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

text:
    (1) Hill v. American Book Company, (2) American Book Company v. Chaney,
    No. 9598.
    No. 9600.
    Opinion delivered June 14, 1926.
    1. Statutes — passage op bill — showing op journal. — The fact that an entry in the Senate journal, showing that a Senate amendment was .stricken from -a House bill, appears after the .recital of the passage of the bill does not show affirmatively that the Senate amendment was stricken from tlie bill after its passage in the Senate, so as -to invalidate Acts Í923, p. 347.
    2. Evidence — parol' evidence to contradict senate journal. — The rule that an act may be held to be invalid when the Senate journal affirmatively 'shows noncompliance with constitutional requirements in its passage does not authorize párol evidénce to contradict the journal, as by showing that a Senate amendment was stricken from a House bill after its passage in the Senate.
    3. Statutes — validity op amendatory] act. — Acts 1925, p. 448, • under which members of the State Textbook Commission were appointed, fits into and amends the acts creating the commission and Acts 1921, p. 326, amending it, and hence is valid, even if Acts 1923, p. 347, which it purports to amend, he invalid.
    4. States — authority op agents to make contracts. — Where, by-public law, agents are appointed to enter into a contract for the •State, the law under which they- act is as much a part of the contract as if transcribed therein.
    5. Statutes — legislative intention. — Crawford & Moses’ Dig., §§ 9077, 9080, authorizing the State Textbook Commission- to contract for school textbooks, must be construed in the light of the purpose of the Legislature in enacting it.
    6. School and school districts — construction op depository act. —The object of Crawford & Moses’ Dig., §§ 9077, 9080, as . amended by Acts 1921, p. 329, being to benefit and protect the people and not the publishers, helé that the publishers to whom textbook contracts are awarded must establish a central depository at their own cost, and cannot add the cost to their bid in fixing the retail price required to be printed or stamped on the books.
    7. Constitutional law — legislative question. — Whether the construction of the textbook law requiring the cost of a central depository to be charged to the publishers, and not added to the bid in fixing the retail price in fixing the retail price of school books, would make it impossible for some publishers to comply with the law without forfeiting their bonds in other States by necessitating the sale of books in Arkansas at a lower price, is not for the courts to consider, being a question of policy for the Legislature.
    8. Mandamus — compelling signature to void contract. — Mandamus will not lie to compel the secretary of the School Textbook Commission to sign a void school-book contract.
    9. Mandamus — nature op acts to- be commanded. — Mandamus confers no new authority, but lies merely to compel a party to do that which it is his duty to do without it, and he must have power to perform the act sought to be compelled.
    10. Schools and school districts — validity, of school-book contract. — As the act creating the State Textbook Commission does not require school-book contracts to be let to the lowest bidder, a contract let to a higher bidder is valid and binding, in the absenqe of fraud or reckless improvidence indicating no intention to protect the public interest.
    11. Evidence — presumption.—The fact that a company, which was awarded a school-book contract, made its bid on .an erroneous interpretation of the statute, as authorizing the addition of the cost of’ a central depository to the retail price, does not overcome the presumption that other hook companies made bids, according to the legal interpretation of the statute.
    (1) Appeal from Pulaski Circuit. Court, Third Division; Marvin Harris, Judge;
    reversed.
    (2) Appeal from Pulaski.Chancery Court; John E. Martineau, Chancellor;
    affirmed.
    STATEMENT BY THE COURT.
    The appeals in both of these cases involve the validity of a contract of the State Textbook Commission with the American Book Company for the adoption of Overton’s Textbooks on Physiology and Hygiene for use in the public schools for a term of six years from September 1,1925.
    No. 9598 is an appeal by A. B. Hill, as Superintendent of Public Instruction, from a judgment in a mandamus case against him in the Pulaski Circuit Court by the American Book Company, to compel him to sign the contract claimed to have been made by the said book company with the said textbook commission.
    No. 9600 is an appeal by the American Book Company from a decree of the Pulaski Chancery Court canceling said contract in a suit brought by certain taxpayers.
    The questions presented by the appeal in each case do not require us to do more than to outline the pleadings and to make a general statement of the undisputed facts.
    On June 12, 1925, the State Textbook Commission met at the State Capitol and agreed upon a meeting of said commission to be held on July 22, 1925, for the purpose of adopting textbooks on physiology and hygiene and other subjects. Notice of the meeting as required by law was given to the various book companies. The commission met at the State Capitol on July 22, 1925, and, all the members being present, proceeded to open the bids of the various book companies on the subjects to be considered by the commission for adoption. Among the bids submitted were the bids of the American Book Company and other book publishers on the subjects of physiology and hygiene.
    Our statute provides that the textbook commission shall require the publishers to whom contracts are awarded to establish a central depository at Little Rock through which the books, under the provisions of this act, shall be distributed to local dealers in the State. The American Book Company, in making its bid, charged the cost of establishing this central .depository in the price of its bid, on the basis that said cost would ultimately be p®id by the users of the books in the schools. On the other hand, the other book companies making bids did so in the interpretation of the law that the cost of establishing the central depository should be paid by them and not by the users of the books in the public schools.
    The bid of 'the American Book Company was accepted, and a contract in writing with the bond required by the statute was duly submitted by the American Book Company for the signatures' of the various members of the State Textbook Commission.
    A. B. Hill, Superintendent of Public Instruction, was a member of the State Textbook Commission, and refused to sign the contract. At a meeting of the State Textbook Commission held on August 1, 1925, said contract and bond of the American Book Company were approved by all of the members of the Stale Textbook Commission present, except A. B. Hill, Superintendent of Public Instruction, who still refused and declined to execute the contract as secretary of the commission.
    The American Book Company filed a petition for mandamus in the Pulaski Circuit Court against the Superintendent of Public Instruction to compel him to sign said contract as secretary of the State Textbook Commission.
    The circuit court rendered a judgment requiring A. B. Hill, as State Superintendent of Public Instruction and ex-officio secretary of the State Textbook Commission, to execute and. sign the contract of the American Book Company with the said textbook commission for furnishing Overton’s Textbooks’ on Physiology and Hygiene in the public schools ’of Arkansas for a period of six'years’beginning September 1,'1925.
    Said A. B. Hill has duly prosecuted an appeal to this court.
    J. S. Chaney and W. D. Jackson, citizen and taxpayers of the State of Arkansas, brought suit in the Pulaski Chancery Court against the American Book Company and others to cancel said cod,tract as being invalid on account of being made in violation of the provisions of the statute.
    The chancellor .was of the opinion that the contract was invalid, and the American Book Company and -the Arkansas School-book Depository were enjoined from asserting any rights under said contract. and from attempting to carry out any of its pr ovisions.
    . To reverse that decree the American Book Company and the Arkansas School Book Depository have duly prosecuted an appeal to this court.

      H. W. Applegate, Attorney- General, Join L. Carter, Assistant, Ben B. Williamson, TJtley, Hammock & Clark, and Mehaffy & Melaffy, for appellant Hill.

      J. W. House, Jr., Murray Seasongood and Emerson £ Donldm, for appellee ‘American Book Company.

      Tom W. Campbell, amicus curiae.

   Hart, J.,

(after stating the facts). It is first contended that the contract of the State Textbook Commission with the American Book Company is invalid, beeause it was not made by persons; legally constituting the State Textbook Commission.

The members of the commission were duly appointed pursuant to the provisions of act No. 153 of the Legislature of 1925. Acts of 19.25, p. 448. This act purports to amend act 379 of the Legislature of 1923. Acts of 1923, p. 347. Act 379 originated in the House, and it is contended that the bill was amended when it reached the Senate, and that the amendment proposed by the Senate was not stricken from the bill until after its final passage in the Senate. If this was the case, of course, the bill passed by the Senate would not be the bill passed by the House of Representatives, and the act would be invalid. The State journal shows that the bill was amended in the Senate. There is an entry on the Senate .journal showing the passage of the bill by the Senate, and immediately following this the same entry shows that the amendments were stricken from the bill. This entry appears on the journal containing a record of the same day’s proceedings. The contention here is that, because the part of the entry showing that the amendments were stricken from the bill follows the part showing the passage of the bill, there is an affirmative showing on the journal that the Senate amendment was stricken from the bill after its passage. We do not think so. In Ewing v. McGehee, 169 Ark. 448, it was held that there is a conclusive presumption of the regularity of the enactment of an enrolled and signed statute, unless the validity is defeated by affirmative recitals in the journal. The entry showing the passage of the bill and that the Senate amendment was stricken from the bill was a part of the proceedings of the same day, and to hold that, because the recital showing that the amendment had been stricken from the bill follows that part of the entry showing the passage of the bill, constitutes an affirmative showing that the proceedings were had in the order in, which they appeared on the journal,’would be to put form above substance. We do not think that good reason or authority require that the inadvertence or mistake of the journal clerk in making his entries on the journal should control in the matter and thus avoid the proceedings of the Senate. This is especially true when the records show that the bill was duly enrolled and signed as required by law.

Again, it was sought to show by parol evidence that the amendment was stricken from the bill after it had passed the Senate. As we have already seen, this court has held that an act may be held to be invalid when the journal shows affirmatively that an essential constitutional requirement has not been complied with. That rule does not authorize resort to oral evidence to contradict the journal. A rule of that sort would render legislation uncertain and leave it to the courts to try its validity on questions of constitutional procedure which might vary in different cases according to the proof made. We think that the better view is to hold that act 379 is a valid act.

