text:
    National Liberty Insurance Company v. Trattner.
    Opinion delivered April 4, 1927.
    1. Insurance — foreign company — jurisdiction. — Under Const. 1874, art. 12, § 11, and Crawford & Moses’ Dig-., § 6063, relating to foreign corporations doing business in the State and providing for serviee of process on the Insurance Commissioner in actions against foreign insurance corporations, an insurance corporation of another State cannot be sued in Arkansas on a contract of insurance made in the other State with a resident of that State, 1 covering property located therein.
    2. Corporations — liability- to be sued.- — At common law, corporations could not be sued out of the State of their domicile, under the laws of which they were created or organized.
    3. Venue — -transitory action. — An action on a fire insurance policy is transitory, and at common law could be brought in any jurisdiction where the defendant could be found or lawfully summoned to appear, or where defendant voluntarily appeared without objecting- to the jurisdicition of the court.
    4. Statutes — extraterritorial effect. — The Legislature is presumed to intend that its statutes shall not apply to acts or contracts done or effected beyond the.limits of the State and having no reference to or effect upon persons or property in the State.
    Appeal from Craighead Circuit Court; G. E. Keck, Judge;
    reversed.
    STATEMENT BY THE COURT.
    Appellee brought this suit in the Craighead County Circuit Court to recover for the loss of his stock of merchandise, of the value of $10,500, and fixtures of the value of $1,500, on seven policies of fire insurance, aggregating $12,000, the property having been destroyed by fire. The goods and fixtures, at the time the policies were issued and the loss occurred, were contained in a store on South Broadway, city of St. Louis and the State of Missouri, in which city and State the plaintiff lived and the policies, which were standard fire insurance policies, were issued.
    Summons was served on Bruce T. Bullion, Insurance Commissioner, agent for service, by the sheriff of Pulaski County, Arkansas, in that county.

      Tlio defendants are foreign corporations authorized lo do business in this State, having complied with the conditions required by law. They appeared specially for that purpose, and filed a motion to quash the summons, alleging that they are foreign corporations authorized to do business in this State.
    “Having authorized, pursuant to the laws of this State, service upon it of legal process in actions upon cont racts entered into solely in this State; that defendant has at no time consented in any wise to the service of legal process upon it by service upon the Insurance Commissioner and Fire Marshal of this State in actions upon contracts made by it without this State; that the contract of insurance sued upon herein was made in the State of Missouri, where the plaintiff at the time resided, and where the property insured at the time of the insurance and the time of its alleged loss was located, and that the plaintiff has, at all times since the execution of said contract of insurance, been, and is now, a resident of the city of St. Louis and State of Missouri; that the said policy of insurance sued upon herein was issued by the defendant as a foreign contract, executed by it in the State of.................. and delivered to the plaintiff in the State of Missouri, and is no more subject to regulation by the laws of this State than any other contract, and, consequently, any law prescribing special service upon defendant to enforce collection because it is a contract of insurance is a special law, and is in contravention of both the Constitution of the State of Arkansas and the Constitution of the United States; that § 6063, Crawford & Moses’ Digest of the Statutes of the State of Arkansas, 1921, where-under service is attempted to be had in this action, upon the defendant, upon a contract of insurance not entered into in this State, is in violation of the Constitution of the United States, § 1 of the Fourteenth Amendment to said Constitution. * * *
    “That the said section of said statute is also in violation of the Constitution of the State of Arkansas, §§ 3 and 18 of article 2.

      ‘ ‘ That, under and by virtue of the said provisions of the Constitution of the United States and the Constitution of the' State of Arkansas, the defendant, a foreign insurance company, which has not consented to service upon it upon causes of action arising in other states, is entitled to the same rights and privileges as any other citizen of the United States, and consequently, in view of the constitutional provisions hereinabove set forth, the said purported service of the writ of summons as aforesaid is null and void, and the said writ of summons and the return of service on said writ of summons should accordingly be quashed.
    “Defendant further moves to quash the writ of summons herein and return thereon for the following reasons:
    “Defendant now is, and, during all of the times mentioned in said complaint, was, a foreign corporation, licensed to do business in this State under and by virtue of the provisions of article 12, § 11, of the Constitution of the State of Arkansas; that, under and b3r virtue of said provisions of said Constitution and the statutes of the State of Arkansas enacted in aid thereof, this defendant is not required to consent to, nor has it consented to, service upon it of any process by serving the Insurance Commissioner, Fire Marshal or other authorized agent, except as to contracts made or business done in this State. The contract sued on herein is a contract of fire insurance, made and executed by the defendant at its home office in the State of............................................................and delivered to the plaintiff in the State of Missouri, and is -a contract to insure against loss by fire to property located in the city of St. Louis, and State of Missouri. That the loss complained of occurred in the city of St. Louis and State of Missouri, and the plaintiff now is, and was at the time of the filing of the complaint herein, a resident of the State of Missouri. That the ‘service of summons in this cause upon the Insurance Commissioner and Fire Marshal of the State of Arkansas was without authority of law, and was and is void.”
    Another motion to quash was also filed, under special appearance, denying the jurisdiction of the court because no service of summons had been made .upon any one authorized to receive service for the corporation, because the insurance policy sued on was not issued in Arkansas; the property insured was not in Arkansas; the loss did. not occur in Arkansas; the plaintiff is not and has not been a resident of Arkansas; because, under the statute authorizing it to do business in the State, it was required only to accept service in certain cases in suits arising from contracts entered into in this State, and for the benefit of those holding claims properly payable in this State; alleged the attempt to secure service herein was a violation of the defendant’s right under the Fourteenth Amendment of the Constitution of the United States;' that the statutes of Arkansas do not authorize the service of process in the manner herein upon cause of action of the kind sued on, and that the application of the statute to this action is prohibited by 3 and 18 of article 2 and § 11 of article 12 of the Constitution of Arkansas.
    A response was filed to the motions to quash, and, upon a hearing, they were overruled and exceptions saved, and, without waiving their rights under the motions to quash, the answers were filed.
    Testimony was introduced tending to show the value of the goods and fixtures insured, the loss, and the denial of liability by the companies. The testimony showed that the plaintiff was a resident of the State of Missouri; that the goods and fixtures covered by the policies were contained in a store or building in the city of St. Louis, that State, where the plaintiff was a citizen and resident, and where the policies of insurance were delivered and the loss occurred.
    The evidence was conflicting as to the value of the property and cause of the fire and loss, some of the testi-rnouy tending to show that the fire and loss was due to an explosion, for which the company coidd not be held liable.
    After the testimony was in, the appellant asked'leave to amend its answer, striking out the clause admitting the complete denial of liability, which was refused.
    The jury were instructed, and returned a verdict in favor of the insured, and, from the judgment thereon, this appeal is prosecuted.

      Leahy, Saunders £ Walther and Gautney & Dudley, for appellant.

      Abbott, Fauntleroy, Cullen £ Edivarcls and N. F. Lamb, for appellee.

      Greens/elder, Dyott £ Grand, and Hawthorne, Hawthorne £ Wheatley, amici curiae.

   Kirby, J.,

(after stating the facts). Appellant contends that the court erred in not sustaining its motion to quash the summons; that it did not consent to service of summons upon it in this State in such actions, but only in order that it might be authorized to do business here in compliance with the requirement of the laws in that respect, and that the court was without jurisdiction to render judgment against it herein.

The facts are undisputed that appellant company is a foreign insurance corporation authorized to do business here under our laws; that the contract for insurance was made in Missouri, where the property insured was located, in the building in the city of St. Louis, of which State the plaintiff is a citizen and resident, and was at the time of the issuance of the policy, and when the loss occurred; that plaintiff and defendant, a foreign corporation, are non-residents of the State of Arkansas, the corporation only doing business in this State as a foreign insurance corporation.

Section XI, article 12, of our Constitution, provides:

“Foreign corporations may be authorized to do business in this State under such limitations and restrictions as may be prescribed by law; provided that no such corporation shall do any business in this State except while it maintains therein one or more known places of business and authorized agent or ageiits in the same, upon whom process may be served; and, as to contracts made or business done in this State, they shall be subject to the same regulations, limitations and liabilities as like corporations of this State.” * ’* *

Section 6063, Crawford & Moses ’ Digest of the Statutes, provides: “No insurance company] not of this State, nor its agents, shall do business in this State until it has filed with the Insurance Commissioner and State Fire Marshal a written stipulation, duly authenticated by the company^ agreeing that any legal process affecting the company, served on the Insurance Commissioner and State Fire Marshal, or the party designated by him, or ihe agent specified by said company to receive service of process for the company, shall have the same effect as if served personally on the company within this State. And if isuch company should cease to maintain such agent in this State, so designated, such process may thereafter be served on the Insurance Commissioner and State Fire Marshal; but, so long as any liability of the stipulating company to any resident of this State continues, such stipulation cannot be revoked or modified, except that a new one may be substituted, so as to require or dispense with the service at the office of said company within this State, and that such service, according to this stipulation, shall bo sufficient personal service on the company. The term ‘process’ includes any writ, summons, subpoena or order, whereby any action, suit or proceeding shall be commenced, or which shall be issued in or upon any action, suit or proceedings.”

Under the provisions of the Constitution, such foreign insurance companies may be authorized to do'business in the State upon the appointment of an agent upon whom process may be served, and, “ as to contracts made or business done in-this State,” are subject to the same limitations and liabilities as like corporations of the State, and, under the statute requiring the appointment of such agent, “so long as any liability of the stipulating company to any resident of this State continues, such stipulation cannot be revoked or modified, except that a new one may be substituted so as to require or dispense with tbe service at tbe office of said company within this State, and that such service, according to this stipulation, shall be sufficient personal service on the company.” ' C. & M. Dig., § 6063.

