source: Caselaw Access Project

author:
      Wood, J.
     McCulloch, C. J.,

license: Public Domain

text:
    Standley v. County Board of Education.
    Opinion delivered December 14, 1925.
    1. Statutes—implied repeal.—Where two laws enacted by the General Assembly are in irreconcilable conflict, the prior enactment is repealed by the subsequent one, whether there is any express repealing clause in the last enactment or not.
    2. Schools and school -districts—county superintendent— repeal op act.—Gen. Acts 1921, No. 503, §§ 1-4, amending Crawford & Moses’ Dig. §§ 5636, 8880, 8883 and 8885, and providing for the appointment of county superintendents and the payment of part of their salary by the State, held to repeal by implication Special Acts 1921, No. 375, passed two days prior, providing for the election by the voters of Lonoke County of a superintendent of schools; the two acts being in irreconcilable conflict.
    Appeal from Lonoke Chancery 'Court; John E. Martineau, Chancellor;
    affirmed.

      Trimble & Trimble, for appellant.

      Reed & Beard, for appellee.

      W. J. Waggoner and Chas. A. Walls, amici curiae.

   Wood, J.

H. B. Standley, a citizen and taxpayer of Lonoke County, for himself and other taxpayers, instituted this action against the County Board of Education of Lonoke County, naming them, and W. C. Davis, as defendants. The complaint alleged that the county board of education, at a meeting held on, June' 13, 1925, elected W. C. Davis as county superintendent of Lonoke County and entered into a contract with him, beginning July 1, 1925, and to continue for a period of .three years, at a salary of $125 per month; that, under and by virtue of act No. 375, a special act of the General Assembly of 1921, the county board of education had no right to elect a county superintendent and to enter into a contract with him as such. The plaintiff prayed that the action of the board be set aside, and that it be enjoined from entering into a contract with Davis as county superintendent for a greater period than allowed by special act Nio. 375. The board and Davis as defendants demurred to the complaint on the ground, first, that the same does not state facts sufficient to constitute a cause of action; second, that the office of county superintendent of schools of Lonoke County, Arkansas, is not an elective office; third, that act No. 375 of the Special Acts of the General Assembly, approved March 24, 1921, was repealed by act No. 503 of the Acts of 1921.

The court found that the office of county superintendent of schools of Lonoke County, Arkansas, is not an elective office, and that the mattér of employing a county superintendent of schools in said county, and contracting therefor, is ia matter entirely and wholly within the rights and powers of the county board of education. The court thereupon entered a decree sustaining the demurrer to the complaint and dismissing the same. The plaintiff excepted to the ruling of the court, and stood upon his complaint, and prosecutes this appeal.

Special act No. 375 of the Acts of 1921 is an act entitled “An act providing that the county superintendent of schools for Lonoke County shall be elected by the qualified electors of said county, and for other purposes. ” The act amends §§ 8880,'8881 and 8882 of Crawford & Moses’ Digest, the general law pertainiiig to the election of county superintendent of schools, and provides that the qualified electors of Lonoke County, at the next general election following the passage of the act, and every two years thereafter, shall elect ia county superintendent ■ of schools at the general election for county officers, and provides for the length of his term of office, and that one, to be eligible to such office, shall hold a professional teacher’s license, or a license of a higher grade. The last section of the special act repeals all laws in conflict with its provisions and provides that the act shall apply only to Lonoke County.

At the same session of the Legislature at which special act 375 was enacted,- the G-eneral Assembly passed a general act No. 503, which is an act entitled “An act to amend § § 5636, 8880, 8883, 8885 of Crawford & Moses’ Digest, and to provide for the payment by the State of part of the salary of the county superintendent of schools of each county, and for other purposes.”

The first section of the general act No. 503 amends § 5636 of C. & M. Digest by striking out the words “school district” wherever they occur in that section.

Section 2 of act 503 amends § 8880 of -C. & M. Digest by authorizing the county board of education to elect at its June meeting, or as soon thereafter as possible, a county superintendent of schools, and provides that the length of his term shall not exceed three years, making him eligible for re-election and providing the standards of qualification to make one eligible for such office, and prescribing his duties.

Section 3 of act 503 amends § 8885 of O. & ML Digest so as to authorize the county board of education to 'fix the salary of the superintendent of schools, -and to purchase the necessary equipment for his office and to pay. his traveling expenses while in the discharge of his official duties. It also authorizes the State Board of Education to pay $1,500 annually as a part of the salary of the county superintendent upon certain conditions therein specified.

Section 4 of act 503 amends § 8885 of C. & M. Digest and prescribes the duties of the county superintendent to be to execute the orders of the county board of education -and the State Board of Education and to perform all the duties required of him by law; to keep a record of the proceedings of the county board and to file the same with the county clerk, etc., as therein provided.

Section 5 of act 503 repeals all laws and parts of laws in conflict with its provisions and attaches the emergency clause.

It will be observed' that special act No. 375 of the Acts of 1921 was approved March 24, 1921, and that general act No. 503 of 1921 was approved March 26, 1921. Counsel for the appellant argue that the fact of these two acts being before the General Assembly about the same time shows an intention upon the part of the Legislature not to repeal the special act by the later general act; that if such had not been the intention of the Legislature they would have provided for an express repeal of the special act by the general act. But it is a well established rule of law in this State that where two laws enacted by the General Assembly are in irreconcilable conflict, the prior enactment is repealed by the subsequent, whether there is any express repealing clause in the last enactment or not. Where there is an invincible repugnancy between the prior law and the subsequent enactment, the latter repeals the former as effectually hy implication as if it had contained express language repealing the prior law. Some of our cases announcing this doctrine are Hampton v. Hickey, 88 Ark. 324; Sanderson v. Williams, 142 Ark. 91; Creamery Pkge. Mfg. Co. v. Wilhite, 149 Ark. 576; Bank of Blytheville v. State, 148 Ark. 50; Farelly Lake Levee District v. Hudson, 169 Ark. p. 33; Mays v. Phillips County, 168 Ark. 829.

In the case of Mays v. Phillips County, supra, we said: “When there are two acts on the same subject, the rule is to give effect to both if possible. But, if the two are repugnant in any of their provisions, the latter act, without any repealing clause, operates to the extent of the repugnancy as a repeal of the first; and, even where two acts are not in express terms repugnant, yet if the latter act covers the whole subject of the first, and embraces new provisions, plainly showing that it was intended as a substitute for the first, it will operate as a repeal of that act.”

Now, applying this doctrine to the facts of this record, a glance at the provisions of the two acts will discover that the general law is much more comprehensive in its scope than the special law, covering practically the whole field of the special law and embracing new provisions which, to our minds, show'that-the Legislature intended that the general law amending the provisions of C. & ¡MÁ Digest therein .designated should contain the entire law! upon the subject of county superintendents of schools, prescribing the manner of their selection, their qualifications and duties, fixing their salaries, and prescribing the method of payment, etc. Hence, when the Legislature in the general act Nio. 503 repealed all laws arid parts of laws in coriflict therewith, it repealed the provisions of special act No. 375, for there is an invincible repugnancy between the general law and the special law. It occurs to us that, if the Legislature had not intended that, the general law should apply to Lonoke County as well as to all the other counties , of the State, it would have had an exception to that effect written info the general act No. 503; that the reason why the Legislature did not do'so was because it knew there was an irreconcilable conflict between the two statutes, and therefore it was unnecessary in express terms to except Lonoke County, since expressly repealing all laws in conflict would cover the prior law in regard to that county.