Moreover, if it should be held invalid, this would not change the result. While act 153 in express language purports to amend act 379, still it is a valid act and capable of enforcement in connection with the original act creating the 'State Textbook Commission and act 285 of the Acts of 1921 amendatory thereof. Of course, if the constitutional requirements in the passage of act 379 were not complied with, it would be invalid and no part of our laws, and no life could be breathed into it by an act purporting to amend it. Act 153, however, under which the members of the State Textbook Commission were appointed, fits into the original act creating the. State Textbook Commission and the act of 1921 amending it, and would amend those acts so far as it is repugnant to them.

This brings us to a consideration of the case on. its merits, and the validity or invalidity of the contract in question depends mainly upon the interpretation to be given to §§ 9077 and 9080 of Crawford & Moses’ Digest as amended by act 285 of the Legislature of 1921. General Acts of 1921, p. 326. Section 4 of that act amends § 9077 of Crawford & Moses’ Digest so as to read as follows:

“The books furnished under any contract shall at all times during the existence of this contract be equal in all respects to the specimen or sample copies furnished with bids; and it shall be the duty of the State Superintendent of Public Instruction to preserve in Ms office, as the'standard of quality and excellence to 'be maintained in Such books during the continuance of said contract, saniple copies of all books which have been the basis of any contract, together with the original bid. The retail price and the exchange price of each book adopted shall be printed, labeled, or stamped on the back, or inside cover, of the book. And the commission shall not enter into contract with any person or publisher for any book or books to be used in the public schools of the State, at a retail price above or in excess of the price or prices at which said book or books are furnished by said person or publisher, under contract executed within one (1) year next preceding the making of the contract with the' commission, to any State, county, city or other school district in the United States, under similar conditions of distribution and cost of delivery. And it shall, be the duty of any contractor to stipulate in his contract that he is not furnishing under contract, executed within one (1) year next preceding, to any State, county, city, or other school district anywhere in the United States .at a less retail price than, he is furnishing same to the State of Arkansas, under similar conditions of distribution and cost of delivery, and the commission is hereby authorized and directed, at any time it may find any book is being furnished at a lower retail price under contract to any State,- county, city, or other school district, as aforesaid, to sue upon the bond of said contractor for the recovery of- the difference between the contract retail price and the lower retail price- at which they find the book or ¡books to have been sold, and should any contractor fail'to execute' the terms and provisions of this contract specifically, said commission is hereby authorized, empowered and directed to bring suit in the name of the State of Arkansas upon, the bond of such contractor for the recovery of all damages, for the benefit of the public school fund; but nothing herein provided shall be construed so as to prevent said commission and any contractor from agreeing in any manner to change, alter or-amend any contract; provided, a majority of the members of said commission.shall agree and think it advisable and for. the best interest of the public schools of. the. State to make, such change, alteration or amendment. ”.

Section 5 amends § 9080 of Crawford & Moses' Digest to read as follows:

“The Textbook Commission shall select and appoint at least one responsible dealer in each county to act as agent or depository for the sale and distribution, of such textbooks contracted for by such Textbook Commission; provided that, in counties where, there are two county, sites, there shall be one such dealer at each county site. The said merchants' ór dealers shall' agree with said Textbook Commission to keep a sufficient supply of said books to supply the demands at all times, and agree.'to furnish each publisher holding a contract with the State of Arkansas under this 'act an acceptable personal or surety bond covering the estimated amount of sales fo be made by him in any one year, provided such publishers or contractors require such bond, whereupon'the said'contractors or publishers shall sell to said' dealer alt books ordered by him at a discount of 15 per cent, from' the retail price; provided, thiat said schoolbook dealer shall paycash to the contractor or publisher for all books received within sixty days of the shipment of said books; provided, that the contractor shall pay all transportation' charges on freight shipments of one hundred pounds or, more to the nearest' railroad or river station to said dealer, or merchant; except that, during the exchange period provided for- in this act, the publishers or con-, tractors shall pay all transportation charges to the nearest .railroad or river station to such dealers or .merchants*, also transportation, charges.on.old books-returned to the publishers, on freight shipments of one hundred pounds or more, which are received in exchange for the new books adopted by the commission, and the dealers shall receive ten per cent, of the cash proceeds for handling said books during .such exchange period; provided, thát the Textbook Commission shall require the publishers to whom contracts are awarded to establish a central depository at Little Rock, through • which the books adopted under the provision of this act shall be distributed to local dealers in the State. The Textbook Commission may delegate to such central depository the authority to select the local dealers, as provided for in this act, and said local dealers shall become responsible to such central depository in the manner provided for in this act, instead of individual publishers. All 'books adopted under the provisions of this act shall be sold to and delivered to the pupils of this State at the retail and exchange prices agreed upon; provided, that parents or pupils desiring to do so may order books direct from the publishers, or from the central depository,' same to be sent by mail or otherwise, transportation prepaid, at the retail contract price, proyided the cash accompanies .the order. ...
' ‘‘Nothing in this section shall be so construed as to prohibit any responsible merchant or dealer, not designated by the Textbook Commission, from buying and selling the books on, the same terms and conditions as apply to the designated dealers. Any merchant or dealer who shall demand or receive more than the retail contract price for any such textbooks shall be fined not less than twenty-five dollars ($25) nor more than one hundred dollars ($100), the same to be paid to the State Treasurer and credited to the common school fund.”

In the early case of State v. Allis, 18 Ark. 269, it was held that where, by a public law, agents are appointed to enter into a contract on the part of the State, the law under which they act is as much a part of the contract, when made by the agents, as if it were transcribed in the contract.

In E. O. Barnett Bros. v. Western Assur. Co., 143 Ark. 358, this was recognized as the established rule in this State, and our earlier cases on the subject are cited. The reason is that officers as well as all other interested persons are bound to take notice of the public laws of the State.

In the instant case, the State Textbook Commission had to look to the act under consideration for its authority to make the contract. It was the power under which they were to act, and the book publishers were given notice in the public advertisement for bids of that fact. The act must be construed in the light of the purpose of the General Assembly in enacting it. Giboney v. Rogers, 32 Ark. 462; Empire Carbon Works v. Barker & Co., 132 Ark. 1; and Logan v. State, 150 Ark. 486.

In Stafford v. Wallace, 258 U. S. 495, the Supreme Court of the United States had under consideration the Packers and Stockyards Act of 1921, seeking to regulate the business of the packers done in interstate commerce and forbidding them to do a number of acts to control the prices or establish a monopoly in the business. Mr. Chief Justice Taft, in recognition of the duty of the court to consider the act whose validity was in question in the light of the environment in which Congress passed it, said: “It was for Congress to decide, from its general information and from such special evidence as was brought before it, the nature of the evils actually present or threatening, and to take such' steps by legislation within, its power as it deemed proper to remedy them. It is helpful for us, in interpreting its validity, to know the conditions under which Congress acted. ’ ’

In Bowman v. Hamlett, 166 S. W. 1008, the Court of Appeals of Kentucky had under consideration a suit the purpose of which was to test the constitutionality and to obtain an interpretation of an act commonly known as the School Textbook Commission Law. In considering the rules for the guidance of. the court in interpreting the act, it was said:

“The one demand for this legislation, the one purpose sought to be accomplished, the one intent of those favoring the act, was to protect the consumer, to procure for the users of school textbooks the lowest prices for which such books could be sold anywhere. The object of the Legislature was to benefit the last purchasers— the people. The law was enacted in the interest of this class, and of this class alone. The Legislature fully understood that the publishers and the retail dealers could take care of themselves without any assistance from the lawmaking .power, if it should be conceded that the lawmaking power could legally assist them, and that no provision of the act was intended to advance. the interests of either.”

Bearing in mind that the object of the law creating the State Textbook Commission and authorizing it to prpvide for the selection of a uniform series of textbooks for the public schools, and to make contracts with book publishers to furnish the same for a term of years, was for the benefit and protection of the people and not of the book publishers, we are. of the opinion that it was the intention of the Legislature that the book publishers should establish a central depository at their own cost, and that the cost of its establishment should not be passed on to the people, by an estimate that the cost of the pentral depository should be added to the cost of the books. It will be noted that the act is specific in its terms. It provides that the retail price of every book should be printed or stamped on the back or inside cover thereof, together with the exchange price between the old and new books of the same grade. It also provides that the exchange price of such, books exchanged shall be fixed in the contract, and that such exchange price shall not bé above or in excess of the exchange price charged in the contract within a year next preceding upon the same book or books in' any other State. The act provides that the Textbook Commission shall select and appoint at least one responsible dealer in each county to act as agent or depository for the sale and distribution of the textbooks contracted for by the Textbook Commission. The publishers or contractors are required to enter into bonds to sell all books ordered by them at a discount of 15 per cent. The act further provides that the Textbook Commission shall require the publishers to whom contracts are awarded to establish- a central depository at Little Rock, through which the books adopted under the provisions of this act shall be distributed to local dealers in the 'State.

