot as such maintain an action for the recovery of the choses in action and personal assets of the estate, but that the suit for the same, either at law or in equity, must be by the executor or administrator, has been repeatedly declared by this court. Lemons’ heirs v. Rector, 15 Ark., 437; Pryor v. Ryburn, 16 ib., 671; Anthony v. Peay, 18 ib., 24; Worsham v. Feild, 18 ib., 448 ; Atkins v. Guice, 21 ib., 179; Pope’s heirs v. Boyd, 22 ib., 535; Norwood v. Holliman, 27 ib., 445; Jacks et al. v. Adair et al., ante.

As a matter of course, if the distributees could not maintain such action, their assignee cannot.

The decree of the court below is affirmed.


text:
    Anthony vs. Brooks.
    .Bill of Exceptions: Office of, appeal, etc.

    The office of a bill of exceptions is not to show facts that are properly matters of record, but to bring upon the record such matters as would not otherwise appear. And a statement in the bill of exceptions that an appeal was asked and granted, is no evidence of the fact, where the record is silent.
    APPEAL from Ashley Circuit Court.
   Harrison, J.:

The transcript in this case, which is very awkward and bungling, does not show the grant of an appeal. It commences with what purports to be a bill of exceptions, which is not any where shown to have been filed, and is not so marked; and then follow the pleadings and record entry, in a most unseemly state of confusion.

In the bill of exceptions, it is stated that an appeal was asked and granted; but there is no entry on the record proper, of such fact. It is not the office of a bill of exceptions, to show facts that are properly matters of record, but to make such — things that would not otherwise appear in it.

The prayer for and grant of the appeal, is, necessarily, a matter of record, and is not the subject of an exception ; and a statement in a bill of exceptions, that an appeal was prayed and granted, cannot countervail the record, when it is silent as to such fact.

There is nothing before us for our consideration; we have, however, looked into the case as presented in the transcript, but with no view of determining it, and are of opinion no cause exists for a reversal of the judgment.

The sole ground of the motion for a new trial was, that the verdict was contrary to the evidence, when the evidence strongly conduced to prove the issues in favor of the plaintiff, for whom they were found.

Instructions given for the plaintiff were not excepted to,' and none offered by the defendants were refused.

The case is dismissed.


text:
    Studdard vs. Trucks.
    1. ¡Slander.

    To say of one that he is a man of bad character in the neighborhood in which he lives, as regards truth and veracity, and that the speaker would not believe him on oath, is not actionable per se.

    2. ----: Pleading.

    In an action for slander, where the words alleged to have been spoken are not actionable per so, the complaint must show special damage to have resulted to the plaintiff.
    APPEAL from Dorsey Circuit Court.
    Hon. T. F. Sorrells, Circuit Judge. ■

      Carroll & Jones, for appellant.
   Harrison, J.:

This was an action .by Joseph Studdard against William Trucks, for slander, in saying that the plaintiff was a man of bad character in the neighborhood in which he lived, as regards truth and veracity; and that he would not believe him on oath. No special damage was alleged.

The defendant demurred to the complaint; the demurrer was sustained, and the plaintiff appealed.

The only inquiry in this case is, were the words charged to have been spoken, actionable, without proof of any special dam-, age.

The distinction between words that are actionable in themselves, and such as are not, and where a special damage must be shown, has been thus stated:

Where the natural consequence of the words is a damage, as if they import a charge of having been guilty of a crime, or of having a contagious distemper, or if they are prejudicial to a person in office, or to a person of a profession or trade, they are in themselves actionable; in other cases, the party who brings an action for words, must show the damage which was received from them.” 9 Bac. Abv. Title Slander, 32.
“ The ground of an action for words, in the absence of specific damage, is,” says Mr. Starkie, the immediate tendency in the words themselves to produce damage to the person of whom they are spoken, in which case, presumption supplies the place of proof.” Stark, on Slander, 18 : As to charge one with the commission of a crime tends to expose him to a criminal prosecution; or, with having a contagious disease, to exclude him from society; or, with misconduct in his profession or trade, to injure his business.

In Horn v. Buster, 19 Ark., 346, a case in which no special damage was alleged, the court held that it was not actionable to charge a person with having sworn falsely on the trial of a cause, where the testimony charged to be false was not material or relevant to the issue.

The words of the defendant were clearly not actionable of themselves, and as no special damage was alleged to have resulted from them to the plaintiff, his complaint showed no cause of action, and the demurrer was rightly sustained.

The judgment of the court below is affirmed.


text:
    Swan vs. Benson, adm’r.
    1. Vendob’s Lien: Notice, Me.

    A vendor’s lien, for purchase money, is solely the creature of equity, and does not depend upon stipulation or contract; and a purchaser, with notice, is bound by it.
    2. Release: Pleading, etc.

