author: Humphreys, J. Hart, J.

text:
    Virgil R. Coss Mortgage Company v. Jordan.
    Opinion delivered November 3, 1924.
    1. Equity — control op court over decree. — As courts have complete power over their judgments during the term at which they are rendered, a court- may set aside its decree at an adjourned day of the term, to permit the interposition of a defense.
    2. Usury — excessive interest. — Where a loan for 10 years bore interest at 6 per cent, per annum, and commission notes were executed to the lender’s agent as part of the same transaction, amounting to 4 per cent, interest additional for ten years, but was to be collected in four instead of ten years, the interest exceeded 10 per cent, for ten years, and the contract was usurious.
    3. Evidence — judicial notice — laws op sister state. — Judicial notice will be taken of the laws of Oklahoma, under which the penalty for usury is forfeiture of the interest contracted for and twice the amount of the interest paid.
    Appeal from Drew Chancery Court; E. G. Hammock, Chancellor;
    reversed in part.

      W. D. Jones and James M. Golden, for appellant.
    The motion to set aside the judgment was insufficient, the same not being in conformity with the statute. It was not verified by affidavit, and the attempt to set up a meritorious defense, viz., a plea of usury, was too indefinite and uncertain. There must be at least a prima facie showing of a defense. C. & M. Dig. § 6292; 83 Ark. 17; 104 Ark. 449; 120 Ark. 255. A judgment will not be set aside for defendant’s own lack of diligence. 93 Ark. 462; 122 Ark. 77; 114 Ark. 493. Nor for mere errors of law. 96 Ark. 504. The burden of proof is upon the party pleading usury to show clearly that the transaction is usurious. 24 A. L. R. 856 and cases cited. To establish usury there must be, first, a loan expressed or implied; second, an understanding between the parties that the money shall be returned; third, that a greater rate of interest than is allowed by law shall be paid or agreed to be paid; and, fourth, a corrupt intent to take more than the legal rate for the sum loaned. 12 Pac. 89; 76 Pac. 1st Ann. Cases, 418; 27 E. C. L. 268; 54 Ark. 566-569. See also, on the burden of proof, 158 Ark. 62; 105 Ark. 653; 159 Ark. 141; 135 Ark. 578; 57 Ark. 251; 83 Ark. 31, 36. To establish the plea of usury, it is essential that there was a loan or forbearance of money, and that for such forbearance there was an intent or an agreement to take unlawful interest, and that such unlawful interest was actually taken or reserved. Usury will not be imputed to the parties, and will not be inferred where the opposite conclusion can be reasonably and fairly reached. 97 Árk. 462; 54 Ark. 566; 67 Ark. 370; 68 Ark. 162: 74 Ark. 241; 83 Ark. 31; 87 Ark. 534; 153 Ark. 219. Prom the foregoing it is seen that it is the intention of the parties that controls. Even if it be held that the American Farm Mortgage Company was the agent of the appellant here, there is still no intent shown on the part of either to charge a greater rate of interest than ten per cent.: and if it should appear that a greater rate was actually charged, the borrower is amplv protected by the provisions of the mortgage itself, by the terms of which he would be credited with any excess paid against any principal or interest remaining unpaid when the overcharge is discovered. 56 Ark. 340:129 Ark. 167; 167 S. W. 362. Jordan, by agreement, made the American Farm Mortgage Companv his agent for the procurement of the loan. Such being the case, a bonus or commission paid to the latter does not make the transaction usurious. ■ 105 Ark. 661; 51 Ark. 535. The court’s decision in the ease of Bolt v. Kirbu. 57 Ark. 251, is a refutation of counsel’s contention that the latter company was the agent of appellant in the procurement of this loan. This is an Oklahoma contract, and the laws of that State on the auestion of usurv will control. 25 Ark. 53; Okla. Statutes $<$> 5098; 195 Pac. 889; 59 Okla. 215; 39 Oye. 899, 900; 15 N. Y. 986; 39 Cyc. 1054-1055.

      John Baxter, W. W. Grubbs and R. W. Wilson, for appellee.

      Courts have the right at any time, during the term, to vacate their judgments. 107 Ark. 415; 6 Ark. 100. It is conceded that the burden of proving usury is on the party pleading it, but that burden has been clearly discharged in this case. If, as we contend, the two mortgages and two sets of notes constitute one contract, the calculation made by the witness Gr. A. Franklin shows clearly that the loan is usurious. This calculation was made in accordance with the statute, C. & M. Digest, § 7368, and is the method approved by this court. 150 Ark. 612; 153 Ark. 219. The fact that both mortgages and all notes were made direct to appellant, regardless of other facts and circumstances, wholly eliminates the question of agency from this case. Appellant will be estopped from disclaiming its ovni contract in order to avoid the penalty thereof. 21 Corpus Juris. In order to render a contract usurious, it is not essential that there be a corrupt agreement to evade the statute and an intention on the part of both parties that usury shall be charged. 62 Ark. 370; 135 Ark. 578; 37 Minn. 441; 41 Ark. 339. The intent clause in the mortgage is a mere subterfuge, to allow which, as a defense tq a plea of usury, would, in effect, strike down our usury laws.
    Williamson & Williamson, amici curiae.

   Humphreys, J.

This is a companion suit with the case of B.F. Dupree v. Virgil R. Coss Mortgage Company, ante p. 18, in so far as the issues are concerned. The instant suit was commenced by the lender instead of the borrower, as in the Dupree case, but there was a cross-bill filed by the borrowers, Marcus Jordan and Melvina Jordan, seeking to cancel all the notes and two mortgages executed by appellees to appellants on May 23, 1918. The notes and mortgages were executed contemporaneously, and consisted of a $600 note, payable in ten years, with interest at the rate of 6 per cent, per annum from date until paid, secured by a first mortgage on certain real estate in Drew County, Arkansas, the interest on the note being evidenced by eleven interest coupon notes attached, the first being for $19.36, due 12-1-1918, nine others being for $36 each, due December 1 for the next nine years, and the last for $18, due 6-1-1928; also four commission notes for $60 each, due respectively. on December 1, 1918, 1919, 1920, and 1921, secured by a second mortgage on the same real estate. All of the notes and both mortgages were made payable directly to appellant, but the understanding between appellant and the American Farm Mortgage Company was that the commission notes should be divided equally between them. The first commission note was paid by appellees, but default was made in the payment of the second and third, and, under a clause in the mortgage that all should become due upon failure to pay either, appellant brought this suit to foreclose the second mortgage for the three unpaid commission notes. The defense of usury was interposed to all the notes, and a cancellation of the notes and both mortgages was sought. This and the Dupree case were pending in different counties at the same time, and, by agree ment, the testimony taken was to be used in each case.

The statement of facts in the Dupree case is therefore adopted as the statement of facts herein, as far as same is applicable.

On December 12, 1921, a decree was rendered in favor of appellant for $180 with interest, and the mortgaged lands were condemned to sale to satisfy the indebtedness. On an adjourned day of the same term of court the decree was set aside on motion of appellees, over the objection of appellant, and appellees were permitted to interpose the defense of usury and try out the issue. Appellant contends that the court committed reversible error in setting aside the decree. Not so, for courts of record have complete power over their judgments during the term at which same are rendered.

The cause was submitted to the court upon the pleadings and testimony, which resulted in a finding that the contrast was usurious, and a decree canceling the notes and mortgages. From that decree an appeal has been duly prosecuted to this court.

The first question arising for determination on the appeal is whether the contract is usurious under the law of Arkansas. Treating the American Farm and Mortgage Company as the agent of appellant, as decided in the Dupree case, we think so. The principal note bore interest at the rate of 6 per cent, per annum for ten years, and the commission or bonus notes were a part of the same transaction, and amounted to 4 per cent, per annum additional interest on the principal notes for ten years. The bonus was made payable in one, two, three and four years after date. The effect of this arrangement was to collect 4 per cent. per annum in one, two, three and four years instead of distributing it over the ten-year period. This method of collecting the interest brings the contract within the rule of partial payments provided by § 7358 of Crawford & Moses’ Digest. This was the method of calculation applied to a contract similar to this, to ascertain whether same was usurious, in the case of Green v. Conservative Loan Company, 153 Ark. 222. When calculated by this method, the interest contracted for was greatly in excess of 10 per cent, per annum. This court, however, ruled in the Dupree case that the parties therein contracted with reference to the Oklahoma law, and, as the facts in the two cases are alike, this case is ruled by the Dupree case. Under the Oklahoma law, of which the courts of this State take judicial knowledge, the penalty imposed upon usurious contracts is a forfeiture of the interest contracted for and twice the amount of any interest paid. The decree of the court was correct in so far as it canceled the commission notes and mortgages securing’ same, but was incorrect in canceling the principal note and mortgage. Instead of canceling the principal note and mortgage, a credit should have been given thereon for $120, double the amount of the bonus note which appellees paid.

On account of the error indicated the decree is reversed, in so far, as it canceled the original $600 note and mortgage, and the cause is remanded with directions to enter a credit of $120 on said note and mortgage. In other respects the decree is affirmed.

DISSENTING OPINION.

Hart, J.

Judge Wood and myself agree with the majority opinion in so far as it holds that the contract in this case was usurious, but dissent from that part of it which holds that it was an Oklahoma contract.

