author: Johnson, C. J.,

text:
    State use School District No. 14 v. American Surety Company.
    4-3114
    Opinion delivered June 26, 1933.

      W. E. Beloate and Horace Chamberlin, for appellant.
    Cunningham & Cunningham, W. P. Smith and J. H. Townsend, for appellees.
   Johnson, C. J.,

(after stating the facts). It will be seen from the statement of facts that this is a suit, primarily, upon the -bond of the county treasurer of Lawrence County. In the outset we are confronted with the question of jurisdiction of the trial court.

Section 1165 of Crawford & Moses’ Digest, in part, reads as follows: “Actions for the following causes must be brought in the county where the cause or some part thereof arose. * * # Third: On actions upon the official bond of a public officer, except as provided in § 1175.”

Section 1175 of Crawford & Moses’ Digest reads as follows:

“All actions for debts due the State of Arkansas, and all actions in favor of any State officer, State board or commissioner, in their official capacity, and all actions which are authorized by law to be brought in the name of the State and all actions against such boards or commissioners or State officer, for or on account of any official act done or omitted to be done, shall be brought and prosecuted in the county where the defendant resides. ’ ’

In the case of Edwards v. Jackson, 176 Ark. 107, 2 S. W. (2d) 44, which was an action against the sheriff of Montgomery County and the sureties on his bond as such, and was brought in the Polk County Circuit Court, it was alleged by the plaintiff in that suit that her husband had been wrongfully killed by the sheriff’s posse, certain members thereof being residents of Polk County, who were served with process in that county. It was there insisted that, as the Polk County residents had been properly sued and served with process in that county, the right existed to sue the sheriff as a joint tort-feasor, in that county. We held, however, that an action upon the official bond of a county officer had been localized by § 1165, Crawford & Moses’ Digest, and could be brought only in the county in which the cause of action arose, and the suit against the sheriff and his sureties was dismissed upon demurrer, for the reason that the Polk Circuit Court was without jurisdiction of the cause of action, notwithstanding the allegation that all of the defendants were joint tort-feasors, two of whom had been properly sued in Polk County.

In the more recent case of Leonard v. Henry, ante p. 75, this court again approved the doctrine announced in Edwards v. Jackson, and used the following language in reference thereto: “The language and meaning of the statute on the questions involved herein is so plain as to admit of no construction. It was within the competency of the Legislature to enact it; it is not in conflict with the Constitution of the State, and does not deprive appellants of any rights guaranteed by the Constitution of the United States.

"The venue of the action, as shown by the allegations of the complaint, was in Montgomery County, where the cause arose, no part of it having arisen in Polk County, where the suit was brought, and the demurrer was properly sustained. Bledsoe v. Pierce Williams Co., 147 Ark. 51, 226 S. W. 532; Reed v. Williams, 163 Ark. 520, 260 S. W. 438.”

From what we have said, it is perfectly evident that the. venue of this action, as shown by the allegations of the complaint, was in Lawrence County, where the cause of action arose and where the official bond of the treasurer was executed, and not in Pulaski County, where the suit was filed.

It is xiot necessary to discuss other interesting questions presented in briefs.

For the error indicated, the judgment of the Pulaski County Circuit Court is reversed, and the cause of action dismissed.


source: Caselaw Access Project

author: Smith, J.

license: Public Domain

text:
    Life & Casualty Insurance Company of Tennessee v. Barefield.
    4-3042
    Opinion delivered June 26, 1933.

      Moreau P. Estes, for appellant.

      John G. Rye and J. B. Ward, for appellee.
   Smith, J.

This is a suit on an accident policy, and from a judgment in favor of the insured is this appeal.

The complaint alleged that the plaintiff Avas traveling north in a Ford coupe, in company Avith his son, when they met a large sedan traveling in the opposite direction at a high rate of speed, and just as the cars Avere passing the sedan ran over a stick and “flipped the said stick in the direction of the car in Avhich the plaintiff AAras riding, striking the said car at the front of the left-hand door. The stick Ayas hurled into the car and struck the plaintiff in the right eye, causing said plaintiff to lose the total and irrecoverable sight of said right eye. That the accident above referred to is covered by the terms of said policy; that said accident occurred Avhile said policy was in full force and effect.”

The cause was heard on a stipulation, which recited that “the facts are as stated in the complaint at law filed by the plaintiff, and, if the facts so stated make out a case of liability against the defendant in favor of the plaintiff, the court is authorized to render a judgment against the defendant in favor of the plaintiff for the sum of $1,625, and penalty of 12 per cent, if the court finds plaintiff is entitled to said penalty from the facts stipulated herein, subject to defendant’s right to except and appeal to the Supreme Court of Arkansas for a reversal of such judgment.”

The stipulation incorporated the relevant portion of the policy sued on, which reads as follows: The appellant insures the plaintiff against the result of certain bodily injuries, including the loss of an eye, “if the insured shall [suffer such injuries] by the collision of or by any accident to any railroad passenger car, passenger steamship, public omnibus, street railway car, taxicab or automobile, stage or bus, which is being driven or operated at the time by a person regularly employed for that purpose, and in which such insured is traveling as a fare-paying passenger or on which he is lawfully riding on a pass; or by the collision of or by any accident to any private horse-drawn vehicle or private motor-driven car in which insured is riding or driving; or shall [suffer them] by any accident to any passenger elevator in which insured is riding as a passenger; provided that in all cases referred to in this paragraph there shall be some external or visible evidence on said vehicle of the collision or accident.”

For the reversal of the judgment of the court below, it is insisted that, under the stipulation as to the facts, there is no evidence that there was any “external or visible evidence on said vehicle of a collision or accident,” as required by the policy, and also that no causal connection was shown between the loss of the eye and the accident to the car.

It appears, however, that there was an accident to the car. It was an accident, within the meaning of the policy, for the flying stick to strike the car, and in striking the car the stick was deflected so as to strike the plaintiff and cause the loss of his eye, and, if it be said that there was left no external or visible evidence on the car of the accident, this provision was in the nature of an exception to the event insured against, to-wit, that the insured, while riding in one ear, should be accidentally injured through the operation of another. Plaintiff having made proof that he was so injured, the burden was upon the insurer to show that the case fell within an exception to the contract by which the insurer had indemnified the insured against such an injury.

The rule appears to be that, when proof is made of damage apparently within a policy of insurance, the burden is on the insurer to show that the injury or damage was caused by an event from the occurrence of which the insured had exempted itself from liability. The rule is stated at § 599 of the chapter on Insurance in 14 R. C. L., page 1437, as follows: “Where proof is made of a loss apparently within a policy, the burden is on the insurer to prove that the loss arose from a cause for which it is not liable. Accordingly, while the plaintiff in an action on an accident policy must prove that the death was caused by accidental means, yet where prima facie evidence of that fact has been adduced, the defendant must show that the death of the insured resulted from an excepted cause.”

The following, among other decisions of this court, are to the same effect: Grand Lodge, A. O. U. W., v. Banister, 80 Ark. 190, 96 S. W. 742; Continental Casualty Co. v. Todd, 82 Ark. 214, 101 S. W. 268; Ætna Life Ins. Co. v. Taylor, 128 Ark. 155, 193 S. W. 540; Harrison v. Interstate Business Men’s Acc. Ass’n, 133 Ark. 163, 202 S. W. 34; Mutual Life Ins. Co. of New York v. Raymond, 176 Ark. 879, 4 S. W. (2d) 536.

We are of the opinion also that there was such causal connection, under the provisions of the policy, between the accident and the injury as to sustain the judgment of the court. The flipping of. the stick was clearly an accident. The stick was thrown against the car, and, after strildng the car, was so deflected that it struck the plaintiff and injured him. That the stick did strike the car, and was deflected in so doing, is a fact which the parties have stipulated to be true, and this stipulation, in our opinion, distinguishes the instant case from that of Life & Casualty Ins. Co. of Tennessee v. Whitehurst, 148 So. 162, decided by tlie Court of Appeals of Alabama, which was cited by appellant and relied upon as announcing the legal principle which should control our decision.

It is finally insisted that the trial court erred in assessing a penalty and attorney’s fee in this case, for the reason that the insurer had defended in good faith under the belief that it was not liable. We have held, however, to the contrary. The plaintiff recovered the full amount sued for; indeed, there was a stipulation declaring the extent of the liability if the insurer was liable at all, and the fact that the assertion of nonliability was made in good faith is no valid defense to the assessment of a penalty and the allowance of an attorney’s fee, as provided in § 6155, Crawford & Moses’ Digest. There was a review of what we regarded as the controlling authorities upon this- subject in the recent case of Missouri State Life Ins. Co. v. Fodrea, 185 Ark. 155, 46 S. W. (2d) 638, and we do not again review them.

As we construe the contract sued on, the judgment is correct, and it is therefore affirmed.


author: Humphreys, J.

text:
    Wasson v. State use Lonoke County.
    4-3154
    Opinion delivered June 26, 1933.

      Trieder & Lasley, for appellant.