In the interpretation of this clause lies the whole nub of this case. The American Book Company claims that it had a right to estimate the cost of establishing such central depository and add same to its bid in fixing the retail price which should be printed or stamped on the back of the books. The American Book Company estimated that 10 per cent, of the wholesale price of the book would cover this cost, and introduced evidence to show that such estimate was reasonable. In addition, the 15 per cent, allowed by the statute as profit to the county depositories was added. Thus it will be seen that the American Book Company, in making its bid and fixing the retail or contract price which was to be printed or stamped on the back or inside cover of every book sold, took into consideration the wholesale price of the book, the 15 per cent, allowed by the statute to the retailer, and the 10 per cent, which it claims the statute allows for the cost of establishing the central depository. As we have already seen, the 'statute was passed for the benefit of the people, and its main object was to furnish textbooks at the lowest cost.

In arriving at this result several elements of value would be considered. In the first place would be the initial cost of the book, and its quality as a textbook. In the next place, the contract being for a number of years, frequent changes could not be made in textbooks, and people removing from one part of the .State to another part of it would not have to go to the expense of buying additional books. Then, too, the Legislature doubtless had in mind the cost of distributing the books. It recognized that this might vary greatly in different States or even in different sections of the same State. It evidently had in mind to standardize or to make this cost as uniform as possible. In doing this the cost of transportation and the cost of handling the books would be important factors. The framers of the act had in mind that the publishers of the textbooks on the same subject might, and doubtless would, vary greatly in their estimates of the cost of transportation and of distribution. Hence it was intended to put this matter at rest, so far as the Textbook Commission and the people were concerned, by inserting in the statute the provision requiring the publisher or contractor to establish a central depository at Little Bock through which the books adopted under the provisions of the act should be distributed to the local dealers in the State, and that the cost of the central depository should be paid by the publisher or contractor, and should not be passed on to the users of the books in the public schools.

The-decision of the Supreme Court of South Carolina in Duncan v. Heyward, 54 S. E. 760, by inference supports this construction of the statute. In that case the court had under consideration an act conferring on the State Board of Education the power to prescribe and enforce the use of a uniform series of textbooks and require the publishers, in the discretion of the board, to establish in each county in the State one or more depositories of their books. The court held that, under the general powers conferred upon the State Board of Education to secure uniformity in the use of textbooks, the State Board of Education might provide by contract with publishers of school textbooks that they should maintain at the State Capital a central wholesale depository from which its agents and county depositories might be supplied at a discount of not less than 10 per cent. In discussing the question the court said: ground for the board to reach the conclusion that, by the use of a central depository, the convenience of patrons might be greatly promoted, with such advantages and savings to the publishers as would enable them to pay 10 per cent, for maintaining it without increasing the price of the books in the hands of the pupil, or ‘the first cost’ referred to in the act of 1905 (25 St. at Large, p. 877).”

“Unquestionably it is still the duty of the Board of Education to use all reasonable means to secure the lowest possible prices consistent with the successful conduct of the schools; but, as we have seen, there was some

In the case at bar a similar provision was enacted in the law by the Legislature and became a part of the contract. But it is claimed that such a construction would make it impossible for some publishers to comply with our law without forfeiting their bonds in other States, because if the 10 per cent, for the cost of the central depository at Little Bock should be charged to the book publishers or contractors,, this would necessarily cause their books to be sold in this State lower'than in other States, and thereby cause it to violate its contracts in other States with school textbook commissions. Such considerations can have no place in the courts. They might have been properly addressed to the Legislature as a reason why it would be bad policy to enact a law like the one under consideration, because book publishers would decline to bid with such a provision in force.

In this connection it may be stated that the book publishers were advised of the provisions of the law bef ore they made their bids. Three other book publishers bid on textbooks on the same subjects as those embraced in the contract under consideration in this case, and in. making their bids they interpreted the statute just as we have construed it, and made their bids accordingly. The act was the power under which the textbook commissioners were to act. They could make no contract contrary to its provisions, and, having made a contract in violation of the provisions of the statute, it is void and no action can be maintained on it. Arkansas Foundry Co. v. Stanley, 150 Ark. 127; Lewelling v. St. Francis County Road Improvement District No. 1, 158 Ark. 91.

If the contract is void, it follows as a necessary consequence that no action can be maintained on the bond given by the American Book Company. The bond was given to secure the faithful performance of the contract, and if the contract is void and of no effect, the bond must fall with it. If the contract was void, mandamus would not lie to compel A. B. Hill, as Superintendent of Public Instruction, to execute it. ' As said by Mr. Chief Justice Puller in Brownsville v. Loague, 129 U. S. 493, “mandamus lies to compel a party to do that which it is his duty to do without it. It confers no new authority, and the party to be coerced must have the power to perform the act.”

The result of our views is that the circuit court erred in awarding a writ of mandamus to compel A. B. Hill, as Superintendent of Public Instruction and ex-officio secretary of the State Textbook Commission, to execute the contract in question, and for that error the judgment is reversed, and the cause of action is dismissed here.

The decree- of the chancellor was correct, and it will therefore be affirmed.

Hart, J.,

(on rehearing). Counsel for appellants assert that “there is not one particle of evidence nor one line of pleading indicating that any other book company, in making up its bid on the textbook in question, interpreted the statute to mean that the book companies should pay the cost of the central depository, and that the same should not be added as a part of the retail price of the book.” This makes it necessary for us to state the evidence on this point and give our reasons for so holding.

A. B. Hill was Superintendent of Public Instruction and ex-officio secretary of the State Textbook Commission. Section 9073 of Crawford & Moses’ Digest, which is a part of the act creating the State Textbook Commission, provides, in effect, that all bids shall be filed with the State Superintendent of Public Instruction, and that he shall give them to the commission upon their convening.

A. B. Hill was a witness” in the case, and the record shows that he had the bids before him while testifying. According to his testimony, the Textbook Commission seriously considered the bids of four book companies, on the textbooks under consideration. ' The Ritchie-Caldwell Company was one of them. Its bid on the first book was 52 cents and on the second 94 cents. That was a total'of $1.46 for the two books of the Ritchie-Caldwell Company. The Emerson-Betts Company made a total bid of $1.53 for.the two books. The price of the first book was-64 cents and that of the second was 89 cents.. The Winslow books were also considered. That company’s bid was 64 cents for the first book and 80 cents for the second, making a total óf $1.44 for the two books. The bid of the American Book Company was 72 cents for the first and $1 for the second book. This made a total of $1.72 for both books.' ' The witnesses for the American Book Company testified to the effect that the text of its books was superior to that of the other companies submitting bids. On the other hand, the witnesses for appellees testified that the text of the books in question of the other bidders was superior to that of the books of the American Book Company. If this were all the testimony oh this branch of the case, the contract of the American Book Company would.be a valid and binding contract, in the absence of proof of fraud, or that the contract Was- so recklessly improvident as to indicate no intention or purpose to protect the public interest within the rule laid down in McCrory v. Richland Township Road Improvement District, post p. 460, and cases cited. The reason is that -the statute creating the State Textbook Commission and regulating its proceedings does not require it to let contracts to the lowest bidder. So, in the absence of a showing to the contrary, the presumption would be'that the book companies properly interpreted the law in making their bids and that the Textbook Commission considered the quality of the textbooks in accepting' the bid of the American Book Company, although it was higher than the bids of the three other book companies on the samé textbooks which were being considered at the same time. The reason is that every man is presumed to know the statute law of the State and to construe it aright. Broom’s Legal Maxims, p. 188.

This testimony, however, does not end the matter. The American Book Company introduced as witnesses several of its principal officers. According to their testimony, the contract of the Arkansas Textbook Commission and the American Book Company provides that the retail price, to the schoolchildren, of Overton’s General Physiology shall be $1. Of that amount the American Book Company receives 75 cents, and the. other 25 cents goes to pay the local dealer and the central depository and for transportation. According to their testimony, the same contract provides that the price that schoolchildren shall pay for the small physiology (Overton’s Personal Hygiene) shall be 72 cents. Of this amount the American Book Company receives 54 cents, and the remaining part of the price goes to the local dealer that sells the books to the children and to the central depository that handles them in wholesale quantities and for transportation.

They further state that they made a contract with Parlette Bros, to handle these books as the central depository in Arkansas. Thus it will be seen that, by their own testimony, they charge the cost of maintaining the central depository to the schoolchildren of the State, and this overcomes the presumption that their bid was made according to a correct interpretation of the law. Of course, the American Book Company had the right to place its own price on its books in making its bid, but it had no right to charge the cost of the central depository to the children of the State, in violation of the provisions of the statute.

The contract which the American Book Company prepared and presented to the State Textbook Commission for the signature of the members thereof contains an express provision that the contract is made under and by virtue of the act of the Legislature creating the State Textbook Commission and the amendatory acts. It provides that all the provisions of said acts are expressly referred to and made parts of the contract as fully as if the same were set forth at length. Thus it will be seen that the American Book Company placed its own interpretation upon the act in question and is attempting in this case to assert rights based upon that interpretation.

In Utermehle v. Norment, 197 U. S. 40, the Supreme Court of the United States said that it has been held from the earliest days, in both the Federal and State courts, that a mistake of law, pure and simple, without the addition of any circumstances of fraud or misrepresentation, constitutes no basis for relief at law or in equity, and forms no excuse in favor of the party asserting that he made such mistake. To the same effect see State v. Paup, 13 Ark. 129; Thomas v. Sypert, 61 Ark. 575; and Holloway v. Eagle, 135 Ark. 206.

