author: EakiN, J. :

text:
    Brodie et at. v. McCabe, Collector.
    1. Taxation by Towns and Counties : Limits of their power wader Constitution of 1874 Obligations of contract not impaired by.

    It is now well settled that where municipal or county bonds have been is ued under authority of law, and where, at the same time, the law has directed a tax to be levied for their protection, or where there is a eeneral law authorizing and directing a tax in all like cases applicable to such bonds, the law becomes a part of tne contract. The holder has a right to look to the taxing provision as a part of his security, and to demand at the proper time that it be exercised in his favor. The measure of that right is the Constitutional limit of the power which the Legislature could grant to the municipality when the contract was made. Such contracts are protected by the Constitution of the United States, and no subsequent act of a State Legislature or Constitutional Convention can impair them.
    ■ 2. Taxation BY Counties and Towns : Sow far power of, limited by Constitution of 1S74-

    It was the intention of the Constitutional Convention of 1874, to cut off utterly all power in counties, cities and towns, to levy taxes beyond the limits assigned in Art. XI., Sec. 4, and Art. XVI., Sec. 3 of the Constitution. But where bonds had been lawfully issued by them under a law directing a levy of taxes to pav them, such bonds a-e protected by the Constitution of the United States; and the constitutional limit of five mills for old indebtedness existing at the ratification of the Constitution may be exceeded, if necessary, for the payment of such debts. But there is no power after having levied a tax for such protected debt, to levy besides, a tax of five mills for other indebtedness.
    Appeal from Pulaslci Chancery Court.
    Hon. D. W. Carroll, Chancellor.

      I>. JD. Turner & J. M. Moore, for appellant.

      Newton — Howard, contra.

   EakiN, J. :

This bill was filed on the 2d of April, 1879, in the Pulaski Chancery Court, against the Collector of the county, by Brodie and others, tax-payers, for the purpose of. restraining him from the collection of certain county and city taxes, alleged to be illegal, and from returning their property to the clerk as ■delinquent. The jurisdiction for such bills in this State, rests upon section 276 of the civil code, as amended in 1873, which provides that “the Judge of the Circuit Court may grant ■“injunctions and restraining orders in all cases of illegal or ■* unauthorized taxes and assessments by county, city or other •“ local tribunals, boards or officers.” (See Gantt’s Digest, Sec. 3451.)

The bill, exhibiting the order of the court, shows : That at the October term, 1868, the County Court of said county assessed the following rates of taxes upon property for county purposes, to-wit:

1. For general county purposes on each dollar of valuation . 5 mills

2. For the purpose of paying old indebtedeess, to be appropriated as follows: 3 1-2 mills to pay judgments of the United States Court on county warrants issued before the adoption of the present Constitution ; the proceeds of which tax the collector was ordered to pay, when collected, into the United States Court-, and 1 1-2 mills to the payment of interest on bonds issued, and to be issued, during the present year, in compromise of county bonds heretofore issued. 5 mills

3.For the purpose of paying judgments on bonds issued to the Memphis and Little Rock railroad, (act of 1859). 2 mills

4.To pay judgments on funding bonds, issued under the act of April 29, 1873, and to pay interest on new bonds issued, and to be issued, in lieu of said funding bonds, to bo appropriated to the judgments, 2 mills ; and to the interest on the new bonds issued in lieu, 1 mill. 3 mills

Further, that on the 10th day of October, 1878, the council of the city of Little Rock, in said county, by ordinance exhibited, levied the following taxes on each dollar of the valuation of property in the city, to-wit ;

1. To pay judgments of the Pulaski Circuit Court, rendered upon indebtedness outstanding at the time of the adoption of the Constitution of 1874, in favor of certain parties whose claims are described, for the specific levy of which tax a peremptory mandamus issued from said court...3f mills

2. For the purpose of paying balance of a certain judgment in favor of Bagley in the United States Court, for which a peremptory mandamus had issued from said court.If mills

4. To pay interest on certain bonds of the city, issued Sept. 1, 1875, and July 1, 1877, under the provisions of the general incorporation act of March 9, 1875 ... 2 mills

5. To pay interest on indebtedness created before the Constitution of 1874, by virtue of Sec. 4, Art. 12, of said Constitution, for general purposes. 5 mills

These levies of ten mills in the aggregate, by the county, and eleven and one-half mills by the city, for the payment of debts, over and above the levy of five mills by each, for general purposes, are alleged tobe illegal, because in excess of the restrictions of Art. XVI., Sec. 9, and Art. XII., Sec. 4, of the Constitution.

Nevertheless, the city levies have been certified to the county clerk, and by him charged on the tax books.

Of the State taxes no complaint is made. Complainants allege that they have tendered them to the collector, and also ten mills upon the dollar, for county, and the same for city taxes, which amounts they claim are, in the aggregate, all which could be lawfully levied.

The answer set up the judgments of the United States Circuit Court rendered in favor of divers holders of bonds issued to the Memphis and Little Rock Railroad Company, under the provisions of the act of February 5, 1859 ; also judgments of the same court in favor of divers holders of bonds issued under the act of April 29, 1873, authorizing certain counties to fund their outstanding indebtedness ; also divers judgments of the -same court in favor of other parties, upon warrants of the county, issued before the adoption of the Constitution of 1874. Upon all these judgments writs of mandamus had issued from said court, commanding the County Court to levy a tax to raise a fund for their payment.

Further, that under the provisions of an act of March 6, 1877, the County Court had issued funding bonds to take up prior bonds issued under the act of 1873, and other acts authorizing the funding of the county debts; and that the ■original obligation of the county to provide, by taxation, for the payment of the bonds so taken up, attached also to those which were substituted. Whereupon he claims that the levies for these purposes were warranted by law and not in excess.

That the levy of five mills on the dollar to pay indebtedness ■existing at the time of the adoption of the Constitution, was authorized and required by its terms, and was judiciously distributed so as to obey the writs of mandamus of the Federal Court, and to further a scheme to reduce the county indebtedness ; and that this was done by arrangement and agreement, whereby the County Court was permitted to make a levy manifestly insufficient for the purpose.

Defendant denies that complainants have paid the State and •other undisputed taxes, or have offered to do so, except on ■condition of getting receipts in full for all taxes charged. He also demurs to the bill.

An amended answer, regarding the city levies, shows that the assessed value of real and personal property in the city subject to taxation in 1868, was $4,985,531.

That to pay judgments rendered in the Pulaski Circuit Court, upon old indebtedness, and upon which writs of mandamus issued, the sum of $12,254.15 would he necessary, with interest, and that the product of the levy of three and one-quarter-mills would give $16,202 ; also that the levy for the Bagley judgments was about sufficient to pay the debt.

These two levies, (amounting to five mills), were made-under section 4 of article 12 of the Constitution of 1874.

That the tax of four mills was levied by virtue of the act of February 5, 1859, and in obedience to a mandamus of the-United States Circuit Court, to pay a judgment of said court, upon bonds issued under act of April 9, 1869, in lieu of bonds; issued to said Memphis and Little Rock railroad.

That the tax of two mills was levied to pay interest on bonds, issued September 1, 1875, and July 1, 1877, under the general incorporation act of March 9, 1875, and the tax of one-half' mill was levied under authority of sections 65 and 66 of said act to provide a sinking fund for the redemption of. bonds, issued to take up.all indebtedness prior to the adoption of tha Constitution.

Upon hearing, the Chancellor found the first and second! items of the county levy to be in strict accordance with the-Constitution, and valid. That the power to levy a tax to pay the bonds issued to the Memphis and Little Rock railroad was. incorporated in the act of 1859, and became a part of the contract, which could not be impaired by the Constitution of 1874 and the levy of two mills to pay judgments on those bonds, was, therefore, valid. As for the levy of one mill out of the-gross levy of three, it was held invalid, because the limit of taxation had been already passed, and because, also, the levy was made in part to pay interest on obligations not yet con-traded. As for the rest of this levy, that of two mills to pay judgments of the Federal Court, it was sustained.

Passing to the city levies, the court held: That, for reasons stated in the discussion of the county levies, they were all valid, save the fourth and fifth items. As for the two-mill tax to pay interest on city bonds of September 1, 1875, and July 1, 1877, these having been issued under the new Constitution, were held bound by its limitations, which had been already exceeded. For the same reason the levy of one-half mill was also held invalid.

Whereupon the court ordered the injunction, as to the levies held illegal, upon terms, that complainants pay all taxes legally levied.

Both parties appealed.

It is now well settled that where bonds of a county or municipality have been issued under authority of law, and where, at the same time, the law has directed a tax to be levied for their protection — or where there is a.general law authorizing and directing a tax in all like cases, applicable to said bonds,'the law b.ecomes a part of the contract. The holder is entitled to look to the taxing provision as a part of his security, and has a vested right to demand, at the proper time, that it shall be exercised in his favor. The measure of that right will be the constitutional limit of the power which the Legislature could grant to the municipality when the contract was made. Such contracts are protected by the Constitution of the United States, and no subsequent act of a State Legislature or Constitutional Convention, can impair them.

The Constitution of 1886 did not limit the powers of taxation which the Legislature might grant to municipalities.