      George F. Hartje and Chas. A. Walls, for appellee.
   Humphreys, J.

This is an appeal from a decree of the chancery court of Pulaski County requiring appellants to pay appellees $17,734.24 on special deposit in the People’s Bank under a depository agreement between Lonoke County as party of the first part, the People’s Trust Company, party of the second part, and Bankers’ Trust Company, party of the third part. The duties of the party of the third part were to hold the bonds deposited by the People’s Trust «Company to secure the deposits óf the public fund to be made from time to time, dependent upon the amount deposited. The People’s Trust Company continued to act as the depository of Lonoke County until the Bank Commissioner took charge of its assets on May 2, 1933, pursuant to act 88 of the Acts of the General Assembly of 1933. The designation of the People’s Trust Company as the depository of Lonoke County grew out of the failure of the Lonoke County Bank, which was the regularly designated depository for said county under the provisions of act 163 of the Acts of the General Assembly of 1927. The People’s Trust Company was designated as the depository of said county under the provisions of the samé act. Appellant attacked the validity of the order constituting the People’s Trust Company the depository of Lonoke County as well as the agreement or contract entered into between them on the ground that in both it was provided that the People’s Trust Company should pay no interest for the use of the money, although the act provided for the payment of 4 per cent, interest, and for that reason asked that the collaterals of $49,000 securing the public funds be released for the benefit of the general creditors of the People’s Trust Company, and that the money set aside as a special deposit be declared a general deposit. The case went off on demurrer. "One paragraph of the complaint states the gist of the contention of appellant, which is as follows:

“Plaintiff further states that Marion Wasson, as Bank Commissioner in charge for management of People’s Trust Company; has refused to pay over to Lonoke County the balance of $17,734.24 of its deposits on the ground that the pledge of securities under the contract between Lonoke County and People’s Trust Company, whereby the latter was designated as depository and under which said funds were deposited, was unauthorized, and void, inasmuch as no interest was to be paid on said deposit, and for that reason People’s Trust Company had no legal right to pledge any of its assets as security for the public funds so deposited.”

The People’s Trust Company acted as the depository of Lonoke County for about a year and had the free use of the public money during that period. The average deposit during that period was about $50,000. When the commissioner took charge, the status of all creditors was fixed as the contract was an executed one and performed as far as possible.

The facts bring the instant case within the rule adopted and announced in the case of State ex rel. Independence County v. Citizens’ Bank & Trust Company, 119 Ark. 617, 178 S. W. 929, as follows:

.“The principal of law controlling here may be stated in the language of Mr. Justice Swayne, speaking for the Supreme Court of the United States in Union National Bank v. Matthews, 25 U. S. (L. C. P. edition) 188-190. ‘A party who has had the benefit of an agreement cannot be permitted in an action founded upon it to question its validity. It would be in the highest degree inequitable and unjust to permit a defendant to repudiate a contract, the benefit of which he retains. ’ While this is not strictly a contract inter partes, it is the same in legal effect, and the'same principal applies hereto.”

We regard this case as parallel in its salient points and controlling; so we deem it unnecessary to refer to the other cases cited in the briefs.

No error appearing, the decree is affirmed.


author: Kirby, J.,

text:
    Stokes v. Farmers’ Bank of Hardy.
    4-3040
    Opinion delivered June 26, 1933.

      Coleman & Reeder, for appellant.

      Sidney Kelley and Gus Causbie, for appellee.
   Kirby, J.,

(after stating- the facts). Appellants insist that the court erred in not holding the note invalid as executed for accommodation of the bank, with the understanding it was not to be paid and without consideration.

The testimony showed that the- president of the bank, Metcalf, who had just taken charge of the bank’s affairs to save it if it could be done, Avas not responsible for its condition any more than appellants, that he stated the bank’s condition to them and the necessity for the contribution or assessment in order to prevent and avoid the necessity for assessments against the stockholders that it might continue business without such assessment and with capital unimpaired. That they gave their note for the purpose of taking- up the bad paper upon the agreement of the bank president to match the amount thereof in cash,, which was done. This furnished, of course, sufficient consideration for the note. Jones v. Green, 173 Ark. 846, 293 S. W. 749; Ellis v. Jonesboro Trust Co., 179 Ark. 615, 17 S. W. (2d) 324.

It makes no difference, so far as such consideration was concerned, that Metcalf later bought and took up $1,428.worth of the notes in the bank, whether they were bad paper or not, since he paid in cash the value thereof.

The note sued on was not conditional, and Metcalf, with whom the agreement was made for its execution, paid the amount as he agreed to do and used same in taking- out the bad paper of the bank and prevented an assessment of stockholders or impairment of the capital.

The note was a valid obligation made for a valuable consideration, of which the court correctly found there was no failure, upon testimony amply sufficient to sustain the finding, and returned judgment thereon accordingly. Ellis v. Jonesboro Trust Co., supra.

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


author: Mehaffy, J.

text:
    Curlin v. Watson.
    4-3137
    Opinion delivered June 26, 1933.

      R. V. Wheeler, for appellant.

      Hal L. Norwood, Attorney General, Pat Mehaffy, Assistant, and Coleman & Riddick, for appellee.
   Mehaffy, J.

The appellant began this suit in the Pulaski Chancery Court alleging that he is the duly qualified and acting sheriff of Crittenden County, Arkansas, for the term ending December 31, 1934, and that the appellee is the duly qualified and acting Commissioner of Revenue of the State of Arkansas; that under the provisions and authority of §§ 29, 30, 31, 32 and 33 of act No. 65 of the General Assembly of 1929 the appellant, as sheriff, is charged with the duty of collecting, under the State Highway Commission, the motor vehicle tax as provided in said act; that such act was amendatory of the laws previously in force; that under preceding sections of the same act the State Highway Commission is charged with the supervision of the collection of said motor vehicle tax, preparation of supplies for use in collecting said tax, including the metal tags for use on the motor vehicle as evidence of the fact of payment, and the auditing of the accounts of the various sheriffs in connection with such collection; that, under the provisions of § 30 of said act, the appellant is entitled to 35 cents from each collection made, as a fee for his services; that, during the session of the General Assembly for the year 1933, acts No. 9 and No. 94 were passed, which, while not stating that they were amendments to said act No. 65, are to a certain extent amendments thereto.

It was further alleged that the only effect of the acts of 1933 was to transfer the duties of the State Highway Commission to the Revenue Department, but leaving act 65 in full force as to all duties enjoined upon the sheriff under said act; that the appellee has notified appellant and other sheriffs that he will undertake on July first all duties under said act 65, and will not allow the sheriffs to exercise any functions under said act, and will not furnish them with any supplies for use in connection with such collection.

Appellant prayed an order restraining the Commissioner of Revenue from acting under act No. 94 of the Acts of 1933.

Appellee filed answer admitting that he would, on July 1, 1933, proceed to collect the motor vehicle tax, and would not recognize the sheriffs as having any duties in connection with said collections; and he admitted that one of the effects of the construction placed upon said act would deprive the sheriffs of the fee for services performed, and that in all acts in connection with such tax, appellee would be acting as Revenue Commissioner of the State of Arkansas.

This cause was submitted to the court upon complaint and answer, and the court entered a decree dismissing the complaint for want of equity. The case is here on appeal.

Act No. 9 referred to by appellant, transferred the duties enjoined upon the highway commission and highway department in relation to the registration and license fees on automobiles, trucks, tractors, motorcycles and all other motor vehicles to the Revenue. Department.

Act No. 94 reads as follows: “Section 1. Beginning July 1, 1933, the Commissioner of Revenues shall collect the motor vehicle license fees prescribed by law, and he is empowered to make and enforce the necessary rules and regulations to insure such,collections.”

The only question for our consideration is whether act No. 94 makes it the duty of the Commissioner of Revenues to collect the motor vehicle license fees, and repeals that part of the law with reference to the collection of this tax by sheriffs.

Act No. 94 is plain and unambiguous, and in express terms requires the Commissioner of Revenues to collect the taxes. It is in direct conflict with the provisions of act No. 65 of 1929.

While the law does not favor repeal of a statute by implication, yet subsequent legislation repeals previous legislation with which it is in conflict, whether it expressly declares such repeal or not. An implied repeal results when the later act cannot be harmonized with the terms and necessary effect of an earlier act. In such case the later law prevails as the last expression of the legislative will. When the repugnancy is ascertained, the later act, in date, has full force, and displaces by repeal whatever in the earlier act is inconsistent with it, .and this is true whether it expressly declares such repeal or not. Lewis’ Sutherland Statutory Construction, vol. 1, 461 et seq; Massey v. State use Prairie County, 168 Ark. 174, 269 S. W. 567; Mays v. Phillips County, 168 Ark. 829, 274 S. W. 5, 279 S. W. 366; Standley v. County Board of Education, 170 Ark. 1, 277 S. W. 559; Babb v. El Dorado, 170 Ark. 10, 278 S. W. 649; State v. White, 170 Ark. 880, 281 S. W. 678; Ouachita County v. Stone, 173 Ark. 1004, 293 S. W. 1021.