In American Casualty Co. v. Lea, 56 Ark. 511, 20 S. W. 416, it was held that a foreign insurance company, authorized to do business in this State, after having appointed the Auditor its agent to receive service of process, could be sued by-a resident in the counts of this State for libel committed here.' That was a petition by the insurance company to this court, praying a writ of prohibition against the circuit court from proceeding in the 'cause pending therein, the suit for libel in which process was issued against defendant and served on the Auditor of State as agent for the insurance company, alleged to be a foreign corporation, organized in the State of Maryland, “and doing an accident, casualty and liability insurance business in this State, and no other business in this State.” The insurance company contended that it could be sued in this State only upon liability growing out of its insurance contracts, while it was doing no other than insurance business in the State, and that it could not be held to answer upon this service in a suit for libel committed in the State.

The writ was denied, the court saying: “We are not prepared to accede to the' proposition that a foreign insurance company, doing only an insurance business in this State, can be sued only upon liabilities arising out of its insurance contracts made in this State. * * * We understand that, when the foreign corporation agrees to ‘be found’ in the State, it may be sued as a domestic corporation or a citizen of the State upon any liability upon a cause of action arising within the State.” The cause of action arose out of or was an incident to “contracts made or business done in this State,” the publications complained of being made in advertising the company’s business.

In the other Arkansas cases cited, wherein judgment was rendered upon causes of action, arising outside of the State, all the parties were either not nonresidents of the State or no proper objection was made to the jurisdiction of the court on that account; in other words, the precise question raised by this motion to quash the service has not been heretofore involved or decided in any cause determined by this, court.

At the common law, corporations could not be sued out of the State of their domicile under the laws of which they were created or organized.

This is a transitory action, it is true, which, under the common-law rule, could be brought in any jurisdiction where the defendant could be found or lawfully summoned to appear, and a recovery could have been had here had the insurance company voluntarily appeared and defended, without objection to the jurisdiction of the court. Timely objection was interposed, however, and insisted upon throughout the proceedings in the trial court, and this court is now urged to reverse the judgment of the lower court for erroneously holding that service of summons could be effectively made upon appellants within this jurisdiction.

The State has no special interest in enforcing the rights of citizens and residents of other States on causes of action arising outside its boundaries against foreign corporations doing business in the State, but is chiefly interested in administering justice under the forms of law, to all persons entitled to seek remedies in its courts, for protection and enforcement of their rights, and for redress of injuries and wrongs, promptly and without delay.

A fair construction of our law under the provisions of which foreign corporations are authorized to do business in the State upon the appointment of- an agent upon whom process can be served, made primarily to secure local jurisdiction in respect of contracts made and business done within the State, would seem to require only that such corporations shall be subject to suit for any liability arising from or growing out of contracts made or business clone in ■ tbe State or necessarily incident thereto, and not that they shall be required by service of summons upon said agent to be subjected to suits of nonresidents of the State upon foreign causes of action, transactions and causes of action arising outside the State and in no wise incident, related to, or connected with contracts made or business done in the State.

The Legislature (quoting syllabus) is presumed to intend that its statutes shall not apply to acts or contracts done or effected beyond the limits of the State, and having no reference to or effect upon persons or property in this State. State v. Lancashire Fire Ins. Co., 66 Ark. 466, 51 S. W. 633, 45 L. R. A. 348.

We are not unmindful of the decisions of the courts of other States holding a different view and giving larger scope to statutes of like kind in their construction, but we do not think comity requires that our courts shall be unduly burdened with litigation of actions of nonresi - dents against foreign insurance corporations doing business here, upon causes of action arising entirely outside of our jurisdiction and having no relation whatever to the contracts made or business done by such foreign corporation within the State, under'the requirements of our laws providing therefor.

The Supreme Court of the United States, which follows the construction of such statutes put upon them by the courts of the State of their enactment, has expressed a leaning toward such construction of like statutes as that made by this court of the statute under consideration herein. In M. P. R. Co. v. Clarendon Co., 257 U. S. 533, 42 S. Ct. 210, 66 L. ed. 354, Chief Justice Taft, for the court, said: “In dealing with statutes providing for service upon foreign corporations doing business in the State upon agents Avhose designation as such is especially required, this court has indicated a leaning toAvard a construction, Avhere possible, that Avould exclude from their operation causes of action not arising in the business done by them in the State.”

It follows, from the view expressed, that the court erred in not sustaining the motion of appellant to quash the summons, and for such error its judgment will be reversed, and the cause dismissed. It is so ordered.


source: Caselaw Access Project

author: Meecaeey, J.

license: Public Domain

text:
    Federal Land Bank of St. Louis v. Goodman.
    Opinion delivered April 4, 1927.
    1. Bills and notes — time for presenting check. — -In the absence of special circumstances excusing delay, where the payee of a check and the bank on which it is drawn are in the same place, reasonable diligence requires the check to be presented for payment not later than the day after it is received, and delay beyond that time without excuse will discharge the drawer from liability if he is injured by the delay. .

      i. Bills and notes — time for presenting check. — A check must be presented for payment within a reasonable time; the question what is a reasonable time depending on the circumstances of the particular case.
    3. Bills and notes — presentation of check — reasonable time.— What constitutes “reasonable time” for presenting a check for payment depends on the circumstances of the particular case, and means such time as a prudent man would exercise or employ about his own affairs.
    4. Bills and notes — time for presenting check. — One residing in Memphis, Tenn., who received exchange drawn on a Memphis bank on Friday after banking hours, acted within a reasonable time in depositing the exchange with' another local bank on Saturday following, the exchange being presented to the drawee bank on the following Monday morning.
    5. Mortgages — place of payment. — A mortgagee residing in Memphis, Tenn., is not concluded by his refusal to accept payment tendered in Arkansas when the contract required payment to be made in Memphis.
    G. Mortgages — cancellation of release. — Where a deed of release of a mortgage was executed and recorded under mistaken belief that the debt had been paid, and the mortgagee, immediately upon discovery of that' fact, placed on the margin of the record a statement that the release was canceled, he is held to have acted with due diligence.
    7. Banks and banking — payment—what law governs. — Whether a drawee bank, which had on deposit money of the drawer. could refuse payment of exchange on the drawer bank’s insolvency, on the ground that the drawer hank was indebted to the drawee -on unmatured notes, was for determination under the law of the place of payment.
    Appeal from Crittenden Chancery Court; J. M. Fut-rell, Chancellor;
    affirmed.

      J. R. Crocker and R. V. Wheeler, for appellant.

      Da/vis & Costen, for appellee.
   Meecaeey, J.

Appellee began suit in the Crittenden Chancery Court, and, on October 19, 1925, the court rendered its judgment in favor of appellee and against the appellants. Tommie Hollowell was the owner of a tract of land, and he executed note and mortgage to Abe Goodman, trustee, of Memphis, Tennessee, for $827. Hollowed applied for a loan from the Federal Land Bank of St. Louis, pledging the same land as security for payment of the loan. The application was made through the Tri-County National Farm Loan Association, and James C. Moore was secretary and treasurer of this association, and he was also the 'active vice-president of the Bank of Commerce of Earle, Arkansas. George F. Scott was an abstracter, and was assistant to Moore as secretary and treasurer of the National Farm Loan Association. Hollo-well’s application for loan was approved, and, on Novem-' her 1,1924, a note and mortgage were executed by Hollowed and his wife in favor of the Federal Land Bank of St. Louis. The mortgage was duly recorded in Critten-den County, Arkansas.

The Federal Land Bank of St. Louis issued its check for the sum of $938.75, mailed said check to J. C. Moore, as secretary and treasurer, and to the borrower. It was given to pay the debt due to Abe Goodman.

Moore received the check November 19, and credited the amount on the books of the Bank of Commerce to Tommie Hollowed and issued exchange of the Bank of Commerce, drawn upon the First National Bank of Memphis, Tennessee, in favor of Abe Goodman, for $827.

Moore delivered the exchange to Scott for the purpose of delivery to Goodman, in satisfaction of the lien held by Goodman. On the 22d day of November Scott wrote to Goodman, asking him to execute and send to the Bank of Marion, Arkansas, the release which he inclosed in that letter, and, upon-presentation, he would pay the bank the amount due.

Goodman wrote Scott, declining to send the release, as the notes were made payable in Memphis, and stated that, if they would have their bank instruct their correspondent here to pay him the amount stated, he would deliver them the notes, marked paid, and also execute the quitclaim deed Scott inclosed.

Scott went to Goodman’s office in Memphis, Tennessee, Friday afternoon, November -28, 1924, after the Memphis banks were closed for the day, arriving between three and four o’clock. There was some testimony that he arrived there and delivered the exchange to Goodman between 1:30 and 2 p. m. on the 28th.

Scott, who delivered the deed, was dead at the time of trial. Goodman executed the release deed upon delivery to him of the exchange. The Bank of Commerce of Earle was open for business during the banking hours of Saturday, November 29, but did not open for business Monday morning.

Goodman, after receiving the exchange on the 28th, having received it too late to deposit it, put it in his safe, and, on Saturday morning, the 29th of November, deposited it in the Bank of Commerce & Trust Company, at Memphis, Tennessee.

Memphis, Tennessee, has a clearing-house association, and the exchange was presented to the First National Bank, through the clearing-house, on Monday morning, December 1,1924, and payment refused because the Bank of Earle was reported closed.

