text:
    North Arkansas Highway Improvement District No. 2 v. Rowland.
    Opinion delivered May 3, 1926.
    1. Highways—mandamus to enforce extension of taxes.—Acts 1917, No. 473, § 25, creating a highway improvement district, by providing that, if any bond or interest thereon should not be promptly paid when due, the county clerk, collector, and commissioners, respectively, may be proceeded against by any person interested to compel the performance of their respective duties, did not restrict the right to the remedy of mandamus in other cases, and in a proper case the board of commissioners could proceed by mandamus to compel the clerk of one of the counties in the district to extend the taxes levied by the board on the tax-books of his county.
    2. Highways—extension of taxes—duty of clerk.—Under Acts 1917, No. 473, creating a highway improvement district in three counties and directing that the board of commissioners shall provide for annual installments to be collected, that the secretary of the board shall file with the county clerks a certified copy of the levying order, and that the clerks shall extend on the taxibooks the amount of such installments, held that the duties of the clerks were purely clerical, and they were without authority to inquire or determine whether it was necessary to levy such taxes.
    Appeal from Fulton 'Circuit Court; John G. Ashley, Judge;
    reversed.

      8. M. Casey, for appellant.

      Oscar E. Ellis, H. A. Northcutt, P. G. Goodwin, G. T. Humphries and E. H. LaMore, for appellee.
   Smith, J.

This suit was brought 'by the commissioners of North Arkansas Highway Improvement District No. 2 against the county clerk and collector of Fulton County to require the clerk to extend, and the collector to collect, the road tax which had been ordered levied against lands lying in the improvement district for the year 1926. The district was created by special act No. 473 of the 1917 session of the General Assembly. Volume 2, Acts 1917, page 2181. The district was organized to improve a public road running through the counties of Independence, Izard and Fulton, and, pursuant to the provisions of the special act, the district was duly organized and the road was improved.

The special act required the commissioners to assess the betterments arising from the proposed improvement against the lands of the district, and § 17 thereof provides that, as soon as the assessments have been completed, “the commissioners shall make an order providing that there shall be assessed on the real property within the entire district such proportion of the assessment of benefits against the land in the entire district as will be sufficient to complete the improvements and pay all expenses of the district, with ten per cent. (10%) added for unforeseen contingencies; and shall provide in said order the annual installments in which said levy shall be paid, not to exceed ten per cent. (10%) in any one year,” and that “the secretary of the commission shall file with the county clerk of each of the counties in which any land in the district is situated a certified copy of said levying order, which shall be inscribed by the county clerk in a record book in his office.” This certificate was prepared and filed with the respective county clerks of the three counties. It recited that $100,000 of the bonds of the district which had been sold had been received 'back from the purchasers and had been canceled, and upon this recital directed the extension and collection for the years 1923 to 1942, inclusive, of 4 per cent, of the betterments assessed against the lands in the district.

Section 20 of the act requires the county clerks of the respective counties to extend on the taxbooks the amount of the installment of the assessment of betterments against each tract of land in his county for that year, “showing the amount opposite the tract of land or real property charged therewith,” and the failure of the clerk to perform this duty is made a misdemeanor.

The complaint of the commissioners recites that the proposed improvement is nearly, but not quite, completed, and that’ they have been required to borrow large -sums of money, and that installments of payments of the principal and interest thereon mature each year, and that, for the purpose of raising the money so required, the board of commissioners, by resolution of the board adopted on October 20,1925, ordered a levy of 3 per cent, of the assessed benefits to be collected for the year 1926, due notice of which had been given to the county clerk of Fulton County, but that official had failed and refused to extend the taxes so ordered extended. There was a prayer that by mandamus the clerk be so required to do, and there was a prayer that, when the taxes had been so extended, the collector be required to collect them.

A demurrer was filed to this petition for mandamus, and certain landowners joined the clerk and collector in an answer filed to the petition. The substance of this answer was that taxes delinquent for prior years had not been collected, and that, if these taxes were collected, as they should be, there would be no necessity to collect taxes against any lands in Fulton County, for the - reason that the county would receive under act No. 3 of the Acts of 1925 a sufficient sum of money to pay the bonds maturing in 1926 chargeable against the lands in Fulton County which were in the improvement district. This act-No. 3 is entitled “An act to relieve landowners in North Arkansas Road-Improvement District No. 2.”

Section 1 of this act provides that, at the July, 1925, term of the county court of Fulton County, and each year thereafter, the county court shall'set aside “a sufficient sum of money out of the automobile and gasoline fund being paid into Fulton County to retire the interest and bonds due each year against North Arkansas Road Improvement District'No. 2, running from Batesville to Mammoth Spring, Arkansas,” and “that said court shall continue to set aside such funds for each year until all of said bonds and interest.shall have been paid in full.”

The court made a finding that, under the provisions of this act of 1925, there was no necessity to extend taxes against the lands of the district, and declined to direct the extension of any taxes.

The only testimony offered at the hearing on the petition was that of (x. R. Landers, the secretary of the district, and the order of the county court made in 1922, hereinbefore referred to, directing the extension of 4 per cent, of the betterments assessed against the lands in the district up to and including the year 1942. The secretary also identified the resolution of thé board of commissioners adopted on October 20, 1925, changing the former order by directing the extension and collection of 3 per cent, of the assessed betterments.

The secretary testified that the commissioners, in adopting this resolution, had decided that a 3 per cent, assessment would be required and would be sufficient, and that a copy of this resolution was mailed to the county clerk of Fulton County the following day, and at the- same time copies were sent to the county clerks of the other counties in the district, who had duly extended the taxes therein authorized against the lands in their respective counties. The certificate mailed to the county clerk of Fulton County was filed by that official on October 23, 1925. The secretary further testified that the levy for the previous year had been made to pay the sum of $30,503.01, the maturities for that year, and he also testified that the funds which Fulton County would derive under act No. 3 of the Acts of 1925 might be sufficient to pay Fulton County’s pro rata part of that sum, but he also testified that, to complete the improvement, there had been issued and sold $140,000 in bonds in addition to the bonds sold at the beginning of the construction. The secretary further testified that the receipts under the act of 1925 left a deficiency of about $3,000 in that year. He admitted that there was due the district about $2,500 in delinquent taxes, and on his cross-examination he stated that he had received no complaint from the holders of any of the bonds of the district about the failure of the district to pay maturing bonds and the interest on the bonds, and that no creditor of the district had requested the board to institute this mandamus proceeding.

At the conclusion of the examination and the cross-examination of this witness, counsel for the respondents demurred to the evidence, and in. his argument thereon stated that the petitioners had admitted that only $30,-000 was necessary to be raised to meet the annual payment, and that Fulton County’s pro rata share of the annual apportionment of the automobile and gasoline tax would suffice to pay Fulton County’s part of the $30,000 of maturities. This statement does not appear to have been made as testimony, but by way of argument, and, when the statement was made, the secretary was then asked about the additional, bond issues, and stated that there had been an additional issue of $140,000 in bonds to complete the improvement.

In denying the relief prayed, the court expressed doubt concerning the right of the commissioners to maintain the suit, and counsel for the clerk and collector and the intervening landowners insist that the commissioners had no such right, it being contended that § 25 of the original act of 1917 gave the right to mandamus, the clerk or the collector only to the holder or holders of any of the bonds of the district.

. We think counsel have misconceived the purpose and effect of this section of the original act. It provides that “if any bond or interest thereon should not be promptly paid when due, the county clerk, collector and commissioners, respectively, may be proceeded against by mandamus by any party interested to compel the performance of their respective] duties required by this act. * *” The obvious purpose -of this section was to give the bondholders the right to proceed by mandamus against either the clerk, or the collector, or the commissioners, or all of them, to compel the performance of their duties under-the act. The act makes the commissioners the fiscal agents of the district, and § 28 thereof requires them to file annual reports with the county courts of the respective counties. Section 25 of the act was not intended to relieve the commissioners of any duty resting upon them. It only gave the bondholders a remedy in the event there was a failure or refusal to collect the taxes and pay the bonds.