As repeal by implication is not favored, in order that a later statute repeal a former statute by implication, there must be such a positive repugnancy between the two laws that they cannot stand together, and there must be irreconcilable conflict. When, however, two acts relating to the same subject are necessarily repugnant to or in conflict with-each other, the later act must control, and, to the extent of such repugnancy or conflict, operates as a repeal of the prior act, whether so expressly declared or not. State v. Bain, 172 Ark. 480, 289 S. W. 324.

Act No. 94 of the Acts of 1933 is in irreconcilable conflict with the prior law with reference to the collection of motor vehicle licenses, and the later act must control.

The decree of the chancery court is affirmed.


author: Butler, J.

text:
    Roetzel v. Adams.
    4-3057
    Opinion delivered June 26, 1933.

      Golden Blount and Brundidge & Neelly, for appellant.

      John E. Miller and C. E. Yingling, Marvin T. Reed, W. H. Gregory, for appellee.
   Butler, J.

In the latter part of November, 1980, the Citizens’ Bank of Bald Knob, having closed its doors and seeking to reopen, was required by the State Bank Commissioner to strengthen its capital structure in the sum of $5,000. This money was procured, and the bank reopened and continued in business for a time, but again closed its doors and was taken over by the Banking Department as an insolvent corporation, for purposes of liquidation.

In the proceedings relating to this matter, J. A. Roetzel intervened, alleging that the money above referred to had been secured from him on the 24th day of November, 1930, and paid by him into the Citizens’ Bank of Bald Knob, payment of which was guaranteed by a contract signed by certain persons who were directors. and stockholders in said bank for themselves and the remaining stockholders, and that subsequently at a regular meeting of the stockholders the contract had been ratified by all the stockholders present in person or by proxy. It was alleged that payment had not been made, and judgment was prayed for the allowance of appellant’s claim against the bank as a preferred claim and for judgment against all.of the stockholders by reason of their guaranty.

The stockholders were made parties defendant, and various pleadings were filed by the bank and these defendants. The cause was submitted to the court upon the intervention of appellant, the exhibits thereto, the demurrers and other pleas filed by the respective parties. The court decreed that the defendants, 'Bing Moody, W. C. Crenshaw, J. W. Coombe, John Q. Adams, J. R. Kilman and L. B. Wallace were personally liable for an amount equal to one-third of the par value of the capital stock owned by each of them in the bank when it became insolvent; that only those stockholders who signed the contract of guaranty were personally liable, but that the capital stock owned by each of them was liable for one-third of its par value for which a lien was fixed and the stock ordered sold in satisfaction thereof. Judgment was entered in accordance with these findings and the intervention dismissed as to the Bank Commissioner and the defendants, W. A. Hodges, R. L. Brawner and Mrs. Sarah Pearce, acting for themselves and others in like position.

On appeal various contentions are made by the appellant and appellees, all of which depend on the construction of the contract of guaranty and its ratification by the stockholders. All of the stockholders were not present in person or by proxy at the stockholders’ meeting, and as to these absent stockholders it is conceded by the appellant no liability attaches. This, in our opinion, is correct. We therefore consider only the questions which relate to the liability of the Citizens’ Bank of Bald Knob and the other stockholders.

The record discloses that all of the defendants, and J. A. Roetzel and his wife, Mrs. Adeline Roetzel, were stockholders of the Citizens’ Bank of Bald Knób. The contract of guaranty is as follows: “This contract made and entered into by and between Bing Moody, J. R. Kilman, W. C. Crenshaw, L. B. Wallace, J. W. Coombe and John Q. Adams unto and with J. A. Roetzel, all as officers and directors of the Citizens’ Bank of Bald Knob, Arkansas, acting for themselves and the stockholders of the said bank but not for the bank as an individual corporate. Whereas, in order to facilitate the reopening of said bank and to strengthen its capital structure, the said W. C. Crenshaw, L. B. Wallace, Bing Moody, J. R. Kilman, J. W. Coombe and John Q. Adams agree with the said J. A. Roetzel that, if he will pay into the undivided profits account of said bank the sum of five thousand dollars, said officers and directors for themselves and the stockholders of said bank agree that they will guarantee to said J. A. Roetzel that, in case he should, by reason of paying into said undivided profits account said sum of money, fail to be reimbursed for such sum together with interest thereon from date until paid at the rate of eight per cent, per annum by June 1, 1932, which date is the end of the liquidation period entered into this day by said bank unto and with its depositors, that all stockholders of record of said bank of this date shall be held equally and ratably liable unto said J. A. Roetzel, his heirs and assigns, according to the amount of stock which they may now own of record in their respective names, and, upon demand by said J. A. Roetzel, his heirs, executors or assigns, will pay promptly over to said J. A. Roetzel, his heirs, executors or assigns, above said sum with stipulated interest, further agreeing that no outstanding stock of said bank shall be transferred upon the books of the bank until said liquidation period of time has passed and this obligation discharged, and the said J. A. Roetzel for and in the above consideration and stipulations hereby agrees and does pay over to the cashier of said bank said sum of money to be credited to its undivided profits account.”

The annual meeting of the stockholders was held on January 13, 1931, a record of which meeting was before the court, giving the names of the stockholders present in person or by proxy, the total amount of the outstanding shares of stock present and voting in person or by proxy. At that meeting the following resolution was adopted:

“Whereas, on November 20, 1930, during the financial crisis, it became necessary for the directors of this bank to close it for a period of five days in order to stabilize conditions, and,
“Whereas, in order to perfect a reopening and meet the requirements of the State Bank Commissioner, the officials and directors were required to strengthen its capital structure to the extent of five thousand dollars immediately in order that certain notes under criticism of said Bank Commissioner might be charged out, and
“Whereas, such officers and directors acting for the stockholders as a whole negotiated a loan from Mr. J. A. Roetzel in the amount of five thousand dollars to be repaid on June 1, 1932.
‘ ‘ Therefore be it resolved: That all stockholders of record this date are hereby assessed an assessment against his or her stock in this bank to the amount of 33 1/3 per cent, of the par value thereof, which assessment is payable on or before June 1, 1932, the proceeds of which shall be used to liquidate said note of $5,000 to J. A. Roetzel, and all such stockholders are hereby directed and ordered to pay said amount to the cashier of this bank on or before said June 1, 1932. This assessment is hereby declared a lien upon said stock for the payment of said $5,000, and all dividends which may accrue and be payable prior to June 1, 1932, shall be held < o apply to same. ’ ’

We will dispose first of the question of the liability of the Citizens’ Bank. An examination of the contract and of the resolution adopted at the' stockholders ’ meeting discloses the reason and purpose for which the loan was procured from the intervener. Unless the capital structure of the bank could be strengthened in the sum of $5,000, the bank would be unable to open, and the stockholders were threatened with loss of their investment and an additional assessment on their stock. It was therefore very much to their interest that the requirement of the Bank Commissioner be met. Mr. and Mrs. Roetzel together owned 96 shares out of a total of 600 shares of the capital stock. It Avas therefore as much to their interest as to the other stockholders to keep the bank a going concern. The condition was that the bank’s capital structure should be strengthened to the extent of $5,000, and that certain worthless notes in that aggregate be withdrawn from the assets of the bank. To meet this condition, the $5,000 Avas procured from the intervener. If the bank AATas to OAve Roetzel for this money, its capital structure would not have been strengthened. Hence .it Avas necessary that the bank be not a party to the contract guaranteeing to Roetzel the payment of the money borrowed from him, and this was provided for in express language. Those Avho signed the contract covenanted that they Avere acting for themselves and the stockholders of said bank, “but not for the' bank as an-individual corporate.” As pointed out by counsel for the Bank Commissioner, it will be noted in the resolution ratifying the contract it is recited .that the officials and directors Avere required to strengthen the bank’s capital structure, and that such officers and directors, acting for the stockholders, negotiated the loan. It was the interpretation placed on the contract by the stockholders themselves that it Avas not the obligation of the bank, but of the stockholders, and that it Avas their intention that they were acting in their indiAddual capacities and not for the corporation. This is clear from the unambiguous language of the contract itself, and where. there is no ambiguity it is our duty to enforce the contract to the letter.

“A contract is not binding on the corporation but on the officers or agents individually, where it is not signed by such corporation, or it does not otherAvise appear that there was an intention to bind it, but is made with the officers, or with stockholders, in- their individual capacities, even though the corporation gets the benefit of the contract.” 14 C. J., p. 481. The court, therefore, correctly dismissed the intervention as to the Bank Commissioner.

