author: McCulloch, C. J.

text:
    Sharum v. Meriwether.
    Opinion delivered January 8, 1923.
    1. Certiorari — void judgment. — A judgment of the probate court declaring a person of unsound mind and appointing a guai’dian ■ may be quashed on certiorari if void on its face.
    2. Judgment — collateral attack.- — The probate court is of superior jurisdiction, and its judgment rendered in pursuance .of. jurisdiction rightfully acquired cannot be attacked collaterally.
    3. Jury — constitutional guaranty. — The constitutional guaranty of the right of trial by jury relates only to cases at common law, in which the issues are triable by the jury.
    4. Jury — inquisitions as to sanity.- — At common 1-aw there was no right of trial by jury in sanity inquisitions.
    5. Insane persons — discretion as to jury trial. — Under Crawford & Moses’ Dig., § 3829, providing that the person charged with being of unsound mind shall be brought before the court, and it shall “inquire into -the facts by a jury, if the facts be doubtful,” the court has a discretion to grant or refuse a jury; but if the person so charged appears and traverses the charge and demands a jury, it is an abuse of discretion to refuse to order a jury.
    6. Certiorari — abuse of discretion. — ■ Abuse by the probate court of its discretion in refusing a jury trial in an inquisition as to sanity does not invalidate the proceedings and render the judgment void, but is merely an error in the exercise of jurisdiction, which may be corrected only by appeal.
    Appeal from Lawrence. Circuit Court, Eastern District; Bene II. Coleman, Judge;
    affirmed.

      Gautney & Dudley, Schoonover & Jaelcson and Smith & Gibson, for appellant.
    Secs. 5829 and 5836, C. & M. Digest, under which, proceedings were instituted, are mandatory. They must be strictly followed, otherwise the proceedings are void (14 B. C. L. p. 556, §§ 7-8), and may be so declared even on collateral attack. 131 Ark. 216.
    Where demand is made, a jury must be called, and a proceeding which ignores such demand is void on its face, and should be quashed on certiorari. See 57 N. W. 203; 60 N. Y. 591; 51 N. J. Eq. 611; 44 A. S. B. 258; 1 L. B. A. 610; 19 A. L. B. 711; L. B. A. 1918-A, p. 339.

      W. A. Cunningham, Ponder & Gibson, Cochrill é Armistead, Pace, Campbell & Davis, for appellee.

      While the Constitution contains a guaranty of the right to trial by jury, it is only applicable to oases at common law in which the issues of fact were triable by a jury. 72 Ark. 177; 99 Ark. 1. There was no provision at common law for jury trials in this class of cases. 84 Kan. 603; 1 Y. & B. 57.
    ■Section 5829, C. & M. Digest, does not guaranty the right to a jury trial. There is provision for a jury only in event the facts are doubtful, thereby vesting discretion in the court. Even though the court erred in the exercise of its discretion in not calling a jury, the error could only be corrected by appeal. 49 Ark. 144.

      Gautney £ DudleySchoonover £ Jachson and Smith £ Gibson, for appellant, in reply.
    . Where the judgment rendered is in violation of constitutional guaranties and void upon its face, certiorari is .the proper remedy. 69 Ark. 587. See also 11 Ark. 519 and 39 Ark. 347.
   McCulloch, C. J.

This is an appeal from a judgment of the circuit court refusing to. issue a writ of certiorari to bring up for review a judgment of the probate court declaring appellant to be a person of unsound mind and appointing' a guardian for his person and estate. The validity of the judgment of the probate court ' is challenged on the ground that the record affirmatively shows that the probate court refused to order a jury, but proceeded to trial and made the adiudication of appellant’s unsoundness of mind without the intervention of a jury..

The record exhibited with appellant’s petition to the. circuit court shows that information of appellant’s alleged unsoundness of mind was duly viven to the probate court bv appellant’s dauvhter. Mrs. Mvrtle Meriwether, and his grandson. ,T. J. Sharum, who aro the. an pellees before this court: tha+. pursuant to the information, the court issued a warrant directing th° appearance of appellant in court on a certain dav named; that, on the day named, appellant, appeared in court in person and by counsel and filed an answer denying the allegation as to bis mental unsoundness, and demanded a jury to try the issue, but that the court refused to order a jury, and proceeded to the trial of the issue before the court, and heard testimony, upon which the judgment of the court was rendered.

The sole question presented to us on this appeal is whether or not the judgment of the probate court is void on its face, for if its invalidity thus appears it should be quashed on certiorari. Crimstead v. Wilson, 69 Ark. 587; Pritchett v. Road Improvement District, 142 Ark. 509.

The statutes governing the procedure in the probate court in cases of this kind are as.follows:

“If any person shall give information in writing to such court that any person in his county is an idiot, lunatic, or of unsound mind, and pray that an inquiry thereof be had, the court, if satisfied that there is good cause for the exercise of its jurisdiction, shall cause the person so charged to be brought before such court, and inquire into the facts by a jury, if the facts be doubtful.” Crawford & Moses’ Digest, § 5829.
“The court may, if just cause appear, at any time during the term at which an inquisition is had, set aside the same and cause a new jury to be summoned to inquire into the facts; but, when two juries concur in any ease, the verdict may be set aside.” Id. § 5831.
“If it be found by the jury that the person so brought before the court is of unsound mind, or incapable of managing his own affairs, the court shall appoint a guardian of the person and of the estate of such insane person.” Id. § 5836.
“Whenever any insane person is confined in the insane asylum of. this State, or in any institution or asylum for the insane outside of the State,.the probate court of the county of which such person is a citizen and resident shall have power to appoint a guardian for such person, without requiring the presence of such person before the court.” Id. § 5837.

These sections of the'Digest have ebme down to ns from the Revised Statutes, except § 5837, which is a comparatively recent enactment. •

The Constitution of 1874 (art. VII, § 34) confers upon the probate courts of the State “exclusive, original jurisdiction in matters relative-to the probate of wills, the estates of deceased persons, executors, administrators, guardians and person of unsound mind and their estates, as is now vested in the circuit court or may be hereafter prescribed by law.”

The probate court is one of superior jurisdiction, and its judgments rendered in pursuance of jurisdiction rightfully acquired cannot be attacked collaterally. Apel v. Kelsey, 52 Ark. 341.

The Constitution of the State also contains a guaranty of the right of trial by jury, but we have held- that this guaranty relates only to “cases at common law in which the issues of fact are triable by a jury. ’’ Kirkland v. State, 72 Ark. 177; St. L. I. M. & S. Ry. Co. v. State, 99 Ark. 281; Drew v. Board of Commissioners, 124 Ark. 569; Hempstead County v. Bridge Dist., 132 Ark. 412; Mo. Pac. Ry. Co. v. Bridge District, 134 Ark. 292. It is well understood that at common law there was no right of trial by jury in sanity inquisitions. Ex parte Tomlinson, 1 V. & B. 57; Crocker v. State, 60 Wis. 553.; State v. Linderholm, 84 Kansas 603; In re O’Connor, 155 Pac. 115; Hagany v. Cohmen, 29 Ohio St. 82; Black Hawk County v. Springer, 58 Iowa 417; In re Bresee, 82 Iowa 573.

The right of trial by jury is therefore dependent upon the language of the statute which confers it, and it is clear that some degree of discretion is allowed a court in granting or refusing .a jury. The language of the statute is that the person charged shall be brought before the court, and that the.court shall “inquire into the facts by a jury, if the facts be doubtful.” ■ Where the person under charge of insanity/appears -and traverses the charge and demands a jury, the court should order a jury,' and it is an abuse of discretion to refuse to do so. It does not follow, however, that snch abuse of discretion, though appearing on the face of the judgment itself, would invalidate the proceedings. On the contrary, we hold that such abuse of discretion is merely an error, which must be corrected, if at all, by appeal.

Probate courts are, as before stated, courts of superior jurisdiction, and, when jurisdiction is rightfully acquired, the judgment is not void, even though it appears on its face to be. erroneous. Jurisdiction is acquired by the filing of information with the court and the compulsory attendance of the accused before the court, and the proceedings which follow constitute the exercise of the jurisdiction thus acquired. The ordering of a jury is done in the exercise of that jurisdiction, and it does not defeat the jurisdiction of the court because there is an erroneous exercise of it in the proceeding. The error must, as before stated, be corrected by appeal. Ex parte Brandon, 49 Ark. 143; McClendon v. Wood, 125 Ark. 155.

In the last cited case the question arose on application for a writ of prohibition to prevent the trial court from proceeding without a jury, and in disposing of the question we said

“The jurisdiction of the court itself is undoubted. The jury is but an arm of the court, and, so far as jurisdiction is concerned, it cannot be said that there is any separate jurisdiction of the jury. The jurisdiction is exercised by the court as a whole, and, if there is an erroneous exercise of that jurisdiction during the progress of the matter while pending before the court, the error must be corrected by appeal. There appears to be no escape from that conclusion, and anything that might be said now with respect to the merits of the controversy would be mere dictum.”

It follows from the decision in the cases cited that an error in the exercise of jurisdiction by refusing to impanel a jury to try the issue does not render the judgment void, and that the action of the court can not be controlled by prohibition, nor its judgment quashed on certiorari. An appeal is the sole remedy, and where the appeal is to the circuit court it tries the case de novo, and is controlled by the same statute; and on appeal to this court there is a review only for errors committed by- the circuit court on the trial there.