The Constitution of 1868, (Art. V., Sec. 47), prohibited the Legislature from authorizing any municipal corporation “to levy any tax on real or personal property to a greater extent than two per centum of the assessed value of the same;” and ■further, with regard to cities and villages, imposes upon the Legislature the duty of restricting their powers of taxation, borrowing money, assessment, contracting debts and loaning their credit, so as to prevent the abuse of that power. It is •evident that counties were meant to bo included in the term ‘municipal corporation.’ ’

The Constitution of 1874 provided, (Art. XII., Sec. 4), that “no municipal corporation shall” •* * * “levy any

tax on real or personal property to a greater extent, in one year, than five mills on the dollar of the assessed value of the ■same ; 'provided, that to pay indebtedness existing at the time ■“ of the adoption of this Constitution, an additional tax of not ■“ more than five mills on the dollar, may be levied.”

With regard to counties, which, in this Constitution, are treated separately, it is provided, (Art. XVI., Sec. 9), that “ no county shall levy a tax to exceed one-half of one per cent “ for all purposes ; but may levy an additional one-half of one “ per cent to pay indebtedness existing at the time of the rati- “ fication of this Constitution.”

Upon a careful consideration of these provisions, in connection with the history of the State, and the existing evils which the Convention of 1874 had probably in view, as resulting from the improvidence and recklessness of counties, cities and towns, in the creation of debts, we conclude that it was the intention of that body to cut off utterly all power to levy taxes beyond the limits assigned. Of course the members who framed the Constitution, knew that, under previous laws, •counties and cities had been competent to create debts which would require a higher rate of taxation to discharge them ; and which debts, with the means of payment, would be under the ■protection of the Constitution of the United States. But we cannot presume they knew that such powers had been •exercised, or were aware that the limit they fixed would actually conflict with the superior Constitution. Where such cases arise, the State Constitution must open sufficiently to give place to the full operation of that of the United States, but need do so no further. Both must stand together as far as possible, and the restriction of the ■State Constitution continues in all respects valid, when not displaced, or pushed forward, by superior power. When that happens it is only pro re nata, and to the extent of the necessity. To suppose that our State Constitution intended the power to levy taxes for debts so protected, if any should exist, to be cumulative, and additional to the power allowed to be granted to levy five mills for existing debts, would do violence to the language, without any safe guide to the real intention. It must, therefore, be held, that where a tax is levied to pay •one or more of these “protected debts,” as the attorneys have called them, it so far exhausts the. five mill power. If the five ■mills be not enough, the levy may go to the extent required by the Constitution of the United States; or if it be not all required, the remainder may be levied for payment of other ■old indebtedness. But there is no power, after having levied a tax for such protected debt, to levy besides, a tax of five ¡mills for other indebtedness.

Several of the levies, both for the county and city, were made under peremptory writs of mandamus, issuing from the Federal Circuit Court for the Eastern District of Arkansas, =and from the Pulaski Circuit Court of the State.

The use of the writ of mandamus, directed to county courts, 'or boards of supervisors of counties, to compel them to levy taxes in satisfaction of judgments at law, has been common in the Federal Court for a number of years. The decisions of the Supreme Court of the United States have sustained that power; and until the Supreme Court may change its rulings, we concede that to the extent to which this power has been-sustained, the judges of the Federal Circuit Courts are constrained to continue its exercise. We cannot yield our assent, however, to the principle upon which this power is founded.. We look upon a mandamus as an original writ, and not as a. mere process in execution, founded upon a judgment, and continuing the jurisdiction in the court in which the judgment was. rendered. It was, in England, a high prerogative writ issued, in the king’s name, and directed to “any person, coi’pdration, or superior court of judicature, requiring them to do some particular thing therein specified.” It is, in no true sense, process in a pending action, or in execution of a judgment.

The writ of mandamus is, in itself, a writ, a litigation of a. right in a court of justice, seeking a decision upon a matter-not involved in the litigation in which any judgment may have-been rendered which gives the right to the writ. It has been, so considered by the Supreme Court of the United States.. (See Note d. to p. 297, 1st Kent’s Oom.) When addressed, to the courts of a State commanding them to perform official duties uuder powers derived alone from the State, it is most, proper that they should emanate from those superior courts of' the State which have supervising control of their own tribunals ; otherwise the harmony of our complicated systems of State and Federal jurisprudence may be seriously disturbed.. If the officers of a State neglect their duty,' the courts of the-State may, and have interposed to compel them, in favor of' creditors, who have obtained judgments in the Federal courts.. (Soutter v. Madison City,) 5 Wis., p. 30; also State ex rel. Carpenter v. Beloit.)

The Federal courts, however, have proceeded upon the ground that it is neither a prerogative writ nor a new suit, when issued to enforce a judgment of their courts, but a mere auxilliary proceeding.

In announcing my dissent from this view, and my conviction-' that the Federal courts have been mistaken, and have herein-transcended their just authority and gone counter to the ideas-which prevailed for three-quarters of a century in the history of Federal judicature, and that they have given a character to-the writ of mandamus not warranted by common law, nor a sound construction of any statute, I must be understood as-expressing my individual opinion. Upon this point in this-case my associates are silent.

The jurisdiction of the Pulaski Circuit Court is proper and. unquestioned, and as to the action of the United States Circuit Court, we concur in the view that comity requires it shall not be collaterally attacked, unless plainly and palpably in violation of those provisions of our State Constitution and laws, which are not in conflict with those of the United States. The-authority to issue the writs of mandamus from the Federal courts, and to enforce the levy and collection of taxes to satisfy their judgments, is predicated upon the supposition that the debts upon which the judgments were rendered were protected, as to this remedy, by the Constitution of the United States. This is a quesition, the final determination of which,, belongs to the Supreme Court of the United States, and upon which an appeal lies not only from the Federal Circuit Courts,, but from this court also. Its supremacy in this respect must be recognized. The decisions upon the several writs of mandamus, in the Federal and State Circuit Courts, were subject to appeal directly, or indirectly, to that supreme tribunal-Until so appealed and reversed, they are not void but voidable. The members of the Pulaski County Court represented the county in those suits; and, having failed to appeal, were-bound to respect the orders made in the cases. However repugnant to the views of the individual members of this court the exercise of the authority may have been, it would be •unseemly and might lead to grave consequences to forbid, in a •collateral proceeding, the performance of acts which the courts have directed to be performed, and for the non-performance of which the defendants in the writs of mandamus would incur the severe penalties of contempt. This court could not protect them against the authority of the United States ; and if it could, eventually, it would still consider the clash of a conflict -as a thing much to be deplored, and avoided by all possible •means.

A calm, earnest and anxious deliberation upon this point, with a full sense of the grave responsibilities devolving upon •us, has resulted m a concurrence of opinion, to respect the mandates of the Federal and State Circuit Courts, with regard to these levies, when they have not attempted, palpably, to confer powers upon State officers not granted by the constitution and laws of the State. We have conceded that there may be cases in which the taxing power would extend beyond the express limits of the State Constitution, and comity requires us to presume, as indeed we believe, the Federal and State courts have meant to act within those powers. If they have erred, the due order of proceedings, which is essential to the harmony of State and Federal governments, and the stable administration of justice in each, requires that the errors should be corrected by appeal, or upon failure, acquiesced in with respect, and not be met with a clash of independent tribunals.

We will now proceed to consider the items, seriatim, in the light of these views, passing, as of course, the levy of five ■mills by the county and city respectively, for general purposes.

The county levy of five mills for old indebtedness was divided, Three and a half mills were levied under order of the Federal Circuit Court, rendered upon county warrants issued before the adoption of the Constitution of 1874. The orders were not appealed, and the levy being- in obedience to them, was not enjoined by the Chancellor. So far he was right.

The remnant of the five mills, (being 1 1-2) was for the purpose of paying interest on bonds issued and to be issued,, during - the year, in compromise of county bonds heretofore issued. The courts were authorized to issue these bonds by Act of March 6th, 1877. By Section 6, it was made the duty of the court “to levy a special tax of sufficient amount to pay “the principal and interest of said bonds as they shall become “due, not to exceed the limit of taxation, together with all other-“taxes levied during that year, prescribed in the Constitution “of the State.” Those who took, or might take these bonds,, evidently submitted to the constitutional limit of taxation under the present Constitution. The Chancellor declined to. enjoin this tax because it was part of the levy of five mills,, which the county had the right to make, by express authority of the constitution, to pay old indebtedness; having.failed, it seems, to notice the next item in this connection ; which, being a protected debt, and levied under a mandamus, more than exhausted the remnant of the taxing power. This levy of' one and a half mills should have been enjoined; the next item was properly sustained. ,

The fourth item was properly divided by the Chancellor,, the levy of two mills sustained, and the ievy of one mill enjoined. These new bonds could only be issued under the-act of 1877, above mentioned.

Of the whole county tax two and a half mills must be enjoined.

Passing to the city levies : the first, of' 3 1-4 mills, made upon writs of mandamus from the Pulaski Circuit Court, will not, upon the principles herein announced, be interfered with in this proceeding. If the outstanding- indebtedness upon which these judgments were rendered was. not under the pro--'tection of the Constitution of the United States, an appeal •■should have been taken to this court from the peremptory ’writs of mandamus. The second item, to pay the balance on 'the Bagley judgment, upon mandamus from the Federal court, ¡stands, of course, upon what has been said.

