author: McCuüoch, C. J. Hart, J.

text:
    Sain v. Cypress Creek Drainage District.
    Opinion delivered December 24, 1923.
    1. Drains — validity op legislative assessment. — Where the Legislature ratified and confirmed assessments already made in a drainage district, this constituted a legislative determination of the correctness and validity of those assessments, which will not be disturbed by the court unless shown to be arbitrary and unfounded.
    2. Drains — injury to lands. — recovery.—Where lands were not taken or appropriated by the construction of a drain, but were merely injured, it will be presumed that the assessment of benefits balanced off the damages against the benefits, so that no separate recovery for such damages can be had.
    3. Drains — actions for damages — limitation.—Under Sp. Act of 1915, No. 80, § 6, providing that the board of directors of a drainage district should award damages to property owners, and that “any property owner shall be presumed to have acquiesced in the action of the board unless he gives the board notice in writing of his objection” within thirty days, and unless he asks for a jury trial within a designated time, held that the failure to appear and demand the right of trial by jury for the ascertainment of the amount of compensation for the property taken was conclusive of the right to maintain an action later for the recovery of damages.
    Appeal from Deslía Circuit Court; T. G. Parham, Judge;
    affirmed.

      Williamson c& Williamson, for appellant.
    1. The liability upon which appellants rely is found in. the formation of the drainage district by the Legislature* and in the construction thereof in conformity with the requirements of the act, and is based upon the provisions of the State Constitution, art. 2, % 22, and of the United States Constitution, art. 14, § 1. As a necessary result of the construction authorized and directed by the Legislature, there was an actual taking of the lands of the appellants. 140 Ark. 241; 15 Ann. Cases 909; 94 Fed. 613, 36 C. C. A. 418; 128 Fed. 125; 236 111. 36; 15 Ann. Cases 904-908; 188 U. S. 446; 23 Sup. Ct. Rep. 349; 149 Ark. 15. This court has repeatedly held that the Legislature cannot arbitrarily declare property benefited which naturally cannot be, and that it cannot arbitrarily so tax lands as to amount to a confiscation of property without benefit. 147 Ark. 181; 152 Ark. 573; 89 Ark. 513; 118 Ark. 294, 300.
    2. The circuit court has jurisdiction to enforce liability in cases of this kind. 140 Ark- 241, 247-248.
    3. No limitation has run against appellants in these suits. The cause of action accrued when, and limitations did not begin to run until, canal No. 19 was constructed in 1919. 157 Ark. 125; 92 Ark. 406.
    4. The liability in these suits is not concluded by the legislative assessment in 1915. The attempted assessments, notices and actions prior to June 23, 1913, were adjudicated to be a nullity. They deprived the appellants of nothing. 109 Ark. 60. The lower court erred in going out of the pleadings and declaring that, by the act approved February 25, 1915, the Legislature ratified the assessment, etc., and that the board of commissioners made due allowance for damages to plaintiffs in determining the benefits to the tract as a whole,' making a reduction to that extent in the total'benefits assessed against the whole tract, etc. 149 Ark. 15; Page & Jones, Taxation by Assessment, vol. 1, p. 67; 66 Minn. 161. See also 140 Ark. 241; 147 Ark. 191, 194; 83 Ark. 54:

      5. Appellants are not concluded by the chancery decree.
    ■6. Appellants are not concluded by any statutory notice. The only legal evidence of the notice and its publication must be found, if at all, in the record of the board. Act No. 80, Acts 1915, p. 309, § 4; Id. p. 303, § 3; Act No. 455, Acts 1911, p. 1231, § 2; 55 Ark. 218, 221. Since the record does not show this notice, nor that the board fixed a day for the hearing, the notice and subsequent proceedings are void. 127 Ark. 165, 168; 64 Ark. 556, 569; 135 Ark. 528; 154 Ark. 46.

      DeWitt Poe, E. E. Hobson and Coleman, Robinson & House, for appellee.
    1. Appellants are concluded by the Legislative assessment. Acts 1915, p. 309, § 2; 220 S. W. 56; 83 Ark. 344; 112 Ark. 357; 107 Ark. 285; 133 Ark. 122; 100 Ark. 369; 108 Ark. 421.
    2. They are concluded by the consent decree. Acts 1915, pp. 309, 310, § 5. This is a collateral attack both upon the assessment of benefits and on the chancery decree, which cannot be maintained. 151 Ark. 484; 139 Ark. 168; Id. 277; 144 Ark. 632; 147 Ark. 469.
    3. They are concluded by the finding of the board of commissioners that the lands were not damaged, and by their failure to assail this finding in the manner and within the time prescribed by law. Act 1915, §6 et seq; 138 Ark. 477.
    4. Appellants are concluded by the court’s finding of facts. 114 Ark. 170; 126 Ark. 587; 90 Ark. 512; Id. 494; Id. 371; 91 Ark. 108; 92 Ark. 41; 100 Ark. 166.
   McCuüoch, C. J.

Cypress Creek Drainage District, composed of a large area embracing certain lands in Chicot, Desha and Drew counties, was created by special statute in the year 1911 for the purpose of constructing drains to relieve the lands in the district from accumulated waters. Theretofore the surface water from a considerable portion of the area included in this district had drained into thé Mississippi River through

Cypress Creek, and, in order to protect the lands from the Mississippi River overflow in times of high water, it was desired to close up the gap in the levee by damming up the levee across the mouth of Cypress Creek, and, in order to provide other means of draining this area, this district was created under a plan to carry the surplus waters in another direction; that is to say, to gather them up and carry them through a main drainage canal to the head of another stream, called Bayou Macon, through which the waters would be carried south, parallel with the Mississippi River, into Chicot County. Plans were formed for the construction of the improvement, and assessments of benefits to the lands in the district were'made, but, in litigation which arose between the district and certain landowners, before further progress had been made in the affairs of the district, it was decided that the plans exceeded in scope the authority conferred by the statute creating the district. Cypress Creek Drainage District v. Wolfe, 109 Ark. 60. After that decision was rendered, further legislation was found necessary to give authority for the construction of the improvement which would be adequate to the demands of the situation, so the G-eneral Assembly of 1915 enacted a statute (Acts 1915, p. 297) amending the original statute creating this district by enlarging the powers with respect to the extent of the improvement to be constructed, and, among other things, it was provided in that statute (§5) “that the assessment of benefits heretofore made by said district, as the same appears upon the assessment books therefor, is just and equitable, and the same is hereby confirmed and declared to be the assessment of benefits of said district.” The improvement was then constructed in accordance with the plans, which contemplated the construction of a large ditch, or canal, beginning in the northern portion of Desha County and running thence southerly about nineteen miles to the head of Bayou Macon, thus gathering up the surface waters and waters which drained through Cypress Creek and other streams and carrying them into the head of Bayou Macon, through which they flowed, as before stated, southward.

The plaintiffs (appellants) are owners of lands included in said district which abut on Bayou Macon, and they instituted separate actions at law (fifteen in number) against the district, to recover damages alleged to have been caused by the flooding of portions of their lands which abut on Bayou Macon. It was alleged in the complaint, in each of the cases, that, by the construction of the main canal and other ditches and drains, the defendant district had diverted the waters of other creeks and streams, which were natural watercourses and carried large volumes of water, from their usual and ordinary courses into Bayou Macon, causing that stream to “overflow its banks and spread out over large quantities of plaintiff’s land, overflowing said land belonging to the plaintiff which was never overflowed before, and overflowing other lands belonging to plaintiff much quicker than was ever done before said ditch was constructed, and causing the same to remain inundated for a much longer period of time, resulting in permanent injury to the land of plaintiff, which injury became apparent after the construction of said ditch.”

There are also allegations in each of the complaints, which are supported by the evidence, that the volume of water passing through Bayou Macon was greatly increased by reason of the construction of the drainage canal which emptied into the head of that stream, and that, prior to the construction of the canal, Bayou Macon carried only a small volume of water; that on each side of the bayou the banks were sloping, thus forming a low-lying area, or terrain, between the first bank or water’s edge and the second bank, or, as expressed by some of the witnesses, the “ultimate bank,” and the allegations as to overflowing of the lands of the abutting 'owners relate to portions of the land which thus lie between the first and second banks.

The evidence shows that, prior to the construction of the drainage canal in question, these lands were subject to cultivation, and were in fact cultivated from year to year, and rarely ever overflowed, but that, since the construction of the canal and the increased volume of water carried through the bayou, the lowlands between the two banks overflowed with such frequency as to prevent the cultivation of crops.

In each of the cases an answer was filed, tendering issues hereinafter discussed, and all of the cases were consolidated and tried together before the court sitting as a jury. After hearing the evidence, the court found the facts against the plaintiffs, and decided against them. Judgment was rendered accordingly, and appeals have been prosecuted to this court by all of the plaintiffs.

• Counsel for the district present two grounds upon which liability now asserted should be denied and the judgments affirmed.