The circuit court was correct therefore in refusing to issue the writ of certiorari, and the judgment is affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Ferguson-McKinney Company v. Whitley & Greer.
    Opinion delivered January 8, 1923.
    1. Frauds, statute of — acceptance of goods. — .Where goods were . ordered from a salesman, who made a memorandum of the order, not signed by the buyer, who was to have a right to cancel the order if he saw fit, but there was no cancellation prior to shipment of the goods, which were received by the buyer’s clerk having; authority to receive shipments there was such an acceptance as -to take the case out of the operation of the statute of frauds (Crawford & Moses’ Dig., § 4864).
    2. Frauds, statute of — delivery to carrier not acceptance.— The mere delivery of goods by the seller to a carrier does not constitute such an acceptance as will take the case out of the ' operation of the statute of frauds, which' requires some affirmative act on the part-of the purchaser constituting an actual acceptance of the goods.
    3. Appeal and error — question not submitted to jury. — Where, in action to reeovér for goods sold, an issue as to the cancellation of the contract, not submitted to the jury, will not be determined on appeal.
    Appeal from Conway Circuit' Court; J. T. Bulloch, special judge;
    reversed.

      Rogers, Barber & Henry, for appellant.
    •The memorandum signed by appellees is sufficient to rebut their contention that the order was not signed by them. Accepting the goods from the express company,' keeping them four days and then mnvoicing' them back to appellant for credit, worked such an acceptance as to put the 'case out of the statute of frauds. The memorandum may be signed subsequent to the making of the contract. 27 C. J. (p. 263. It was complete. 27 C. J. 267.

      Edward Gordon, for appellee.
    The memorandum does not embody any of the essential elements of the contract, and is not sufficient to satisfy the requirements of the statute of frauds. 45 Ark. 17. See also 27 C. J. 265 D, and 27 C. J. p. 267 (4).
   McCulloch, C. J.

This is an action instituted against appellees by appellant to recover on an account for merchandise alleged to have been sold and delivered. The account was for $132.56, the price of a bill of goods verbally ordered by appellees, and they pleaded, among other defenses, that the oral contract was void under the statute of frauds, which provides that a contract for the sale of goods, etc.,-for a price in excess of thirty dollar's, -shall not be binding unless ‘‘there be s-ome note or memorandum signed by the party to be charged; or, second, the purchaser shall accept a part of the goods so sold, and actually receive same; or, third, shall give something in earnest to bind the bargain, or in part payment thereof.” Crawford & Moses’ Digest, § 4864.

Appellees also plead that the goods were purchased on an agreement that the order might be canceled under certain conditions.

After the testimony was introduced, the court submitted the issues to the jury on the sole question as to the statute of frauds, and in the instructions given the jury was told that “while the goods may have been delivered out of the common carrier in the defendant’s house of business, yet if he didn’t intend to receive them and complete the contract by receiving. the goods, that was not receiving or delivery of the goods to him in contemplation of the contract.”

The facts relating to the delivery and acceptance of the bill of goods are undisputed. Appellant was engaged in the wholesale business in the city of St. Louis, and Mr.’ Whitley, one of the appellees, gave the order verbally to one of appellant’s salesmen in the St. Louis salesroom. The salesman made a memorandum of the order and turned it over to the shipping department, but the memorandum was not signed by appellees. Mr. Whitley testified that there was an agreement between him and the salesman that he should have a right to cancel the order if later he found a satisfactory line of goods at lower prices. There was, however, no cancellation of the order prior to the shipment, and the goods were billed out and shipped by express to appellees at their place of business in Arkansas. Mr. Whitley bought goods of this kind from another concern, but, as before stated, neglected to exercise the reserved right of cancellation, and he also neglected to inform his partner and the employees of the fact that he had made the purchase from appellant. When the shipment arrived Mr. Whitley was absent from the store, and during his absence one of the employees of appellee firm who customarily received goods delivered by the carrier, and whose duty it was to do so, accepted the shipment and paid 'the charges of the carrier.

A few days later Whitley directed the return of the goods to appellant, and they were reshipped, and the return charges were paid. Accompanying the reshipment appellees made out an invoice on one of their own bill-heads of the goods returned, and the following statement was written at the bottom and signed by appellees: “We were of the opinion that we had canceled this order. We found a real dress line we liked, so we are returning the dresses express for credit, if you please.”

There being no memorandum of the purchase signed by appellees, the contract was within the statute of frauds, and, unless it was taken out of the operation of the statute by acceptance and actual receipt of the goods, there can be no recovery on the contract.

There is some contrariety of opinion in both English and American cases as to what constitutes acceptance and actual receipt of goods purchased under oral contract sufficient to take the contract out of the operation of the statute of frauds. It is, however, very generally held by the court that the mere delivery of goods by the seller to a public carrier does not constitute such an acceptance by the purchaser as would take the case out of the operation of the statute. The reason given for this is that the statute requires some affirmative act on the part of the purchaser which constitutes an actual acceptance of the goods. 25 R. C. L. 620; Maxwell v. Brown, 39 Me. 98; Caulkins v. Hellman, 47 N. Y. 449; Denmead v. Glass, Laws & Co., 30 Ga. 637; Jarrell v. Young, 105 Me. 280.

Each of the cases cited above contains a thorough discussion of the subject and throws much light upon it. Some of the cases hold that the actual taking possession of the goods by the purchaser will not, under all circumstances, constitute an acceptance within the meaning of the statute. One of the cases on that subject is the New York case cited -above, in which the opinion was written by Mr. Justice Rapallo. It was held that where the goods were taken into possession by the purchaser from the carrier it was competent to prove, as a part of the res gestae, the sending of a telegraphic message by the purchaser to the seller at the time the goods were received and opened which' showed that there was no intention to-accept thé goods in consummation of the sale. Giving full recognition, however, to the rule thus announced by many able judges, we think that the facts of this case constitute such an acceptance as took the case out of the operation of the statute of frauds.

It iis undisputed that the goods were actually delivered by the carrier to an agent of appellees, who was authorized to receive and accept shipments of goods. The freight charges were paid, and appellees rebilled and reshipped the goods, with the statement that they were doing so in the exercise of their right of cancellation. The letter of appellees which accompanied the shipment shows that they were not refusing the goods because they had been shipped without authority, but were doing so under their right of cancellation, which they claimed to have •under the terms of the contract.

We are of the opinion therefore that the court erred in submitting to the jury the question whether or not the contract was within the operation of the statute of frauds. There was a conflict in the testimony, as to whether there was any right of cancellation reserved in the contract, and we canxiot pass upon that question, for the reason that it was not submitted to the jury. .

For the error in submitting the issue indicated above, the judgment is x'eversed, and the cause is remanded for a new trial.


text:
    Hodgkiss v. State.
    Opinion delivered January 8, 1923.
    1. Criminal law- — failure to file brief in felony case. — On appeal by one convicted of a felony, the Supreme Court will consider the whole of the record to discover grounds for reversing the judgment, though the accused has filed no brief.
    2. Intoxicating liquors — sufficiency of evidence. — Evidence held to sustain a conviction for violation of the statute against setting up a distillery for the purpose of using the same.
    3. Criminal law — motion in arrest. — Failure of an indictment to charge the material elements of a public offense may be taken advantage of by motion in arrest of judgment.
    4. Intoxicating liquors — sufficiency of indictment. — An indictment alleging that defendant “did set up a certain trough as a substitute for a still, for the purpose of using same for the production of distilled spirits and alcoholic liquors” was not sufficient to charge the setting up of a complete still for the distillation or production of alcoholic liquor.
    5. Criminal law — distillation—matter of common knowledge.— It is a matter of common knowledge that the distillation of ardent spirits is a process consisting in the evaporation of fermented liquids and the liquefaction of the vapors by condensation; the evaporation being produced by heating to a boiling point, and condensation of the vapor being brought about by passing the vapor through a metal .tube or coil submerged in cold water.

      6. Intoxicating liquors — “still” defined. — The word “still” is sometimes applied to the whole apparatus for evaporation and condensation used in the manufacture of ardent spirits, but in the description of the parts of the apparatus it is applied merely to the vessel or retort used for boiling and evaporation of the liquid.
    7. Intoxicating liquors — “stillworm” defined. — The words “still-worm” apply to the tube or coil used for the condensation of the vapor.
    8. Intoxicating liquors — statute construed. — The first part of § 2 of'Acts 1921, No. 324, makes it an offense to have in possession either a “stillworm” or a “still” without registering same, and this regardless of the purpose of having them in possession; but the language of this part of the statute is used in a technical sense as relating to apparatus subject to registration and -made for use only in the distillation of liquors, and it was not intended to apply to any vessel which might be used as a retort for the use of boiling liquid for evaporation.
    9. Intoxicating liquors — statute construed. — The latter part of § 2 of Acts 1921, No. 324, relates to the setting up of apparatus for use as a complete distillery, technically speaking, or to any substitute therefor which, after being set up,-may be used for the production of distilled spirits.
    Appeal from Madison Circuit Court; W. A. Dickson, Judge;
    reversal.
    No brief for appellant.

      J. 8. Utley, Attorney General, Elbert Godwin and Wm. T. Hammock, Assistants, for appellee.
   McCulloch, C. J.

Tlie indictment in tbis case reads as follows, omitting caption and formal parts:

“The said George Hodgkiss, in the county of Madison, in the State of Arkansas, on the 10th day of June, 1921, feloniously did set up a certain trough as a substitute for a still, for the purpose of using same for the production of distilled spirits and alcoholic liquor, against the peace and dignity of the State of Arkansas.”