The third item is to pay the judgments of the Federal Court '■Tendered upon certain certificates of indebtedness, which were ¡issued under authority of the general incorporation act for -cities and towns, of the 9th of April, 1869. These certificates -seem to have been issued to the Memphis and Little Rock railroad company in lieu of bonds which had been issued under Act of February 5, 1859. The bonds had been protected to their full extent by the Constitution of the United States, but where new certificates of indebtedness were taken in lieu there-of, with different provisions for payment, it became a ¡novation.

Turning to the general incorporation Act of 1869, beginning nvith Section '3295 of Gantt’s Digest, we find that the city was ¡authorized, thereby, to assess and collect a tax of five mills for -•any indebtedness existing at the time of the levy. Section -3298 authorized the issuance of bonds for the purpose of extending the time for payment of indebtedness heretofore incurred, with provision for a tax to create a sinking fund of not more than a mill on the dollar, to be annually levied, and to be paid to the extinguishment of the bonds or funded debt, "These were the certificates meant, being the same which came before this court in the case of Vance v. The City of Little Rock, 30 Ark., 436. Those who took them did so upon terms, ' ..and they doubtless relied upon the security for their payment, provided by the act authorizing their issuance. Whatever Ttlieir rights might have been under the original bonds, when they took these certificates they could only claim from the city -•.a levy of five mills .in .the aggregate, for all general indebtedness, and one mill for a sinking fund for the certificates — being ■six mills at most. Perhaps, if the city authorities had appeared in response to the writ of mandamus, and shown all this, the Federal Court would not have made it imperative beyond one mill. However that may have been, the court issued the mandamus for four mills, and the Chancellor acted properly in refusing to disturb it.

The bonds of the city, issued September 1st, 1875 and July 1st, 1877, were, of course, subject to the constitutional provisions of 1874. The limits of the city’s power to levy under this constitution, had been already exceeded, and this tax, together with the tax of half mill, to pay interest on indebtedness created before the Constitution of 1874, was properly -enjoined.-

The decree of the Chancellor will be modified so far as he •erred in not including in the injunction the amount of one and •a half mills out of the general county levy for old indebtedness.

A decree is directed here, declaring the following taxes ■illegal and enjoining their collection, to-wit:

COUNTY TAXES.

That portion of the levy of five mills, for old indebtedness, which provides for new compromise bonds.... lJ- mills That portion of the three mill levy providing for 'the same. 1 mill

CITY TAXES.

Tax for interest of bonds of September 1,1875, and •July 1, 1877. 2 mills

Interest on old indebtedness. i mill and it will be further ordered that the benefit of this injunction be extended to all tax-payers of the county, and that in the return of delinquent taxes, these items shall not be included by the collector ; and that he, as collector, pay the costs of this appeal, to be allowed him on settlement.


source: Caselaw Access Project

author: English, C. J. :

license: Public Domain

text:
    Town of Jacksonport v. Watson et al.
    Mühicipal CORPORATIONS: — Injunction against illegal appropriations by.

    A court of equity may, at the suit of property holders or taxable inhabitants of' a municipal corporation, restrain the corporation and its officers from making an unauthorized appropriation of the corporate funds.
    Same :
    Municipal corporations have no authority to expend the corporate funds in establishing and operating free ferries without the limits of the corporati n, to promote trade, commerce, etc.
    APPEAL from Jackson Circuit in.Chancery.
    Hon. William Byers, Circuit Judge.
    Goody, for appellant.
    Minor, contra.

   English, C. J. :

The bill in this ease was filed in the Circuit Court of Jackson county by Elbert L. Watson and Julia Boyer, against the-incorporated town of Jacksonport, to enjoin the town council from appropriating money to maintain a free ferry across White river, without the limits of the corporation.

The bill alleges, in substance, that complainants are citizens of the State and residents and tax-payers within the limits of the corporation.

That, in November 187G, the town council appropriated from its treasury $200, in State scrip, for the purpose of establishing a free ferry at Scott’s Point, on White river, about a half or three-quarters of a mile from the town, and without the limits of the corporation. That, under directions of the Council, the scrip was sold, and proceeds expended in purchasing a ferry-boat and skiff.

That the council had employed Jack Moore to run the ferry at $23 per month, and was about to appropriate money out of the treasury of the corporation to pay his wages, and would, do so unless restrained.

That defendant was not authorized to run a public ferry at Scott’s Point, or to appropriate money for that purpose out of its treasury; nor had it a license from the County Court or elsewhere to keep the ferry.

Prayer for injunction against appropriating the money of the corporation to maintain the ferry, etc.

The defendant answered that the object of the town council in establishing a free ferry at Scott’s Point, was to induce citizens residing west of White i'iver to make Jacksonport their place of trading, and thereby to increase the trade and commerce of the town, and promote its growth, prosperity, etc.

That on the 1st of January, 1876, the County Court granted, a license to John Cost, to keep said ferry for that year, which license defendant acquired by purchase. That on the 1st of January, 1877, Thad D. ICemnan obtained license to run said ferry, and transferred the license to defendant, under which it was operating the ferry free of charge to promote the business-of the town, etc.

On the filing of the bill, an interlocutory injunction was-granted, and on the final hearing the court rendered a decree making the injunction perpetual, and defendant appealed to this court.

I. A court of equity majq at the suit of property holders-oi- taxable inhabitants of a municipal corporation, restrain the corporation and its officers from making an unauthorized appropriation of the corporate funds. This is so because the corporation holds its money for the corporators, the inhabitants of the town or city, to be expended for legitimate corporate purposes, and a misappropriation of these funds is an injury to-the tax-payer, for which no other remedy is so effectual or appropriate as an injunction. Dillon on Municipal Corporations, Bees. 731, 732, etc.

II. In the act of 9th March, 1875, for the incorporation, organization and government of municipal corporations, (A.cts of 1874-5, p. 1,) we find no express grant of authority to councils of cities or towns to expend the corporate funds in ■establishing and operating free ferries without the limits .of the corporation, to promote trade, commei’ce, etc.

Counsel for appellant submits that the power to maintain the free ferry in this case, may be implied from general grants contained in section 22 of the act.

The section provides, among other things, that “municipal ■corporations, etc., etc., shall have power to make and publish by-laws and ordinances, not inconsistent with the laws of this State, as to them shall seem necessary to provide for the safety, preserve the health, promote the prosperity and improve morals, order, comfort and convenience of such corporations and ■the inhabitants thereof.”

If under these general expressions, a corporation may appropriate corporate funds to establish and maintain a free ferry without its limits, it may as well aid in the construction of railroads, bridges, etc., and subject the corporations to burdens for such purposes, under the plea of pi’omoting the prosperity of the corporation and the inhabitants thereof.

To engage in such enterprises, express grants are required. Dillon on Municipal Corp., Sec. 104, 1064; Chisholm v. City of Montgomery, 2 Wood. 594.

Affirmed.


author: ENGLISH, C. J.:

text:
    Lambeth v. Ponder.
    Lien : Landlord’s superior to Mortgagee’s.

    The lien of a landlord for rent is superior to that of a mortgagee, upon the crop giown upon the rented premises.
    APPEAL from Lawrence Circuit Court.
    HON. Wm. R. Coody, Special Judge.

      T-. J. Ratcliff, for appellant.

      Henderson & OanUh, contra.

   ENGLISH, C. J.:

Willis M. Ponder brought this action in the Circuit Court of Lawrence County against Robert Lambeth; the complainant alleging that on the 1st day of November, 1874, the defendant with force and aims unlawfully seized and converted to his own use 5,200 pounds of seed cotton, the property of plaintiff, of the value of $177.

The defendant answered, denying the allegations ,of the 'complaint.

Verdict and judgment in favor of plaintiff for $104 ; defendant filed a motion for a new trial, which the court overruled, and he took a bill of exceptions and appealed.

The grounds of the motion for a new trial were :

1st. That the court erred in permitting incompetent and irrelevant testimony to go to the jury.

2d, 3d and 4th. In substance, no evidence to sustain the verdict.

5th. That the court erred in instructing the jury. '

I. The bill of exceptions fails to show that the appellant objected to the competency or relevancy of any evidence introduced by appellee on the trial. All of the evidence offered by appellee appears to have been admitted without any objection by appellant.

Nor, if it might be done here, does the counsel for appellant indicate in his brief what particular evidence introduced by appellee he deems to have been improperly admitted.

II. The appellee claimed title to the cotton in controversy, by virtue of a mortgage, with power of sale, executed to him for supplies, by J. C. Owen, who was. a tenant of appellant.

The mortgage was. read in evidence without objection, but counsel for appellant submits that it having been executed upon a cotton crop not in being prior to to the passage of the act of 11th February, 1875, (Acts of 1874-75, p. 149) vested in appellant no legal title to the cotton, or lien upon the crop, which he could assert in this action.

The mortgage bears date 23d of May, 1874, by which time cotton in this climate is usually growing. Moreover the mortgagor, in the language of the mortgage, conveys to the appellant: “The following described property, t.o-wit: All his present growing crop of corn and cotton, now growing on the farm of Dr. Robert Lambeth, known as the Lambeth place, situated in Lawrence County,” etc.

The growing crop was the subject of a valid mortgage (Apperson & Co., v. Moore, 30 Ark. 66,) but the lien of appellant upon the crop for rent, as the landlord of Owens, the mortgagor, was prior and superior to the title of appellee, the-mortgagee. Tomlinson v. Greenfield, 31 Ark. 557.