    A release must be in writing, and for a consideration; and, in pleading it, the defendant must set out the consideration.
    APPEAL from Woodruff Circuit Court, in Equity.
    --, Circuit Judge.

      Rose, for appellant.
   Harrison,-J.:

The facts in this case were substantially these:

Benjamin J. Johnson and his wife, Ann C. Johnson, on the 4th of October, 1864, sold and conveyed the tract of land mentioned in the pleadings, to Edward C. James, and James executed to said Benjamin J. Johnson his writing obligatory, payable at a future day, for the purchase money. On the 15th of January, 1866, and before Johnson had been entirely paid, James sold and conveyed the land to Benjamin F. Seamans and William B. Swan. Seamans and Swan, at the time of their purchase, knew that James still owed Johnson a balance on his purchase, and it was in their purchase agreed between themselves and James and Johnson, that they should pay Johnson the balance due him, which was $2,200 j and on the 5th day of April, 1866, they executed to him their two writings obligatory, for $1,100 each, one payable on the 1st day of January, 1867, with ten per cent, interest after maturity until paid; and the other on the 1st day of January, 1868, with the same interest from the 1st day of January, 1866, until paid, and expressly stating therein to be in consideration of the purchase of the land. The remainder of the purchase money they paid James, either at the time of their purchase or afterwards. The complaint further alleges, that it was also understood and agreed between all of the said parties, that Johnson should still hold his lien on the land, for the balance due him.

The writings obligatory not being paid, Johnson filed his complaint in equity against Seamans and Swan, to enforce a vendor’s lien on the land for the payment of the same; and dying after che commencement of the suit, it was revived in the name of Jasper M. Benson, as administrator, with the will annexed, of his estate.

The defendants filed separate answers, but the answer of Sea-mans is not found in the transcript. He, however, did not appeal, and it does not appear to be material to a decision of the cause before us.

Swan’s answer admitted all the allegations in the complaint, and the facts as above stated, except the averment that there was an agreement for the lien, and denied that there was any express agreement concerning it; and averred, and pleaded, that in a compromise between Johnson and himself, after the suit was brought, he was discharged and released from liability on the writings obligatory.

A demurrer was sustained to the answer.

The court held that the plaintiff had a lien, and decreed a sale of the land to pay the debt.

Swan appealed.

The vendor’s lien, for purchase money, does not depend upon stipulation or contract, and is solely the creature of a court of equity.

The defendants, when they purchased from James, knew that he still owed Johnson a balance for the land, and gave him their obligations for the amount. The amount they assumed to pay Johnson, was part of the consideration in their purchase, and was at the time a lien on the land.

There is no room for the presumption that Johnson, in taking the obligations of the defendants, intended to waive his lien, because they were not given as an additional security for James’ debt, but in substitution for it; and if it was inequitable for Janies to have the land without paying for it, it seems to us to be equally so for the defendant.

The release set up by the appellant, was not averred to have been made ujion any consideration; nor even to have been in writing.

“In a plea of release,” says Story, “the defendant must set out the consideration upon which the release was made.” Sto. Eq. Plead., sec 797; 1 Dan. Ch. Prac., 669.

A consideration is an essential part of every contract.

A release formerly, before private seals were abolished, must have been under seal; and, as a matter of course, must be in writing.

The demurrer to the appellant’s answer was properly sustained; and there is no error in the decree.

Decree affirmed.


author: Jack Holt, Jr., Chief Justice. Tom Glaze, Justice, Donald L. Corbin, Justice,

text:
    SUMMERS CHEVROLET, INC. v. YELL COUNTY, Arkansas
    92-38
    832 S.W.2d 486
    Supreme Court of Arkansas
    Opinion delivered June 22, 1992
    [Rehearing denied July 20, 1992.]

      Michael U. Sutterfield, for appellant.

      Winston Bryant, Att’y Gen., Frank J. Wills III, Asst. Att’y Gen., for appellee.

      Corbin, J., would grant rehearing.

   Jack Holt, Jr., Chief Justice.

This appeal concerns whether the appellant, Summers Chevrolet Inc. (Summers), was denied fair treatment under the Arkansas Constitution, and equal protection under the Fourteenth Amendment of the United States Constitution, in the 1990 tax assessment of its motor vehicle inventory.

Summers is an automobile dealership in Yell County selling new and used motor vehicles. In 1990, Summers voluntarily assessed its inventory, as was the practice in that county, at a value of $ 140,000. Roy Summers, President of Summers Chevrolet, Inc., testified at trial that the value was based on approximately 25 % of the actual value of the inventory and that this percentage had always been accepted without question in the years prior to 1990. The county assessor deemed this value too low, however, and conducted an on-site investigation. The assessor estimated the inventory at its full, fair market value, resulting in an assessment of $ 1,327,000. Since personal property is then taxed at 20% of its assessed value, the reassessment resulted in an increase in the amount of Summers’ taxable business property from $28,000 to $265,400.