1. The anticipated benefits to the whole of the tracts of land owned by each of the. plaintiffs, including the lands now claimed as those damaged by the overflow, were assessed in accordance with the original statute creating the district, and, as has already been referred to, there was a section of the statute enacted in 1915 (supra) ratifying and confirming those assessments. This constituted a legislative determination of the correctness and validity of those assessments, which will not be disturbed in a judicial review unless shown to be arbitrary and unfounded. Sudberry v. Graves, 83 Ark. 344; Salmon v. Board of Directors, 100 Ark. 369; Alcorn v. Bliss-Cook Oak Co., 133 Ark. 118; Gibson v. Spikes, 143 Ark. 270. There is no attempt in the present litigation to attack the correctness of those assessments of benefits, but the contention is that, irrespective of the assessment of benefits, the plaintiffs are entitled to recover for damages to their lands, or, rather, to recover for the value of the lands, which they 'Contend has in effect been taken in the operation of the improvement. That contention will be discussed later.

The same section in the act of 1915 (supra) which confirmed the assessment of benefits' contains a further provision as follows:

“All persons claiming that their lands would not be benefited by the making of the improvement contemplated by this act are hereby required to apply to the proper court of chancery, within sixty days after the passage of this act, to enjoin the enforcement of said assessment; and any person failing so to apply to the court of chancery within said sixty days shall be forever barred from contesting the assessment of benefits aforesaid.”

The plaintiffs and other landowners in the district instituted an action in the chancery court of Desha County within sixty days after the passage of the act of 1915 (supra), attacking the correctness of the assessments, and a final decree was rendered in that cause substantially reducing the assessments of benefits on all of the lands of the plaintiffs. The contention of the plaintiffs is that the assessments' of benefits and the former suit in the chancery court relating thereto included only benefits to the lands in the district and had no reference to injury to the lands in the operation of the drainage project, which, in effect, constituted taking of property, and that, notwithstanding the finality of the assessment of benefits as adjudicated in the chancery court, the plaintiffs still have a right to maintain an action at law to recover compensation for the injury to their lands which, in effect, constituted a taking. The contention of the district is, on the contrary, that the lands of the plaintiffs were not actually taken and used in the construction and operation of the drainage project ; that there was only an injury to the land by reason of the construction of the improvement, which was taken into account in the assessment of benefits, the one being balanced off against' the other, and that the conclusive effect which must be given to the assessment of benefits and the litigation which finally adjudicated the matter constitute a bar to the right of plaintiffs to recover damages.

The Constitution of this State provides that “private property shall not be taken, appropriated, or damaged for public use, without just compensation therefor.” Art. 2, § 22. The constitutions of some of the States differ from ours in that the guaranty of compensation extends only to property taken for- public use, without expressly providing for compensation for property damaged. Such is the form of the provision in article 5 of the Constitution of the United States. In some of the decisions on this subject it has been held that constitutional provisions guaranteeing compensation merely for the taking of property only include damages for injuries resulting from an invasion or destruction of the property, and not merely an incidental injury; but decisions of other courts, including the Supreme Court of the United States (United States v. Lynch, 188 U. S. 446), hold that the constitutional guaranty relates to compensation for any injury done to property for public use. Of course, our Constitution involves no such distinction, for it expressly guarantees that compensation shall be paid for property either “taken,' appropriated or damaged for public use.” ' It is undeniable that the kind of injury which the plaintiffs claim they sustained to their property, and which the testimony tends to show, is protected by the constitutional guaranty. There is no controversy here over that question, but the point involved relates to the manner in which such compensation must be ascertained, adjusted and paid. .

The Supreme Court of the United States, in the case cited above, and upon which learned counsel for plaintiffs rely with so much confidence, holds that the injuries to the property, or its destruction for public use, constitute a taking within the constitutional guaranty, but this decision has no relation to the question how the compensation may be paid, nor to the question, more directly involved in the present discussion, whether or not the incidental damage to the property in the construction of the improvement, regardless of its extent, may or may not be balanced off against the benefits which are to be derived. The law on that particular subject has, we think, been fully settled by the decision of this court in Gregg v. Sanders, 149 Ark. 15. In that case a levee district was formed for' the purpose of constructing a levee along White River, and the plaintiff in the case was the owner of a tract of land abutting on the river, a portion of which was actually taken and used in the construction of the levee. In a suit by the plaintiff to recover damages for the land so taken it was contended, on behalf of the district, that such damage should be balanced off and deducted from the appraised benefits to accrue to the remainder of plaintiff’s tract of land. We held against that contention, and in doing só we drew a distinction between lands actually taken and used and. those which were merely damaged incidentally in the construction or operation of the improvement. In disposing of the question we said:

“The theory upon which rests the proceedings for the construction of local improvements by the imposition of special assessments on contiguous property is that the improvement is public in.its nature to the extent that the right of eminent domain may be authorized, but it is local to the extent that special benefits accrue to the adjoining property. The improvement is paid for out of special assessments based on such benefits, and when property is taken for use in the construction of the improvement, full compensation must be awarded in order to satisfy the requirements of the Constitution, without deduction of the benefits which are to accrue to the owner on the remainder of his property. Damages to the property not taken may, however, be balanced off against the benefits which accrue, for damages must necessarily be taken into account in the estimate of benefits.”

Discussing the question further in the same case, we said:

“At any rate, we are convinced that the true rule is that, whether the taxes levied amount to the appraised benefits or not, there can be no deduction of any part of the benefits from the compensation to be allowed to a property owner for that portion of his property which is taken and used in the construction of the improvement, for the reason that he pays for his benefits in taxes, the same as other property owners, and it would destroy the rule of equality to require him to contribute to the common use any part of his property without compensation.”

Counsel for appellants contend that the undisputed proof shows that the value of the property was totally destroyed, so that it constituted a taking of the property within the meaning of the law, and that the case of Gregg v. Sanders, supra, supports their right to recover damages in the present cases. In the first place, it may be said that there is a conflict in the testimony, and a finding of fact against them by the trial court, which is binding upon this court on appeal. The trial court found from the evidence that the damage to the lands of the plaintiffs was actually considered, by the assessors in making the assessment of benefits. In addition to that, we are of the opinion that, according to the undisputed evidence,' the property was not actually taken and used by the district in the operation of the project so as to separate it from the other lands of the plaintiffs and prevent the damage being balanced off against the benefits. The only portions of the land taken for the purpose of constructing the improvement were the lands covered by the drainage ditch. The waters were gathered up and thrown into Bayou Macon, but the incidental injury to lands abutting on Bayou Macon did not constitute a taking of those lands, though it resulted in injury for which compensation must be made within the meaning of the Constitution. The lands were frequently overflowed, but they remain the property of the plaintiffs for the enjoyment of such limited use to which they were susceptible in the damaged condition. Suffering the damages thus inflicted did not 'constitute a contribution of private property to public use in the sense that that portion of the land was separated from the remainder so as to prevent the balancing off of said damage against benefits to the whole of the lands. We think that the facts of the case bring it within the rule announced in Gregg v. Sanders, supra, and that the assessment of benefits, including the estimate of damages, was conclusive of the rights of plaintiffs to recover compensation. In other words, the finality of the assessment raises a conclusive presumption that they had been compensated by having the damages balanced off against the assessments of benefits.

2. It is equally plain that the plaintiffs, except possibly plaintiff R. H. Wolfe, are barred from recovery of damages on still another ground, now stated. The act of 1915 (supra) contains the following ' provision (§ 6) :

“Said board shall obtain rights-of-way for its drains, ditches, canals, levees and dams without cost to the district, wherever possible, and it is empowered to make all necessary contracts for the acquisition of such rights-of-way. They shall have power to adjust and pay all damages that may accrue by reason of such drains, ditches, canals, levees and dams. Any property owner may accept the damages awarded to him by the board, or acquiesce in its failure to award damages in his favor, and shall be presumed to have acquiesced in the action of the board unless he gives said board notice in writing of his objection to the award made him, or the action of the board in failing to award him damages, within thirty days after the action of the board thereon.”

This provision relates to the value of property actually taken and used and also any property which may necessarily be destroyed in the construction of the improvement, and if the injury to plaintiffs’ lands constitutes what they contend it to be, it falls squarely within this provision for the adjustment and payment of damages in the manner specified. The same section provides that, as soon as the board has determined upon the system of drainage and the award of damages to be made, it shall publish a notice, and the form of that notice is set forth in the statute. Another provision of the same section is as follows:

“Any one who shall appear, and shall feel aggrieved at the action of the board on his complaint, shall, within five days after said meeting, file written notice with the board that he demands an assessment of his damages by a jury, and in such instances the board shall institute in the circuit court, in the county in which the lands lie, an action to condemn the lands that must be taken or damaged in the making of any proposed drain, ditch, canal, levee or dam.”

