text:
    Stranahan, Harris & Oatis, Inc., v. Van Buren County.
    Opinion delivered December 5, 1927.
    1. Counties — authority to issue bonds. — Although an order of the county court directing a bond issue under Acts 1925, p. 608, was made within less than 30 days of the publication of the amount of the county’s outstanding indebtedness, this did not deprive the county court of jurisdiction to issue bonds where the bonds were not to be issued until the expiration of 30 days after the publication of the order.
    2. Counties — estoppel to question validity of bonds. — Where the county court made an order under Acts 1925, p. 608, authorizing the issue of bonds to pay outstanding debts of the county, and the bonds when issued conformed to the court’s order, and contained recitals that the law had been complied with in their issuance, and the county had received the proceeds from the sale, it was estopped to question their validity.
    3. Mandamus — compelling quorum court to levy tax. — The quorum court may be compelled by mandamus to meet as a court and levy a tax not exceeding three mills on a dollar of assessed valuation of property to pay the interest on the outstanding bonded indebtedness of the county, and the amount of the bonds matured for payment, the word “may,” used in Amendment No. 11, being construed as “shall.”
    4. Mandamus: — requiring quorum court to levy tax.' — Where bondholders were entitled to payment in accordance with the terms of the original order of the county court, authorizing a bond issue to pay outstanding debts of the county, and it was the duty of the quorum court to make necessary levy to insure payment, bondholders were not required to wait until default before bringing mandamus to require the quorum court to levy tax to pay interest and matured bonds.
    5. Mandamus — right of bondholder to enforce payment of bond. —One who sold a part of a bond issue of the county is entitled to sue in a State court to enforce payment of the interest and bonds, though a holder of another portion of such bonds had brought suit in the Federal court for the same purpose.
    Appeal from Van Burén Circuit Court; J. F. Koone, Judge;
    reversed.

      W. H. Holmes, Harry E. Meek and Robinson, House & Moses, for appellant.

      Opie Rogers, for appellee.
   Smith, J.

Appellants applied to the circuit court of Van Burén County for a writ of mandamus requiring the county judge and the justices of the peace of that county, composing the quorum court, to meet as such and levy a tax, not exceeding three mills on the dollar of the assessed valuation of the property of the county, to pay the interest on the outstanding bonded indebtedness of the county and the amount of the bonds which had matured for payment. The circuit court denied the relief prayed, and this appeal has been duly prosecuted from that order.

On March 1, 1926, the county court of Van Burén County, by an order duly entered on the records of that court, found and declared the outstanding indebtedness of the county to be $77,475.25, and directed that notice of that fact be given pursuant to the requirements of act 210 of the Acts of 1925 (Acts 1925, page '608). Notice of this order was duly published in a local newspaper in the issue of March 8. On March 16, 1926, the county court made an order, which recited the previous order ascertaining and declaring the amount of the county’s outstanding indebtedness and the publication of the notice thereof, and directed that the bonds of the county be issued and sold in the principal amount of $63,591.35 to discharge and pay, to that extent, the 'outstanding indebtedness of the county. It appears to be conceded that the revenue which would be derived from a levy of three mills on the dollar on the assessed valuation of the county would not produce a revenue sufficient to pay the entire outstanding indebtedness, but would be sufficient only to pay the interest and mature bond issue as it matured in the amount authorized by the order of March 16.

This order of the court recites that the proceeding was had under the authority of the amendment to the Constitution proposed by Senate joint resolution No. 2, authorizing the submission of the amendment to be voted on as Amendment No. 11, appearing at page 797 of the General Acts of 1923, and of the act No. 210, above referred to, passed as an enabling act after the adoption of the proposed amendment.

The order of March 16 further provided the recitals which the bonds should contain, and that they should be signed by the county judge of the county and countersigned by the clerk of the county court of the county. It was there directed that the bonds so to be issued should contain the following recitals:

“It is hereby certified, recited and declared that all acts, conditions and things required to be done, exist and be performed precedent to and in the issuance of this bond, in order to make this bond a legal, valid and binding obligation of Yan Burén County, Arkansas, have been existing and been performed in legal and due time, form and manner as required by law; that provision has been made for the collection of a direct tax upon all taxable property within said county sufficient to pay the principal and interest hereof as the same shall fall due, and that the indebtedness represented by this bond and, the issue of which it forms a part, together with all other outstanding indebtedness of said county, does not exceed any constitutional or statutory limitation; and for the prompt payment of principal and interest of this bond, as the same becomes due, the full faith and credit of Yan Burén County, State of Arkansas, are hereby pledged. Should this bond prove to be invalid for any reason, then and in that event the holder hereof shall be' subrogated to the rights of the creditors of Yan Burén County whose indebtedness has been discharged by the issuance of this bond.”

On April 8,1926, the county court made a third order “in the matter of funding the outstanding indebtedness of Yan Burén County, Arkansas. ’ ’ This order recited the previous orders and repeated the findings of fact in regard to the ascertainment of the amount of the county’s outstanding indebtedness and of the publication of the notice thereof. This order also recited that, pursuant to the constitutional amendment and the enabling act above referred to, the county had contracted to sell $60,000 in 5% PGr cent, serial funding bonds to Stranahan, Harris & Oatis, and had given the purchaser the option “to convert same to 5 per cent, bonds at the same yield basis to the county, and which option the purchaser hereby exercises, and which amount, under the conversion to a 5 per cent, bond, would substantially be $63,591.35.” Act 210 specifically authorized this conversion of bonds. This order also provided the form of the bond and the recitals it should contain and the manner of its attestation, in which respects the order of April 8 was identical with that of March 16. -

Shortly after the entry of the order of April 8 the bonds were issued and delivered to the proposed purchasers, who paid into the treasury of the county the full value thereof. These bonds contained the recitals authorized by the orders of March 16 and April 8, and were signed by the county judge and countersigned by the county clerk, as both orders of the county court required that they should be.

At the trial from which this appeal comes, testimony was offered to the effect that the chancery court of Yan Burén County convened on the first Monday in April, which was the 5th day of the month, and the time appointed by law for that court to convene, and that the April term of the county court did not convene until two weeks after the first Monday in April. The county judge of the county, who presided at all the sessions of the county court herein referred to, testified that the sessions of that court held on March 1 and on March 16 were adjourned terms of the January term of the court, and that, on the date last mentioned, the county court was adjourned to the 8th day of April, and a session of the court was held pursuant to this adjourning order, at which he presided, and that the clerk of the court and the sheriff of the county were in attendance at that session. Upon this showing the circuit court held “that the county court of Van Burén County did not convene on the first Monday in April, 1926 (the time fixed by law for the convening of said court), but attempted to adjourn the January term of said court on the 16th day of March, 1926, over to the 8th day of April, 1926,” because the chancery court convened on the 5th day of April. Upon this finding of fact the circuit court declared that the county court was not in session on April 8, and that its order made that day was void, and the bonds were therefore issued without authority of law.

We do not find it necessary to determine whether the judgment of the circuit court in regard to the validity of the session of the county court held on April 8 is correct or not, and.we do not therefore decide that question, for the reason that the order of March 16 was valid, and, if this is true, it was not necessary that there should have been a subsequent order. The only objection made to the validity of the order of March 16 is that it was made within less than thirty days of the publication date of the order of the county court of March 1, which ascertained and declared the amount of the outstanding indebtedness of the county.