• Goodman’s office in Memphis is within forty feet of the First National Bank. The release deed .executed by Goodman was placed "on record in Crittenden. County immediately, having been filed for record the same day it was executed, November 28, 1924, at 4 o’clock p. m.

The Bank of Commerce of Earle had on deposit to its credit in the First' National Bank of Memphis, on December 1, subject to check, over $6,000, but the Bank of Earle was indebted, to the First National Bank in the form of notes not matured. When the exchange was returned unpaid, Goodman placed on the margin of the record of the release deed a statement that it was erroneously given and without consideration, and canceled the release deed, certifying that it was void. This was done on December 19.

Appellee’s complaint set up the facts’which are in substance outlined above, and the Federal Land Bank answered, and stated that the advance was made, secured by a mortgage upon the faith of a release deed, and that plaintiff, by his own negligence, failed to collect the exchange, as the same would have been paid to Goodman on either the day of its receipt or the following day. It filed a cross-complaint against the First National Bank of Memphis and the original plaintiffs, Bank of Commerce of Earle, and Loid Rainwater, Bank Commissioner.

The Bank Commissioner entered his appearance, but no service appears upon any of the other cross-defendants. The answer of the appellants also denied the allegations in plaintiff ’s-complaint.

The chancellor found in favor of appellees against the appellants and others in the sum of $811.59 and interest, and decreed that the release deed executed by Goodman should be canceled and set aside; dismissed the cross-complaint of the Holloweils, held that the deed from the Hollowells to the Federal Land Bank was valid, but was subject to the first deed in favor of Goodman, and ordered the sale of the land to pay Goodman’s judgment.

The appellant contends, first, that, if the holder of a check and the bank on which it is drawn reside in the same place, the check must be presented for payment not later than the day after its receipt. This presents the only real controversy in the case. The authorities cited by appellant, while announcing this rule, state that it is not absolute, and that the holder of a check must use due diligence hi tlie presenting of a check for payment. The authorities cited also hold that, if a hank fails after the holder, using due diligence, could have gotten the money on the check, the loss is his. Both parties agree that this question should be determined or decided under the laws of the >State of Tennessee. The law with reference to this matter in the State of Tennessee is the same, however, as the Arkansas statute, and both statutes provide, in substance, that a check must be presented within a reasonable time after its issue.

One of the cases relied on by appellant in discussing tills question is an Arkansas case, and the court said in that case: “In the absence of special circumstances excusing delay, the reasonable time for presenting a check, Avliere the person receiving the same and the bank on which it is drawn are in the same place, is not later than the next business day after it is received; and, where they are in different places, reasonable diligence requires the check to be forwarded to the place of payment not later than the next'business day after it is received by. the payee, and presented not later than the day after it is there received. Inexcusable delay will discharge the drawer from liability if he is injured by the delay.”

But the'court also said in the same case: “A check, like a bill of exchange, must be presented for payment within a reasonable time, and what is a reasonable time will depend upon the circumstances of each particular case.” Burns v. Yocum, 81 Ark. 127, 98 S. W. 956.

The above case was decided in 1906, before we had any unif orm negotiable instrument law in Arkansas. The court in that case, however, as we have said, recognized the rule that all that was required of the holder of the check was to present it in a reasonable time, and that a reasonable time depended upon the circumstances of each particular case. It may be said that what is a reasonable time in any case depends on the circumstances of that particular ease, and means such time as a prudent man would exercise or employ about his OAvn affairs. It,, of course, does not mean indulgence in unnecessary delay un the one hand nor does it mean -that he is to act without any regard to the circumstances and convenience of transacting business of that kind. It is whatever time is necessary to conveniently do what should be done in the particular case. It has been said that it means such length of time as may fairly, properly and reasonably be allowed or required, having regard to the nature of the act or duty and to the attending circumstances.

Since the establishment of clearing-house associations, and especially in cities as large as Memphis, it would be very inconvenient, if not practically impossible, for each person who received a check drawn on a bank in Memphis to present it to the particular bank upon which it-was drawn. It would very greatly interfere with business, and due diligence does not require this.

It has been, said: ‘ ‘ The usage of trade and business in presenting checks for payment has been incorporated in the banking business of the State and country, and would be seriously affected if immediate payment to the bank was required. Bearing in mind the general commercial law, that the paying bank is required to satisfactorily identify the payee, * * # and bearing in mind also the vast number of checks daily used in the city of New York, it is apparent that, if the banks and trust companies of New York were required, immediately upon their receipt, to present deposited checks to banks upon which they are drawn' in payment, confusion amounting almost to chaos would be the result. * * * A rule which required all the banks in the city of New York to present for payment all the checks deposited by their customers on the day of their deposit would compel them to decline business of that character and defeat the objects, in many cases, for which deposits are made, and put an end to certain facilities which result from obtaining credit for the amount of a check for the day of its deposit, without providing for its payment until the following morning.”

The court further said: “I have not overlooked the cases which hold that a check on a bank in a city in which tlxe .payee resides must be presented for payment not later than tbe day following its receipt. These cases may be distinguished from the case under review. The facts and circumstances in each must, in a great degree, govern the rule to be applied, and the facts in those cases differ materially from those of the present case.” Zaloom v. Ganim, 72 Misc. Rep. 36, 129 N. Y. S., p. 85.

What is said about the business of New York is also true of Memphis, Tennessee, except in a different degree, but it would certainly be very inconvenient and a great interference with business as it is conducted today to require one to go to the bank on which the check was drawn, instead of depositing it as the appellee did in this case. As said by the New York court, it would 'create confusion and, in many instances, defeat the very purpose for which deposits are made, and we do not think any such conduct is required by law, and we therefore conclude that, in this case, the appellee deposited the check within a reasonable time.

Appellant next insists that the effect of'the refusal to accept payment, when tendered, bars recovery. We do not agree with appellant in this contention. The facts are that appellee had a letter from one Scott, whom he did not know, as far as this record shows, but, even .if he did, and if it had been from the debtor himself, it did not amount to a legal tender, and the appellee simply called his attention to the terms of the contract, which required payment in Memphis, and practically all the delay thereafter was caused, not by appellee, but by the agents of appellant. The appellee executed the release deed, of course, believing that the exchange was good, but, as soon as he found out that it was not, he put on the record the cancellation,' and we think, from the proof in this case, that the appellee acted with reasonable diligence throughout the transactions conneeted with this case.

As to appellant’s contention that the Memphis bank had no right to refuse to pay, that is also- a question to be decided under the Tennessee -law,"■and it seems to be the settled law that the bank had the right to refuse to pay. although the Bank of Earle had money, on deposit there, because the Bank of Earle was indebted to the Memphis bank. As we stated in the outset, the main question in the case seems to be whether the appellee presented the check for payment in a reasonable time, under the circumstances, and our conclusion is that he did, and the decree of the chancellor is affirmed.


author: Mehafey, J.

text:
    Purnell v. Nichol.
    Opinion delivered April 4, 1927.
    1. Appearance— filing answer. — Where the defendant in a divorce suit filed an answer when no summons had been issued, she thereby entered her appearance and could not assert that the decree was invalid for want of jurisdiction of her person.
    2. Appearance — waiver of process. — Both the issuance and service of a summons are waived by a general appearance.
    S. Courts — consent to jurisdiction. — Where the court has jurisdiction over' the subject-matter, jurisdiction of the parties may be acquired by consent.
    4. Process — waiver of objection. — Defects of jurisdiction arising from irregularities in the commencement of proceedings, defective process or even the absence of process may be waived by a failure to make seasonable objection.
    5. Appearance — jurisdiction.—A court acquires jurisdiction over the person of plaintiff whenever he appears and invokes the power or action of the court in any manner, and when the defendant voluntarily appears in any case, and, without objection, proceeds, the court thereby acquires jurisdiction of his person, whether any summons was issued or served or not.
    6. Divorce — insufficiency of allegations of complaint. — A decree of divorce will not be vacated merely because the allegations of the complaint did not warrant it, where the testimony heard was not preserved but presumably supported the decree.
    7. Divorce — evidence.—On a bill to review a decree of divorce, the court’s finding on conflicting evidence against a claim of fraud practiced on the court held not against the preponderance of the evidence.
    ■ Appeal from Jefferson Chancery Court; II. R. Lucas, Chancellor;
    affirmed.

      Martin, Woottoii & Martin, for appellant.
   Mehafey, J.

The appellant, who was the plaintiff below, and D. T. Purnell were married in August, 1923, in Texas, and came back to 'Arkansas, where they lived together a while at Pine Bluff, and, on the 22d day of March, 1924, the chancery court of Jefferson County granted D. T. Purnell a decree of divorce, and D. T. Pur-nell paid her, at the time of the divorce, $3,500. D. T. Purnell died on September 14, 1924. Wlieij he died the appraisement showed the value of his estate to be approximately $00,000. Ou January 6, 1925, the appellant filed in the Jefferson Chancery Court a bill of review, in which she sought to have the decree of divorce vacated. The following, omitting the caption, is her complaint:

She alleged that the appellees, children and grandchildren of her said husband, combined and confederated for the purpose of alienating his affections from appellant and causing their separation and divorce, to th.e end that she might not share in his estate; that, being among strangers and surrounded by his relatives, she was so importuned and threatened by her husband that she was compelled to agree to his demands. She alleged that her husband was worth approximately $300,000, but that he solemnly stated to her his entire estate was worth not above $11,000, and proposed to pay her the sum of $3,500, provided she would permit him to get a divorce without defense; that she agreed thereto, induced by her miserable and unhappy condition, and by his said representation as to the value of his estate, and, on the same day, the said I). T. Purnell filed his bill seeking a divorce, and that a decree was rendered, granting a divorce on the same day the bill was filed; that no summons was ever served upon her, but her attorney filed an answer for her; that the case was submitted and decided without appellant being present and without any testimony being taken, and upon its being represented to the court that such decree was agreeable to her and her said husband.; that fraud and imposition were practiced upon her and her solicitor by the said D. T. Purnell assuring her and her solicitor that the entire value- of his estate did not exceed the sum of $11,-000, which statement, she alleges, was knowingly false and fraudulent upon the part of her said husband; that she accepted said statement, relying thereon, and believing it to be true, unaware of the falsity thereof, until after the death of her said husband, when it turned out he -owned a large and valuable estate; that said judgment and decree were obtained by fraudulent imposition upon the court as well as upon her; that by said fraud she has been deprived of her dower and homestead rights in the estate of her husband. Prayer that the divorce decree be set aside and her dower and homestead interest in said estate be decreed.