The mortgage given by appellees to appellant contains the following: ‘ ‘ It is agreed that the rate of interest herein reserved and charged shall not in any event exceed the maximum legal rate permitted by the laws of Arkansas.”

Another clause of the mortgage provides that the promissory note which the mortgage is given to secure and the interest coupons shall be payable at Muskogee, Oklahoma, or such other place as the holder of such note may designate in writing.

As soon as the interest became due, the holder df the note directed, by letter, that it be paid through the American Farm Mortgage Company of Pine Bluff, Arkansas, within the next ten days. These facts clearly show that appellant intended that the contract was to be performed in this State, and it is therefore to be governed by the usury laws of the State of Arkansas. Tallman v. Union Loan & Trust Co., 161 Ark. 614.


source: Caselaw Access Project

author: Humphreys, J.

license: Public Domain

text:
    Pope v. Wylds.
    Opion delivered December 15, 1924.
    Mortgage foreclosure — redemption.—Where a decree of foreclosure of a mortgage provided that, upon report of sale and the confirmation thereof, all right and equity of redemption of the defendants should be barred, the defendant was entitled to redeem from the sale at any time before confirmation.
    Appeal from St. Francis Chancery Court; A. L. Hutchins, Chancellor;
    affirmed.

      8. 8. Hargraves and John M. Prewett, for appellant.
    In the absence of fraud and unfairness, inadequacy of price, however gross, does not invalidate a sale. 20 Ark. 381; 44 Ark. 502; 65 Ark. 152; 74 Ark. 324; 108 Ark. 368. Where property has been struck off to the highest bidder by the court’s commissioner, the bidder acquires vested rights which the courts must respect. 65 Ark. 152; 77 Ark. 216; 86 Ark. 258. Such a sale can only be set aside upon good and valid grounds. 99 Ark. 327; 86 Ark. 258. The right to redeem from the sale was cut off by the waiver expressed in the mortgage. 102 Ark. 649; 117 Ark. 417.

      Mann & Mrnin, for appellee.
    The chancery court did not err in allowing the appellee to redeem from the commissioner’s sale. 73 Ark. 37; 133 Ark. 456. Only those who were parties to the suit when the decree was entered would haveAhe right to perfect the appeal. 117 Ark. 394. The chancery court has no power to alter a decree after the expiration of the term at which the decree was entered..- 135 Ark. 308; 139 Ark. 408. A litigant cannot accept benefits under a decree and, at the same time, appeal from it, or object to any of the provisions -of the decree. 117 Ark. 481. A sale is not complete until confirmed by the court. 32 Ark. 391; 105 Ark. 261. Purchasers at judicial sales become parties to the suit and are bound by all subsequent orders of the court. 133 Ark. 332; 105 Ark. 261; 36 Ark. 591.
   Humphreys, J.

This is an appeal from an order ot the chancery court of St. Francis County refusing to confirm and setting aside a commissioner’s sale of certain land, made under a decree of foreclosure in this suit. The plaintiff in the suit was the Guaranty Bank & Trust Company, and appellee and his wife were the defendants. Appellee had executed a second mortgage, in which his wife joined, on said land to the Guaranty Bank & Trust Company to secure a number of notes, subject to a first mortgage thereon in favor of said trust company for $3,500. The Guaranty Bank & Trust Company duly assigned the first mortgage to the Prudential Insurance Company of America. The second mortgage contained a written waiver of his equity of redemption and of his wife’s dower and homestead interest in said land. Appellee made default in the payment of the notes secured by the second mortgage, and this suit was instituted to secure judgment against appellee upon the notes and to foreclose the second mortgage to pay same, subject to the first mortgage lien upon said land. Appellee did not appear in the suit, but made default, whereupon the chancery court rendered judgment against him in the sum of $1,062.06, with interest thereon at the rate of 10 per cent, per annum until the judgment should be paid, and decreed a foreclosure of the lien, and ordered a sale of the land, subject to the first mortgage lien, to pay said judgment. The decree contained the following paragraph:

“It is further considered, ordered, adjudged and decreed that, upon the report of sale and the confirmation thereof, all right and equity of redemption of the defendants, and each of them, 'and all right of dower and homestead of the said Anna Wylds, shall be forever barred and foreclosed.”

Appellant herein purchased said land at the commissioner’s sale, subject to the first mortgage owned by the Prudential Insurance Company of America, bidding therefor the amount of the judgment, interest and costs. After the sale, and, before the confirmation thereof, appellee filed a petition to set aside the sale and redeem tiie land. In keeping with his .offer to redeem the land he tendered the amount of the judgment, interest and costs into court.

Appellant contends the trial court erred in setting aside the sale, for the reason that appellee did not allege or prove any misconduct or gross irregularities in making the sale, or that appellant purchased the land for a grossly inadequate price. It is true that the sale was regularly made and free from fraud, and that appellee bid a fair price for the land, but the sale was, accordjing to the terms of the decree, a conditional one; the condition being that appellee might redeem the land from the sale before a confirmation thereof. This is the correct interpretation of the decree. It is unnecessary to determine whether the court erred in ordering a conditional sale of the land. The order of sale was final, and no appeal was taken therefrom. The appellant therefore bought the land subject to the condition in the decree, and must abide by appellee’s right to redeem the land at any time before the confirmation of the sale by paying the judgment, interest and costs. The doctrine of caveat emptor applies.

No error appearing, the decree is affirmed.


text:
    Missouri Pacific Railroad Company v. Parker.
    Opinion delivered December 15, 1924.
    1. Evidence — opinion of npnexpert. — In an action for flooding plaintiff’s land with surface water, caused bv defendant constructing a large ditch on each side of its track, the opinion of a nonexpert as to whether plaintiff could have avoided or mitigated his damages by cleaning out his own ditches was inadmissible.
    2. Water and watercourses — variance.—In an action against a railroad company for overflow of surface waters by constructing a ditch on each side of its track, evidence that defendant closed culverts above plaintiff’s plantation in enlarging the ditches.was properly received as supporting the allegation of the cause of the damages.
    3. Trial — abstract instruction. — In an action for overflow of plaintiff’s land by surface water caused by ditches constructed by defendant, an instruction that defendant could not recover if the overflow was caused by plaintiff’s failure to use reasonable care in maintaining, repairing, enlarging or widening his ditches across his land was properly refused where there was no evidence that plaintiff suffered damages from failure to do those things.
    4. Waters and watercourses — duty of landowner to enlarge ditch. — A landowner is not required to enlarge or widen a ditch on his land in order to carry off surface waters accumulated and thrown in a body on his land.
    5. Waters and watercourses — surface water. — A railroad company has no right to collect waters in a ditch and to cast it in a body upon plaintiff’s land, and an instruction to the contrary was properly refused.
    6. Waters and watercourses — instruction as to diversion of surface water. — In an action against a railroad company for overflow of land by surface water, caused by defendant constructing new ditches, a requested instruction that defendant was not liable for excess water thrown into its ditches by an upper proprietor, was properly modified by adding, “unless defendant opened its ditches to accommodate such water and by doing so accelerated the flow in such volume as to flood” plaintiff’s land.
    7. Waters and watercourses — liability of upper proprietor. — An upper proprietor is liable in damages to a lower proprietor if he gathers the surface water of the dominant estate and casts it in a body upon the servient estate.
    8. Water and watercourses — limitation.—'Refusal to submit the question whether the overflow complained of was caused by defendant simply cleaning out its ditches, which had been dug ■more than three years prior to the suit, held erroneous.
    Appeal from Chicot Circuit Court; Turner Butler, Judge;
    reversed.

      E. B. Kinsworthy and B. 8. Kinsworthy, for appellant.

      W. B. Sorrels and W. B. Sorrels, Jr., for appellee.
   Humphreys, J.

Appellee instituted this suit against appellant in the circuit court of Chicot County to recover damages for flooding his lands with surface water alleged to have been gathered together by means of ditches and thrown in a body upon his cultivated fields. The cause of appellee’s damage was alleged in the complaint m the following language:

“That the defendant, some time in the latter part of March, 1921, or about said date, constructed two large ditches, one on each side of its railway, beginning at mile-post on its roadbed number 418.5 and emptying them or ending them near its mile-post 420.20, into the ditch plaintiff had before constructed to drain his land, as aforesaid; that the ditches constructed by the defendant tapped surface water above, consisting of many square miles and of great quantity of water, and by means of these ditches so constructed a great quantity of water was cast in a body upon the lands of the plaintiff, as aforesaid, and that this was the effect of the defendant’s ditches so constructed, as aforesaid.”'

Appellant filed an answer denying the material allegations of the complaint, and, in addition, interposed three separate defenses; first, that in March, 1921, it simply cleaned out two old ditches which it had constructed on each side of its track in 1917 at the request of appellee; second, that the ditches as originally dug were a part of the original construction of its roadbed, and that' any damage resulting therefrom was barred by the three years’ statute of limitation; and third, that the overflow was caused by excessive rains in the year 1921 and by the failure of appellee to clean out the drainage ditches composing his own drainage system on his plantation.

The cause was submitted to the jury on the pleadings, testimony, and instructions of the court, which resulted in a verdict and judgment in favor of appellee for $1,120, from which is this appeal.