There was a trial, which resulted in a conviction, and appellant filed a motion for a new trial, and also a motion in arrest of judgment, on the ground that the indictment failed to state facts sufficient to constitute a public offense. Both motions were overruled, and an appeal has been duly prosecuted, all of the exceptions saved during the trial being presented in a bill of exceptions.

No brief has been filed on behalf of appellant, but the conviction being a felony, it becomes our duty to consider the whole of the record to discover grounds for reversing the judgment, if any are shown therein.

Without discussing the various assignments of error set forth in the motion for a new trial, it is sufficient to say that none, of them calls for a reversal of the judgment.

The principal assignment relates to alleged. insufficiency of the evidence. The sheriff of the county testified that he went to appellant’s home and there found in his possession several bottles and jars containing whiskey, secreted under the floor, two barrels of fermented mash in a barn, suitable for use in the distillation of alcoholic liquors, a wooden trough in a barn, with a hole in the end, and one or more metal pipes secreted in the bushes near by, and two blocks of wood with a hole through each of them about the size of the pipes. The trough was six or eight feet long and about six inches wide. The blocks of wood had flour dough oh them. These circumstances warranted the jury in finding that appellant had in his possession an improvised still, temporarily disconnected, but that the same had been set up complete for the distillation of whiskey, and that appellant had been using the same for that purpose. It was sufficient to sustain a conviction for violation of the statute against setting up a distillery for the purpose of using same. McGarity v. State, 151 Ark. 423.

The question of the sufficiency of the indictment is more serious. If it failed to charge the material elements of a public offense, the defects can be taken advantage of by motion in arrest of judgment. State v. Keith, 37 Ark. 96; Beard v. State, 79 Ark. 293; McIntire v. State, 151 Ark. 458.

The indictment was intended to charge a violation of one of the sections of act No. 324 of the Legislature of 1921. Acts of 1921, p. 372. The first section of that statute has no application to this case, for it declares the making or fermentation of mash, wort, or wash fit for distillation or manufacture of wine, beer, or other alcoholic liquors to be an offense. The next three sections read as follows:

“Sec. 2. No person shall keep in his possession any stillworm or still without registering the same with the proper United States officer, and no person shall set up to be used as a distillery any stillworm or substitute therefor, and a still or substitute therefor, such as a kettle, washpot, metal tank, or any other vessel of any kind, for the purpose of using same, or which, after being so set up, may be used for the production of distilled spirits.
“Sec. 3. No distillery shall be set up in this State for the purpose of manufacturing distilled spirits for beverage purposes, and no distillery shall be used in the manufacture of such spirits. Any device or any process which separates alcoholic spirits from any fermented substance shall be regarded as a distillery.
“Sec. 4. No person shall manufacture a stillworm or still without first having qualified under the laws of the United States as a manufacturer of stills and without paying the tax required by the laws of the United States on the still and worms manufactured. Any person who converts a kettle, washpot, metal can,, tank, barrel, or other vessel into a still, or who converts any metal pipe of any kind into a stillworm or a condenser for a still, shall be deemed to be a manufacturer of stills.”

The language of the indictment is not sufficient to charge the setting up of a complete still for the distillation or production of alcoholic liquor. It merely charges the setting up of “ a certain trough as a substitute for a still for the purpose of using same,” etc.

The primary purpose of this statute — at least of the three sections now under consideration — is to prevent the production of distilled alcoholic liquor, and, in order to properly understand the meaning* of the various provisions, it is well to consider the ordinary method of such production, the several parts of the apparatus used for that purpose, and the definition of the words describing them.

It is a matter of common knowledge that the distillation of ardent spirits is a process consisting* in the evaporation of fermented liquors and the liquefaction of the vapors by condensation. The evaporation is produced by heating to a boiling point, and condensation of the vapor is brought about by passing the vapor through a metal tube, or coil, submerged in cold water. The word “still” is sometimes applied to the whole apparatus for evaporation and condensation, but in the description of the parts of the apparatus it is applied merely to the vessel or retort used for boiling and evaporation of the liquid. Webster’s Dictionary.

The word “stillworm” applies to the tube, or coil, used for the condensation of the vapor.

Now, it is easily seen that § 2 of the statute is divisible into two parts, the first making it an offense to have in possession either a stillworm or a still without registering the same — this regardless of the purpose of having them in possession. McIntire v. State, supra. It is manifest that the language of this part of the statute is used in a technical sense as relating only to the apparatus subject to registration and made for use only in the distillation of liquors. Any metal pipe can be used as an improvised method of condensing vapor in the distillation of spirits, but it was certainly not intended by the lawmakers to penalize the having of such an article in possession. Any kind of metal vessel can be improvised as a retort for use in boiling liquid for evaporation, but' it was not intended to constitute an offense in- having possession of such a. vessel.

The latter part of § 2 relates to the setting up of the (apparatus for use as a distillery, and the thing or things set up must be susceptible of that use. A still-worm cannot alone be used as a distillery, neither can a “kettle, washpot, metal tank, or any other vessel” alone be so used. The language relates to a complete distillery, technically speaking, or to any SRibstitute therefor, “which, after being set up, may be used for the production of distilled spirits.” It will be observed that the words, “any stillworm or substitute therefor,” are conjunctively joined with the words, “a still or substitute therefor,” which bears out the interpretation that, in order to constitute an offense under this part of the statute, the apparatus -set up must be complete .so that it may be used for the production of distilled spirits. This part of '§ 2- of the statute, and § 3 thereof, overlap tó some extent in effect, but an indictment may be framed in the language of either. The indictment in this case was intended to state an offense under the latter part of § 2, but it merely charges the setting up of “a certain trough as a substitute for a still, for the purpose,” etc. It does not charge the setting up of a worm in connection with the still, nor that the trough- was a thing, “which, after being set up, may be used for the production of distilled spirits.” A trough may be fit for use as a part of the apparatus for the distillation of spirits, but it cannot alone be used for that purpose.

Our conclusion is that the indictment does not charge • a public offense.

Reversed and remanded for further proceedings not inconsistent with this opinion.


text:
    Foran v. Wisconsin & Arkansas Lumber Company.
    Opinion delivered January 8, 1923.
    1. Mines and minerals — bond of lessee to complete test well.— Under an oil -and gas lease providing that a test well should be commenced within ninety days from date of the lease (for the performance of which a bond in the sum of $5,000 was executed), and further providing that if any of the land should be proved dry or should, in the opinion of the lessee, not contain oil or gas, the lessee should have the right to surrender such territory to the lessor, and, upon such surrender, should be under no further obligation to develop the surrendered territory, held, that the lessee did not have the right to surrender the contract so far as it related to the obligation to commence a test well.
    2. Appeal and error — consideration of excluded evidence. — Evidence improperly excluded by the trial court must be considered in determining whether there was sufficient evidence to warrant submission of the issues to the jury.
    3. Mines and minerals — jury question. — In an action by a lessor against his lessee to reeovér on a bond obligating lessee to commence a test well, evidence held insufficient to warrant submission to the jury of question as to the existence of a subsequent agreement either to accept surrender of the lease' or to extend the time for commencing the well.
    4. Damages — test as to liquidated damages. — The surest test as to liquidated .damages is whether the actual damages caused by. the breach would be uncertain and difficult of proof, and the sum stipulated appears to be a reasonable compensation.
    5. Damages — liquidated damages in oil lease. — A bond for $5,000 provided in an oil and gas lease to be paid on failure to test an oil well within 90 days held to be liquidated damages, and not a penalty.
    Appeal from Hot Spring Court; W. II. Evans, Judge;
    -affirmed.

      Roy M. Sayre and L. E. Sawyer, for appellant.
    The measure of damages would be the difference between the value of -the lease -ait the time made and the value of the lease when breached. 57 Ark. 174.

      Cockrill & Armistead, for appellee.
    The contract and bond were executed as distinguished from executory, and binding. 161 Pac. 826. A release would have to be supported by come consideration. 121 Ark. 194. The evidence does not show an abandonment of the contract. 234 S. W. 504. The parties by mutual agreement could fix the amount of damages at the time the contract was entered into. 164 Fed. 305; 144 Cal. 494; 158 Pa. 277; 131 S. W. 660; 91 Pac. 913; 87 Ark. 545.
   McCulloch, C. J.

Appellee is the owner of a large body of timber and cut-over lands, consisting of about 13,000 acres, in Dallas County, and on May 5, 1920, entered into a written contract with appellant, A. E. Foran, whereby it leased to appellant said lands for the purpose of exploring for and producing oil and gas. The contract provided, in substance, for a lease of the lands in consideration of the payment of one dollar and the laying of pipe lines, and other things, and the performance of other stipulations set forth in the contract. It was also agreed that, if oil or gas was developed, royalties were to be paid to appellee by delivery of one-eighth of the product. It is provided in the contract that the lease shall remain in force for the term of one year from the date of the discovery of oil or gas in paying quantities in a well sunk by lessee in pursuance of this contract, and so long thereafter as oil or gas is produced on said lands in paying quantities by the lessee, his heirs or assigns, subject to the reservations and restrictions .herein mentioned.