She afterwards filed an amended complaint, setting out the misrepresentation in greater detail, and charging that fraud was practiced on her and upon the court.

The defendants answered, denying all the material allegations of the complaint.

Adelia Clement testified that she lived in Hot Springs, Arkansas, and that she was the mother of appellant ; -that her daughter became engaged to be married to D. T. Purnell, and was afterwards married in Texas. Witness was present at the wedding. She testified that they were to have been married earlier, but Purnell stated, on account of the.opposition of his children, he could not come to Hot Springs. Later he' wrote to her daughter to come to Texas, and she and her daughter went, and they were married in Texas. They afterwards returned to Pine Bl-uff, Arkansas, where they lived for about six months before their separation. After the separation, Purnell visited witness’ daughter again and stated that he was going to' remarry her. He said he was going to correspond with her,.but the only way he could do it was to secure a postoifice box, because his children got all his mail. Witness’ daughter received a telephone message from Mrs. Carter, telling her that Purnell was very ill, and'wanted to see her, and she went to see him; that she had seen letters from Purnell to her daughter, and that the letters were destroyed. After their marriage, when they returned to Arkansas, Pnrnell went to Pine Bluff and her daughter went to Hot Springs, and later Purnell ’phoned for her to come, and she went to Pine Bluff. She said Purnell had two orange groves in Texas. She testified that Purnell gave her daughter an automobile for a wedding present.

The appellant testified, in substance, that she was 37 years old; had lived in Hot Springs nearly all her life, and she met Purnell there about three months before their marriage; that they were married in August, 1923, at Edinburg, Texas; that she was introduced to Purnell at the Great Northern Hotel by a friend from St. Louis; that their marriage was originally set for September, 1923, in Hot Springs, but that Purnell wrote to her, stating that they would have to postpone the wedding because his daughter was threatening to kill hersélf, and he was afraid she would kill him. He wrote her from Laferia, Texas, asldng her to come, and she and her mother went out there, and she was married; that she and Purnell lived together about seven months, about four months of which was in Pine Bluff; that his family never seemed to_ like her; she never could have the automobile for her own use; that there were many little things and disagreements ; that they got along together fine in Texas; never had any trouble until they got to Pine Bluff, and then it was over the children. She said that Purnell had about fifteen relatives, and they all turned against her; that, one Sunday, she and Purnell were going to church, and that Purnell’s son and Purnell drove off and left her ready, and she did not get to go. She finally decided they could not get along, and he asked her what she would take, and she told him she did not know, and he advised her to go see Judge Toney, his attorney. Purnell said he would give me one-third of his entire estate. Purnell offered me an automobile, and I told him I did not want to leave him. Afterwards, at his suggestion, I went-to see Judge Toney again. I was being urged on, and then I had a talk with Mr. DeLay, who afterwards represented me. Mr. DeLay found that a lot of property was listed in the name.of Purnell, but Toney assured me and Mr. DeLay that this land had been conveyed to Purnell’s children before the marriage, but the deeds had not been recorded. Mr. DeLay came out to see me after I refused to compromise. I did not know what to cío. I went to see Judge Toney again, and he told me that my husband had made his estate to his children and he would give me one-third of what he had. I told him that was all right. I was paid $3,500, of which $200 went to my attorney. ’ ’ She testified that she believed, at the time, that this was one-third of the estate; that she was never served with summons, never present at court, nor testified; that they never had any trouble at ail except on account of the children. He promised to leave there and go to California. “Mr. Purnell and a notary public came out and gave me a paper to sign, and I refused to sign because I thought it was a stock of goods, but it was a warranty deed. Mr. Purnell talked about moving to Florida. I never knew that lie owned more property than he told me until I read his will in the paper, aiid I know then that I had not received one-third of his estate.”

Witness testified that she had been divorced twice before; that both her husbands got divorces from her, but that she got no alimony from either of them. “Mr. Purnell wrote me letters during the time we were separated. We lived in Pine Bluff right in the same block with practically all the family. We took our meals with his daughter, and she told me I could not stay there, she did not want me. We took some meals with his son, Sherman. I signed some papers at the bank before the divorce was rendered. I did not just understand it. Sometimes I ran little bills, when I could not make the money go far enough, but I always paid them as soon as I got time. At the time we separated my wardrobe bills did not amount to $1,000. I got a dress or two after the separation, but the divorce had not been granted. I had signed the papers, and I called up Mr. DeLay, and, after talking to him, I returned the dresses. When we were discussing the settlement and a divorce Mr. Purnell and Mr. Toney had offered me, I wanted to see if it was all right. I believed what they told me, and took the money, and.did not know that there was any fraud until after he died.' After the divorce I went to New York and stayed at the Times Square Hotel.”

Witness testified to a good many- things about the disagreements being caused by the children, and that, but for them, they would have got along all right, and .that she thought she was getting one-third of his property, and that that was the reason she settled.

Mr. DeLay testified, in substance, that he represented Mrs. Purnell, and that he went to see Mr. Toney, who represented Mr. Purnell, and got the impression that $11,000 was all that Mr. Purnell owned; that he did not know what his holdings were; that he was told that Mr. Hunt drew the deeds and took the acknowledgments for Mr. Purnell when he deeded it to his children, and that he thought it was all right, relying on the statements of Mr. Purnell and Mr. Toney. Mr. Toney’s stenographer prepared all the writings that were prepared, will) the understanding that the settlement was to be upon a basis of one-tliird of his holdings; that they went into court and presented the nleadings and decree to Judge Elliott, and that he was positive that no witnesses were examined, no witnesses were sworn, nor any testimony taken. The abstract copy furnished showed what purported to be Mr. Purnell’s holdings. He had a memorandum before the settlement was made. He did not consult Mr. Hunt with reference to the matter. He said he could have seen Mr. Hunt if he had made up his mind that the statements of Toney and Purnell were not true. He is positive that no . witnesses were sworn; knows that he was not, but he was interrogated by the court; could not say what Pur-nell or his son did or what testimony they gave, as he was' not present, does not recall that the bill was filed before the decree.

There was then offered in evidence the will of Pur-nell, and also offered inventory filed by the executor, which showed the estate to be worth a little more than $59,000.

Judgre Elliott testified that “Toney came into court with some witnesses, and Mr. DeLay was present?'representing Mrs. Purnell, and I asked about the property rights set out in the decree. I asked Mr. DeLay if he represented the defendant and if she had read the decree and knew the property rights set out in the decree, and he said it was entirely satisfactory as far as the property was concerned. I told them I would hear the testimony, and D. T. Purnell and Sherman Purnell and, I think, a third witness, testified. I always put on the complaint ‘cruel treatment.’ That was the ground of divorce, and put ‘witnesses, D. T. Purnell and Sherman Purnell.’ I am not sure about the third witness, but I think there was a third. I administered the oaths to Mr. Purnell and his son. There were present Mr. DeLay, Mr. Toney, Mr. Purnell and Sherman Purnell, and I am not sure about the third witness. The allegations were borne out, otherwise I would not have granted the decree. They testified that Mrs. Purnell was abusive and treated him with neglect. No record was made of the testimony. The papers had been filed in the clerk’s office. I never hear a case until, the papers have been filed.”

H. K. Toney testified about preparing the papers and the witnesses testifying and the agreement as to the property, and as to telling Mr. DeLay about what he thought the property was worth.

Sherman Purnell testified about the divorce, and that ■ he was sworn when the decree was granted.

S. J. Hunt then testified that-he had written some deeds and taken some acknowledgments for Mr. Pjirnell.

Two or three other witnesses testified about Mrs. Purnell’.s visit after Mr. Purnell took sick. The above is sufficient, we think, to show what the issues are.

Appellant’s first contention is that the court never acquired jurisdiction of the divorce action, and she calls attention to § 1049 of Crawford & Moses’ Digest, which provides that an action is commenced when a complaint is filed and summons issued thereon. An action is not commenced until the complaint is filed and summons issued, hut we think that this does not mean that the court cannot acquire jurisdiction over the person any other way. He also calls attention to 15 Corpus Juris, 797, to the effect that, where the mode- of acquiring jurisdiction is provided by statute; compliance therewith is essential or the proceedings would be a nullity. This is true where the other party does not consent to the proceedings or where he does not appear. But it has been many times held that both the issuing and the serving of a summons may be waived, and it is stated in Corpus Juris: “The general rule is that a general appearance confers jurisdiction in personam over the party so appearing, but that a special appearance does not.” 15 C. J. 801.