Section 1 of act 210 of the Acts of 1925 provides that, before the issue of any county bonds under that act, the county court shall, by order entered upon its records, declare the total amount of such indebtedness, and that such order of the county court shall be published immediately for one insertion in some newspaper published in the county, and that any property owner who is dissatisfied with the published finding as to the amount of the indebtedness may question the correctness thereof by suit in the chancery court, which suit must be instituted within thirty days after the publication of such order. It is there further provided that, if no such suit is brought within thirty days, such finding shall be conclusive of the total amount of such indebtedness, and not open to further attack.

The obvious purpose of this provision is to prevent the issuance of bonds in excess of the outstanding indebtedness, and it may be first said that it is admitted that the indebtedness of the county was in excess of $77,000, whereas bonds were issued in an amount less than $64,000.

It may be next said that no suit was ever brought by any property owner of the county, and, as more than thirty days expired before the issuance of the bonds, the recitals of the publication order have the verity which the statute was intended to give.

It is not contended that the bonds were issued or delivered prior to the expiration of the thirty days immediately following the publication order, and it will be noted that neither the amendment nor the enabling act requires the time for filing suit to expire before an order can be made authorizing the issue of the bonds. The inhibition is that the bonds shall not be issued prior to that time, and, as we have said, this was not done.

In Webster’s New International Dictionary the following definitions of the verb “issue” are found: “To go, pass, or flow out; to run out, as from any inclosed place.” “To be produced as an effect, result, or outcome; to proceed as from a source; to arise; to be derived; to result.” “To be given or sent out officially or publicly; to be published, as a proclamation; to be emitted, as money.” “To deliver, or give out, as for use; 'as, to issue provisions.” “To send out officially; to deliver by authority; to publish or utter; to put into circulation; to emit; as, to issue an order; to issue a writ; to issue notes.”

The same authority gives to the word “issue” as a noun the following definitions, among others: “Act of sending out, or causing to go forth; delivery; issuance; as, the issue of an order from a commanding officer; the issue of money from a treasury.” “Law. Of a negotiable instrument, the first delivery of the instrument, as a bill or note, complete in form, to a person who takes it as a holder. This is the definition of the British bills of exchange act, 1882, and of various American codes.”

The word “issue” is defined in 33 'Q. J., page 818, as follows: “As a verb, to bring to a conclusion or final issue; to come or pass out; to go out; to go forth as authoritative or'binding; to proceed, as from a source; to proceed or arise from; to send forth; to send out officially; to settle.”

It was held in the case of Cumnock v. Little Rock, 168 Ark. 777, 271 S. W. 466, that the amendment, designated as Amendment No. 11, was «elf-executing, and, while the General Assembly had the right, notwithstanding that fact, to prescribe the manner in which the right there conferred might be exercised, it does not appear that the provisions of the enabling act of 1925 have been violated.

The validity and binding effect of the order of March 16 is questioned only because it was made within less than thirty days of the publication of the order of March 1, and, as we have shown, that fact did not deprive the county court of the jurisdiction to make an order authorizing the issue of bonds which were not to be issued and were not issued until the expiration of the thirty days after the publication of the order of March 1.

It is not questioned that the county received the proceeds of the sale of the bonds, nor that the county had the right to issue the bonds; nor is it questioned that the county court had the jurisdiction to authorize the issue of county bonds. The bonds, when issued, conformed to the order of the county court, and contained the recitals set out above, to the effect that the law had been complied with in their issuance. Under these circumstances the county is estopped from questioning their validity.

The case of Aurora v. Gates, L. R. A. 1915A, page 910, contains elaborate notes on the subject of estoppel of municipal corporations to deny validity of bonds issued by them, and, after a very extended review of numerous cases dealing with this subject, the annotator announces the following as the general rule:

“It is a general rule that a municipality which, by the apparent legality of its obligations, by recitals of their validity or by other means, has induced innocent purchasers to invest in them, is estopped to deny their legality on the ground that, in some preliminary proceedings which led to their execution, or in the execution, itself, it failed to comply with some law or rule of action relative to the mere time or manner of procedure, with which it might have lawfully complied, but which it carelessly disregarded. ’ ’

It is finally insisted for the affirmance of the judgment of the court below that it was not alleged in the complaint or otherwise shown that the quorum court had failed in its duty, inasmuch as the necessity for the levy was not shown, as the constitutional amendment permits the county to discharge' its obligations out of any funds available, the language thereof being that the court “may” levy a tax not exceeding three mills on the dollar of the assessed valuation, and it is insisted that the discretion thus vested in the county court should not be controlled by mandamus.

It is true that this court held, in the case of Pioneer Construction Co. v. Madison County, 174 Ark. 298, 296 S. W. 729, that mandamus would not lie against the county court to compel the issuance of bonds to refund the county’s indebtedness, as provided for in the constitutional amendment, this being upon the theory that the failure so to do did not deprive the holder of the evidence of indebtedness against the county of any remedy existing at the time of the adoption of the amendment. This failure to issue bonds did not impair the indebtedness or extinguish any remedy for its collection possessed by the holder thereof prior to the adoption of the amendment. But the discretion vested in the county court was either to issue or not to issue the bonds. Once this discretion had been exercised by issuing bonds-, the .discretion was at an end. It is inconceivable that-the court should have any discretion in the matter of making provision for the payment of the bonds, once the discretion to issue them had been exercised.

Section 4 of the enabling act of 1925 provides that: “Before or after the issue of said bonds, the quorum court of such county * * * shall levy a tax, which, on the existing assessed value of the property of such county, * * * will suffice to retire said bonds as they mature, with five per cent, added for unforeseen contingencies; provided, that said tax shall not exceed three ■mills on the dollar of such assessed value.” This section of the enabling act also provides that the rate may be lowered when a rate so high is not required, but it further provides that “no tax shall be levied which will produce less than the sum required to meet the maturities of the bonds, with five per cent, added for unforeseen contingencies, nor shall any tax in excess of three mills on the assessed value existing at the time of such levy ever be levied in any year. ”

In the case of Washington County v. Davis, 162 Ark. 335, 258 S. W. 324, it was said: “In Pirani v. Barden, 5 Ark. 81; Spratley v. La. & Ark. Ry. Co., 77 Ark. 412, 95 S. W. 776; and C. R. I. & P. Ry. Co. v. Jager, 85 Ark. 232, 107 S. W. 1170, this court has recognized that the word ‘may’ is often interpreted to mean ‘shall.’ The general rule of construction is that the word ‘may’ is construed to mean ‘shall’ whenever the rights of the public or third persons depend upon the exercise of the power or the performance of the duty to which it refers” (citing authorities).

The levy of this tax is the security provided by law for the payment of the bonds and the interest thereon, and it was upon the faith of this statute, and the (amendment as well, that the bonds were sold, and the enforcement of the right of the holders of these bonds to be repaid the money invested in them is dependent upon the action of the court in levying the tax, and in such case the word “may” must be construed as meaning “shall.”

In the recent case of Chicago Mill & Lbr. Co. v. Drainage District No. 17, 172 Ark. 1059, 291 S. W. 810, it was held that, where the commissioners of a drainage district, which had issued bonds, determined the amount necessary to be raised by taxation to discharge the maturing bonds and the interest thereon, the court, having the power and being under the duty to levy the tax, could be compelled by mandamus to do so.