Summers appealed the assessment to the Yell County Equalization Board, where it was slightly decreased. The Yell County Court affirmed the Board’s findings. Summers then appealed to the Yell County Circuit Court by way of a petition for administrative review and notice of appeal. The argument presented there was that the assessment of Summers’ property at 100 % of its market value exceeded the percentage at which other car dealerships and similarly situated businesses were being assessed in other counties. It was stipulated that the assessment was conducted in compliance with the guidelines promulgated by the Arkansas Assessment Coordination Division, and the computed full fair market value was not challenged. Summers argued, however, that the disparity in assessments between counties violated Ark. Const. Art. 16 § 5, which requires uniformity and equality of tax assessments, and its rights under the Equal Protection Clause of the Fourteenth Amendment. Summers requested the assessment be reduced to the statewide average of similarly situated property.

Following a trial and the submission of briefs, the circuit court found that although there was disparity in assessment of car dealers between the 75 counties, “ranging from 30% to 65% of full value, and until now none have been assessed at 100 %,” the Yell County assessor had complied with the law in assessing Summers’ inventory and Summers had not been denied equal protection of the law “any more than those who had been assessed at 65 %, as opposed to 30 %.” The trial court noted that “all of this points up the problem of assessing car dealers.”

Summers now appeals, arguing 1) the circuit court erred in concluding there was no violation of his federal equal protection rights, despite a specific finding that a disparity in assessments existed across the state, and 2) the circuit court erred in finding no violation under the Arkansas Constitution. We find the evidence simply does not support a violation of Summers’ rights under either constitutional provision. We will affirm the trial court if it reached the right result, even though it may have announced the wrong reason. Smackover State Bank v. Oswalt, 307 Ark. 432, 821 S.W.2d 757 (1991).

I. EQUAL PROTECTION

The United States Supreme Court has held in order to invoke one’s rights under the Equal Protection Clause of the Fourteenth Amendment, it must be shown there was an intentional systematic undervaluation by state officials of other taxable property in the same class. Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster County, West Virginia, 488 U.S. 336 (1989); Sunday Lake Iron Co. v. Wakefield, 247 U.S. 350 (1918). It is clear that mere errors of judgment by officials will not support a claim of discrimination; there must be something more — something which in effect amounts to an intentional violation of the essential principle of practical uniformity. Furthermore, the good faith of state officers and the validity of their actions are presumed and, when assailed, the burden of proof is on the complainant. Sunday Lake Iron Co., supra; see also White River Lumber Co. v. State, 175 Ark. 956, 2 S.W.2d 25 (1928).

We must first note that although the trial court stated in its order that the parties “stipulated that car dealers are assessed at a value in all 75 counties ranging from 30% to 65 % of full value, and until now none have been assessed at full value,” we find nothing in the record evidencing such a stipulation. The trial court may have gleaned these facts from the evidence introduced by Summers, but nowhere is there any agreement as to these facts. The parties agreed only as to the validity of the assessment procedures and the calculation of the full fair market value of Summers’ inventory.

Other than the assessor from Yell County, only seven of the 75 assessors from the various counties in Arkansas testified. Two of the assessors did state that they routinely accepted voluntary assessments averaging much lower than 100 % of the fair market value. One estimated the assessment percentage at approximately 30 % and the other at between 30 % and 40 %. The other five assessors, however, could not give specific percentages and stated they were striving for 100 %. All but one assessor testified they did not have the staff necessary to conduct countywide appraisals and were largely forced to rely on voluntary assessments in which the taxpayers render their own assessments and swear, under oath, that they are assessing at 100%. See Ark. Code Ann. §§ 26-26-901 through 903 (1987 and Supp. 1991).

Bob Corbin, the assessor from Yell County, testified that he began a reappraisal of all business personal property in 1989 when he discovered the assessment ratio had fallen below the required 20 %. He stated he personally reviewed the assessments of all 350 businesses in Yell County and that he had treated Summers no differently from any other business.

James Metzger, an expert witness testifying on Summers’ behalf, stated that studies conducted in 1987 and 1988 indicated the assessments of automobile dealers across the state were lower than any other category of personal property. He stated the method of assessment used then was predominantly voluntary assessment and that although the Assessment Coordination Division has since instituted changes in order to improve the quality of assessments, the primary method of assessment remains the same. Mr. Metzger conceded, however, that no statistically valid studies had been done since 1988. He also testified that automobile dealers were very difficult to assess due to the nature and turnover of the inventory, in addition to the problems with lack of staffing among the county assessors.