We conclude therefore that the act does not restrict the right to proceed by mandamus to the bondholders. The commissioners may do so in a proper case.

Was a case for mandamus made? We think there was. The clerk was without authority to inquire or to determine whether it was .necessary to levy the taxes. His duties were clerical. The original levying order made when the assessment of benefits was approved by the county court required him to extend against each tract of land 4 per cent, of the assessed betterments, and this he should have done, unless, by order of the court, he was directed to reduce the levy to 3 per cent.

We do not discuss the testimony of the secretary or the inferences deducible from it. His testimony shows that the board of commissioners considered an assessment of 3 per cent, necessary to take care of the maturing obligations of the district, and this conclusion had been embodied in a resolution, which the board had the authority to make, and it was the duty of the. clerk to obey it.

We do not mean to hold that, if it were shown in a proper proceeding that the commissioners of the district were levying taxes unnecessarily, the taxpayers would be without remedy to prevent this from being done.

We do not understand that the commissioners have attempted to remit delinquent taxes which other landowners have paid. It is their duty to see that these taxes are collected, and they may be required to perform that duty, if necessary, and, when these taxes have been collected, they will be available for use in paying the district’s indebtedness, and may then be taken into account in determining what future levies against the assessed betterments will be necessary, after taking* into account the revenues derived from act No. 3 of the Acts of 1925.

There is some question as to the sufficiency of the funds which will be derived from act No. 3 of the acts of 1925 to meet the district’s obligations, and it is the duty of the commissioners to see that these obligations are met. The duties of the clerk and collector in. the premises are purely ministerial, in the performance of which they have no discretion, and mandamus should therefore have been ordered.

The judgment of the court below will therefore be reversed, and the cause remanded..


source: Caselaw Access Project

author: Humphreys, J. Smith, J.,

license: Public Domain

text:
    Straub v. Missouri Pacific Railroad Company.
    Opinion delivered March 22, 1926.
    1. Appeal and error—issues not raised below.—Issues not raised in the trial court either in the pleadings or testimony will not be considered on appeal.
    2. Carriers—acceptance of shipment—destruction by fire.— Where a railway company, in pursuance of an agreement with a shipper, furnished an empty car for a shipment to be placed on an industrial track, and, after it was loaded, the shipper filled out the receipts and placed same in a box furnished by the railway company and verbally notified the railway company that the car was ready to move, but, before being moved, the car was burned, held that there was a completed delivery and acceptance, and the railway company was liable.
    3. Carriers—contract limiting liability—intrastate shipment. —Under Crawford & Moses’ Dig., § 843, prohibiting railroads from entering into agreements with shippers abridging, modifying, limiting or abrogating their statutory or common-law duties and liabilities, an agreement between a railroad and a shipper that the railroad should not be liable for loss to the shipper’s goods by fire while on an industrial track was void as to goods which were destroyed after being accepted for shipment to a destination within the State.

      Appeal from Phillips Circuit Court; E. D. Robertson, Judge;
    reversed.

      Moore, Walker & Moore, for appellant.

      Thomas B. Pryor and Daggett & Daggett, for appellee.
   Humphreys, J.

This is an appeal from a judgment rendered in accordance with a directed verdict in the circuit court of Phillips County dismissing appellant’s complaint against appellee. The purpose of the suit was to recover $1,215, the value of a car load of cottonseed alleged to have been delivered on the 12th day of October, 1923, by appellants to appellee for transportation from the gin of appellants at Helena crossing to the New South Oil Company at Helena, which was destroyed by fire before the car was actually moved by appellee.

Two defenses were interposed to the alleged cause of action by appellee: first, that it had not received the seed for shipment at the time it was destroyed by fire; and, second, that it was exempt from liability on account of fire under a paragraph in the contract which the predecessors of appellants and appellee had entered .into when the industrial track was constructed from appellee’s main line to the cotton gin of appellants.

Appellee has interposed ¡and argued on appeal two other defenses in support of the judgment, which we understand were not presented as issues by the pleadings or testimony in the trial court. The new issues contended for in support of the judgment are that appellee was not a public carrier of the cotton seed for appellants but a private carrier, and that the track upon which the alleged shipment was originated was a private and not a public track. As these issues were not raised below, vwe cannot consider them on appeal. Plummer v. Reeves, 83 Ark. 10; White v. Moffett, 108 Ark. 490.

Reverting to the issues upon which the case was. tried below, according to our understanding of the records, we will first discuss whether or not the undisputed testimony showed that the shipment of seed was delivered by appellee to appellants in accordance with the custom pre-. vailing between them with reference to shipments from the gin. The trial court ruled that there was a delivery; and, since the ruling was favorable to appellants, it would be unnecessary to discuss this issue on appeal if the court had not erroneously instructed a verdict on another issue. Appellee insists that the ruling of the court in this respect was erroneous because the shipping order was never signed by its agent. The undisputed facts bearing upon the custom with reference to shipments from the gin are 'as follows:

The parties agreed, on account of the distance of the gin from the depot, that appellee would place a box near the scalehouse at the gin to receive the bills of lading, which appellants were permitted to fill out after placing a car for shipment on the industrial track. In keeping with this agreement, appellee put up the box and furnished appellants with a book containing cross-town billing receipts to make out in duplicate, and place in the box when cars were loaded for shipment. The cross-town billing receipts did not specify that appellants should notify the company in writing that a car was ready for shipment or that it would not be accepted until signed by an agent of appellee. A blank space appeared on the receipt for the engine foreman to sign the hour at which he moved the car, but appellee’s witnesses testified that they were signed in duplicate by the engine foreman so that he might use one as reference for the destination of the car, and that the other might be kept as a record by appellee showing the shipment.

The custom in carrying out the agreement was for appellants to order a car; and, after same had been set by appellee and loaded with products from the gin, they would fill out the receipts, place the same in the box, and notify the company orally that the car was ready to move. Nothing else was to be done by appellants in order to obtain the services of appellee.

In this instance, after the car had been set and loaded, appellants notified the engine foreman in person that' the car was ready for shipment, and he agreed to move it that night. Before it was moved, the gin and car were burned.

Appellants did all that was required of them, according to custom, to constitute a delivery of the car, and the notice to, and the agreement of the engine foreman to move the car that night, constituted an acceptance of it by appellee for shipment. The receipt neither required written notice nor the signature of an agent of appellee to constitute an acceptance of the car for shipment. The facts bring the case within the rule announced in the cases of Railroad Company v. Murphy, 60 Ark. 333; Pine Bluff & Arkansas River Railroad Co. v. McKenzie, 75 Ark. 100; Matthews & Hood v. St. L. I. M. & S. R. Co., 123 Ark. 365.

Appellants contend for a reversal of the judgment upon the alleged ground that the court erred in absolving appellee from liability under the eleventh paragraph of the contract between the predecessors of appellants and appellee, which is as follows:

“The said second party hereby releases and agrees to indemnify and hold the railway company harmless from and against all liability or claim for loss and damage by fire, which may happen upon or be done to or upon the buildings, premises and property of the party of the second part, or to the property of any other persons or corporations, now or hereafter, on the premises of the party of the second part, and whether inside or outside of said buildings, caused by fire, sparks or burning coals from any locomotive when operated upon said track, or by fire otherwise happening howsoever.”

This provision in the contract exempting appellee from liability on account of fire is a limitation upon its common-law liability, and is void under § 843 of Crawford & Moses’ Digest, the shipment being controlled by the laws of this State. It was a local shipment. Mo. Pac. Rd. Co. v. Porter, 168 Ark. 22. The contention of appellee is that the contract does not abridge, modify, limit, or abrogate the common-law duty of appellee, and that it is not in conflict with § 843 of the Digest.