It has been often held that, where the court has jurisdiction over the subject-matter, jurisdiction over the particular action may be conferred by consent; and, where • jurisdiction has attached and the cause of action or subject-matter is legally and properly within the power and cognizance of the court, it may proceed on consent of parties with reference to matters before it. . It seems to be a general rule that, where the court has jurisdiction over the subject-matter and .the cause of action, jurisdiction of both the plaintiff and defendant may be acquired by consent- of the parties. ' This court has held that, even where a court would not have jurisdiction, yet where the persons entered their appearance and submitted themselves to.the tribunal, they will be held to have appeared there for the purpose of submitting themselves to the county court as a court of arbitration, and, having elected to do this,-they cannot now object that the county court was without jurisdiction - in the matter. Having elected to submit themselves to the jurisdiction of the tribunal provided by the statutes, and having taken an appeal in accordance with the provisions of the statute, they must abide the result of their own voluntary action. Morgan Engineering Co. v. Cache River Drain. Dist., 115 Ark. 437, 172 S. W. 1020.

“ It is well established, as a general rule, that, where the court has jurisdiction over the subject-matter or cause of action, jurisdiction over the person of the parties may be conferred by consent, unless, of course, such a submission to jurisdiction would be violative of some statute. Accordingly, defects of jurisdiction arising from irregularities in the .commencement of the proceedings, defective process, or even the absence of pro cess, may be waived by a failure to make seasonable objection.” 15 C. J. 808, § 104.

“Broadly stated, any action on the part of the defendant, except to object to the jurisdiction over his person, which recognizes the case as in court, will constitute a general appearance.” 4 C. J. 1333.

A court acquires jurisdiction over the person of the plaintiff Avhenever the plaintiff appears and invokes the power or action of the court in any manner, and when the defendant voluntarily appears in any case, and, without objection, proceeds, the court thereby acquires jurisdiction over his person, whether any summons was issued or served or not. This court recently said: “While a suit upon the note and upon the contract of sale are entirely separate and distinct causes of action, the effect of defendant’s answering the complaint and defending the action entered its appearance.” Bernard Mfg. Co. v. McRae Model Pharmacy, Inc., 171 Ark. 978, 287 S. W. 187.

In the above case the plaintiff proceeded on a different cause of action altogether, and on it no summons ivas ever issued, but the defendant filed an answer, and the court held that he thereby entered his appearance. In another recent case the court said: “We do not think any error was committed in permitting appellee to amend his complaint to allege a greater damage than that claimed in the original complaint. It-is true there was no personal service, but appellants voluntarily filed an answer to the original complaint, and this action entered their appearance as completely as if they had personally been served with process.” Purse Bros. v. Watkins, 171 Ark. 464, 287 S. W. 533.

We therefore conclude that, when Mrs. Purnell, by her attorney, filed an answer, she entered her appearance and thereby gave the court jurisdiction as completely as it would have had by issuing summons and serving on the defendant.

Appellant’s next contention is that the allegations of the complaint did not warrant the decree. This is probably true, but it contained a sufficient allegation to give the court jurisdiction, and the court had jurisdiction of the person of the plaintiff and defendant, and, according to the testimony of the chancellor Avho tried the ease, and other witnesses, the court took testimony, and there is no record preserving the testimony or showing what the testimony was, and the presumption therefore is that there was sufficient evidence introduced to justify the chancellor in granting the decree. The mere fact that that the complaint was defective did not prevent the plaintiff from introducing proof sufficient to justify the court in granting a decree, and the presumption is that this was done.

Appellant’s next contention is fraud practiced upon the court and the appellant in procuring judgment. The evidence is conflicting on this issue, and we cannot say that the finding of the chancellor Avas against the r>ve-ponderanee of the eAddence. The judge Avho tried the case testified that he swore the Avitnesses and took their testimony, and he is corroborated by one or tAvo other witnesses. ’ '

There is some evidence that no proof was taken, but, as AAre have said, Ave think the preponderance of the evidence sIioavs that evidence AAras taken. This answers the next contention of the appellant, AArhich is that the decfee was rendered Avithout hearing the evidence.

• After a careful examination of the record, our conclusion is that the defendant voluntarily appeared, thereby giving the court jurisdiction, and that the presumption is that the evidence taken by the court supplied any defect that there may have been in the complaint, and that, on the question of fraud, and also the question of tbe decree being rendered without bearing evidence, tbe testimony is conflicting, and, since tbe finding of tbe chancellor was not against tbe preponderance of tbe evidence, bis finding should be sustained, and tbe decree is. therefore affirmed.


author: Mehapey, J.

text:
    El Dorado Ice & Cold Storage Company v. Dingle & Kincaid.
    Opinion delivered April 4, 1927.
    Justice op the peace — order dismissing appeal — refusal to set aside. — Where a cause was pending in the circuit court on appeal from a justice of the peace for more than nine months, and defendant’s manager neglected to inquire when the case would be tried, it was not an abuse of discretion to refuse to set aside an order of dismissal on defendant’s failure to he ready for trial on the day when the cause was set for trial.
    Appeal from Union Circuit Court, Second Division; W. A. Speer, Judge;
    affirmed.

      J. R. Wilson, for appellant.

      J. S. Brooks, for appellee.
   Mehapey, J.

On tbe 9th day of January, 1925, tbe appellees, plaintiffs below, filed suit in the justice court against tbe appellants for $300 for labor and material furnished defendants by plaintiff. Summons was issued, returnable on tbe 20th day ,of January, 1925, and summons was returned, served by delivering copy to M. B. Morgan, manager for El Dorado Ice. and. Cold Storage Company, more than 10 days previous to the day of trial. On the 31st day of January, 1925, M. B. Morgan filed affidavit for appeal and bond in the sum of $350. Tbe transcript was filed in tbe second division of tbe circuit court within 30 days. On tbe 14th day of September, 1925, -the circuit court met and set cases covering a p.eriod of two-weeks, beginning tbe 19th of October, and, among others, this case was set. The court announced to tbe bar, on tbe 14th day of September, that a term of court would be held beginning on the 19th of October and to be in session two weeks, in order to try cases and dispose of the crowded condition of the docket. Announcement was made several times during the term of the court, and request was made that all members of the bar be present on the day designated by the court, which was September 26. This case was set on September 26 for the 22d day of October.

When this case was called for trial neither the defendant nor his counsel was present, and no announcement was made by the defendant or his attorney, and the case was dismissed. The court had been informed that the defendant’s regular attorney was sick, but that said attorney had employed other counsel to handle this case in order to be ready when the case was called. Shortly after the case was dismissed the defendant’s attorney appeared and filed a motion to set aside the order dismissing the appeal, in which he alleged that the defendant’s manager had been in Little Rock attending Federal court in the trial of an important case, and did not learn of the setting of the case until the day before the appeal was dismissed. Defendant’s motion to set aside the order dismissing the appeal was as follows:

“Comes the defendant, the El Dorado Ice & Cold Storage Company, and represents to the court that the above cause was set down for trial in this court for the 22d day of October,-1925, and neithér the manager of defendant company nor his attorney was aware of the setting of said cause for trial, and knew nothing of the setting until the morning that the cause was called for trial.

“The defendant’s manager, M. B. Morgan, whose business it was to look after all litigation of the company, had been engaged in the preparation and trial of the cause of King v. The Republic Power & Service Company the entire time since the latter part of the preceding week.. That was a suit for damages in the sum of $35,000 claimed against the defendant in that suit, and that trial required the presence of the said .M. B. Morgan in thé United States District Court, Little Rock, Arkansas, and tlie defendant in this case was wholly unprepared and unable to go into the trial of this case when called, and his attorney knew nothing about the facts in the case, and liad no opportunity to interview the Avitnesses, but offered 1o get the witnesses together if allowed time until 11 a. m. of the 22d day of October, 1925, and, had the defendant’s attorney’s request been granted by the court, the defendant could and would have been ready to go to trial at 11 a. m., as above indicated.

“The defendant had a meritorious defense to the claim sued on herein, which defense was asfolloAVS: The plaintiffs offered to install hrw-pressure gas burners at defendant’s plant at SmackoA^er, Arkansas, and take as their pay one-half the saving in cost of fuel over the preceding month’s bill. The result of that experiment was a loss, and not a saAdng for the defendant.

“The plaintiffs admitted the truth of the above statement, and asked permission to try it another month, and the result of the month’s experiment Avas a loss, and not a saving.

“The plaintiffs, in a further effort to demonstrate the efficiency of their low-pressure burners, got permission from M. B. Morgan to install the same style burners in the El Dorado plant of the aboA-e named defendant, and look out of the El Dorado plant six gas burners OAA'ncd by M. B. Morgan, of the value of $65 each, and took them aAvay, Avithout any authority from the said M. B. Morgan, and appropriated them to plaintiffs’ OAvn use, and the plaintiffs have never returned to ascertain the character of service given by the burners installed by plaintiffs at the El Dorado plant. No price Avas ever made or agreed upon for the nfeAv burners, but the price Avas to be determined by the saving on fuel in the first month-’s service, just as in the case of the Smackover agreement.

“The first specific claim of plaintiffs’ cause of action Avas made knoAvn to- M!. B. Morgan months after-Avard, Avhen one Kincaid called and demanded $50 each for the burners, and the said Kincaid Avas informed that the said defendant did not care to retain the burners, hut warded them removed and the defendant’s old burners restored, to which Kincaid replied that he did not know where the old burners were, and attempted to get the defendant to keep their burners and pay $150 for the whole claim, and the defeiidant refused because the actual records show a loss on the nerv burners over the old burners.

“The next the defendant heard from this claim was about sixty days ago, when a laborer for Dingle & Kin-caid claimed that Dingle & Kincaid were gone and had no further interest in this claim; that the said Dingle & Kincaid had transferred all their interest in the claim to the said Bland, one of their laborers, and that he was the sole owner of the said claim, and offered to take, and demanded, the sum of $150 in full settlement thereof.