As pointed out in our original opinion, the statute in question was enacted for the benefit of the schoolchildren of the State, and, if book companies could build up rights based upon their own interpretation of the statute, it had just as well never have been passed. The fact, however, that the American Book Company, by its own evidence, shows that its bid was based upon what it interpreted the statute to mean, does not overcome the presumption that the other book companies made their bids according to the legal interpretation of the statute.

In short, if a person could deliberately act contrary to that which the law, by his own contract, imposed on him, and could thus build up vested rights, this would be done in almost every case, and statutes for the protection of the public in cases like this would be of no benefit whatever.

Again, it is claimed that the court erred in its construction of the statute because of that clause which provides that it shall be the duty of the contractor to stipulate that he is not furnishing, under contract executed within the preceding year, to any State, county, city or other school district anywhere in the United States, at a less retail' price than he is furnishing the same to the State of Arkansas under similar conditions of distribution and cost of delivery. '

Now, as we have already seen, the statute does not provide' that the textbook contracts shall be let to the lowest bidder. The reason is manifest. The commission is given the power to take into consideration the quality of the text, the plainness of the print and the texture of the paper out of which the books are made. ' Nevertheless, in order to protect the people' as far as possible, the clause just recited was placed in the statute so.that the book companies could not have one cost for' the- central depository in one State and another estimate of cost'for a central depository in an adjoining State. As we have already seen, the cost of transportation and 'the 'cost of thé distribution of the books is all included in the cost of the central depository, and it was the object' of the statute td standardize this cost and make it uniform.

The result of our views is that we adhere to our original opinion, and the motion for a rehearing is denied.

McCulloch, C. X,

(dissénting). The only prohibition in the statute with reference to the substance of a contract for furnishing schoolbooks is that “the commission shall not enter into contract with any person or publisher for any book or -books to be used in the public schools of the State at a retail price above or in excess of the price at which said book or books are furnished by said person or publisher, under contract executed within one year next préceding the making of the contract with the commission, to any State, county,-city, or other school district in the United States, under similar conditions of distribution and cost of delivery.” There is not a particle of evidence that the contract of American Book Company is in violation of this feature of the statute. There is no evidence that the book company has, within the past year, sold or contracted to sell, books “under similar conditions of distribution and cost of delivery,” in any other Stat¿ of the Union, at prices lower than those stipulated in this contract. The majority of the court do not, in this opinion, declare the contract void on that ground. But they seem to have found .in the statute an implied prohibition against allowing a publisher to include, in his retail price specified in. the contract, .the expense of maintaining a central depository as a part of the cost of distribution. I am unable to find any .such implication in the statute. Neither its language nor the general purpose of the legislation justifies .it. The statute does indeed require the contractor, to maintain a. central depository for .the distribution o.f. books, and this means, of course, that the contractor must pay the cost of maintaining the depository, bilt that'is far from prohibiting the contractor from including that expense in the cost of distribution which he adds to his wholesale price in fixing the retail price.. The statute also requires the contractor to pay the.freight charges on shipments of books from the central depository to the local dealer in each county, but will it be contended that this prohibits, the contractor from adding the expense of transportation to his wholesale price in fixing the retail price? , Surely not. To do so-would be to violate all known customs of trade.; in fact, to do violence to' essential economic laws. Cost of production, plus reasonable profit and expense of distribution, necessarily fixes the retail price to the consumer., No producer or dealer can survive who ; omits either of these essentials in fixing his price to the consumer.- An intention to violate those rules by. prohibiting the inclusion- of expense of-distribution in-fixing the retail price should not be attributed to the. lawmakers- in the absence of express language to that effect. An analysis of the contract -with the book company will,. I think, clearly demonstrate the error of the views of .the majority in-declaring it to be void. There are two .books involved; in the contract, viz., Overton’s Personal Hygiene, and Overton’s .General Hygiene. The American Book Company is the publisher of each of these books, and the wholesale or publisher’s prices are 54 cents and 75 cents, respectively. The' publisher has, according to undisputed evidence, only one price on each book — the above wholesale prices plus cost of delivery — and the list or retail prices are fixed in accordance with that rule.

The contracts for furnishing books required under our statute are for retail prices at point of delivery to local dealers in each county, with transportation charges prepaid, and the book company in this instance contracted to furnish the books named at 72 cents and $1, respectively, which includes the addition of 25 per cent, of the Retail price to the wholesale or factory price to cover the expense of distribution and delivery. This addition of 25 per cent, consists of 15 per cent, allowed by the statute to local dealers and 10 per cent, the estimated expense of transportation charges and maintenance of the central depository. The book company has a contract with the central depository to distribute the books and pay all transportation charges. It is affirmatively proved that this percentage compensation to the central depository is fair and reasonable, and this is undisputed. It is thus seen that, under the contract, the book company receives only its uniform wholesale or factory prices, and that the remainder of the retail prices goes to pay the expense of distribution to purchasers. It would seem very clear that all of the expenses of distribution should be added to the wholesale price, and that the statute does not prohibit it. The fact that some of the bidders did not include the expense of the central depository is of no importance in determining the validity of this contract. -Such bidders may have been willing to cheapen the price in order to induce the commission to adopt their books. The price, in comparison with prices of other books on this subject, is not the only consideration, for, in the procedure of adopting schoolbooks, there is no competitive bidding in the ordinary meaning of that term. The bidders are the publishers, and they bid on their own publications — no others. There is no way of comparing bids as to prices. The commission selects the particular book it wants and then makes the- best bargain it can as to price. If the price is not satisfactory, another book at a lower price can be selected from some other bidder. The law, speaking through the commission, says to each publisher, if you want to enter into contract for furnishing a book on a given subject,.fix a retail price for the book, delivered to all local dealers, pay all distribution charges, including local dealers’ compensation fixed by statute, maintenance Of central depository, and transportation. The publisher has the right to include in his retail price all of the expenses of distribution, and this does not invalidate the contract unless it is an improvident one.

There is no indication in the opinion of the majority that this contract is an improvident one in fact; it is merely denounced as an unlawful one, in conflict with the statute. I do not think so. No court has ever held that such a contract made under a similar statute is void. The primary purpose of the statute is to secure uniformity of books in use in the schools of the State for a given period of time, so that frequent changes may not be made at the expense or inconyenience of school patrons, and, incidentally, to cheapen the cost of books as far as practical. The purpose is to secure the best books, not the cheapest ones. Quality in subject-matter is not to be sacrificed for sake of economy. No right-minded teacher would think of selecting a book merely because it is the cheapest. All of the school men who testified in this case expressed concurrence in this rule, and the proof shows that such has been the prevailing rule in selecting books by the commission in former years.

Unless the law, as interpreted by the majority of the court in this case, is changed by the Legislature, the commission must, in selecting books, give more consideration to price than to quality.


source: Caselaw Access Project

author: Wood, J.

license: Public Domain

text:
    Matlock v. Jones.
    Opinion delivered June 7, 1926.
    1. Highways — ^-alteration of route. — 'The county court had authority to change the route of the road, as designated by special Act No. 172, of February 18, 1920, creating a road improvement district, to a route as surveyed by engineers of the State Highway Department, where the termini remained the same; the construction of a dam having caused a portion of the original route to overflow.
    2. Highways — alteration of route — powers of commissioners.— Creation of a road improvement district is not’invalidated by. the fact that the - commissioners were authorized by the act creating it to select or vary the route of the road to be . improved.
    Appeal from Garland Cliaiicery Court; William R. Duffie, Chancellor;
    affirmed.

      B. N. Florence, for appellant.

      Martin, Wootton & Martin, for appellee.
   Wood, J.

This is an action by the appellant against the appellees, Road Improvement District No. 2, Garland County, Arkansas, and its commissioners. The appellant alleged in substance that he 'was a taxpayer in the district, being an owner of lands therein, and he brings this action for the benefit of himself' and all other taxpayers similarly situated. After setting up the special act creating the district, the appellant alleged that the district was created to construct a road to follow substantially the Hot Springs-Arkadelphiaroadto the county line, but that the appellees had' filed a petition in the county court of Garland County in which it was alleged that the original improvement of the roadbed contemplated by the act could not be made by reason of the proposed construction of a hydro-electric dam across Ouachita River, which would cause a flooding of three miles of the roadbed,«and the appellees asked that a change be made in conformity with the United States and State laws, so that Federal aid might be obtained in the construction of the improvement; that an order of the county-court was entered making a change in the roadbed as described in the act to a route laid out by the engineers of the State Highway Department as shown on a map filed with the petition; that the changed route under the order of the county court contemplated 6.1 miles of new roadbed passing through sections 20, 19, 24, 25, 26 and 35, township 3 south, ranges 19 and 20 west, and sections 2 and 1, township--4 south, range- 20 west, instead of through the sections and townships as originally ronted by the act. ..The appellant alleged that the construction' over the route as.changed by order of the county court could not be- made under the act creating the district, for the reason that the change was so extensive as to constitute a deviation from the purposes of the district as created by the act. of the Legislature, and had the effect of nullifying the provisions of that act. The appellees alleged that the act creating the district contemplated an improvement of-the highway approximately ten miles in length, but that, under the change directed by the order of the county court, the roadbed would be lengthened exceeding one mile and take in a new roadbed, not provided in the act, of approximately six or seven miles. The commissioners answered the complaint, admitting all the allegations of fact therein, but denied that they could not proceed with the construction of. the road over the changed route under, the provisions of .the. special, act creating the district.