We agree with the contention of appellants, for a common carrier cannot change its public character by private contract with shippers to haul freight over its tracks from one industrial track to another industrial track in this State. It is immaterial whether the industrial tracks are owned by .the shippers or by the railroad company if, in delivering the shipment, it is necessary to pass over tracks which do belong to the railroad company. As we understand the facts in this case, the shipment wias across town on tracks belonging to the railroad company which it had accepted for shipment at a point on an industrial track to be delivered at a point pn another industrial track, each of which intersected appellee’s tracks.

Since there was a completed delivery óf the car of cotton seed for shipment by ¡appellants to appéllee, and since paragraph eleven in the contract is void, the judgment dismissing appellants’ complaint is reversed, and the cause is remanded with directions to the circuit court to render a judgment in favor of. appellants for the' value of the seed.

Justices Wood and Smith dissent.

Smith, J.,

(dissenting). The answer filed by the railroad company specifically pleaded the eleventh paragraph of the contract which is quoted in the majority-opinion, and alleges that, by virtue of this paragraph, the railroad-company was to be held harmless for any liability for fire occurring on the industrial track where the car of seed was standing when it burned. If the railroad company can so exempt itself, paragraph eleven accomplishes that purpose, for it expressly provides that the railroad company shall be exempt from liability for damages from fire to property on the track “happening howsoever. ’ ’

The majority do not set out the agreement for the use of the industrial track, nor "shall we do so. It is quite lengthy, and is no doubt in the form used by thousands of shippers over the State whose interests are subserved by using industrial tracks. This is a service which the railroad company cannot be required to render. We so expressly held in tbe case of Fairview Coal Co. v. Arkansas Central Ry. Co., 159 Ark. 649. Tbe syllabus in that case reads as follows: “A railroad company wbicb furnishes sufficient facilities for the receipt and delivery of freight cannot be required to receive freight on a private .switch.”

The railroad company was giving plaintiff a service which it was not required to give, and this service was being rendered pursuant to contract. There was neither statutory nor common-law duty to give plaintiff service on the private industrial track. The rights and obligations of the parties arose out of a private contract, and the real question is whether the railroad company may have the benefit of an exemption for which it contracted as a condition upon which it would render service upon the industrial track.

The. majority say this clause of the contract exempting the railroad company from liability for fire is void under § 843, C. & M. Digest, because it imposes a limitation upon the railroad’s common-law liability as a common carrier, contrary to that section of the statute. But if the contract is valid, the railroad company occupied the relation of a private carrier while the car was standing or moving on the industrial track, and the authorities hold that railroads may contract for an exemption from liability while granting a right which, its common-law or statutory duties as a common carrier do not require it to perform. The validity of such an exemption as the one involved in this case was expressly upheld by this court in Clark v. St. Louis, I. M. & So. Ry. Co., 132 Ark. 257.

The test to determine whether a carrier in a given case occupies the relation of common carrier or that of a private carrier is whether the carrier could be required to perform the service, and, as. has been held by this court, a railroad cannot be required to serve private industrial tracks whenever an adequate service is otherwise rendered. A railroad may by contract agree to serve a shipper on a private industrial track, and, when such a contract is made, the rights and obligations of the parties are dependent on the contract.

In volume 4 Elliott on Railroads (3d ed.), page 463, it is said: “While a railroad company cannot by contract or otherwise change the nature of its public duties or obligations, it may, where it is not under a duty or obligation to the public, contract to perform service in the character of a private carrier of goods or passengers. In other words, where there is a right to refuse to perform the services requested, there is a right to contract for their performance in a different capacity from that which rests upon a railroad company as a public or common carrier. ’ ’

Here the railroad company had, by private contract, agreed to render service which its duty as a common carrier did not require it to perform, and it had agreed to render this service upon the express condition that its ■relation and obligation should not be that of a common carrier while rendering the service. The statute cited therefore has no application, because the railroad was not contracting against an obligation resting upon it as a common carrier. On the contrary, the purpose of the contract was to prevent that relation from arising. Such contracts are quite common; the railroads have the right to make them, and, when made, they should be enforced, and, if enforced, the railroad should be accorded the exemption against liability for which it contracted, which is a natural part of the consideration inducing the contract.

The writer and Mr. Justice Wood therefore respectfully dissent.


author: Humphreys, J. McCulloch, C. J.,

text:
    McKinney v. Dillard & Coffin Company.
    Opinion delivered April 19, 1926.
    Will—vested remainder—partition.—Under a will which devised lands to testator’s daughter during her natural life, and at her death to her children in equal portions, and provided that if, at the daughter’s death, any of h.er children be dead, leaving children, then such child or children are to have the same interest in the lands that the parent would have had if alive, held that the remainder vested in the daughter’s children as soon as horn and before the daughter died, and a decree of partition among such children during the daughter’s life was valid.
    Appeal from Crittenden Chancery Court; J. M. Futrell, Chancellor;
    affirmed.

      G. T. Fitshugh, for appellant.

      B. V. Wheeler and Hughes & Hughes, for appellee.
   Humphreys, J.

Two actions were commenced in the chancery court of Crittenden County, one by appellees to foreclose certain mortgages given them by appellants upon lands in said county, the other by appellants attacking the validity of the mortgages. The issue joined by the pleadings in each case was whether appellants owned a mortgageable interest in the real estate. Appellants alleged that they owned a contingent remainder-therein, not subject to mortgage, and appellees asserted that their interest as remaindermen vested with the life estate of their mother, Mrs. Mary B. McKinney, daughter of Mrs. Martha A. Beattie, who willed whatever interest appellants owned in the lands to them. The two causes were consolidated, and demurrers were sustained to the several pleadings of appellants; and, upon their refusal to plead further, the court rendered decrees of foreclosure, from which is this appeal.

The pleadings disclosed that Mrs. Beattie, the owner of the land at the time of her death in 1897, made her last will and testament .in 1886, which contained the following provision: “I give to my daughter, Mary B. McKinney, during her natural life, the following described tracts, * * * and at her death I give and devise the same lands to her children in equal portions; and if, at the time of Mary B. McKinney’s death, any of her children be dead, leaving children, then such child or children is to have the same interest in said lands that said parent would have had, if alive.” At the time of Mrs. Beattie’s death Mrs. McKinney had six children; Mattie, aged 15; Charles, aged 12; Mary, aged 9; J. M.,' aged 7; Coby, aged 5; and Madison, who died in 1906 leaving a wife and two children. In 1917 the land was divided under a decree of the chancery court. Mrs. McKinney 'consented to the partition, and all of her children and the children of Madison were parties to the suit. Commissioners were appointed, who divided the land in kind according to the several interests of the parties, and their report was confirmed. The mortgages involved in this suit were subsequently executed to appellees.

Appellants contend for a reversal of the decree upon the ground that, under the will, they took a contingent remainder in the real estate, which was not subject to partition, and for that reason 'the court was without jurisdiction to render a decree dividing the land in kind. In other words, they collaterally attacked the decree of partition as being void. The correctness of their attack must depend upon the construction placed upon the provision of the will quoted above. The law favors the vesting of estates as early as possible. Booe v. Vinson, 104 Ark. 439; McCarroll v. Falls, 129 Ark. 295. In applying this doctrine, where a life estate was given to parents and to their children after their death, share and share alike, it was ruled by -this court that the remainder vested as soon as the child was born and before the life tenant died. Jenkins v. Packingtown Realty Company, 167 Ark. 602. Also in the case of Black v. Bailey, 142 Ark. 210, this courted ruled that the testator did not intend to create a contingent remainder in the appellants in that case in the lands he devised to them under a provision similar to the provision in the will in the instant case. The provision of the will in the Black case, supra, is as follows:

“Provided, that if any of my children should die before the expiration of the above trust, hereinbefore created, leaving issue] said issue shall only take the share that should go to my children if living. ’ ’

This court said the language quoted was a mere declaration of the law of descent and distribution and not an expression of an intention to create a remainder interest in the grandchildren. We think the instant case is ruled by the Jenkins and Black cases, supra, and that the remainder estate vested in fee simple in Mrs. McKinney’s children, subject to her life estate. In this view of the law, appellants had a mortgageable interest in the lands subject to partition when the decree dividing them in kind was rendered, hence the decree foreclosing the mortgages was correct, and must be affirmed.