“Your petitioner would represent that the above statement of the facts constitutes a full and complete defense to the plaintiffs’ claim and cause of action, and that your petitioner Avould have established the facts above detailed by at least three competent witnesses, and that these witnesses could have been produced in court in two hours’ time after the defendants learned that this case was set down for trial.

“Your petitioner prays the court to set aside its former order dismissing the appeal in this cause and reinstate the said cause upon the said docket- of this court, and set the case down for trial on its merits,, in order that the defendant may be given an opportunity to show that these plaintiffs have no interest in this cause of action and that the owner of this cause of action is not a party to this record, and that, in truth and in fact, the defendant is not indebted to the plaintiff nor to the owner of the alleged cause of action in the sum of $300 nor any other sum, but that the plaintiffs are indebted to the’defendant for the six burners converted by the plaintiffs, in the sum of at least $300 as the cash value of the burners at the time of conversion, and, in order to impose no undue burden on the plaintiffs in this cause of action, the defendant agrees to be taxed with the cost of the proceedings had on the 22d day of October, 1925, in this canse, including the cost of plaintiffs’ witnesses, if any, as shown by the certificates issued in their behalf, and the defendant agrees and offers to comply with such orders and reasonable requirements as the court may make or impose, in order that the parties to this action ■may have a fair and equal opportunity to have their rights determined by a jury, under appropriate instructions from this honorable court, and for such other and further general relief as may be meet and proper, the defendant will ever pray.”

The motion was subscribed and sworn to by M. B. Morgan on the 30th day of October, 1925. And oil said day the court denied the motion of defendant, and defendant thereupon filed its motion for a new trial for the following reasons: First, that the order and judgment of the court was contrary to the evidence introduced on the motion; second, that the order and judgment of the court on the motion was contrary to the law; third, that the order and judgment of the court was contrary to both the law and the evidence.

• Court overruled defendánt’s motion for a new trial; defendant excepted, prayed an áppeal to the Supreme Court, which wás granted, and defendant was given 120 days within which to file its bill of exceptions.

M. B. Morgan testified for the defendant, on the motion to set aside the order of dismissal, that he is manager of El Dorado Ice & Cold Storage Company; that he has heard the reading of this petition to the court, and knows the facts upon which the petition was based. He was asked to state to the court why he was not here and did not know anything about the setting of the ease at the time it was set for trial in this court, and replied that, the week before the case was set for trial, “I waá in Little B-ock, in a case in the Federal court before Judge Trieber, and I was busy the entire week in preparing the evidence in that case, which was a $35,000 damage suit, and I did not return to El Dorado until late Sunday night, and I did not know of the suit.”

Upon further questioning, witness stated that it was Wednesday night that he meant he returned to El Dorado, and did not know of the suit until next morning about 9:15 o’clock, and that he was sick in bed when he was called up for the suit, and that was the reason that he was not at the office so that he could be reached about 8:30, and that he got up here after the case had been dismissed — about 30 minutes after it was dismissed — and that, if he had been given until 11 o’clock, he could have had his witnesses here; the witnesses were in Smackover, and he could have reached them by telephone, and he would have done so. Witness was then asked to state his defense in this action, and he stated it as follows:

“Our defense is this: That Mr. Kincaid came to me here and suggested that they had a low-pressure boiler (burner) which was more efficient than the Victory, which I was using, and asked the privilege of installing two of them in our Smackover plant, with the understanding that he was to receive one-half of the saving effected in the next month’s service, so we'consented to let him put these in there. Our bill at that time was running normally, if I remember correctly, about $600, and it was increased over the preceding month about $225. * He continued to tinker with the burners, and attempted to reduce the bill for possibly sixty days, but all during that time the gas consumption was increasing over our former service. Still thinking that he could reduce our bill, he came to me and stated that, if he could have his men watch them,, and see what the trouble was, and asked my permission to put them in at the El Dorado plant, where it would be more convenient for him to look after them; and, with the same understanding we had had before, I gave him permission to install them at the El Dorado plant. After that time Kincaid and Dingle left town, and I had never seen either one of them since then. The reason we are still using the burners is because he took our old burners off, took them away from the premises, and we didn’t have anything to use if we took these burners out. About April or May of this year Mr. Kincaid himself . came over from Shreveport, and demanded — in fact, rendered me a bill for $50 apiece for the burners, and I informed him that I had not reached any agreement with Dingle to purchase the burners until they had shown their efficiency, and that they had not done, and .1 told him the facts of the agreement, and he attempted to settle on the basis of $150, and I advised him, at that time, 'that we didn’t want the burners, that they were not satisfactory, and we would rather have our old burners returned to us.”

Witness was further examined and cross-examined at length, but we deem it unnecessary to set out any more of the testimony, because the only question in the case is whether the court abused its discretion in refusing to set aside the order of dismissal.

It appears from the record that the suit was begun in justice court on the 9th day of January, 1925, and, while Morgan states that he was not served with summons, the return of the officer shows that he was served, but whether he was served or not is now immaterial, because, on the 31st day of January, 1925, Morgan filed an affidavit for appeal, and his appeal was perfected by filing his transcript with the clerk of the circuit court, as required by law, and this, of course, had to be done before the expiration of 30 days from the 9th day of January. He therefore knew that his case was pending in the circuit court at least from about the 10th day of January to the 22d day' of October, more than nine months. It also appears that his regular attorney was sick, and had made arrangements with another attorney to try the case for him. Since he filed the appeal himself, knew that it was on the circuit court docket, and knew that it would be for trial, he should have made some inquiry as to Avlien it would be tried. Evidently the appellant and his attorney knew that court Avas in session in El Dorado, and evidently kneAv the time of its meeting in the morning. Since they kneAv all these facts, it Avas their duty to give some attention to the matter, and Morgan, before he came to Little Rock to try his cáse here, could liave ascertained, or had his attorney ascertain, whether or not his case was set for trial in the Union Circuit Court. The trial court-announced, when he.overruled the motion, that the court was in session beginning with (he 14th day of September; that, announcement, had been made for the members of the bar to attend, and that this announcement.was made several times. .These things were all done in open court, and the trial court had a knowledge of all the facts, and the setting aside the order of dismissal is like the granting or refusing a continuance in a ease. It is a matter that is in the discretion of the court. It Avas a question for the trial court to determine whether the appellant had used due diligence to ascertain when his case Avould be tried, and due diligence in the preparation for the trial.

“Questions as to the trial or the continuance of causes rest so much in the sound discretion of the trial court that it must be a very capricious exercise of poAver or a very flagrant case of injustice that the appellate court Avill interpose to correct. ® * * Continuances are largely in the discretion of the court, and that discretion Avill not be controlled unless there is a manifest abuse of it.” Spear Manufacturing Co. v. Shinn, 93 Ark. 346, 124 S. W. 1025.

The trial court heard the motion and the argument on the motion, kneAv all the facts and circumstances, and this court has said: “The general rule is that continuances in criminal as Avell as in civil cases are in the sound discretion of the court, and that a refusal to grant a continuance is never ground for a new trial, unless it clearly appears to have been an abuse of such discretion and manifestly operates as a denial of justice.” Eddy v. State, 165 Ark. 289, 264 S. W. 832.

“Granting or refusing a continuance in a criminal case is discretionary, and this court has many times held that the trial court’s action Avill not be disturbed unless it appears that there was an abuse of discretion. Burt v. State, 160 Ark. 201, 256 S. W. 361.

We cannot say in this case that the trial court abused its discretion in refusing to set aside its order of dismissal, and the judgment is affirmed.


author: McHaney, J.

text:
    Park v. Rural Special School District No. 26.
    Opinion delivered April 4, 1927.
    1. CERTIORARI — DISCRETION to issue. — The writ of certiorari is not a writ of right, but is a writ of discretion.
    2. Certiorari — function of writ. — The writ of certiorari' will lie to review the action of the county board of education.
    3. Certiorari — when writ denied. — Where the action of a board or tribunal sought to be reviewed by certiorari is correct, the circuit court must deny the writ, since it would be required to refuse to quash such action when brought before it.
    1. Schools — authority of county board of education. — Acts 1925, page 876, creating- Rural Special School District No. 26 of Lonoke County, did not authorize the county board of education, nor was it otherwise authorized, to change the boundaries of such district or to dissolve the district.
    ' Appeal from Lonoke Circuit Court; George W. Clark, Judge;
    affirmed.

      Reed £ Beard, for appellant.

      Chas. A. Walls, for appellee.
   McHaney, J.

Bural Special School District No. 26 of Lonoke County, Arkansas, was created by a special act of the Legislature, same being act No. 291 of the Acts of 1925, page 876, approved March 27, 1925.

On November 2, 1925, appellant, J. I. Park and 123 other electors within the boundaries of said district, filed in the Lonoke Circuit Court their petition for a writ of certiorari to the county board of education of Lonoke County, Arkansas, in which they alleged that the petitioners had, after giving the notice required by law, petitioned the county board of education to dissolve said appellee district, under the provisions of § § 8869 et seq. of Crawford & Moses ’ Digest; that their petition had been dismissed without a hearing on the merits, and under an erroneous construction of' law that it had no jurisdiction to try said cause; that no appeal would lie from said order of dismissal; and they prayed that a writ of certiorari issue to the Lonoke County Board of Education, directing it to send up a transcript of its proceedings therein for review by the circuit court, that the judgment of said board be quashed, and that it be directed to hear and determine their petition as provided by law.