The supervisor of the 1987 and 1988 studies was Steve Sutterfield, with the Arkansas Assessment Coordination Division. Mr. Sutterfield testified that the assessments ratios were indeed low for those years but that since that time his department had made extreme efforts to educate assessors as to methodology of valuation and their responsibility under the law, and to provide more specific guidelines. Since 1990, the department has required the use of a statewide, standardized commercial property assessment form. Mr. Sutterfield stated that as a result of these efforts, two billion dollars were added to the personal property revenues of the state between 1990 and 1991, three times the normal amount of growth in any given year over the last ten years. He could not render an opinion as to the statewide uniformity in assessment of car dealers for 1990, since the last study was conducted in 1988. Mr. Sutterfield testified he felt Summers’ assessment was proper in comparison to other classes of personal property within Yell County.

We recognize the longstanding problem with county assessment problems, see Arkansas Pub. Serv. Comm’n v. Pulaski County Bd. of Equalization, 266 Ark. 64, 582 S.W.2d 942 (1979), and all of this evidence, as the trial court noted, “points up the problem of assessing car dealers.” It does not, however, evidence an intentional, systematic practice of undervaluation, either in Yell County or in other counties across the state. Only two assessors testified that their average assessments were below full, fair market value. The other assessors were at least attempting to assess at 100% and to equalize the business personal property assessments in their counties. Neither expert witness could adequately evaluate the status of uniformity in automobile dealer assessments following the last study in 1988.

We simply cannot say, based on the evidence presented, that there was an intentional, systematic practice of lowering assessment values and that, as a result of this practice, Summers was denied equal protection under the Fourteenth Amendment.

II. ARKANSAS CONSTITUTION

Summers also challenges its assessment under Art. 16 § 5 of the state constitution, which provides in relevant part:

(a) All real and tangible personal property subject to taxation shall be taxed according to its value, that value to be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State. No one species of property for which a tax may be collected shall be taxed higher than another species of property of equal value. . . .

Contrary to the State’s argument that this mandate applies only within county lines, the above provision clearly refers to statewide equality and uniformity, and we have held that a taxpayer has the right to compel a reduction in his assessment as would afford equality and uniformity with assessments of other like property in other counties of the state. State ex rel. v. Meek, 127 Ark. 349, 192 S.W. 202 (1917).

We will reverse property assessments “only in the most exceptional cases,” however, and the burden of proof is on the protestant to show that the assessment is manifestly excessive or clearly erroneous or confiscatory. Arkansas Elec. Coop. Corp. v. Ark. Pub. Serv. Comm’n, 307 Ark. 171, 818 S.W.2d 935 (1991). Also, in reviewing a finding of fact by a trial judge, we view the evidence and all reasonable inferences therefrom, in the light most favorable to the appellee. Id.

A review of the evidence in the light most favorable to Yell County, again leads us to the conclusion that the evidence does not support proof of an overall system of inequality in assessments. Summers points to James Metzer’s opinion that for 1990, car dealers were still assessing, statewide, at an average of only 50% of fair market value. As stated earlier, however, Mr. Metzger conceded that no valid studies had been conducted since 1988. Steve Sutterfield confirmed this fact and admitted he was unable to speculate as to the overall quality of assessment in 1990. Again, only two of the assessors who testified conclusively stated they were assessing well below 100%.

Clearly, the assessor from Yell County was acting under the mandates of the Arkansas Coordination Division and he testified that for the year in question he had treated all businesses equally in his assessments of their personal property. We note that it is the Arkansas Public Service Commission that is given the full power and authority over “the valuation, assessment, and equalization of all property. . . .” and over “the several county assessors. . .to the end that all assess-

ments. . .shall be made in relative proportion to the just and true value thereof, in substantial compliance with the law.” Ark. Code Ann. § 26-24-102 (1987); see also Tuthill v. Arkansas County Equalization Board, 303 Ark. 387, 797, S.W.2d 439 (1990). Although the question of whether the state, and not Yell County, should properly have been named the defendant in this case was not raised here, we think it important to note its overall duties of ensuring statewide uniformity.

Notwithstanding this commentary, we hold the evidence does not support a finding of state or countywide inequality and there was, therefore, also no violation under Art. 16 § 5.

Affirmed.

Glaze, J., concurs.

Corbin, J., dissents.

Tom Glaze, Justice,

concurring. Although the appellant’s proof failed to show an intentional, systematic practice of undervaluation of personal property, this case does reflect there are counties where assessment at fair market value is not being achieved. The state has the obligation to assure assessments on property, privileges and franchises are properly made.