The record reflects that, in 1917, appellee purchased a plantation at Norcross, in Chicot County, and ditched same in accordance with specifications and survey of an engineer, for the purpose of draining it. Appellant’s railroad ran through appellee’s plantation. Trestle or bridge No. 8, in appellant’s track, was on appellee’s land. After buying tbe land, and when appellee constructed Ms drainage ditches, he requested appellant to dig a ditch on each side of its track, which it did. These two ditches ended at trestle No. 8, and the surface water carried by them emptied under the trestle into appellee’s ditch, through his land on -the east side of appellant’s track. Appellee constructed a ditch through his plantation on the west side of the track, which passed under trestle No. 8, into his own ditch, through Ms land, on the east side of appellant’s track, which ditch carried the surface water into Bayou Macon. The ditches constructed by appellant along its track extended about two and-one-half miles above appellee’s plantation, and the surface water which gathered in them above said plantation emptied through some five or six culverts, and flowed away before reaching trestle No. 8, on appellee’s plantation.

The testimony introduced by appellee tended to show that, in order to take care of the surface water on the Parnell plantation, two and. one-half miles above appellee’s plantation, appellant enlarged the ditches along its track, and, in doing so, closed the culverts between Parnell’s and appellee’s plantations, which had the effect of accumulating large quantities of surface water at trestle No. 8, and casting same in a body under the trestle and into appellee’s ditch, thereby flooding a large part of his plantation. Appellant objected to the testimony tending to show that it closed the culverts, because it introduced a cause for damage which was not pleaded in his complaint. The court overruled appellant’s objection to this testimony, and permitted it to be introduced.

The testimony introduced by appellant tended to show that appellee’s lands were flooded in 1921 bv excessive rains; that it did not enlarge the ditches in 1921 along its tracks, which were dug in 1917 at the request of appellee; that, in 1921, it simply cleaned the ditches which it had dug in 1917, and, in doing so, did not obstruct or close up the five or six culverts between appellee’s and Parnell’s plantations.

Appellant asked appellee, on cross-examination, whether he could not have .avoided or mitigated his damages to his crops in 1921 from overflow by cleaning out his own ditches, which question was excluded by the court, over appellant’s objection and exception.

Appellant contends for a reversal of the judgment because the court refused to permit it to ask appellee, on cross-examination,' whether he could have avoided or mitigated his damages by cleaning out his own ditches. We think not. This question called for an opinion of a non-expert as to how appellee’s lands could be drained and the overflow prevented, and was inadmissible. St. L. S. W. R. Co. v. Morris, 76 Ark. 549.

Appellant also contends for a reversal of the judgment because the court permitted appellee to prove that it closed the culverts above his plantation in enlarging the ditches along its track. The basis of the contention is that the admission of this evidence, over appellant’s objection, constituted a variance between the allegation of the cause of damage and the proof. We think if these culverts were closed or obstructed in enlarging the ditches along the track, it was an incident connected with the work, which necessarily increased the flow of the surface water in the ditches and tended to prove the allegation of the cause of damages alleged in the complaint.

Appellant also contends that the court erred in refusing to give its request No. 5, which is as follows:

“The court instructs you that the defendant has no control over any land except its right-of-way, and that it has no right to go onto any of the land mentioned in the plaintiff’s complaint, and that, if you believe that plaintiff suffered any damage as alleged in his complaint, and if you believe that this was due to the fact that plaintiff failed to use reasonable care in the main» tenance, repair, enlarging or widening of the ditches across his land, your verdict should be for the defendant. ’ ’

This instruction was erroneous and properly excluded, because there was no testimony in the record showing that appellee suffered damage by reason of his failure to maintain, repair, enlarge or widen the ditch across his own land. The instruction was also erroneous because the law did not impose any duty upon appellee to enlarge or widen the ditch on his own land in order to carry off surface waters accumulated and thrown in a body upon appellee’s land.

Appellant also contends for a reversal of the judgment because the court refused to give his request No. 4. This request, in effect, permitted appellee to collect surface waters in a ditch and cast same in a body upon the land of appellee. This is not the law, and the court was correct in refusing to give the instruction. Wine v. Northern Ry. Co., 49 L. R. A. 714.

Appellant contends for a reversal of the judgment because the court refused to give its request No. 11, and in modifying said request and giving it as modified. Appellant’s request No. 11, in its original form, is as follows:

“You are instructed that, if you believe that the ditch was dug by the owners of the Parnell land, and this ditch opened up on the railroad right-of-way and discharged large quantities of water into the ditches, the railroad is not responsible for any excess of water thrown into the right-of-way by the ditch across the Parnell land. ’ ’

In its modified form it is as follows:

“You are instructed that, if you believe that a ditch was dug by the owners of the Parnell land and this ditch opened into the railroad right-of-way and discharged large quantities of water into the ditches, the railroad is not responsible for any excess water thrown into its right-of-way by the ditch across the Parnell farm, unless defendant opened its ditches to accommodate such water, and by doing so accelerated the flow of such volumes as to flood the lands of the plaintiff.”

The testimony tended to show that the work done on the ditches was for the purpose of caring for the surface water on the Parnell plantation. It was proper therefore for the court to amend the instruction in such a way that it would conform to either phase of the proof. An upper proprietor is liable in damages to a lower proprietor if he gathers the surface water of a dominant estate and easts it in a body upon the servient estate. 27 R. C. L., p. 1151, § 79; St. L. I. M. & S. R. Co. v. Magness, 93 Ark. 53.

Lastly, appellant contends for a reversal of the judgment because the court refused to instruct the jury as follows:

“The court instructs you that, in no event, can you find any amount for any damage that may have been caused by the permanent structure which may have been made by the railroad company three years prior to the bringing of this suit. So the court tells you that, even if you find that the ditches caused damage to- plaintiff’s crop in 1921, yet, if you believe that these ditches were á part of the permanent roadbed and that they were originally dug more than three years prior to this suit, and that the work that defendant did on them in 1921 was merely a cleaning out or maintenance work, then the court tells you that this cause of action is barred, and your verdict will be for defendant.”

This instruction presented the defense and theory of appellant in apt words. The main issue in the case was whether appellant simply cleaned out the old ditches along its track in 1921, which appellee had requested it to dig in 1917, or whether it enlarged the ditches in 1921 for the purpose of gathering additional surface waters from the lands of upper proprietors, and, in doing so, obstructed culverts which had theretofore taken care of a part of the surface water, and cast same in a body upon appellee’s lands, thereby causing them to overflow.

Appellant’s theory of the case was correctly incorporated in its request No. 9, and the court erred in refusing to give the instruction.

On account of the error indicated the judgment is reversed, and the cause is remanded for a new trial.


text:
    Connelly v. Earl Frazier Special School District.
    Opinion delivered December 15, 1924.
    1. Schools and school districts — authority of district to borrow money. — Special Acts 1923, No. 324, § 4, authorizing the directors of a special school district to execute promissory notes or bonds and to mortgage the property of the district to secure same, is sufficient authority to the directors to borrow money.
    2. Schools and school districts — authority to bind district. — • Special Acts 1923, No. 324, § 4, authorizing the directors of a certain school district to execute negotiable paper and mortgage the district’s property, but providing that the “directors shall in no way be personally liable for the payment” thereof, sufficiently indicates that such paper was to be executed in the name of the district.
    3. Injunction- — sufficiency of complaint on demurrer. — In a suit to enjoin issuance of school bonds for a new school building, a complaint alleging that the district’s present building is practically new and sufficient, and that the erection of a new building would result in a shortening of the school term, and that the ■directors were paying an excessive price for land to be used, was good against demurrer, but the demurrer should be treated as a motion to make the complaint more specific.
    4. Schools and school districts — discretion of directors. — School directors are invested with a large discretion which will not be interfered with unless an arbitrary -abuse thereof -is contemplated.
    Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor;
    reversed.

      J. G. Marshall, for appellant.
    This district has no power to borrow money for building a schoolhouse, as a city district might do without a favorable vote of the people. The act of 1909, Acts 1909, p. 947, and the repealing act, 1919, p. 6, provide for forming country special districts with all the powers of city districts except as “therein provided,” and it is therein provided that they can borrow money to build only by the assent of the people. C. & M. Dig. §§ 8831-8842. The same may be said of consolidated districts. C. & M. Dig., §§ 8849-8857. “All special school districts in the 'State of Arkansas” were authorized by the act of 1905, and are now authorized by the amending act of 1923, C. & M. Digest, §§ 8977-8, to borrow money to build, and yet this language has never been held to include country special districts. The act of 1917, C. & M. Digest, §§ 8984-7, which includes the act creating this district, Acts 1923, p. 698, since it authorizes “any special, rural special or consolidated school district in the State” to borrow money to build, limits this power in case of rural districts to cases where the assent of the people is given. The district can have only such power to build as is expressly given or necessarily implied, and all such grants are also limitations of power. 35 Cyc. 925; 152 Ark. 507; 42 Ark. 279; 155 Ark. 161. The same is true of the power to borrow money, and of the power to mortgage school property. 35 Cyc. 976, 988, 924. The special act involved here, see § 4 thereof, provides neither for borrowing nor building, these words or the equivalent thereof not being used; and neither of these powers can be implied, for there is nothing from which to imply them. The power to execute paper for an indebtedness incurred is not the borrowing power. 78 Ind. 192, 193. The special act must be construed so as to stand with the general law, if possible. 201 S. W. 116 (Ark.); 146 Ark. 47; Id. 32. A special act restricts a prior general act only as to the subject-matter covered by it. If the special act is not incompatible with the general law, both must stand. 26 L. E. A. (N. S.) 207. See also 169 N. T. S. 976; 108 S. E. 84. If the proposed action, of the school board was so clearly unreasonable as to amount to an oppressive and clear abuse of discretion, then it was proper for the court to interfere by injunction. 32 C. J. 252, 254; 166 N. W. 202; 133 N. W. 169; 81 S. E. 1001; 84 Ark. 29; 105 Ark. 77.