It is so ordered.

McCulloch, C. J.,

(dissenting). If the language of the will which refers to the devolution of the remainder at the death of Mary M. McKinney, the life tenant, be given any effect at all, it clearly manifests the intention of the testatrix not to vest the remainder prior to the death of the life tenant, for the reason that, if the remainder became vested prior to that time, there was nothing left of the remainder to vest in the children of remainderman who might die previous to that time. In this case the life tenant, Mary B. McKinney, is still alive, and, if the mortgage deed of appellants effectually passed the title, then the conveyance may defeat the will of the testatrix if any of the appellants die prior to the death of the life tenant. The decision of the majority is, I think, in conflict with the great weight of authority on this subject. See the following cases cited on the brief of counsel: Tate v. Tate, 126 Tenn. 169; Bates v. Gillett, 132 Ill. 287; Brownback v. Keister, 220 Ill. 544; Dohn v. Dohn, 110 Ky. 884; Ross v. Ware, 131 Ky. 828; Schaeffer v. Schaeffer, 54 W. Va. 681; Crapo v. Price, 190 Mass. 317; Hospital Trust Co. v. Harris, 20 R. I. 408; Rosengarten v. Ashton, 228 Pa. 389; Paget v. Melcher, 156 N. Y. 399; Straus v. Rost, 67 Md. 465; Whitesides v. Cooper, 115 N. C. 570; Darnell v. Barton, 75 Ga. 377.

The majority rely upon our “decisions in Black v. Bailey, 142 Ark. 201, and Jenkins v. Packingtown Realty Co., 167 Ark. 602, but neither of those decisions has any bearing on the present case. In Black v. Bailey the question involved was whether or not the title passed to a trustee, for, if there was no title vested in the trustee, there was no remainder, and the title passed in the first instance to the cestui que trust. In other words, the effect of the decision was that, there being no prior estate created. by the will, there could be no remainder, either vested or contingent. The language of the devise in Jenkins v. Packingtown Realty Company was essentially different from the language of the will now under consideration. In that case the remainder over was devised directly to the children of the life tenants without restriction or limitation.

My conclusion in the present case is that the remainder was contingent, and that appellants had no vested interest which could pass under the mortgage to appellees.

The majority has not discussed the effect of the partition decree, hence I shall not do so further than to say that the chancery court had no jurisdiction in a partition suit to defeat the will of the testatrix by rendering a decree of partition between the contingent remaindermen.


author: McCulloch, C. J.

text:
    United States Fidelity & Guaranty Company v. Bourland.
    Opinion delivered May 3, 1926.
    1. Venue — transitory action. — A suit to cancel a deed to land is transitory and not local, and may be brought in any county in which jurisdiction over the persons of the defendants can be obtained.
    2. Equity — general prayer for relief. — A complaint setting forth no cause of action except for cancellation of a mortgage will be confined to that relief, though it contains a general prayer that the title be quieted as against all defendants.
    3. Injunction — conflict of jurisdiction. — Where the same person executed two mortgages conveying the same land to different persons, and separate suits were brought by different plaintiffs in different counties to cancel each of the mortgages, there is no such conflict between the suits as will entitle one of the courts to restrain the suit in the other court.
    Prohibition to Sebastian Chancery Court, Fort Smith District; J. V. B-ourland, Chancellor;

    writ denied.

      Bose, Hemingway, Cantrell $ Loughborough, for petitioner.

      Sam T. & Tom Poe, for respondent.
   McCulloch, C. J.

This is an application for a writ of prohibition to restrain the chancery court of Sebastian County (Fort Smith District) from proceeding with a cause therein which was instituted against petitioner, United 'States Fidelity & Guaranty Company, á foreign corporation, and the Union Trust Company, a banking institution in the city of Little Bock, by Jennie P. Fulton and her daughter, Audrey Mae Fulton. The basis of the application is that there is another action involving the same snbject-matter now pending in the chancery court of Pulaski County, which was instituted prior to the commencement of the action in the Sebastian Chancery Court, and that, there ¡being a conflict in the assumption of jurisdiction by both courts, this court ought to prevent the conflict by restraining the Sebastian Chancery Court from assuming jurisdiction of the subject-matter of the action which had previously been assumed by the chancery court of Pulaski County. The iwo actions will be referred to herein as the Pulaski County action and the Sebastian County action.

The following is the status of the controversy as appears from the pleadings in the two actions and as shown in the exhibits filed with the petition for prohibition: Prior to July 26, 1924, A. W. Fulton was an employee of the Union Trust Company of Little Bock, and the petitioner, United States Fidelity & Guaranty Company, became security for Fulton to the Union Trust Company to indemnify the latter against default of the former. Fulton defaulted for a large sum of money, and the petitioner herein paid the amount to the trust company under its contract of indemnification. On the date mentioned above, Fulton 'and his wife, Jennie P., who was the owner of certain real estate in the city of Little Bock constituting her homestead, joined in a conveyance to the Union Trust Company, as trustee, conveying said property for the use and benefit of the petitioner. Subsequently the Union Trust Company conveyed the property to petitioner, and the latter took possession and has remained in possession since that date.

On July 13, 1925, Jennie P. Fulton executed to Sam T. Poe, as trustee, a deed conveying said property to secure payment of an indebtedness of $2,500 to Sam T. Poe, Tom Poe and W. F- Sharp, and on October 12,1925, the petitioner herein and the Union Trust Company, as trustee, instituted an action in the chancery court of Pulaski County against Sam T. Poe, Tom Poe, W. F. Sharp, Jennie P. Fulton and A. W. Fulton to cancel the mortgage just referred to as a cloud on the title. The complaint in that action, after setting forth the default of A. W. Fulton to the Union Trust Company and the payment to the latter by the United States Fidelity & Guaranty Company under its obligation, and the conveyance of the Little Rock'real estate, as stated above, and the execution of the mortgage from Jennie P. Fulton to the Poes and Sharp, reads as follows: “The said Union Trust Company, as trustee for the said United States Fidelity & Guaranty Company, is the absolute owner of said property, and the said defendants, Jennie P. Fulton and A. W. Fulton, at the time they executed the said deed of trust to the said Sam T. Poe, trustee, had no title whatsoever, but nevertheless the defendants, Sam T. Poe, Tom Poe and W. F. Sharp, are asserting the validity of said deed of trust. The said deed of trust constitutes a cloud upon the plaintiffs’ title and has destroyed the marketability and impaired the value of said lot. The plaintiffs are without adequate remedy at law.” Then follows the prayer, which is that the title of the plaintiffs “be quieted and confirmed as against all of the said defendants, and that the said deed of trust be canceled as a cloud upon their title.” Original process was issued against all of the defendants in the action to the sheriff of Pulaski County, who immediately served the same on Sharp and Tom Poe, 'but has been unable to serve Sam T. Poe, Jennie P. Fulton or A. W. Fulton.

On November 25', 1925, petitioner and the other plaintiff in the action, Union Trust Company, caused to be issued and served upon Jennie P. Fulton, by an officer in the State of Oklahoma, a summons with a copy of the complaint annexed thereto, pursuant to the terms of our statute authorizing such service in another State. Crawford & Moses’ Digest, § 1157. On October 15, 1925, three days after the commencement of the Pulaski County action, Jennie P. Fulton and her daughter, Audrey Mae Fulton, commenced the Sebastian County action against petitioner and the Union Trust Company to cancel the deed , executed by Jennie P. Fulton and A. W. Fulton to Union Trust Company on July 26, 1924, conveying the Little Buck property, and also a bill of sale for personal property, executed to the Union Trust Company by Jennie. P. Fulton* and her daughter, Audrey Mae. It was alleged, in substance, in the complaint in that action, that said conveyances were procured by fraud and duress. Summons was duly issued in that action on the day the complaint was filed and the same was immediately served on the two defendants therein, the United States Fidelity & Guaranty Company and the Union Trust Company. The service on each of the defendants was in Pulaski County, where the Union Trust Company was domiciled and where the United States Fidelity & Guaranty Company had its principal office in the State. Both of the defendants later appeared in that action and filed a motion to’ quash the service, which was overruled. . Previous to this time there had been an action instituted by each of the respective parties against the other, but those actions have each been dismissed and have no bearing on the present controversy with reference to the jurisdiction of the respective courts wherein the .two present cases are pending.