It appears from the record in the present case that such an ascertainment of damages was made, or at least that the board formally ascertained that there were no damages to lands not actually 'taken in the construction of the canal, and that notice was duly published in accordance with the terms of the statute. Plaintiffs-did not respond to the notice nor pursue the remedy pointed out in the statute. There is some evidence in the record to the effect that plaintiff, R. H. Wolfe, presented a claim for damages to the commissioners, but as he too must be denied further relief on the first ground herein •stated, it is unnecessary to decide whether his claim constituted a demand for trial by jury within the-provisions of the statute. ' , ■

In the case of Dickerson v. Tri-County Drainage District, 138 Ark. 471, there was involved the procedure under a statute identical with the one now under consideration, and we held that the statute was valid, and that (quoting from the syllabus), “where the Legislature provides a method for ascertainment of compensation to be allowed owners of land taken under eminent domain for construction of drainage ditches, the constitutional guaranties are complied with.” In that case it was alleged1 that the plaintiff’s land was actually taken and used in the construction of the drainage ditch, and we held that the failure to appear and demand the right of trial by jury for the ascertainment of the amount of compensation for the property taken was conclusive of the right to later maintain an action for the recovery of damages. The decision in that case is conclusive of the present one, for the statute is the same, and the facts were less favorable to the plaintiff than those disclosed in the present case.

Counsel for appellants rely on Road District v. Hall, 140 Ark. 241, as disclosing the distinction which exists in the present case from our decision in the Dickerson case, supra. The distinction found in the Hall case does not exist in the present case, for in that case there was a change of plans, subsequent to the assessment of benefits, whereby the road to be improved was widened, and the decision involved the question of recovery of compensation for property taken, subsequent to the assessment of benefits, for the widening of the road. There is no such distinction in the present case, for there has been no change in the plans and no additional taking or damage to the property further than the recurring injuries resulting from the frequent overflows. This damage was one which was in contemplation at the time the plans were formed to gather up the waters and east them into Bayou Macon, and this, according to the findings of the court and the evidence adduced in the case, was taken into consideration by the board of assessors in assessing the benefits. Whether such damages were, in fact, taken into consideration, is immaterial, for they should have been taken into consideration, and the failure of plaintiffs to complain in the manner provided in the statute bars them from the subsequent assertion of any claim for damages.

Our conclusion on this point is, as on the other one already stated, that the plaintiffs are not entitled to recover damages, and that the judgment of the circuit court was correct. The judgment is therefore affirmed.

Wood, J., disqualified.

DISSENTING OPINION.

Hart, J.

My dissent is based upon the fact that I believe that practically the undisputed facts bring this case within the principles of law decided in the following cases: Road District No. 6. v. Hall, 140 Ark. 241; United States v. Lynch, 188 U. S. 445, and Pumpelly v. Green Bay Co., 13 Wall. (U. S.) 166.

In the last mentioned case Mr. Justice Miller made a 'dear and comprehensive statement of the principles of law as follows:

“It .would be a very curious and unsatisfactory result if, in construing a provision of constitutional law, always understood to have been adopted for protection and security to the rights of the individual as against the government, and which has received the commendation of jurists, statesmen, and commentators as placing* the just principles of the common law on that subject beyond the power of. ordinary legislation to chango or control them, it shall be held that, if the government refrains from the absolute conversion of real property to the uses of the public, it can destroy its value entirely, can inflict irreparable and permanent injury to any extent, can, in effect, subject it to total destruction without making any compensation, because, in the narrowest sense of that word, it is not taken for the public use. Such a construction would pervert the constitutional provision into a restriction upon the ris’hts.of the citizen, as those rights stood at the common law, instead of the government, and make it an authority for invasion of private right under tile pretext of the public good, which had no warrant in the laws or practices of onr ancestors.”

In the application of this principle, of law I think the evidence for the defendant shows that the damage done to the lands of the plaintiffs was caused by a change of the plans under which the drainage ditches were constructed by the commissioners.

O. G. Baxter was a civil engineer for the United States Government, and had charge of the surveying, and was responsible for the designing of the plans of the Cypress Creek Drainage District. He was a witness for the defendant. On the subject of a change of the plans I quote from his testimony on pages 430, 431 and 432 of the transcript as follows:

“Q. Describe to the court the natural drainage of this territory prior to the organization of the Cypress Creek Drainage District, and explain the plan with reference to converting that natural drainage into a proper system of artificial drainage to take care of this water when the gap was closed? A. The upper part of the district was drained by Cypress Creek, the headwaters beginning about twelve miles southeast of Pine Bluff and extending parallel to the Arkansas River, and entering the Mississippi River just below the mouth of the Arkansas. The drainage south of Amos Bayou was southerly through natural channels, and the closing of the gap necessitated providing for a new outlet for this Cypress Creek water, and plans were prepared and filed providing for carrying the Cypress Creek water to the south, down into Chicot County, through Boggy Bayou, which was called ditch 81, and through ditch 43, which was the middle ditch, down through the center of the district, and ditch No. 19, which takes the water from the upper portion of the district down through Bayou Macon to Macon Lake, in Chicot County, and ditch No.18, which provides drainage for the Little Bayou Macon, and ditch No. 13, which takes care of the Wells Bayou watershed, together wdth the various lateral ditches shown on this map (referring to map), covering the whole of the territory included, in the district. Q. Prior to the organization of this district was Bayou Macon a natural waterway? A. Yes sir.”

Again I quote from his testimony on pages 435, 436 and 437 of the transcript as follows:

“A. The water level from the head of the Cypress Creek, ditch No. 19, Walnut Lake region, has been raised two feet, and from Walnut Lake to a point where ditch 13 is supposed to enter Bayou Macon, which is in the east quarter corner of section four (4), township twelve (12) south, range three (3) west, has been raised three feet from what it would have been if the Kirsch Lake Drainage District had not cut across the natural divide of Choctaw Bayou, in Lincoln County, and carried fifty square miles of headwater into Cypress' Creek, that would have been carried down through Walls’ Bayou; and the failure to construct ditch No. 13 from Walnut Lake to the east quarter of .section four (4), township twelve (12) south, range three (3) west, had brought in seventy-six more square miles into Bayou Macon, due east of Walnut Lake, that otherwise would have gone down below. So, from.the head of ditch No. 19 to a point about nine miles down Bayou Macon, we have three feet higher water than we would have had if the plans had been carried out according to design. Q. Where does the Kirsch Lake Drainage District lie with reference to the Cypress Creek Drainage District? A. The Kirsch Lake District is on the northwest. Q. On the northwest? A. Yes sir. Q. Is it immediately contiguous to the Cypress Creek Drainage District on the northwest? A. I think part of it is. Q. Now, that district is cut through the natural divide and empties, its waters into the ditch system of Cypress Creek Drainage District? A. Yes sir. Q. ¡What is the area of water that is thereby turned into Cypress Creek that does not come from the territory of Cypress Creek at all? A. Well,let’s see. Fifty square miles, which would eventually come to Cypress Creek down below, but not at the point where it would put fifty square miles at the head, and one hundred and twenty-six square miles from Walnut Lake down. Q. What effect will the completion of this plan have on the efficiency of the district to take core if this additional water that'has been wrongfully put into the district? A. The completion of the plans---the completion of this clearing down Bayou Macon will nive us relief down Bayou Macon, but of course from the point above ditch No. 13 we will still have higher water than we planned. Q. And that is due to the water that the Kirsch Lake District has turned into Cypress Creek? A. Yes sir, and the failure to cut ditch No. 13.”

C. H. Miller was employed by the drainage district as a consulting engineer, and was a witness for the defendant. On this same subject I quote from his evidence on pages 497, 498 and 499 of the transcript as follows:

“Q. Do you know when the water from Kirsch Lake Drainage District was diverted into Bayou Macon? A. In a general way. I wasn’t here at the time. I was here in 1917, or the early part of 1918. Q. The original plans of the Cypress Creek District did not contemplate taking care of any of the water which the Kirsch Lake District dumped into the Cypress Creek Drainage District, did it? A. Not at that point. They contemplated taking care of that water down below- the point where this land is located. It would have finally come into Bayou Macon. Q. But it would have come into Bayou Macon, had the original plans of the Kirsch Lake District been carried out, below the location of the lands in suit? A. Yes sir. Q. But the act of Kirsch Lake Drainage District in dumping their water into Cypress Creek at a different place affected -the lands in suit? A. Yes sir, it resulted in throwing more water into the ditch where these lands are located. Q. That is what I mean? A. Yes sir. Q. It raised the flood level on this'land by nutting additional water on them? A. Yes -sir. Q. Mr. Miller, do you know whether or not the plans for the Kirsch Lake Drainage District called "for a discharge ditch at a place that would carry this water into Bayou Macon below the lands in the suit — the original plans called for that? A. I don’t recall very well about that. The Cypress Creek Drainage District plans were, made so as to take care of the Kirsch Lake water at the lower end of that district. Q. The point I am asking is this: Didn’t the plans of the Kirsch Lake District also call for a ditch, in conjunction with the plans of the Cypress Creek Drainage District, to take care of the water you have mentioned? A. I think so. I am not sure. Q. But the Kirsch Lake District afterwards dug an additional ditch not called for in the plans at all? A. Yes sir, I know that. Q. And this threw the water of the Kirsch Lake District on the lands in suit, where it wouldn’t have done that if they had followed the plans of the district? A. Yes sir, that is a fact.”