It is unnecessary to discuss in detail all of the repugnant provisions of the two statutes and would unduly extend this opinion to do so... Suffice it to say, the 'special law provides that the .county superintendent of Lonoke County shall be elected by the qualified electors of the county, while the general law provides that the county board of education of each county shall elect a county superintendent. Certainly this provision of the general law includes Lonoke County ias well as all of the other counties of the State, and the election of a courity superintendent by the county board of education applicable to each county in the State is certainly in conflict with the special law providing that a county superintendent shall be elected by the qualified electors. Then, too, the special act only requires that the county superintendent of schools shall hold ia professional teacher’s license or license of a higher grade, whereas the general law requires that the county superintendent “shall have met the standards' of qualification prescribed by the State Board of Education and shall have been certified by the State Department of Public Instruction as having met such requirement's.” These qualifications ' or requirements' are entirely different and might be wholly in conflict. Again, no duties whatever are prescribed for the county superintendent under the special act, whereas under the general law his duties are defined. Under the provisions of the special act, no salary is fixed for the county superintendent, but his salary is to be. paid by warrants drawn by the board of education upon the general School fund of .the county; while in the general act' the 'State Board of Education is authorized to pay each county superintendent as a part of his salary and from State funds the sum.of $1,500 per annum; but, before the county superintendent of schools of any county shall be paid any sum as provided by the general act, the county board of education shall have met the requirements relative to county school administration prescribed by the State Board of Education. The.general act No. 503 requires that the county superintendent shall hold a county superintendent’s certificate issued by the State' Department of Public Instruction, 'while the special act makes the county superintendent eligible if he holds a teacher’s license or license of a higher grade.

Out of these provisions there arises an invincible conflict which would deprive Lonoke County of a right to have piart of the superintendent’s salary paid by the State Board of Education, provided for under the general act No. 503, to-wit: $1,500. Therefore we aré convinced that- it was not the purpose of the Legislature to place Lonoke County in a class by itself,' but, on, the contrary, to have Lonoke County take her place along with all the other counties of the State in the general educational system as administered by the Department of Education through the State and county boards of education as'provided under the general school laws of the State.

The decree of the chancery court is in all things correct, and it is therefore affirmed.

McCulloch, C. J.,

(dissenting). This court has often declared the familiar rule that a later statute does not operate as an implied repeal of a former one unless there is an irreconcilable conflict between the two statutes, or unless the later statute is found to cover the whole subject so as to exclude the prior one, and an intention to repeal was thereby indicated. Our cases on that subject are so numerous that it is scarcely necessary to cite them. It has also been frequently said by this court that repeals by implication are never favored, and that courts of justice “have always endeavored so to construe two apparently inconsistent statutes as to give effect to both, if possible.” Blackwell v. State, 45 Ark. 90.

My conclusion is that the Lonoke County, statute (act No. 375, session of 1921) was not impliedly repealed by the general statute (act No. 503) of the same session. When the two statutes are compared, there is no repugnance, for one is special and applies only to Lonoke County. The other statute is general in its nature, and on its face it purports not to be exclusive of other statutes, but merely to amend certain enumerated sections of the Digest. “A general affirmative statute does not,” said this court in Chamberlain v. State, 50 Ark. 132, “repeal a prior particular statute, or particular provisions of a prior statute, unless negative words are used, or unless there be an invincible repugnancy between the two. The more specific provision controls the general, without regard to their order and dates. The two acts are interpreted as operating together, the specific provisions furnishing exceptions and qualifications to the general rule.”

The two statutes made their progress through the two houses of the Greneral Assembly contemporaneously. Act No. 375 originated in the House of Representatives; it was introduced in the House, and read the first time on February 19, 1921; passed the House on February 21, and the 'Senate on March 4, and was signed by the Governor on March 24, 1921. Act No: 503 originated in the Senate; was introduced February 17, 1921, passed the Senate on February 23, and the House on March 5, and was signed by the Governor on March 26, 1921. It thus appears that these two measures were put through the two houses at the same time; that the Bouse bill was the last to pass the Senate, and that the Senate bill was the last to pass the House. The fact that the Senate bill was signed by the Governor 'two days later than the date of the approval of the House bill does not, I think, indicate an intention on the part of the lawmakers to repeal one of the statutes by implication. On the contrary, it seems clear to me that the history of the legislation, of which we take judicial knowledge, and which is brought especially to our attention in the record, flatly negatives any intention on the part of the lawmakers to repeal one of the statutes by the' enactment of the other. It is our duty, under settled principles of construction, to give effect to both statutes where it is obvious that such was the legislative will.

I dissent, therefore, from the conclusion of the majority, and am authorized to say that Mr. Justice Smith shares in these views.


author: Per Curiam.

text:
    Canady v. State.
    Opinion delivered December 21, 1925.
    1. Criminal law—bill op exceptions.—An instrument purporting to be a bill of exceptions which is certified by the court stenographer, but without the signature of the trial judge or the file-mark of the clerk, will not be considered on appeal.
    2. Criminal law—presumption in absence op bill op exceptions. —Where defendants appealed from a conviction of murder, but ■ neglected to file a bill of exceptions, it will be presumed that the verdict was supported by sufficient evidence, and that' the issues were properly presented to the jury.

      Appeal from Ouachita. Circuit Court; L. 8. Britt, Judge;
    affirmed.

      H. W. Applegate, Attorney General, and John L. Garter, Assistant, for appellee.
   Per Curiam.

Appellants, John . Canady, Ishman Jones, Cephas Johnson and Clint Mason, were arrested and committed to jail in Ouachita County under a charge of murder in the first degree, said to have been committed by shooting and killing J. M. Moore. The circuit judge called a special term of the circuit court of that county, to be held on September 14, 1925, while appellants were still confined in jail, and a special grand jury was summoned and impaneled to consider the charge against appellants. Separate indictments against each of them were returned by the grand jury charging the crime of murder in the first degree. Neither of the appellants was able to employ counsel, and the court appointed attorneys for each of them, and by order of the court, entered upon express consent of appellants’ attorneys, the four cases were consolidated and tried together, separate verdicts being rendered against each of the appellants finding him guilty of murder in the first degree, as charged in the indictment. Judgment of sentence was rendered against each, and, after the motion for a new trial was overruled, each of the appellants prosecuted an appeal to this court. The motion was overruled on September 23, 1925, 'and appellants were allowed fifty days from that date within which to present and file their bill of exceptions. The transcript was lodged here on November 14, and the appeal was granted by one of the justices of this court, but the transcript does not contain any bill of exceptions signed by the trial judge and filed with the clerk. "What purports to be a bill of exceptions is in the transcript certified by the court stenographer, but has not been signed by the trial judge, nor does it bear the filing mark of the clerk. No brief has been filed on behalf of either of the appellants, and we have nothing before us except the transcript of the piapers on file, including the indictments and the motion for a new trial, and the record entries of the proceedings below.

There is no error appearing anywhere in the proceedings. The special term of the circuit court was called in accordance with the law on that subject, the grand jury was regularly impaneled, the indictments were duly returned in proper form charging each of the appellants with the offense of murder in the first degree, and the trial before the jury was conducted in due form, so far as appears from the record.

Appellants consented for the four cases to be tried together, and the verdict against each was returned by a jury of his own selection. We must indulge the presumption, in the absence of a bill of exceptions, that the verdict was supported by sufficient evidence and that the issues were properly submitted to the jury.

The • judgment ag'ainst each of the appellants is therefore affirmed.


author: McCulloch, C. J.

text:
    Babb v. El Dorado.
    Opinion delivered January 11, 1926.
    1. Statute—implied repeal.—The repeal of any law merely by implication is not favored, and the repeal will not be allowed unless the implication is clear and irresistible.
    2. Statutes—implied repeal.—Where the provisions of two statutes' are in irreconcilable conflict with each other, there is an implied repeal by the later one which governs the subject, so far as relates to the conflicting provisions, and to that extent only.
    3. .Statutes—implied repeal.—A repeal by implication is accomplished where the Legislature takes up the whole subject anew and covers the entire ground of the subject-matter of a former statute, and evidently intends it as a substitute, although there may be in the old law provisions not embraced in the new.
    4. Constitutional law—repeal op amendment.—The amendment adopted in 1918 purporting to be. an amendment of § 1 of art. 16 of the Constitution, which authorized counties, cities and towns of one thousand inhabitants to issue bonds to fund their debts and to construct certain public improvements, was impliedly repealed toy amendment No. 11, adopted in 1924, purporting to amend § 4 of art. 12 of the Constitution, which limited the purpose for which bonds might toe issued by counties, cities and towns to the payment of existing indebtedness, both because there is an irreconcilable conflict between the two amendments, and because the later amendment covers the .sutoject-matter of the former amendment.
    Appeal from Union Chancery Court, Second Division; George M. LeCroy, Chancellor;
    reversed.