One of the clauses of the contract relating to the present controversy reads as follows:

“Third. The lessee covenants and agrees that development for oil and gas on all of the lands covered by this lease shall be prosecuted in a diligent manner and as is consistent with practical operation and development •and as is recognized in the oil and gas industry as adequate and proper in order that the lessor may receive as early as possible the royalties provided for in this lease; said development in no event to be less than ten wells per year, after discovery of oil or gas in paying quantity, until the land is fully developed; provided that, if any of said lands be proved dry or unproductive, or shall, in the opinion of the lessee, not contain oil or gas, said lessee shall have the right to surrender to the lessor, its successors or assigns, all of the rights of the lessee hereunder so far as the territory so released is concerned, and, upon such surrender, the lessee shall be under no further obligations to develop the surrendered territory. The failure on the part of the lessee to diligently develop the production of the lands held under this lease shall, in addition to rendering the lease subject to cancellation as hereinafter provided, render the lessee liable for the damages sustained by the lessor during the time development is so delayed.”

Certain other clauses bearing on the present controversy are as follows :

“Fourteenth. That the lessee, in consideration of the covenants and agreements herein contained, agrees and undertakes to drill, at a location to be selected by him, upon lands of the lessor, a well to a depth of three thousand five hundred (3,500) feet, such well to be commenced within three months from the date of the acknowledgment hereof by lessor, and to be completed to the depth aforesaid within one year from said date, unless oil or gas be found in paying quantities at a lesser depth, or unless a formation be encountered which would preclude further drilling on that account, in which latter event the lessee shall have the right to commence operations on another well within thirty days after the first Avell is abandoned; provided, however, that in the computation of such time the lessee shall not be liable or accountable for acts of Providence which would interfere with drilling operations, and shall not bo held accountable if, after the well shall be begun in good faith, drilling operations are- stopped or delayed by conditions OA^er which he has no control, and he shall receive due credit for such time during which the drilling operations are so suspended.
■ “Fifteenth. Said lessee further agrees to execute and deliver to lessor a bond with sureties satisfactory to lessor in the sum of five thousand dollars ($5,000), conditioned that he, his heirs or assigns, shall fully and faithfully perform his aforesaid agreement to drill such well to the depth and within the time as herein specified. * * *
“Seventeenth. It is further agreed that, in case a well is drilled as herein provided and neither oil or gas is discovered in paying quantities, this agreement shall thereupon cease and terminate, and lessee shall have no further rights hereunder; provided, that if a well is drilled as herein provided, and neither oil or gas is discovered in paying quantities, the lessee shall have the right to keep this lease in force for another year by beginning work or sinking a well on some of said lands within thirty days from the date of the abandonment of the well to be sunk in accordance herewith, and by prosecuting work thereon in accordance with this contract.
“Eighteenth. It is further agreed that, in case said lessee fails to fully and faithfully perform his agreement aforesaid in regard to the drilling of said well as herein provided, all rights of the said lessee hereunder shall cease and terminate, and ho and the sureties on his said bond shall be jointly and severally liable to the said lessor in the said sum of five thousand dollars ($5,000) payable forthwith upon such breach, and it is expressly agreed that the said sum of five thousand dollars ($5,000) to be paid as aforesaid shall not be construed as or held to be in the nature of a penalty, but as stipulated damages for the nonfulfillment of this agreement by lessee and as a consideration to be paid for the rights and privileges granted herein. * * *
“Twentieth. The lessee has caused to be executed and delivered to lessor a surety bond in the sum of five thousand dollars ($5,000) guaranteeing that' lessee will begin operations for drilling a well on-said land within ninety (90) days from the date of the contract; and the lessee shall, before the expiration of said bond, causé to be executed and delivered to lessor a surety bond in the sum of five thousand dollars ($5,000) in compliance with section fifteen of this contract, and if the lessee fails to provide the bond in accordance with said paragraph eighteen, the rights of the lessee under this agreement shall cease, and the bond guaranteeing the lessee will begin operation shall be considered as breached, and the lessee and his sureties on said bond shall be jointly and severally liable to lessor in the sum of five thousand ($5,000) dollars.”

Other sections of the contract have no bearing on this controversy.

At the time of the execution of the contract, Foran furnished a bond, as called for in the contract, with appellant, American Surety Company, as surety in the sum of $5,000. The terms of the bond, after reciting the provisions of the contract, read as follows:

“Now, therefore, the condition of this obligation is such that if the principal shall commence operations or cause to be commenced operations for the said exploiting for or production of oil, gas and other minerals within ninety (90) days from the date of the said lease aforementioned, then this obligation shall be null and void, othenvise to remain in full force and effect; provided, however, that this bond is executed upon the following conditions, performance of each of which shall be a condition precedent to any right of recovery thereon:
“First. That, in the event of default on the part " of the principal, a written statement of the particular facts showing such default shall be delivered to the surety by registered mail at its office in the City of New York and State of New York, promptly, and in any event within ten (10) days after the obligee or its representatives shall learn of such default; that the surety shall have the right within fifteen (15) days after the receipt of such statement to proceed or procure others to proceed for the performance of such work; it shall also be subrogated to all of the rights of the principal and any and all moneys or property that may at (the time such default be due or thereafter may become due to the principal. ’ ’

The drilling of the well was not commenced as stipulated under the contract, and this action was instituted by appellee against Foran and the surety on his bond to recover the sum of $5,000 as liquidated damages foi breach of the contract and the terms of the surety bond.

Both of the appellants answered, denying that there was a breach of the contract, and pleading that there was a surrender and cancellation of the contract under clause 3, and also that there was an agreement between appellant Foran and appellee’s agent for a release from the terms of clause 14 of the contract respecting the commencement of the well within ninety days, and that this agreement of release discharged the surety as well as operated as an extension of the time for the performance of the contract so as to excuse appellant Foran for nonperformance.

Appellants also pleaded that the stipulated amount in the bond was a provision for a penalty and was not enforceable. •

There was a trial of the issues before a jury, but the court, at the conclusion of the introduction of testimony, directed a verdict in favor of appellee for the full amount named in the bond. Both of the defendants appealed.

It is first contended that appellant Foran had the absolute right to surrender and cancel the contract under clause 3, and that the court erred in excluding offered testimony that there had been an offer to surrender and cancel before the expiration of the time for the commencement of the test well. The court excluded this testimony on the ground that the lessee did not have the right to surrender the contract so far as it related to. the obligation to commence and complete a test well.

We think that the court reached the correct conclusion on this phase of the case. There was an absolute obligation on the part of the lessee to commence a test well within ninety days from the execution of the contract and to complete it within twelve months, and this obligation was not affected by clause 3, which related to the right >of surrender or cancellation. The purpose of the lease was for the exploration for gas and oil and the development of these minerals, if found. Pursuant to that design there was, as before stated, an unequivocal obligation on the part of the lessee to commence and complete a test well, regardless of any other rights that he might have under the contract. The purpose of clause 3 was to give the lessee the right to cancel the lease and relieve himself from all of the obligations of. the contract except 'the one to commence and complete the test well. If it had been intended to make this right of surrender apply to the agreement to commence the test well, altogether different language would have been incorporated in the contract.

The contention of appellant is inconsistent with the exprese terms of the contract, for, if it was intended to give the lessee the right to cancel at any time, it would have been wholly unnecessary to require him -to give a bond to perform the terms with relation to tlie commencement and completion of the test well. Surety to perform this part of the contract would have been ineffectual if the lessee had a right to cancel at any time and in that way escape the performance of that part of the contract.

It is next contended that there was evidence sufficient to 'establish a contract between appellant and Cook, the agent of appellee, for the release or cancellation of contract which discharged the surety, and also that the agreement was sufficient to authorize an extension of the time for the commencement of the well. These contentions call for an examination of the testimony on this subject.

The court excluded, as before stated, the offered testimony of Foran to the effect that he had, after cans-mg the lands to be examined by a geologist and finding, there was no prospect for oil or gas, notified appellee of his intention to surrender in accordance with the third clause m the contract. The excluded testimony must,, of course, be 'Considered in determining whether or not there was sufficient evidence to warrant a submission of the issues to the jury. In addition to that, appellant Foran testified that he had a'conversation with Mr. Cook, the agent of appellee, about two weeks after the execution of the contract, in which the following occurred (quoting the precise language of the witness):

“A. After the examination of the lands in question, With my geologist, I went and saw Mr. Cook, and told him I had been all over every part of the land, and that it was very mountainous, and that we, both the geologist and myself, had come to the conclusion that it would be absolutely useless to drill a well there for oil, and I thought it was the honorable thing, and the best thing, to come to him at once and tell him the facts of our conclusion. Q. Now, what did he say to you? A. He said, ‘Mr. Foran, Mr. Edgar, who is president of our company at the present time, is not here, but I feel sure that Mr. Edgar, or the company, wouldn’t want you to drill a well on these lands, if such is the case. I would suggest you having a geologist go over our adjacent lands, and perhaps he may think better of them, and, if so, the acreage might be exchanged. In the meantime,’ he said, ‘I would let the matter stand’.”

This statement of Cook’s, as detailed by appellant, does not, we think, constitute either an agreement for a release or for an extension of time, nor was it such a statement as was calculated to mislead appellant and induce him to defer action in the performance of the. contract. Cook did not, according to this statement,, assume to act for the company, but, on the contrary, the effect of his statement was to notify Foran that Mr. Edgar, the the president of the company, was the one to act upon the matter. It is clear- that Cook was merely stating his opinion as to what Edgar would do with the proposition, and the statement about letting the matter stand was merely a suggestion made by Cook without any appearance of offering it as a contract or agreement. Appellant had no right to act upon this statement of Cook’s and waste away the time allotted to him under the contract for the commencement of the test well, or at least of ascertaining from authoritative sources, namely, the president of the company himself, before the expiration of the time, whether or not strict performance of the contract would be required. Instead of that, the evidence shows that Foran waited until after the expiration of the contract before asking for definite terms, and he was then told that it was too late, as the time for performance of the contract had expired.