On February 5, 1926, the petitioner and the Union Trust Company appeared in the Sebastian County action and filed a demurrer and separate answers, setting up, among other defenses, the, pendency of the suit in the Pulaski .Chancery Court, and on that day the' Sebastian Chancery Court, .on the application of the plaintiffs in that action, issued an order restrainiug the petitioner and the Union Trust Company from prosecuting in any other court a suit involving the same questions in issue in the Sebastian Chancery Court.

It must be conceded, arid, as- we interpret the argument of counsel 'for petitioner, it is conceded, that the chancery court of Sebastian County has jurisdiction of the subject-matter of the action therein instituted, which was one to cancel a deed executed by the plaintiffs therein to certain property, including real estate situated in Pulaski County. It is not an action for the recovery of real property or for an injury to real property. It is not a local action, but is transitory, and could have been brought in any county where jurisdiction over the persons of the defendants could be obtained. Jones v. Fletcher, 42 Ark. 422; Pickett v. Ferguson, 45 Ark. 177. The contention of counsel for petitioner is that the subject-matter of the action is, at most, one of concurrent jurisdiction which may be exercised by the court first acquiring it over the persons of the defendants to the exclusion of all other courts which might have obtained jurisdiction, and that jurisdiction was first acquired by the chancery court of Pulaski County by the filing of petitioner’s complaint and the issuance of process thereon.

The first important inquiry is to determine whether or not there is identity of the two causes of action set forth in the two complaints. In the Pulaski County action the rights set forth are confined to the cancellation of the mortgage executed to the Poes and Sharp. There is no other cause of action set forth in the complaint. It is true that there is a general prayer that the title be quieted as against all of the defendants, which included Mrs.- Fulton, but there are no facts set forth in the complaint sufficient to constitute any other right of action or any other relief, and the general prayer must be confined to the statement of facts as set forth in the complaint. Now, the Sebastian County action is of a wholly different nature, for the facts set forth in the complaint are that the deed of conveyance executed by the Fultons was induced by fraud and duress, and the relief sought is the cancellation of that deed. We fail to discover any identity between the two causes of action so as to cause a conflict in the attempt of the two courts to exercise jurisdiction at the same time. The two actions may proceed concurrently without conflict, for one is to cancel the mortgage to the Poes and Sharp, who are the real parties in interest, the Fliltons being only nominal parties by reason of having been the grantors in the mortgage, and the other action being for a different purpose and to which the Poes and Sharp are not parties. It is therefore clear that the chancery court of Sebastian County is properly proceeding with the exercise of jurisdiction without any conflict with the jurisdiction of the chancery court of Pulaski County. It will be observed that theinjunctionissued by the Sebastian Chancery Court does - not specifically restrain the parties from attempting to prosecute the action in the Pulaski Chancery Court. It merely operates as a restraint upon the petitioner from “instituting or prosecuting any action in any court involving the same issues as the action herein pending.” The injunction only operates against an attempt to adjudicate in the Pulaski Chancery Court, as between petitioner and the Fultons, the validity of the conveyance by the latter to the former, for that is the issue raised in the 'Sebastian Chancery Court and must be determined there. If the chancery court of Sebastian County subsequently renders an erroneous order or decree, the error would have to be corrected by appeal, for the jurisdiction of that court over the subject-matter set forth in the complaint is complete.

We are not at liberty, nor is it necessary, to discuss in this opinion the question whether or not a cause of action is stated in the complaint in the Pulaski Chancery Court — whether the deed of trust executed to the Poes and Sharp subsequent to the deed of the Fultons to the Union Trust Company constituted a cloud on the title conveyed. That is a question which must be decided by the chancery court of Pulaski County, and if any error is committed in that proceeding it may be corrected by appeal.

There being no conflict in the jurisdiction, it is not appropriate for this court to attempt to restrain the exercise of jurisdiction by the Sebastian Chancery Court, and the writ of prohibition is therefore denied.


text:
    Mott v. First National Bank.
    Opinion delivered May 10, 1926.
    Trial — transfer of action from law to equity. — In an action at law upon a note an answer by one of the makers alleging that she signed the note through mistake and that she.had no intention of being bound, if sufficient to constitute a defense, did not state a defense exclusively cognizable in equity, and a motion to transfer the action to equity was properly denied.
    Appeal from Cross Circuit Court; G. E. Keck, Judge;
    affirmed.

      Killough, Killough & Killough and G. W. Barham, for appellant.

      Ogan & Shaver, for appellee.
   McCulloch, C. J.

Appellee instituted this action against appellant and against John M. Graham as joint makers of a promissory note. Graham defaulted, and judgment was rendered against him. Appellant filed an answer denying that she signed the note set forth in the complaint, and stating further that, “if she did in fact sign said note, it was signed through mistake on her part,” and that she “had no intention of being bound.” Appellant then moved to transfer the cause to equity on the ground that the answer presented an equitable defense. The court overruled the motion to transfer, and the cause proceeded to trial before a jury, resulting in a verdict and judgment in favor of appellee.

It is conceded that there was no error in the trial of the cause, and the sole ground urged here for reversal is that the court erred in refusing to transfer the cause to the chancery court.

Our statute provides that an action properly commenced by proceedings at law shall be transferred to equity on motion by either party for the trial of “any issue which heretofore was exclusively cognizable in chancery,” and that “if all the issues are such as heretofore were cognizable in chancery, though none were exclusively so, the defendant shall have the right to have them all tried as in cases of proceedings in equity.” Crawford & Moses’ Digest, § 1045. In the case of Horsley v. Hilburn, 44 Ark. 458, this court, in construing the statute, held that the transfer of a case to equity is not imperative except when the answer presents some defense exclusively cognizable in equity,, or when all of the issues are cognizable in equity but not exclusively so. If it be conceded that the statement in the answer with reference to the mistake in the execution of the note and the absence of an intention to become bound was sufficient to constitute a defense at all, it was on.e which was available in an action at law, and was entirely adequate. It was not a defense which was exclusively cognizable in equity, for it could be made at law as well as in equity.

Counsel for appellant insist that the cancellation of the note was involved, and that this made it an equitable defense exclusively, but we cannot agree with counsel in this contention. The note was the basis of fhe action at law, and was, of course, exhibited with the complaint and introduced in evidence. ' It became a part of the record in this case, and a judgment for the defendant on the issues presented constituted a bar to any future action on the note, and was tantamount to its cancellation.

The court was correct therefore in refusing to transfer the cause, and the judgment is affirmed.


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    Henderson v. Road Improvement District No. 1 of Hot Spring County.
    Opinion delivered May 10, 1926.
    1. Highways — improvement district — collateral attack. — Where a road improvement district was created by a special statute, the validity of the district cannot be assailed except by showing that the statute is -void on its face.
    2. Highways — improvement district — attack on assessments.— Where the eorrecthess of an assessment is assailed on a collateral attack, in a suit brought after the expiration of the time allowed by the statute, the presumption in favor of the validity and correctness of the assessment is conclusive, unless the assessment is arbitrary on its face.
    3. Pleading — statements of conclusion. — Allegations by defendants, in a suit to enforce a tax lien for highway improvement, that the assessments were arbitrary and unreasonable were mere statements of a conclusion and not of facts sufficient to overturn the validity of the assessment.
    Appeal from Hot ‘Spring Chancery Court; Jabez M. Smith, Special Chancellor;
    affirmed.