The order of the county court authorizing the bond issue provided the dates of maturity of the bonds, the first being in October, 1927, and it is shown that the quorum court, at its 1926 session, failed and refused to make the levy necessary to meet the 1927 maturity. No order of the county court is necessary, as counsel for the county insist, to determine the county’s liability in the year 1927. The original order of the county court authorizing the bond issue determined that fact.

The bondholders are not required to wait until default has actually occurred on the part of the county. They are entitled to payment in accordance with the terms of the original order of the county court under which the bonds were sold, and it is the duty of the quorum court to make the necessary levy to insure payment.

A motion to dismiss the present appeal has been filed by the county upon the ground that the holders of certain of the bonds sold originally to appellants have brought suit in th.e Federal District Court against the county to enforce the payment of the bonds. It appears, however, that, while the appellants bought the entire bond issue, they have sold $20,000 of the bonds to an insurance company, and it is that company which has brought suit in the Federal court. It is not essential that appellants should own the entire issue to obtain relief by mandamus, as the owner of only one of the bonds would, in a proper case, be entitled to that relief.

The motion to dismiss the appeal is therefore overruled.

It follows from what we have said that the circuit court was in error in refusing to award the writ of mandamus as prayed, and the judgment of that court will be reversed, and the cause remanded to the circuit court, with directions to award relief by mandamus as prayed, by directing the quorum court to levy a tax sufficient to discharge the maturing bonds and the interest on all of them, not exceeding, however, three mills on the dollar of the assessed valuation of the property of the county.


source: Caselaw Access Project

author: Humphreys, J.

license: Public Domain

text:
    Price v. New York, Chicago & St. Louis Railroad Co.
    Opinion delivered December 5, 1927.
    1. Carriers — assignment of claim for transportation charges— necessary party. — In an action by a terminal carrier against the shipper to recover transportation charges advanced to the initial carrier on a shipment of poultry subsequently confiscated for the diseased condition of the fowls, the initial carrier having assigned its claim to the plaintiff, the court did not err in overruling defendant’s motion to make the initial carrier a party, where the shipper’s agreement to pay the freight and transportation charges was witnessed by the bill of lading.
    2. Carriers — action for freight charges — necessary parties.— In an action by a terminal carrier to recover freight and transportation charges of a shipper on a through bill of lading, refusal to grant the shipper’s request to make the initial carrier a party in order that defendant might offset a claim for .damages against the amount plaintiff paid the initial carrier for freight and transportation, was not error where, even though the bill of lading was assignable, under Crawford & Moses’ Dig., §§ 475, 477, it was not assigned to plaintiff.
    3. Carriers — suit for transportation charges — set-off.—'Where a shipper’s cause of action against the initial carrier for negligence in delaying shipment was different and independent from the terminal carrier’s action against the shipper to recover freight and transportation charges on poultry shipped on through bill of lading, the shipper could not counterclaim and set-off his damages against the terminal carrier’s claim for freight; Crawford & Moses’ Dig., §§ 1194, 1204, being inapplicable.
    Appeal from Washington Circuit Court; W. A. Dick-- ' son, Judge;
    affirmed.

      Hill & Fitzhugh and W. N. Ivie, for appellant.

      Walter A. Fversman, Charles W. Racine and Walker é Walker, for appellee.
   Humphreys, J.

This suit was brought in the circuit court of Washington County by appellee against appellant to recover freight and transportation charges amounting to $935.30 on a car of live poultry shipped on a through bill of lading from Ardmore, Oklahoma, to New York City, which included return freight and transportation charges to Delphos, Ohio, where the car of poultry was stopped, condemned and destroyed by the Ohio State Department of Agriculture, on account of the diseased condition of the poultry, contracted in the terminal yards at Hoboken, New Jersey. -The initial carrier was the St. Louis-San Francisco Railway Company, and appellee was the terminal carrier, which paid the freight and transportation charges to the initial and all intermediate carriers on the forward and return shipments. When the poultry reached its destination, delivery could not be made on account of a disease known as European fowl plague that had developed in the terminal yards, and the car of poultry was reconsigned, on through bill of lading, to appellant at Fayetteville, Arkansas, by the Chelsea Live Poultry Company, the duly authorized agent of appellant. The matters set out above constitute the material allegations of appellee’s complaint.

Appellant filed an answer and motion to make the St. Louis-San Francisco Railway Company a party defendant, alleging that the freight and transportation charges paid by appellee to it was on open account, upon which appellee had no right to maintain an action without making its assignor a party; and that, if the bill of lading was an assignable contract and not an open account, under the statutes of Arkansas, appellee acquired same subject to all defenses that appellee had against the St. Louis-San Francisco Railway Company. Appellant also filed, as a part of his answer and motion, a cross-bill against the St. Louis-San Francisco Railway Company, in which he alleged that said initial carrier negligently delayed the shipment between Ardmore, Oklahoma, and St. Louis, Missouri, which prevented it from reaching its destination before an embargo was declared against the delivery of poultry in the New York markets, to its damage in the sum of $3,500, the value of the car of poultry.

A demurrer was filed to the answer and cross-complaint and sustained by the court, over the objection and exception of appellant.

The cause was then submitted to the court sitting as a jury upon the pleadings and testimony introduced by appellee in support of the allegations of the complaint, which resulted in a judgment against appellant for the freight and transportation charges paid by it to the initial and intermediate carriers in the sum of $935.30 with interest at 6 per cent, per annum from March 31, 1925, from which is this appeal.

Appellant’s first contention for a reversal of the judgment is that the court erred in overruling its motion to make the initial carrier, the St. Louis-San Francisco Railway Company, a party to the action, and in support of its contention cites § 1090 of Crawford & Moses’ Digest, which is as'follows:

“Where the assignment of a thing in action is not authorized by statute, the assignor must be a party, as plaintiff or defendant.”

It is argued by learned counsel that the claim for freight and transportation charges is an open account not authorized to be assigned by statute. We cannot agree with them. The agreement to pay freight and transportation charges is a written contract in the form of a bill of lading between all the carriers and the shipper. It is not an open account, but it is a written contract in the nature of a request to the last carrier to pay the freight for him to the initial and intermediate carriers.

Appellant’s next contention for a reversal of the judgment is that, if the bill of lading was an assignable agreement, the court erred in refusing' to grant his request to make the initial carrier, the St. Louis-San Francisco Railway Company, a party, in order that he might offset his claim for damages against the amount appellee paid him for freight or transportation charges, which amounted to $424.40, according to the undisputed testimony. In support of the contention, he cites §§ 475 and 477 of Crawford & Moses’ Digest, which are as follows:

“Section 475. All bonds, bills, notes, agreements and contracts in writing, for the payment of money or property, or for both money and property, shall be assignable.
“Section 477. Nothing contained in this act shall change the nature of the defense, or prevent the allowance of discounts or offsets, either in law or equity, that any defendant may have against the original assignor previous to the assignment, or against the plaintiff or assignee after the assignment.”

We do not think the sections have any application, for the reason that the bill of lading, if assignable -under said § 475, was not assigned to appellee. Appellee was the delivering or terminal carrier that paid the freight and transportation charges to the initial and connecting carriers at the request of appellant, the shipper, in expectation of being reimbursed when the consignee or party designated in the bill of lading to receive the ear should present same and request its delivery.