The Assessment Coordination Division of the Public Service Commission is given the power of supervision and control over the several county assessors and boards of equalization and review in order that assessments of property shall amount to true market value. Tuthill v. Arkansas County Equalization Bd., 303 Ark. 387, 797 S.W.2d 439 (1990); Ark. Code Ann. § 26-24-101 and - 102 (1987). It is the duty of the assessors, boards of review or equalization and county judges to adopt the basis of valuation certified by the Commission. Ark. Code Ann. § 26-24-105 (1987). The Commission has the authority to direct and approve suits to be instituted by the Attorney General, prosecuting attorneys, or attorneys specially employed for such purpose for the collection of any taxes or penalties due the state. Ark. Code Ann. § 26-24-109 (Repl. 1991).

Apparently, Yell County followed the directive of the Arkansas Assessment Coordination Division and assessed property in the county at the property’s full value. However, if Yell County proves the exception in this regard rather than the rule, state and county officials failing to meet their duties in administrating and enforcing legal evaluation or assessment requirements may be placing themselves at risk to potential litigation designed to ensure all state taxpayers are treated evenhandedly. See generally Annotation, Tax Assessment Standing to Challenge, 9 A.L.R.4th 428, 436 (1981). Hopefully, a concerted effort by state officials can serve to avoid such litigation. The result reached by this court in this case merely highlights a serious flaw in the state’s and counties’ apparent underassessment of property; it in no way resolves the problem.

Donald L. Corbin, Justice,

dissenting. I would reverse under our Arkansas Constitution art. 16, § 5. We have two cases, White River Lumber Co. v. State, 175 Ark. 956, 2 S.W.2d 25 (1928) and State ex rel. v. Meek, 127 Ark. 349, 192 S.W. 202 (1917), that contain strong language regarding the “uniformity” requirement of state assessments. This court has stated that the “paramount command of the [state] Constitution [is] that the valuation must be equal and uniform throughout the State.” Meek, supra, at 354, 192 S.W. at 204. Consequently, this court has refused to compel county assessors to raise taxes, even to conform to state guidelines, when the county’s tax valuation would then be greater than the other counties in the state. Id. “It is true the Constitution provides that all property subject to taxation shall be taxed according to its value, but this is done when the valuation is equalized with other property of the same kind in the county.” Id. at 353, 192 S.W. at 204. The court’s reasoning was summarized in the Meek opinion as follows:

We are of the opinion that the answer of the defendants is a sufficient one and that they are compelled by the plain mandate of the Constitution to assess property in the county in conformity with valuations placed on such property in other counties, regardless of the fact that it calls for an assessment at less than full value. Any other view of the matter would work an injustice to the taxpayers of that particular county and that, too, in manifest violation of the constitutional guaranty. [Emphasis added.]

Id. at 357, 192 S.W. at 205.

The corollary to the holding in Meek is that an individual taxpayer, whose property valuation is based on a higher percentage of his property value, is entitled to a reduction of his assessment so as to conform to the valuations placed upon other similar property. In fact, this court has held as much in Drew County Timber Co. v. Board of Equalization, 124 Ark. 569, 187 S.W. 942 (1916) and Ex Parte Fort Smith & Van Buren Bridge Co., 62 Ark. 461, 36 S.W. 1060 (1896).

In this case, .1 believe that appellant presented sufficient proof to establish that his assessment was out of line with the assessments of other car dealers throughout the state. James Metzer, author of Sales Tax and Automobile Sales in Arkansas, testified that county tax assessors continue to rely predominately on voluntary renditions to evaluate business inventory. While the Assessment Coordination Division has implemented new valuation methods in the last several years, Metzer testified that the current average valuation of business inventory was approximately fifty percent of the inventory’s market value.

Appellant also presented the testimonies of the tax assessors from Pulaski, Johnson, Logan, Faulkner, Conway, Pope, and Washington counties. These counties represent a cross-section of the state, and the testimonies of these assessors support appellant’s argument that he was assessed unfairly. The county assessors testified that they continued to rely on voluntary renditions for assessing the market value of inventory, and several assessors testified that they did not believe that these voluntary renditions reflected 100% of the inventories’ fair market values.

American Heritage Dictionary defines “uniform” as “always the same; unvarying — without fluctuation or variation; consistent; being the same as another or other. “Equal” is defined as “being the same or identical to in value.”

The majority contends that appellant did not make its case. I disagree. The trial judge was convinced that Summers made a case for a lack of uniform tax assessments in other counties in the state but found that the assessment was equal and uniform for the taxpayers of Yell County. I do not fault the assessor of Yell County. He should be lauded for doing a very difficult and thankless task. I would reverse and remand this case.


author: Steele Hays, Justice.

text:
    Ashel GORDON v. PLANTERS & MERCHANTS BANCSHARES, INC., Gillett, d/b/a Planters & Merchants Bank
    91-305
    832 S.W.2d 492
    Supreme Court of Arkansas
    Opinion delivered June 22, 1992

      Gibson & Deen, by: Thomas D. Deen, for appellant.

      Berry & Mejia, by: Russell D. Berry, and Arnold, Grobmyer, & Haley, by: Robert R. Ross, for appellee.
   Steele Hays, Justice.