Appellees responded to said petition, and denied that the board of education had dismissed appellant’s petition under erroneous construction of law, but that said petition was dismissed on the ground that Bural Special School District No. 26 of Lonoke County was created by the Legislature under the special act above mentioned, and that the action of the Legislature in fixing the boundaries of said district was conclusive, final and binding on the board.

The court heard said petition for writ of certiorari, and, in denying same, said: “That the application for writ of certiorari should be denied and the petition filed herein should be dismissed, because it appears that the county board of education did not act illegally in dismissing the petition asking for a dissolution of Bural Special School District No. 26 of Lonoke County, Arkansas.”

From the judgment of dismissal in the circuit court appellants have prosecuted this appeal.

This court has.many times held that the writ of cer-tiorari is not a writ' of right, but is a writ of discretion. Arkadelphia Milling Co. v. Clark County Board of Equalization, 136 Ark. 180, 206 S. W. 70. It will lie to review the action of a county board of education. Mitchell v. Directors of School Dist. No. 13, 153 Ark. 50, 239 S. W. 371.

“Certiorari will not lie to correct a purely ministerial act, even though the performance of the act involves discretion.” Patterson v. Adcock, 157 Ark. 186, 248 S. W. 904.

When it appears to tlie circuit court, bn a petition for certiorari, that the action of the board or tribunal which he is called upon to review is correct, it is the duty of the court to deny the writ, for the reason that it would be required, under the law, to refuse to quash such action, since it was right to begin with.

We think the action of the circuit court was right in refusing to grant the writ, as, in our judgment, this case is ruled by the recent case of School District No. 25 v. Pyatt Special School District, 172. Ark. 605, where the question for determination was whether the county board of education could change the boundary lines of a district created bjr a special act of the .Legislature, and this court, in holding that it could not, used this language:

“The Legislature has full poiver, it may organize a district itself, and may do so Avithout the consent, of the inhabitants of the district, or it may authorize the county court or board of education oivother governmental agency to form districts and change boundary Hues; but, Avhen the Legislature itself creates a district, of course it cannot be said that it authorizes any governmental agency to change the boundaries of a district so created, and neither the county board of education nor any other agency would have authority to change the boundaries of a school district created by the Legislature, unless the Legislature expressly authorized such agency to do so.”

Wc have examined the act creating Rural Special School District No. 26, and there is no authority in the act authorizing the county board of education cither to change the boundaries of the district or to dissolve the district. It establishes the boundaries of the distinct, and necessarily took the territory embraced in the district from other districts already created. The sections of the Digest referred to by appellants, authorizing the county board of education to dissolve school districts and attach the territory thereof lo adjoining districts, cer-tainh'- have no apulicalion to a school district created hv special act of ihe Legislature subsequent thereto. Moreover, tlie-act creating this school district expressly repeals all laws in conflict therewith.

It necessarily follows, from what we have said, that the circuit court would have been under the duty of refusing to quash the action of the county board of education, even though it had issued the writ, and its action in refusing to issue the writ, under these circumstances, was correct, and it is therefore affirmed.


author: Hart, C. J.,

text:
    James v. Board of Commissioners Greene and Craighead Counties Drainage District.
    Opinion delivered April 11, 1927.
    1. Drains — sufficiency of proof of claims against district.— Under Sp. Acts 1921, p. 1159, § 3, repealing an act creating a drainage district and providing that claims for preliminary expenses duly verified, as in case of accounts, should be presented to the commissioners and paid by a levy of taxes, held that claims of banks for such expenses, duly verified by their cashier, and not contested by the district, should be paid.
    2. Banks and banking — representation by cashier. — Verification of a bank’s claim by its cashier was the act of the bank itself, as the bank could only act through its officers.
    3. Appeal and error — objection not raised below. — Objection that a bank’s claim was verified by its cashier; instead of by its president, cannot be raised for the first time on appeal.
    4. "Drains — allowance of claims. — Allowance of claims for preliminary expenses against a drainage district by the commissioners under Sp. Acts 1921, p. 1159, held proper procedure, where the project had been abandoned.
    5. Drains — allowance of claims for preliminary expenses. — Evidence held to sustain a finding that claims allowed to certain banks by the commissioners of a drainage district were for preliminary expenses.,
    6. Drains — authority of district to borrow money. — -Commissioners of a drainage district had authority to borrow money for preliminary expenses and to pay 6 per cent, interest thereon.
    7. Drains — collection of assessment — penalty.—Provisions of Sp. Acts 1919, p. 516, creating a drainage district, that the preliminary expenses should be paid by a tax levy, and that 25 per cent, penalty for delinquency should be added on a proceeding to collect the assessment, under Acts 1909, p. 829, §§23, 24, held valid.

      Appeal from Greene Clianeery Court; Horace Sloan, special Chancellor;
    affirmed.
    STATEMENT OE EAOTS.
    The board of commissioners of Greene and Craig-head Counties Drainage District No. 1 brought this suit in equity against J. M. James and other landowners in said drainage district to foreclose a lien on their lands to pay an assessment for the preliminary expenses for organization and preliminary surveys of the lands of the district.
    The Legislature of 1919 passed an act creating Greene and Craighead Counties Drainage District. No. 1 in Greene and Craighead counties, Arkansas. Special Acts of 1919, page 516. Section 16 provides that, in order to dp the work, the board may borrow money at a rate of interest not exceeding six per cent, per annum, may issue negotiable bonds therefor, and mortgage all assessments for the repayment thereof.
    Section 27 provides that, in case the work of improvement contemplated by the district is not performed, all expenses incurred by the commissioners, including any obligations that they may have given for the purchase of plans, heretofore made for said improvements, shall constitute a first lien upon said lands and shall be paid by a levy of taxes upon the real property of the district, to be made by the commissioners in the manner hereinbefore set forth, but based upon the assessments for State and county purposes. No assessment of benefits was ever made by the commissioners in compliance with the terms of the act.
    The Legislature of 1921 passed an act to repeal the act creating said drainage district, and provided that the affairs of the district should be wound up in compliance with § 3 of the act. Special, Acts of 1921, p. 1159.
    Section 3 provides that all claims against the district must be presented to the commissioners thereof, duly verified, as required in actions of account; and, if not presented within six months from the date of the act, they-shall be forever barred. The section further provides that it shall be the duty of the commissioners to levy upon the real property of the district a tax sufficient to pay the indebtedness thereof. It provides that, if the assessment of benefits has not been made and approved, it shall be made upon the assessed value of the property for State and county purposes as it appears upon the county assessment.
    Within the dates provided by the repealing act, claims aggregating $19,907.38 were filed with the commissioners, and the same were allowed and approved by them at a regular board meeting, and the minutes of the meeting and the resolutions of the commissioners show that said claims were examined and allowed; The board of commissioners also passed a resolution providing that evidence of the indebtedness of the claims that had been allowed and approved for payment should be prepared and certificates of indebtedness given for the various claims. It was also provided that an assessment of 6 per cent, against all the lands in the district should be levied for the payment of said indebtedness. Among the claims allowed was that of the Security Bank & Trust Company for $3,539, and that of the Paragould Trust Company for $10,386.37. The claim of the Security Bank & Trust Company is recited to be a note executed by the president and secretary of the drainage district to said company,'date July 6, 1920, due six months after date, with interest from date at 6 per cent, per annum. The claim is signed by the cashier of the company and duly verified by him. The cashier swore that the account was just and correct and that no part had been previously paid.
    The claim* of the Paragould Trust Company was also signed by its cashier and duly verified by him in the same manner as the account of the Security Bank & Trust Company. The claim of the Paragould Trust Company also recites that it is a note executed by the president and secretary of the drainage district to said company, due six months from date, with interest at the rate of 6 per cent, per annum.

      The chancery court found the issues in favor of the plaintiff, and it was decreed that the lien of the drainage district against the lands situated in it and involved in this suit be foreclosed, in default of the payment of the assessment within the time provided in the decree. The case is here on appeal.

      Gautney $ Dudley, for appellant.

      Robert E. Fuhr, for appellee.
   Hart, C. J.,

(after stating the facts). It is first contended that the decree should be reversed because the cashiers of the two banks signed the claims which were presented to the commissioners and swore that nothing had been paid towards the satisfaction thereof. It will be remembered that each claim recites that it was a note given to the bank by the commissioners of the drainage district. As we have already seen, the original act creating the district provides that, if the work of improvement is not performed, the preliminary expenses shall be paid by a levy of taxes upon the real property of the district to be made by the commissioners. The Legislature of 1921, in the act repealing the district, provides that the commissioners allow all claims presented to them as required by the act, and that they may levy an assessment upon the real property of the district in the manner provided by the act for the ' pavment thereof. The repealing act provides.that all claims must be presented to the commissioners, duly verified as is required in actions of account. Section 4200 of Crawford & Moses’ Digest provides that, in suits upon actount, the affidavit of the plaintiff, duty taken and certified according to law that such account is just and correct, shall be sufficient to establish the same, unless the defendant shall, under oath, deny the correctness1*of the account. In the case at bar the cashier of -each bank verified the claim and stated that it was just and correct,' and' that nothing had been paid towards the satisfaction thereof. In addition to this the record recites that the commissioners had signed a note to each bank bearing 6 per cent, interest. No attempt was made by the landowners to show'that the claims were not just and correct or that any part of them had been paid. The action of the cashiers of the. banks in verifying the claims Avas the action of the banks themselves, for a bank can act in no other Avay than through its officers, and its cashier is the manager thereof. Michie on Banks and Banking, § 102 (5ca), pages 710-711; lb. § 54, page 274, and § 1.10 (4), page 772.