      Moorehead & Brand, for appellant.

      J. G. Ragsdale and Rose, Hemingway, Cantrell $ Loughborough, for appellee.

      T. W. Campbell and J. C. Marshall, amici curiae.

   McCulloch, C. J.

The city of El Dorado, acting through its city council, is about to issue bonds, aggregating the sum of $150,000, to raise funds for the purpose of constructing a new city hall, and is also about to levy a special tax, ini addition to the five-mill tax authorized by the Constitution, in order to make payments of the bonds as they fall due. The city asserts the power to issue the bonds and levy the special tax under an amendment to the Constitution initiated by the people and voted on at the general election in the year 1918. The measure, according to the recitals of the caption, purports to be an amendment to § 1, art. 16, of the Constitution, which reads as follows:

“'Section 1. Neither the State nor any city, county, town or other municipality in this State shall, ever loan its credit for any purpose whatever; nor shall any county, city, town or municipality ever issue any interest-bearing evidences of indebtedness, except such bonds as may be authorized by law to provide for and secure the payment of the present existing indebtedness, and the State shall never issue any interest-bearing treasury warrants or scrip.”

The measure re-adopts in full the section quoted above and then adds to it la provision authorizing incorporated towns of one thousand or more population and cities of the first and second class to issue interest-bearing bonds for the purpose of funding or refunding existing indebtedness incurred prior to tbe adoption of the amendment, and also for the purpose .of raising funds to construct any of the public improvements enumerated, which include the purchase or construction of city halls, and also authorizes the levy of a special tax of not exceeding five mills on the dollar to raise funds to pay said bonds when due. . ; •

Appellant is a citizen and tax-payer in the city, and he instituted this action to restrain the officers of the city from taking any further, proceedings toward the issuance of the bonds and levying the tax.

The court sustained la demurrer and dismissed the complaint, and- an appeal has been, prosecuted to this court.'

The amendment referred to was declared, at the time of the announcement of the result of the election, not to have been adopted and has remained in desuetude until the present time, 'but it is now conceded by counsel on both* sides that, under the decision of this court in Brickhouse v. Hill, 167 Ark. 513, it received the-requisite number of votes to adopt if, that is to say, a majority of those voting on the question; and the only contention made by appellant is that it was superseded and repealed by the more recent amendment known as number 11, which was adopted at the general election in the year 1924.

Amendlment No. 11 makes an addition to § 4 of art. 12 of the Constitution by a provision authorizing counties, cities and incorporated towns to issue bonds to secure funds to pay indebtedness existing at the time of the adoption of the -amendment and to levy an additional tax not exceeding three mills on the dollar to raise funds to pay the bonds as they mature. This amendment contains a further declaration as follows:

“The. fiscal affairs of counties, cities and incorporated tdwns shall be conducted on a sound financial basis, and no county court or levying board-or agent of any county shall make or .authorize any contract or make any allowance for any purpose whatsoever in excess of the revenue from all.sources for the fiscal year in which said contract or allowance is made; nor shall any county judge, county, clerk, or any other county officer sign or issue any scrip, warrant, or make any allowance in excess of the revenue from all sources for the current fiscal year; nor shall any city council,.board of aldermen, board of public affairs, or commissioners of any city of the first or second class, or any incorporated town, enter into any contract or make any allowlances for any purpose whatsoever or authorize the issuance of any contract or warraD.ts, scrip or other evidences of indebtedness, in excess of the revenue for such, city or town for the .current fiscal yearsnor shall any mayor, city clerk, .or recorder, or any other officer or officers, however designated, or any city of the first or second class or incorporated town, sign or issue any serip, warrant or other certificate of indebtedness in excess of the revenue from all sources for the current fiscal year. ” ....

Amendment No. 11. does not expressly repeal .any existing provisions of the Constitution, and, if any repeal was effected thereby, it is merely implied from the force of the various provisions of this amendment.

It is a.principle of universal recognition that the repeal of a law merely by implication is not favored, and that the repeal will not be allowed unless the implication is clear and irresistible; but there are two familiar rules or classifications applicable in determining whether or not there has been' such repeal. One is that, where the provisions of two statutes are in irreconcilable conflict with each other, there is an implied repeal by the later one which governs the subject so far as relates to the conflicting provisions, and to that extent only. C. R. I. & P. Ry. Co. v. McElroy, 92 Ark. 600; Carpenter v. Little Rock, 101 Ark. 238; Eubanks v. Futrell, 112 Ark. 437. The other one is that a repeal by implication is accomplished where the Legislature • takes up the whole subject anew and covers the entire ground of the subject-matter of a former statute and evidently intends it as a .substitute, although there may be in the old. law provisions not embraced in the new. Lawyer v. Carpenter, 80 Ark. 411; Western Union Tel. Co. v. State, 82 Ark. 302. In the recent case of Mays v. Phillips County, 168 Ark. 829, we quoted the following statement of the rule from the opinion of Mr. Justice Field in United States v. Tynen, 11 Wall. 88.

“When there are two acts on the same subject, the rule is to give effect to both if possible. But if the two are repugnant in any of their provisions, the later act, without any repealing clause, operates to the extent of the repugnancy as a repeal.of the first; and, even where two acts are not in express terms repugnant, yet, if the latter act covers the whole subject of the first, and embraces new provisions, plainly showing that it was intended as a substitute for the first act, it will operate as a repeal of that act.”

It seems clear to us, upon consideration of the language of both of these amendments, that there was, under the application, of either of these rules or classifications, a repeal by amendment No. 11 of the authority conferred by the amendment of 1918 upon cities and towns to issue bonds and to levy a special tax. There is absolute and invincible repugnancy between the two amendments in relation to that subject so as to accomplish a repeal to the extent of the repugnancy. The amendment of 1918 authorizes the issuance of bonds, not only to pay indebtedness existing at the time óf its adoption, but also to raise funds to construct various public improvements enumerated in the measure; but amendment No. 11 in express terms limits the issuance of bonds to the payment of indebtedness existing at the time of the adoption of the amendment, and it inhibits the issuance of “any scrip, warrant or other certificate of indebtedness in excess of the revenues from all sources for the current fiscal year.” The language of amendment No. 11 is too clear to admit of any construction which would harmonize it with the continued existence of authority under the amendment of 1918 to issue bonds. The language cannot be restricted in its operation, as contended by learned counsel for appellee, to the mere issuance of warrants or evidences of debt for current expenses. This court decided in Kirk v. High, 169 Ark. 152, that amendment No. 11 prohibited the issuance of warrants or other evidences of indebtedness in excess of the revenues for the current year, and this without any exception whatever.

The vital point of the amendment of 1918 is the authority to issue bonds, and with that repealed there is nothing left to it except the restatement of the original § 1 of art. 16 of the Constitution.

We are also of the opinion that a comparison of the language of the two amendments brings the case within the operation of the other rule, where the lawmakers have taken up the subject anew and have thereby substituted the new provision for the former one. We think it is evident that amendment No. 11 is a complete substitution for the whole provision in the amendment of 1918 with reference to the issuance of bonds, and leaves nothing of that amendment except the restatement of the original § 1 of art. 16.

In considering the question of repeal by substitution, the fact that the first amendment purports to be an amendment of § 1 of art. 16, and amendment No. 11 is an amendment of § 4, art. 12, is not important. Amendment No. 11 contains the distinct provisions which are applicable, regardless of the particular place in which it is inserted in the Constitution, and the fact that it is annexed to § 4 of art. 12 does not lessen its effect in repealing the conflicting provisions of the former amendment. If we consider the “history of the times,” as we are permitted to do under some circumstances (Hartford Fire Insurance Co. v. State, 76 Ark. 303), we know that the amendment of 1918 was treated as having failed of adoption, and it was declared not to be adopted, and was so.regarded at the time that amendment No. 11 was submitted. The conclusion is irresistible that the Legislature, in framing the proposed amendment which was “ adopted as No. 11, were considering the whole subject anew and intended to cover the whole subject to the extent deemed advisable in conferring authority upon counties, cities, and towns to issue bonds except for the purpose of paying indebtedness incurred prior to the adoption of the Constitution of 1874. The whole purpose of the amendment, as we said in Kirk v. High, supra, was to help counties, cities and towns to get out of debt and -to require them to stay out of debt, and the language of the amendment was unmistakable, so far as it restricted the authority to issue bonds.