Since it is conceded that only those stockholders who ratified the contract of November 24, 1930, are liable in this action, the remaining subject of inquiry is which of the stockholders are liable and the extent of that liability. The court found that only such of the stockholders as signed the contract were personally liable to the intervener and those the court held were not liable here insist that the contract in so far as it related to the bank was ultra vires and void, and that because of this it could not be ratified by the stockholders. We are of the opinion that our conclusion as to the liability of the bank and what we have said regarding it disposes of this contention. The officers and directors were not acting for the bank, nor did they profess to do so, but for themselves and the other stockholders personally. The contract, in express terms, guarantees the payment to the intervener the $5,000 and professes to act for the parties signing the contract and for the stockholders. These stockholders at their next annual meeting considered a resolution which recited the reasons for the advancement of the money by the intervener, the negotiations of the officers with the intervener for the loan, and that in conducting the same they were acting for the stockholders. With this in mind the resolution was adopted by which, in express terms, they recognized their liability ánd not that of the bank under the contract theretofore entered into between the directors and Roetzel. By this resolution the par value of the shares of stock each stockholder owned was used as a yard stick by which the liability of each would be measured, and such stock was pledged to the extent of such liability. Because of this resolution, we are of the opinion that there was no other or different liability on those acting for the stockholders who signed the contract and those who ratified it. By the. plain terms of the language used they intended to, and did, bind themselves personally to pay their .just proportion of the $5,000 advanced by Roetzel, which was deemed to be an 'amount equal to one-third of the par value of the capital stock owned by each. It was equally to the interest of J. A. Roetzel and Adeline Roetzel as to the other stockholders that the capital structure of the bank be strengthened. They joined with, the other stockholders in the resolution, and therefore they, too, are liable for their proportionate part, and, with this deducted, the remaining stockholders are obligated for the balance.

It follows that the decree of the trial court must be reversed as to that part dealing with the liability of the stockholders, and the cause is remanded with directions to enter a judgment against each of them who signed the contract or were present in person or by proxy and ratified the same at the stockholders’ meeting, in such proportion as one-third of the par value of the capital stock owned by each bears to the sum borrowed, after the proportionate amount due by J. A. Roetzel and Adeline Roetzel as stockholders is deducted; and that a lien be fixed on the stock and the stock sold to satisfy the judgment, the intervener being entitled to have execution for any residue of the debt after the stock has been applied to the payment thereof.


text:
    Leonard v. Smith.
    4-3143
    Opinion delivered June 26, 1933.

      Hal L. Norwood, Attorney General, and Robert F. Smith and Pat Mehaffy, Assistants, for appellant.

      Trieber & Lasley, for appellee.
   Butler, J.

This suit was brought for the purpose of restraining the appellant, Roy V. Leonard, as State Treasurer, from paying in cash warrants drawn on the State Highway Fund, each of which was for less than $100, to holders of” the same whose aggregate holdings exceeded $100 without first requiring said holders to present the warrants to the State Refunding Board for action thereon. The complaint alleged that there were outstanding, on February 1,1933, warrants and vouchers issued by the highway department payable out of the State Highway Fund, each for a sum of less than $100 but in the aggregate amounting to a sum in excess of $500,000; that the appellant, as State Treasurer, had accepted such warrants and had redeemed the same by paying out of the Bond Refunding Fund $60,000 and that, unless restrained, he would continue to pay the same in cash without requiring the holders to present said warrants to the Refunding Board for examination and allowance.

A demurrer was interposed to the complaint which was overruled by the court, and, appellant refusing to plead further, the temporary injunction which had been granted was made permanent and in accordance with the prayer of the complaint. From the action of the court in overruling the demurrer and from the judgment, an appeal to this court was prayed and granted.

The correctness of the court’s ruling on the demurrer is to be determined by the construction of legislation passed by the Legislature of 1933. To arrive at a proper construction of this legislation the intent of the Legislature, of course, must be discovered, and this we find to be not without doubt and difficulty. The intent is obscured by the general terms in which it has manifested its purpose, and it is necessary to notice the situation existing which induced its action.

At the convening of the General Assembly of 1933, the State had just completed an ambitious program for the construction and maintenance of highways, the cost of which was to be paid from revenues derived from the license fees on automotive vehicles and the oil and fuel used in their propulsion. From a survey of the revenues derived from these sources, it was expected that those derived from the same sources in the future would be ample to pay the current expenses of maintenance of the administration of the Highway Department and for the interest on bonds and for their retirement as the same matured. Owing largely to extraordinary circumstances which were not foreseen, such as the failure of many banks in Arkansas in the fall of 1929 and the spring of 1930, unusual climatic conditions and the general and wide-spread financial depression, a great falling off in the use of motor-driven vehicles on the highways resulted and a consequent decline in the fuel and oil consumed, which occasioned a corresponding decrease in the amount of revenues, far below the sum expected, and at the beginning of the year 1933 the State found itself unable to pay the interest on' bonds not matured and for the bonds that had matured, and also unable to pay for the ordinary maintenance of the highways constructed on which work had been done and warrants issued to those who had performed the work and furnished the material. To meet this situation, the Legislature of 1933 addressed itself.

Under the legislation existing prior to the meeting of the General Assembly of 1933, the highway revenues were deposited in the State Treasury, designated as “The State Highway Fund,” and all warrants drawn for payment of construction, maintenance work and other highway expenses were made payable out of this fund, warrants for the payment of highway notes and interest, toll bridge bonds and interest, revenue bonds and interest being given preference over the payment of the salaries of the State Highway Audit Commission and the maintenance of the Highway Department and highways. By §§ 7 and 8 of act No. 82 of the General Assembly of 1933, it was provided: “Section 7. There is hereby created in the State Treasury a fund to be known as the Highway Maintenance Fund, and all appropriations for the expenses of the Highway Department and for the maintenance of the State Highway System shall be payable from this fund, to which the State Treasurer shall transfer each month from the highway revenues in the Unapportioned Fund the sum of $166,666. The remainder of the State Highway revenues shall be transferred to a fund to be known as the Bond Refunding Fund. ’ ’

“Section 8. The State Treasurer shall transfer from the State Highway Fund to the Highway Maintenance Fund immediately upon the effective date of this act the sum of $166,666, and he shall also transfer to the Unapportioned Fund the remainder of the Highway Fund. After these transfers have been made all further transfers required by law to be made to or from the State Highway Fund shall be made to and from the Bond Refunding Fund.”

The effect of these sections was to abrogate the State Highway Fund and substitute for it the funds named in the sections supra, evincing the purpose of the Legislature to change the method for the payment of warrants drawn against the State Highway Fund.

Following the passage of act No. 82, supra, the General Assembly passed act No. 167, the parts of which, pertinent to the question involved, are as follows: ‘‘ Section 1. The issuance of Arkansas State Bonds, hereinafter called State bonds, is hereby authorized in a total sum equal to the aggregate of the entire outstanding indebtedness of the State on account of the construction and maintenance of the State Highway System, including all State highway notes or bonds, toll bridge bonds, revenue bonds, valid outstanding road district bonds on which the State has been paying interest under act No. 11 of the Acts of 1927 and act No. 65 of the Acts of 1929, hereinafter called road district bonds, certificates of indebtedness issued or authorized under act No. 8, approved October 3, 1928, and act No. 85 of 1931, short term notes issued under act No. 15, approved April 14, 1932, all valid claims against the State Highway Commission, and all warrants and vouchers issued by the State Highway Commission prior to February 1, 1933, together with the interest on the respective obligations and claims. Such bonds shall be the direct obligation of the State, for the payment of which, principal and interest, the full faith and credit of the State and all its resources are hereby pledged. They shall be dated May 1, 1933, shall be payable in twentydive years, and shall bear interest at the rate of three per cent, per annum, the interest to be payable semi-annually, and lo be evidenced by attached interest coupons.”

“Section 5. The holder of any State Highway Note or Bond, Toll Bridge Bond, Revenue Bond, valid Road District Bond or Short Term Note issued under act No. 15 may deposit the same with the State Treasurer for exchange for a State Bond of equal face value. All other obligations and claims mentioned in § 1 shall be presented to and examined by the State- Refunding Board, and, if allowed, may be presented to the State Treasurer, with the certificate of allowance, and exchanged for a State Bond of the face value of the amount allowed by the Board.”
“Section 7. Whenever the amount for which the-State Treasurer is to issue a State Bond is not one hundred dollars or a multiple thereof, the treasurer shall issue such bonds in denominations of one hundred dollars or multiples thereof and pay the excess in cash.”

The General Assembly of 1933 also passed act No. 206, approved on the same day as act No. 167, §§ 2 and 3 of which provided as follows: “There is hereby appropriated payable from the Bond Refunding Fund, the sum of one hundred thousand dollars ($100,000) for the purpose of paying to the holders of obligations to be-exchanged for Arkansas State Bonds the difference between bonds delivered to such holders and the obligations exchanged.

“The Auditor of State is hereby directed to issue his warrants against the above appropriations on vouchers drawn by the designated agent of the Refunding Board.”