      Emerson & Donham, for appellee.
    It is clear from the language of the act, § 4, that the notes and bonds should be executed in the name of the school district. That the name of the district was omitted was clearly a typographical error. The act is not invalid because it does not state for what purpose notes or bonds may be executed. Certainly they could only be executed for school purposes, and the directors would then be required to look to the general law to ascertain the purposes for which special school districts may execute notes and bonds. Section 4 of the special act in no way conflicts with the general law on the subject, and, under appellant’s contention and authorities cited, the two acts must stand. This court has clearly distinguished between the powers of a rural special school district established and created under the general law authorizing its creation, and a special school district created by an act of the Legislature. 142 Ark. 279. And this distinction has been made also by the Legislature itself. Act 180, Acts 1917; C. & M. Digest, § 89¡84. It is therefore settled that it was not the intention of the Legislature to require special school districts created by special acts of that body to submit the question of borrowing money for building purposes to the electors of the district, but left it entirely discretionary with the board of directors, and that the act of 1909 as amended by the acts of 1911 and 1919 authorizing the creation of rural special school districts, has no application to special school districts created by special acts of the Legislature. If it be conceded that it was the duty of appellee to procure a favorable vote of the electors before borrowing money and issuing bonds, then appellant is not affected, since the issuance of notes and bonds without first submitting the question to the electors would be ultra vires, and the notes and bonds executed by the board would be void, and appellant would not suffer. 115 Ark. 161; 142 Ark. 279; 78 Ark. 118. In the absence of any allegations in the complaint that the board of directors acted fraudulently or collusively, it merely being charged that the directors were using their discretion unwisely in attempting to erect a school building, there was no ground for interference by injunction. 32 C. J. 252; 24 R. C. L. 575; 182 la. 691; 5 A. L. R. 841; 75 8. E. 166; 62 S. E. 902.
   Humphreys, J.

This is a suit brought by appellants against appellee to enjoin the directors of the Earl Frazier Special School District oh Pulaski County from borrowing money and issuing bonds to build a new schoolhouse in the district, upon two alleged grounds; first, that the act creating the district is void because it contains no authority to borrow money, and because it does not state in whose names the notes and bonds may be executed; second, that, if the act is valid, the directors were about to recklessly expend and waste the school funds in the construction of an unnecessary school building.

A demurrer was filed to the complaint, upon the alleged ground that it did not state sufficient facts to constitute a cause of action.

The demurrer was sustained and the complaint dis.missed, from which judgment an appeal has been duly prosecuted to this court.

(1). Earl Frazier Special School District of Pulaski County was created by special act of the Legislature, No. 324. Section 4 of the act is as follows: “A majority of said board of directors is hereby authorized to execute a promissory note, or notes, or bonds, in the name of, and for such sums of money as may be required, which shall be similar in form as are like instruments of like kind, and shall have the same force and effect as though it had been the act of an individual; and said directors may mortgage any of the property of said district and pledge the revenues thereof as security for payment of said notes and bonds, and against such instruments said district shall be allowed no defense by virtue of its capacity as a school district, in law or in equity, not accorded to individuals. Said directors shall in no way be personally liable for the payment of said notes or bonds. Nothing in this act shall be so construed as shall prevent or preclude from such school district any right in law or in equity which as a natural person it may claim..”

This section clearly authorizes the directors to execute negotiable paper and to mortgage the property of the district to secure same. We think it just as clearly auuionzes rue directors to borrow whatever money may be necessary for school purposes, inducting construction or necessary school buildings, it will ,be observed that the first part of the section provides that the notes and bonds may ,be executed by the directors, “for such sums of money as may be required.” There is no inhibition in our Constitution against the creation of the special school district in rural territory by the Legislature, and investing it with the same power and authority which may be conferred upon special school districts m cities and towns. Again, we do not think § 4 of said act is invalid because it does not state in whose name the notes, bonds, and mortgages may be executed. The section clearly indicates that they are to be executed for the benefit of the school district, and not for the benefit of the directors. It is provided in the section that the directors shall not be personally responsible upon them. The clear inference is that the school district shall be responsible for them. It is apparent that the name of the school district was omitted through typographical error.

(2). The gist of that part of the complaint charging an abuse of the discretion on the part of the directors in attempting to construct a new school building, is that they are about to destroy a practically new building, which is in every way ample for school purposes, and to erect one in its stead at a cost of $58,000, which will result in cutting the school term down to a very short period of time each year; and are about to pay $1,200 for two acres of land worth only $200. These are general allegations of fact, but not so general that they may be characterized as conclusions only. As the allegations are more than mere conclusions, the court should have treated the demurrer as a motion to make the complaint more definite and certain by requiring the appellants to state the accommodations and conveniences afforded by the old building, the number of scholars in the district, the revenues thereof, and the length of time the annual terms of the school district will be cut down, etc., if the new building is constructed. The complaint should specifically set out facts showing a clear abuse of discretion amounting to a reckless expenditure and waste of the school funds, or a shortening of the school term to such an extent-that it would destroy the real purposes for which the school district was created. The main purpose of public schools is to educate the children, and not merely to provide equipment which cannot be used. The law, however, accords to school directors a broad discretion, and courts will not interfere with their discretion unless an arbitrary abuse thereof is contemplated.

On account of the error indicated, the decree is reversed, and the cause is remanded, with leave to appellants to amend their complaint if they desire to do so, and for further proceedings not inconsistent with this opinion.

Hart, J., concurring.


author: McCulloch, C. J.

text:
    Wray v. State.
    Opinion delivered December 22, 1924.
    1. Larceny — sufficiency op evidence. — Evidence held to sustain a conviction of stealing an automobile.
    2. Witnesses — impeachment.—It is error to impeach a witness on cross-examination by asking him concerning a mere accusation against him of an offense different from that charged against defendant.
    3. Criminal law — prejudicial error. — The error of having questioned defendant’s principal witness as to his having been indicted for a different offense from that charged against defendant was prejudicial, though the witness answered that the charge had been dismissed.
    Appeal from Calhoun Circuit Court; L. 3. Britt, Judge;
    reversed.

      J. 8. McKnight, for appellant.

      J. 8. Utley, Attorney G-eneral, and Darden Moose, Assistant, for appellee.
   McCulloch, C. J.

Appellant was convicted of the crime of grand larcency, alleged to have been committed by stealing an automobile (a Ford touring car) the property of H. S. Speer. The owner of the car lived at Tinsman, in Calhoun County, and the' car in question was stolen from his garage in Tinsman on the night of July 29-30, 1923. Speer testified that he missed his car from the garage the next morning, and that he followed the track from the garage to the town of Hampton, the county seat of Calhoun County, and thence to a ferry known as the Lee Ferry, on the Ouachita River near Cal-ion. He testified that he got to the ferry about eleven o’clock on the morning after the car was stolen, and that he there gave to the ferryman a description of the two men he had seen the afternoon or evening before, whom he suspected of being guilty of the theft. He testified that he saw no other track but that of his car in the bottom near the ferry. He also described appellant and another man with him, whom he said he saw in Tinsman the evening before the car was stolen. He identified appellant as one of the men he saw in Tinsman, and described the other man with him as being about thirty years of age, with “kind of red hair.”

Bud Lee, a witness introduced by the State, testified that he operated a ferry at Calion, and that, about daylight, or a little before daylight, on the morning of July 30, appellant and another man came to his ferry to be put across. He said that he identified appellant as being one of the men, and testified that the other man was about eighteen years old, and was much smaller in size than appellant. He testified that appellant crossed the ferry on the Sunday before in a car, and was accompanied by a woman. He also testified that the man he put across the river had on khaki pants, a yellow hat and a yellow shirt, and that the two men were traveling in a Ford car without a license. The witness did not attempt to state any marks of identification about the car, but, on the contrary, stated that he could not tell anything about the car except that it was a Ford car and had no license tag on it.

Several other witnesses identified appellant as being seen at Tinsman on the afternoon or evening before the night during which the car was stolen. These witnesses identified appellant, but differed somewhat in their descriptions of the young man or boy who accompanied him. Two of them, however, stated that appellant had on khaki pants, but that his hat and coat were white instead of yellow, as stated by witness Lee.

The car was found a few days after it was stolen, between Calion and Smaekover — about three-quarters of a mile from Smaekover. Appellant was arrested at Camden.