The decision of the chancery court was erroneous, and the decree is therefore reversed, and the cause remanded with directions to overrule the demurrer to the complaint, and for further proceedings.


text:
    Ohio Galvanizing & Manufacturing Company v. Nichol.
    Opinion delivered January 11, 1926.
    1. Corporations—appointment of receiver—filing claim within specified time.—As an incident to a controversy between stockholders concerning the control and management of a solvent corporation where a receiver had been appointed, the court had no power to compel creditors to present their claims against the corporation within any specified time, and a creditor who failed to assert his claim within the time specified in such an order had a right to assert his claim against the debtor corporation at any time within the statutory period of limitation.
    2. Bills and notes—burden of proving execution.—Where the genuineness of a draft sued on was denied toy affidavit, as provided .by Crawford & Moses’ Dig., § 4114, this placed the burden on the plaintiff to prove the execution of the draft as well as to prove all other facts upon which the validity of the claim rested.
    3. Bills and notes—proof of execution of draft.—The execution of a draft was sufficiently established by proof of a consideration and that it was drawn and sent to plaintiff in the regular course of .business by defendant’s officer or agent, and such proof is not overcome by an affidavit of a receiver of defendant’s property denying the genuineness of the draft.
    4. Bills and notes—remedy against drawer and acceptor.—Upon nonpayment of a draft, the holder may sue the drawer and acceptor, either jointly or severally, though there can be but one satisfaction.
    5. Trial—objection to forum—waiver.—While equity has no jurisdiction of claims against a corporation not alleged to be insolvent, the objection to the forum is waived where the parties went to trial without objecting to the court’s jurisdiction.
    Appeal from Jefferson Chancery Court; John M. Elliott, Chancellor;
    reversed.

      Mehaffy £ Mehaffy, for appellant.

      Rowell £ Alexander, forlippellee.
   McCulloch, C. J.

Consumers ’ Ice & Coal Company is a domestic corporation engaged in the manufacture and sale of ice at Pine Bluff, 'and while so engaged it purchased from appellant, a foreign corporation, domiciled at Niles, Ohio, a lot of standard ice cans, the total price for the purchase being $6,701. The cans were shipped by appellant to 'Consumers ’ Ice & Coal Company and received by the latter at its place of business in Pine Bluff. After the completion of the purchase, Consumers ’ Ice & Coal Company, on March 18,1921, drew a draft for the above mentioned amount in favor of appellant on S. E». Morgan & Company, of Little Rock, and this draft was forwarded to appellant by mail with the acceptance of the drawee indorsed thereon. S. R. Morgan & Company was the trade name of S. R. Morgan, who, at that time, owned the controlling stock in Consumers’ Ice & Coal Company. The draft wias not paid on the stipulated date (sixty days after date), and was protested in due form before a notary public. Thereafter, payments were made down to the sum of $5;000, which sum still remains unpaid.

Appellant instituted an action, or actions, in the circuit court of Pulaski County against Morgan -and Consumers ’ Ice & Coal Company to recover the balance due on the draft and took judgment 'by default against Morgan, but the action against Consumers’ Ice & Coal Company has never been disposed of on the docket of that court, and is still pending.

There appears to have been a struggle between two groups of stockholders of Consumers’ Ice & Coal Company, the group in control at that time being headed by S. R. Morgan, and, after the purchase above referred to from appellant, certain stockholders opposed to the Morgan interests instituted an action in the chancery court of Jefferson County against the corporation and against Morgan and the other stockholders associated with him in managing the affairs of the corporation, alleging misconduct of Morgan in securing a majority of stock, and also alleging mismanagement of the affairs of the corporation. It was not alleged in the pleadings that the corporation was insolvent, but it was alleged that, unless further mismanagement and waste was prevented by the appointment of a receiver, the corporation would become insolvent. The chancery court made an order on March 4, 1922, appointing a receiver to take charge of the affairs of the corporation and operate the business of manufacturing and selling ice, and the receivership continued down to the trial of the present action in the chancery court. The receiver was ordered to make an inventory of the assets of the corporation and give notice to creditors to present their claims within ninety days. Notice was published in a newspaper, and many creditors of the corporation filed claims, which were allowed and paid. The court made a general order that ¡all claims not filed within ninety days from the date of the notice should be forever barred from participating in the assets of the corporation. Appellant did not present its claim to the receiver until November 21, 1923, long after the expiration of the period of ninety days specified in the Court’s order for presentation of claims. The receiver disallowed the claim, and the cause ivas tried before the chancery court on the pleadings and proof adduced, and the court rendered a decree finding the issues in favor of the receiver and the corporation and disallowing appellant’s claim.

Appellant, in presenting its claim to the chancery-court, filed a complaint setting forth all of the facts upon which it based its right of recovery against the corporation for the balance of the unplaid draft, and the receiver, Mir. Nichol, filed an answer denying all the allegations of appellant’s complaint. The receiver also filed an affidavit especially denying that the draft was executed by Consumers ’ fee & Coal Company. At the trial, appellant introduced the deposition of A. J. Bently, who was the treasurer of appellant corporation, .and he testified at length concerning the sale of cans to Consumers’ Ice & Coal Company and the correspondence and dealings between appellant and Consumers’ Ice & Coal Company, including the draft and payments made thereon. Appellant also introduced other testimony concerning the pendency of appellant’s action at law against Consumers’ Ice & Coal Company in the circuit court of Pulaski County. No testimony wtas adduced by appellees.

The court seems to have based its decree on the fact that appellant fáiled to present its claim within the period of time specified in the court’s order and notice published by the receiver, but our conclusion is that creditors were not bound by that notice. The only authority 'conferred by statute for a court of chancery to fix the time for barring claims short of the statutory period of limitation is in proceedings to wind up an insolvent eorporlation. Crawford & Moses’ Digest, § 1801. The proceeding against Consumers’ Ice and Coal Company by some of its stockholders was not such a proceeding, and there was no allegation of insolvency. It was merely a controversy between .stockholders concerning the control and management of the corporation. As an incident to the proceeding, the court properly authorized the receiver to pay creditors, but the court hlad no power to compel creditors to present their claims within any specified time. Appellánt was therefore not barred, and had the right to assert its claim against the debtor corporation at any time within the statutory period of limitation.

It is next contended that appellant flailed to establish its claim by a preponderance of the evidence. The receiver filed an affidavit in accordance with the statute (Crawford •& Moses’ Digest, § 4114) expressly denying the execution of the draft, and 'this placed the burden of proof on appellant to prove the execution of the draft,as well as to prove all other facts upon which the validity of the claim rested. St. L. I. M. & S. Ry. Co. v. Smith, 82 Ark. 109; J. R. Watkins Medical Co. v. Warren, 150 Ark. 542. Appellee introduced no testimony tending to show that the draft was a forgery or that it was executed without authority, and the only testimony introduced on the 'subject was that of Mr. Bently, the treasurer. It is true that he had no personal ¡knowledge of .the execution of the .draft, but he testified concerning the receipt of this di-aft in due course of business as part of a long series of transactions between the parties, beginning with the negotiations for the purchase of the cans and continuing by letters and telegrams in due course-of the mail. 'Some of the letters .were registered and showed registry .receipts signed by Consumers’ Ice & Coal Company. It is undisputed that Consumers ’ Ice & C.oal Company purchased .the cans, and..there is no proof that the amount had been paid,.except the amounts which were credited, on the draft, and it would be a very technical view of the testimony to say that there is an absence of proof that the draft wias actually signed by Consumers’ Ice & Coal Company. It was a part of the series, of. transactions in due course of business, which were fully established by the testimony -of Bently and the, correspondence exhibited with his deposition; There is no denial of Bently’s testimony, and nothing which tends to. discredit his statements. : Learned counsel for appellees depend entirely upon the weakness of this testimony on account of Bently not being aible to testify that he was present when the draft was actually executed by Consumers’ Ice & Coal Company.