Hubert Furr was one of the commissioners, and on' the same point I quote from his testimony, on pages 521 and 522 of the transcript, the following:

“Q. If Kirsch Lake District had drained down ditch No. 43, as contemplated, would the lands in suit have received as much water as they do? A. Kirsch Lake District wasn’t ever contemplated to go down ditch 43. It was originally planned to go down Bayou Bartholomew to ditch 13. Q. That is what I mean? A. Yes sir. Well, it was a part of the original plans of Cypress Creek to dig number 13, but 13 was abandoned, then the Kirsch Lake District changed their plans, and, instead of turning their water into Bayou Bartholomew, they diverted it into ditch number 19 at the north of the Desha County line. That put an additional amount of water into Bayou Macon? A. It turned the water they' had planned from Kirsch Lake District to go into No. 13, but when No. 13 was abandoned they turned it in, about fifteen miles higher up, into Cypress Creek Drainage District, and thereby increased the volume of water in' the upper waters of Bayou Macon. A. Yes sir.”

The testimony of those witnesses shows conclusively that the damage °to the lands of the plaintiff was caused by a change of the plans under which the drainage ditches were constructed. It was known from the beginning that •the Kirsch Lake Drainage District was being formed and that the water from it must flow into some of the ditches or bayous of the Cypress Creek Drainage District. The Kirsch Lake Drainage District was adjacent to the Cypress Creek Drainage District, and northwest from it. The waters from the ditches in the territory comprising it flowed in a general southeasterly direction, and would necessarily flow into the territory of the Cypress Creek Drainage District.

It was first intended to construct what was called ditch No. 13, in the Cypress Creek Drainage District, for the purpose of receiving the waters which flowed out of the Kirsch Lake Drainage District. Drainage ditch No. 13 would carry the waters from the Kirsch Lake Drainage District to a point about 15 miles below the lands of the plaintiffs and there empty the waters into the drainage ditch, or canal No. 19, which was the main drainage ditch of the Cypress Creek Drainage District.

The landowners in the Cypress Creek Drainage District contested the assessment of benefits against their lands, and their contention was sustained by the chancery court, which held the assessments to be void. The decision of the chancellor was affirmed by this court, in an opinion delivered on June 23, 1923, reported in 109 Ark. 60, under the style of Cypress Creek Drainage District v. Wolfe.

This caused an amendment to be made to the statute creating the Cypress Creek Drainage District by an act of the Legislature, approved Feb. 25,1915. Acts of 1915, p. 297.

By the provisions of § 3 of this act the construction of ditch or canal No. 13 was made optional with the landowners of part of the territory embraced within the boundaries of Cypress Creek Drainage District.

By § 5 of the act it was recognized that the taxes of the district upon a portion of the land had been enjoined by the chancery court of Desha County on the ground! that the lands in question would not be benefited by the drainage system contemplated in the act.

The Legislature declared that,.according to the plans under contemplation by it, the lands would be entirely reclaimed from surface water, or put within easy reach of reclamation. The assessments of benefits theretofore made was thereupon confirmed, including those as to which the collection of taxes had been enjoined. No attempt was made to construct canal No. 13 under the provisions of this act. Hence it became necessary for the commissioners of the Kirsch Lake Drainage District to find-another outlet for the waters flowing from that district. This was done by digging a canal in a generally eastern direction, so that the waters would flow into canal No. 19, which was the main canal in the plans of the Cypress Creek Drainage District, above the lands of the plaintiffs, and thereby caused them to overflow, as testified to by the witnesses for the plaintiffs and also by the engineers for the defendant, as shown by their testimony as copied above.

The original assessments were made upon the theory that the waters from the Kirsch Lake Drainage District, would empty into canal No. 13; which would, in turn, empty into canal No. 19 about fifteen miles below the lands of the plaintiffs. No. 19 flows into Bayou Macon, and I have referred to them as No. 19. The Legislature ■confirmed' the original assessments upon this theory.

A subsequent change in the plans by emptying the waters from the Kirsch Lake Drainage District into canal No. 19 above the lands of the plaintiffs, instead of below them, caused their lands to overflow for a greater part of the year, so that fertile lands which, before the construction of the drainage canal, had been very valuable for cultivation in cotton, became worthless except for pasturage. Therefore, instead of benefiting the lands of the plaintiffs, the construction of the drainage system caused their lands to be greatly damaged.

The testimony of the witnesses for the defendant shows that this change of the outlet of the waters from the Kirsch Lake Drainage District was done in 1919 and 1920. As we have already seen, it was evidently done after the passage of the act in 1915 amending the act under which the drainage system, was originally planned. If so, then the damage caused by the change of the plans could not have been considered by the commissioners in making the original assessments or by the Legislature in 1915 in confirming the same. It necessarily follows that the damage was caused to the plaintiffs’ lands by a change of plans made after the act of • February 25, .1915, was passed; the case falls squarely within the principles of law decided in Road District No. 6 v. Hall, 140 Ark. 241.

Therefore I' think that the opinion of the majority is wrong, and respectfully dissent.


source: Caselaw Access Project

author: McCulloch, C. J.

license: Public Domain

text:
    Chambliss v. Clear Creek Oil & Gas Company.
    Opinion delivered December 24, 1923.
    1. Gas — power to regulate public utility. — Where a natural gas company was operating as a public utility, it was beyond its power to contract with reference to supplying gas, so far as such contract might interfere with the power of the Railroad Commission to regulate the price thereof.
    2. Gas — reasonableness of rate fixed. — Rates fixed by the Railroad Commission for charges by public utilities are presumed to be reasonable, and will not be disturbed except upon testimony sufficient to overcome such presumption.
    3. Gas — public utility charges — review..—On appeal from a finding of the Railroad Commission as to the reasonableness of the charges of a public utility, it is within the jurisdiction of the circuit court to determine whether such charges were reasonable, and, if not, to determine what would be a reasonable schedule of charges.
    Appeal from Pulaski Circuit Court, Second Division; R. M. MaA%n, Judge;
    affirmed.

      G. M. Wofforcl and Joh)% D. Arb%ichle, for appellants.
    The burden of showing the rates to be unreasonable rests with the complaining company. 12 K,. C. L. 900, § 39. The elements from which reasonable rates are to be determined are: (1) present reasonable value of the company’s plant; (2) amount of gas furnished customers; and (3) the cost of gas. 12 R. C. L. 901, § 40. What is a reasonable return varies according to the circumstances of the particular case. 12 R. C. L. 902, § 41. The courts will not interfere with the orders of the Railroad Commission unless they are arbitrary, unreasonable and unjust. 85 Ark. 12; 97 Ark. 473; 99 Ark. 1-15; 33 Cyc. 52, and authorities cited; 153 N. W. 247; 147 N. W. 681; 96 Neb. 205.

      E. L. Matlock and Pryor & Miles, for appellees.
   McCulloch, C. J.

The two appellees, Clear Creek Oil & Gas Company and LaSalle Oil & Gas Company, are corporations producing gas in the fields located in Crawford County and furnishing it for domestic and industrial purposes in Fort Smith and Yan Burén. Appellants are farmers residing in the vicinity of Yan Burén, and have been users of gas for domestic purposes. Private lines are run to the farms of appellants from the gas mains extending from the wells. There are two of these lines running from the gas mains, on one of which are situated about sixty-five farm houses, and on ■the other line there are situated thirty-five farm houses.

When the gas field was developed thé Clear Creek ■ Oil & Gas Company entered into oral agreements with the various appellants that, if the latter would pay for the construction of the line running out from the gas main, they could have gas at fifteen cents per thousand cubic feet, and, pursuant to this agreement,' appellants paid for the construction of the line. They received gas at that price until January, 1921, when the Clear Creek Oil & Gas Company applied to the Railroad Commission for permission to increase its gas rates generally, including an increase for domestic purposes to twenty-five cents per thousand cubic feet. At the same time the LaSalle Oil &> Gas Company made application to the Railroad Commission for an order fixing the price of gas for domestic purposes at twenty-five cents, and the Commission made an order granting the request. The proceedings before the Commission were regular, and the order was made after notice given to consumers. Subsequently appellants appeared before the Railroad Commission and asked that the rates fixed by the Commission be set aside, and, on a hearing, the Commission granted the request and set aside- the rate of twenty-five cents per thousand cubic feet, as fixed in the previous order, and restored the original rate of fifteen cents'per thousand cubic feet. From this order the appellees prosecuted an appeal to the circuit court of Pulaski County. • There was a hearing in the circuit court upon the testimony adduced before the Commission, which was certified in the record, and the circuit court rendered judgment finding the reasonable rate to be twenty-five cents per thousand cubic feet, and certified the judgment to the ‘Railroad Commission. An appeal has' been duly" prosecuted to this court.