This is an appeal from the granting of a 12(b)(6) motion and requires construction of a provision of Article Four of the Uniform Commercial Code — Ark. Code Ann. § 4-4-213 (1987).

The complaint alleges that on September 24, 1990, Ashel Gordon (plaintiff/appellant), deposited a check for $2,494.21 in his account at Planters & Merchants Bank, (defendant/appellee). The check was issued by Stuttgart Cooperative Buyers’ Association, drawn on the First National Bank of Stuttgart, and payable to “Gordon Wallace Farms.” Planters accepted the check for deposit and gave a provisional credit to Gordon’s account.

Gordon alleges that on September 25, 1990, First National made final settlement with Planters for the amount of the check, completed the posting process, and the credit to his account was made final. Gordon further alleges that on October 1, 1990, Lloyd Wallace, an employee of Planters, contacted First National and instructed it to dishonor and return the check, in spite of the fact that final settlement had been made. Pursuant to those instructions First National agreed to dishonor the check. The check was retrieved from the maker and returned to Planters, which then debited Gordon’s account in the amount of the check.

Gordon brought suit against Planters for violation of Ark. Code Ann. § 4-4-213 (1987). The complaint charges that Planters violated the statute by charging back the check after final settlement had been made on the item. The complaint alleges that Planters, through its employee Wallace, acted maliciously and in bad faith. Gordon sued for the amount of the check, interest and punitive damages.

Planters responded to the complaint with a motion to dismiss for failure to state a claim upon which relief could be granted. Ark. R. Civ. P. 12(b)(6). After a hearing on the motion, the trial court granted Planters’ motion, and Gordon appeals from that order.

Before we face the Rule 12(b)(6) question, we address the law underlying the complaint, for in order to determine whether the facts are sufficient to state a cause of action, the cause of action and its elements must be identified. Mid-South Beverages Inc. v. Forrest City Grocery Co., Inc., 300 Ark. 204, 778 S.W.2d 218 (1989). In this case the interpretation of the law was as much in dispute as the sufficiency of the complaint. Planters renews its arguments made before the trial court that Gordon, irrespective of the adequacy of his complaint, does not have a cause of action against Planters under Article Four. We disagree.

Ark. Code Ann. § 4-4-213(3) provides in part:

If a collecting bank receives a settlement for an item which is or becomes final (subsection (3) of Section 4-4-211, subsection (2) of Section 4-4-214) the bank is accountable to its customer for the amount of the item and any provisional credit given for the item in an account with its customer becomes final.

In this instance Planters was the collecting bank. It received an item, the check, payable to Gordon, which became finally settled when, according to the complaint, First National “made final settlement” with Planters. Thus, the collecting bank was at that moment “accountable” to the payee, Gordon, for the amount of the check and the provisional credit became final. The Official Commentary to that section is clear:

9. Subsection (3) states the general rule that if a collecting bank receives settlement for an item which is or becomes final the bank is accountable to its customer for the amount of the item. . . .If previously [the collecting bank] gave to its customer a provisional credit for the item in an account its receipt of final settlement for the item “firms up” this provisional credit and makes it final. When this credit given by it so becomes final, in the usual case, its agency status terminates and it becomes a debtor to its customer for the amount of the item.

Moreover, under Ark. Code Ann. § 4-4-212 (1987), it is plain the right of the collecting bank to charge back terminates when a settlement for the item becomes final. This point is clearly made in 5 W. Hawkland, Uniform Commercial Series § 4-212:05 (1984)

The right to revoke a settlement, charge-back or obtain a refund terminates “if and when a settlement for the item received by the bank is or becomes final.” This rule is consistent with the general approach of Article 4: the collecting bank is merely an agent for collection. Once payment is made, the agency status ceases and the parties enter into a debtor-creditor relationship. If, for some reason, the collecting bank accepts return of an item, after final payment, the collecting bank, rather than its customer should be responsible for collection. [Footnotes omitted.]

And see e.g. 622 West 113th Street Corp. v. Chemical Bank, 276 N.Y.S.2d 85 (1966); Fromer Distributors, Inc. v. Bankers Trust, 321 N.Y.S. 2d 428 (1971). And as pointed out in Appliance Buyers Credit Corp. v. Prospect National Bank, 708 F.2d 290 (7th Cir. 1983), the liability under the provision of § 4-213(3) is one of strict liability, for the face amount of the item in question.

Under the facts of this case and the law in Article Four, we are persuaded there is a cause of action by the customer against a collecting bank when the collecting bank makes a charge-back for an item after it has received final settlement.