      G. T. Gotham and Houston Emory, for appellant.
   McCulloch, C. J.

Appellee is a road improvement district created by special statute. Special Acts 1921, pp. 16, 228. The statute lays off certain road districts in Hot Spring County by sections and creates a separate district or section for the completion of each one of the specified roads, the boundaries of each district or section being described in the statute. The road to be constructed under the section involved in this litigation is one that runs in a general westerly direction from a certain street in Malvern, designated as a public road. The statute names the commissioners and authorizes the formation of plans for the improvement, the assessment of benefits, the issuance of bonds, and contracts for the construction of the improvement. The statute provides, in- substance, that, after the benefits have been assessed, the list shall be filed and notice published and an opportunity given for owners of property to be heard as to the correctness of the assessments. A period of twenty days is provided in the statute for suit to contest the validity of the assessments.

The assessments were completed and approved, and the road was constructed, and this suit was instituted by the commissioners of the district against appellants and other property owners who were delinquent in the payment of their taxes, to enforce the tax lien. Appellants appeared and filed answers and cross-complaints contesting the validity of the assessments on the ground that their property would not be benefited. It was alleged by appellants, in general terms, that the assessments were arbitrary and unreasonable, and there was a specific allegation in the answer that the lands of appellants lie north of a certain mountain which constitutes an impassable barrier to the use of the road. The court sustained a demurrer to the answer, and rendered judgment in favor' of the district' for the enforcement of the tax lien.

The district was, as before stated, created directly by legislative enactment, and the validity of the -district cannot be assailed except by showing that the statute is void on its face. House v. Road Improvement District, 158 Ark. 357. The defense offered by appellants to the enforcement of the taxes constitutes a collateral attack on the validity of the assessments made in accordance with the statute. In the latest case on this subject, we said:

“Where the correctness of an assessment is assailed on collateral attack in a suit brought after the expiration of the time allowed by statute, the presumption in favor of the validity and correctness of the assessment is conclusive, unless the assessment is arbitrary on its face.” Farelly Lake Levee Dist. v. Hudson, 170 Ark. 1106.

There is nothing to show that the assessment of benefits in the present case is void on its face. The appraisal of benefits was a matter of judgment and opinion, and the appraisement made by the officers of the district pursuant to the statute is conclusive on collateral attack. Appellants had the opportunity to challenge the correctness of the assessments when the list was filed and notice thereof published in accordance with the statute, hence it is too late now to challenge their -correctness. The allegations of the complaint that the assessments were arbitrary and unreasonable were mere statements of a conclusion and not a statement of facts sufficient to overturn the validity of the assessments. Salmon v. Board of Directors, 100 Ark. 366.

We are of the opinion that the chancellor was correct in sustaining, the demurrer, and the -decree is therefore affirmed.


author: Hart, J.,

text:
    Walden v. Fallis.
    Opinion delivered May 10, 1926.
    1. Sales — contract—illegality.—A contract for the sale of a stock of goods, in which the seller, who was the postmistress, agreed to resign her office and recommend the appointment of the purchaser as her successor, would be void as against public policy.
    2. Contracts — construction—jury question. — If a written contract, whether it consists of one or more instruments, unequivocally manifests the intention of the parties, the court should declare its effect; but if it is not clear, from a consideration of the contract as a whole, what the intention of the parties is, whether the ambiguity is patent or latent, the question is one for the jury to determine.
    3. Contracts — construction.—In arriving at the intention of the parties where the language of a contract is susceptible of more than one construction, it should be construed iii the light of the circumstances surrounding the parties at the time it iá made.
    4. Evidence — explanation of written contract. — Where a contract for sale of a stock of merchandise was ambiguous as to whether payment was conditioned on the appointment of the vendee as postmaster, or whether the clause as to such appointment merely fixed a time for payment, parol evidence was properly admitted to explain its terms.
    Appeal from Independence Circuit Court; Dene H. Coleman, Judge;
    affirmed'.
    STATEMENT OE FACTS.
    Marvin Fallis and Esther Fallis sued T. M. Walden, Owen Walden and Curtis Walden, doing business under the firm name of T. M. Walden & Sons, to recover $500, alleged to be tbe balance due for tbe purchase price of a stock of merchandise. The following contract was made Exhibit A to the complaint:
    “This agreement, entered into between Esther Fallis, Marvin Fallis, hereinafter known as parties of 'the first part, and T. M. Walden & Sons, known as party of the second part.
    “Whereas, party of the first part has this day sold to party of the second part the following property:' “The entire stock of goods now belonging to Walden & Fallis, at Charlotte, the fixtures, notés receivable, accounts rec., money on hand and in banks to credit of Walden & Fallis, one-ton Ford truck, for which the party of the second part agrees to pay at once a deed to the place now known as Frank Bullington place and ($1,000) one thousand, in cash, to be paid as follows: $500 to be paid when Curtis Walden becomes postmaster of the Charlotte office. Provided the appointment is made within the next eight months from date of this agreement. ’ ’
    A contract executed on the same day was made Exhibit B to the .complaint. It is as follows:
    “This agreement entered into this day between Esther Fallis, known hereafter as party of the first part, ánd Curtis Walden, hereafter known as party of the second part.
    ‘ ‘ The party of the first part hereby agrees to resign as postmaster at Charlotte, Arkansas, within the next 'sixty days from this date and to recommend and lend her influence, together with the influence of her husband, Marvin Fallis, for the appointment of the party of the second part to said position as postmaster at Charlotte, Arkansas.
    “The party of the second part hereby agrees that, should he be appointed postmaster and later resign the said office, he will recommend and lend his influence toward the appointment of Marvin Fallis or Esther Fallis for the place. (The following inserted with ink and pen): ‘provided either should desire appointment, on condition if said Curtis Walden should resign without selling stock of goods.’ ”
    According to the testimony of Marvin Fallis, his wife was postmistress at Charlotte, Arkansas-, and it was agreed between the parties at the time the contract was executed that she was to resign as postmaster, but that she did not do it. The $500 mentioned in the contract was not to be paid as a consideration for the postoffice so as to retain it in the store. The parties thought that they could secure the appointment of Curtis Walden as postmaster inside of eight months; but the understanding was that the $500 should be paid in any event, and was not conditioned upon the appointment of Curtis Walden to be postmaster. It was contemplated that he should be appointed, and the clause was inserted with that understanding, meaning to be merely a time fixed within which the $500 should be paid; but it was further understood that, if he was not appointed within eight months, the $500 was to be paid at the end of that time. After the expiration of the eight months, demand was made for the payment of the $500, and the defendants refused to pay it.
    Owen Walden was a witness for the defendants. According to his testimony, he informed Marvin Fallis that he did not want the business at all unless he could get the postoffice in the purchase price, and that Fallis promised him that the postoffice should go in as a part of the purchase price. It was thought to be illegal to insert this unconditionally in the contract, but it was understood that the defendants were not to pay the $500 unless they got the postoffiee.' The contract was drawn in such a way that it would -not show the sale of the postoffice. Esther Fallis refused to resign, and none of the defendants were ever appointed as postmaster.
    The jury returned a verdict in favor of the plaintiffs, and from the judgment rendered the defendants have duly prosecuted an appeal to this court.

      W. M. Thompson and 8. M. Bone, for appellant.

      Charles F. Cole and J. Paul Ward, for appellee.
   Hart, J.,

(after stating the facts). It is insisted by counsel for the defendants that the. judgment should be reversed because the two instruments in. writing set out in our statement of facts were executed on the same day and should be considered together in interpreting the meaning of the contract sued on.. It is contended that, when'so considered, it is manifest that the $500 was not to be paid unless Curtis Walden was appointed postmaster as specified in the contract. In other words, it is contended that the two instruments show on their face that the payment of the $500 was not intended as an unconditional obligation of the defendants, but that it rested upon the condition that Curtis Walden should be appointed postmaster, and the case of Belding v. Vaughan, 108 Ark. 69, is cited to sustain their contention.

In the first place, it may be stated that, if this was the effect of the contract, it is illegal as being against public policy.