It appears from the testimony that appellants had a contract with the Clear Creek Oil & Gas Company for gas at the price of fifteen cents per thousand cubic feet, ' and that they enjoyed that rate from the time the pro duetion of gas began in that field, back in the year 1916 or 1917, but the two appellees were operating as public, utilities, and it was beyond their power to contract with respect to gas, so far as such contract might interfere with the power of the Commission to regulate the prices. Clear Creek Oil & Gas Co. v. Fort Smith Spelter Co., 148 Ark. 260. Notwithstanding those contracts, the question presented to the Commission, on the petition of appellees for a regulation of the rates, and also the question for the circuit court on review, was what is a fair and reasonable rate for the price of gas? . . -

There is a presumntion as to the reasonableness' of the rate fixed bv the Railroad Commission, and the rate thus fixed should not be disturbed excént upon testimony sufficient to overcome the presumption thus raised. Clear Creek Oil & Gas Co. v. Fort Smith Spelter Co., ante, p. 12. In this instance. the circuit court found that the testimony was sufficient to overcome the presumption raised by the finding of the Commission, and, after careful consideration of the testimony, we are of the opinion that the testimony fully sustains the conclusion reached by the circuit court. It is shown clearly, and almost beyond dispute, in the testimony, that twenty-five cents per thousand cubic feet is a reasonably remunerative rate for furnishing gas under the circumstances under which appellants are to receive it. The evidence shows that the gas costs nineteen cents per thousand cubic feet to furnish it to appellants, and that the difference between that and the rate fixed by the circuit court in its finding is a fair profit upon the investment and operations of appellees.

It is unnecessary to review the evidence in all of its detail, but, after considering it, we are of the opinion that its effect is as above stated. It was within the jurisdiction and power of the circuit court, on the appeal, to determine whether or not the prices fixed by the Bail-road Commission were reasonable, and, if the same were found not to be reasonable, to determine what would be a reasonable schedule of prices for enforcement by the Commission. Coal District Power Co. v. Booneville, post, p. 638.

Our conclusion is that the judgment of the circuit court was correct, and the same is therefore affirmed.


text:
    St. Louis-San Francisco Railway Company v. Solomon & Weinberg.
    Opinion delivered December 24, 1923.
    1. Railroads — service op summons. — Under Crawford & Moses’ Dig.. § 1147. providine- that in case of railroad corporations service of a summons “upon the clerk or agent of any station in the county where-the same shall he issued shall be deemed and considered as a good and valid service,” held that service of a summons upon a conductor of a train passing through the county is insufficient.

      2. Railroads — service of summons — waiver.—As an action against a railroad company upon a liability as carrier may be brought in any county through or into which the road passes, under Crawford & Moses’ Dig., § 1172, objection to the sufficiency of service of summons in any such county may be waived by pleading the merits without preserving the right to object.
    3. Carriers — loss of freight. — limitation.—Where an action against a railroad company for loss of freight was commenced within the statutory period of two years, but the summons was not properly served within that time, the subsequent waiver of objection .thereto by the company by entering its appearance will relate back to the commencement of the action.
    Appeal from Greene Circuit Court; W. W. Bundy, Judge;
    affirmed.

      W. F. Evans, W. J. Orr and E. L. Westbroohe, for appellants.
    1. The service of summons on the conductor of the appellant’s train was not sufficient to bring the company into court. C. & M. Digest, § 8572; Id. § 1147. •
    2. The merchandise in the cars after arrival at Blytheville remained in the oars at the owners ’ risk, as is provided by section 5 of the bill of lading. 141 Ark. 71; L. R. A., 1916-C, 608; 163 N. Y. S. Ill; 163 N. Y. S. 114; 100 Ark. 37; C. & M. Digest, § 905.

      M. P. Huddleston, for appellees.
    1. The suit was commenced when the complaint was filed and the summons was issued, and was in time. C. & M. Digest, § 1049.
    2. The service on the conductor was sufficient. 100 S. W. 57; Thompson on Corporations, vol. 3, § 3080; 65 Pac. 539; 118 N. W. 539; 150 N. W. 168; 9 Ind. 243; 12 Ind. 3; 74 Am. Dec. 195; 38 Kan. 299; 16 Pae. 442; 126 Mo. 69; 28 S. W. 965; C. & M. Digest, § 1147.
    3. Whether the service was sufficient or not, appellant entered its appearance by pleading to the merits ■without preserving its objections to the service, and it therefore waived such objection. 95 Ark. 588-91; 6 Ark. 552; 38 Ark. 102; 32 Ark: 432; 64 Ark. 150; L. R. A., 1916-E, 1086, note; 64 Mich. 208;. 2 Standard Enc. of Proc. 534.
   McCulloch, C. J.

Appellees shipped a lot of merchandise over appellant’s line of railroad ■ under a through bill of lading from Walnut Eidge to Blytheville, and this action was subsequently iiistituted to recover damages on account of the alleged loss of a portion of the merchandise so shipped. The claim is that the car in which the merchandise was shipped was broken open and a portion of the goods taken therefrom. Appellees introduced testimony sufficient to show the loss of the goods and that the car had been broken into prior to its arrival at destination. The trial of the case resulted in a verdict in favor of appellees for the full value of the goods alleged to have been stolen. The action was instituted in Greene County, and the service of summons was on the conductor of a train passing through the county. Appellant filed a motion to quash the service, which motion was overruled.

Appellant’s line of railroad runs across the corner of Greene County for a distance of about one-fourth of a mile, but there is no station in that county, nor any place of business maintained by appellant. The statute regulating the service of summons provides that the summons shall be served “in case of railroad corporations, upon any station agent, or upon any person who has control of any of the business of said corporation, either as clerk, agent or otherwise, who, as such agent or clerk, has to report to the corporation who employed them; and, in cases of railroad corporations, a service of a copy of the summons upon the clerk or agent of any station in the county where the same shall be issued shall be deemed and considered as a good, and valid service.” Crawford & Moses’ Digest, §1147.

Counsel for appellees defend the ruling of the court in upholding the service on the authority of decisions cited from other States, but we think those decisions are not applicable, for the reason that they arose under statutes not similar to our own. The language of our statute clearly means that the service must be upon some agent of the company at a fixed place of business of the company in the county, not a mere agent who happens to be in the county at the time of service. Appellant maintains no place of business in Greene County, and the operation of trains through the county does not constitute the maintenance of .a place of business there in the sense that a conductor in charge of a train has authority to receive service. It might as well be said that service could be had upon a section foreman passing along the track, because he had charge of the company’s business of maintaining the track and was required to report to some superior. We do not think that the language is open to that interpretation, and it follows therefore that the service was not sufficient. Appellant waived the service, however, and made a general appearance by filing an answer and going to trial without preserving its right to insist upon the insufficiency of the service. Vulcan Construction Co. v. Harrison, 95 Ark. 588.

The statute provides that an action against a railroad company for injury to person or property upon the road, “or upon a liability as a carrier, may be brought in any county through or into which the road or * * * coaches of the defendant upon which the cause of action arose passes.” Crawford & Moses’ Digest, § 1172. This was an action against the company upon its liability as a carrier, and the action could have been brought in Greene County if service could have been had there. The question involved therefore is not one as to the venue, but as to the sufficiency of the service, and, since the action is one in which the venue could properly be laid in Greene County, there could be a waiver of the sufficiencv of the service, and there was, in fact, a waiver bv nleading the merits without preserving the right to object.

It is insisted further that the action is barred by reason of the fact that it was not instituted within two years, as prescribed in the contract of shinment. The action was in fact commenced within two years, and summons was issued within that time, which constituted the commencement of the action. Even though the suit was brought in a county where service could not have been had and jurisdiction obtained other than by appearance of appellant, the waiver of the service by appearance related back to the commencement of the action. Sims v. Miller, 151 Ark. 377.

It is contended that the goods were lost while in the yards after arrival at destination, and that, under a clause in the bill of lading, the goods, under those circumstances, were held at the owner’s risk. One of the an- ' swers to this contention is that the clause referred to relates only to property “destined to or taken from a station, wharf or landing at which there is no regularly appointed agent.” This does not apply to the yards at Blytheville, where there is a station of appellant. A further answer is that there is proof sufficient to show that the damage occurred before arrival at Blytheville.'

It is argued that the evidence is not sufficient to sustain the verdict, but we are of the opinion that there is substantial evidence tending to show that the goods were lost from the possession of appellant, and that they were taken from the car before its arrival at Blytheville. One of the witnesses introduced by appellees testified that, on arrival of the car at Blytheville, one of the doors had been broken off and the place nailed up.

Our conclusion is that the evidence was sufficient and that the issues were properly submitted in the court’s charge.