Cook testified as a witness, and denied that he had any such conversation with Foran, but, of course, if' Foran’s testimony was sufficient to warrant a submission to the jury, the court ought not to have taken the case away from the jury by peremptory instructions. We think, however, that the testimony of Foran was not sufficient to warrant.a submission of the issue to the jury, for, taking the conversation just as related by Foran, it does not show that Cook entered into any agreement either for the surrender of the contract or for. an extension of time.

Finally, it is argued that the contract specifies a penalty and not liquidated damages, or at least that such is the effect of the contract under the facts of this case.

There is no proqf as to the amount of damages, but the nature of the contract may be determined from its own terms. The obvious purpose of this provision was, as before stated, to provide for a speedy exploration for minerals by commencing a test well within ninety days and completing it within a year. There was a large body of iand owned by appellee, and it was important to appellee, in view of rapid developments in this State concerning the production of oil and gas, to have this test well commenced and completed so as to determine whether or not there were minerals to be found underneath any part of this large body of lands. The contract itself contemplates that there might be damages on account of delay, and (this justified the parties in putting in a provision for the payment of damages stipulated in amount.

It is sometimes difficult to determine, under a contract of this sort, whether the provision is for penalty of stipulated damages. In Nilson v. Jonesboro, 57 Ark. 168, Judge Mansfield, speaking on this question, said:

‘ ‘ Such questions are regarded as exceptionally vexatious, and the courts have not been guided to their solution by any rule applicable alike to all oases.”

• Further on in the opinion he stated the test to be:

“Where the contract is of such a nature that the damage caused by its breach would be uncertain and difficult of proof, the sum named by the parties is generally held to be liquidated damages, if the form and language of the instrument are not unfavorable to that construction and the magnitude of the sum does not forbid it.”

In many decisions rendered by this court since that date the case of Nilson v. Jonesboro has been followed, and it is quite well settled by our decisions that the surest test of liquidated damages is “where the actual damages caused by the breach would be uncertain and difficult of proof, and the sum stipulated appears to be reasonable compensation.” Stillwell v. Paepcke-Leicht Lbr. Co., 73 Ark. 432; Chickasawba Rd. Co. v. Crigger, 83 Ark. 364; Tidwell v. So. Engine & Boiler Wks., 87 Ark. 52; Cox v. Smith, 93 Ark. 371; Wait v. Stanton, 104 Ark. 9.

We decided in those cases that the question must be determined in the light of the situation as it stood at .the time the contract was executed, and not at the time the controversy arose. Tested by these rules, we are of the opinion that this was a contract for liquidated damages, and, as such, was enforceable for the full amount named.

The judgment will therefore be affirmed.


text:
    Lewis v. Forrest City Special Improvement District.
    Opinion delivered January 8, 1923.
    ■ 1. Municipal corporations^-improvement district. — Special Acts 1921, p. 1358, providing for the formation of a special improvement district to take over the property of three previously organized improvement districts in a city, is not invalid on the ground that the Legislature cannot authorize the creation of a local improvement district with power to pay the debts incurred by the city in the operation of the improvements constructed by the old districts; nor on the further ground that such indebtedness includes interest on the city’s obligations, which is forbidden by law, since the act contemplates that only legal obligations of' the city shall be paid.
    2. Municipal corporations — ordinance—failure of mayor to sign record. — Failure of the mayor to authenticate a duly passed and recorded ordinance, as provided by Crawford & Moses’ Dig., § 7499, does not defeat the ordinance; the statute merely providing for the method of making a record.
    3. Municipal corporations — proof of ordinance. — Introduction of a certified transcript from a city clerk’s record, showing the passage of a certain ordinance, held sufficient bo establish the • legal enactment of the ordinance, though the record was signed by the mayor after his term, of office expired.
    4. Municipal corporations — ordinance—parol attack. — Where the record of city ordinances kept by the city clerk, together with the journals showing the progress of the ordinances through the council, show a valid ordinance, they cannot be attacked by parol evidence.
    5. Municipal corporations — ordinance—record.—The record of a municipal ordinance was not invalid because, instead of actually transcribing it on the record, the pages containing the copy were pasted, into the record.
    6. Municipal corporations — ordinance—disqualification of members OF council. — The fact that some of the members of a city council had signed a petition for the formation of a local improvement district did not disqualify them to join in the action of the council in passing the ordinance creating the district; as the members acted in a legislative capacity, and personal interest did not disqualify them.
    7. Municipal corporations — local improvement — petitions.— Where a special act providing for the creation of a municipal improvement district in accordance with the general statute contained a special limitation of indebtedness, it was not necsary that the petitions for the improvement required by the general statute should express the limitation of indebtedness provided by the special act, as the petitions carry with them the limitation expressed in the special act.
    8. Municipal ' corporations — variance between petitions.— Where the first petition for the formation of a local improvement district did not express the statutory limitation of expenditures, the fact that the second petition stated the maximum total cost did not constitute .a variance from the first petition nor invalidate the proceedings for the formation of the district.
    9. Municipal corporations — unauthorized signature of corporation. — Where a petition for a special local improvement district was signed in the name of the corporation by its president and manager, without express authority from the board of directors, the board of directors could not, after enactment of the ordinance pursuant to .the petition, validate the signature by ratification, since there must be a majority in value of the property represented by authorized signatures before the council could pass the ordinance.
    10. Municipal corporations — signature of corporation — authority. — Where the president, manager and principal stockholders of a corporation signed the name of the corporation to a petition for a special local improvement district without express, authority from the directors, the corporation was bound where such officer had the exclusive management of the affairs of the corporation, and was permitted to exercise full authority to do anything which in his judgment called for action for its benefit, in effect amounting to a holding out of such officer as the corporation itself.
    11. Municipal corporations — petition for improvement — presumption as to signature. — The appearance of a signature on a petition for a local improvement district raises a presumption that it was placed there by authority.
    12. Municipal corporations — local improvement — presumption op benefit. — There is a presumption that a proposed local improvement to be made through the organization of a local improvement district under the terms of a special statute would result in a benefit to all of the real property in the district.
    Appeal from St. Francis Chancery Court; A. L. Hutchins, Chancellor;
    affirmed.

      Walter Gorman, for appellant.
    The ordinance laying off the district was not legally passed. 80 Ark. 108; 28 Cyc. 355; 71 Atl. 211; 10 Atl. 162; 80 N. W. 564; 50 N. W. 316; 71 N. W. 189; 54 N. E. 1081; 90 N. E. 583; 25 N. J. Law 399; 19 R. C. L. 892. The signing of the ordinance by the mayor, after his term of office expired, was of no effect. 93 N. W. 510. Courts will not take judicial notice of ordinances. 68 Ark. 483; 108 Ark. 24. The ordinance was never recorded as provided by law. C. & M. Digest, § 7499; 3 Pa. Co. Ct. Rep. 480. It is improper and illegal for a member of a'municipal council to vote upon any question in which he is personally interested. 19 R. C. L. 897; 67 Atl. 564; 44 L. R. A. 728; Cooley’s Constitutional Limitations (7th ed.) 392.

      Mann & Mann, for appellee.
    A mere delay in the mayor affixing his signature to an ordinance will not defeat the express wishes of the taxpayers. His signature is.merely a ministerial act as a means of authenticating the record. C. & M. Digest, § 7499; 28 Cyc. 357; 19 R. C. L. 892. The presumption is that the signing of the petition by the officers of the corporations was authorized. 144 Ark. 249; 79 Ark. 338; 89 Ark. 435; 116 Ark. 520; 103 Ark. 283. .
   McCulloch, C. J.

It appears that there have been organized in the city of Forrest City three local improvement districts under general statutes (Crawford & Moses’ Digest, § 5647 et seq.), designated, respectively, as Forrest City Improvement District No. 1, Improvement District No. 2 of Forrest City, and Improvement District No. 3 of Forrest City, for the purpose of constructing a waterworks plant, an electric light plant, and a sewer system within the territory of the respective districts, and, after the completion of the improvements, they were taken over, for operation, by the city council. The city has incurred in the operation of said districts an unpaid indebtedness of $51,013.76.

The General Assembly of 1921 enacted a statute authorizing the organization, under general statutes, supra, of the real property in the city of Forrest City, or in any part which includes the whole of the territory embraced within the three districts heretofore referred to, into an improvement district to be known as “The Forrest City Special Improvement District,” and with authority to “take over and be the owner of >all the real and personal property and property rights and choses in action now belonging to Forrest City Improvement District No. 1, Improvement District No. 2 of Forrest City, and Improvement District No. 3 of Forrest City, and shall assume all debts and obligations of said districts, and shall have power to repair, enlarge, overhaul, erect and in every manner equip the present plants belonging to said three improvement districts heretofore existing,. or to purchase and install new machinery and power plants, erect any suitable buildings, to purchase real or personal property, to sell or trade any real or personal property now owned by either of said districts or hereafter acquired by it, to enlarge and extend water, sewer and light facilities, lay additional water-pipes or erect additional electric lines, or lay additional sewers, as needed.”

Another section provides that the new district “shall assume and discharge all liabilities incurred by the city of Forrest City in the operation of any of said plants, and in the improvement thereof.” The statute provides that the district shall be organized pursuant to the general statutes and be controlled by said statutes, except as otherwise specifically provided in the new statute.