Appellant’s next and last contention for a reversal of the judgment is that his .cross-complaint, seeking damages against the initial carrier on account of negligence, entitled him to counterclaim and set-off his damages against appellee’s claim for freight and transportation charges. In support of this contention he cites §§ 1194 and 1204 of 'Crawford & Moses’ Digest, which are as follows :

“Section 1194. The answer shall contain: (1) The style of the court and the style of the action, followed by the word ‘ answer. ’ But where there are several plaintiffs and defendants, it shall be only necessary to give the one first named of each class, with the words ‘and others.’ (2) A denial of each allegation of the complaint controverted by the defendant, or of any knowledge or information thereof, sufficient to form a belief. (3) A statement of any new matter constituting a defense, counterclaim or set-off, in ordinary and concise language, without repetition. (4) The defendant may set forth in his answer as many grounds of defense, counterclaim and set-off, whether legal or equitable, as he shall have. Each shall be distinctly stated in a separate paragraph, and numbered. The several defenses must refer to the causes of action which they are intended to answer in a manner by which they may be intelligently distinguished.”
“Section 1204. A defendant may file a cross-complaint against persons other than the plaintiff, and have proceedings thereon as follows: (1) When a defendant has a cause of action against a co-defendant, or a person not a party to the action, and affecting the subject-matter of the action, he may make his answer a cross-complaint against the co-defendant or other person. (2) The defendant to such cross-complaint may be actually or constructively summoned, and defense thereto shall be made in.the time and manner prescribed in regard to the original complaint, and with the same rights of obtaining provisional remedies applicable to the case. (3) The filing and prosecution of the cross-complaint shall not delay the trial and decision of the original action when a judgment can be rendered therein that will not prejudice the rights of the parties to the cross-complaint. ’ ’

We do not think either section has any application to the instant case.

The alleged action of appellee against appellant and that of appellant against the St. Louis-San Francisco Railway Company are entirely different and wholly independent of each other. Appellee’s right of action against appellant is based upon appellant’s request, either express or implied, to pay freight and transportation charges for him to the initial and connecting carriers, in order that the car of poultry might be delivered to the party designated by him; whereas appellant’s’ alleged fight of action against the St. Louis-San Francisco Railway Company is based upon the latter’s negligent delay in transporting the car of poultry from Ardmore, Oklahoma, to St. Louis, Missouri. No negligence is alleged against appellee occasioning a delay in shipment and delivery.

The causes of action are different, hence there could be no offset or counterclaim of one against the other. Ry reference to § 1204 it will be seen that a third person may be a party to the action in case the action against the third party affects the subject-matter of the original action. There is no relationship between the subject-matter of the two actions. One does not and cannot affect the other. The statutes cited and relied upon by appellant were in existence when the case of Railway Company v. Lear, 54 Ark. 399, 15 S. W. 1030, was decided. In that case Mr. Justice Hemingway said:

“Each of several lines of connecting carriers, engaging in the transportation of property under a bill of lading for a continuous carriage, may .ordinarily pay the charges of previous carriers and have a lien on the property for the amount advanced, as well as for its own charges. The rule is a part of the commercial law of the land, and, as it is said, of the world, springing from a commercial convenience and necessity. It is to the special advantage of the snipper, as well as of the public, for it facilitates rapid transit without breaking bulk, and tends to lower rates. Each carrier is entitled to hold the property until its proper charges are paid, and, but for the rule above stated, the shipper would be required to arrange in some way for the payment thereof at each point on the route where carriers changed. Convenience and necessity.therefore authorize successive carriers to receive property billed, and to advance previous charges and assert a claim for the amount advanced.”

We think the instant case' is ruled by Railway Company v. Lear, supra.

No error appearing, the judgment is affirmed.

Hart, C. J., dissents.


text:
    Milton v. Fort Smith.
    Opinion delivered December 5, 1927.
    1. Criminal law — evidence obtained under illegal search warrant. — In a prosecution for' possessing intoxicating liquor for the purpose of sale, in violation of Acts 1925, p1. 363, evidence obtained toy city police officers while searching defendant’s premises under an illegal search warrant was admissible, as against the contention that the search and seizure were unreasonable and unconstitutional.
    2. Intoxicating liquors — evidence.—In a prosecution for possessing intoxicating liquor for the purpose of sale, in violation of Acts 1925, p. 363, the purpose for which the liquor is kept can be proved by circumstantial evidence.
    3. Intoxicating liquors — circumstantial evidence. — Circumstantial evidence held to sustain a conviction of possessing intoxicating liquors for purpose of sale.
    Appeal from 'Sebastian Circuit Court, Fort Smith District; J. 8am Wood, Judge;
    affirmed.

      Cravens é Cravens, for appellant.

      Pryor, Miles <&- Pryor, for appellee.
   Humphreys, J.

Appellant was convicted in the circuit court of the Fort Smith District of Sebastian County, on appeal from the municipal court of the city of Fort Smith, for the crime of possessing intoxicating- liquors for the purpose of sale, in violation of act 121 of the Acts of the General Assembly of 1925, for which he was adjudged to pay a fine of $250. From the judgment of •conviction he has duly prosecuted an appeal to this court.

An officer of the city arrested appellant for transporting- liquor, at which time he threw a half-gallon jar of corn whiskey out of his car, and broke the jar all to pieces. Thirty or forty minutes thereafter, W. L. Robertson, a police officer of said city, filed an affidavit before J. A. Gallaher, judge of the municipal court, charging appellant with the crime of having intoxicating liquor in his home for the purposes of sale, and procured a warrant for his arrest and a warrant to search his home and seize the liquor. Pursuant to directions contained in the search warrant, officers of the city, in company with appellant, went to his home, and proceeded to make la search for whiskey. Appellant informed them that there was no whiskey in the house. They made search, however, and discovered a trapdoor in the floor of one of the bedrooms, under a rug near the bed, and, upon opening the trapdoor, discovered twenty-four half-gallon jars of intoxicating liquor wrapped up in sacks.

Prior to the calling of the case for trial, the appellant filed a motion to suppress the testimony of the police officers of the city of Fort Smith, obtained while they were upon the premises of defendant, and to enjoin the city of Fort Smith from using in the trial of the cause, as evidence, the liquor seized by said officers, for the reason that said search warrant was illegal and void, and that said search warrant did not show upon its face that the magistrate issuing the same heard testimony before the issuance of said warrant, and for the reason that there wias no information filed under oath with the magistrate issuing said warrant, stating any flacts from which could be inferred probable cause for believing that the appellant possessed intoxicating liquor for the purpose of sale or otherwise, and that the search of the officers of the city of Fort Smith under said pretended search warant and the seizing of the liquor at defendant’s home amounted to an unreasonable and unconstitutional search and seizure of defendant’s property.

. The court, after considering the matter under the agreed statement of facts entered into between counsel for -appellant and appellee, overruled said motion, and, upon the trial of this cause, permitted the officers of the city of Fort Smith to detail to the jury what they found on appellant’s premises while thereon by virtue of the pretended search warrant, and permitted the city of Fort 'Smith to introduce in evidence part of the liquor taken from appellant’s home.