The cause was. heard upon the deposition of one R. A. Jones and the exhibits to, his deposition, showing, the petition filed in,the Garland County,Court and.-the order of,the county court granting the petition for the change in route. The chancery court.found,that special act 172, approved February. 13, 1920,.. created Road Improyement District No. 2 of Garland County, Arkansas, for the purpose of repairing, improving and constructing a public highway beginning on the north side of Grand Avenue, where it intersects with Central Avenue in the city of Hot Springs, Arkansas, and continuing in- a southerly and southwesterly direction along the present public, road known as the Hot Springs-Arkadelphia Road to the Garland County line, at a point (describing it) and including property on each side of the road within the district. The court further found that the district and its commissioners had filed a petition in the Garland County Court alleging that the use of the roadbed as designated in the act creating the district was impossible in view of the proposed construction of the hydro-electric dam across Ouachita Eiver, which would create a lake that would overflow that portion of the roadbed originally contemplated “commencing at a point near the southern boundary of section 20, township 3 south, range 19 west, and extending to the southern boundary of section one, township four south, range twenty west, approximately three miles, and that Federal and State aid, which are necessary in the construction of the proposed road in the district, would be refused, and that a survey had been made by the Federal and State engineers whereby that part of the road which would be overflowed was changed from a point beginning approximately on the southern line of section 2, township 2 south, range 19 west, and extending to the southern line of section 1, township 4 south, range 20 west, Garland County, Arkansas, and passing through section 19, township 3 south, range 19 west, and sections 24, 25, 26, 35 and 36, township 3 south, range 20 west; that the Garland County Court, in accordance with act 422 of 1911 of the Legislature of Arkansas, duly entered its order changing said roadbed, as shown by the survey of the engineers of the State Highway Department, as exhibits “C” and “D” to the deposition of E. A. Jones; and that the commissioners will be unable to make the improvements contemplated by the act creating the district unless the road is constructed over the route as surveyed by the engineers for the State Highway Department. # * * And the court further finds that, in order to improve the road, it will be necessary for the commissioners to abandon approximately three miles of the road as designated in the act creating the district, and to improve a changed roadbed as designated by the county court for a distance of approximately six and a half miles.” The court found that the changed route is not such as to constitute an entire departure from the improvements contemplated by the act creating the district. The court thereupon entered its decree dismissing the appellant’s complaint for want of equity, from which is this appeal.

The only question presented by this appeal is whether or not the county court of Garland County had authority to change the route of the road as described and laid out in the act creating the district to the route designated in the order of the county court making the change. The district was created by special act No. 172, approved February 18,1920. The first section of the act creates the district, and names Bobert Jones and John DeWoody and S. H. Grandstaff as commissioners thereof. The second section, after describing the road to be improved, contains this provision: “The improvements to be made by the said district are to be made along the route designated in this act. If it becomes necessary to lay out or designate any new route, the same shall be laid out by the county court of Garland County in accordance with act No. 422 of the Acts of 1911 of Arkansas, being an act to amend § 7328 of Kirby’s Digest of the Statutes of Arkansas. All changes in the route of the road are to be approved by the county court. Said road is to be constructed of material selected by the commissioners and approved by the county court.”

Section 5 of the act provides, among other things, that, “if said commissioners deem it to the best interest of the district to vary the line of the roads as heretofore laid out, they may report that fact to the county court of Garland County, and, in the event if the county court approves of the report, it may make an order changing the route of the road, and, if necessary, it shall in that event lay out the new roads in the manner provided in act No. 422 of the Acts of the General Assembly of the State of Arkansas for the year 1911.”

The above provisions clothe the county court with ample authority to change the route laid out and described in tbe act creating the district to the route designated in the order of the county court making the change; that is, to the route as shown by the plans, plat, profile and survey prepared by engineers of the State Highway Department and attached to the petition of the commissioners filed before the county court praying for the change in the route. The language of the act under review, it will be observed, confers authority upon the county court “if it becomes necessary to lay out or designate any new route,” to make an order changing the route of the road and lay out the new .road in the manner provided in act No. 422 of the Acts of 1911. Act No. 422 confers upon the county court the “power to open new roads, to make such changes in old roads as may be deemed necessary and proper.” It occurs to us, when the language' of the act under consideration is taken in connection with the language of act 422, supra, the Legislature intended to confer upon the county court, not only the power to make material changes in the road to be improved as designated in the act creating the district, but also,' if the commissioners and the county court deemed it to the best interests of the district, the power to designate and lay out an entirely new route to be improved under the terms' of the statute creating the district. The language of the statute conferring such power is unambiguous and unmistakable. It is not within the province of the court to limit it. The purpose of the law is' expressed in its second section — “to repair, improve and construct a public road, beginning on the north side of Grand Avenue where it intersects Central Avenue in the city of Hot Springs, Arkansas, and running thence in a southerly and southwesterly direction along the present public road known as the Hot Springs-Arkadelphia road to the county line.” The termini of this road are thus fixed on the Hot SpringsArkadelphia Road at a certain place in the city of Hot Springs as the beginning of the northern terminus of the road, and the county line of Garland County on the Hot •Springs-Arkadelphia Road as the southern terminus. Observing these termini and this general direction, unquestionably the act creating this district contemplates that the commissioners of the district, if they deem it for the best interest of the district, may report an entirely new road, and the county court, if it approves their report, may lay out such new road to be improved under the act creating the district.

In Bulloch v. Dermott-Collins Rd. Imp. Dist., 155 Ark. 176, page 186, we said: “The rule contended for, that only immaterial changes can be made in the route, is applicable to districts organized under the Alexander law, or special acts in which authority was not conferred on any agency to make a change in the route. * # * The Legislature has authority to create an improvement district based upon the benefits to the lands included therein, and to designate the route, of select an agency to do so, without the consent of the propery owners. Havifig such authority, it naturally follows that it may authorize an agency to make a material change in the designated route. ’ ’

And in Mashburn v. Northern Arkansas Imp. Dist. No. 3, 167 Ark. 58, we had under consideration the following language: “If such plans contemplate that the line of any public road to be improved shall be straightened or changed, and the county court of the county in which the changed part is situated approve the same, this shall constitute a laying out :by the county court of the said road as changed.” A majority of the judges construed this language to mean that “the board of commissioners may, with the approving action of the county court, make material changes in the route, if those changes are not such as to constitute an entire departure from the improvement contemplated by the statute.” The language of the statute in the case at bar is more comprehensive and confers a broader .power than the statute under review in the above cases, in that it vests the commissioners with the power to report the new route to the county court and the county court with the power to lay out the new road as reported. This court, in numerous cases, has held that the creation of an improvement district is not invalidated by the fact that the commissioners were authorized by the act creating the district to select or vary the route of the roads to be improved. Board of Com. Rd. Imp. Dist. No. 9 v. Furlow, 165 Ark. 60-64, and cases there cited.

The decree is therefore in all things correct, and it is affirmed.


author: Hart, J.,

text:
    Mitchell v. Hanley.
    Opinion delivered June 14, 1926.
    1. Frauds, statute of — agreements not to be performed within year. — The statute of frauds applies to those agreements only which appear from their terms to be incapable of performance within a year, or such as the parties never contemplated should be performed within that time.
    2. Frauds — statute of — part performance. — Partial performance of an oral contract within the, statute of frauds has no effect at law to take the case out of the provisions of the law.
    3. Frauds, statute of — oral contract — part performance.— Where defendant had a contract for a specified consideration to carry the United States mail between certain towns for a period of four years, and, before expiration thereof, plaintiff, for an additional consideration, verbally agreed to execute defendant’s contract for the remaining period of 21 months, and accordingly took a subcontract from the United States, the collateral agreement between plaintiff and defendant was within the statute of frauds, and the fact that plaintiff fully performed the subcontract did not take such collateral agreement out of the statute.
    Appeal from Baxter Circuit Court; Jewell Black, Special Judge;
    reversed.
    STATEMENT BY THE COURT.
    John Hanley instituted tbis action in tbe circuit court against L. A. Mitchell to recover $345.69 for a balance due for breach of contract.
    According to the allegations of the complaint, the defendant entered into a written contract with the United States to carry the mail from Zion to Melbourne, in, Izard County, Arkansas, six times per week, beginning on tbe first of July, 1918, and ending on June 30, 1922.
    On the 30th day of September, 1920, the defendant entered into an oral contract with the plaintiff whereby the plaintiff agreed to take over said contract for carry-, ing the mail, and entered into a subcontract with the United States to carry out the provisions of the defendant’s contract with the United States from September 30, 1920, to June 30, 1922, in consideration that the defendant would pay the plaintiff the sum of $38.41 per month in, addition to the amount to be paid by the United States. The plaintiff entered into a subcontract with the United States for carrying the mail under said contract, which is exhibited with the complaint.
    The plaintiff has fully complied with the terms of his oral contract with the defendant. The defendant paid him the sum of $38.41 per month from September 30, 1920, until October 1, 1921, but has failed and refused to pay him the amount due from the first day of October, 1921, to June 30, 1922.
    The defendant Mitchell filed a plea to the complaint in which he alleged that the oral contract, which is the basis of this action, not being a contract to be' performed within a year from the date of its execution, is void under the statute of frauds.
    His plea was overruled, and the defendant elected to stand upon his demurrer. Whereupon the court found from the original complaint, which has been duly verified, that the plaintiff was entitled to judgment'for the amount sued, for, and judgment was rendered accordingly.
    To reverse that judgment the defendant Mitchell has duly prosecuted an appeal to this court.