The statute contains a recital that “it has been found advantageous to consolidate the operations of said districts, treating them as a single district for the purpose of economy and efficiency in their operation,” and that, on account of the growth of the city, “there is much territory requiring water, electric light and sewers which is not served by said districts, and the water, electric light and sewer plants need large repairs, reconstruction and great extensions in order to serve the people of said city.” Special Acts, 1921, p. 1358.

Pursuant to the terms of this statute, Forrest City Special Improvmeent District was created by ordinance upon the petition of ten owners of real property, in accordance with the general statutes, supra. The second petition asking for the improvement, and purporting to be signed by a majority in value of the owners of real property in the proposed district, was filed with the city council, and, after notice, it was found to contain a majority, and an ordinance was enacted authorizing the construction of the improvement and imposing the cost on the real property in the district.

The two appellants, who are owners of real property in the district, instituted this suit in the St. Francis Chancery Court to restrain further proceedings under the ordinances, and they attack the validity of the statute itself, also the validity of the ordinances of the city,as well as raising the question of the majority in' value of the property owners having signed the second petition.

On the hearing of the cause on testimony adduced by each side, the chancery court dismissed the complaint for want of equity, and an appeal has been prosecuted.

An attack is made on the validity of the statute on the sole ground that the Legislature could not authorize the creation of a local improvement district with power to pay the debts incurred by the city in the operation of the improvements constructed by the old districts, especially where the indebtedness of the city Included interest on notes or other written obligation.

As to the question of authority to pay interest, it can be said that no such authority is expressly conferred in the statute. The statute merely provides that the new district, when organized, ‘ ‘ shall assume and discharge all liabilities incurred by the city of Forrest City in the operation of any of said plants, and in the improvement thereof.” This language refers, of course, to'valid and enforceable obligations of the city, and the new district is not bound to pay any other asserted liability. We eannoit adjudicate in advance what will be treated as valid obligations, as the district has never got far enough along to actually undertake to assume or pay the obligations of the city. Owners of property .would, of course, be entitled to be heard in court to restrain any unauthorized act of the commissioners in attempting to pay an il • legal obligation of the city.

This statute was passed for the purpose of enabling the new district formed under its terms to take over the affairs of the three former districts and to assume their obligations, and, as a part of the adjustment of equities in taking over the property of the old districts, the new one is required to assume the indebtedness incurred by the city in operating these districts while under its control. There is no legal objection to the' inclusion/of these things in the taking over of the old districts by the new one, since it is necessary to operating under the new district that the assent of a majority in value of the owners of property in the district be obtained. The attack upon the validity of the statute is therefore unfounded.

It is next contended that the second ordinance of the city council authorizing the construction of the improvement and imposing the cost on the real property in the district is void because it was not properly recorded and authenticated by the signature of the mayor, as provided by statute.

Counsel for appellants relies on the statute, which reads as follows:

“All by-laws .or ordinances shall, as soon as may be after their passage, be recorded in a book kept for that purpose, and be authenticated by the signature of the presiding officer of the council and the clerk; and all bylaws or ordinances of a general or permanent nature, and of those imposing any fine, penalty or forfeiture, shall be published in some newspamr of general circulation in the corporation. Provided, in incorporated towns where no newspaper is published, written or printed notices posted up in five of the most public places in said corporation shall be deemed a sufficient publication of any law or ordinance for incorporated towns; and it shall be deemed a sufficient defense to any suit or prosecution for such fine, penalty or forfeiture to show that no such publication was made.” Crawford & Moses’ Digest, § 7499.

The city clerk was introduced as a witness, and produced a certified transcript of the ordinance, purporting to have been taken from the record, and also produced the record itself. The ordinance in question appeared on a typewritten page or pages pasted into the record kept for the purpose of recording ordinances, and this was signed by the mayor and city clerk, that is, by Mr. G-robmyer, the person who was mayor at the time the ordinance was passed. It was shown by oral testimony that Mr. Grobmyer’s term of office expired within a day or two after the ordinance was passed, and that he did not sign the record until after he went out of office.

Counsel is mistaken in his assumption that the signature of the mayor to the ordinance is essential to its legal enactment, or that the signature of that officer to the record is essential to its proof. The mayor of a city has authority under the statute (Crawford & Moses’ Digest, § 7701) to veto an ordinance, but there is nothing in the statute requiring him to approve it or sign it before it becomes effective. The statute quoted above merely provides for a method of making a record of ordinances of a city or town similar to the record of enrolled bills enacted by the Legislature and deposited with the Secretary of State. The signature of the presiding, officer of the council is merely for the purpose of making a record, but the failure to sign this does not defeat an ordinance which has been duly passed.

Another section of the statute (Crawford & Moses’ Digest, § 7497) provides what shall constitute proper proof of by-laws and ordinances of a city council. The provision is that printed copies of such by-laws and ordinances published under authority, and transcripts of such by-laws or ordinances recorded in any book or entered on the minutes or journal “kept under the direction of sucli municipal corporation, and certified by its clerk, shall be réceived in evidence for any purpose,” etc. In the present case there was introduced a certified transcript from the record showing the recorded ordinances as passed by the city council. This is sufficient evidence to establish the legal enactment of the ordinance, and its effect is not defeated by showing that the record had not been signed by the mayor while he was acting as such. The record of the ordinances is kept in the hands of the city clerk, together with the journals showing the progress of the ordinances through the council, and Avhere these records, taken together, show a valid ordinance, they cannot be attacked by parol evidence. Roberts v. Street Improvemnt Dist. No. 2 of Morrilton, ante p. 248.

It is also contended that the record of the ordinance is invalid because, instead of actually transcribing it on the record, the pages containing the copy were pasted into the record. This was sufficient compliance with the statute. Carrier v. Comstock, 108 Ark. 515.

Some of the members of the city council signed the petition for the construction of the improvement, and it is contended that this disqualified them from joining in the action of the council in passing the ordinance pursuant to the petition.

The city council, in passing on the petition and enacting the ordinance, acts in a legislative capacity, and personal interest does not disqualify the members of the council. We think that there is nothing in the contention that the fact that some of the members of the council signed the petition rendered the action of the council invalid.

Section 9 of the statute creating the district provides a limitation in the expenditures “for the extension, repair and reconstruction of said water, light and sewer plants to thirty per cent, of the assessed value of the real property within the district, as shown'by the last county assessment, but said thirty per cent, shall not include the interest on money borrowed, nor debts of the city of Forrest City or its water and light department heretofore incurred, nor the debts now existing against said” former districts. The original petition for the' creation of the district did not express a limitation on the cost, but merely asked for the creation of the district in accordance with the statute. It was not essential to the validity of the proceedings that there should be any limitation expressed in the petition, for the petition followed the law and carried with it any limitations expressed in the law.

The second petition was identical in language with the original petition, so far as the purpose of the organization was concerned, but it contained the following clause with respect to limiting the cost of the improvement: '

“We further petition and pray that the cost of such improvements so undertaken be assessed and charged upon the real property situated within said district, the total cost of"the undertaking herein, exclusive of interest, not to exceed the sum of $115,000.”

This limitation upon the cost, of the improvement, certainty did not constitute a variance from the original petition so as to avoid the proceedings. It is not necessary to limit costs of an improvement in the petition signed by owners of the property asking for the improvement, but the fact that the property owners do express such a restriction in the petition does not avoid the proceedings. Jt is unnecessary to discuss the full effect of the limitation expressed in the petition, for the only question we are called on to decide now is whether the inclusion of that expression constitutes a departure from the purposes expressed in the original petition, and whether it affects the validity of the proceeding, apd we.hold that it does not constitute such a departure, and does not affect the validity.

The final contention-is that the second petition does not .contain the signatures of the owners of a majority in value of the real property in the district.

Appellants introduced proof in an effort to show that many of the signatures to the petition were unaii- . thorized, and that some of the persons who signed did not own any real property in the district. During the progress of the trial the parties on each side obtained the consent of the court for three persons who were familiar. with the property in the locality and the persons signing the petition, as well as the ownership of the various pieces of property, to check over the list, in an effort to'1 agree upon the question as to the valuation of the property, of those who had properly signed the petition, so as to • eliminate controversy in open court and reduce the controversy to. a determination of the questions about which there were irreconcilable differences of opinion. Upon the report of these persons, after examining the list carefully, it was conceded that the value of the property owned by the persons and corporations whose names appeared signed to the petition amounted to $536,000, in round numbers, and that the total valuation of the real property in the district was found to be $1,014,000 in round numbers. So, in order to constitute a majority, there must be found the signatures of owners of property in excess of $507,000.

It appears from an examination of the petition that' local business corporations, the names of which were signed to the petition, owned property set opposite the respective names of each corporation in the following list:

Forrest City Grocer. Co...........................................$14,000
Fussell-Graham-Alderson Co............................... 2,150
The Vaccaro-Grobmyer Co..................................... 2,620
, The Merchants Grocer Co..................................... 2,000
Forrest City Compress Co........................................ 2,000
Forrest City Box Co................................................. 2,400
The Planters ’ Bank & Trust Co......................... 4,250
. The Forrest City Gin Co........................................... 2,600
The Bank of Eastern Arkansas........................ 3,000
The B. P. O. E. Lodge No. 1219........................ 3,000
The First Nat’l Bank of Forrest City......... 3,500
Making a total of....................................$41,520

Appellants contended below, and contend now, that, according to the evidence adduced, persons who signed the names of these corporations had no legal authority to do so, and that the names should be stricken from the petition, and that the property owned by these corporations should not be counted in making up the majority. It is thus seen that if the contention of appellants is sound and the total valuation of the property owned by the corporation be stricken from the list, it leaves the petition about $12,000 short of the requisite amount to constitute a majority.