The evidence introduced on the part of appellee conduced to-prove that appellant not only received a sufficient amount of the cotton after it was gathered, to pay the rent due to him from Owens, but that he took and appropriated an over quantity of the cotton, the value of which appellee claimed in this, suit.

On the contrary, the testimony of appellant conduces to-show that he did not get more of the cotton than was due him for rent.

What the truth of the matter may be we do not know. Upon the conflicting evidence, the jury found for appellee, as above indicated, and it was their province, not ours, to judge of the weight of the evidence.

III. To the charge which the court gave to the jury, and which is divided into four paragraphs, the counsel for appellant made a general objection in the court below, as shown by the bill of exceptions, and has repeated it in his brief here, no •specific objection being made to any one of the paragraphs or to any principle of law announced in either of them.

We deem it unnecessary to copy the charge thus objected to.

It seems to be fair, appropriate to the issue and the evidence Introduced by the parties, and we can discover in it no erroneous announcement of law.

Affirmed..


text:
    Smith v. Carder.
    3. Limitation-: Pleading.

    The statute of limitations of five years is not applicable to an action on a writing ooligatory executed before the adoption of the Constitution of18@8.
    2.-
    The defendant, with intention to become surety on a note, wrote his name on a blank paper and left it with the principal, vho afterwards wrote the body of the note and signed his own name above that of the surety, and attached a seal to each name. Held, that the defendant was not bound by the instrument.
    Assignment : ‘Of writing obligatory not governed by law merchant.

    The statute making writings obligatory assignable so as to vest the legal title and right of action in the assignee, did not put them upon the footing of commercial paper, and bring them within the rules of the law merchant.
    Assignees took them at their poril as to defenses.
    APPEAL from Desha Circuit Court.
    Hon. J. A. Williams, Circuit Judge.

      Me Gain, for appellants.

      JPindall — Weatherford, contra.

   ENGLISH, C. J.:

Action upon the following instrument as a writing obligatory :

“$5,120.36. On the first day of January next, we, or either of us, promise to pay to James W. Pelts, as the executor of the estate of John F. Smith, deceased, the sum of five thousand, one hundred and twenty (36-100) dollars, to bear-interest at the rate of ten per cent per annum, value received.,

“Thos. Fletcher, [Seal.J

“W. M. CARDER, [Seal.]

“J. N. AllmtjND, [Seal.J

“January 18, 1860.”

■ The instrument was delivered by Fletcher, the principal, to. Felts, executor of Smith, for slaves purchased by him at a public sale made by Felts, of the property of his testator, under an order of the Probate Court of Arkansas county.

Felts endorsed the obligation, without recourse, to John W. Simpson, the guardian of the plaintiff in this suit, then a minor, who was a son and legatee of John F. Smith, and after-the plaintiff (Richard H. Smith), became of age, Simpson-delivered the obligation to him.

The plaintiff commenced this suit in the Circuit Court of' Desha county, against W. M. Carder, April 3, 1874.

The defendant pleaded, Code fashion, non est factum, and limitation of five and of ten years.

The court sustained a demurrer to the paragraph of the-answer setting up five years as a bar.

Verdict and judgment for defendant, the court refused plaintiff a new trial, and he took a bill of exceptions and* appealed to this court.

I. The instrument sued on bearing date before the adoption of the Constitution of 1868, which abolished private seals, and appearing on its face to be under seal, or a writing obligatory, the statute of limitations of ten years, and nót of five, was applicable. Gould's Digest, Sec. 15, chap. 110; Dyer v. Gill, 32 Ark., 410.

The instrument matured 1st of January, 1861, and saying* nothing of a payment made upon it by Fletcher 1st of March, 1864, but counting out the period of the civil war, during* which the running of the statute was suspended, the action was-not barred when commenced. Shinn v. Tucker, MS.

II. On the trial the testimony introduced by appellant conduced to prove that the body of the obligation and the three seals were in the hand-writing of Fletcher, and written, perhaps, with a different iuk from that with which the signature of appellee was written.

Appellee proved that before the sale of the slaves Fletcher called at his office and asked him to sign a note for him, but having no note written, at the request of Fletcher he wrote his name upon a blank sheet of paper, which he supposed was taken out of the office by Fletcher.

The court below, in its instructions to the jury, followed the decision of this court in Gross v. State Bank, 5 Ark., 525, where it was held that “a writing purporting to be a bond, signed and sealed by a party with a blank left for the sum, which blank is afterwards filled and the writing delivered by one not authorized under seal, is not the deed of the party signing and sealing. The rule is otherwise as to promissory notes and bills of exchange.”

This is a stronger case against appellant than the one cited. There the party signed and sealed the instrument in blank, as to the sum. Here, appellee wrote his name upon a sheet of blank paper, and Fetcher, without other than implied verbal authority, wrote the body of the instrument, affixed a seal to ■the signature of appellee and delivered it to Eelts after the purchase of the slaves.

By statute in force at the time the instrument bears date, •writings obligatory were made assignable, so as to vest the legal title and right of action in the assignee, but they were not put upon the footing of commercial paper and governed by the law merchant. Hence persons taking them took them at their peril as to defenses. Gould’s Digest, chap. 15, Sec. 3.

. The cases cited by counsel for appellant are unlike the one now before us. The bonds on which the obligors were sought to be charged, were complete in body and seals when they were signed. See Nash v. Fugate, 24 Grattan, 202, where .similar cases are reviewed.

In this case appellee wrote his name on a blank sheet of paper, and afterwards, when he was not present, and without •competent authority from him, the whole instrument was written over his name, and a seal made for him.

No intentional wrong is imputed to the principal maker of the instrument. He made a payment upon it, and would, •doubtless, have paid the whole debt if he had not been broken down in his fortune by disasters of the civil war. He made free use of the name of a confiding friend, but he could not legally bind him by writing the body of a bond over his name and adding a seal, though he might have bound him by making a commercial instrument.

Affirmed.


text:
    Humphries et al. v. State.
    Bail Bond :-
    It is no objection to the validity of a hail bond that there is no order on the record for the issuance of a bench warrant on which the party is arrested. Nor is a bail bond void because it is the joint bond of two or more defendants for the same sum that was required of each of them for hail, by the order of the judge endorsed upon the indictment.
    APPEAL from Arkansas' Circuit Court.
    Hon. JOHN A. Williams, Circuit Judge.
    Dooley, for appellants.
    Henderson, Attorney-General, contra.

   ENGLISH, C. J.:

At the March term, 1876, of the Circuit Court of Arkansas -county, James W. Collins and David Collins were jointly indicted for stealing a mare.

On the day that the indictment was returned into court by the grand jury (29th March), the presiding judge made the following endorsement upon it:

‘■‘Bail will be received in this case in the sum of $500 each.

“John A. Williams, Judge.”

On the same day a capias was issued by the clerk for the arrest of the parties accused, in the form prescribed by the ■statute (Gantt's Digest, Sec. 1808), upon which the clerk -made the following endorsement:

“The defendants may give bail in the sum of $500, and the same may be taken by the sheriff of the county in which they are taken, or by the sheriff of Arkansas county.” Signed by the clerk.

The sheriff of Arkansas county, to whom the writ was delivered, arrested the defendants on the 80th of March, 1876, and on the next day they executed a joint bail bond in the penal sum of $500, with Zach. Humphries, John H. Barker, and William Garrison as the sureties, conditioned that they would appear in the Circuit Court of Arkansas county on the first day of the following September term, etc., to answer the indictment, etc.; and the sheriff duly returned the capias and bail bond.

It seems that on the application of James W. Collins, the venue as to him was changed to the Circuit Court of Jefferson county.

At the March term, 1877, of the Arkansas Circuit Court,, David Collins failed to appear, and a forfeiture was entered upon the above bail bond, and an alias bench warrant ordered against him, and a summons issued to his sureties, upon the-forfeiture, returnable at the next term.

The alias capias was returned non est as to Collins, and the summons was served upon Zach. Humphries and John H. Barker, two of the sureties, and returned not found as to Win., Garrison.

At the return term, Humphries and Barker answered, setting-up the defenses below stated aud considered.

At a subsequent term the .case was submitted to a jury, and the prosecuting attorney read in evidence the indictmei/c, the bench warrant issued thereon, the bail bond, the entry of forfeiture and the summons, all of which were admitted against the objection of defendants. No other evidence being introduced, the jury returned a verdict in favor of the State for $250. Defendants filed a motion for a new trial, which was overruled, aud they took a bill of exceptions. Judgment was entered in accordance with the verdict, and defendants appealed.

The first point of defense made by appellants is that the Slate failed to show that the court made an order for the issuance of the bench warrant upon which their principal was: arrested, and that therefore the warrant, arrest, and bail bond; were void.

The principal was indicted for a bailable felony, and was not' in custody or under recognizance when the indictment was found. It would not have been proper, therefore, for the-court to have caused to be entered of record, and thereby made-public, an order for the clerk to issue a bench warrant for his. arrest. Gantt’s Digest, Secs. 1799, 1800.

The presiding judge endorsed upon the indictment, when it. was returned into court, the amount of bail required, and, it. must be presumed, ordered the clerk to issue the bench warrant, as required by the statute, ( Gantt’s Digest, Secs. 1806„ 1810), but a prudent judge would hardly announce such order-openly from the bench, and direct it to be entered of record,, subject to public inspection.