Treating the affidavit.of the receiver as proof adduced in the trial, it was a mere formal statement of a conclusion, and gave no facts upon which its probative force might be tested. It was insufficient to overcome the affirmative testimony that the draft was in fact drawn and sent to appellant in regular course of business by the officer or agent of Consumers’ Ice & Coal Co.

It is also contended on behalf of appellees that, upon non-payment of the draft, appellant was put to an election whether it would pursue its remedy against Morgan or against Consumers’ Ice & Coal Company, and was bound by its election to take judgment against Morgan. This contention is, we think, unsound, for both the drawer and acceptor of the draft were severally liable to appellant, and appellant had the right to pursue its remedy against the two parties, either jointly or severally. Both remedies could be pursued, though there could be only one satisfaction. Crawford & Moses’ Digest, § 1099, 1100; Lamew v. Wilson-Ward Co., 106 Ark. 340.

The original proceedings against Consumers’ Ice & Coal Company not being for the purpose of winding up the affairs of the corporation, and there being no proof of insolvency, the chancery court was not the proper forum for the adjudication of claims of creditors against the corporation. Appellant’s remedy at law was complete, but no objection was made to the jurisdiction of the court, and, on the contrary, appellees filed an answer tendering an issue as to the validity of appellant’s claim, and the trial proceeded by consent of both parties. The court proceeded to hear and determine appellant’s claim, but reached the wrong conclusion as to. liability being barred by failure to file the claim within the time specified in the notice. We must therefore treat appellant’s intervention as an ordinary action erroneously instituted in the chancery .court but tried there by consent.

The decree is reversed, and the cause remanded with directions to enter a' decree in favor of appellant for the full amount of its claim as asserted in the pleadings.


author: Hart, J. Hart, J.,

text:
    Tri-County Highway Improvement District v. Vincennes Bridge Company.
    Opinion delivered December 14, 1925.
    1. Judgment—conclusiveness of decree sustaining demurrer.— A decree rendered on sustaining a demurrer to a complaint is equally conclusive, by way of estoppel, of the facts confessed by the demurrer as a verdict finding the same facts would have been, and, where a demurrer goes to the merits, a judgment .sustaining it is a bar to a subsequent suit on the same cause of action.
    2. Highways—jurisdiction of equity to wind up improvement district.—The power of the chancery court to wind up the affairs of a road improvement district and to adjust claims against it is within the general jurisdiction of chancery courts over the enforcement of liens on real estate.
    3. Judgment—decree sustaining demurrer.—A demurrer on the ground that a complaint does not state a cause of action involves the merits of the action, and a decree sustaining such demurrer is conclusive of everything necessarily determined by such decree.
    4. Judgment—representation of class by individuals.—A suit by certain landowners against a road improvement district to review a decree adjudging the claims of creditors is for the benefit of a class of individuals having common rights that need protection, and a decree in such suit is binding on other landowners.
    5. Judgment—presumption.—Where a decree allowing a claim against a road improvement district recites that evidence was heard, it will be presumed on collateral attack that any evidence necessary, to support the decree was introduced.
    G. Judgment—conclusiveness of judgment sustaining demurrer. —A general demurrer admits the facts alleged in the complaint, and a final judgment sustaining it is as conclusive of the same cause of action as if the plaintiff had proved such facts and judgment had been rendered against him.

      7. Judgment—res judicata—reasons assigned.—The value of a plea of res judicata is not to be determined by the reasons which the court rendering the former decree gave for doing so.-
    8. Judgment—effect on bar of error or irregularity.—So long as a decree remains unappealed from and in full force, it is a bar to further suits upon the same cause of action, though it may be erroneous or so irregular that it would be vacated on proper application. -
    9. Equity—bill of review.—'Decrees of the chancery court, winding up the affairs of a road improvement district and allowing the claims of certain creditors, which stated that the claims were heard on certain resolutions before the board of commissioners relating to various claims of creditors and on the various contracts of claimants, which were set forth, held not erroneous on their face, on a bill of review.
    10. Judgment—fraud in procurement.—Evidence held not to establish fraud in the procurement of a decree winding up the affairs of a road improvement district.
    11. Equity—b’ill of review—false testimony.—'False testimony in the procurement of a decree is not sufficient to justify a bill of review to vacate and set aside such decree.
    12. Equity—bill of review—newly discovered evidence.—To support a bill of review for newly discovered evidence, such evidence must not have been known at the time of the trial and could not have been known by the exercise of reasonable diligence.
    18. Equity—validity of vacation decree.—Where proceedings for the adjustment of claims against a road improvement district were in fact adversary in character, though styled an ex parte proceeding, a decree entered in vacation by- consent of the parties, in accordance with the statute, is valid and binding.
    14. Judgment—interest—res judicata.—A decree which provided that no interest should run on certain claims allowed, not set aside by appeal or otherwise, was res judicata on the question of interest.
    15. Taxation—penalty for nonpayment of taxes.—The Legislature is authorized to impose a penalty for nonpayment of special . .taxes in a road improvement district.
    16. Equity—bill of review—matters considered.—In determining whether a bill of review should be sustained, the pleadings as well as the decree itself should be looked to.
    Appeal from Craighead Chancery Court, Western District; Sam Frauenthal, Special Chancellor;
    affirmed.

      Horace Sloan and Arthur L. Adams, for appellant.

      J. W. House Jr., D. K. Hawthorne, Wm. B. Kinealy, Seymour Biddle and A. P. Patton, for appellee.
   Hart, J.

Appellees, the plaintiffs in the court below, brought this suit in equity against appellants, TriCounty Highway Improvement District, its commissioners and the landowners in the district to foreclose a lien in their favor upon lands in the district for indebtedness due them under an alleged decree of the chancery court rendered by consent on November 30, 1920.

An answer was filed which attacked the validity of. said decree in so far as the claims of appellees, John R. Scott, Vincennes Bridge Co., and Hugh R. Carter are concerned, but did not attack the validity of said decree in so far as it relates to the other creditors of the TriCounty Highway Improvement District.

A cross-complaint was filed alleging that appellees had collected various sums on their claims which are sought to be recovered.

A bill of review was also filed for the purpose of setting aside the alleged decree of the chancery court of November 30,1920, under which appellees are attempting to assert their lien on the lands of the district in satisfaction of their claims.

The decree of November 30, 1920, is sought to be vacated on several grounds.

First, it is insisted that said decree was rendered in vacation and is therefore a nullity.

Second, it is claimed that it is apparent from the decree itself that it is erroneous.

Third, that it is sought to be set aside upon the ground of newly discovered evidence, and also upon the ground of fraud.

Appellees interposed a plea of res judicata, and introduced evidence in support thereof.

A great volume of testimony relating to the merits of the case was introduced.

The chancellor sustained the plea of res judicata of appellees, and a decree was entered of record in accordanee with his finding. To reverse that decree appellants have prosecuted this appeal.

Having reached the conclusion that the chancellor was correct in sustaining the plea of res judicata of appellees, it is not necessary to abstract the evidence on the merits of the case or to determine the issues relating thereto. Indeed, it would be improper to decide the merits of the case, for the reason that we are of the opinion that the defense of res judicata made by appellees was properly sustained by the chancery court, and that necessarily ends the cause.

The facts relating to the defense of res judicata are practically undisputed and may be briefly stated as follows:

An act creating the Tri-County Highway Improvement District was passed by the Legislature of 1919* approved March 6,1919. Boad Acts of 1919, vol. 1, 51G. The act was in the usual form of the special road acts passed at that session of the Legislature. Pursuant to its terms, the commissioners met and formed plans for the construction of the proposed improvement, and did various other things looking towards carrying out the construction of the proposed improvement.

On April 17, 1920, J. "W. Kuykendall and numerous other landowners in the proposed improvement district brought suit in equity against the Tri-County Highway Improvement District and the commissioners thereof for the purpose of restraining them from doing any further work on the construction of the roads and ditches provided for under the act creating the district. In their complaint they alleged that the plans and specifications prepared by the commissioners under the provisions of the act creating the district include a construction of roads and also a drainage system which are two separate and distinct improvements. They also set up facts tending to show that the assessment of benefits by the commissioners was arbitrary, discriminatory and confiscatory, and that it was well known to said commissioners and their engineers that said contemplated improvements could not be completed for anything like the amount of the assessment of benefits.