The proof shows that all the other signatures necessary to make up the amount of approximately $495,000 were authorized, and were properly signed to the petition. '

It is unnecessary to discuss the circumstances under which the names of 'all these corporations were signed, but we will discuss a sufficient number of the items to be determinative of the present controversy.

The largest corporation property owner is the Forrest City Grocer Company, with a valuation on its real property of $14,000. This is a corporation carrying on a merchandise business in the city of Forrest City, and Mr. A. B. Nimocks, who signed the name of the corporation to the petition, is the president and manager and principal stockholder. There are seven directors, all living in Forrest City except one, who resides in a town a few miles distant. Mr. Nimocks testified that he talked to a majority of the directors, and they approved it. He testified further that he had the management of the general affairs of the corporation and attended to all of its business, including the assessment of property for taxes. He testified that he usually signed all necessary papers concerning the business and property of the corporation, without obtaining express authority from the other directors. He stated that he did not remember that he had ever had occasion to sign a petition for an improvement before this one. There was no formal meeting of the board of directors for the purpose of authorizing Nimocks to sign the petition, nor was there any such formal meeting held until during the progress of the trial in the chancery court. During a suspension of the trial this corporation,' as well as all the others whose signatures appeared on the petition, held directors’ meetings, and formal resolutions were passed ratifying the action of the respective officers who had signed their names. Counsel for appellee insist that that was a timely ratification in each instance, but this court reaches the conclusion that it was too late to validate the signatures by ratification after the enactment of the ordinance, for the reason that there must be a majority in value of the property represented by authorized signatures before the council can pass the ordinance.

We are of the opinion that the evidence is sufficient to show that the signing of the petition was within the scope of the general authority which the directors, by continued custom, permitted the person who signed the petition to exercise, and that the corporation as well as all others are bound by his act. It appears from Nimocks’ testimony that he had exclusive management of the affairs of the corporation and was permitted to exercise full authority to do anything which, in his judgment, called for action for the benefit of the corporation. In other words, there was a course of conduct permitted on his part which amounted to holding him out as the corporation itself, and under these circumstances we think that the corporation is bound. Estes v. German Natl. Bank, 62 Ark. 7; Stiewel v. Webb Press Co., 79 Ark. 45; Winer v. Bank of Blytheville, 89 Ark. 435; Wales Riggs Plantations v. Caston, 105 Ark. 641; C. L. Kraft Co. v. Grubbs, 116 Ark. 520.

This court, in dealing with this subject in the case of Estes v. German National Bank, supra, speaking of the authority of the board of directors, said:

■ “They can do so by permitting the directors to establish a habit or usage of assenting separately.to the making- and performance of contracts by their agents. •By permitting snch usages or habits to be formed by a long course of business, they adopt and become bound •by them, so long as they acquiesce. If this were not so, great injustice might be done to parties contracting with .them in their usual way.”

In Winer v. Bank of Blytheville, supra, we said:

“The rules governing the authority of an agent to act for a private business corporation, and the proof thereof, are in many regards the same as between agents of natural persons. The authority of an officer to act for a corporation may be established by proof that he was held out to the public as possessing those powers which he exercised in a given case, or that the corporation has acquiesced in or ratified such acts.”

Applying this rule to the present case, we think it is clear that Mr. Nimocks had authority to bind the corporation. The appearance of the signature on the petition raised the presumption that it was placed there by authority. Malvern v. Nunn, 127 Ark. 418; Walton v. Light Improvement Dist., 144 Ark. 249.

There is also a presumption that the proposed improvement will result in benefit to all the real property in the district, and the evidence shows that Mr. Nimocks was'authorized to act for the corporation in all matters in which it was interested or from which it could receive benefit. The addition of the property of this corporation to the' amount of other property which is represented on the petition by authorized signatures runs the valuation up to an amount about $2,000 in- excess of'/a majority of the property in the district, but there are several other corporations in precisely the same attitude with respect to the manner in-which their signatures 'were' attached. For instánce, the signature of the Fussell-Graham-Alderson Company was signed by Mr. Alderson, who testified as a witness in the case, and stated •that he was the .vice-president and the manager of the .business, that he had authority from, the directors to handle any business matter which came up with reference to the property and affairs of the corporation. • Mr. James Fussell was the president, and expressly consented to the signing of the petition, as did the other directors, except one who was sick at the time and could not be consulted. He testified that it had been his custom to sign deeds without .any special authority from the board. The testimony of Mr. Alderson was sufficient, we think, to show that he was permitted to pursue a course of conduct with respect to the affairs of the corporation which fairly implied the authority to do anything which affected the interests of the corporation in regard to its property and affairs.

The name of the Yaccaro-Grobmyer Company was signed by Mr. Grobmyer, who was the active manager of the business. He testified that there were three stockholders and directors — -himself, Mrs. Pearl Yaccaro, and Cazzola Yaccaro, and that the business was under the active control of himself and Cazzola Vaccaro; that the latter expressly approved his signing the petition, but that Mrs. Yaccaro was not consulted, as she was absent at the time the matter came up. The testimony of the witness shows that this corporation, in which only three persons were interested as stockholders and directors, was under the active management of fwo of them, who did whatever was necessary to further the interests, of the corporation in regard to its property and affairs, and that these two participated in signing the petition. We think that, under the rule already announced, there is abundant testimony to show that there was authority on the part of Grobmyer to sign the petition.

This carries the amount of valuation represented by the signatures on the petition considerably above a bare majority, and it is unnecessary to discuss the circumstances under which the names of the other corporations were signed. It may be said, however, in passing, that in most, if not in all, instances, the evidence was sufficient to establish authority for the signatures 'of the names of the other corporations. It' follows that the court was correct in finding that there was a majority in value shown on the petition.

The decree is therefore affirmed.

Wood and Hart, JJ., dissent.


author: Wood, J.

text:
    Western Union Telegraph Company v. Arkadelphia Milling Company.
    Opinion delivered January 8, 1923.
    1. Accord and satisfaction — burden of proof. — In an action on an account, defended on the ground that plaintiff had accepted a check in settlement of the account, the burden was on defendant to prove an accord and satisfaction, either by an express agreement or by proving facts and circumstances from which an agreement to settle the account could reasonably be inferred.
    2. Accord and satisfaction — acceptance of check. — Where a milling company owed a telegraph company for sending messages, and sent it a check for part of its debt, claiming a set-off as to the remainder on account of damages for the incorrect transmission of a message, but without stating that the amount offered was in full payment, acceptance of the check by the telegraph company did not constitute an accord -and satisfaction.
    Appeal from Clark Circuit Court; George W. Hays, special judge;
    reversed.

      Francis R. St arle, J. H. & D. H. Crawford and Rose, Hemingway, Cantrell & Loughborough, for appellant.
    1. The transactions between the parties cannot be construed as an accord and satisfaction. They fall short of a good accord and satisfaction in.three respects: (1) The debt of the telegraph company for the April tolls ag:aimst the milling company was not in dispute. (2) The milling company did not clearly state, or even remotely suggest, that the check sent to the telegraph company was in full payment of the latter’s claim. (3) The telegraph company was not called upon to make an election between accepting a check tendered in full payment, or returning it rather than agree to the debtor’s terms. Arkansas oases relied on by appellee are not applicable to the facts in this case, viz: 94 Ark. 158; 148 Id. 512; 114 Id. 559; 122 Id. 121. But these eases do set out what constitutes a good accord and satisfaction. See also 67 Kap. 194, 100 Am. St. 368; 37 Minn. 418, 35 N. W. 1; 1 Corpus Juris, 554, § 74. Further, as sustaining the position that there was not an accord and satisfaction, see: 56 Ark. 37; 216 Mass. 204; 51 L. R. A. (N. S.) 315; 21 N. J. L. 391; 47 Am. Dec. 169; 23 Am. Dec. 566 and note; 10 Ind. App. 613; 38 N. E. 340; 12 Ind. App. 677; 40 N. E. 30; 21 Ky. L. Rep. 421; 51 S. W. 616; 99 Mich. 247; 41 Am. St. 597; 151 Mo. 671; 51 S. W, 738; 22 Ky. L. Rep. 498;-58 S. W. 323; 155 Pa. 30; 25 Atl. 996; 91 Md. 144; 50 L. R. A. 401; 89 Ky. 429; 12 S. W. 926; 81 Ga. 531; 7 S. E. 623; 145 Mass. 379; 14 N. E. 177; 56 Minn. 13; 67 N. W. 635; 58 Vt. 551; 5 Atl. 407; 1 Rul. Cas. Law, 198, § 33; 1 Corp. Jur. 557, § 80.
    2. An accord and satisfaction is necessarily based on a new contract for which there must be a new consideration. 55 Ark. 369; 112 Ark. 223, 226; 126 Ark. 327; 80 Neb. 551; 14 L. R, A. (N. S.) 443.
    3. The alleged accord and satisfaction, if permitted to stand, would violate the Interstate Commerce Act and Federal interstate commerce rules and regulations. IT. S. Comp. Statutes, 1916, § 8564; 162 IT. S. 197; 168 IT. S. 144; 71 Fed. 672; 226 IT. S. 286; 209 IT. S. 56; 195 Fed. 330; 149 Pae. 436; 228 Fed. 335; 144 S. W. 1080; 154 .S. W. 465; 100 Ark. 22; 106 Ark. 237; 124 Ark. 326; 198 S. W. 1132; 93 So. 238; 241 IT. S. 190; 163 Pac. 836; 167 N. W. 475; 185 S. W.1145; 116 N. E. 475; 256 U. S. 406.