Appellant testified in his own behalf, and stated that he lived at Smaekover, where he had been following different occupations and employments. He testified that he was in -Smaekover on the night of July 29, and introduced witnesses to prove that he was there that night and was engaged in a game of poker. Another witness, Hollingsworth by name, was introduced by appellant, and he testified that he lived in Hampton, and that the Speer car was stolen by a man he had known 'by the name of “Two Gun Blondie,” who was now in the penitentiary • for holding up an oil camp. Hollingsworth testified that .he saw “Two Gun Blondie” and another man by the name of Jones with the car about three o’clock on the morning of July 30, 1923, and that they were asking the road to Smaekover.

It is earnestly insisted that the evidence is not sufficient to sustain the verdict, but we are of the opinion that there was sufficient evidence to warrant the submission of the issues to the jury.

The only other assignment of error relates to the ruling of the court in permitting the prosecuting attorney to ask witness Hollingsworth concerning the latter having been indicted for participating in the theft of one or more automobiles, This was done over the objection of appellant, and the error was duly assigned in the motion for a new trial.

Hollingsworth testified, as before stated, that he lived at Hampton, and that he saw two men, ‘‘ Two Gun Blondie” and Jones, with the Speer car at Hampton on the night it was stolen. This fact was inconsistent with the guilt of appellant, and, if the jury had accepted Hollingsworth’s statement as true, they should, and doubtless would, have acquitted appellant. In order to discredit Hollingsworth, the prosecuting attorney asked him the following questions: “Did you know these three little boys that stole cars and brought them across the ferry and delivered them to some of you fellows in Camden ? A. I never got one of them. Q. You were indicted for receiving one of these cars? A. Yes sir, and you dismissed it this morning.” On objection being made, the court overruled the objection, and stated that the testimony could be considered by the .jury in determining the credibility of the witness. This court has decided that, for the purpose of testing the credibility of a witness, he may be asked on cross-examination concerning collateral matters which may affect his credibility, but the party cross-examining is bound by the answer of the witness. Hollingsworth v. State, 53 Ark. 101. But it has also been held that a witness cannot be interrogated concerning a mere accusation or indictment for crime. Johnson v. State, 161 Ark. 111; Parnell v. State, 163 Ark. 316. If the inquiry had been concerning an accusation of crime in connection with the particular offense under which appellant was being tried, it would have been competent as tending to show bias on the part of the witness, but the question related to an altogether different offense, and it fell within the rule announced by our decisions that a witness cannot be discredited by showing a mere áccusation or indictment. The Attorney General suggests that there was no prejudice for the reason that the witness stated in his answer that the charge against him had been dismissed. The answer does not necessarily relieve the prejudicial effect of the inquiry, for the court, in effect, permitted the jury to consider the accusation in determining the credibility of the witness, and the mere fact that the charge had been withdrawn did not relieve the inquiry of its prejudicial effect. Hollingsworth was an important witness for appellant in connection with the testimony of other witnesses, who stated that appellant was in Smackover on the night the car was stolen. We have no means of knowing the extent to which the jury were influenced by the State being permitted to improperly discredit the testimony of the witness by showing that he had been indicted for another crime. The only way to eliminate the error is to grant a new trial, and the judgment is reversed, and the cause remanded for that purpose.


author: McCulloch, C. J. Hart, J., Smith, J., Mr. Justice Wood

text:
    Mashburn v. North Arkansas Highway Improvement District No. 3.
    Opinion delivered December 22, 1924.
    1. Highways — authority to make changes in route. — Under act No. 32, approved February 3, 1920, establishing the North Arkansas Highway Improvement District No. 3, which authorized the board of commissioners to straighten and change the line of the public roads to be improved, it was the intention of the Legislature to give the commissioners authority to improve public roads already laid out, and to make only immaterial changes in them or to straighten or widen them.
    2. Highways — preliminary survey. — A preliminary survey is work undertaken by a highway improvement district to determine whether or not the work can be made under the terms of the act creating the district, and its cost is an incident to the organization of the district, and, in case the project is abandoned, its cost should be borne by a tax on the lands.
    3. Highways — preliminary survey — engineer's compensation. —Where an engineer in good faith performed services in making a preliminary survey and plans for a road improvement, he is entitled to a reasonable compensation for so much of his work as was performed within the authority of the act providing for the improvement.

      Appeal from Sharp Chancery Court; Lyman F. Reeder, Chancellor;
    reversed.

      J. W. Rouse, Jr., for appellant.
    . D. L. King, G. E. Elmore, and Arthur Sullivan, for appellee.
    Appellant was not entitled to recover for preliminary work at any place other than on the road as created by the act. 59 Ark. 344; 31 Ark. 720; 103 Ark. 269. The commissioners did not have authority to authorize the survey for construction of new roads. 89 Ark. 513; 118 Ark. 119; 148 Ark. 365. See also 142 Ark. 509; 133 Ark.- 491.
   McCulloch, C. J.

North Arkansas Highway Improvement District No. 3 is composed of territory embraced in the counties of Sharp, Lawrence, Izard and Pulton, and was created by act No. 32 (unpublished), approved February 3, 1920, of an extraordinary session of the General Assembly. The statute is in the usual form, creating the district, providing for commissioners in each county, to be appointed by the respective county courts, and conferring authority to improve the road mentioned, to borrow money, assess benefits and levy taxes. Power is also conferred to employ engineers and other agents to carry on the work. Section 2 of the statute describes the route of the public road to be improved as one beginning near Mammoth Spring, in Pulton County, “at a point to be selected by the commissioners,” thence in a general southeasterly direction to the towns of Hardy and Williford, in Sharp County, and thence to the town of Bavenden, in Lawrence County; also beginning at or near Mount Olive, on White Biver, at a point to be selected by the commissioners, thence northeasterly through the towns of Melbourne, La Crosse, Violet Hill, Franklin and Myron, in Izard County, and through Ash Plat, in Sharp County, to the town of Hardy, intersecting the Mammoth Spring road at Hardy; also a lateral beginning at a point on the Mammoth Spring road near Mammoth Spring and thence- east to the town or village of Wirth; also beginning at the village of Hill Top, and thence southwesterly to Williford and Sitka, and thence to Poughkeepsie, in Sharp County, this being a lateral intersecting the Mammoth Spring road at Williford. These roads are treated as a single improvement, and they connect up with each other so as to be treated as such.

Section 3 of the statute makes it the duty of the commissioners to “improve roads herein described by grading, drainage and surfacing them, or part thereof, in such manner and with such material as the plans of the district may designate, and by straightening and widening them, and to construct bridges and culverts as needed on said road, according to the plans that may be approved by the county courts of the respective counties in which said road or parts thereof is situated.”

Section 7 provides for the filing of the plans of the proposed improvement with the respective county courts, together with an estimate of the cost of the work to be done in each county.

Section 10 provides that “if said plans contemplate that the line of any public road to be improved shall be straightened or changed and the county court of the county in which the changed part is situated approve the same, this shall constitute a laying out by the county court of the said road as changed.” The section further provides that, if additional lands are taken in laying out and constructing the new road caused by the change of route, damages shall be paid, and provision for notice to the affected landowners is made.

The commissioners of the district were duly appointed by the respective county courts, and, after effecting an organization, they entered into a contract with appellant to do the engineering work, both preliminary and permanent, and, pursuant to this contract, appellant started a preliminary survey, which was practically completed, though the work was stopped before the plans 'were made out. During the progress of the work of making the preliminary survey much opposition was developed, and it was determined by tbe commissioners that it would be impracticable to construct the road, so the scheme was abandoned, and appellant instituted this action against the district in the chancery court of Sharp County to recover on the quantum meruit for services performed in making, the preliminary survey. He alleged in his complaint that, in making the survey, he incurred an actual expense of $6,343.09, and that $3,000 would be a reasonable compensation for his own services. The district answered, denying that the services performed by appellant were of any value to the district, and alleging that the survey made was along a route not specified and authorized by the statute. There was a trial before the chancery court, which resulted in a decree dismissing appellant’s complaint for want of equity.

There is a conflict in the testimony, which it becomes necessary to reconcile, and in doing so it is our duty to leave the findings of the chancellor undisturbed unless discovered to be against the preponderance of the evidence.

It appears from the testimony that the public road described in the statute begins at the town of Mammoth Spring, on the west or south side of Spring River, and runs down the river for about a mile and a-half or two miles, and then crosses the river by a concrete bridge, thence approximately following the line of the St. Louis-San Francisco Railway Company down the east or north side of Spring River to the town of Hardy, and thence, partly on that side of the river, to the town of "Williford and on to the town of Ravenden, in Lawrence County. It is also conceded that appellant, in surveying for the construction of the improvement, changed the route so as to •cross Spring River near Mammoth Spring, instead of following the line of the old road down on the south or west side, and that, from Hardy to Williford, lie crossed back to the south or west side of the road, instead of following the old line on the north or east side to Williford. The road from Hardy, on Spring River, over to Mount Olive, on White River, runs through the towns mentioned in the statute, and the evidence shows that the line surveyed by appellant also ran through those towns, but it is conceded that the survey did not follow the old road, and, on the contrary, that it frequently departed from the old route for the purpose of straightening the line and lessening the distance. There is, as before stated, a conflict in the testimony as to the extent of these changes. The same can be said with respect to the line of road beginning at Hill Top and intersecting the Mammoth Spring road at Williford and running southwesterly down to Poughkeepsie. The survey made by appellant followed the route with respect to the termini and the intervening points mentioned in the statute, but the line was frequently changed by the new survey, and did not follow the old route.