The defendants filed an answer in which they denied all of the allegations of the complaint and averred specifically that the system of drainage provided by the act was only such as would be necessary and proper for the construction of the roads provided for in the act creating the district.

On August 21, 1920, a resolution was adopted by the commissioners providing that the plans and assessments of benefits filed in the office of the clerk of the county court on March 20', 1920, were erroneous and void, in so far as any further work in making and completing said improvement was concerned. The stipulation further provided that all the work in said improvement district should be abandoned, and that the proposed improvement could not be made for the amount of benefits assessed against the lands, and that said lands would not be benefited by said improvement.

On August 24, 1920, which was a regular day of the August, 1920, term of the chancery court, a consent decree in said cause was entered of record. The chancery court found that, in accordance with the provisions of the stipulation above referred to and by the consent of the parties, the plans and assessment of benefits filed in the office of the county clerk on March 20, 1920, could not be used to complete said improvements; that the improvements contemplated in the act creating the district could not be made for the amount of the assessment of benefits, and that the affairs of the district should be wound up in the manner provided by law, the indebtedness ascertained and determined, to the end that any assessments which might be necessary upon the lands in the district might be imposed for such amounts as the district might owe.

It was decreed that all further work in the district be abandoned, and that the commissioners ascertain the amount of the indebtedness owed by the district and to whom due; that the plans and assessments which had been filed in the office of the clerk of the county court be declared null and void; that this shall not be construed as a finding regarding the validity of any work done, or as to the validity of the assessments for the purpose of extending the same against the lands as assessed to pay for the indebtedness.

It was further decreed that nothing contained in the decree should affect the rights of any other persons having claims against the district. The court reserved the right to make all such further orders and decrees as might be necessary to wind up and terminate the affairs of said district.

On the 30th day of November, 1920, a decree was entered of record which bore a heading as follows:

‘ ‘ Tri-County Highway Improvement District and its Commissioners, W. B. Moyer, W. A. Smith, J. A. Weaver, A. L. Salmons, Herbert Wood, W. H. Woodruff, ex parte”

This decree was entered of record in vacation in accordance with the allegations of a petition filed by the attorneys for the commissioners of the improvement district.

The decree is very lengthy, and need not be set out in full. It recites that the cause is submitted upon the petition of the Tri-Oounty Highway. Improvement District and its commissioners, a resolution of said board with reference to the claim of John B. Scott, a resolution with reference to the claim of Hugh B. Carter, and Carter & Knoch, a resolution with reference to the claim of the Vincennes Bridge Co., various other resolutions with regard to other creditors not necessary to mention, the intervention of J ohn B. Scott, Hugh Carter, the Vincennes Bridge Co., and of numerous other creditors not affected by this suit and therefore not necessary to be more particularly referred to, the contract between said district and said J ohn B. Scott, the contract between said commissioners and Hugh B. Carter, the contract between said district and the Vincennes Bridge Co., and numerous other contracts of said district with various creditors, the claims of said John R. ¡Scott, Hugh R. Carter, Vincennes Bridge Co., and of various other creditors which-had been filed with the commissioners.

Continuing, the decree recites that, being advised in the premises, the court finds from the pleadings and evidence that the petitioner, Tri-County Highway Improvement District, is indebted to John R. Scott, Vincennes Bridge Co., Hugh-Carter, and various other creditors, in certain sums which are specifically set- outj • and a lien is fixed upon the real property in the' district for the purpose of paying and discharging said claims in accordance with the assessment of benefits as finally revised and corrected by the commissioners of the district:

In March, 1921, by consent of the parties the decree of November 30,1920, was modified so as to provide that all the indebtedness due by the district should not be collected by one ¡assessment.

On the 22nd day of April, 1921, C. W. Lashbrook and numerous other landowners brought suit in equity against the Tri-County Highway Improvement District, its commissioners, John R. Scott, Hugh Carter, Vincennes Bridge Co., and numerous other creditors of said improvement district, for the purpose of setting aside the consent decree of the chancery court rendered on the 24th day of August, 1920, and the decrees rendered in vacation on November 30, Í920, and in March, 1921, above referred to.

' In- this complaint it is alleged that, during the year 1920, the commissioners of the district, without authority of law, undertook to abandon and dissolve said district and to compromise and adjust the claims of creditors. John R. Scott, Hugh Carter, Vincennes Bridge Co.-, and other creditors are specifically mentioned as having fraudulent claims and no right to demand of said commissioners the payment thereof.

The complaint further alleges that the commissioners undertook to allow by resolutions- said claims, which are fraudulent; that said defendants knew that they had no legal right to claims against said district, and that their allowance was secured by fraud; that to secure their fraudulent claims aforesaid the consent decrees of August 24, 1920, and November' 30, 1920, were entered of record. The consent- decree of November 30, 1920, and that rendered in March, 1921, are specifically made a part of the complaint. What is termed • an amendment to the complaint was filed, in which the allegation of fraud against appellees with respect to their claims is again set forth, and it is again alleged' that their act in securing the consent decrees above referred to was a fraud upon the court.

It was further alleged that- the commissioners were without legal authority to abandon -said district or to allow any sums for work done, or for contracts .to perform any work in the construction of the improvement.

It was further alleged that appellees herein knew at the time that the commissioners were without power to abandon the district and that the court was without power to fix a lien upon the lands for the purpose of paying their alleged claims. The prayer was that the decrees of the court rendered on August 24,1920, November 30,1920, and in March, 1921, be canceled and set aside.

The defendants filed separate demurrers to the complaint on the ground that it did not state a cause of action.

The court was of the opinion that the demurrers should be sustained. It was therefore decreed that said demurrers be sustained, and, the plaintiffs declining to plead further and electing to stand upon their complaint and the amendment thereto, said complaint and the amendment thereto be dismissed for want of equity. The. plaintiffs duly prosecuted an appeal to this court. See Lashbrook v. Tri-County Highway Improvement Dist., 152 Ark. 461.

In that case, in an opinion delivered on. March 13, 1922, the decree of the chancery court was affirmed.

In a case note to 13 A. L. R. p. 1104, it is said that it is well settled that the judgment rendered upon sustaining a demurrer is equally conclusive by way of estoppel of the facts confessed by the demurrer as a verdict finding the same facts would have been; and, accordingly, that, where the demurrer goes to the merits, a judgment sustaining it is a bar to a subsequent suit on the same cause of action. Numerous cases sustaining the text are cited from the Supreme Court of the United States and. from the courts of last resort of the various States. Among the cases cited are the following from our own State: Luttrell v. Reynolds, 63 Ark. 254, ■ and Barrentine v. Henry Wrape Co., 113 Ark. 196.

The case of Bissell v. Spring Valley Township, 124 U. S. 225, contains a clear and comprehensive statement of the rule and the reason for it. Mr. Justice Field delivered the opinion of the court, and in discussing the question said: “There are undoubtedly many cases where a final judgment upon a demurrer will not conclude as to a future action. The demurrer may go to the form of the action, to a defect of pleading, or to the jurisdiction of the court. In all such instances the judgment thereon will not preclude future litigation on the merits of the controversy in a court of competent jurisdiction upon proper pleadings. And it has been held that, where a demurrer goes both to defects of form and also to the merits, a judgment thereon, not designating between the two grounds, will be presumed to rest on the former. But where the demurrer is to a pleading setting forth distinctly specific facts touching the merits of the action of defense, and final judgment is rendered thereon, it would be difficult to find any reason in principle why the facts thus admitted should not be considered for all purposes as fully established as if found by a jury, or admitted in open court If the party against whom a ruling is made on la demurrer wishes to avoid the effect of the demurrer as an admission of the facts in the pleading demurred to, he should seek to amend his pleading or answer, as the case may be. Leave for that purpose will seldom be refused by the court upon a statement that he can controvert the facts by evidence which he can produce. If he does not ask for such permission, the inference may justly be drawn that he is unable to produce the evidence, and that the fact is as alleged in the pleading. Courts are not established to determine what the law might be upon possible facts, but to adjudge the rights of parties upon existing facts; and when their jurisdiction is invoked, parties will be presumed to represent in their pleadings the actual, and not supposable, facts touching the matters in controversy. ’ ’

In Alley v. Nott, 111 U. S. 472, Chief Justice Waite, speaking for the court, said: “A demurrer to a complaint because it does not state facts sufficient to constitute a cause of action, is equivalent to a general demurrer to a declaration at common law, and raises an issue which, when tried, will finally dispose of the case as stated in the complaint, on its merits, unless leave to amend or plead over is granted. The trial of such an issue is the trial of the cause as a cause, and not the settlement of a mere matter of form in proceeding. There can be no other trial except at the discretion of the court, and, if final judgment is entered on the demurrer, it will be a final determination of the rights of the parties which can be pleaded in bar to any other suit for the same cause of action.”