      McMillan & McMillan, for appellee.
    1. The question here is not, as suggested by appellant, “'an accord and satisfaction effected by this transaction between the milling company and the telegraph company,” but, taking the findings of the lower court as conclusive as far a.s the evidence warrants, and giving to the fasts .disclosed the strongest inference-of an intent to settle which their legal tendency will bear, the question'is, do they sustain the court’s finding? 53 Ark. 75-80; 54 Id. 229-235; 149 IT. S. 43, 37 Law. Ed. 642; 81 Ark. 337. Appellee did not in words say that the check .was in full settlement of the balance owing on the April account but the statement accompanying it was a demonstration in figures that the check was in full settlement of that account. The intent was clear. 148 Ark. 512. That there was an accord and satisfaction see 122 Ark. 212; 114 Ark. 559; 148 Ark. 512. There was a dispute as to the amount due appellant growing out of the counterclaim or set-off for which the appellee contended it was entitled to have credit. • 22 R. I. 66; 46 Atl. 182; 4 A. L. R. 471 (1919); 161 111. 339; 108 Mich. 58; 31 L. R. A/171; 65 N. W. 664. This is an executed contract, wherein there was no extortion or duress, and appellant i>s seeking to set aside the settlement it made. Turpin v. Antonio, 153 Ark. 377; 49 Ark. 70; 145 Ark. 185; 130 Ark. 520.
    2. As to the contention that the accord and satisfaction was illegal because in violation of the interstate commerce act and interstate commerce rules and regulations, there is nothing in the record from which a violation of any law can even be inferred. Before the case can be reversed, the evidence must be such as to exclude every other reasonable inference. 53 Ark. 327. The contract was proved, and, in the absence of evidence to the contrary, the law presumes it was legal. The lower court’s finding that it was not a device to evade the law is not against the evidence, and the settlement should be upheld. 59 Law. ed. 805.
   Wood, J.

This is an action by the appellant against the appellee. The appellant in its complaint alleged that the appellee was due it for tolls on telegrams and cablegrams transmitted for the appellee and the .revenue tax thereon in the sum of $448.50, for which it prayed judgment.- The appellant filed as an exhibit to its complaint an itemized statement of its account showing the above amount as the balance clue it. The appellee, in its answer, admitted the service, but set up,. among other things, in its defense to appellant’s claim, an accord and satisfaction thereof for the April account. The appellant answered the appellee’s plea of accord and satisfaction, denying the same.

The cause, by consent of parties, was tried by the. court sitting as a jury upon the following agreed facts: “That the telegraph company and the milling company are corporations, as alleged. That the milling company was, on May 1, 1921, indebted to the telegraph company for tolls on messages sent by the telegraph company for the milling company in April, 1921, $347.41. That on May 1, 1921, the milling company was making a claim against the telegraph company for alleged damages for $233.67, on account of the incorrect transmission and delivery of a message sent by it to J. G. Bynum, at Indianola, in the State of Oklahoma. That the telegraph company was not willing to concede its liability, and the parties were unable to agree upon a settlement. That the milling company mailed to the telegraph company the following letter, with the check therein mentioned, to-wit:

“May 18, 1921.
“Western Union Telegraph Co.
“Gentlemen: We herewith hand you our check for $113.74, covering your statement our account' for April amounting to $347.41, less $233.67, which we are holding up to cover our claim, J. H. Bynum, Tndianola-, Okla.
“Yours truly,
“Arkadelphia Milling Oo.”

It is also agreed that the following statement accompanied the said letter and check as a part of the said transaction and may be considered as a part of it, to-wit;.

“Arkadelphia Milling Co.
“Western Union Telegraph Co.
‘‘Grentlemen: We inclose check herewith for $- in payment of invoice Apl. a/c-................................................$347.41
“Money transferred................................................................. 41.42
“Less J. H. Bynum claim
$233.67
155.16
$388.83 $388.83
“Tours truly,
“Arkadelphia Milling Co.”

The check referred to was accepted and cashed by the telegraph company in due course of business. The milling company contends that the above transaction constitutes an accord and satisfaction of the April account for tolls due by it. Thé telegraph company contends it does not constitute an accord and satisfaction, and further, that same could not be allowed as an accord and satisfaction without violating interstate commerce rules, and, if paid and allowed as an accord and satisfaction, it would be equivalent to giving the milling company an unlawful rebate.

It is agreed that the account for message tolls sued for is due to the telegraph company, with interest, unless the milling company is entitled to retain $233.67 on its plea of accord and satisfaction, and that in any event the milling company will not be entitled to recover any other sum on its answer and set-off in this action.

The trial court found that the appellee’s plea of accord and satisfaction should be sustained, and that the appellant was not entitled to recover judgment for $233.67, its claims for tolls during the month of April, 1921, with interest thereon. From the judgment entered in accordance with this finding is this appeal.

The undisputed facts, established by the evidence set forth in. the agreed statement of facts, do not constitnte an accord and satisfaction, and the court should have so declared as a matter of law. The agreed statement shows that on May 1, .1921, the appellee was indebted to the appellant in the sum of $388.83. This indebtedness was not disputed by the appellee. The appellee was making’ a claim against the appellant for alleged damages in the sum of $233.67, but the appellant disputed this claim. The appellee made up a statement of the account showing its indebtedness to the appellant and appellee’s claim, and deducted the amount of its claim from the amount it conceded to be due the appellant, and inclosed the appellant a check for the balance, with the statement that it was “holding up” or holding out the amount of its claim. But it will be observed that the appellee did not, in its letter, say to the appellant that the check was intended in full payment of the amount which it conceded to be due the appellant. Nor is there anything in the agreed statement to justify the inference that, if the appellant cashed the check, it would do so with the understanding that it was thereby receiving full payment of its account against the appellee.

Giving the testimony, as we must, its strongest probative force in favor of the appellee, the only reasonable inference to be drawn is that the appellee was making1 a claim against the appellant for the sum of $233.67, which, if appellant conceded, would reduce the appellant’s account to the sum of $155.16, and that appellant was sending its check to cover the amount and to be applied in payment of the account as thus stated. But appellee did not, in its letter, or in its statement of the account, or in the check, give the appellant to understand that an acceptance of the. check and cashing of the same would be considered by the appellee as a recognition by the appellant of appellee’s claim for damages and an approval and settlement thereof.

- The burden was upon the appellee to prove the contract of accord and satisfaction. It was essential for it to show either an express agreement upon the part of the appellant of accord and satisfaction by which the amount of appellant’s claim against the appellee was settled, or else to prove facts and circumstances by which an agreement on the part of the appellant to settle its account by allowing the claim of the appellee for damages could reasonably be inferred. There is nothing in the statement of facts to indicate a meeting of the minds of the parties upon any such terms. There is nothing to justify the conclusion that the appellant was notified by the appellee that, if the appellant cashed the check, it would do so with the understanding that appellee’s claim for damages had been allowed and that appellant’s account against the appellee had in that manner been satisfied.

As we have already stated, there was no dispute between the appellant and the appellee as to the correctness of appellant’s account against the appellee.. The appellee could not pay this account by making up an account of its own and simply tendering to the appellant the balance as shown by the account thus rendered. Such tender and acceptance by the appellee would not justify the inference that the appellant agreed to receive the same in full payment of the amount due it. Greer v. Laws, 56 Ark. 37; Harrison v. Henderson, 67 Kansas 194. The agreed statement of facts, taken as a whole, shows that the appellant was not conceding its liability to the appellee upon the latter’s claim for damages, and, in the absence of any evidence tending to prove that the check was tendered by the appellee and accepted by the appellant in full settlement of this disputed claim of damages, the court erred in holding that there was an accord and satisfaction of appellant’s account against the appellee.

The cases of Pekin Cooperage Co. v. Gibb, 114 Ark. 559, Arkansas Zinc & Smelting Corporation v. Silver Hollow Mining Co., 148 Ark. 512, and Longstreth v. Halter, 122, Ark. 212, upon which the appellee relies, are all differentiated by the facts from the case at bar. In those cases we recognized the familiar rule that “when a claim is in dispute and a debtor sends to his creditor a check or other remittance which he clearly states is in full payment of the claim, and the creditor accepts the remittance or collects the amount of the check without objection, it is generally recognized that this constitutes a good accord and satisfaction.” The facts of those cases brought them clearly within the above declaration, because in each case there was the unequivocal fact, proved by letter, check, or statement, which brought home knowledge to the creditor that the debtor was tendering the amount in full satisfaction of the creditor’s claim, and on condition that if the tender were accepted it would be in full 'satisfaction of the claim. When the creditor accepted the amount tendered under such circumstances, necessarily he assented to his debtor’s proposition, and there was a meeting of the minds of the parties that completed a contract of accord and satisfaction. But the evidence set forth in the agreed statement of facts did not warrant the trial court in coming to such conclusion in the instant case, and in so doing the court erred. For this error the judgment is reversed, and, as the cause appears to have been fully developed, judgment will be entered here in the sum of $233.67, the amount of the April tolls, with interest at six per cent, from Mav 1,1921.