As to the Rule 12(b)(6) motion, we cannot sustain the contention that the complaint fails to state sufficient facts for a cause of action under §4-4-213(2), supra. The complaint reads in pertinent parts:

2. On or about September 24, 1990, Plaintiff caused to be deposited in his account with Defendant a check in the amount of Two Thousand Four Hundred Ninety-four Dollars and Twenty-one Cents ($2,494.21). The check was issued by Stuttgart Cooperative Buyers Association, and was drawn on First National Bank of Stuttgart.
3. The check was made payable to “Gordon Wallace Farms,” and was endorsed and accepted for deposit accordingly, and a provisional credit was entered in Plaintiffs favor in the amount of the check.
4. On or about September 25, 1990, First National Bank of Stuttgart made final settlement with Defendant for the amount of the check. The posting process was completed, and the credit to Plaintiff’s account made final.
5. On or about October 1, 1990, Lloyd Wallace, an employee of Defendant, contacted the remitting bank, First National Bank of Stuttgart, and instructed the remitting bank to dishonor and return the check, despite fact that final settlement had been made.
6. Pursuant to Defendant’s instruction, the remitting bank and its agents agreed to dishonor and return the check and the same was retrieved from the maker (to whom it had been returned in the normal course of business) and it was returned to Defendant.
7. Upon receipt of the check, Defendant disregarded the final settlement made, and debited the account of Plaintiff, its customer, in the amount of the check.
* * * * *
9. Defendant’s actions in causing the wrongful dishonor of the check, and in debiting Plaintiffs account accordingly, are in direct violation of Ark. Code Ann. § 4-4-213 (1987), and Defendant is accountable and strictly liable to Plaintiff in the amount of the check.

In reviewing a trial court’s decision on a motion to dismiss, we treat the facts alleged in the complaint as true and view them in a light most favorable to the plaintiff. It is improper for the trial judge to look beyond the complaint to decide a motion to dismiss. Battle v. Harris, 298 Ark. 241, 766 S.W.2d 431 (1989); Mid-South Beverages, Inc. v. Forrest City Grocery Co., supra.

These facts state a cause of action under § 4-4-213:1) “A collecting bank” (Planters), 2) “receives settlement for an item” (made provisional settlement when appellant first deposited his check in Planters), 3) “which is or becomes final” (First National completed the posting process and made final settlement with Planters, and the credit to Gordon’s account was made final. See § 4-4-104(j): “ ‘Settle’ means to pay in cash, by clearing house settlement, in a charge or credit or by remittance, or otherwise as instructed. A settlement may be either provisional or final.”)

The order of dismissal is reversed and the case is remanded for further proceedings.

Brown, J., not participating.


author: David Newbern, Justice.

text:
    Clifford GREEN v. STATE of Arkansas
    CR 91-235
    832 S.W.2d 494
    Supreme court of Arkansas
    Opinion delivered June 22, 1992

      Keil & Goodson, by: John C. Goodson, for appellant.

      Winston Bryant, Att’y Gen., by: Clementine Infante, Asst. Att’y Gen., for appellee.
   David Newbern, Justice.

The appellant, Clifford Green, was convicted of two counts of rape, and one count each of burglary, robbery, and theft of property. The jury imposed two life imprisonment sentences for the rapes, a five year sentence for burglary, robbery, and theft of property. The jury imposed two life imprisonment sentences for the rapes, a five year sentence for burglary, a fifteen year sentence for robbery, and a one year sentence for theft of property. The sentences are to run consecutively with the exception of the theft sentence which is to be served concurrently with the other sentences. Green argues the Trial Court erred by (1) not directing a verdict in his favor because the evidence identifying him as the person who committed the crimes was insufficient, and (2) not granting a mistrial when the victim testified about a robbery which was not specifically detained in the State’s bill of particulars. We find no error and affirm.

On the night of December 25, 1989, the victim was reading a book in her apartment when she heard someone who identified himself as “John” knock on the front door. She believed the person at the door was the security officer who lived downstairs, so she opened the door slightly. She testified that a young man pushed the door open, grabbed her by the throat, and pushed himself into her apartment. The assailant then forced her into the bedroom, threw her onto the floor, tied her hands together with the sash of her robe, and raped her. The victim stated that after the rape the man took 30 dollars from her purse and then raped her again. He took the victim’s keys and drove away in her car.

The victim described her assailant as a black male, approximately 160-170 pounds. She told officers he was wearing a tan cap with a scarf attached, a jacket, blue jeans, white tennis shoes, and a white shirt with “Los Angeles” written in dark letters. A description of the suspect and the stolen vehicle was dispatched over police radio.

Officer Jackie Runyan observed a car matching the description of the stolen vehicle. He began following the car, and it increased speed. Runyan saw that the license plate matched that of the stolen car. After a chase, the stolen vehicle went into a ditch, and the driver jumped out and ran into the woods.