But it is claimed by counsel for the defendants that, under § 1215 of Crawford & Aloses’ Digest, the verification of any pleading of a corporation may be by any officer or agent on AAdiom the summons in an action against the corporation may be served, and that the president is the officer upon w-hom service of summons must be had under our statute. A sufficient ansAver to this contention is that no objection Avas made to the form of the verification of the claim as presented to the commissioners, and no attempt Avas made to dispute the validity of either claim. Hence, in any event, it Avould lie too late to make the objection for the first time on appeal.

It is next sought to reverse the decree because the repealing act provides for the allowance of the claims by the commissioners. As Ave have just seen, the presentation to the commissioners and the alloAvance by them of the claims constituted a compliance avíÜi the provisions of the repealing act. Such method of procedure for the ascertainment of preliminary expenses Avhen an improvement district is abandoned has been expressly approved by the court in Gould v. Toland, 149 Ark. 476, 232 S. W. 434, and other later cases.

It is next insisted that there is no finding that the claims allowed were for preliminary expenses. We think, under the circumstances, no other legitimate inference could be drawn. The act providing for the creation and organization of the district gave the commissioners the poAver to incur indebtedness for certain preliminary expenses, and provided that it should be a lien upon the lands of the district in case the improvement Avas not made. The record sIioavs that the commissioners borrowed certain money from the two banks in question and gave their notes as commissioners therefor. They allowed the 'Claims of these banks when presented to them under the provisions of the repealing act. The attendant circumstances show very plainly that the amounts allowed were expenses incurred in the organization of the district and in making preliminary surveys. This view is strengthened when we consider the kind and character of the claims presented by other claimants and allowed by the commissioners. We are of the opinion that the facts presented by the record show that the claims of the banks were for borrowed money used in preliminary expenses, and we have decided that, under similar circumstances, the banks are entitled, as lenders of the money, to an allowance against the district. Gould v. Sanford, 155 Ark. 304, 244 S. W. 433; and So. Crawford Imp. Dist. v. Brown, 156 Ark. 267, 245 S. W. 821.

It is next insisted that it was error to allow interest on the claims. In the first place, it may be said that the act creating the district authorized the commissioners to pay 6 per cent, interest on money borrowed for preliminary expenses, and this was the amount allowed. In the next place, under the two authorities just cited, the commissioners had the inherent power to pay interest on the amount borrowed to be used in paying preliminary expenses. In each of the cases cited the statement of facts shows that the commissioners borrowed money and executed a note bearing interest at the rate of 6 per cent.

It is next insisted that the court erred in allowing a penalty of 25 per cent. Now, the act creating the district provides that, in case the work of improvement is not performed, all expenses incurred by the commissioners shall be paid by a levy of taxes to-be made by the commissioners in the manner set forth in the act. Under § 11, where delinquencies are reported to the board of commissioners in payment of assessments, it is made its duty to add to the amount of the tax a penalty of 25 per cent, and to proceed to collect the same in the maimer provided by §§ 23 and 24 of act 279 of the Acts of 1909. The method adopted for the assessment of benefits for paying the preliminary expenses was valid, nnder onr previous decisions. Standard Pipe Line Co. v. Index-Sulphur Drainage District, ante p. 372, and cases cited.

It follows from the views that we have expressed that the decree was correct, and should be affirmed.


text:
    Waterworks Improvement District of Ashdown v. Rainwater.
    Opinion delivered April 11, 1927.
    1. Depositaries — liability on bond — release by executing new contract. — Where a hank’s depository bond wag conditioned that the hank would pay the deposit “on demand, together with interest,” the bank’s issuance of a new certificate of deposit at the end of the first year did not amount to the execution of a new contract releasing the sureties on its bond.
    2. Depositaries — liability on bond. — The sureties on a bank’s depository bond were not liable for payment of a deposit made after the execution of the bond and as a separate transaction from that intended to be secured.
    Appeal from Little River Circuit Court; Otis Gilley-len, special Judge;
    reversed.
    STATEMENT. BY THE COURT.
    Appellants instituted this action against appellees to recover the sum of $6,687.74, balance alleged to be due them for failure to pay over on demand funds belonging to appellants as improvement districts.
    The record shows that, on the 26th day of July, 1922, the Arkansas State Bank made separate bids to the board of commissioners of Water District No. 1 of Ashdown, Arkansas, and. to the board of commissioners of Sewer District No. 1 of Ashdown, Arkansas, to become the depository of the funds of said improvement districts. Each bid contained the following: “It hereby offers to pay interest upon the daily balance, payable or • quarterly, at the rate of ¿ve per cent. And also states that if its bid is accepted it will execute a bond as required by the board of commissioners of said District No. 1/’
    The bid of the Arkansas State Bank was accepted by both of the improvement districts, and, in compliance with the terms of the contract, the bank executed a bond in the sum of $3 5,000 to each district, with five individuals as sureties. We copy from the body of each bond the following': "The condition of this bond is such, however, that, whereas the board of commissioners of said improvement district has deposited with said bank funds belonging to said, districts, which said principal bank shall pay on demand, together with interest on daily balances at the rate of four and one-fourth per cent.
    "Now, if said bank shall well and -truly pay said funds upon demand, and interest as aforesaid, which interest shall be paid each quarter, then this bond shall be void; otherwise to remain in full force and effect.”
    At the end.of the first year the 'bank issued to the commissioners what was termed a certificate of deposit in the sum of $4,170. Of this amount $4,000 was the amount which had been deposited in the bank by said improvement district from time to time, and $170 was interest. This certificate of deposit was renewed again on August 35, 1924, .for $4,347.22. There was a distinct and separate deposit made at the bank by said improvement districts from time to time, which amounted, on April 9, 3.924, to $2,084.84. A certificate of deposit was also issued for this sum.
    Three of the sureties on the bond of the bank were members of its board of directors, and the other two had no interest in the bank. None of the sureties on the bond knew of the issuance of the certificates of deposit extending the time of payment ■ for one year. They never authorized such a course or knew that it had been pursued.

      Tlie jury returned a verdict in favor of appellees, and appellants have duly prosecuted an appeal to this court.

      A. P. Steel and Nortvood & Alley, for appellant.

      Shaver, Shaver d Williams and A. D. T)uLaney, for appellee.
   Hart, C. J.,

(after stating1 the facts). It is first sought to uphold the judgment on the ground that the bond, by its terms, made the amounts deposited by the improvement districts in the bank payable on demand, and that the granting of the extension of the time of payment for one year by the commissioners constituted a new contract between the bank and the improvement districts which released the sureties on the bond. Wo do not agree with counsel in this contention.

The body of the bond relating to this phase of the case is copied in our statement of facts, and need not be repeated here. Tt recites, in short, that the board of commissioners of the improvement districts had deposited with the bank funds belonging to said districts, Avhich the bank shall pay on demand, with interest on the daily balance. We are of the opinion that this language of the bond, when taken in connection with the bid, contemplated that there should be future as well as past deposits, which should be considered as one entire fund, and that it wa s the intention of the bond to secure the entire fund. The record shows that the funds already deposited and those deposited in the future at the end of one year after the bond was executed amounted to $4,000. This constituted the fund then on hand, after accounting for all deposits made from time to time and the items withdrawn by the commissioners during the course of the year.

An agreement was made to extend the time of payment for another year and to issue what was called a certificate of deposit embracing the principal and interest. This did not amount to the execution of a new contract, but was merely an extension of the time of payment; and, there being no consideration for its execution, the sureties on the bond were not released.

The clause of the bond undertaking that the bank should pay on demand did not use the word “demand” in the sense of a commercial instrument payable on demand, but it was used in the sense that the sureties on' the bond obligated themselves to pay back the amount deposited in the bank and not checked out by the commissioners when required by them to do so.. In other words, the'bond was given to secure the performance of the contract by the bank as a depository of the two improvement districts. The 'bank was rightfully in possession of the funds of the improvement districts, and was under no obligation to pay them over to the districts until so required or until demand was made by them to do so. That this is the sense in which the word “demand” was used will be seen by the reasoning in the case of Talley v. State, 121 Ark. 4, 180 S. W. 330. That was a depository case, and it is evident that, in this case as in that, the word “demand” meant that the depository was not required to pay over the funds until a demand was made on it for that purpose by the treasurer who was entitled to the funds. In this view of the matter there was no change or modification of the terms of the contract which would have the effect to release the sureties on the bond. Neither can it be said that the so-called certificate of deposit was a renewal of the original obligation for a definite period which had the effect to release the sureties because it was a change in the terms of the contract.

As we have already seen, the certificate of deposit amounted to nothing more than an extension of time of payment of the amounts deposited, without any consideration for its execution. They were subject to be drawn out at the time the instrument was executed, and the mere indulgence of the bank for the period of a year without consideration did not have the effect to release the sureties on the bond'of the bank for the faithful performance of its contract to pay the funds upon the demand of the treasurer of the improvement districts.

The result of our views on this branch of the case is that, under the facts, proved, the court should have entered judgment in favor of the improvement districts for the sum of $4,000 with interest at four per cent, per annum, as provided in the contract between the bank and the improvement districts.

This brings us to a consideration of the item of $2,084.84 for' which a certificate of deposit was issued on April 9, 1924. The record shows that the items constituting this amount were a separate transaction from the $4,000, and was so treated by the parties. The amounts were not deposited until long after the execution of the bond, and were deposited as a separate transaction^ Hence the 'bond could in no sense be said to cover them. On this branch of the case, under the facts proved, we hold that there is no liability whatever on the part of the sureties.

The court erred in not rendering a verdict in accordance with the views expressed in this opinion, and for that error the judgment will be reversed, and the cause - remanded for further proceedings according to law and not inconsistent with this opinion.