It is apparent that the State was unable to meet its matured obligations in cash, and it is also apparent from the language of the legislation just quoted, viewed in the light of the circumstances then existing, that it was the dominant purpose of the Legislature to provide for a just and equitable method for the satisfaction of those holding the obligations of the State. Not being able to provide for the payment of these obligations in cash, the Legislature provided by § 1 of act No. 167 that, in lieu of the outstanding obligations evidenced by State Highway Notes or Bonds, Toll Bridge Bonds, Revenue Bonds. Road District Bonds, Certificates of Indebtedness issued under existing authority of law, Short Term Notes issued under act No. 15 of the Acts of 1932, all valid claims against the State Highway Commission and all warrants and vouchers issued by the State Highway Commission prior to February 1, 1933, together with the interest on the respective obligations and claims, interest-bearing bonds of .the State should be issued, for the payment of which the full faith and credit of the State would be pledged. There was no distinction made between any of these obligations or the amounts thereof, but it was the obvious purpose to issue bonds in lieu of all of them, regardless of the amount of the obligation or the manner in which it was evidenced. The Legislature deemed it proper that no bond should be issued in any sum less than $100 and provided that the method for the exchange of the outstanding obligations for State Highway Bonds was that • these obligations should be presented to and examined by the State Refunding Board, and, if allowed, a certificate of allowance should be issued by the State Board, which, when presented to the State Treasurer, might be exchanged for a State bond of the face value of the amount allowed by. the board. It was provided that the bonds should be issued in denominations of $100 or multiples thereof. The Legislature recognized that some of the valid obligations would not come under this classification, that is, that some one might have claims which in the aggregate exceeded $100, but did not equal a multiple thereof — for instance, for $125; also that others might present claims which did not amount to $100, and by § 7 provided that in such cases the warrants when allowed might be redeemed in cash. If this section is considered apart from-the remaining sections of the act and the sections of acts 82 and 206 noted, it might appear that the Legislature seemed to have had in mind those having claims in excess of $100 or some multiple thereof. But the language of the section should be construed, if it may be done so reasonably, to include any claim allowed in a less sum than $100, for it is not to be presumed that the Legislature intended to avoid the payment to those holding a single small obligation and to provide for the payment of only those obligations as would in the aggregate amount to $100 or more. Therefore, we are of the opinion that where one is a holder of a number of warrants, each of which is in a sum of less than $100, but the aggregate of which exceeds $100, the holders are entitled only to receive bonds for each $100 or multiple thereof, the remainder if any to be paid in cash.

It is the contention” of the appellant that, unless it was the intention to pay obligations for less than $100 in cash out of previous appropriations made, then no provision has been made, that act No. 167 impaired the obligation of contracts, and for that reason, in so far as it has done so, is void. It is further contended that the Legislature either intended that all.of the small warrants (those for less than $100) should be paid in cash or not at all. The Attorney General has pressed these contentions and supported them by apt argument and reasons which merit, and have had, our closest attention. We are unable, however, to accede to the position taken by him.

We do not see how any substantial right of the holder of small warrants is impaired by the legislation referred to. There was no money with which to pay these warrants, and, under § 3 of act No. 15 of the Acts of 1931, the payment of small warrants was deferred until all the matured bonds and accrued interest thereon should be paid. There is little doubt that, under the law existing prior to the passage of acts Nos. 82, 167 and 206 of the Acts of 1933, supra, all the highway warrants unpaid at that time would remain so for - an indefinite period. This included not only the small warrants, but those in excess of $100, and the legislation, therefore, could not reasonably be said to impair the rights of holders in any substantial manner.

As noted, when the purpose of the legislation, supra, is considered and the circumstances which impelled it, it seems to us that the controlling thought was not how any particular claim should be paid, but how all might be taken care of on a just and equitable basis Avithout discrimination. It is current history, of which we take knowledge, that the fund in the State Treasury pledged to the payment of the outstanding obligations was virtually exhausted, and that the reA^enue then to be expected Avas totally inadequate to proAdde for the payment in cash of but a very small portion of these outstanding obligations. Therefore, as this condition existed, the State was attempting to do the best it could to meet it, which was to issue its interest-bearing bonds payable in the future in sums of $100, or multiples thereof, and it was only in the event that bonds of this character could not represent the obligation that payment in cash was provided. So, it would be immaterial whether one had only a single warrant of less than $100 or a number of such which, in the aggregate, exceeded $100, or some multiple thereof; for, in the first instance, no bond could be issued and the claimant was therefore entitled, under § 7 to have his warrant paid in cash; and, in the second instance, no bond could be issued for the excess where the aggregate amount exceeded $100, or a multiple thereof, and in that event the excess was to be paid in a like manner. It is alleged and admitted by the demurrer that the aggregate of small warrants outstanding is in excess of $500,000. It is to be presumed that the Legislature in dealing with the subject knew of the amount of the small outstanding warrants, and, indulging this presumption, we are of the opinion that the view just expressed is strengthened 'by the language of § 2 of act No. 206, supra, for, if the Legislature intended that all of the small warrants should be paid in cash, it would have appropriated a sum approximately sufficient to effectuate this purpose.

If, then, the holder of a number of warrants, each in a sum of less than $100 but in the aggregate amounting to a greater sum, can receive in cash only the amount the aggregate, sum was in excess of $100, or some multiple thereof, it follows that the evidences of the outstanding obligations, whether bonds, notes, certificates of indebtedness, warrants or vouchers issued by the State Highway Commission before February 1, 1933, must be presented to the State Refunding Board for allowance. From the provision of § 5 of act No. 167, supra, the only way in which one holding these instruments can exchange same for State bonds and receive the excess in cash, where they amount to over $100 or some multiple thereof, is by presenting them to such board for allowance and for its certificate of such to be presented to the State Treasurer. Hence, if one having a number of small warrants which, in the aggregate, exceed the sum of $1,000 and less than $1,100, we will say, the only method provided by the statute is that these be presented to the Refunding Board, and if allowed, such board will issue its certificate for the issuance of State bonds up to the sum of $1,000 and for the payment in cash of the excess.

Section 5 of act No. 167, when considered in connection with § 1 thereof, can have no other meaning than that all obligations except notes and bonds mentioned therein must be presented to the State Refunding Board before any bonds can be issued or cash paid. The language is: All obligations and claims mentioned in § 1 shall be presented to and examined by the State Refunding Board and, if allowed, may be presented to the State Treasurer with the certificate of allowance and exchanged for a State Bond of the face value of the amount allowed by the Board.”

It is argued that the Refunding Board has no authority, under the legislation we have reviewed, to inquire into the validity of small warrants and that to require them to bé presented to a Refunding Board which has no authority to pass upon them would be absurd, and that where a warrant is for less than $100 and is presented, the board has no discretion in the matter and must allow the same. This contention is untenable for the reason that, when the act gave the board authority to allow or disallow a claim or warrant, there was necessarily implied the power to investigate the validity of a warrant and, if found to be .valid, to allow the same; otherwise, to disallow it. As suggested by counsel for the appellee, the investigation of the Audit Commission disclosed the fact that there had been irregularities in the allowance of claims by the Highway Commission and the issuance of warrants, and that many illegal claims and warrants had been discovered. The Legislature deemed it wise to vest in the Refunding Board the authority to investigate the claims and warrants presented in order to ascertain whether or not they represented valid obligations of the highway department. It is argued that to require the holder of a small warrant to present his claim to the Eefnnding Board before it could be paid would occasion much trouble to the holder and probably result in great delay and expense to him. This may be true, but reliance must be placed upon the board to provide for a procedure which will be as little burdensome as possible to the warrant holder and yet protect the interest of the State.

We have considered acts Nos. 82, 167 and-206, since they deal with the same subject-matter and are in pari materia, drawing from all of them, together with the circumstances of the occasion, the reasons for the enactment of act No. 167 and the consequences flowing therefrom. When this is done, we are constrained to find that the conclusion reached by the court below is correct. The decree will therefore be affirmed.

Kirby, J., dissents.


text:
    Jernigan v. Harris.
    4-3179
    Opinion delivered July 3, 1933.

      C. W. Norton and John Sherrill, for appellant.

      Roy D. Campbell, for appellee.
   Smith, J.

This appeal questions the constitutionality of acts 131 and 132 passed at the 1933 session of the General Assembly.

Act 131 provides the means whereby the cities and towns of the State may purchase, construct, and improve waterworks systems, and operate them. The act provides that these municipalities may, by ordinance, provide for the issuance of revenue bonds, which ordinance shall set forth descriptions of the contemplated improvement, the estimate of costs, the rate of interest, and time, and place of payment, and other details in connection with the issuance of the. bonds, from the proceeds of the sale of which the waterworks are to be purchased, constructed or improved. The act declares a statutory mortgage lien upon all property to be acquired or constructed, and directs the city or town council to fix the minimum rate for water to be collected from the users of the water, and pledges the revenues derived from the waterworks system for the purpose of paying such bonds and the interest thereon, which pledge shall definitely fix and determine the amount of revenues which shall be necessary to be set apart and pledged to the payment of the principal; that the rates to be charged for the service of the waterworks shall be sufficient to provide for the payment of interest upon all bonds and to create a sinking fund to pay the principal thereof as and when they become due, and to provide for the operation and maintenance of the system, and also an adequate depreciation fund.