Appellant insists that the court committed reversible error in overruling his motion and allowing this testimony to be introduced by the city, over his objection and exception, which objection and exception were preserved by him in his motion for a new trial. Under the rule announced by this court in the case of Starchman v. State, 62 Ark. 538, 36 S. W. 940, and adhered to in the cases of Benson v. State, 149 Ark. 633, 233 S. W. 758; Van Hook v. Helena, 170 Ark. 1083, 282 S. W. 673, and Knight v. State, 171 Ark. 882, 286 S. W. 1013, it is unnecessary for us to set out the agreement of facts upon which the motion was heard, the affidavit for a search warrant, and the search warrant, and to determine the sufficiency thereof. Under the doctrine of those cases the admissibility of evidence is not 'affected even though the search warrant was illegally issued.

Appellant insists that, even though the testimony gained by the officers as a result of the search and seizure was admissible, it, together with the other evidence in the case, is insufficient to support the verdict and judgment. The testimony reflected that a number of warrants had been issued against appellant, and that he had done no work for three or four years. The purpose for which liquor is kept may be proved by circumstantial evidence. State v. Barnes (S. D.), 213 N. W. 504; Porter v. City of Atlanta, 18 Ga. App. 33, 88 S. E. 744.

We think the circumstantial evidence in the instant case sufficient to support the verdict and judgment. Thirty or forty minutes before the search, appellant was arrested for transporting intoxicating liquor, and, in order to destroy the evidence, threw a half-gallon jar of corn whiskey out of his car and broke the jar all to pieces, so that the officer could not tell whether it was the same make of jar as those found in his house. Appellant told the officers no whiskey was in his house, yet they discovered, in his presence, during the search, twenty-four half-gallon jars of corn whiskey wrapped in tow sacks and hidden in a hole sawed in the floor of his bedroom, under a trapdoor that was covered with a rug. When the discovery was made, appellant made no excuse and offered no explanation as to why he had denied having it or the purpose for which he had it. It cropped out in the testimony that he was a frequent offender, and that he had been an idler for years.

No error appearing, the judgment is affirmed.

Justices Smith, Mehaffy and McHaney dissent.


text:
    Van Buren v. Smith.
    Opinion delivered December 5, 1927.
    1. Eminent domain — liability op city for changing grade of street. — A city is liable for damage to property by reason of changing a grade of a street already established, but not for damage thereto in establishing grades in the first instance.
    2. Eminent domain — set-off of special benefits. — Where a city, in improving a street, constructed an embankment in front of plaintiff’s lot, the city could not set-off special benefits resulting to plaintiff’s property against damages which resulted from the construction of the embankment.
    Appeal from Crawford Circuit Court; James Cochran, Judge;
    reversed.

      C. M. Wofford, for appellant.
   Humphreys, J.

Appellee, who owned lot 3 in block 25 in the city of Van Burén, and within the boundaries of Paving* District No. 6, proceeded, in accordance with §§ 7573-7575 of Crawford & Moses’ Digest, to recover alleged damages to his lot by the construction of an improvement in the district. The assessors appointed under the statute awarded 'appellee $50 damages. He refused to accept the amount, and instituted suit against appellant in the circuit court of said county for $750. Upon the trial of the cause appellee recovered a judgment for $100, from which is this appeal.

In the construction of the improvement, an embankment six feet high was built in Cherry Street, upon which the lot fronted, and, according to the allegation of appellee’s complaint, obstructed ingress and egress to and from his lot.

The testimony introduced by appellee tended to show that his lot was damaged by reason of the embankment anywhere from $400 to $800. The damage was estimated by the witnesses upon the basis of a six-foot embankment constructed in front of it.

The testimony introduced by appellant showed that, in the year 1892, a street grade was established by city ordinance on Cherry Street, leaving the lot in question four feet below the established grade. Appellant’s testimony also tended to show that, had the lot been filled to the grade first established, the additional fill of two feet in front of the lot would not have damaged it at all.

The court sent the case to the jury upon the theory that appellee was entitled to recover damages to his lot on account of the construction of an embankment six' feet high in front thereof. Appellant requested the court to instruct the jury as follows:

“You are instructed that, in determining the question of damages to plaintiff’s property, you may take into consideration the established grade of Cherry Street fronting the property, if you find there was an established grade. The city had the right to construct the paving as high as the established grade, and would only be liable in damages, if at all, for the excess to which it caused the street to be built higher than the established grade for the street at this point.”

The court refused to give the instruction, and, in refusing to do so, committed reversible error. A city is only liable to damage to property 'by reason of changing a grade already established, and not for damage thereto in establishing grades of streets in-the first instance. Dickerson v. Okolona, 98 Ark. 206, 135 S. W. 863, 36 L. R. A. (N. S.) 1194; Fayetteville v. Stone, 104 Ark. 138, 148 S. W. 524; Red v. Little Rock Ry. & Elec. Co., 121 Ark. 71, 180 S. W. 220. Under the rule announced in these cases, the court should have given appellant’s requested instruction confining the damage to the property on account of building the embankment two feet higher than the grade established in 1892.

Appellant also requested and was refused the following instruction:

“You are instructed that, if the jury believe from the evidence that the property of the plaintiff was in any manner specifically benefited by the grading of the street adjoining same, and that the amount of said special benefits is equal to or greater than the damages, if any, done to said property by reason of said grading, then the plaintiff cannot recover, and your verdict should be for the defendant.”

The undisputed evidence shows that this particular lot was assessed $24 a year as benefits by reason of the construction of the improvement. This assessment is an annual charge upon the property until the indebtedness created by the construction of the improvement shall have been paid. Under the rule laid down in the cases of Donaghey v. Lincoln, 171 Ark. 1042, 287 S. W. 407, and Miller Levee District No. 2 v. Dale, 172 Ark. 942, 290 S. W. 948, appellant was not entitled to set-off special benefits resulting to the property from the improvement against damages which resulted by reason of said embankment.

On account of the error indicated the judgment is reversed, and the cause is remanded for a new trial.


text:
    Hall v. Bowen-Oglesby Milling Company.
    Opinion delivered December 5, 1927.
    1. Sales — nonpayment op draft — evidence op bank’s solvency.— In an action for the value of flour sold where the hank through which the buyer paid the draft had become insolvent before the seller received payment, testimony as to the bank’s solvency at the time the bank accepted the buyer’s check and gave its draft therefor, and the buyer received the goods, held competent.
    2. Customs and usages — competency of evidence. — In an action for the value of flour sold, where the draft for which the buyer had given his check was never paid by the bank giving it, because the bank became insolvent, testimony with reference to the custom of banks in collecting and remitting checks held competent, since the neglect of the bank in failing circumstances to conform to the custom in handling the check would be a circumstance tending to show that its failure to remit was due to lack of funds.
    3. Trial — argumentative instructions. — In an action for the value of flour sold, where the bank through which the buyer paid the ■ draft became insolvent before the seller received payment, an instruction that the jury might consider all the evidence in determining whether the bank was able to pay the check when it received the same for payment, held proper as against the contention that it was argumentative and singled out a particular part of the evidence.
    Appeal from Polk Circuit; B. E. Isbell, Judge;
    affirmed.

      Pipkin & Frederick, for appellant.

      Norwood & Alley, for appellee.
   Humphreys, J.