The conflict in the views held by the judges of this court, both with respect to the facts and the law of the case, is such that it becomes necessary to determine the net result of these views. It is the opinion of Justices Wood and Hart that the statute creating the district does not authorize the commissioners to make any changes in the road other than those that are deemed immaterial. Justices Smith and Humphreys and the writer are of the opinion that the power of the commissioners is not thus limited by the statute, but that, on the contrary, the board of commissioners may, with the approving action of the county court, make material changes in the route, if those changes are not such as to constitute an entire departure from the improvement contemplated by the statute. They are of the opinion, further, that an engineer performing, in good faith, services in making a preliminary survey and plans authorized by the statute, is entitled to compensation, even though that survey may never be approved by the county court. It is necessary for the survey to be made in order for the county court to determine whether or not the route thus surveyed will be approved, and, if the services are performed in good faith, the fact that the time for approval by the county court is never reached, or, if the county court should, for good cause, not approve the change in the route, the engineer nevertheless is entitled to his compensation. The test is whether or not the services were performed in good faith and are reasonably calculated to be of resulting-benefit in the event of the construction of the improvement.

These views of the majority, of course, constitute, to that extent, the law of the case. There is, however, a further difference in the views of those just referred to as the majority, in that Mr. Justice Smith is of the opinion that, according to the facts of this case, in making the survey there was a complete departure from the scheme of improvement authorized by the statute, and the views of Mr. Justice Humphreys and the writer are to the contrary. They (the writer and Mr. Justice Humphreys) areof the opinion that, since the survey ran between each of the stated termini and through the towns and villages mentioned in the statute, the scheme was not departed from, even though material changes were made.

It will be observed from the language of the statute that the lawmakers intended to authorize material changes, for the reason that the approval of the count}court is required. This court has decided that immaterial changes may be made without the authority of the county court (Wimberly v. Road Imp. Dist., 161 Ark. 79), and, if only immaterial changes had been contemplated by the lawmakers, it is not reasonable to suppose that they would have required the approval of the county court. It will be observed that § 3 of the statute uses the words ‘‘straightening and widening” in referring to the roads to be improved, but § 10, in referring to the approval of the county court, uses the word “straightened or changed,” and provides that, where additional lands are taken “in laying out and constructing the new road caused by the change of route,” damages shall be paid, etc. Now, all of this shows clearly to our minds that the lawmakers contemplated the making of material changes, and the only limitation placed upon the power was that it should be subject to the approval of the county court, for this was a recognition of the county court’s jurisdiction in laying out or changing public roads. What the Legislature contemplated, in the opinion of Mr. Justice Humphreys and the writer, was that the route of the road to be constructed, whether according to the line of the old road or by a changed route made by the commissioners, should be designated by the .respective termini and the intervening points, and that a rouie surveyed between those points, even though there was a material departure from the line of the old road, fell within the authority of the statute.

Justices Wood and Smith have reached the conclusion, from a consideration of the facts of the case, that the whole line surveyed by appellant constituted- such a complete departure from the route indicated in the statute that it was, in effect, a wholly different project, and was unauthorized, and that appellant is not entitled to any compensation for his services in making the survey. They are of the opinion that the facts of the case bring it within the decision of this court in the ease of Kern v. Booneville and Sanatorium Highway Dist., 154 Ark. 107. Their conclusion is, on the whole case, that the decree of the chancery court should be affirmed. Mr. Justice Humphreys and the writer are of the opinion that the testimony in the case shows that, under their view of the law as expressed above and of the facts as they find them to be, the survey made by appellant was done in good faith and within the authority conferred by the statute, even though there were material changes in the route, and that the case of Kern v. Booneville & Sanatorium Highway District, supra, does not apply, and that appellant is entitled to compensation for all of his services.

There seems to be no serious conflict in the testimony as to the expenses incurred by appellant in making the survey, or the amount of compensation to which he is entitled. We (Mr. Justice Humphreys and myself) would reverse the case, with directions to enter a decree in favor of appellant. The views of Mr. Justice Hart traverse middle grounds between the extreme views, on the facts, of Justices Wood and Smith on the one side and Mr. Justice Humphreys and the writer on the other. He (Mr. Justice Hart) is of the opinion that appellant is not entitled to compensation for services rendered in making material changes in the route of the road. He thinks that the survey was made in good faith, and that the case of Kern v. Booneville & Sanatorium Highway District, supra, does not apply, but that, in so far as material changes were made, it was not authorized by the statute, and for that reason there should be no compensation. He is of the opinion, however, that the survey of parts of the road made only immaterial changes so as to widen or straighten the road, and that, since the survey was made in good faith, appellant is entitled to recover for those services on the quantum meruit. Those conclusions of fact reached by Mr. Justice Hart, since they occupy middle ground between the other extreme views, necessarily control the decision of this case. There was not such a separation, however, in the testimony adduced below-to afford means for determining what amount of compensation appellant is entitled to under the rule resulting from our conflicting views. There being such a conflict in the views of the justices as to the facts of the case, we deem it unnecessary to state them here in detail. There are separate opinions stating in their own language the views of the respective justices, and, since the opinion of Mr. Justice Hart will be controlling, it will serve as a guide to the trial court in the further proceedings.

The decree is therefore reversed, and the cause remanded, with directions to the chancery court to hear further testimony, if offered by either party, and to determine therefrom the amount of compensation to which appellant may be found to be entitled on the quantum meruit basis, for surveying such parts of the route where the changes from the old route were not material.

Hart, J.,

(concurring). The act creating the highway district in question provides that it is formed for' the purpose of improving certain public roads, which are described as running from one town to another, or from one town through, other towns, to the place where the roads end. This indicates that it was the intention of the Legislature to improve the existing public roads.

Another section of the act provides that it is the duty of the commissioners to improve the roads herein described by grading, draining, and surfacing them with such material as the plans for the district may designate, and by straightening and widening them.

Another section of the act provides that, if the plans contemplate that the line of any public road to be improved shall be straightened or changed, and the county court of the county in which the changed part is situated approves the same, this will constitute a laying out by the county court of the road as changed. When the act is read from its four corners, I do not think that it contemplates radical or material changes in the public roads to be improved. I am of the opinion that it was the intention of the Legislature to give the commissioners the authority to improve public roads already laid out, and that it only contemplates making immaterial changes in them or straightening or widening them. Rayder v. Warrick, 133 Ark. 491; Hout v. Harvey, 135 Ark. 102; Pritchett v. Road Imp. Dist., 142 Ark. 509; and Nunes v. Coyle, 148 Ark. 365.

Now the testimony in this ease shows that, in making the preliminary survey on the road from Hardy to Williford, the engineer made a material change. The road from Hardy to Williford is on the north side of Spring River, and the engineer made a survey on the south side of Spring River, where there was no public road.

The act gave the commissioners the authority to employ engineers to make a preliminary survey of the roads to be improved, but it gave them no authority, in my judgment, to lay out new roads on wholly or materially different routes. Therefore the engineer could not charge the district with the costs of making the preliminary survey on the south side of Spring River from Hardy to Williford, or in other parts of the road where the change was material.

It is conceded that the engineer was only entitled to recover on a qumtum meruit basis. While preliminary work must be done and its costs must be met by the landowners, no allowance can be made for a preliminary survey which was unauthorized by the act creating the road district. I do not think, however, that, because the engineer, in making’ the preliminary survey, exceeded the authority given the commissioners by the act, this should prevent him from recovering for work which he was authorized to do. The preliminary survey is work undertaken by the district to determine whether it is feasible to make the improvement contemplated, and is therefore, a necessary incident to the organization of the district. It seems to me that, if the engineer is entitled to recover on a quanhim memit basis, the fact that he did work for which he is not entitled to receive pay ought not, in the absence of bad faith, to prevent him from recovering for work which was necessary to be done to determine whether the improvement could be made or not.

As we have already seen, the preliminary survey is work undertaken by the district in order to determine whether or not the proposed improvement can be made under the terms of the act, and its cost is an incident of the organization of the district, and should be borne by a tax on the lands therein. Thibault v. McRaney, 119 Ark. 188, and Houck v. Little River Drainage Dist., 239 U. S. 254.

Section 6 of the act in question gives the commissioners the express power to employ an engineer, to be approved by the State Highway Department, to assist them in the preparation of plans for the improved roads. The engineer is entitled to a reasonable compensation for this survey, and the fact that the commissioners, by mistake, exceeded their powers in making the preliminary survey, ought not to prevent him from recovering a reasonable compensation for services which the commissioners had the authority to employ him to render under the terms of the act.

I do not think that the case of Kern v. Booneville & Sanatorium Highway Dist., 154 Ark. 107, is controlling under the facts of this case. There this court said that the chancery court was justified in holding that the engineer knew, before he proceeded far with his work, that the road could not be constructed within the limits of the cost provided in the act, and that, under the circumstances, he acted in bad faith in making a preliminary survey. I do not think that the facts in the case before us warrant any such finding.