If the parties indicted, on being arrested, had moved to. quash the capias on the ground that no order appeared of record for it to issue, the court, of course, would have overruled the motion, and the sheriff would have put them in jail-had they failed to give bail.

The second point of defense made is that each of the parties indicted was required by the endorsement to enter into-bail in the sum of $500, and that the sheriff accepted a joint-bail bond from them in the penal sum of $500 only.

If both of them had made default, there could not have been a forfeiture and judgment for more than the penalty of the-bond. On the default of one of them only, the condition of the bond was broken, and there might have been a forfeiture- and judgment against appellants for $500, but the verdict and judgment against them were for only $250, which was an error-of which they have no cause to complain. See Gantt’s Dig.,. Sec. 1726.

Affirmed.


author: HarrisoN, J. :

text:
    Hodgkin v. Fry, Collector.
    'School Districts : — Notice of Elections for directors and voting tax.

    It -was the duty of the district school trustee under the former law, and now of the directors, to designate the place of meeting for electing directors and voting taxes for school purposes, and notice of the time and place of meeting is essential to the validity of the tax. But the statute designates the time for the meeting, and all are hound to take notice of it. If notice of the place be given, the meeting will be legal, though the time be not specified in the notice.
    Distri :t School Tax—
    Unless the judges make return of the election or vote, to the County Court,- it can not levy the tax.
    APPEAL from Chicot Circuit Court.
    Hon. T. F. Sorrells, Circuit Judge.

      Reynolds, for appellant.

      Valentine, contra.

   HarrisoN, J. :

Edgar G. Hodgkin, in behalf of himself and all other taxpayers of school district No. 9, in the county of Chicot, filed his complaint in equity against Reuben M. Fry, as collector of taxes of said county, to enjoin the collection of the school tax •of said district, levied by the County Court for the year 1876.

The complaint alleged that the tax was levied by the County Coui't without a vote therefor by the electors of the district.

No annual school district meeting, it averred, was held on the third Saturday in August, 1876, and no notice forsuch a meeting was given either by the trustee or the sheriff, but that fourteen, •of about four hundred electors of the district, met together on that day at the court-house in Lake Village, and organized themselves as the annual school meeting of the district, and having chosen three judges and one clerk for that purpose, proceeded to hold an election for three directors, and proceeded to determine whether any and what tax should be levied for that year ; and they voted a tax of five mills ; a report of whiclu proceedings was filed with the county clerk ; but no return of' the result of the election was made. by the said judges to the-County Court.

The report of said proceedings, a copy of which was filed as-an exhibit with the complaint, was as follows :

‘ ‘Pursuant to call the annual school meeting of McConnell1 school district No. 9’, Chicot county, Arkansas, met at the court-house, in the town of Lake Village, Saturday, August 19th, 1876, at 2 o’clock, p. m., to order by the trustees, and was organized by electing S. H. Holland, chairman, who-explained the object of the meeting.

The trustee read his report for the past year, which, on motion was received and adopted. On motion, the meeting, proceeded to the election of three school directors ; and Aaron Walker, Phan Walker and William Miles, were chosen judges, of the election, and W. H. Logan appointed clerk, who were duly sworn ****** * * *■ * * * * And the votes being counted, the judges reported as follows: * * * * * * * Eor tax, 5 mills. 14 votes. Against. no votes.. * * * * * * * *

* * * * On motion, the school directors were instructed to have taught each school in the district a term of three months, and as much longer as they may be able.

A copy of the proceedings of this meeting was directed to be-filed with the county clerk.

On motion, the meeting adjourned.

H. W. Gkavers, Clerk. S. H. Hollare, Ck’m.”

The defendant demurred to the complaint upon the ground that it did not state facts sufficient to constitute a cause of" ■action. The court sustained the demurrer and dismissed the complaint. The plaintiff appealed.

The act “to maintain a system of free common schools,” of December 7th, 1875, is a revision of the former school law. It .retains the provisions for the annual school meeting of the district, on the third Saturday in August, in each year, but more particularly directs the mode of proceeding at such meetings, in determining the tax to be levied, and provides for the •election, at the first annual school meeting, of three directors in place of a trustee.

The former law — Section 5436, Gantt’s Digest, required the trustee to give notice of each annual, and of each special .meeting, by posting notices thereof at least fifteen days previous to such meeting, in three or more conspicuous places in the district, which duty is now required of the directors ; and the first section of the act of December 1st, 1875, requires the sheriff, by proclamation, to give twenty days notice of the time and place of holding the election for ascertaining the will of the electors as to the tax ; which provision, not being inconsistent with the act of December 7th, 1875, is not repealed by it; and the notice by the sheriff is additional to that given by the directors, or formerly by the trustee.

It is somewhat remarkable that we find no where in the present, or in the former law, any provision fixing the place of the annual meeting, or in any very clear terms, indicating whose duty it is to designate it. As, however, the trustee, formerly, and the directors now, “have charge of the school affairs and the local educational interests” of the district, it must necessarily have devolved on the former, and now on the latter.

Notice of the time and place of voting the taxes is essential to its validity. Judge Cooley says : “A popular assembly for .any legal purpose must be regularly convened in such manner as the law may have prescribed. The coming together of a majority of the people of a municipality, or even of all the people, at a time and in a manner not provided for by law, and the voting upon the levy of a tax, will have no legal force or validity whatever. In levying taxes, or in exercising any other function of government, the local community are wielding a part of the sovereign power of the State, but only with •the State’s permission, and under such conditions, instructions and regulations as the State has prescribed. One of these invariably is, that the power shall be exercised in an orderly manner, at a meeting assembled after due notice, and conducted according to legal forms, in order that there may be full ■opportunity for reflection, consultation and deliberation upon the important work tobe done.” Oooley on Taxation, 245.

The statute having fixed the time of the annual school meeting, all are bound to take notice of it. The right to hold the meeting comes from the statute, and not from the published notices, Avhich are but to remind the people that the law has provided for such a meeting ; and though omitted, the meeting-then held at the place legally appointed and in accordance with the provisions of the statute in regard thereto, is the lawful annual school meeting of the district. Ib., 246.

But it is as important and essential to its authority that it be •held at the proper place as at the proper time.

There is nothing, however, in the record before us to show that the place at which the meeting referred to in the complaint, was appointed by the trustees, whose duty, we have before said, it was to fix or designate it; and consequently it •does not appear that said meeting had the power to vote the tax.

The act of December 9, 1875, went into force at the date of its passage, but the first election for directors did not take place until at the annual school meeting on the third Saturday in August, 1876, and until then the teachers necessarily continued in office.

The first section of the act of December 1, 1876, before mentioned, is as follows :

“Be it enacted, etc., That hereafter an election shall be held in every school district in this State on the third Saturday in August in every year, for the purpose of ascertaining-the will of the qualified electors, and the rate of taxation for school purposes within such district; which election shall be held and conducted as other elections ; and the sheriff of each county shall give twenty days notice of the time and place of holding such election, by proclamation throughout the county* and the returns of such election shall be made to the county clerk of the county in which such election is held, who shall certify the result to the County Court of such county, which shall proceed to levy the tax thus voted, in the manner now-required by law.”

Among other provisions of Sec. 56 of the act of December-7, 1875, concerning the annual school meeting and its powers, are the following: “The annual district election shall be held by the school directors as judges, who shall have power to appoint two clerks; and if any of the directors should not attend, the assembled voters may choose judges in the place of those not attending, and the judges and clerks shall take the oath prescribed by the general election law. The ballot of the vote shall, in addition to the name of the persons voted for as directors, have written or printed on it the words, “for tax,” or “against tax,” and also the amount of the tax the voter desires levied. When the polls are closed the judges shall proceed to count the votes, ascertain the result and make return thereof to the County Court, showing the number of votes cast for each person voted for for school director; also the number cast for and against tax ; and the number of votes cast for each amount or rate of tax voted for. Such return, together with the ballots, shall be sealed up and delivered by one of the judges to the county clerk at least ten days before the meeting of the County Court for levying the taxes.

“In other respects the election shall be held according to the-general election law.”

It was provided by Sec. 59, that at the first annual school meeting after the passage of the act, (which was that in 1876),. three directors should be elected for one, two and three years, respectively.

So far, if at all, as the provisions of the act of December 1, 1875, are inconsistent with the provisions of the act of December 1, 1876, just read, they are repealed by the latter act.

It evidently was the intention of the Legislature, that after the passage of the act revising the whole school system, the-tax should be voted and the election conducted and the return made in the manner there provided ; although at the first election thereafter there could be no directors to serve as judges. According to the general election law, when the judges appointed by the County Court are not present when the polls, are to be opened, the electors may appoint others ; and at all subsequent elections under the act, if any of the directors do-not attend, the electors may choose other judges.

It is therefore clear to our minds, that the electors should have appointed, as they did do, the judges for that election.

But it was alledged, and the demurrer admitted it, that the-judges made no return of the election or vote to the County Court. Without such return the County Court had no authority to levy the tax. Murphy v. Harbison, 29 Ark., 132; Cairo & Fulton Railroad Co., v. Parks, 32 Ark., 131, Worthen v. Badgett, Ib., 496.

“Every essential proceeding in the course of the levy of taxes must appear,” say the "Supreme Court of Michigan, “in some written and permanent form in the records of the bodies authorized to act upon them.” Moser v. White, 29 Mich., 59; Cooley on Taxation, 247.