This is the second appeal in this case. On the first appeal the judgment in favor of L. W. Hall, the appellant herein, was reversed, and the cause was remanded for a new trial on account of an erroneous instruction .given by the court. For a statement of the issues and most of the facts in the case, reference is made to the written opinion of this court on the first appeal, which is reported in 170 Ark., page 201, under the style of Bowen-Oglesby Milling Company v. Hall. On a new trial of the cause a judgment was rendered against appellant herein for $807.04.

Appellant contends for a reversal of the judgment upon three alleged grounds: (1) The court erred in permitting witness Holder to testify in detail as to the condition of the Bank of Hatfield subsequent to the 9th day of October, 1923. (2) The court erred in permitting witness Magruder to testify concerning the custom and rule among the banks as to collecting checks and remitting therefor. (3) The court erred in giving to the jury the court’s instruction No. 1, as follows:

“The jury may consider all the evidence in the case in arriving at the conclusion as to whether or not the bank was able to pay the check when it received the same for payment.”

(1). There were only two issues of fact in the case, one being whether the goods were shipped on October 1, 1923, on a written order of August 7, 1923, or on a separate and distinct verbal order made on October 1, 1923; and if, on a separate and distinct verbal order, whether the bank at Hatfield had sufficient funds to remit for the collection on, the day it accepted Hall’s check and delivered him the draft with bill of lading attached. Of course, if the goods were shipped under the written order, it was immaterial, as between appellant and appellee, whether the Bank of Hatfield had sufficient funds to pay appellant’s check on the day it accepted it, because the written order contained a clause making appellant responsible for final payment. Although the cashier of the Bank of Hatfield testified, on direct examination, that the bank had funds sufficient to remit for the check it accepted from Hall in payment of the goods, yet, on cross-examination touching the condition of the affairs of the bank, he made statements indicating otherwise.

We think appellee had a right to assail the statement of the cashier by requiring him to disclose its insolvency at the time it accepted the check and its failure in a few days thereafter. The testimony objected to was competent and relevant as responsive to the issue whether the bank had available funds to remit for the check in payment for the car of goods.

(2). 'Magruder’s testimony with reference to the custom of banks in collecting and remitting on checks was competent. He testified that it was the custom to remit for 'checks collected by a bank on the day they collected them. The neglect of a bank in failing circumstances to conform to custom in handling a.check would be a circumstance tending to show that its failure to remit was due to a lack of funds.

(3). Appellant admits that the issues and respective theories of himself and appellee were correctly submitted to the jury under the instructions requested by each of them, and which were given by the court, but insists that instruction No. 1, given by the court on its own motion, set out above, was erroneous and prejudicial to its rights. The specific objections made to the instruction are that it is argumentative, and calls attention to a particular part of the evidence. It is not argumentative, but simply advises the jury that it might consider all of the evidence in the case in determining the issue as to whether the bank had available funds to pay the check it received in payment of the draft, or whether it could have remitted for the draft the day it delivered same to appellant in exchange for his check drawn on said bank. The court did not call attention to any particular evidence bearing upon this issue, or express lany opinion thereon. He simply referred to one of the pivotal issues in the case, and said that they should consider all of the evidence relating thereto in reaching a conclusion upon it. It perhaps would have been better to tell the jury that, in determining each issue in the case, it should take into consideration all the evidence introduced relative to each. Objection was not made that the instruction unduly emphasized one issue to the exclusion of the other. No doubt the court would have broadened the instruction to include all the issues had the appellant made such request. We are unable to see where appellant was prejudiced in the least by the instruction.

No error appearing, the judgment is affirmed.


author: Kirby, J.,

text:
    Standard Oil Company of Louisiana v. Gray.
    Opinion delivered December 5, 1927.
    1. Master and servant — assumed risk. — One employed in an oil field, working on his own initiative in starting a gas engine, and familiar with the method of starting such engine, and appreciating the danger incident thereto, must be held, to have assumed the risk in removing a cap from the air mixer.
    2. Master and servant — contributory negligence. — One employed as an oil fielder, roustabout, and gang-pusher, who removed the cap from the air mixer in order to start the gas engine used in operating an oil well, was guilty of contributory negligence, as a matter of law, in bringing his face too near to and over the open mixer in order to pick u/p and replace the cap, from which position he was injured by the engine’s back-firing.
    Appeal from Miller Circuit Court; James II. McCollum, Judge;
    reversed.
    STATEMENT OP PACTS.
    This suit was brought by appellee for personal injuries alleged to have been caused by the negligence of the oil company from the back-firing of a gas engine used in operating an oil well.