The 'State of Missouri had laid out and improved the highway from Kansas City to a point on the Missouri line near Mammoth Spring. It was intended to make the proposed road in the present case a link or continuation of that highway. Under the act, the commissioners and the engineer, in good faith, thought that they had a right to make material changes in the route of the proposed highway so as to make the plans conform to the requirements of the engineers of the United States Government, in order that they might receive Federal aid. In my judgment the act does not give them the power to make material changes in the existing highway, and, for that reason, the commissioners and the engineer exceeded their authority when they did so. I think that they acted in good faith, however, in the matter, and for this reason the engineer had a right to recover reasonable compensation for making the preliminary survey where no material changes were made in the route.

In determining whether the changes were material or not, within the intention of the Legislature, it is proper to consider the topography of the ground; the fact that a change was being attempted from a system of dirt roads to that of hard surface roads; that motor vehicles have become the chief means of travel, and other surrounding circumstances conducive to the safety of traveling and the proper drainage of the road. This made it necessary to straighten and widen the existing road in order to obtain the most practical route. As above stated, I do not think, however, the Legislature meant to give the commissioners the power to recommend radical or material changes in the route.

The profiles referred to by the engineer in his testimony are not in the record. Both parties, in my judgment, tried the case on the wrong theory. Inasmuch as, in my judgment, it is very difficult to separate the legal and illegal items, I think it would be better to reverse the decree and remand the cause, with directions to allow either party, if so advised, to take additional testimony to show what would be a reasonable fee or compensation to the engineer, within the meaning of our previous decisions on the subject. In short, I think that the engineer acted in good faith and should, under our previous decisions, be allowed to recover compensation upon a quantum meruit for the reasonable value of his services performed within the authority conferred by this act as interpreted in this opinion.

Smith, J.,

(dissenting). The testimony developed the fact, as is stated in the concurring opinion of Mr. Justice Hart, that the State of Missouri had laid out and improved a highway from Kansas City, in that State, to a point on the Missouri line near Mammoth Spring, in this State, and it is just here that I think the engineer of the district fell into error. He evidently thought it would be a good idea to extend this road as far as possible into this State; but that purpose, however laudable, was not authorized by the act of the General Assembly authorizing the improvement.

The purpose of the act under review was to improve four existing roads, having a total length of 125 miles, running through a mountainous, sparsely settled country, and the roads to be improved were the existing roads at the time of the passage of the act, and the authority conferred was not to build new roads, with designated termini, which should run through certain named towns and villages, but to improve the roads then existing, having the termini named, and which ran through the towns and villages named,

It is my opinion, as stated in the opinion of the Chief Justice, that, subject to the approval of the county court, material changes might have been made in the roads; but I do not agree that the act conferred any such wide discretion in this respect as the engineer undertook to exercise. In my opinion, material ehang'es were to be made only in straightening and improving the existing roads, and there was no intention to confer, even with the approval of the county court, the authority to lay out, practically speaking, new roads.

I do not agree that the good faith of the engineer is the only test to be applied in determining the compensation he may charge the district for his services. He must, of course, have acted in good faith, but even so he cannot charge for services which the act creating the district did not authorize him to perform, however much or however honestly he may have been mistaken.

The commissioners themselves could confer no greater authority upon the engineer than the act which authorized them to employ an engineer conferred on them, and it is my opinion that the engineer wholly misconceived the nature of his employment and the extent of his powers thereunder.

Section 2 of the act designates the roads to be improved, and those were the existing roads, which were to be changed only when change was necessary to straighten or widen them. This section of the act clothed the commissioners “with power and authority to construct any bridges across any of the rivers or streams at or near the point where the said public roads intersect said streams,” and the undisputed testimony shows that these bridges were located at crossings of rivers and streams without any reference to the existing crossings of such rivers and streams.

The opinion of the Chief Justice, as well as the concurring opinion of Mr. Justice Hart, refer to and describe the road from Mammoth Spring, through Hardy, to ÍWilliford, and the road surveyed between these points is typical of the other three roads. It does begin at Mammoth Spring, and it does rnn through Hardy, and does terminate at Williford; but that is as much as can be said for it. Certainly, the survey of' the engineer did not contemplate the improvement of the existing road which ran from Mammoth Spring, through Hardy. On the contrary, as appears from both of the opinions referred to, the engineer ignored even a river. Equally as little attention was paid to the existing roads in the survey of the other three roads which the district proposed to improve.

It may be admitted that, from an engineering standpoint, good reasons for the changes in the location and route were given. On behalf of the engineer, it was testified that the existing roads were not suitable to become improved highways, and the excuse given for many of the changes made was that excessive grades were eliminated. It was explained that State and Federal aid would not be given an improved road having grades exceeding seven per cent., and that much of the existing roads exceeded that limitation. But many witnesses on behalf of the district testified that these changes involved the acquisition of practically new right-of-way for the roads, and that much damage would be done through obstructed drainage, and much expense would be incurred by reason of the blasting excavations, fillings, and bridges which would be required to construct the new road which was being surveyed.

The county judge of one of the counties testified that he informed the commissioners, while the survey was progressing, that he would not pay or authorize the payment of the damages which would result from the laying out of the new road, and yet the survey continued.

One of the commissioners testified that the board of commissioners gave the engineer no authority or direction to shift the road to the opposite side of the river, nor was the engineer given any authority or direction to deviate from the old roads to any extent; and another commissioner who corroborated this statement testified that such suggestions as he did make were disregarded. In this connection, it may be said that it was not contended that the road had been shifted to the opposite side of the river for the purpose of straightening or widening it. No such discretion was vested as was here exercised, and the engineer’s case would not be bettered had the commissioners themselves directed him to ignore the provisions and purpose of the act and to lay out the kind of road which he, as an engineer, regarded as most desirable.

No attention whatever appears to have been paid to the requirement of the act that the bridges of the district should be constructed “at or near the point where the said public roads intersect said streams.” This language, of course, means where the roads existing at the time of the passage of the act intersected said streams.

In the recent case of Plum Bayou Levee District v. Pocket Cypress Drainage Dist. No. 1, 165 Ark. 576, legislative authorization was given for a drainage district to cross the line of the levee of a levee district, and the appeal involved a suitable place for the drainage district to intersect the levee. The act gave the privilege of crossing at or near a certain mile-post. In construing’ the use of the word “near,” there used, we said: “Of course, the use of the word ‘near’ gives a little latitude,_ but it clearly means that the point of passage should he approximately at the mile-post between the designated sections.”

So here I think the language of the act set out above was a legislative direction showing clearly that the roads to be improved were the existing roads.

The court below made the following finding of fact:

“The court finds further that under the provisions of said act it was the purpose and intention of the General Assembly to improve and repair the existing public roads only, not to construct or build an entirely new and different road. That the ronte as surveyed by plaintiff was almost entirely along a new route, and, in order to have used said survey, it would have been necessary to build many bridges over Spring River and other streams, and have purchased right-of-way, and to have built an entirely new road, in some instances miles from the established public road on the opposite side of Spring River from the present road.
“That said survey so made by plaintiff was worthless to the said district, and could not have been used or adopted by the commissioners of the district for the reason that the said special act creating said district did not authorize such departure from or change in the existing roads, and for the further reason that the route surveyed and laid out did not belong to the respective counties, and could not have been used without the exercise of the right of eminent domain and at a great cost to the respective counties, which was not authorized by said act No. 32.”

Certainly, this finding of fact is not clearly against the preponderance of the evidence. Many witnesses gave testimony fully supporting this finding. Indeed, as I understand the testimony, the finding is sustained by the undisputed evidence. I copy from'appellant’s own testimony the following questions and answers: “Q. Then, your survey, as made by your man, was made according to your idea of laying out a new road from Mammoth Spring by way of Hardy, Ash Flat, Franklin, and Melbourne, down to Mount Olive, was it not? A. Well, I don’t know whether you would regard it as a new road entirely or not. It was made with the view of improving the old road, but in making’ the improvement according to the act as we understand it it was practically necessary to construct a new road. Q. And that was your object? A. Yes sir.”

Under this testimony and the finding made by the court, the rule announced in Kern v. Booneville Sanatorium Highway Dist., 154 Ark, 107, should be applied, In that case the engineer did complete his preliminary survey, while here that was not done. The testimony of numerous witnesses shows that appellant did not complete the preliminary survey, for he was not permitted to do even this, and the undisputed testimony shows that the chief cause of the dissatisfaction was the apparent attempt to lay out what were regarded as practically new roads.

In the Kern case the estimate of cost far exceeded the particular benefits, though the point of assessing benefits was never reached. Here, of course, no benefits were assessed because there was not even a preliminary survey; but it is equally as certain in this case, as it was in that, that the roads could not have been built within the limitation upon the cost imposed by the act. Section 14 of the act limited the cost of the improvement, exclusive of interest on borrowed money, to a sum not exceeding thirty per cent, of the value of all the lands and real property in the district as shown by the last county assessment, including railroads.