Affirmed.


author: Wood, J.

text:
    Elkins v. Huntington-Midland Highway District.
    Opinion delivered December 24, 1923.
    1. Highways — claims for preliminary expense — fraud.—Claims based on contracts for preliminary expenses of a highway district held, under the evidence, not to be fraudulent.
    2. Highways — liability of district for preliminary expenses.— Persons contracting with a highway district, whose project was subsequently -abandoned, held to have known, when they entered into contracts for work to be done, that the district would not be liable unless the road was constructed, and that, if the work was abandoned, the district would be liable only for preliminary expenses.
    S. Highways — preliminary expenses — burden of proof. — In a suit to enforce claims against a highway district, after the undertaking had been abandoned, the burden was on the claimants to show that their claims were for preliminary expenses.
    4. Highways — abandonment of project — claims for subsequent work. — In a suit against a highway district which had abandoned the proposed improvement, claims which accrued after the preliminary work had been done cannot be allowed as preliminary expenses.
    5. Highways — abandoned improvement — engineer’s charge. — In a suit to enforce claims for preliminary expenses against a highway district which had abandoned the proposed improvement, charges of an engineer held to be for more than was necessary to determine whether the benefits contemplated exceeded the cost of the improvement.
    6. Highways — abandoned improvement — -loan for preliminary expenses. — In a -suit to enforce claims for preliminary expenses against a highway district, after it had abandoned the proposed improvement, a loan to the district made for the purpose of paying valid preliminary expenses held binding.
    Appeal from Sebastian Chancery Court, -Greenwood District; J. V. Bourland, Chancellor;
    reversed in part.

      John F. Clifford-, for appellant, Elkins.
    Considering the claim of Elkins as strictly preliminary expenses, the certificates of indebtedness held by bi-pi were proper charges against the district. Act No. 298 of 1920, ^ 3,16, 22, 23, 29; 149 Ark. 476; 119 Ark. 188. The action of the county court in approving the action of the commissioners was-a valid exercise of the discretion placed in that court, and it will be presumed to have acted upon facts -sufficient to maintain its action. 38 Ark. 156. No appeal from its action was taken, and, there being no allegations of fraud, accident or mistake alleged or proved, under such circumstances the -correctness of its judgment cannot be attacked collaterally. 37 Ark. 540; 55 Ark. 275; 107 Ark. 142. As affecting the validity of the meeting of the board -and the acts done, it was not essential that the minutes thereof be signed, or even that they be recorded. It was susceptible of parol proof. 103 Ark.-283; 71 Ark. 438; 79 Ark. 45, and cases cited.

      G. L. Grant and Geo. W. Johnson, for appellants.
    The commissioners were not required by hny to keep a written record of the proceedings of their board meetings. 103 Ark. 283; 126 Ark. 622. However, a party cannot impeach a record which he himself introduces in evidence. ■ Counsel for the receiver introduced the minute book of the meetings of the board. He cannot introduce it for one purpose and discard it for another, and is estopped from questioning its accuracy or its- authenticity. 52 N. W. 341; 50 Am. Dec. 394. The action of the county court in relation to the claims was the action of a judicial tribunal which should have been respected by the chancellor. The burden of showing that the allowances made were inequitable and unjust was upon the parties attacking the allowances. 149 Ark. 476. Where services are rendered under a defectively executéd contract, and such services are accepted, the contract is ratified. The commissioners accepted the plans, specifications and estimates from appellant Carter and submitted them to the county court for approval. That amounted to a ratification. 129 Ark. 211.

      Pryor & Miles, for the receiver.
    1. There was no order of the county court either authorizing or approving the loan of the money received from appellant. Section 16 of the act creating the district. The domicile of the district was Huntington. Section 4, Id. The negotiation of the loan at Little Rock was not the action of the board at its domicile.
    2. All parties dealing with the commissioners of the district were bound to take notice of the limitation on the power of the commissioners imposed by the act. 94 Ark. 585; 152 Ark. 511.
    3. It is clear from the evidence that the commissioners acted individually, or, more correctly speaking, that one member, now deceased, transacted all of the' business for the district. They could act only .as a board. 64 Ark. 490.
   Wood, J.

The Huntington-Midland Highway District (hereafter called district) was created by act No. 298 at the special session of the Legislature of 1920. The third section of that act provides for the appointment of three commissioners by the county court. of Sebastian County. The following commissioners were duly appointed: Frank McCormack, John W. Jasper and W. P. Fitzgerald, who duly qualified as such and organized themselves into a board of the district, as provided in § 5 of the act. Section 4 of the act provides that the commissioners and their successors in office shall compose a body corporate under the name of the district, and, under such name, the district might contract and sue and be sued. The domicile of the corporation was fixed at Huntington, in the Greenwood District of Sebastian County. Carter & Enoch were employed by the board as engineers of the district. They made a preliminary survey and filed plans and specifications, with an estimate of the cost, etc. The board ' also employed the firm of Covington & Grant as attorneys for the district. The plans were approved by the county court, as required by the act, and the board proceeded to assess the benefits under the terms of the act.

Section 16 of the act, among other things, provides: “In order to hasten the work, the board may borrow money and issue its negotiable evidence of indebtedness for its payment, in such form as the board may adopt, and may issue bonds with interest coupons attached, or in such other form as the board may adopt, and dispose of them in such manner and for such amount as the board may deem best, subject to the approval of the county court.”

Section 29 of the act provides: “If, for any reason, the improvements herein contemplated are not constructed, all obligations incurred by the commissioners for preliminary work of any kind shall be a lien and a charge. oil the lands of the district, and an assessment shall be made and a tax levied, as hereinabove provided, to that end, that the same may be paid. ’ ’

On the 29th of December, 1920, the board of commissioners made a report to the county court, giving a full account of the proceedings of the board, from its organizatipn to that date, and showing, among other things, that the board had entered into a contract for the construction of the work contemplated by the act, and that it had entered into a contract for the sale of the bonds as contemplated by the act. The report stated that Chas. B. Thweatt had been employed to prepare the necessary transcript of proceedings incident to the issuance of bonds, under a written contract, which it set forth. A contract had also been entered into with Carter & Knoch and with the attorneys, Covington & Grant, as heretofore mentioned. The report contained the following recital: The board of commissioners has incurred various items of expense, an itemized list of which is hereto attached and made a part hereof, for the making of the plans 'and for the preliminary expenses.” The items of expense enumerated in this report are as follows :

Salary of assistant secretary...................................................$1,050.00

C. B. Thweatt, attorney fee....................................................... 500.00

Cash borrowed from M. W. Elkins.................................... 3,000.00

The $3,000 cash received has been spent as follows:

Paid H. R. Carter, engineering fee....................................$1,500.00

Commissioner’s fees ........................................................................ 180.00

Telephone messages ........................................................................ ■ 10.00

Covington & Grant, attorneys’ fees.................................... 665.00

Geo. B. Rose, attorney fee......................................................... 100.00

Salary to assistant secretary................................................ 450.00

Incidentals ................................................................................................... 95.00

The order of the county court approving the report of the commissioners is as follows:

“On the 29th day of December, 1920, come the commissioners for Huntington and Midland Highway Distriot and file and present to the court their report as to proceedings and actions had and done by them; and, after hearing evidence in the matter, and being familiar with said proceedings through the knowledge of the judge presiding, and after being fully advised and informed:
“The court hereby ratifies, approves and confirms the organization of the commissioners on February 25 by electing Frank McCormack, president, Jno. W. Jasper, secretary, and W. P. Fitzgerald, treasurer, and the election of Henry Lane as .assistant secretary at a salary of $150 a month; also approves the selection of engineers and the contract made with them; also the selection of attorneys, and the purchase of the,record book; also approves the selection of Jas. A. Chadwick, on December 11, as president, to fill the vacancy caused by the resignation of Frank McCormack; also approves assessment of benefits as made and filed by the commissioners, and their action in sustaining said assessment on the date of the hearing had; also approves the construction contract entered into with Hogan Construction Company; also approves the contract for the sale of bonds entered into with Cordon N. Peay, Jr.; also approves the various items of expense incurred, as shown by the report of the commissioners; also approves the contract of employment of Chas. B. Thweatt to prepare transcript of proceedings incident to the issuance of bonds; and fully ratifies and approves all actions and proceedings had, done, and taken by said commissioners, as shown by the report this day filed with the court.”

After the above proceedings were had, this action was instituted in the Sebastian Chancery Court by M. W. Elkins on the 20th of November, 1920, against the district and its commissioners and against H. C. Lane and Covington & Crant. He alleged, among other things in his complaint, that the district was indebted to him in the sum of $3,000, with interest, as evidenced by certain certificates, which he attached and. made exhibits to his complaint. These certificates amounted in the aggregate to the sum of $3,000. He alleged that he had acquired them before maturity and for a valuable consideration; that they were issued by the district to the various parties named therein for preliminary expenses of the district; that Lane had indorsed the certificates issued to him for the amount of such certificates’; that Grant had indorsed the certificate issued to Covington & Grant, and that they had thereby become liable to plaintiff Elkins for these amounts; that the plaintiff had a contract with the district to purchase its bonds issued in the sum of $100,000; that the district breached this contract and failed to deliver the bonds, to plaintiff’s damage in the sum of $2,000; that the sums due-the plaintiff on the certificates were long past due, and that the district and its commissioners refused to pay the same; that the district was insolvent, and that plaintiff had no adequate remedy at law. He prayed for- judgment in the sum of $3,000 against the district, and that he have judgment also in the sum of $450 against Lane, the amount of the certificate indorsed by him; and that he have judgment against Covington & Grant in the sum of $665, the amount of the certificate indorsed by Grant, and also against Grant individually for the sum of $500, the amount he guaranteed to pay on this certificate, and that a receiver be appointed to wind up the affairs of the district and to levy and collect the tax on the lands of the district to satisfy the judgment rendered against it.