In Edwards v. Randle, 63 Ark. 318, it was held that a contract for the sale of the fixtures of a postoffice, in which the seller, who was the postmaster, agreed to resign his office and recommend the appointment of the purchaser as his successor, is void as against public policy. To the same effect see McGuire v. Corwine, 101 U. S. 108 ; 6 R. C. L., § 141, pp. 736 and 737; and 13 C. J., § 375 (I), p. 438.

We do not think, however, that the contract is unambiguous and calls for the construction sought to be placed upon it by counsel for the defendants On the other hand, we do not think the intention of the parties appears clearly from the written instruments, but are o‘f the opinion that there is a latent ambiguity in the contract which calls-for an explanation by the introduction of parol evidence, and that the court properly submitted the question to the jury.

This court is committed to the rule that if the written contract, whether it consists of one or more instruments, unequivocally manifests the intention of the parties, the court should declare its effect. Oh the other hand, if it is not clear, from a consideration of the contract as a whole, what the intention of the parties is, whether the ambiguity is patent or latent, the question is one for the jury to determine. New York Life Insurance Co. v. Allen, 143 Ark. 143; Battle v. Draper, 149 Ark. 55; and Wisconsin & Arkansas Lbr. Co. v. Fitzhugh, 151 Ark. 81.

In arriving at the intention of the parties, where the language of a contract is susceptible of more than one construction, it should be construed in the light of the circumstances surrounding them at the time it is made. Arlington Hotel Co. v. Rector, 124 Ark. 90; Fort Smith Light & Traction Co. v. Kelley, 94 Ark. 461; and Keopple v. National Wagonstock Co., 104 Ark. 466.

The parties will be presumed to have known, and the testimony shows that they did know, that it was against public policy for them to contract for one of the plaintiffs to resign as postmaster and ' secure the appointment of one of the defendants as postmaster in her stead. When these and other circumstances attending the transaction are considered, we are of the opinion that its terms were ambiguous, and that the court was warranted in admitting parol evidence, to explain its terms and in submitting the question to the jury.

No objection was made to the form or to the substance of the instructions. In submitting the theory of the defendants, the court instructed the jury that, if it believed from the evidence that the’ $500 mentioned in the contract filed with the plaintiffs complaint was to be paid only on the condition that the postoffice at Charlotte, Arkansas, was to be delivered to the 'defendants and Curtis Walden was to be appointed as such postmaster, its verdict should be for the defendants.

On the other hand, as submitting the theory of the plaintiffs, the court instructed the jury that, if it should believe from a preponderance of the evidence that the $500 in question was not a consideration for Mrs. Fallis ’ resigning from the postoffice, but that the time mentioned in the contract that the payment of the $500 should be made was when, Walden became postmaster, was merely to fix the time of its payment, then the verdict should be for the plaintiffs.

The jury by its verdict has accepted as true the testimony of the plaintiffs, and, in the light of the attendant circumstances, we think the court properly held that the instruments exhibited.with the complaint were ambiguous, and their meaning was properly left to the jury to be determined.

It follows that the judgment will be affirmed. '


author: Hart, J., McCulloch, C. J.,

text:
    Kinder v. Looney.
    Opinion delivered May 10, 1926.
    1. Injunction — encroachment 9N franchise. — Injunction is the appropriate remedy to protect a party in the enjoyment of an exclusive franchise against continuous encroachments; the jurisdiction resting on the ground of its necessity to avoid a multiplicity of suits and to give adequate protection of the franchise.
    2. Injunction — exclusive franchise — encroachment.—To entitle the owner of a franchise to relief in equity, it is not necessary that the franchise should be exclusive, in the sense that the grant of another similar franchise to be exercised and enjoyed at the same place would be void; it being exclusive as to one attempting to exercise the same franchise without legal sanction.
    3. Public service commissions — regulation of motor busses.— Motor busses operating as public carriers between municipalities are “common carriers,” within Gen. Acts of 1921, p. 177, conferring on the Railroad Commission jurisdiction of all matters pertaining to the regulation and operation of common carriers.
    4.' Public service commissions — regulation of motor busses.— The Railroad Commission could not arbitrarily decline to issue a certificate of public convenience and necessity to' one who, in good faith, applied for a license to operate busses between certain municipalities and offered to comply with the rules prescribed by the Commission.
    5. Public service commissions — restricting number of busses.— Before the Railroad Commission can limit the number of certificates of public convenience and necessity issued to companies over a given route, there must be a finding, based upon evidence, that such restriction .will result in a benefit to the public.
    6. Public service commissions — right to operate motor busses. — The holder of a. certificate or license from the Railroad Commission to operate busses between certain municipalities cannot enjoin another from operating his busses over the same route where the latter has made proper application for a certificate or license to operate over the same route, but his application has not been acted upon by the Railroad Commission.
    Appeal from Union Chancery Court, Second Division; George M. LeCroy, Chancellor;
    reversed.
    STATEMENT BY THE COURT.
    On the.9th day of March, 1926, appellee filed a complaint in equity against appellants to restrain them from, operating a passenger transportation business by motor bus lines between the-city of El Dorado, Union County, Arkansas, and other points in the State.
    On the 11th day of March, 1926, appellants filed an answer in which they denied insolvency and denied that they had not complied with the requirements of the Railroad Commission in the operation of their business.
    The record shows that the appellants were employees of W. H. Johnson of Shreveport, Louisiana, who operates motor busses between cities within the State of Arkansas.. W. H. Johnson did business as the Union Bus Line, and operated motor busses under a schedule approved by the Arkansas Railroad Commission in December, 1925. At that time he had a station in the city of El Dorado, Arkansas, and maintained a schedule for his motor busses running south. He allowed the appellants the use of his station and required them to maintain his schedule of operation and to give satisfactory service. They paid him a certain per cent, of all the passenger tickets sold.
    The record shows that W. H. Johnson, doing business as the Union Bus Line, filed an application with the Arkansas Railroad Commission for a permit to operate motor busses between the city of Camden and intermediate points, and that said application was set down for formal hearing before the Commission at El Dorado, Arkansas, on March 29, 1926.
    The record also shows that the rules promulgated and adopted by the Commission require a hearing to be had upon every application filed covering a route upon which a previous permit has been granted.
    W. H. Johnson, doing business as the Union Bus Line, filed his application for a permit to operate a bus line as above stated, and complied with the rules and regulations of the Arkansas Railroad Commission as to filing bonds, etc. The hearing of his application was deferred 'by the Arkansas Railroad Commission until March 29, 1926, because of the crowded condition of its docket.
    • The record shows that W. H. Johnson was operating motor busses under the rules of the Arkansas Railroad Commission, during the year 1925. On the 5th day of February, 1926, the Arkansas Railroad Commission granted a certificate of convenience and necessity to J. P. Looney of El Dorado, Arkansas, to operate motor busses over the route specified in his application. The permit granted him was to operate a motor bus line on the same schedule and over the same route as that applied for by W. H. Johnson, doing business as the Union Bus Line. J. P. Looney is a taxpayer of El Dorado.
    On the 13th day of March, 1926,jthe cause was submitted to the chancery court on final hearing, and it was decreed that appellants be enjoined from operating motor busses or motor vehicles for the transportation of passengers in Union County, Arkansas, until such time as they have complied with the laws of the State of Arkansas and the regulations of the Arkansas Railroad Commission, and have obtained from said Commission a permit or certificate of necessity and convenience to transact such 'business.
    The case is here on appeal.

      Kirby (& Hays and Oren Par meter, for appellant.

      Coulter é Coulter and B. M. Hutchins, for appellee.
   Hart, J.,

(after stating the facts). The Arkansas Railroad Commission gave J. P. Looney what was termed a certificate of public convenience and necessity to operate motor busses over the same route and practically under the same schedule as attempted to be operated by the Union Bus Line.

In 5 Pomeroy’s Eq. Jur. (2 ed. § 2016), it is said that an injunction is the appropriate remedy to protect a party in the enjoyment of an exclusive franchise against continuous encroachments. Prof. Pomeroy said that “the jurisdiction rests on the firm and satisfactory ground of its necessity to avoid a ruinous multiplicity of suits, and to give adequate protection to the plaintiff’s property in his franchise.”