The act further provides that the bonds shall be payable solely from the revenues derived from the waterworks system, and shall not, in any event, constitute an indebtedness of the municipality within the meaning of any constitutional inhibition. The act provides that the statutory mortgage lien securing the payment of the bonds and the interest thereon may be, if necessary, foreclosed by a suit in equity.

Section 9 of the act reads as follows: “For the purpose of acquiring any waterworks system under.the provisions of this act, or for the purpose of acquiring any property necessary therefor, the municipality shall have the right of eminent domain as is provided in § 4009 of Crawford & Moses’ Digest of the Statutes of Arkansas (and any acts amendatory or supplemental thereto).”

By § 18 of the act it is provided that: ‘ ‘ Said revenue bonds shall be exempt from all taxation, State, county and municipal; this exemption including income taxation, inheritance taxation as well as all forms of property taxation. ’ ’

It was alleged that the provisions of the act referred to are violative of various sections of the Constitution of the State.

Act 132 contains many provisions similar to act 131, and the same constitutional objections are offered to it.

By the provisions of act 132 the cities and towns of the State are authorized to construct, own, equip, operate, maintain and improve sewage plants, and to authorize charges against the owners of real estate within such cities and towns for the use of same, and for the collection of such charges, and to authorize cities and towns to issue revenue bonds, payable solely from the revenues from such systems. Section 13 of act 132 directs the city and town councils to pass ordinances “to establish and maintain just and equitable rates or charges for the use of and the service rendered by such works, to be paid by each landowner whose premises are connected with, and use, such works by or through any part of the sewerage system of the city or town, or whose premises in any way use, or are served by, such works.” The councils are charged with the duty of changing and adjusting such rates or charges from time to time to such extent as will not render insecure the rights of the holders of the revenue bonds, the proceeds of the sale of which are to be used in the construction, etc., of the sewage system.

This § 13 of the act provides that: “It is the intention of this act that a landowner shall be liable for such service charge, even though the use of the sewer system is by his tenant or lessee; but vacant, unoccupied property not actually using such works shall not be subject to a service charge.” It is provided that these rates or charges shall be sufficient for the payment of operation, repairs and maintenance, and “for the payment of the sums herein required to be paid into the sinking fund.”

It is further provided that all rates or charges, if not paid when due, shall constitute a lien upon the premises served by such works, “said charges to constitute a lien upon the fee title to the land and permanent improvements, even though the occupant receiving the benefit of the service for which the rate or charge is due has merely a leasehold interest (or other lesser estate) in the premises,” and that the service charge or rate may be recovered by the sewer committee of the council by a suit in the chancery court, where a lien shall be declared and foreclosed to enforce the payment.

Act 132 contains provisions similar to those of act 131 exempting the bonds from taxation and authorizing condemnation proceedings in accordance with § 4009, Crawford & Moses ’ Digest, and acts amendatory thereof.

The appellant filed a complaint in the Woodruff Chancery Court, in which he alleged that he was the owner of a lot in the town of McCrory, which he was occupying as a homestead, and that the council of the town of McCrory had passed ordinances pursuant to both acts, under which a waterworks system and a sewage system would be installed unless that action were restrained, and he prays that relief as against both systems. The causes were consolidated and heard on a demurrer thereto, which the court sustained. The plaintiff declined to plead further, and both complaints were dismissed, and from that decree is this appeal.

We proceed to consider the objections made to the constitutionality of the legislation.

It may be first said that the power of cities and towns to install sewage systems and waterworks is universally recognized. The health, as well as the comfort and convenience of persons living together in close relation and in large numbers require the existence of such powers, and a sewage system would be valueless unless the power inhered to require all property owners to make physical connections with the sewers.

The existence of this power was clearly recognized in the case of Dinning v. Moore, 90 Ark. 5, 117 S. W. 777. That was a suit under § 5525, Kirby’s Digest (now appearing as § 7593, Crawford & Moses’ Digest) which provides that the board of health of any city may direct property owners to make connections with adjacent sewers, with a provision that, upon their failure to make such connection, it shall be the duty of the board of health to have it made and to charge the property therewith, and to enforce payment of the cost thereof against the property by a suit in the chancery court. The power of the city to pass such an ordinance and to enforce its provisions was not questioned, but the relief there prayed was denied solely upon the ground that the board of health had not properly entered the necessary orders of record to bind the owner whose property was sought to be charged.

It is insisted that the attempt to make the provisions of § 4009, Crawford & Moses’ Digest, and acts amendatory thereof, available to the district are violative of § 23, of article 5, of the Constitution, and are not sufficient to incorporate that legislation into acts 131 and 132, and that there is therefore a lack of power to exercise the right of eminent domain which will probably be required to make either or both systems effective.

We quoted § 9 of act 131 above, and the same provisions appears in act 132, the effect thereof being that the municipalities “shall have the right of eminent domain as is provided in % 4009, Crawford & Moses’ Digest, of the Statutes of Arkansas, and any act amendatory or supplemental thereto.”

Such legislation, known as a reference statute, is quite common, and is uniformly upheld. It refers to another statute to regulate the procedure to make its provisions effective,, and legislation would be very cumbersome and difficult if such acts were not held valid. For instance, it was contended in the case of Wilson v. Magnolia Petroleum Co., 181 Ark. 391, that § 5745, Crawford & Moses’ Digest, providing that chancery courts shall have concurrent jurisdiction with the circuit courts to remove the disability of minority in the same way and manner as is provided for the removal thereof by circuit courts in § 5744, Crawford & Moses’ Digest, was unconstitutional because it violated article 5, § 23, of the Constitution, which provides, in effect, that no act may be amended by reference to its title, but that so much thereof as is revived, amended, extended, or conferred, shall be reenacted and published at length. In overruling this contention we there said: ‘ ‘ The two sections of the statute exist as separate and distinct legislative enactments. The later act in no manner attempts to amend or change the existing requirements as to the removal of the disabilities of minors. It simply confers the power upon the chancery courts to remove their disabilities, and provides that it shall be done under an existing statute as to the' procedure. In other words, it confers upon the chancery court the power to remove the disabilities of minors, and provides the same procedure in executing the power as already existed in the case of circuit courts. (Citing cases.)” See also Winton v. Bartlett, 181 Ark. 669, 27 S. W. (2d) 100; State v. McKinley, 120 Ark. 165, 179 S. W. 181; House v. Road Imp. Dist., 154 Ark. 218, 242 S. W. 68; Grable v. Blackwood, 180 Ark. 311, 22 S. W. (2d) 41; Arkansas State Highway Commission v. Otis & Co., 182 Ark. 242, 31 S. W. (2d) 427; Shepherd v. Little Rock, 183 Ark. 244, 35 S. W. (2d) 361; Dozier v. Ragsdale, 186 Ark. 654, 55 S. W. (2d) 779.

We conclude therefore that neither act violates § 23 of article 5 of the Constitution.

It is attempted in both acts to exempt from all forms of taxation any of the bonds authorized by each of the acts.

Section 5 of article 16 of the Constitution provides that all property subject to taxation shall be taxed according to its value, in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State, and provides also the property which shall be exempt from taxation. Section 6 of the same article of the Constitution provides that “All laws exempting property from taxation other than as provided in this Constitution shall be void.”

It would appear therefore that this provision of the act exempting the bonds from taxation is void, at least when such bonds are held by any person or agency whose property is not otherwise exempt from taxation. Clallam County, Washington, v. United States Spruce Products Corporation, 263 U. S. 341, 44 S. Ct. 121; United States v. Coghlan, 261 Fed. 424; United States Shipping Board Emergency Fleet Corporation v. Delaware County, Pa., 17 Fed. (2d) 40; United States Housing Corporation v. City of Watertown, 186 N. Y. Supp. 309; United States v. City of New Brunswick, 11 Fed. (2d) 476; United States v. Mayor and Council of City of Hoboken, N. J., 29 Fed. (2d) 932; State of Alabama v. United States, 38 Fed. (2d) 897.

This exemption does not however render either aet void, for the reason that each act contains identical sections reading as follows: “The sections and provisions of this act are separable and are not matters of mutual essential inducement, and it is the intention to confer the whole or any part of the powers herein provided for, and if any of the sections or provisions or parts thereof is for any reason illegal, it is the intention that the remaining sections and provisions or parts thereof shall remain in full force and effect.”

We have uniformly held that, where a statute is unconstitutional in part, the valid portion will be sustained if complete in itself and capable of being executed in accordance with the apparent legislative intent. These acts are both complete and eapablé of being executed in accordance with the legislative intent expressly declared in the section quoted, and the acts must therefore be upheld, notwithstanding this exemption and its consequent unconstitutionality as applied to persons or agencies whose property would otherwise be subject to taxation. Nixon v. Allen, 150 Ark. 244, 234 S. W. 45; Marshall v. Holland, 168 Ark. 449, 270 S. W. 609; Alsup v. State, 178 Ark. 170, 10 S. W. (2d) 9; Stanley v. Gates, 179 Ark. 886, 19 S. W. (2d) 1000; State v. Hurlock, 185 Ark. 807, 49 S. W. (2d) 611.