Later on, in February, a suit was also instituted by the Midland Valley Railway Company against the district and its commissioners. The -action of the railroad company called in question the validity of the act under which the district was created and the assessments of benefits thereunder, alleging various reasons why the assessment of benefits levied against its property should be enjoined, and prayed for an injunction. The proceedings in that suit are not germane to any question arising in this action further than that, in the answer to the railroad suit, the district and its commissioners alleged, among other things, that “because of objection being urged to the building of said road, and because of the great expense connected with its construction, they have abandoned the project, and ask the court to consolidate this cause with another cause pending in the chancery court loo-king to the dissolution of the district and the liquidation of its affairs.” The pleadings in that case were made a part of the record in this case.

In the answer to the suit- by Elkins, the district and its commissioners admit the indebtedness claimed by Elkins, but denied that he was an innocent purchaser. They alleged that, before these certificates were issued and before Elkins had purchased the same, he had agreed to buy the bonds of the district, and, as a part of the contract of purchase, he had agreed to loan the district a sum sufficient to pay the preliminary expenses of the district, which was to be repaid at the time the bonds were delivered; that, at the time the certificates were issued, the commissioners of the district and Grant, the attorney of the district, met with the plaintiff at.his office in the city of Little Rock, at which time the plaintiff caused the certificates to be prepared by his stenographer, and directed the commissioners to sign the certificates and have them indorsed by the persons to whom they were payable and then to be sent to him through the bank with draft attached, all of which was done; that the plaintiff therefore knew the puruo-se -of the certificates, and, being charged with such knowledge, he was not an innocent purchaser. They further alleged that the plaintiff at the time explained that he desired the indorsements of the commissioners on the certificates merely for the purpose of creating evidence of the indebtedness of the district represented by the certificates, and to show that the amounts thereof had been paid to the persons in whose favor the certificates were drawn, and not for the purpose of creating any liability again-st the individual indorsers; that the indorsements of the commissioners of the district were had under these circumstances, and that they were not liable.

Grant answered, and admitted that he had guaranteed the sum of $500 to the plaintiff, but alleged that he should not be required to pay the same unless the amount could not be collected from the district, inasmuch as he was the attorney for the district, and the district was due his firm more than that amount, as shown by the certificate issued to his firm. The commissioners further answered that there was no money in the treasury of the district to pay the amount claimed as preliminary expenses, and alleged that they would be unable to collect the assessments, inasmuch as serious objection had been urged against the improvement, and they alleged that it was to the best interest of all concerned and the taxpayers of the district to abandon the project. They therefore also-prayed the court to appoint a receiver to take over the affairs of the district, and with directions to levy an assessment to pay the indebtedness of the district.

Upon the above pleadings the court appointed a receiver, who was also appointed master, who executed a bond and entered upon the discharge of his duties as •such. All claims against the district were ordered filed with the receiver, and he w-as directed, as master, to take testimony, after due notice to the claimants, -and to make a report, with his recommendations, to the court.

Hugh R. Carter, as surviving partner of the firm of Carter & Enoch, filed a claim for $876.67. Lane filed a claim for $1,350, and C. B. Thweatt filed a claim for $600, and certain other small claims were filed. In the receiver’s report concerning these claims, among other things, he said: “That M. "W. Elkins has filed a claim for $3,000, based upon eight certificates, purported to have been -signed by the three commissioners. That it is the understanding of your receiver, from talking with the commissioners, that there was never at any time any resolution adopted by the .board authorizing any member of tbe board of commissioners to borrow said money; and that said money was not used, as far as yonr receiver has been able to learn, for tbe use or benefit of said district, and yonr receiver submits the validity of said claim to the court without making any recommendation.”

In support of the allegations of his complaint, Elkins introduced his verified account against the district for $3,000 and the certificates issued to various parties by the district, through its commissioners, purporting to be signed by them for the district. All of these certificates, except the certificate of $1,500 to Carter & Knoch and the sum of $765 to Covington & Grant, specify that they were issued “for preliminary expenses.”

Elkins testified that he entered into a contract with the commissioners of the district for the purchase of its bonds. He advanced $3,000 under the contract “for preliminary expenses,” which transaction was closed, and the warrants, numbered from one to eight, as evidenced by the certificates already alluded to, were executed in his office in Little Rock, upon the date shown on the face of those warrants. He witnessed the execution of the warrants by the commissioners. The commissioners were present with their attorney, Mr. Grant. The commissioners, asked the witness to give them a check the day the warrants were executed. He told the commissioners to go back and hold their meeting* in their own county, at the domicile of the district, allow the claims, attach them to a draft, and witness would pay the same. They did that. He identified the draft, which was signed by McCormack, Jasper and Fitzgerald, the commissioners, drawn upon the witness through the Southern Trust Company at Little Rock, Arkansas. Witness paid the amount of the draft, the same being sent them through the bank. Witness had never been able to obtain Dayment of the certificates. The understanding was that the $3,000 was to be used by the commissioners “for preliminary expenses.” The amount covered office equipment, engineering fees, attorneys’ fees', clerk hire, and items of that kind. It was all to be strictly “preliminary expense.” The commissioners wanted witness to advance them $5,000, but they could not show witness where they owed the sum of $5,000 as preliminary expenses, and he would not let them have that sum. They could only show an. amount for preliminary expenses in the sum of $3,000. On cross-examination he stated that he didn’t see the commissioners sign the draft for the $3,000, which, witness paid, but he was acquainted with their signatures and knew that the commissioners had signed the draft; that the signatures on the draft were the same as the signatures on the warrants and certificates, which witness did see the commissioners sign. “The gist of the whole transaction,” says the witness, “is that I loaned the district $3,000 for preliminary expenses, which I have never gotten back, or any part of it,” and the district owes the witness that sum, plus the interest from the date of the warrant. ' I ' i u*'!

G. L. Grant testified that he was a practicing lawyer at the Fort Smith bar and a member of the firm of Covington & Grant, attorneys for the district. He handled the legal affairs of the district. Elkins offered to prove by him that he was present at a meeting of the board of commissioners when a contract was executed with Elkins for the purchase of bonds; that he identified what purported to be the contract, and recognized the signatures to the contract. He saw. the commissioners sign the identical paper which was offered in evidence. The court excluded this testimony.

Carter testified, concerning his claim, that he was employed under regular contract with the commissioners, which contract was made a part of the record; that he filed his bond as required by the contract, which was duly approved; that he proceeded to make the survey and preliminary plans and specifications, and organized Ms field and -office forces; that he incurred a great deal of expense, prepared all maps, for the use of the field party. He specified minutely the various tMngs that were done by his firm, and concluded by saying: “All of which was necessary to determine whether the project was feasible from an economical standpoint .and the location of the road,” which was to be five and a quarter miles in length. The surveys covered approximately ten miles, and the total expenditures, without any compensation to the witness, were $2,076.63. He introduced an itemized statement of his expenses, and testified that he put in considerable time on the work, for which no charge was made. The $1,500 warrant issued by the district in favor of Carter & Knoch was given the witness by the board because the district had no available funds, at the time the work was completed, to pay his fee in accordance with his contract. The commissioners stated that they didn’t have the cash, but had sold their bonds to M. W. Elkins with the understanding that he would take up the warrant for the board and pay witness the cash called for, which was a payment of $1,500 on account of engineering due on the contract. Elkins paid witness the $1,500 for the warrant, and it was indorsed over to him without recourse. All services rendered by the witness were preliminary.

Chas. B. Thweatt testified that he was a duly licensed attorney at law, and, as such, entered into a written contract with the district by the terms of which he was employed to prepare a transcript of all proceedings had and done incident to the issuance of bonds of the district; that he was to receive pay for his services in the .sum of $500; that, in pursuance of the contract, he had prepared a transcript of all proceedings, had and done incident to the issuance of the bonds, and had fully complied with his contract; that nothing had been .paid him for his work. He was also directed by the commissioners of the district to prepare an act amending the act by which the district was created. For his services to be rendered in connection with the drawing of this hill and advice to the commissioners as to the steps necessary to be taken to perfect the organization of the district and •show legal authority for the issuance of the bonds, he was to receive as compensation $100. He rendered .the services, and nothing had been paid. The written contract entered into between him and the board was introduced in evidence.