In § 2017, Prof. Pomeroy says that it is not necessary, “to entitle the owner to relief in equity, that the franchise should be an exclusive franchise in the sense. that the grant of another similar franchise to be exercised and enjoyed at the same place would be void.”

The reason given is that, “as to the one who is invading his rights without legal sanction, the franchise is an exclusive franchise, although the owner of it might not be entitled to any protection as against the granting of a similar franchise to another.”

This brings us to the question of whether or not the Union Bus Line, for which appellants were working, was acting in violation of law in operating its motor 'busses, and also to a consideration of the interpretation of our statute establishing the Arkansas Railroad Commission and giving it power to regulate public utilities and service corporations, and the rules and regulations adopted by the said Commission.

The act in question was passed by the Legislature of 1921, and comprises twenty-seven sections. General Acts of 1921, p. 177.

Section 5 of the act provides that the jurisdiction of the Commission shall extend to and include all matters pertaining to the regulation and operation of all common carriers, etc., and this court has held that motor busses operating' as public carriers between municipalities are included in the words “all common carriers.” Mason v. Intercity Terminal Ry. Co., 158 Ark. 542.

Section 6 provides that those engaged in public service business shall establish and maintain adequate and suitable facilities and shall perform such services in respect thereto as shall be reasonable, safe and sufficient for the security and convenience of the public. This section and others also gives the Commission authority to establish rates and maintain: the same.

Section 20 provides for an appeal to the circuit court from any order made by the Commission.

Among other rules promulgated by the Arkansas Railroad Commission is the following:

“(1). No person or motor transportation company shall begin to operate any motor-propelled vehicle for the transportation of persons or property, or both, for compensation between fixed termini or over a regular or irregular route in this State, without first obtaining from the Railroad Commission a certificate declaring that a public convenience and necessity require such operation.”

We all agree that the States have the undoubted right to regulate motor vehicles operating for hire as common carriers within the State, and that the statutory regulation of motor vehicles varies in the different States. The statutes of many States creating public service commissions require certificates of public convenience and necessity before any such company can begin or carry on business. Other statutes give public service commissions the power and authority to limit or restrict the number of motor vehicles operating as public carriers’ over given routes to a number sufficient to meet the public convenience and necessity. Such legislative enactments have commonly been sustained in the courts.

The statute under consideration in this case does not confer express authority upon the Arkansas Railroad Commission to establish a rule that no automobile transportation company shall operate for the transportation of persons for hire over a regular route in this State without first having obtained from the Commission a certificate declaring’ the public convenience and necessity require such operation.

It is claimed, however, that such authority in the Commission is-necessarily implied by the language of -§ 5, providing that the jurisdiction of the Commission shall extend to and include all matters pertaining to the regulation and' operation of all common carriers. In other words, it is claimed that giving the Commission jurisdiction over all matters relating to the operation of common carriers gives it the right to promulgate a rule that no motor busses shall operate as common carriers over a given route until they have obtained a certificate of public convenience and necessity, and that this requirement is a prerequisite to their operation.

No adjudicated case has been cited in support of this contention, and a májority of the court expressly reserves this question for future determination, for the reason that the conclusions we have reached under the facts of this case render it unnecessary for us to decide the question.

Assuming that the Legislature had passéd a statute in the language of the rule promulgated by the Commission and copied above, we do not think that it would give the Commission the power to arbitrarily decline to issue a certificate of public convenience and necessity, or to restrict and limit the number of corporations desiring to operate over a given route without a hearing. All the authorities hold that statutes regulating public service corporations are enacted to promote the common welfare as well as to protect parties who invest money in such public service corporations. It is true that laws regulating them are primarily based on the public needs, and not to promote the desire of such corporations, to serve the public.

Now, if it be conceded that the rule promulgated by the Commission is necessarily implied under the terms of the act creating the Commission and defining its powers, it follows that the Commission could not decline to issue a certificate of public convenience and necessity to a company applying in good faith therefor and offering to comply with the rules of the Commission with respect to bonds and other conditions imposed upon such applicants, without adequate reason therefor.

A certificate of public convenience and necessity is nothing more than written evidence that the party obtaining it has complied with the provisions of the statute and the reasonable rules and regulations of the Commission. It will be noted that the rule itself does not restrict the number of certificates of public convenience and necessity which may be issued to companies operating motor busses for hire over a given route. If the Commission may limit the number, it mnst act in a reasonable manner and upon evidence. It must determine the question with justice and fairness to the public, as well as to the public service corporations. It cannot restrict the number of certificates of public convenience and necessity issued to companies over a given route without reasonable evidence tending to show that such restriction would result in a benefit to the public. The decision of the Commission limiting the number of such certificates must in any event be based upon a finding that the public needs in the premises will be best served thereby.

In the case at bar, the Union Bus Line had an established station, and was operating a bus line over the route in question during the year 1925. Application was made to the Commission for a certificate to operate during the year 1926, and the conditions prescribed by the rules and regulations of the Commission had-been complied with. Owing to the crowded condition of the docket of the Commission, the hearing of the application was postponed until the 29th day of March, 1926. In the meantime the applicant desired to operate motor busses over the route and under the schedule set forth in its application. J. P. Looney had already obtained a certificate of public convenience and necessity over the same route and under the same schedule as that applied for by the Union Bus Line.

The record shows that the rules promulgated and adopted by the Commission require a hearing to be had upon every application filed covering a route upon which a previous permit had been granted, and that, owing to the number of cases before the Commission, it could not hear this application before March 29, 19'26, and it was therefore set down for hearing on that date.

The record also shows that the Commission expressed the view that it was a violation of its rules and regulations for any applicant to operate a bus line until it was issued'a permit to do so, but that it has been the custom with all applicants running competitive lines to continue their operations until a final hearing should be had upon their case.

Under the facts stated, the majority of the court is of the opinion that J. P. Looney had no right to an injunction against the Union Bus Line, or its employees, until after the final hearing by the Commission of its application and the rejection of the same. If the Commission, on final hearing, had denied the application of the Union Bus Line for a certificate of public convenience and necessity, and the company itself, or through its employees, had- attempted to operate in violation of the orders of the Commission, then Looney, under the principles of law above announced, would have had a right to enjoin them from so operating. If the Union Bus Line had deemed itself aggrieved by the ruling of the Commission on final hearing, it would have had an appropriate method of review under § 20 of the act in question. Until there was a final hearing in the matter, the Commission could not intelligently determine whether or not public necessity and convenience required it to limit or restrict the number of companies operating over the route in question.

The result of the views of a majority of the court is that the decree of the chancellor was wrong and should be reversed, and the complaint of the plaintiff will be dismissed here.

McCulloch, C. J.,

(dissenting). The use of public highways by a public carrier is a privilege which the State may give or withhold, and the privilege may be granted upon such terms as may be determined by the lawmakers. Such use may be regulated, and, as a part of the regulation, the number of conveyances to be used on a given route may be limited. Pond on Public Utilities, §§ 714, 715. Now, if the statutes of this State have conferred upon the Commission the power to issue permits and determine the number of such permits to use a given route (and I think such power is conferred in the statute), then it necessarily follows that such use cannot be taken without first securing a permit — not even during the period of delay while an application is being considered by the Commission or while the proceedings are in progress. The burden is on the applicant to show that the public convenience requires additional service, and that he is entitled to a permit to furnish the same. Pond on Public Utilities, § 820.

Our statute provides a remedy by appeal to the circuit court' of Pulaski County from erroneous orders of the Commission. Acts 1921, p. 177', § 20. An applicant cannot bid defiance to the order of the Commission and use the highway without a permit, nor is he entitled to use the highway while the application is pending. He must wait until he gets the permit.

I dissent from that part of the opinion of the majority which holds that, until there has been a final hearing by the Commission and determination of an application, the applicant may continue to use the highway.