      W. M. Dyer and John L. Bledsoe, for appellant.

      8. M. Bone, for appellee.
   Hart, J.,

(after stating the facts). The judgment of the circuit court was wrong. In the very nature of things the contract between the plaintiff and the defendant could not be performed within a year, and was void within the sixth subdivision of § 4862 of Crawford & Moses’ Digest, which provides, in effect, that no action shall be brought to charge any person upon any promise, contract, or agreement that is not to be performed within one year from the mailing thereof, unless the same is in writing and signed'by the party to be charged therewith.

This court has held that the statute applies only to agreements which appear from their terms to be incapable of performance within a year, or such as the parties never contemplated should be performed within that time. Johnson v. Cheek, 163 Ark. 176, and Reed Oil Co. v. Cain, 169 Ark. 309, and cases cited.

It is true that there was partial performance of the oral contract sued on, but this court has held that partial execution has no effect at law to take any'case out of the provisions of the statute. Henry v. Wells, 48 Ark. 485.

Again, in Oak Leaf Mill Co. v. Cooper, 103 Ark. 79, it was held that a parol contract for personal services for a period longer than one year is within the statute of frauds, and no action can be maintained on it; and if the employee enter upon its performance and is after-wards discharged, the employer is liable only for his wages for the time he served.

But it is sought to uphold the judgment under the rule announced in Johnson v. Cheek, 163 Ark. 176, that the contract had been fully executed when the suit was brought, and for. that reason the statute of frauds would have no application. In making this contention, counsel .rely upon the allegations in the complaint to the effect that the plaintiff entered into a subcontract with the United States whereby he took over the defendant’s contract with the United States for carrying the mail between Zion and Melbourne, in Izard County, Arkansas, from September 30, 1920, until June 30, 1922, and has fully performed said contract.

This the plaintiff was- required to do under the -subcontract for mail -service executed by him with the United States on the 30th day of September, 1920. He received the compensation from the United States provided for in said subcontract, and claims that he is entitled to receive the additional compensation from the defendant of $38.41 per month because he has fully executed his subcontract with the United States.

His claim for the additional compensation is based upon the oral contract which he made with the defendant on the 30th day of September, 1920. This contract, however, was not a part of the subcontract with the United States. The oral contract between the plaintiff and the defendant whereby the defendant agreed to pay the plaintiff the additional sum of $38.41 per month during the remainder of the term of his contract for carrying ’ the mail was a collateral benefit to be conferred, and constituted no part of the subcontract with the United States for carrying the mail. Hence the fact that the plaintiff has fully performed the subcontract with the United States according to its terms does not take the nase out of the statute of frauds. The policy of the statute is to prevent frauds which may be accomplished by setting up contracts of the prohibited class by parol testimoiiy.

The plaintiff was bound to perform the contract of carrying the mail with the United States according, to its terms and for the compensation named therein. . The performance of that contract in full could in no sense take out of the statute of frauds a collateral agreement between the plaintiff and defendant.

The result of our views is that the circuit court erred in not sustaining the plea of the statute of frauds; and for that error the judgment must be reversed, and the cause remanded for further proceedings according to law and not inconsistent with this opinion.


author: Smith, J.

text:
    McCrory v. Richland Township Road Improvement District.
    Opinion delivered June 14, 1926.
    1. Highways — improvement district — prospective profits. — In a suit by subcontractors against a road improvement district, organized under a special act of extraordinary session of 1920, for profits Which they would have made if permitted to perform the contract, which the district claimed was so improvident as to be invalid, testimony as to what performance would have cost is admissible to show the reasonable cost, though the profit as between contractor and subcontractor does not concern the district.
    2. Highways — improvement district — validity of contract. — A road improvement district is not bound by a contract signed, at different times and places, by two of the three commissioners; such signatures not having been obtained as a result of the action of the board of commissioners at a meeting at which all of the members were either present or had notice.
    3. Highways — improvement districts — power to contract. — The authority of commissioners of road improvement districts to make contracts is not absolute and unlimited, for they do not contract as individuals, but as representatives of the public interest.
    4. Highways — improvement districts — power of courts to REVIEW contracts. — While the courts will not review contracts made by the commissioners of a road improvement district when there is involved merely a question of judgment, the courts have a right to interfere where it is made to appear that a contract made by them is so recklessly improvident as to indicate a conscious or reckless indifference to the interests of the district.
    Appeal from. Monroe' Chancery Court; John M. Elliott,' Chancellor;
    affirmed.

      Bogle & Sharp, for appellant.

      Boss Mathis and Lee & Moore, for appellee.
   Smith, J.

Richland Road Improvement District was organized by an act of the General Assembly passed at an extraordinary session in 1920, and it is the contention of appellants that the district entered into a contract with appellant Ran McGregor to do certain construction work, and that McGregor, with the consent of the district, sublet the work to McCrory and Mitchell, but the district wrongfully refused to permit appellants to perform their contract, and this suit was brought to recover damages resulting from this breach.

The. court found that there was no valid contract, and dismissed the complaint.

Appellee road improvement district insists that the testimony supports the finding made, and further insists that the contract was so grossly improvident as to be beyond the power of the commissioners to make. As we have concluded that appellee is correct in the second proposition, we do not consider the first.

By the terms of the contract the district agreed to pay McGregor for unloading, hauling, spreading and rolling gravel $1.48% cents per yard for the first mile and 54 cents extra for each additional mile. McGregor immediately sublet the contract to McCrory and Mitchell for $1.25 for the first mile and 40 cents extra for each additional mile. The contract contemplated the spreading of something over 70,000 yards, and the profit to McGregor would therefore have been, according to the figures of the engineer of the district, $16,860.44. The subcontractors made proof that they could have laid down and spread the gravel for 50 cents for the first mile and 25 cents, for each additional mile.

The subcontractors were parties plaintiff, and sought to recover from the district the profits they would have made had they been permitted to perform their subcon-' tract, and in support of their suit they offered testimony showing what the actual performance of the contract would have cost. The district was, of course, not concerned about the profits in the contract between the principal contractor and the subcontractors, but this testimony is competent to show what the reasonable cost of the work was, and, according to the testimony of the plaintiffs themselves, the district had agreed to pay $1.48% for the first mile and 54 cents for each additional mile, whereas the actual cost of doing the work was 50 cents for the first mile, with 25 cents added for each additional mile.

We do not set out the testimony showing the circumstances under which the-contract was executed which led the court below to the conclusion that no valid contract had in fact been made. It suffices to say that the signatures of two of the commissioners were secured at different times and places, and neither read the contract before sighing it. Unquestionably the contract did not become a valid one, notwithstanding these two signatures, because they were not obtained as a result of any action of the board of commissioners had at a meeting at which all were present or of which all had notice.

The theory of appellants is that the contract was ratified at a meeting of the commissioners of which all had notice and at which all the commissioners were present.

We do not pass upon this question of ratification because, in our opinion, the contract was one which the district had no right to make, and, as no work was done under it, the district is not liable for its breach.

At the meeting at which the contract was said have been ratified, the commissioner who did hot sign and who protested against its ratification, pointed out to his associates the reckless improvidence of the contract, and it does not appear to be questioned that this commissioner named a responsible contractor who stood ready to enter into a writing with the district to do the work required by the contract at a price $18,000 less than the amount the contract With McGregor required the district to pay. It will be remembered that appellee district is quite a small one, comparatively speaking.

We have in a number , of cases considered the power of-commissioners to inake contracts Of this kind, among the earliest of which are the cases of Seitz v. Meriwether, 114 Ark. 289, and Sain v. Bogle, 122 Ark. 14.