The engineer was proposing to construct four practically new roads, which would have had no grades exceeding seven per cent., through a sparsely settled country, having high hills and deep valleys, and which is largely undeveloped, and that this could not be done at a cost not exceeding thirty per cent, of the assessed value is a fact which is as certain, although no betterments were ever assessed, as that the Booneville road could not have been built within the estimated and authorized cost of that road; and I think it is as certain here, as it w'as there, that the surveys of the engineer could not have been of any value to the district, because in this case, as in that, the cost of the road would have exceeded the limitation upon the cost, the limitation in that case being imposed by the commissioners themselves, while in the instant case the limitation was imposed by the act creating the district. The doctrine of that case should be applied here for the additional reason, which I have shown, that the engineer surveyed roads which the district was not authorized to build at all, whereas Kern did at least survey a road which that district was authorized to improve, and compensation was denied him only because the cost was too great.

In my opinion, appellant should have compensation for all the work he did, or should be denied any compensation. His work was authorized or it was unauthorized, and his plans could have been used by the district if he had completed them, or they were worthless. The route he was surveying could have been adopted, or it must have been rejected as being unauthorized by the act creating the district.

Mr. Justice Wood

concurs in what is herein said, except that he does not think the act conferred authority to make any material changes in the existing roads; but as we both agree that the act authorized no such disregard of the legislative purpose as is shown by the testimony in this case, we are of the opinion that the decree of the lower court should be affirmed.


text:
    Cross County Road Improvement District No. 4 v. Henderson.
    Opinion delivered December 22, 1924.
    1. Statutes — construction as a whole. — .Courts will look to the whole of a statute to determine the real intention of the lawmakers.
    2. Highways — adding territory to district. — Special Acts 1923, p. 354, amending act 625 of 1919, creating the Cross County Road Improvement District No. 4, by adding territory thereto, is not void as amending a. repealed act, since the act of 1921 (Acts 1921, p. 1353) only partially repealed the act of 1919.
    3. Highways — effect of adding territory to district. — Special Acts 1923, p. 354, adding 'additional territory to the Cross County Road Improvement District No. 4, constitutes a legislative determination that the added lands will be benefited by the original improvement.

      4. Highways — addition op territory to improvement district.— The fact that an improvement has already been constructed does not prevent the Legislature from adding benefited property to the territory which is to be taxed for payment of the improvement.
    5. Highways — discriminatory assessment. — The fact that Special Acts 1923, p. 354, added a part of the territory of a city to the assessed property while omitting the rest of the city does not establish that the act is arbitrary or discriminatory.
    Appeal from Cross Chancery Court; A. L. Hutchins, Chancellor;
    reversed.

      Ogan £ Shaver, and T. E. Lines, for appellant.
    The effect of the act annexing the land to the district determines the question of benefits. The extent thereof is to be arrived at according to the plan in the original act creating the district. 81 Ark. 208; 125 Ark. 330; 145 Ark. 49.

      Killough, Killough £ Killough, for appellee.
    Property cannot be taxed solely for revenue. 239 IT. S. 478. The act is retroactive and interferes with vested rights, and is therefore unconstitutional. 25 B. C. L., p. 785; 130 Ark. 128; 147 Ark. 24. The. act is void because it purports to amend a repealed act and is not sufficient in itself to be complete. 25 B. C. L. 1035. While the title of an act is not controlling, it- is proper to consider it in determining the meaning of the lawmakers. 150 Ark. 244; 151 Ark. 486. The repeal of a statute need not be express. 140 Ark. 628; 141 Ark. 247. The original act, being repealed, could not be amended. 61 Ark. 238. The power to tax additional territory, was not saved by the act of 1921, and the commissioners have only such powers as are given by that act. 130 Ark. 410. The act is void for vagueness and arbitrary exclusion. 139 Ark. 595; 146 Ark. 288.
   McCulloch, C. J.

Cross County Boad Improvement District No. 4 was created by an act of the Greneral Assembly of 1919 (Road Acts of 1919, vol. 2, p. 2362), authorizing the improvement of a certain public road in Cross County, running south from the city of Wynne. The statute was in the customary form, describing the boundaries of the district and the road to be improved, naming the commissioners, and authorizing the formation of plans, the improvement of the highway, borrowing money and issuing bonds, the assessment of benefits to adjacent property situated in the district, and the levying of taxes to pay for the improvement and to pay off the bonds as they became due. The improvement authorized by the statute was completed, and bonds were issued and sold to raise funds in advance to construct the improvement. Before this was done, however, there was another statute, enacted at the extraordinary session of the General Assembly in February, 1920, confirming the assessments made by the commissioners. No question is raised in the present litigation concerning the validity of the original statute, or the statute confirming the assessments or any proceedings thereunder. However, the General Assembly of 1921 enacted a statute prohibiting the commissioners of the aforementioned district from issuing any additional bonds or other obligations. Special Acts 1921, p. 1353. The title of this act provides for the repeal of act No. 44 of the special session of 1919, confirming the assessment of benefits in Road Improvement District No. 4 of Cross County, and also recites the repeal of the act of 1919 creating said district. Section 1 of the statute provides that the commissioners of said district “are hereby prohibited from issuing any additional bonds or obligations for or on behalf of said district from and after the passage of this act.” That section reads, further, that the commissioners “are hereby authorized and empowered to spend the balance of the funds on hand for the purpose of constructing the road heretofore laid out in said district, and, when said funds have been expended, it shall be the duty of the board of commissioners for said district to file a true and complete report of expenditures with the clerk of Cross County, Arkansas.” Section 2 of the statute provides that the commissioners “are hereby empowered and directed to continue to serve as a board of commissioners for said district for the purpose of paying all bonds, certificates of indebtedness or other outstanding indebtedness of the district, and that it shall be the duty of the board of commissioners for that district, from time to time, to levy such annual taxes for collection as shall be necessary for the maintenance and operation of the district, which have heretofore been entered into by said board.” This section also provides that the board “shall have full authority and power to take any and all necessary proceedings under the terms of act 625 of the Acts of the General Assembly of the State of Arkansas of the year 1919, approved on April 2, 1919, and as amended by. act 44 of the extraordinary session of the General Assembly of the State of Arkansas for the year 1919, approved February 4, 1920, but said board shall not have authority to issue any additional bonds or obligations from and after the passage of this act.”

The General Assembly of 1923 enacted still another statute in regard to this district (Special Acts 1923, p. 354) purporting to amend the original statute creating the district hereinbefore mentioned. It amends the first section of the original statute only by including certain other real property in the district. This is the only extent to which the amendment operates, and the additional property thus included constitutes that portion of the city of Wynne lying south of the Memphis-Bald Knob branch of the Missouri Pacific Railroad.

Appellees are the owners of some of the lots of real property added to the territory of the district by the act of 1923, supra, and they instituted this action in the chancery court of Cross County to restrain the board of commissioners and the assessors of the district and also the tax collector of the county from assessing benefits and levying and collecting taxes on any of the property added to the boundaries of the district by the act of 1923, supra. The benefits had already been assessed, and the chancery court held that there were jurisdictional defects which invalidated the assessments, and, as this feature of the case is not in controversy, it may be discarded from any further discussion. The chancery court went further, however, and decided that the act of 1923, supra, was void, and that the commissioners had no authority to levy taxes on the property added to the district by that statute.

The contention of learned counsel for appellees in support of the decree of the chancery court is that the original statute creating the district was repealed by the act of 1921, supra, and that the Legislature could not thereafter authorize the assessment of other lands. We are of the opinion that the contention of counsel is unsound, and that the original statute creating the district was not, in fact, entirely repealed. It is true that, in the caption of the statute, there is a recital of the repeal of the original statute, but this recital is not in conformity with the language of the body of the statute. We look to the whole of the statute for the purpose of determining the real intention of the lawmakers. State v. Trulock, 109 Ark. 566. On the contrary, instead of taking away from the board of commissioners all of the. authority conferred by the original statute, § 1 expressly authorizes the board to use the balance of the funds on hand “for the purpose of constructing the road heretofore laid out in said district,” and § 2 contains a provision expressly authorizing and empowering the board to “take any and .all necessary proceedings under the terms” of said original statute. The effect of the act of 1923 is merely to add additional territory, and this constitutes a legislative determination that the added lands will be benefited from the original improvement. The Legislature had the power to add benefited territory to the district, even after the completion of the improvement. The fact that the improvement had already been constructed does not prevent the Legislature from adding benefited property to the territory which is to be taxed for the payment of the improvement. Hiter v. Harahan, Viaduct Imp. Dist., 165 Ark. 351; Wagner v. Lesser, 239 U. S. 207; Valley Farms Co. v. County of Westchester, 261 U. S. 155.

It is also contended that the statute adding new terrltory-'is void because the effect is discriminatory and arbitrary in not including the whole of the city of Wynne. It is argued that, if a part of the city is benefited, all of it is necessarily benefited, and that the statute is discriminatory in omitting any part. This argument is unsound, for there are no facts pleaded which show that there is an obvious and demonstrable discrimination. The mere fact that part of the city is omitted does not show that benefited property is omitted. Van Dyke v. Mack, 139 Ark. 524; Hill v. Echols, 140 Ark. 474; Tatum v. Wallis, 146 Ark. 287; Sanders v. Wilmans, 160 Ark. 133.

The chancery court erred in deciding that the act of 1923, supra, was void, and that the commissioners had no authority to tax the lands added to the district.

The decree is therefore reversed, and the cause remanded with directions to enter a decree dismissing the complaint of appellees for want of equity, so far. as it seeks to restrain the commissioners of the district from proceeding with the work of assessing benefits and levying taxes.