This brings us to a consideration of the jurisdiction of the court over the subject-matter, and of the parties in the Kuykendall and Lashbrook suits referred to above. Kuykendall and other landowners attacked the legality of the proceedings of the road commissioners on various grounds, and finally the original commissioners resigned and others were appointed in their stead. The new commissioners revised the assessments, and passed a resolution abandoning the work because it would cost more than the amount of benefits assessed against the lands, and for various other reasons. Then a compromise was effected between the creditors, and the consent decrees of August 24, 1920, and of November 30, 1920, were the fruits of the compromise.

Under the first decree, the work was abandoned and the commissioners were directed to wind up the affairs of the district. They were directed to ascertain and settle with the creditors of the district. The results of their settlement with the creditors were embodied in the decree of November 30, 1920. The power of the chancery court to wind up the affairs of the district and to adjust the claims against it has been held to be within the general jurisdiction of chancery courts over the enforcements of liens on real estate. Bowman Eng. Co. v. Ark. Mo. High. Dist., 151 Ark. 47.

The precise issue was also determined in the case of Lashbrook v. Tri-County Highway Improvement Dist., 152 Ark. 461, above cited. In that case the court held that, where property owners in a road improvement district brought suit in equity to enjoin the commissioners from proceeding with the contemplated improvements upon the ground that the cost of the improvements would exceed the benefits to the lands embraced within the district, and the court ordered the work stopped, it also had .jurisdiction to wind up the affairs of the district and to adjudicate claims' against the district. Hence it may be said that it has been judicially determined that the chancery court had jurisdiction in the Kuykendall and Lashbrook cases.

As we have already seen, the defendants in the Lash-brook case filed a demurrer on the ground that the complaint did not state a cause of action, and under such circumstances the trial of the issue raised by the demurrer involved the merits of the action, and the decree on the demurrer to the plaintiff’s complaint was conclusive of everything necessarily determined by such decree.

In the Lashbrook case certain landowners were the plaintiffs and the commissioners of the district, and appellees herein were defendants. Under the pleadings in that case it is apparent that the taxpayers sought to contest the same matters that are in issue in the present case. That is, they sought to set aside the decree in the Kuykendall case providing for a dissolution of the road improvement district and the winding up of its affairs and a subsequent decree settling and adjusting the claims of numerous creditors, including the appellees in this case.

The record on appeal in this court may also he looked to to see whether the issues raised in the Lashbrook case are substantially the same as those raised in the present case. In discussing the question of the jurisdiction of the case and the power to adjust and settle the claims in the Lashbrook case, the court said: “We think, therefore, when appellants instituted suit in the chancery court to enjoin the commissioners from proceeding with the work upon alleged grounds within the jurisdiction of the court, and the court ordered the work stopped, as an incident thereto the court acquired jurisdiction to bring in creditors and adjudicate claims against the district. In the exercise of its power the court directed the commissioners, in the decree of August 21, 1920, to investigate and report all claims against the district to the court for approval. In the decree rendered on November 30,1920, with lall necessary parties, including appellants in the instant case, before the court, and after a full hearing, according to the recitals therein, the court allowed the claims sought to be contested in this case. The court having acquired jurisdiction of the parties and the subject-matter, the decree became final and binding upon all the parties thereto, and impervious to collateral attack by any of them, except for fraud in the procurement of same. ’ ’

As we have already seen, the appellees and the commissioners and certain taxpayers were parties to that suit, and the court expressly said that the decree of November 30, 1920, became final land binding upon all the parties thereto and impervious to collateral attack by any of them, except for fraud in the procurement of the decree. Thus it will be seen that, if Lashbrook and the other plaintiffs in that case had filed the present suit, it would necessarily follow from the language of the court just quoted that the 'amount and validity of all the claims involved in the decree of November 30, 1920, were settled.

The bill of review in the present suit was filed by the commissioners land certain landowners. They were the representatives of the same class for whose benefitthe Lashbrook ease was filed. The plaintiffs in the bill of review were represented by the plaintiffs in the Lash-brook suit, and therefore were bound by the decree therein entered. The remedy in suits of this character is in the interest of a class of individuals having common rights that need protection, and, in the pursuit of that remedy, individuals have the right to represent the class to which they Ibelong. Howard-Sevier Rd. Imp. Dist. No. 1 v. Hunt, 166 Ark. 62.

In this connection it may be stated that it is claimed that in any event the claim of Carter could not be settled by the decree of November 30, 1920, and in making the contention counsel for appellants rely upon the case of Carter v. Bradley County Road Imp. Dists. 1 and 2, 155 Ark. 288, where it was held that it wlas against public policy to make a contract with a State Highway Engineer as the engineer of 'a road improvement district, and in such case there could be no recovery on a quantum meruit, since the engineer could not establish his case without the aid of a contract prohibited by statute.

We do not think that case controls here. In the first place, it was proved in that case that Carter was highway engineer at the time the contract was made, and an lappeal was taken from the decree of the chancery court adjudicating the matter. Here no appeal was taken from the decree of the chancery court allowing the claim, and under the decision in the Lashbrook case it could only be contested on the ground that it was procured by fraud. The decree allowing the claim of Clarter in the chancery court was made before the decision of this court holding that such a contract was prohibited by statute- There is nothing in the record tending to show that the claim was procured by fraud or collusion between the commissioners and 'Carter. So far as the record discloses, they proceeded on the theory thiat Carter was entitled to recover, and there is nothing to impeach their integrity in making the settlement. Indeed, the holding that such contracts are prohibited by statute was made by a divided court, and two of the judges filed a dissenting opinion.

Moreover, the decree of November 30, 1920, shows that it was heard on evidence, and it will be presumed on collateral attack that any evidence necessary to support the decree was introduced. In short, it may be that there was a new contract entered into with Carter or that his first contract was ratified by the commissioners after he resigned as State Highway Engineer, even if it should be said that the court should take judicial notice of the date of his resignation.

Hnder the authorities above cited and many others, a general demurrer admits the facts alleged in the complaint, and there is no good reason why final judgment or decree sustaining it should not be as conclusive of the same cause of action as if the plaintiff had proved these facts and a judgment or decree had been then rendered against him. His facts being admitted, he is not prejudiced by not being allowed to prove them. Cases should not be tried by piecemeal. If a plea of res judicata should not be sustained, when the issues are practically the same, the litigation would not end until the parties had no more money or the ingenuity of counsel in suggesting additional grounds in support of the issue had been exhausted. For the same reason the value of a plea of res judicata is not to be determined by the reasons which the court rendering the former decree gave for doing so. Girardin v. Dean, 49 Tex. 243; Davis v. Talcott, 12 N. Y. 184; Hannon v. Auditor of Public Accounts (Ill.) 5 Am. St. Rep. 502; Southern Pac. Rd. v. United States, 168 U. S. p. 1, and 34 C. J. p. 906. Hence it may be taken as settled that, in order to render a plea of res judicata available, it makes no difference whether the facts upon which the court proceeded in determining the merits were proved by evidence upon an issue joined, or were admitted by way of demurrer to a pleading stating the facts. The decrees in the Kuykendall case were not appealed from, and, so long as a deeree remains unappealed from and in full force, it does not detract from jts effect as a 'bar to further suits upon the same cause of action that it may be erroneous, so as to be reversible on appeal, or so irregular thlat it would be vacated on a proper application for that purpose. 34 C. J., p. 769; Jones v. Williams, 31 Ark. 175; and Wilson’s Executor v. Dun, 121 U. S. 525.