In the case of Bagou Meto Drainage District v. Chapline, 143 Ark. 446, it was said: “The commissioners as public agents under the statute, as we have seen, aie not clothed with arbitrary power in the matter of fixing fees of attorneys. They are acting as trustees for the public, and must have an.eye to the interests of those whom they serve — the property owners who pay all the' expenses incident to the improvement. They must be guided, in entering into the contract of employment with attorneys and” .fixing their compensation, by, what would .be a reasonable compensation for services which the attorneys are actually to render. It was not the purpose of the statute to confer upon the commissioners absolute power to contract with the attorneys, for fees that woiild be exorbitant and unreasonable for the services rendered the district. While the .presumption, is that, these'public agents will conscientiously discharge their duties, yet it is not impossible, and indeed is entirely-within the range of probability, that unreasonable and unconscionable fees may-occasionally be agreed upon between, the attorneys and commissioners. A statute giving the commissioners absolute power in the premises to' thus squander the money of the taxpayers, levied for the; purposes of making the improvement, would be contrary to public policy. ’ ’

In the case of Sikes v. Douglas, 147 Ark. 469, we said: “Appellee, as a taxpayer, has a right of. action to prevent the performance of such a contract if it be found to be grossly excessive and unreasonable. Seitz v. Meriwether, 114 Ark. 289. The commissioners had no authority to enter into a contract for payment of an unreasonable fee to an engineer. Sain v. Bogle, 122 Ark. 14; Bayou Meto Drainage Dist. v. Chapline, 143 Ark. 446. ”

In the case of Bowman Engineering Co. v. Arkansas & Mo. Highway Dist., 151 Ark. 47, we said: “We have said that contracts made by the commissioners with the assessor for the amount of fee must be reasonable in order to be .valid and binding. The commissioners have power to make contracts, -but they are trustees of the property-owners, and can only -make reasonable ones. The owners of The property have a-right to challenge the validity of such contracts by showing that they are unreasonable. Of course, in testing the5 validity of such contracts, the court should not substitute its own judgment primarily for that of the commissioners, the authority to make the contract being lodged by the lawmakers in the commissioners, bnt the inquiry of the court is to determine whether or not the contract is so improvident as to demonstrate its unreasonableness.”

These cases were all reviewed and reaffirmed in the case of Vaughan v. Woodruff-Prairie Road Dist. No. 6, 158 Ark. 236.

The result of all these cases is that the authority of commissioners of road improvement districts to make contracts is not absolute and unlimited. They do not contract as individuals, 'but as representatives of the public interest. The courts will not undertake to review mere questions of discretion, for the power of the commissioners to act is fully recognized, and the courts will not therefore substitute their judgment for that of the commissioners of the district when there is involved merely a question of judgment. But when it is made to appear that there was a conscious or reckless indifference to the interests of the district, which the commissioners are supposed to represent, the courts have the right to interfere upon the ground' that the commissioners have exceeded the power conferred upon them by law.

We- think this showing was made here, as the contract was so recklessly improvident as to indicate no intention or purpose to protect the public interest.

The decree of the court below, which dismissed the complaint as being without equity, is therefore affirmed.


text:
    Purse Brothers v. Watkins.
    Opinion delivered June 14, 1926.
    1. Appeal and error — conclusiveness of verdict. — A verdict upon conflicting testimony is conclusive.
    2. Appearance — filing answer. — Though defendants were not personally served with process, they will "be held to have entered their appearance for all purposes by voluntarily filing an answer to the complaint.
    3. Process — necessity after amendment of pleading. — It was not error to permit a complaint to be amended after notice to allege greater damages without new service of process, where defendants, though not personally served, entered their appearance by filing an answer.
    .4. Trial — refusal of instruction already covered. — It was- not error to refuse an instruction covered by one given by the court.
    Appeal from Howard Circuit Court; B. E. Isbell, Judge;
    affirmed.

      Pinnix & Pinnix and W. C. Rodgers, for appellant.
    J. G. Sain and Geo. R. Steel, for appellee.
   Smith, J.

This action was brought by appellee Watldns against appellants, Purse Bros., who are produce dealers, with their place of business in Detroit, Michigan, for damages arising from an alleged breach of contract.

It was alleged in the complaint that on June 18,1923, appellee entered into a written contract with appellants for the sale of eight cars of peaches of the following specifications :

“No. 1 ring-pack corrugated top, $2.60. No. 2 ring-faced corrugated top, $1.60. No. 1 peaches-are to be 1%‘ inches and above. No. 2 slightly smaller. Peaches to be paid for when loaded and bill of lading signed.”

Appellee shipped to appellants, pursuant to said contract, six cars of peaches of the kind and character specified in said contract, and, upon arrival of same .in Detroit, they were inspected and rejected, whereby appellee was damaged in the sum of $400, for which amount he prayed judgment.

Appellants filed an answer, in which they alleged that the peaches did not come up to the requirements of the contract, in that many of the peaches shipped as No. 1 contained twenty to thirty per cent, of No. 2, and that the peaches were not of the grade, pack or quality called for hy the contract.

Some time after appellants had filed their answer, appellee amended his complaint to allege that the damages sustained amounted to $806.70. The allegations of the complaint were not changed except to allege greater damages had been sustained than the original complaint alleged.

Appellants filed a motion to strike the amended complaint from the files, “for the reason that the defendants have not been served with process within the jurisdiction of this court.” Appellants had entered their appearance voluntarily to a suit wherein only .$400 .damages were claimed, and it was objected that, inasmuch as there had been.no personal service, the-court should not permit the cause of action to !be changed by allowing, appellee to claim an increased amount as damages. This motion was ovérruled, and exceptions were saved. Thereafter, reserving .their .exceptions, appellants filed ah answer denying any liability, as had been done in their original answer.

It was shown that the terms, “No 1 ring-pack corrugated top” and “No 2 ring-faced corrugated top,” were trade terms, having a well-known and certain meaning to those engaged in buying and shipping peaches, and the testimony was conflicting as to whether the peaches came up to the standard which those trade terms, implied.

The testimony on the part of the appellee was to.the effect that the peaches graded up to the specifications required by the contract, that the peaches were in fact of a better'quality than the contract required; whereas .the testimony on the part of appellants is to the contrary.

The deposition of Ida Sf. Burns was taken; and she testified that she was a clerk in the Bureau of Agricultural Economics, stationed at Detroit, and that she had in her custody inspection certificates, made by members of her department, on produce shipped to Detroit, and she produced inspection certificates covering five cars of the peaches. involved in this litigation, according to which certificates many of the peaches were hail-pricked and scabby and to an extent that the peaches did not grade up to the specifications of the ’ contract. Other testimony to the same effect was offered, but, as we have said, the testimony was conflicting on this question, and the' testimony is legally sufficient to support either contention concerning the quality and grade of the peaches.

Unlike the case of Federal Grain Co. v. Hayes Grain & Commission Co., 161 Ark. 51, and the same case reported in 169 Ark. 1072, there Was-no provision whereby any arbitration of the question Was provided for, and the verdict of the jury must therefore be treated as conclusive of this question of fact.

It is also insisted that the court erred in giving and in refusing to give certain instructions.

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 been personally served with process.

In the case of S. R. Morgan & Co. v. Pace, 145 Ark. 273, the plaintiff sued the defendant to recover the sum of $500 alleged to be due for legal services, and a judgment was rendered by default for that amount. This judgment was later set aside, and an answer was-filed in which the defendant denied liability. Thereafter the plaintiff filed an amended complaint in which the value of the services warnalleged to be $1,000. No summons was 7 issued on the amended Cdmplaint or notice given to the defendant of the claim for the additional amount, and no answer was filed to the amended: complaint. The cause was set down for trial, and defendant failed to appear, . whereupon a trial was had and a Verdict was returned in favor of the plaintiff for $750. Upon the appeal from ‘ the judgment pronounced upon the verdict, it was insisted by the defendant below, appellant here, that the increase " in the amount claimed in the amended complaint stated a 7 new cause of action, which necessitated the issuance and . service of an additional summons. The original action for $500 covered the same transaction, and Was alleged in identical language in’the amended Complaint. We said that, under the statute, a plaintiff may file an amended complaint before answer filed without permission of the court, but that, after answer had been filed, the complaint could only be amended by permission of the court, and then upon such terms as might be imposed by the court, and that “to allow an amendment, after the issues have been joined, increasing the amount of a claim, and to render a judgment for the additional amount claimed, without notice to a defendant, would be an abuse of sound discretion,” for the reason that the defendant had the right to make default in reliance upon the case proceeding to a hearing upon the issues joined. The judgment appealed from was reduced to $500, the amount claimed in the original complaint, and affirmed for that sum.

It appears from the language quoted that new service of process was not required. The amendment to the complaint enlarging the sum claimed was not treated as a new cause of action, and it was required only that permission to amend be obtained from the court and that notice of the amendment be given the defendant, so that he might not, in case he elected not to defend the action, rely upon the assumption that no greater judgment would be rendered than had been prayed for in the complaint which the process served upon him required him to answer. Here there was permission from the court and' notice to the defendant. A motion was made to strike the amended complaint, and this motion was overruled, so that appellant had ample opportunity to resist the increased claim as well as the original demand.

In volume 1 Encyclopedia of Pleading and Practice, § 10 of the chapter on Amendments, at page 586, it is said: “Amendments of the ad damnum are never deemed to. constitute a new cause of action. Hence that frequent ground of objection will not hold at any stage of the case against amendments increasing or reducing the amount demanded.” See also Phillips’ Code Pleading, § 315, and note to the case of Commonwealth v. A. B. Baxter & Co., 42 L. R. A. (N. S.) 484.

Appellants asked instructions to the effect that the contract, was an entire one, that appellants were not required to accept any of the cars unless all of the cars came up to the specifications, and that appellants were not required to accept the peaches unless they were of a kind which could be handled by them under the grade, quality and size called for by the contract. No error was committed in refusing these instructions, for the reason that the instructions given submitted the question of fact whether the peaches conformed to the contract, and required a finding that appellee shipped to appellants, “in pursuance to said contract, six cars of peaches of the kind, grade and specifications provided in said contract,” before finding for the plaintiff. There was no question about the deterioration of the peaches in shipment, and the grade of the peaches was, when received, the same as when they were shipped. The instructions required the jury to find, before returning a verdict for the plaintiff, that the peaches were of the kind, grade and quality specified in the contract, and, if they were, plaintiff was entitled to a verdict for any damages sustained by reason of appellants ’ refusal to receive them.