The provisions of § 13 of act 132, hereinabove referred to, providing for the sale of the fee for a service charge due by an occupant in possession under a lesser estate is not subject to the objection that one owner is required to discharge a burden which the law has imposed upon another. It is the theory of the acts that; before either improvement is begun, the cost thereof shall be ascertained and shall be paid with the proceeds of the sale of bonds, which are to be discharged, together with operating expenses, etc., by charges against the real estate, ratably fixed in such manner .that these charges will accumulate the money with which to pay the bonds.

A sewer is a permanent improvement, and, if properly maintained, lasts indefinitely. It adds to the value of the fee as well as to the value of the mere right of occupancy, and the property thus served pays the installments of cost as they mature.

A case declaring the legal principle here involved was that of Crowell v. Seelbinder, 185 Ark. 769, 49 S. W. (2d) 389. There a question arose between the owner of the remainder and the owner of a lesser estate as to liability for the annual assessments due upon the property thus owned in an improvement district. We there held that the equitable distribution of the burden of paying the annual assessments requires the. life tenant to discharge these assessments during each year of his occupancy. Yet, the entire fee would have been sold had this burden not been discharged, for the reason that the assessments were a lien upon the fee. But, as between the owners of the two estates, it was the duty of the occupant to pay installments maturing during his occupancy. So here the remainderman may require the. owner of the lesser estate, as between themselves, to discharge rates maturing during the continuance of his estate, but, if neither pays these charges, the entire -estate may be sold, for the reason that the entire estate, has the benefit conferred upon the land by the sewer system. •

The plaintiff has alleged that he occupies his property in the town of McCrory as a homestead, and he insists that act 132, which authorizes the sale thereof under a decree of the chancery court, if he does not pay the rates and charges of his sewer connection,- is violative of § 3 of article 9, of the Constitution. This’section provides that the homestead of an}^ resident of this State-, who is married, or the head of a family, shall not be subject to the lien of any judgment or decree of any court, except such as may be rendered for the purchase money, to enforce certain specific liens, or for taxes, or against certain persons sued in their fiduciary capacity.

It was contended in the case of Shibley v. Fort Smith Van Buren District, 96 Ark. 410, 132 S. W. 444, that an act of the General Assembly creating an improver ment district to construct a bridge across the Arkansas River was void, because assessments imposed under the authority of the act were made liens on the homesteads of residents of the district, which might be enforced by decrees of courts, in violation of § 3 of article 9, of the Constitution. It was held, however, that these assessments were in the nature of taxes against which there was no right of homestead exemption.

The liens which may arise under act 132, and which may be enforced pursuant to its authority, are not taxes within a strict definition of that word, but they are of that nature. More properly, they are burdens imposed pursuant to the exercise of the police power, to and for the validity of which the consent of the property owner is not essential. It is a burden imposed pro bono publico.

At § 1463 of Dillon on Municipal Corporations, vol. 4 (5th ed.), page 2621, it is said: “It has been decided, in Massachusetts, that authority to make needful and salutary by-laws, or perhaps authority to make regulations for the public health, will, in the absence of more specific power, authorize a city to construct a common sewer, and to subject the owners of the lots or land abutting, and who use the sewer, to contribute for the expenditure.” See also First State Bank of Sutherlin v. Kendell Lumber Corporation, 107 Or. 1, 213 Pac. 142.

It is urged that the acts are violative of § 4, of article 12, of the Constitution, which prohibits any municipality from levying a tax to a greater extent in one year than five mills on the dollar of the assessed value of the property in the city or town; and also that the acts violate § 1, of article 16, of the Constitution, which provides that no city or town shall ever loan its credit for any purpose whatever, nor ever issue any interest-bearing evidences of indebtedness.

A single answer will dispose of both objections. The municipality, as such, does not incur any obligation on account of the bond issues, nor does it assume any responsibility for their payment, nor can payment be enforced out of taxes or other municipal revenues. It is provided in each act that the bonds to. be issued shall be payable solely from the revenues of the proposed systems, the waterworks, in one ease, the sewer system, in the other, and that such bonds shall not, in any event, constitute an indebtedness of such municipality within the meaning of the constitutional provisions or limitations, and that it shall be plainly stated on the face of each bond that the same has been issued under the provisions of the respective acts and do not constitute an indebtedness of such municipality within any constitutional or statutory limitation.

In the case of Mississippi Valley Power Co. v. Board of Improvement Water Works District No. 1, 185 Ark. 76, 46 S. W. (2d) 32, a waterworks improvement district found it necessary to expend large sums of money, which it did not have on hand, for engines and replacement expenses. A property owner in the district sought to prevent this action, upon the ground that the district could only incur such an obligation after having been authorized so to do upon the petition of property owners. Under the terms of the contract for the purchases required by the district, it was provided that the purchase price was payable only out of the savings in the cost of pumping the water ‘ ‘ and shall never be held to create any liability or general obligation upon the said district, and no taxes, general or special, shall ever be levied upon the real estate or other property in said district or hereafter within the district, to pay all or any part of said sum of $23,560 or any interest thereon.” In holding against the contention of the protesting property owner that the district was without power to incur the obligation, we there said: “ ‘It is, in effect, a cash transaction, where the payments are to be made pari passu with the accumulation of the fund, and the only fund, out of which they are to come.’ Smith v. Town of Bedham, 144 Mass. 177, 10 N. E. 782. Appellant insists, however, that, notwithstanding the notes or instruments are payable out of the ‘savings fund,’ they are none the less a debt, bearing interest, and are purchase-money notes for machinery, of which title is retained until their payment. The courts have held, however, that contracts of this character did not create debts within the purview of constitutional or statutory prohibitions against incurring debts as the only recourse in the contract which the selling company has in the case of the failure to pay the purchase price is to retake the machinery. It is a contingent liability only, for which a general tax cannot be levied, and does not constitute a lien upon the power plant, nor its revenues. It can be paid only on the contingency that the district derives enough net revenues from the consumers of water and lights furnished by the plant to pay such notes after payment of all expenses of operation, and, as said in Bell v. Fayette, 325 Mo. 75, 28 S. W. (2d) 356: ‘There is no aspect to that situation which could make the. agreement to pay in the manner provided a debt of the city. It is a contingent purchase, the property to be paid for only out of the net earnings which it produces; the seller takes a chance on that contingency.’ (Citing numerous cases).”

In the case of McCutchen v. Siloam Springs, 185 Ark. 846, 49 S. W. (2d) 1037, it was held, (to quote a headnote) that “A contract with a city to construct a power house and install necessary equipment therein and providing for payment solely from the light plant’s earnings held not to violate amendment No. 10 forbidding’ a contract in excess of revenue for the current year.”

As to amendment No. 13, it may be said that it has no application here, as there is no attempt to exercise any of the powers conferred by it.

We conclude therefore that neither act violates any of the constitutional provisions which appellant insists render it unconstitutional. The decree of the chancery court must therefore be affirmed, and it is so ordered.

Mehaffy, J., dissents.


text:
    Dodd v. Gower.
    4-3150
    Opinion delivered July 3, 1933.

      George W. Parks, J. Paul Ward and Ben B. Williamson, for appellant.

      W. O. Edmondson and Coleman & Reeder, for appellee.
   Humphreys, J.

This is an appeal from a judgment of the circuit court of Stone County dismissing the election contest of appellant for the office of assessor of Stone County.

The contest was heard by the county court of said county upon the pleadings and testimony adduced before him, from which he found that, after the returns had been delivered to the election commissioners, and before they had certified appellee the duly elected assessor at the regular November election, the talley sheets in the townships of Turkey Creek, Richards, Franklin and Washington were erased, changed and altered so as to add 55 more, votes to appellee than actually received by him in said four townships and to take from appellant 35 votes less than received by him in said townships; and that the judges and clerks in Sylamore township failed to count certain votes cast for appellant.

Based upon these findings, the court found and declared that appellant had carried the county by a majority of 25 votes and entered a judgment that appellant was the duly elected tax assessor of Stone County, from which judgment appellee prosecuted an appeal to the circuit court of Stone County, where the cause was heard de novo on the pleadings filed and depositions introduced in the county court.

After the depositions had been read, the circuit court ordered the 'ballots brought into court. During the interval between the two trials, it was discovered that the ballots had been kept in the vault of the circuit and county clerk, where any one who desired might enter in the daytime, and that the ballots had been broken into. The court thereupon declared that the ballots had lost their integrity and could not be used in evidence, and that he must rely on the certificate of the election commissioners, holding that it was prima facie correct, and that such presumption had not been overcome by sufficient evidence.

The undisputed evidence in the record reveals that the certificate of the election commissioners was made up from the talley sheets of the various townships in Stone County, and that the talley sheets in four of the townships had been tampered with between the time they had been delivered to the election commissioners and before the time the count and certification was made.

The prima facie effect of the certificate was overcome by the undisputed testimony that it was based upon talley sheets, the integrity of which had been destroyed.