Had there been no change in the law as to the manner of voting the tax, and making return to the County Court, and had the assemblage of electors on the third Saturday in August been the annual school meeting of the district, the report of its proceedings filed with the county clerk would, perhaps, have authorized the levy of the tax by the County Court; but the law requiring the judges of the election to make the return, their return could alone be considered or acted upon by the court.

The decree of the court below is reversed and the cause is remanded for further proceedings.


author: HaerisoN, J.:

text:
    Beavers v. Baucum.
    Pleading : Mistake in name, the effect of. Mow corrected.

    A mistake in tlie name of a party does not affect the pleading or the merits of the action, and can be corrected only by motion to correct, or by the court of its own motion.
    Parties : Married women.

    A married woman may sue alone, upon a note which is her separate property, without joining her husband with her in the action.
    Exhibits : Effect and pleadings.

    An exhibit is part of the record, and when it is the foundation of the action will explain or even control an averment in the pleadings.
    Deed : Acknowledgment of.

    The acknowledgment by a married woman of a relinquishment of dower, in a deed containing no relinquishment, is not sufficient for a deed in which she is the grantor, and a purchaser entitled to a good title' from her will not be required to accept such deed.
    APPEAL from Lonoke Circuit Court, in Chancery.
    Hon. J. W. MartiN, Circuit Judge.

      Hallum — Clark & Williams, for appellant.

      ■Oliphint, contra.

   HaerisoN, J.:

This was a suit in equity, which the appellee brought by the name of Rebecca McRae against W. B. Beavers, to enforce a lien on a tract of land for the payment of a note given in the purchase of it.

The complaint alleged, in substance, that the plaintiff, on the 15th day of October, 1873, bargained and sold to the defendant the land in question, part of the price of which he paid in cash, and executed to her his note for $250, the remainder, with ten per cent interest from date, payable on the 1st ■day of November, 1874; and she executed to him a bond to make him a title upon the payment of the note, and gave him possession of the land.

That after the note became due, she offered, if he would pay it, to make him a deed to the land, and had tendered one to him, but that, with the exception of $130, paid on the 18th of January, 1876, the note remained unpaid. And that he was, and had been ever since his purchase, in possession of the land.

It also stated that sinee the tender of the deed, she had assigned and delivered the note to H. B. Strange, as collateral ■security for a debt which Eliza Smith owed him, who still held it; and besides the prayer for the foreclosure and sale, asked that the decree stand as a security for the debt instead of the note.

She filed the note and a copy of the bond for title, as exhibits, with her complaint; but no assignment of the note to ■Strange appears.

The answer of the defendant admitted the purchase of the land, the giving of the note for a part of the purchase money, the execution to him of the bond for title, and' his entry into* and continued possession of the land under his purchase ; but denied that the plaintiff had ever tendered him a sufficient deed, and averred that the plaintiff',, when she sold, had not, nor had she since had, any title to the land, the same having-before then been sold for taxes, and the title was then in-Eogers and J. E. England, who had a tax deed for the same ;■ and she never had had an absolute title to more than an undivided fourth part — whatever title she had having been conveyed to her by a deed from Archibald A. McKay for her own use, and as trustee for Helen McKae, Elizabeth McKae and Koger W. McRae, minor heirs of Daniel McKae, dated November —, 1866. Denied that plaintiff had assigned the note to Strange, or that he or she had any interest in it, the same being, it said, the property of Eliza Smith, to whom the plaintiff had given it. Admitted that there was still a balance due on the note, but claimed a further credit of $8.76 for taxes of 1873, paid by him at plaintiff’s request.

The plaintiff, it averred, a few days after the sale to the defendant, inter-mai*ried with George P. Baucum, who was still living; and that her name was Rebecca Baucum, and not Rebecca McRae.

A copy of the deed from Archibald K. McKay to the plaintiff, referred to in the answer, was filed with it as an exhibit.

The plaintiff, by an amendment to her complaint, brought, into court and tendered to the defendant a deed for the land containing covenants of warranty of title and quiet enjoyment, from George F. Baucum, Rebecca Baucum, John S. Gibson, Helen Gibson, Roger W. McRae, J. Floyd Smith, and Eliza Smith, the persons, as stated in said amendment, named in the defendant’s answer as grantees and beneficiaries in the deed from Archibald K. McKay, or having an interest in it. No answer was made to the amendment.

The court, upon the hearing, found the remainder due upon the note to be $200, and rendered a decree for the same, and also for a foreclosure and sale.

It also found that the note was, as stated in the complaint, pledged to said Strange as security for a debt Eliza Smith owed him, and of which $100 was still due ; and it ordered that the decree stand as security for said debt in lieu of the note.

The decree was entered in the name of Rebecca Baucum, without any amendment of the pleadings.

The defendant appealed.

There was, upon the hearing, no controversy as to the aveiment in the answer that the plaintiff, after the sale of the land, inter-married with George E. Baucum; that fact was conceded; but the mistake in her name did not affect the pleadings or the merits of the action. Such defect can now be reached only by motion to correct the mistake, or such correction may be made by the court on its own motion, as was very properly done in this case. Newm. Plead, and Prac., 287.

The note was the separate property of the plaintiff, upon which she could sue alone, or without joining her husband •with, her in the action. Gantt’s Digest, Secs. 4193, 4194.

It was stated in the complaint that the plaintiff had assigned the note to Strange as a collateral security, yet it is apparent from the fact that there is no assignment upon the note, and also from the general tenor of the evidence — the witnesses saying only that it was deposited with him — that nothing more was meant by that averment than that she had simply deposited it with him as such security.

The note being an exhibit, became a part of the record ; and an exhibit, when it is the foundation of the action, as in this case, will explain, or even control, an averment in the pleadings. Newm. Plead. and Prac., 252.

The propert}' in the note being in the plaintiff, the action was properly brought in her name, and though Strange had a beneficial interest, and might have been made a party, he was not a necessary one, and the defendant not having demurred to the complaint because he was not joined in the action, the objection was waived.

Indeed, the note seems to have been in the hands of the plaintiff, as she filed it as an exhibit with the complaint, having been delivered back to her most likely for the purpose of the suit.

It was not averred in the complaint, nor is it so stated in the deed, that George F. Baucum is the husband of Rebecca Bau-cum ; John S. Gibson, of Helen Gibson, and J. Floyd Smith,, of Eliza Smith, nor what were their respective interests ; but it does so appear by the certificates of acknowledgment of the deed ; and moreover, as no answer was made to the amendment of the complaint, in which the grantors were averred to be the sole owners of the land, it was admitted that they were such, and if properly executed, the deed would have been sufficient.

But it appears from the certificate of Mrs. Baucum’s-acknowledgment, that she acknowledged to have signed a relinquishment of dower, although, there was no such relinquishment in the deed, and there was no acknowledgment of the execution of the deed by her. Title being in her, she should have acknowledged its execution as a grantor. ■

The deed, therefore, was not such as the defendant could be required to accept.

There was no proof that the land had been sold for taxes.

The court, it appears, allowed the defendant the additional-credit claimed by him, but computed the interest for the whole time- at ten per cent when the note bore that rate only until maturity, and after that but six per cent.

The decree must be reversed, and the cause will be remanded’ with direction to the court below that should the plaintiff bring into court a proper and sufficient deed to the defendant for the land, to enter a decree in her favor for the true amount due upon the note and as heretofore rendered.


text:
    Reinhardt, Adm’r, v. Gartrell.
    1. Administration — Jurisdiction of Probate Courts:

    Art. VH, Sec, 34, Constitution of 1874, relegated to the Probate Courts their old jurisdiction in matters of administration, etc., which had been transferred to the Circuit Courts by Act of 16th April, 1873, without restriction or quali-ficat'on.

      2.-Jurisdiction of Chancery Courts:

    Courts of Chancery have no power to take administration eases out of the Probate Courts for the purpose of proceeding with the administration, but may correct any fraud in the settlements of administrators and executors. When that is done, if there be still a necessity for further proceedings in the administration, they should be had in the Probate Court. But if there be no such necessity — if the assets be all collected and the debts ascertained, and nothing remains but to fix the liabilities of administrators, ex^cut >rs and their sureties, and the rights of creditors, heirs, legatees and distributees, and make adjustment on equitable principles, all this can be better done in Chancery, and the cause should be retained there for completion.

      3.-Practice in Chancery:

    In referring administration settlements to a master for the correction of fraud, the Chan"ellor should find and designate the points in which the fraud consists, and confine the refer-nce to those points: and his finding of fraud should always be upon the allegations of the bill, specifically pointing it out, and not upon vague and general charges. Proof of the fraud devolves upon the party alleging it.
    4. Parties in Chancery:

    Sureties of an administrator are proper parlies to a bill to correct fraud in his account.
    APPEAL from Prairie Circuit Court in Chancery.
    Hon. J. N. Cypert, Circuit Judge.

      Gate-wood — Glarlc & Williams, for appellant.

      Gompton, contra.

   EakiN, J. :

This bill was filed February 12, 1876, by the widow and children oi Francis C. Gartrell, deceased, who were devisees and legatees, equally, under his will, against D. F. Reinhardt, the executor, and his sureties. It charges fraud in his settlements, seeks to have them re-opened, a re-statement of the accounts and a decree against the executor and his sureties, in favor of the several complainants, according to their rights. It seems the debts of the estate have been paid up, leaving nothing to be done, beyond making a fair distribution.