When appellants refused to receive the peaches, appellee ordered the peaches sold by another dealer, and no complaint- is made that the verdict returned by the jury, which was for the sum of $793.80, is excessive.

Finding no error, the judgment is affirmed.


author: ■ Smith, J.

text:
    Ellisville Lumber Company v. First National Bank of Fordyce.
    Opinion delivered June 14, 1926.
    1. Trial — construction of charge as a whole. — In an action on drafts by an indorsee against a drawer, an instruction, to find for the indorsee if the drawer failed to prove that the indorsee agreed to take the drafts in absolute payment of the drawer’s indebtedness “without recourse” held not objectionable in using the words “without recourse,” as their meaning was well-defined, and the instructions as a whole left no doubt as to their meaning.
    2. Bills and notes — acceptance op draft as payment — instruction. — In an action on a draft by an indorsee against the drawer, an instruction to find for the drawer if the indorsee accepted them in full payment of the drawer’s indebtedness, held to submit the issue raised by the drawer’s answer alleging that the indorsee induced the drawer to sell lumber at a sacrifice under an agreement to take the drafts in absolute payment.
    3. Bills and notes — burden of proof. — The drawer of a draft has the burden of overcoming the presumption that the drawer is liable to the holder on the drawee’s bl^nk indorsement.
    4. Bills and notes — handling of drafts — evidence.—In an action ’ by an indorsee against the drawer of a draft, wherein the drawer’s answer alleged that the drafts were accepted in payment of drawer’s debt to the indorsee, testimony of the indorsee’s . president as to a conversation had with the drawer relating to the ' handling of this and other drafts was competent.
    5. ' Evidence — silence as declaration against interest. — In an action on a draft by an indorsee against the drawer, wherein the drawer contended that the draft was taken in payment of the debt, held that testimony relating to a conversation wherein the indorsee’s president demanded payment of the drawer and the drawer said nothing, was competent as a declaration against interest.
    Appeal from Dallas Circuit Court; Turner Butler, Judge;
    affirmed.

      P. G.. Matlock and Wilson & Martin, for appellant.

      8. F. Morton and Frauenthal <& Johnson, for appellee.
   ■ Smith, J.

This is the second appeal in this case, and, as appears from the opinion on the former appeal (163 Ark. 471), the suit was brought against the appellants, Ellisville Lumber Company, by appellee, First National Bank of Fordyce, to recover the amount of three drafts which had been indorsed by appellants to appellee. These drafts were drawn by appellants on the Morse Bros. Lumber Company, and were payable to the order of appellants, and were indorsed by them in blanto appellee. The drafts were presented to Morse Bros. -Lumber Company at the place of payment, and were duly protested when payment was not made. Thereupon this . suit was brought.

The Morse Bros. Lumber Company made no defense, but appellants filed an answer in which they alleged that, by threats of suit, appellants had been compelled to sell certain lumber to Morse Bros. Lumber Company at a price much below,its market value, but had made the sale upon the agreement that, if made, drafts drawn on Morse Bros. Lumber Company for the lumber so sold would be accepted at their face value as credits on the indebtedness due from appellants to appellee, and it was alleged that the drafts were indorsed by appellants in blank, and that the indorsements were made simply to pass the title to the drafts indorsed.

A demurrer to this answer was sustained, and appellants stood on their answer and appealed to this court.

Upon the appeal we held that it was not duress to do that which a party had a. legal right -to do, and .the fact that a creditor threatens to bring suit to collect a claim constitutes neither duress nor fraud, and that the compromise of such a claim is binding in law.,

We also held that, while there is a conflict of authority upon the question whether parol evidence is admissible to contradict or vary the implied terms of a blank indorsement as between the immediate parties,, the prevailing view favors the rule excluding parol evidence, since the contract implied by the blank indorsement is as definite as if it were expressed.

We said, however, that there are certain well recognized exceptions to the general rule,as between the immediate parties, that it was always competent to show by parol evidence either want or failure of consideration between indorser and indorsee, or that the. indorsement was procured by fraud, or that it was made upon some special trust, or to make collection.

There was some uncertainty about the interpretation of the allegations of the answer, but we construed, the answer to mean that appellants had indorsed the drafts merely to pass the title to the indorsee,; and had done this under an agreement that the drafts so indorsed should be accepted as absolute payment of the. inde'btedness of the indorser to the indorsee to the extent of .the face of the drafts, and that the demurrer- to the' answer had therefore been improperly sustained.

Upon the remand of the cause, testimony was offered tending to establish the fact that the indorsement had been made only for the purpose of passing title.

The court gave, at appellee’s request and over appellant’s objection, an instruction numbered 5, reading as follows: “You are instructed that, when the defendant executed the three drafts .as drawer and indorsed them, under the law they became responsible to and agreed to pay the plaintiff the amount thereof in the event that Morse Bros. Lumber Company failed to pay them and they were duly protested, just as if that agreement was written on the back of the drafts above their indorsements, unless there was a specific agreement made at the time to the contrary; and, if you find from the evidence that defendant did draw the drafts and indorse them, and the drafts were not paid, and were duly protested, and the defendant has failed to prove by a preponderance of the evidence that the plaintiff at the time agreed that it took the drafts not only in payment of defendant’s indebtedness to the amount of the proceeds of said drafts, but also agreed that it took them without recourse on defendant, regardless of whether Morse Bros. Lumber Company paid them, and that defendant indorsed the drafts only to pass the title to them to the plaintiff, then your verdict should be for the plaintiff.”-

Appellants specifically objected to that part of the instruction which reads as follows: “but also agreed that that it took them without recourse on defendant, regardless of whether” for the reason that the words “without recourse” were misleading.

Objection was also made to another instruction given at the request of appellee because it toó employed the phrase “without recourse”, the objection being-made for the same reason.

We think there is nothing ambiguous or misleading in the phrase “without recourse.” It is a term with a well-defined meaning in commercial law. Indeed, one of the partners composing the appellant firm, in testifying as a witness, employed it himself, The court was not asked to define the phrase. In fact, all the instructions, read together, left no doubt as to what it meant. Appellants now insist that the jury may have , thought the employment of this phrase was necessary at the time the drafts were drawn, but the instruction does not say so, and, if appellants were apprehensive on this score, they should have asked an instruction stating that the employment of these particular words was not essential.

The court gave on its own motion, and over appel-' lant’s objection, the following instruction: “A. If the jury believe from a preponderance of the evidence in this case that there was a specific agreement at the time on the part of the First National Bank of Fordyce to take the acceptances introduced in evidence in this case as payment in full of the indebtedness due by defendants to it, the amount of the acceptances, regardless of the fact of whether or not the Morse Bros. Lumber Company paid the acceptances, and that the defendants indorsed the acceptances in blank for the purpose of transferring the title of the acceptances to the plaintiff and thereby carry out its original agreement with the plaintiff, your verdict should be for the defendant. ’ ’

This instruction fully and correctly submits the issue of fact in the case, and accords with the law as declared •in the opinion on the former appeal, and we think makes clear the fact necessary to be shown for appellants to escape liability on their indorsement.

An objection was saved to an instruction which placed the burden of proof on appellants. There was no error in this. In the former opinion we said: “As we have already seen, the presumption of liability arising from a blank indorsement is prima facie merely, and not conclusive.” The fact that there is a presumption, although it is only prima facie, and not conclusive, casts the burden of proof of overcoming this prima facie presumption on appellants.

Exceptions were saved to the admission of certain testimony. Mr. Abernathy, the president of appellee bank, testified that, after he had called upon appellants to reduce their indebtedness to the bank, appellants came to him and wanted to know whether or not the bank would handle drafts given by prospective purchasers of lumber, among these being the Morse Bros. Lumber- Company and the Riley Lumber Company. Abernathy testified that lumber was sold to the Riley Lumber Company as well as to the Morse Bros. Lumber Company, and that a draft drawn on the Riley Lumber Company was deposited to appellants’ account, and was paid by the company on which it was drawn.

We think no error was committed in.admitting this testimony. In the first place, the Riley draft was paid, and appellants were, for that reason, entitled to credit for its proceeds. Moreover, Abernathy testified that the conversation in regard to all these drafts occurred at the same time, and before they were drawn, and that all of the drafts drawn were part of the same arrangement.

Exceptions were also saved to the admission of certain testimony which the appellants say was self-serving. This testimony related to a conversation which occurred in the bank between the president thereof and a member of appellants’ firm which was overheard by employees of the bank. The purport of this testimony was that Abernathy advised the member of appellants’ firm that the drafts had not been paid, and demanded that they be taken up and paid, and nothing was then said about the drafts having been accepted as absolute payment for the amounts thereof. This testimony was competent. It related to a conversation between the parties in interest, and was in effect a declaration against interest.

The testimony presented a clear-cut issue of fact, and the jury might have found either way, but the jury accepted as true appellee’s version of the transaction, and the verdict of the jury is conclusive of the question of fact.

We find no error in the record, and the judgment must be affirmed.