      It was alleged that the engine died, and appellee and his co-workers had difficulty in starting the same, and removed the cap off the air mixer, as it would start more easily with the cap off, and that they succeeded in getting the engine started, and that the plaintiff reached over for the cap of the air mixer to replace it, and, when he did so, the engine hack-fired, the explosion coming out of the open air mixer into his face, burning and damaging his eyes. It was alleged that the compression roller upon the rock arm of the gas engine was old, worn, and unfit for use, and was the cause of the back-firing, which condition of the compression roller was alleged as negligence on the part of the oil company.
    Appellant denied that appellee was injured, and pleaded contributory negligence and assumed risk on his part.
    Appellee testified that he was an oil fielder, roustabout and gang-pusher, and had been working in the oil fields for six years, in the digging department, as a roustabout and in pumping and in gang-pushing. That he was employed by the oil company as a roustabout, and “they are supposed to pu'll tubing, rods, and overhaul engines, and do general lease work. ’ ’ Had been working about two months before he was injured in June, 1925. That, on the morning he was injured, the gang was instructed to pull the well on Comb B-6, and, after they took the well off the beam and laid down two or three doubles of rods, the engine stopped running, about 30 or 40 minutes before noon, and that they came back to try to start it in the afternoon. “We kicked it over several times; wouldn’t take the shot.” Was not positive whether he started it next, or some of the other boys, “but, anyhow, I set the engine, took this top off the air mixer — I don’t know whether I did it or somebody else. It was off, was over on the cylinder of the engine. So I set the engine, opened the air wide open; the top was off the mixer, and we kicked it through several times, and it fired and run off just as pretty as I ever saw an engine.” Said the top was removed from the air mixer because it was easier to start the engine that way, and that was the customary way of starting these engines, and “it has been my experience all Superior engines are customarily started with the top off.” As the engine made five or six revolutions he released the compression and advanced the ignition in running condition, and, after that, he raised up and reached over to get the top to put on the air mixer, the engine back-fired, and exploded into his face and eyes. He examined the engine to ascertain the cause of its failing to start, “and all that I could see that was wrong with it was that the compression roller was worn, and nothing else.” Said he had had six years’ experience operating with engines; examined this one to see what was wrong, keeping’ it from starting, and only found that the roller on the rock arm was worn. The roller just revolves around the pin (and roller and pin were exhibited to the court). The pin is through the roller on the inside of the mouth of the rocker arm, and is made to revolve by an o'blong shaped nut on the cam-shaft, and, as the oblong part hits this roller, it knocks the rock arm down, releases the exhaust valve, and sends the explosion out through the exhaust pipe.
    Appellee said he had not known of the explosion from an engine back-firing through the air mixer after the compression had been released and the spark advanced, and did not know the effect of the roller being worn, but had since learned. “The pin wears the same as the roller, and, the roller and pin being worn, when the nut comes over and hits the roller, it does not knock the rock arm down far enough to release the exhaust valve and let the explosion out through the pipe, and causes it to come back out through the air mixer.” Nothing of the kind had occurred before in his experience in the oil fields.
    The testimony shows that the pin and roller were continued in use satisfactorily for a year and a half after the injury occurred, and were exhibited to the jury, and they have been-brought to the court here. An expert testified that the pin and roller were in as good condition as new ones; that there was not more play between the roller and pin on which it revolves than was necessary for oiling’, and it does appear now to be 'but little worn, probably 1/32 of an inch, upon examination here.
    The undisputed testimony .shows that this pin and roller had nothing to' do with the firing or timing of the engine, and could not cause the back-fire. It was also undisputed that, if the top had been on the air mixer, the explosion from the back-fire could not have come out of it, and the appellee admitted that he could have reached and picked up the top without bringing his face within two or three feet of the air mixer, and that, although he said he was in a hurry to get it finished, he also stated that nothing prevented his even going around the engine and putting himself in a different position entirely out of the way of danger from the explosion, or, without changing his position, from keeping his face away from over the open mixer in reaching for the top. Said he supposed he did it unthoughtedly, and that he had not known before of any explosion from a backfire coming through the air mixer after the engine was ' started. He said his eyes were as good as anybody’s before they were burned by the explosion; that he sufferred pain several days thereafter, and had a dull headache, which interfered with his work. He stated, on cross-examination, that he had worked there for defendant about one and one-half months before the injury, was an experienced man around a gas engine and oil field, and acquainted with the equipment and workings of machinery, and also made the following answers:
    “Q. Why did you stick your face over there? A. Well, the position I was in and where the cap was, I was forced to reach over there and pick it up. Q. Why didn’t you get in another position?! A. I was in. a hurry — unthoughted, reached over there to get the cap. Q. Just unthoughtedly reached for it and got it, is that it? A. Yes sir. Q. Wasn’t thinking about it. Now, then, you necessarily take that cap off to start the engine? A. Yes sir, it’s customary to do it. •* * # Q. I understand that, but what were you in a hurry for? A-Well, a man gets in a hurry with your work, or anything. Q. Did you have any special reason to hurry? A. Well, no. Q. Nothing ibut just pursue your work? A. Just pursue our work. * * * Q. Why didn’t you go around the mixing chamber: and-put it on there? A. I just didn’t dó it, unthóughtedly. A man would have to walk plumb 'back around over here and put it on. * * * Q., I say, can’t you go right there now and put the top over here, and right around here, and get it without getting your face in three feet of that mixing chamber (indicating) ? A. I can do it, yes sir. Q. But yet you didn’t do that? A. Didn’t do it.” * * *
    Said that he had been paid all the time since the injury, but one day, until the company stopped his pay; that he ivas now making $15 a month more wages than when he worked for the company. Admitted that one of his eyes was affected before the injury.
    Two of the physicians testified that they found no scar on the eyes from the 'burn, -but that pterygium is due to inflammation and might arise from any sort of irritation, and develops slowly, and might be caused from a burn that would leave no scar.
    Dr. Mitchell, who had examined the eyes of appellee shortly after the explosion, was not allowed to testify over his objection, and complaint is made of error committed in excluding this testimony, and also in refusing to give certain instructions, one for a directed verdict, and from a judgment of $500 this appeal is prosecuted.

      T. M.'Millard, Gaughan & Sifford, Elbert Godwin and Arnold & Arnold, for appellant.

      Steel & Edwards and James D. Head, for appellee.
   Kirby, J.,

(after stating the facts). It is earnestly insisted that the evidence is not legally sufficient to support the verdict, land that the court erred in refusing to give appellant’® requested instruction No. 1 for a directed verdict.

There is very little conflict in the testimony. It is ■undisputed that it was not necessary to remove the top from the air mixer in order to start the engine, but that it was not unusual — -was in fact customary — to do so, the engine 'being started more readily when it was done. The appellee was an experienced workman, and understood the operation of such engines, and undertook to start this one in this customary way. He said it could be done more easily 'by removal of the top 'from the air mixer. It is not complained that the appellant was negligent in not warning him of the danger incident to the service performed, but only that it failed in its duty to exercise ordinary care to furnish safe machinery and instrumentalities for the performance of his work. He could have easily picked up and replaced the top of the air mixer without bringing his face over the mixer or near enough thereto to have 'been injured by an explosion from a backfire of the engine coming out of the mixer, and none could have escaped that way had the top not been removed for starting the engine, as he also knew. There was no emergency requiring him suddenly to select the method for doing the work, or excusing him from attempting the least safe way. He was working under his own. initiative or direction in starting the engine, working according to his preference at the time, and, being familiar with this method of doing the work, and necessarily knowing and appreciating the danger incident thereto in attempting it, he must be held to have assumed the risk. St. L. I. M. & S. By. Go. v. Wiseman, 119 Ark. 477, 177 S. W. 1139; Henry Wrape Go. v. Huddleston, 66 Ark. 239, 50 S. W. 452. He carelessly and unthoughtedly brought his face over the air mixer in reaching- for the top to replace it, and without any necessity for doing so, and, although he stated he had not known of any explosion from a back-fire coming through the open air mixer after the engine was started, he knew that the top was put on such mixer to prevent the explosions from backfire coming out that way, and also that the top was off, necessarily exposing him to any danger that might result therefrom.

There does not appear to be any reasonable excuse for the careless manner of bringing his face near to and over the open mixer in attempting to replace the top thereon, and in so doing he was guilty of negligence contributing to his own injury also, and but for which the injury would not have occurred.

The court erred in not directing a verdict for the appellant, and the judgment is reversed and the cause dismissed.


author: Kirby, J.

text:
    Southern Surety Company v. Pfeifer Stone Company.
    Opinion delivered December 5, 1927.
    1. Trial — right to transfer of cause — waiver.—Treating defendant’s demurrer to the court’s jurisdiction of equity as a motion to transfer the cause to the law court, defendant waived its right to a transfer by not insisting upon a ruling thereon before the final determination of the case.
    2. Equity — garnishment of commissioners of improvement district. — A complaint in an action against the commissioners of an improvement district and the surety on the contractor’s bond for materials furnished the contractor, alleging that the commissioners had money belonging to the contractor and that the contractor was insolvent and seeking to impound money in the commissioners’ hands by garnishment, gave the court of equity jurisdiction.
    3. Municipal corporations1 — improvement district — liability of contractor. — Where a contractor agreed to remove dirt and sprawls in procuring crushed stone, in return for a rebate on the purchase price of the stone, the cost of removing the dirt and sprawls by the seller on the contractor’s default constituted part of the purchase price of stone furnished and was recoverable from the contractor’s surety under bond covering labor and materials furnished.
    Appeal from Independence Chancery Court; A. S. Irby, Chancellor;
    affirmed.

      S. M. Casey, for appellant.

      MoCaleb & McGaleb, for appellee.
   Kirby, J.

This appeal comes from a judgment for appellee against the surety company on the contractor’s bond for the price of crushed stone furnished the contractors and used by them in tbe construction of the improvement in Paving and Guttering District No. 4 in .the city of Batesville.