The sureties demurred: Because, 1st. There was no equity in the bill. 2d. No fraud was shown. 3d. They were joined in the bill as defendants, when their liability was only at law, after the liability of their principal might be established. The ■demurrer on hearing of the cause, was overruled, and it may be convenient now to dispose of this branch of the case in limine.

Courts of probate, during their existence in this State, have ever had and still have exclusive original jurisdiction in the matter of the administration of the estates of decedents. This was ■ statutory until the abolition of these courts, by act of April 17, 1873. By an act approved April 16, 1873, this * ‘exclusive original jurisdiction, in all matters pertaining to probate and of administration,” was transferred to the Circuit Court. The experiment was not satisfactory, and by the Constitution of 1874, the Probate Courts were re-established. It was provided, (Art. VII, Sec. 34,) that they should have “such exclusive original jurisdiction in matters relative to the probate of wills, the estates of deceased persons, executors, administrators, guardians, etc.,” * * * as is now vested in the ■Circuit Court, or may be hereafter prescribed by law ! Obviously, it was meant to relegate to the Probate Courts their old jurisdiction, without restriction or qualification. The decisions of this court regarding their former power apply now. 'Their jurisdiction has been simply elevated from a statutory to a constitutional basis ; being as to limits, unchanged.

The courts of Chancery have no power to take such cases out of the Probate Courts, for the purpose of proceeding with the administration. But their power and functions to relieve against fraud, accident, mistake, or impending irremediable mischief, is universal; extending over suitors in all courts, and •over the decrees in those courts, obtained by fraud, or rendered under circumstances which'render it inequitable that they should be enforced. Hence, any frauds in the settlements of ■administrators or executors may be corrected. When that is done, if there be still a necessity for continued proceedings in the course of administration, such proceeding should go on in the Probate Court, upon the basis of the reformed settlement. The object of Chancery intervention having been accomplished, the jurisdiction in equity should cease with the necessity. 'Otherwise, the courts of Chancery might make themselves ■courts of Probate, in violation of the spirit and intention of 'the Constitution. If however there be no continuing necessity for a further course of administration : if the assets be collected in, and the debts be all ascertained, and nothing remains but to fix the liabilities of administrators, executors and their sureties, and the rights of creditors, legatees and distributees, and to make adjustment on equitable principles, all that business ■comes within the more facile and effective operation of the remedial processes peculiar to equity practice. This makes no ■conflict of jurisdictions, and it is most proper, in such cases, for the Chancery Court to retain the cause for completion.

As for the sureties of an administrator or guardian, it is true that they cannot be sued at law, upon the bond, until the liability of the principal has been fixed, and there has been a breach ■of its conditions. Courts of equity have a wider regard for tbe interests of those who may be affected by their decrees ; and their power of adjustment render multiplicity of issues-, regarding the same subject matter, much less objectionable-than at law. Sureties have a very material interest in the-determination of the liabilities of their principals ; and it concerns that complete and effective disposition and adjustment of all rights, at once and forever, which courts of equity are emu-lous of attaining, that the sureties should have day in court, and be bound by decrees, which may and should be so moulded as to protect their rights of exoneration, so far as may consist with the rights of the parties secured.

In this view it has been, heretofore, held by this court that the sureties of an administrator are proper parties to a bill to-correct fraud in his accounts ; not only that they may be heard in a matter which may affect them ultimately, but for the purpose of subjecting them to-the direct operation of the decree to-be rendered. Clark, ad., v. Skelton, 16 Ark., 474; Moren et al. v. McCown et al, 23 Ark., 93; Osborn et al v. Graham, ad., 30 Ark., 66; Jacks v. Adair, 31 Ark., 616.

The answer of the executor admits some of the errors, charged as fraudulent, and endeavors to excuse them on the-ground of inadvertence and mistake. As for the rest, it may suffice to say, that it consists of explanations going to show-that no fraud was intended, but that manifest errors being-corrected, the settlement should be confirmed as proper and. just. A detail of the charges and explanations' would be more-prolix than useful to the profession.

The Chancellor, upon the hearing, found the administrator-amenable to the charge of fraud in the following x’espects :

1. In failing to charge himself in any settlement with sixty dollars received by him in currency for the estate.

2. In taking ci’edit, in his settlements, for intei’est iix his disbursements at the rate of ten per cent per annum.

3. In taking credit for excessive commissions.

4. In failing to charge himself with a large amount of rents; collected.

5. And because of other errors and mistakes appearing in> his settlements.

It was, therefore, ordered that all the settlements of the-executor should be set aside and held for naught, and that the accounts should be re-stated. The matter was referred, for this purpose, to a master, with directions to charge the executor with the amount of all assets which came to his hands, and to credit him with all paymeuts legally made, and all unavoidable* losses, if auy; and, also, with all reasonable attorneys’ fees,, and with the maximum rate of commissions allowed by law. In stating the account the master was directed to use the pleadings and papers on file in this cause and in the Probate Court, giving them such value as evidence as the law, or the admissions of parties attached thereto. He was further empowered to examine the parties and such witnesses and papers as might be produced before him. He was also to ascertain and state* what amount of gold the executor had received as assets, what he had paid out to the legatees, and whether he had used any part for himself, and at what time; and, if he had, to charge-him with the premium at the time. He was further directed to state an account of the sums which had been paid to the legatees.

In accordance with this order, to which defendant at the time excepted, the master proceeded to state the whole account de novo, from the time of the testator’s death, reforming it in all respects, according to his views of the law and the weight of evidence, as well as- with regard to matters not found by the court to be fraudulent as with regard to those that were. This appears from the report itself and the exceptions on both sides. Of these, six, taken by the defendant, were overruled. 'The first four were for the exclusion of allowances made by the Probate Court and refused by the master upon matters not embraced in the findings of the court as fraudulent. Two more were on account of charges of interest made by the master when no fraud at all had been found by the court on failure to charge any interest whatever. The fraud was found in the •credit of interest on sums disbursed. A decree was rendered, •save as to some exceptions sustained, in accordance witn the master’s report, against the executor and his sureties, in solido, for the amount found in his hands, and in favor of the several •complainants respectively for the proportion coming to each. The defendants appealed.

The first question for this court arises on the decree and •order of reference. Upon a review of the evidence, we think the Chancellor was justified thereby in reaching the conclusion that the settlements should be held fraudulent, and the ■accounts re-stated. The executor was shown to be a man of •unblemished honor and high character for integrity, and it is ■easily conceivable that he entertained no actual purpose of ■defrauding the estate. Perhaps no one circumstance would be • sufficient of itself, to warrant the interference of a court of ■equity. Mere error or irregularity in matters within the juris- • diction of the Probate Court, not tinged with actual mala fides, •ought to be corrected only on appeal. The same may be said •of excessive allowances for commission and attorneys’ fees, or • any other illegal credits. If made by the Probate Court, upon ■ a fair consideration of all the circumstances, with full knowledge of the facts, and without concealment or improper practice on the part of the executor, they become the-judgments of -a court having jurisdiction, and are simply erroneous, voidable •on appeal, not fraudulent and void ; and so with regard to mistakes and omissions. They may be the result of accident, •consistent with good faith. But in this case there was a combination of acts, omissions, irregularities and erroneous allowances, sufficient, altogether, to satisfy the mind that if fraud, had not been really intended, there had, at least, been such gross carelessness and reckless disregard of the rights of others as to make the inference of fraud necessary to the purposes of' justice. The court did not err in re-opening the settlement of' the accounts. The question is, whether it went too far in its directions for the purpose? ought the re-statement to have been confined to the matters adjudged fraudulent? or was it proper to open the whole matter de novo, to embrace the action of the executor during a period of more than ten yeaas, with-out any regard to the matters adjudged by the Probate Court ?■

The principles applied in the re-statement of accounts on account of fraud, as derived from the authorities, are thus classed by Justice Story in his Equity Jurisprudence, Sec.. 5231: “In some cases, as of gross fraud, or gross mistake, or “ undue advantage, or imposition made palpable to the court,. “ it will direct the whole account to be opened and taken do novo. In other cases, where the mistake, or omission, or “ inaccuracy, or fraud, or imposition is not shown to affect or “ stain all the items of the transaction, the court will content “ itself with a more moderate exercise of its authority. It “ will allow the account to stand, with liberty to the plaintiff “ to surcharge and falsify it, the effect of which is to leave the “ account in full force and vigor, as a stated account, except “ so far as it can be impugned by the opposing party, who has- the burden of proof on him to establish errors and mistakes.. “ Sometimes a still more moderate course is adopted, and the “ account is simply open to contestation as to one or more “ items, which are specially set forth in the bill of the plaintiff “ as being erroneous or unjustifiable; and in all other respects. “ it is treated as a conclusion.”

These rules apply to accounts stated between parties, and MKit with the same latitude to accounts settled and adjudicated ■by courts of peculiar and exclusive jurisdiction. With regard ifco the latter class, and in view of the constitutional dignity of •our courts of Probate, there are high considerations of public policy, which require‘that the interference of courts of «Chancery should be restricted to and limited by the necessities •of each particular case. Their powers should be invoked for the particular occasion, and invoked only for correction. The • exclusive jurisdiction of courts of Probate would fall speedily ■into contempt, if the discovery of a few errors of a fraudulent nature could be made the ground in chancery of sweeping away all that has been properly adjudicated, taking control of the whole subject matter as upon appeal, and hearing, de novo, and overruling the decisions of the Probate Court with regard "to matters concerning which no fraud was alleged, and upon which parties may, for years, have rested.