The appellees introduced the minute book of the commissioners. That hook contained unsigned minutes, purporting to he the proceedings of the commissioners of the district, showing its organization, February 25, 1920, and the employment of Carter & Enoch as engineers, and of Lane as secretary of the district at a salary of $150 per month. The recitals, among other things, show that a meeting was had on May 17, 1920, and that the commissioners had returned from Little Rock, where a deal was closed with Elkins for the purchase of $100,000 bonds, and reciting that certain bills were closed up in certificates of indebtedness and sent to Elkins for payment, amounting in the aggregate to $2,997.50, and directed the secretary to draw a draft on Elkins for the payment of the same, and reciting that the arrangements had been made with Carter & Enoch to advance the sum of $250 to the district, and various other recitals which it is unnecessary to -set forth, purporting to he a record of the proceeding of the board from its organization February 25, 1920, to October 30, 1920.

The court held that the minutes of the proceedings, not signed, were not competent. Appellee also introduced Fitzgerald, who testified that he was one of the commissioners. He attended one meeting’ of the board— didn’t remember- the date; that was after they had returned from Little Rock, where they had gone to figure on making a contract to get some money. Witness never had notice of any other of the meetings of the hoard. He stated that he was a figurehead; that he had no knowledge of any certificates being signed at any meeting of the board and the contract with Elkins. The certificates were signed in Little Rock, if witness was not mistaken. There was no meeting of the board authorizing the contract or authorizing' the board of commissioners to sign the certificates of indebtedness. Witness, further on, stated that he thought the contract with Elkins was signed in Little Rock, but it might have been signed in Huntington. Witness had very little bo do with it, and didn’t remember much about what happened.

McCormack testified that Secretary Lane was never present at a meeting of the board that witness attended. Witness was very busy, and would- come in in the evenings and would call the men in Jasper’s office. Witness stated that the meetings he attended were too numerous to mention. He stated that Jasper wrote the supposed minutes. A sworn affidavit of the witness was read in evidence, in which he stated that the negotiations with Mr. Elkins were conducted at Little Rock between the 14th and 19th of May, 1920. Grant was the attorney, and brought a number of matters to the attention of the witness, and witness signed papers while he was there at Little Rock, and didn’t remember what they were, or what they contained. He did remember the meetings of the board in May, 1920, when the Elkins matters were up for consideration — May 14, 17 and 29, 1920. Witness had nothing to do with the transaction as shown in the unsigned minutes. They were written in witness’ presence, by Jasper. It was in evidence that Jasper, the other member of the board of commissioners, was dead.

The above are substantially the facts upon which the court dismissed the complaint of Elkins against the district and its receiver, and also the claims of Carter, Lane and Thweatt. From that decree is this appeal.

1. The record shows that the improvement contemplated by the creation of this district was not made. Therefore, under § 29 of the act under which the district was created, the obligations incurred “for preliminary expenses ’ ’ were, by the expr’ess terms of the act, made a charge and a lien on the lands of the district. The record discloses that the chancellor found that most of the contracts upon which the claims were predicated were made away from the county, and that this fact rendered the claims fraudulent and. void. We cannot agree with the court in its finding. It could serve no useful purpose to discuss -the testimony, which is set forth rather elaborately above. It speaks for itself, and it occurs to us that a decided preponderance of the evidence shows that the claims, to say the least, were not fraudulent. They were based upon contracts with the district which the commissioners had power to make, and, if the improvement contemplated by the act creating the district had been constructed, unquestionably these claims would be valid and binding claims against the district and be a charge and a lien on the lands included within the district. However, since the construction of the improvement contemplated by the act was abandoned, under the express terms of the act the only obligations incurred by thé commissioners which are a charge against the district are the 'obligations for preliminary work. Therefore the only question presented by this appeal is whether or not the claims of appellants were for preliminary expenses.

All parties, in entering into contract with the commissioners for work in the contemplated improvement, weré bound to take notice of the law. Therefore the appellants must be held to have known, when they entered into the contract with the commissioners, for work contemplated under the improvement, that~ these contracts would not be binding on the district unless the improvement were constructed, and that the district, if the work were abandoned, would oulv be liable for preliminary expenses. This court, in Thibault v. McHaney, 119 Ark 188, 201, said: “Under the terms ‘preliminary'expense’ would be included * * * attorney’s fees as counsel to the board in the preliminary work of organization, etc. such costs as expenses for maps,” plans, surveys of land, and for engineer’s expenses in preparing the plans and specifications. In other words, all expenses incident to the investigation by which it is sought to determine whether the value of the benefits to the lands by the improvement contemplated would exceed the cost of such improvement and thereby warrant its completion. ’ ’

The burden was upon the appellants to show that their claims were for preliminary expenses. Under the testimony the claims of Lane and Chas. B. Thweatt must pass out, for the reason that there is no testimony whatever to show that their claims were for preliminary expenses. The claim made by Lane was obviously for salary which accrued under his contract long after the preliminary work had been done. Likewise the service rendered by Thweatt was under a contract to take the necessary steps to issue bonds and to secure money for the construction of the improvement. Such services cannot be classed as preliminary expenses, under the rule announced in Thibault v. McHaney, supra. See also Gould v. Sanford, 155 Ark. 304. The court was correct in dismissing the claims of C. B. Thweatt and Lane, and the decree in this respect is affirmed.

2. The testimony of Carter shows that the actual expense incurred by him was $2,076.63. He also testifield that, in addition to this, he loaned the board $250 in.cash “for preliminary expenses.” He stated that the charge was made for engineering services, not including any charge for his own time. His testimony was to the effect that all of the services rendered by his firm were preliminary; but his testimony further shows -that it included services from March 3, 1920, till October 14, 1920, the date of the completion of the plans. The enumeration of what was done and the itemized statement of expenses incurred, attached as an exhibit to his testimony, show that he was actually making a charge for much more than was necessary to determine whether the benefits to the lands contemplated by the improvement would exceed the cost of such improvement. We feel quite sure that the amount paid him, of $1,500 in cash, is most liberal compensation for the value of such services as were really incident to the preliminary engineering work on 5*4 miles of roadway which the district was created to construct. His claim therefore should be allowed only to the amount of $250, which he states he advanced to the board “for preliminary expenses.”

3. The claim of Elkins is predicated upon an’ advancement made by him in the sum of $3,000 to the commissioners of the district “to pay preliminary expenses.” We are convinced that a decided preponderance of the evidence, indeed practically the undisputed evidence, shows that this sum was advanced by Elkins under his contract with the commissioners do loan them that amount of money to pay the preliminary expenses. This is evidenced by the certificates, the report of the commissioners to the county court to that effect, which was approved by it, and by the testimony of Elkins and Carter. We find no. evidence whatever in the record to the contrary, and, as we view the record, there is not a vestige of proof to justify the finding of the trial court that this claim was fraudulent. While the testimony of the commissioners shows that their recollection as to the details of the transaction was very hazy, still even their own testimony does not contradict the positive testimony .of witnesses, taken ore terms before the court, and the record evidence to the effect that Elkins’ claim was for money which he loaned the district to pay preliminary expenses, and that this money was used by them for that purpose.

While the testimony shows that the negotiations leading to the advancement of this money by Elkins were conducted in Little Rock, yet it abundantly establishes the fact that the transaction was not consummated until the board, in regular meeting, had authorized the borrowing of the money and the drawing of a draft for the amount. This amount Elkins paid to the board for the preliminary expenses, as evidenced by the certificates issued by the board and the draft which Elkins paid.

The trial court seems to have laid great stress on the fact that the records of the proceedings, as set forth in the minutes of the hoard, were not all signed, hut the testimony, even of the commissioners themselves, shows that the meeting authorizing the borrowing of the money from Elkins and the drawing of a draft on him for the amount of his claim, was held at the domicile of the district in Huntington, Sebastian County, Arkansas. Even if there were no minutes recorded of this meeting, the undisputed proof, as we view the record, shows that it was held and that the board authorized the borrowing of the money from Elkins. Such authority could be proved by parol testimony. Merchants’ & Farmers’ Bank v. Harris Lumber Co., 103 Ark. 283; Wolfe v. Erwin & Ward Co., 71 Ark. 438; Stiewel v. Webb Press Co., 79 Ark. 45.

In Gould v. Sanford, 155 Ark., supra, we said: “Preliminary expenses are an essential burden upon the property of the districts, even though the effort to construct the improvement turns out to be abortive. The commissioners had the power to provide for the payment of these expenses, and, even in the absence of express statutory authority, to borrow money for that purpose, where the money is obtained and used for that purpose the district is liable therefor.” See also Gould v. Toland, 149 Ark. 476.

It follows that the trial court erred in dismissing the claims of the appellant Elkins, and also in dismissing the claim of Carter for $250. In these respects the decree is reversed, and the cause will be remanded with directions to allow the full amount of Elkins’ claim and also to allow a decree in favor of Carter for the sum of $250; and, since G. L. Grant admits in his answer that he became liable to Elkins, as guarantor, in the sum of $500, a decree should be entered against him in favor of Elkins for that sum, such sum to be paid in the event Elkins fails to collect that amount on his claim for attorney’s fees against the district, and for such other proceedings as may be necessary according to law and not inconsistent with this opinion.