It can not be said that the bill of review should be sustained upon the ground that the decrees sought to be set aside are erroneous on their face. As we have already seen, the chancery court had jurisdiction to dissolve the district and wind up its affairs. The decree of November 30, 1920, settling the claims of appellees and other creditors, does not show error on its face. It expressly recites that it was heard on certain resolutions relating to the various claims of creditors, which are recited to have been taken up and acted upon by separate resolutions of the board of commissioners.

The decree also recites that the cause was heard upon the various contracts between the commissioners and the claimants, which are separately set forth. Hence it can in no sense be stated that there is error apparent upon the face of the decree.

This brings us to a consideration of the question of whether there was fraud in the procurement of the decree. It is apparent from the record that there was no collusion between the parties. The landowners became dissatisfied with the plans and assessments of benefits prepared by the original commissioners, and the final result was that the commissioners resigned and new ones were appointed in their stead. The new commissioners revised the assessment of benefits of the old commissioners and abandoned the contemplated improvement for several reasons, including the one that the cootemplated improvement could not be made for the 'amount of benefits assessed against the lands. Then a compromise was effected by the commissioners with the various persons holding claims against the district. It appears that these claims were separately examined and allowed in good faith.

Again it is sought in the hill of review to set aside the decrees on the ground that the settlements were secured by false testimony. False testimony is not enough to justify >a bill of review. There is contradictory testimony given in most contested cases. The evil which would result from retrying such cases, even if the judgment was secured by false testimony, by reason of the endless nature of the strife, would be greater than any compensation arising from doing justice in individual cases. The same rule applies to newly discovered evidence. It must not have been known at the time of the trial, or at least could not have been known by the exercise of reasonable diligence. Bank of Pine Bluff v. Levi, 90 Ark. 166; Smith v. Rucker, 95 Ark. 517; Long v. Long, 104 Ark. 562; McMurray v. McMurray, 153 Ark. 365, and Johnson v. Johnson, 169 Ark. 1151. It is manifest that all the new evidence that has been secured might have been introduced in the first trial if reasonable diligence had been used.

Finlally, it is contended that the decree of November 30, 1920, was entered in vacation, and for that reason it is not valid because it is an ex parte decree and not between adversary parties. We Cannot agree with this contention. It is true that the style of the case is given. as if it was an ex parte proceeding, but to allow this to control would be to put form above substance. It is apparent from the pleiadings in the Kuykendall case that it was an adversary proceeding. Owing to the action of the landowners being hostile to the contemplated improvement, the original commissioners resigned, and new commissioners were appointed for the very purpose of winding up the district and settling the claims of the various creditors.

The decree of November 30,1920, shows that the commissioners took up by separate resolutions the claim's of each individual creditor and settled with him. The contracts of the commissioners with the various creditors were referred to in the decree. All of the claims of the creditors except those of appellees have 'been paid. Thus it will be seen that the proceedings were adversary in character and were so regarded by the parties to the suit. This also follows from what was said upon the appeal in the Lashbrook case. The court expressly said that in the decree of November 30, 1920, all necessary, parties, including the landowners, were before the court, and that the court allowed the claims sought to be contested in the case. Appellees, the commissioners of the district, and numerous landowners representing all the landowners' as a class, were parties to the Lashbrook suit, and this court said that, the chancery court having acquired jurisdiction of the parties and of the subject matter, the decree became final and binding upon all the parties.

Thus it will be seen that the proceedings were adversary in character at all times, and the decree of November 30, 1920, although entered in vacation, is valid and binding because it wlas entered by consent of the parties in accordance with the provisions of the statute regulating the making and entry of decrees in chancery cases in vacation.

The chancellor properly refused to allow interest upon the amount of the claims of appellees. The reason given was that in the compromise above referred to it was provided that no interest should run upon these-claims allowed by the commissioners, and in the decree of November 30, 1920, it was so provided. This decree not being set aside by appeal or otherwise, it was equally effective as an estoppel upon the question of interest, whether the decision was right or wrong, as it was upon the other issues decided in the decree and embraced within the issues of the petition filed in the proceeding when the decree was entered of record.

The result of our views is that the decision of the chancery court sustaining the plea of res judicata was correct, and the decree of the chancery court must therefore he affirmed.

Hart, J.,

(on rehearing). Counsel for appellants in their motion on rehearing insist that the provisions of-the decree of the chancery court for a penalty are clearly erroneous.

The Tri-County Highway Improvement District was created by special act approved March 6, 1919. Road Acts of 1919, vol. 1, p. 510. Section 26 provides for the time of the payment of the taxes and how suits to collect the same shall be conducted. Upon the failure of the land-? owners to pay the special taxes to the collectors, as provided in the act, the commissioners are empowered to enforce the collection by chancery proceedings in the county in which the land is situated, and the penalty for the nonpayment óf the taxes is provided in the section.

Thus it will be seen that the Legislature has deemed it expedient or advisable for the speedy and certain collection of the special assessments to enact a penalty to provide against protracted delays. The penalty became by operation of the statute a part and parcel of the taxes due.- We are not called upon to defend the terms of the statute, either in whole or in part. It .is sufficient to say that, in accord with the general rule on the subject, this court has held that the Legislature has the power to impose a penalty for the nonpayment of taxes and to authorize the penalty to be. enforced with the taxes. Scott v. Watkins, 22 Ark. 556; Craig v. Flanagin, 21 Ark. 319; Thompson v. Sherill, 51 Ark. 453; Brasch v. Mumey, 99 Ark. 324; and Cooley on Taxation, 3d ed., vol. 2, pp. 900 and 1030.

In this connection it . may be stated that in State v. Norton, 63 Minn. 497, it was held that penalties the, saíne as in the case of nonpayment of taxes levied for general purposes, may be added in case of nonpayment of taxes levied by a municipality for local improvements. . Such is the effect of our own decision in Dickinson v. Cypress Creek Drainage Dist., 139 Ark. 76.

But it is claimed that the provisions of § 26 do not apply to winding up proceedings where the road contemplated is not improved or constructed. We can not agree with this contention. Section 30 provides that, if for any reason the improvement shall not be made, all expenses and costs accrued to that time shall be charged against the real property in the district, and the amount necessary to discharge all such indebtedness shall be assessed, apportioned and paid in the manner herein provided. So it will be seen that the same method of procedure is provided for the collection of assessments in a proceeding to wind up the district where the improvement is not made as in case where the improvement is made under the provisions of the act.

Again it is insisted that such a holding is contrary to the rule laid down in Federal Union Surety Co. v. Flemister, 95 Ark. 389. The primary object of the suit in that case was to wind up the affairs of a fire insurance company on account of its insolvency, and a receiver was appointed to take charge of its assets. Certain policyholders were allowed to intervene arid to establish the amount of their fire losses. The policy-holders also sought to have taxed in their favor the attorneys ’ fees provided by the statute, and the court held that the policy-holders were not entitled to recover attorneys’ fees where the policy-holders filed their claim in the insolvency proceedings, and could only claim the penalty and attorneys’ fees provided by the statute where they brought suit directly against the company to establish their claims.

In the case at bar, as we have already seen, the penalty was expressly provided by the statute and was enforced in a direct proceeding under the statute to collect the unpaid taxes. It will be noted that the penalty for the nonpayment of taxes was enforced in the chancery court in the eases cited above. It was expressly held that the power to provide for a collection of the penalty with the taxes was so essentially necessary to meet the wants of the government that it could not be regarded as unreasonable or oppressive to the taxpayers.

It is next insisted that the court erred in holding that only the decree of the court could be looked to in determining whether the bill of review should be sustained. We did not mean that such a restricted meaning should he placed upon the language used on this phase of the case in our original opinion. Of course the pleadings as well as the decree itself may be looked to, and, when this was done in the present case, there was no error on the face of the record.

It was pointed out in our original opinion that the decree expressly recites that it was heard on certain resolutions relating to the various claims of creditors, and the decree was within the issues presented by the pleadings and the evidence. For this reason we hold that there was no error apparent upon the face of the record upon which to base the bill of review. The same may be said of the decree of August 24, 1920, as the one of November 30, 1920.

The result of our views is that the petition for a rehearing must be denied.