It is a difficult and delicate dutjr to lay down the boundaries ■of chancery jurisdiction, in its overlapping extension into fields peculiar to other tribunals. It may bejsafe, in general, '.to say that it should not exceed the necessity for the correction •■of fraud, accident and mistake, and for the prevention of irremediable mischief.

Whilst, on the one hand, the courts of Chancery should be jealous of the rights of children, widows, relations and creditors, and should take care that frauds upon them should not be sheltered by the exclusive jurisdiction of the Probate Courts, it must be remembered on the other hand that the proceedings in such courts are not generally technical, nor always conducted under skillful professional advice. Substantial justice may be done, often in a rude and informal way, and administrators and executors may be men not used to preserving records and memoranda of their transactions. One may conceive a wery lamentable state of confusion and injustice, which might •arise in the case of old administrations, if, upon the discovery •of some erroneous items, infected by fraud, the administrator ■or executor should be put to the proof again, in a different tribunal, of every matter connected with the administration, and •made to sustain the onus, after witnesses may have died or been removed, or documentary evidence been lost.

We think the Chancellor should have found the particular ¿points in which the fraud consisted, and have confined the reference to the correction of the settlements as to those points where the errors originally occurred, and where they entered into subsequent statements, and this finding should, itself, be 'always upon the allegations of the bill pointing out the fraud, •and not upon vague and general charges. General assertions ■of fraudulent intent add nothing to the strength of a bill, unless made applicable to specific acts or declarations. The •onus of establishing the errors and mistakes should be upon ■those alleging the fraud; and in all other respects the settlements of the Probate Court should be allowed to stand as ■conclusive. This rule, as we have seen, is often applied to accounts settled between parties, and should, for much 'stronger and more obvious reasons, be applied to constitutional courts of exclusive jurisdiction.

It was not sufficient for the Chancellor to add that the 'accounts and settlements were fraudulent because of other ■errors and mistakes. They should have been specified, and •the reference confined to them, and the accounts, as they might be affected by them. -We are satisfied that this is the •only safe rule of practice, without which all the better and-more competent class of men will shrink from the administration of estates, and those interested in estates will be encouraged to neglect the proper vigilance over their interests in the Probate Courts, in the hope of an entire new hearing at some future day in a court of Chancery. There are many cases in which the protection extended to the interests of children and. married women, must, of necessity, be adjusted in accordance-with a high public policy. If any evils are to be apprehended, from the supineness of guardians, husbands, relations and friends, and in concluding them by the action of the Probate-Courts, the remedy must be sought by greater care on the part of the people to fill those tribunals with a class of judges whose ability, industry and integrity will justify the important trust reposed in them by the Constitution; and the respect which this court is constrained to pay them as judges of constitutional courts of record.

It is unnecessary to consider the master’s report and the-exceptions. It was error in the court to annul the whole-action of the Probate Court, and to order a new account from the beginning. The matters into which the elements of fraud entered should have been specified, and the reference confined to a re-statement of the accounts so far as they might be affected thereby, leaving them to stand in other respects as re& judicata. Upon striking the balance it will be proper to ascertain the proportion belonging to each legatee, and to render a decree accordingly.

For the error of the Chancellor in setting aside and holding-for naught the entire settlements in the Probate Court, and in referring the whole matter of the administration to a master for a re-statement, and in failing to specify more particularly the matters of fraud to be corrected, the decree must he reversed, and the cause will be remanded with directions ta re-hear the cause, and for such other proceedings as may be in accordance with law and this opinion.


author: English, C. J.:

text:
    Watson v. Johnson et al.

      Ijiest — Landlords’ for rent, superior to mortgagee’s.

    The lien of a landlord on the crop of his tenant for rent, is superior to that of a mortgagee

      Pleading and Practice — new matter.

    Under the Oode practice no reply is allowed setting up matter of defense only. The statute makes issue to matters of avoidance, and they must he proved.
    APPEAL from Ashley Circuit in Chancery.

      Hon.-- Circuit Judge.

      Van Oilder, for appellant.
   English, C. J.:

The bill in this case was filed on the chancery side of the Circuit Court of Ashley county, in July 1877, by E. D. Watson, against A. L. Johnson and Isaac Cohen, to foreclose and enforce the lien of a mortgage upon cotton.

The bill alleged, in substance, that on the 29th day or February, 1876, defendant Johnson, executed to complainant a mortgage, to secure his then indebtedness, and also such advances as complainant might make to him during that year, whereby he conveyed to complainant, among other .things, the crop of cotton that he would raise on fifteen acres of ground on a place-in Ashley county, known as the Robert Daniel place — which mortgage was acknowledged and filed for registration in the recorder’s office of Ashley county on the day it was executed, and duly recorded, and is exhibited and made part of the complaint. °

That the mortgage was conditioned to be void if Johnson paid complainant all his indebtedness on or before the 1st of November, 1876, which he wholly failed to do.

That he was indebted to complainant in the sum of $162.46, for goods, wares and merchandise advanced to him upon the mortgage, as per bill of particulars made an exhibit.

That in the year 1876 there was grown and raised on the fifteen acres of land above described, gathered, ginned and baled 1 ,542 pounds of lint cotton or more ; and that defendant, Isaac Cohen, without consent of complainant, took possession of said cotton on or about the — day of February, 1877, and so disposed of the same as to put it out of the power of complainant to get possession thereof, and out of the reach of the process of the court. That th.e cotton, so disposed of by him, was of the value of about $1.80.50.

Prayer for decree against defendant, 'Johnson, for $162.46, etc. ; that the lien of the mortgage be declared and enforced against the cotton, etc., and for decree against Cohen for the sum due to complainant from Johnson.

Johnson did not answer the bill but made default.

Cohen answered, in substance, that ho knew nothing of the alleged transaction between complainant and Johnson, except from the statements of the bill.

■ That he had no certain knowledge as to the amount of cotton raised by Johnson on the Robert Daniel place in the year 1876. Denies that he took any cotton from complainant, with or without his consent. Admits that he did receive of Johnson three bales of cotton, produced on said place in the year 1876, but states that it was in payment of the rent for that year, and that the cotton did not weigh more than 1200 pounds, and was sold in New Orleans for the net sum of $105. That it was not necessary that he should have the consent of the complainant to enable him rightfully to receive said cotton. That he took the cotton as coming from Johnson to Julia A. Daniel, to discharge a debt which she owed respondent. That his connection with the whole affair was brought about in this way, and in no other manner : That is to say, the said Julia A. Daniel had rented to Johnson a portion of the Robert Daniel place (that part mentioned in the bill) for the year 1876, for the . um of $109, and taken bis note therefor. That she was desirous of purchasing goods and supplies of respondent during •said year, and to enable her to do so, she delivered to him said rent note for $109, as collateral security for such articles as •she might purchase of him. That in pursuance of this arrangement she bought of him more than $105 worth of goods and supplies. And in the mouth of October or November, 1876, Respondent carried the note to Johnson and demanded the rent, having with him Julia A. Daniel’s agent Joseph Daniel, and •Johnson, then and there delivered a lot of seed cotton to the respondent, which amounted to three bales of lint cotton, and ■respondent, under the directions of the agent of said Julia A. Daniel, then and there delivered up the rent note to Johnson, That the said cotton was-afterwards ginned aud baled by Johnson, and the three bales delivered at points named for shipment.

Respondent submits, that holding the rent note as collateral security for a subsisting debt, based (in the faith of the note, entitled him to receive said cotton, and that complainant had no manner of lien thereon, and ought not, in good conscience, to have a decree against him for any sum whatever.

The cause was heard upon bill and answer, and decree rendered against Johnson for $162.46, and the bill dismissed as to Cohen, and complainant appealed.

The lien of Mrs. Daniel upon the cotton, for rent, was paramount to the lien of appellant under the mortgage, (Tomlinson v. Greenfield, 31 Ark., 558), and if appellee had proven the matters in evidence alleged in bis answer, the decree would have been right.

Under the Code practice no reply is allowed to an answer setting up matters of defense only. The statute .makes an issue to matters in avoidance alleged in the answer. Gantt's Digest, 4561, 4569, 4608.

Appellee admitted, in effect, the execution and registration of the mortgage, and that he had received of Johnson, the mortgagor, three bales of the cotton covered by the mortgage, and appropriated them to his own use. To avoid the effect of these admissions, he alleged, in substance, that Mi's. Daniel had alien on the cotton for rent, and that the three bales of cotton received and appropriated by him were, in effect, delivered to her in payment of rent. The onus of proving these allegations — this new matter in avoidance, was upon him.

The cause having been heard on bill and answer, without deposition or oral proof, and the material allegations of the bill being admitted, and the affirmative allegations of the answer made by way of avoidance, being put at issue by the statute, and not proven by the appellee, appellant was entitled, to a decree against him.

The decree' must be reversed, and the cause remanded for a re-hearing, with leave to appellee to produce, if he can, proof of the affirmative allegations of his answer.