After finding that the integrity of the ballots in the four townships had been destroyed, the court should have proceeded to ascertain from secondary evidence the number of votes each received in the four townships in question. We refer to such evidence as the talley sheets, poll books and certificates in the hands of the judges and clerks which had not been tampered with and any other evidence tending' to show what number of votes the contestant and contestee had received in said townships.

The court sat as a jury in this case, and was trying the case de novo, and it was his duty to try the case and declare the result with the best admissible testimony available. This court is not trying the case de novo, as it is not an equitable proceeding.

The judgment is therefore reversed, and the cause is remanded with directions to the trial court to proceed with the hearing in accordance with this opinion.


text:
    Hough v. Leech.
    4-3053
    Opinion delivered July 3, 1933.

      John D. Shackleford, for appellants.

      Oscar H. Winn, for appellee.
   Mehaffy, J.

Salina Leech, widow of Will Leech, deceased, filed a complaint in Pulaski Circuit Court against J. D. Hough and Hughie Hough, alleging that about the 14th day of January, 1931, H. M. Hough carelessly and negligently, and without ordinary care for the safety of Will Leech, husband of Salina Leech, fired a gun and shot Will Leech in the hip; that he was thereafter taken to the hospital; that he suffered severe physical pain and mental anguish from the date of his injury until the date of his death on January 24, 1931; that said H. M. Hough was negligent and careless in firing his pistol at the deceased to make him dance, and was negligent in using a pistol or gun loaded with powder and ball to secure amusement, shooting at deceased and other negroes present; that said H. M. Hough was at the. time drinking.

Leech was about 60 years of age. It is alleged that his earning capacity was $50 a month, and that his widow, who brought the suit, had been damaged in the sum of $6,000, and prayed for judgment for the further sum of $6,000 for pain and suffering. The gunshot wound caused pneumonia, from which he died 10 days after the injury. There was a prayer for $12,000 damages against H. M. Hough.

There is no allegation in the complaint with reference to J. D. Hough, and no judgment is asked in the complaint against him.

The facts are that J. D. Hough owned a store in North Little Rock, and his son, H. M. Hough, who is about 40 years of age, worked around the store and lived near there, and, on the day of the injury, J. D. Hough, the father, had gone to lunch and Will Leech, the deceased, and another negro named McIntosh, were at work there. H. M. Hough and Will Leech had both taken a drink of whiskey. There was an old pistol in the store which had not been fired in a long while. H. M. Hough secured this pistol, fired it several times, and finally, while carelessly handling the pistol, shot Will Leech, as described in the complaint. Leech lived about ten days thereafter, and died.

This suit is to recover damages for his death and pain and suffering.

There is no evidence that J. D. Hough was guilty of any negligence or wrongful conduct in any way. The evidence is ample to sustain the verdict against H. M. Hough.

It is contended that H. M. Hough was about the master’s business. In the case of American Ry. Express Co. v. Mackley, 148 Ark. 227, 230 S. W. 598, a great many cases were cited by the court, and, after citing these eases, the court said: “The doctrine of all these cases is that the test of the master’s liability is, not whether a given act is done during the existence of the servant’s employment, but whether it was committed in the prosecution of the master’s business.” In the instant case the act was committed during the existence of the employment, but it was certainly not committed in the prosecution of the master’s business. It had no connection with the master’s business.

Again we said, in the same case: “Where a servant acts without reference to the service for which he is employed, and not for the purpose of performing the work of the employer, but to effect some independent purpose of his own, the master is not responsible for either the acts or omissions of the servant.” Numerous cases of this court might be cited in support of this rule. Applying the test mentioned in the ease cited, there is no liability in this case.

As we have already said, there is no evidence tending to show that J. D. Hough was guilty of any negligence or wrongful conduct in connection with the shooting of Leech. Yerdicts of juries must be based on evidence, must be supported by some substantial evidence, and not on mere speculation. Hunter v. State Bank of Morrilton, 181 Ark. 907, 28 S. W. (2d) 712.

Again we said:

“The rule is firmly established that the master is civilly liable for the tortious acts of his servant, whether of omission or commission, and whether negligent, fraudulent or deceitful, when done in the line of his employment, even though the master did not authorize, or know' of such acts, or may have disapproved of or forbidden them. But the act must be done riot only while’the servant is engaged in' his master’s service, but it must pertain to the particular duties of that employment. * * *
“An act.is within the scope of the servant’s employment, where necessary to accomplish the purpose, although in excess of the powers actually conferred on the servant by the master. The purpose of the act, rather than its method of performance, is the test of the scope of employment. * * * The mere, fact that he was in the service generally of the master or that the servant was in possession of facilities afforded by the master in the use of which the injury was done would not make the act attributable to the master. The act must have been done in the execution of the service for which he was engaged.” Healey v. Cockrill, 133 Ark. 327, 202 S. W. 229.

The appellant, H. M. Hough, admits that he shot Leech, and, although he says it was an accident, he admits that he shot the pistol 5 or 6 times, and that at the time he shot Leech he had the gun, rolling it around by the cylinders.

Evidence of other witnesses tended to show that H. M. Hough was negligent, and the question of his negligence was submitted to the jury under proper instructions, and the jury’s verdict, where there is any substantial evidence to support it, is conclusive here.

It follows from what we have said that the judgment against H. M. Hough must be affirmed, and the judgment against J. D. Hough reversed and dismissed. It is so ordered.


text:
    Beavers v. State.
    Crim. 3844
    Opinion delivered July 3, 1933.

      Rains & Rains, for appellant.

      Hal L. Norwood, Attorney General, and John H. Caldwell, Assistant, for appellee.
   Mehaffy, J.

The appellant was convicted of transporting liquor, and fined $100. At the trial, after the appellant had exhausted his challenges, three citizens were called as jurors, T. J. James, Lee Basham and D. P. Selby.

Each of these three citizens had served on the petit and grand juries of their county within two years next before the trial. Appellant challenged each of these jurors for cause before he was accepted on the jury.

His ground of objection was that T. J. James had served on the regular panel of the petit jury within the last two years, and this was admitted by the juror.

Lee Basham was challenged for cause because he had served on the regular panel of the grand jury within the last two years, and D. P. Selby was challenged for cause on the ground that he had served on the regular panel of the petit jury and grand jury within the last two years.

The challenges and objections to each of the jurors were overruled, and they were selected and served on the jury that tried appellant.

The learned trial court held that they were competent jurors, as they were only called in as special jurors at this term of court.

Act 135 of the Acts of 1931 entitled, “An Act to Regulate Jury Service,” reads as follows:

‘ ‘ Section 1. After ninety days from the passage and approval of this act no citizen in this State shall be eligible to serve on either grand or petit jury oftener than one regular term of the circuit court, every two years.
“Section 2. All laws and parts of laws in conflict herewith are hereby repealed and this act shall take effect and be in force from and after its passage.”

This appeal is prosecuted to reverse the judgment of the circuit court.

The Attorney General confessed error on the ground that the three jurors mentioned were not eligible to serve on the jury, and that it was error to accept them as jurors because each of them had served on the regular panel of the circuit court within two years before the trial.

After a careful examination of the record we have concluded that the confession of error is well taken.

It was thought by the trial court that the act above copied made jurors ineligible to serve on the regular panel if they had served on a regular panel in the circuit court within less than two years, but that it did not render them ineligible to service as special jurors.

Statutes must receive a reasonable construction, and courts should take into consideration the purpose of the Legislature in passing the act, and ascertain the intention of the Legislature, in passing the act.

The title of the act, “An Act to Regulate Jury Service,” means, we think, what it says. No one is eligible for jury service if he has served on the. regular panel of either grand or petit jury within two years of the time he is called to serve.

The service of a special juror or a juror selected to serve on one case is as important as the service on the regular panel, and there would seem to be no reason why a juror would be eligible to serve on a case when summoned specially, and not be eligible to serve on the regular panel.

There seems to be some conflict in authority, but when the disqualification in terms applies to jurors generally, it applies to a special juror as well as members of the regular panel. 35 C. J. 253; City of Goshen v. England, 119 Ind. 368, 21 N. E. 977, 5 L. R. A. 253.

The Supreme Court of Nebraska, in construing a statute regulating jury service said:

“The statute has made no exception in favor of talesmen, and we do not feel justified in making exceptions. The purpose of the statute seems to be to exclude professional jurymen, but, whether so or not, the language is plain and unambiguous. It is therefore a good cause of challenge to one called as a juror that he had been summoned and attended the district court as a juror at any term of court held within two years prior to the time of challenge, and this rule applies to those summoned as talesmen.” Figg v. Donahoo, 4 Neb. Unoff. 661, 95 N. W. 1020; Coil v. State, 62 Neb. 15, 86 N. W. 924.

It was the intention of the Legislature to exclude from jury service professional jurymen, and to exclude this class of jurors, whether called on the regular panel or to serve on a special case.

We therefore think the trial court erred in not excusing the jurors mentioned, and the judgment of the circuit court is therefore reversed, and the cause remanded for new trial.