Clifford Green was apprehended in the woods some two hundred yards from the stolen vehicle. At the time of the arrest, Green was wearing a brown cap with a scarf attached, a green jacket, blue jeans with blue jogging pants underneath, white tennis shoes a gray shirt, and a black shirt with “Los Angeles Raiders” written in white letters.

Lisa Calhoun, a serologist with the State Crime Lab, found evidence of semen on Green’s sweatpants. She also found semen on the victim’s vaginal smear slides and vaginal swabs submitted as part of the rape kit.

At trial, Green admitted stealing the car but denied raping the victim. He said he was elsewhere when the rape allegedly occurred.

Green was charged with four counts of rape, and one count each of burglary, robbery, and theft of property valued at $2500 or more (Class B felony). During jury selection, the State amended the charges to state two counts of rape rather than four; the first count stating the rape which occurred before the robbery and the second count that which occurred afterwards. The State also lowered the theft charge to a Class C felony because the value of the stolen property was believed to be over $200, not $2500. Green moved for a bill of particulars. The Trial Court allowed the State to amend the charges and granted the motion for a bill of particulars. The State complied the next day, and the trial began the day after the bill was furnished.

1. Substantial evidence

Green argues the identification evidence was insufficient. He contends the victim told police officers that the man who attacked her was wearing a white shirt with “Los Angeles” written on it; however, at the time of the arrest, Green was wearing a black shirt with “Los Angeles Raiders” written on it.

On appeal from a denial of a motion for directed verdict, this Court reviews the evidence in the light most favorable to the appellee, Birchett v. State, 289 Ark. 16, 708 S.W.2d 625 (1986), and affirms if there is any substantial evidence to support the verdict. Traylor v. State, 304 Ark. 174, 801 S.W.2d 267 (1990).

An element to be proved in every case is that the person who stands before the court in the position of the defendant is the one whom the indictment or information accuses and to whom the evidence relates. Womack v. State, 301 Ark. 193, 783 S.W.2d 33 (1990); Moore v. State, 297 Ark. 296, 761 S.W.2d 894 (1988). Identification may be inferred from all the facts and circumstances in evidence. Becker v. State, 298 Ark. 438, 768 S.W.2d 527 (1989).

Although the victim told officers her assailant was wearing a white shirt, and Green was wearing a black shirt when arrested, we have consistently stated discrepancies in testimony and the credibility of witnesses are issues for the jury to resolve. Wilkins v. State, 292 Ark. 596, 731 S.W.2d 775 (1989). Almost every other item of clothing Green was wearing matched the description of the assailant given by the victim, including the hat with the attached scarf with which the assailant had covered his face, apparently preventing the victim from being able to identify him directly at the trial. The evidence, combined with the fact that Green was apprehended shortly after trying to elude police while driving the victim’s stolen vehicle, leaves no doubt the jury was presented with substantial identification evidence.

2. Mistrial

Green’s other point is that the Trial Court erred by failing to grant a mistrial when the victim testified her assailant took 30 dollars from her purse. Green argues the details of this robbery were not included in the State’s bill of particulars, and thus the State should not have mentioned it. The Trial Court denied the motion for mistrial because the State had furnished Green with the victim’s statement that 30 dollars was taken.

A mistrial is a drastic remedy which will be employed only when there has been an error so prejudicial that justice cannot be served by continuing the trial. Richmond v. State, 302 Ark. 498, 791 S.W.2d 691 (1990). The decision whether to grant a mistrial is left to the sound discretion of the trial judge and will not be reversed absent an abuse of discretion or manifest prejudice to the complaining party. King v. State, 298 Ark. 476, 769 S.W.2d 407 (1989).

As a substitute for a bill of particulars the State may furnish an accused with the information in its file and any other information within the control of the State reasonably necessary to defend against the charges. Harris v. State, 299 Ark. 433, 774 S.W.2d 121 (1989). In the Harris case, a copy of the victim’s statement was furnished to the defense instead of a formal bill of particulars. We held Harris could show no prejudice because the State sufficiently informed him of the charges by furnishing the victim’s statement. See also Cokeley v. State, 288 Ark. 349, 705 S.W.2d 425 (1986).

In Limber v. State, 264 Ark. 479, 572 S.W.2d 402 (1978), the Limbers argued the Trial Court erred by not requiring the State to file a formal bill of particulars. We found no merit in the argument as the State had turned over its complete file to the defense. Because the State fully complied with discovery, the Trial Court was not in error, nor were the Limbers prejudiced by the technical failure to file a bill of particulars.

While the bill of particulars in this case did not specifically state that 30 dollars was taken from the victim’s purse, it clearly indicated that robbery was one of the charges. Green was furnished the State’s full investigative file including the victim’s statement and official police reports stating the money was taken. We cannot say the Trial Court abused its discretion by finding Green had not demonstrated prejudice in the failure to detail the robbery offense in the bill of particulars.

Affirmed.