Suit was brought by appellee against the Kearney ■Construction Company, the commissioners of the. improvement district and the appellant company, surety on the contractor’s bond, for the price of crushed, stone alleged to have been purchased from appellée for use in the construction of the improvement, in the sum of $1,187.50, as stated on account in Exhibit A to the complaint, as follows:

'EXHIBIT A.
“Pfeiffer Stone Co. in account with Kearney Construction Company.
“For materials sold to Kearney Construction Company during the months of October, November and December, 1925, and used in the construction of Paving and Guttering District No. 4, Batesville, Arkansas.
“To balance due for purchase price of stone:
3,229 cubic crushed stone at 30c...........................:..............$ 322.90
Removing 1,082 cubic yards mixed dirt and stone and being a part of purchase price of said stone above mentioned, at 80c per cubic yard 865.60
Total '...................................................!............................................................$1,187.50

This stone is alleged to have been furnished under a contract of purchase attached to the complaint as Exhibit B.

It was alleged that the contractors had abandoned the work, and failed or refused to pay appellee for said materials furnished; that same were -furnished under the written contract; that, “under said contract, all amounts sued for herein are a part of the purchase price of said materials so furnished and for which defendants and each of them are liable”; that the surety company, as bondsman, was liable to the payment of the full amount claimed; that the commissioners of the district have in their hands moneys, credits and effects belonging to the contractors for portions of the improvement entirely completed and in use by the public, in the sum of $2,000, upon which plaintiff was entitled to a lien; and that the contractors are insolvent, and, unless the amount owing plaintiff was impounded in the hands of the commissioners, it would suffer irreparable loss; that it was entitled to have writs of garnishment issued to said commissioners on said funds impounded in their hands, and that it had no adequate remedy at law.

Appellant filed a general demurrer to the complaint, and also demurred to the jurisdiction of the court, and, without waiving its demurrer, answered, admitting the execution of the bond and denying any indebtedness due from the contractors to the appellee and any liability on its part under the terms of the bond for the payment of any of the alleged indebtedness.

The commissioners also demurred to the complaint and the jurisdiction of the court, and, ’ reserving the demurrer, answered, denying that the district was indebted to the contractors in any sum. whatever and that they had in their hands any moneys, credits or effects belonging to said contractors.

J. A. Pfeiffer, the general manager of appellee company, the only witness who testified, stated that he made the contract with the Kearney Construction Company, Exhibit B to the complaiift, and furnished the stone used in the paving in the district in Batesville, and that the amount claimed, $1,187.50, was still due therefor, with interest; that' the stone company • first thought about moving the dirt and furnishing the crushed stone for 75c a yard, but the contractors finally agreed to move the dirt and sprawls from the locality, and pay 10c a yard for the stone crushed; that they failed to move 1,082 cubic yards of dirt and sprawls, which would cost 80c a yard to move, and to pay 10c a yard on 3,229 cubic yards of crushed stone; that the other element of the purchase price of the stone, being the removal of the dirt and sprawls they failed to remove, at a cost of 80c per yard. Said appellee was willing to let the defendants remove the dirt and sprawls and allow a credit of $856.60 therefor on the account.

The contract provides: “It is agreed that the stone to be used for crushing’ shall be removed by lessee from the north end of the quarry upon what is known as the ‘F’ ledge, and which has been pointed out to lessee, and to dispose of all sprawls, .dirt and refuse from said ledge so as not to hinder further quarrying operations of lessors.”

The bond was conditioned that the construction company keep and'perform each and all covenants and undertakings of said contract, “and shall pay for all labor and material employed and used for the purpose of carrying out the said contract,” and was made expressly for the use and benefit of all persons who performed labor or furnished labor and materials under the contract, giving them a right to sue thereon.

The court found that there was due the stone company, as shown by the account sued on, $1,187.50, as the purchase price of the stone furnished by it and used in the construction of the improvement in said district, and that it was entitled to a lien therefor in the said sum, and, under the terms of the bond, the surety company was liable to the payment thereof, and entered a decree accordingly, from which this appeal is prosecuted.

• It is insisted that the court had no jurisdiction of the cause, and that it erred in holding the bonding company liable for the estimated cost of the removal of the mixed dirt and stone, which, it is claimed, was not covered by the bond, and also that the lOe per yard for the crushed stone was, in effect, pay for the use of machinery leased to the contractors, for payment of which the sureties on the bond were not liable.

Treating appellant’s demurrer to the jurisdiction as a motion to. transfer the cause to a law court, it waived its right to such transfer by not insisting upon a ruling' thereon before the final determination of the case. Arkansas Construction Co. v. Pidgeon-Thomas Iron Co., 172 Ark. 721, 291 S. W. 57, 28 L. R. 445; Newell Contracting Co. v. McConnell, 156 Ark. 558, 246 S. W. 854; Hayes v. Bishop, 141 Ark. 155, 216 S. W. 298; Goodrum v. Mer chants’ & Planters’ Bank, 102 Ark. 326, 144 S. W. 198, Ann. Cas. 1914A, 511.

The plaintiff sought 'by proper allegations of the complaint to subject the money alleged to be due the contractors from the paving district for the .portion of the improvement completed to the payment of its claim for materials furnished and used in making the improvement iby equitable garnishment, which would have given the court jurisdiction to hear and determine the question. Arnold v. Oliver, 152 Ark. 47, 237 S. W. 425; Sims v. Hammons, 152 Ark. 616, 239 S. W. 19; Murray v. Rapley, 30 Ark. 120.

The undisputed testimony shows that the amount of crushed stone as charged for was furnished and used in the construction of the improvement by the contractors, and, in the opinion of the majority, the cost of removing the dirt and sprawls in procuring the stone agreed to be done by the contractors was necessarily a part of the purchase price of the stone actually furnished and used in the improvement for the balance due, upon which appellant, as surety on the bond, was liable to the payment, and no error was committed by the trial court in so holding.

The decree is affirmed.


text:
    Smith v. Lawrence.
    Opinion delivered December 5, 1927.
    1. Drains — notice op proposed drainage district. — Notice of hearing on a proposed establishment of a drainage district required to be given by Crawford & Moses’ Dig., § 3607, is jurisdictional, and no lands can be included within the boundaries of such district which are -not included within such notice.
    2. Drains — purpose op preliminary survey. — Crawford & Moses’ Dig., § 3607, providing that a preliminary survey and estimate should be made showing the territory to be benefited, contemplates only a preliminary survey and estimate, and not that the reports should be conclusive, and exclude lands from the district which were not recommended as benefited. •

      3. Drains — notice of proposed district. — Notice of a proposed drainage district given under Crawford & Moses’ Dig., § 3607, held to properly include the tract of land which was described in the petition for the district, though the engineer of the proposed district had recommended that the tract be excluded from the district.
    4. Drains — validity of order establishing district. — An order establishing a drainage district which excluded a certain tract of land therefrom in accordance with the recommendation of the engineer held valid, though the petition for the establishment of the district and the notice of hearing thereon given under Crawford & Moses’ Dig., § 3607,' included this tract of land.
    5. Drains — drainage district overlapping previous district. — The drainage district attempted to he established under Crawford & Moses’ Dig., § 3607, held invalid where it embraced the same territory as a previously organized district with the addition of 80 acres, omitted from the prior district after hearing, and had the same purpose and proposed construction of the same improvement, with little difference in cost and expense, being in effect a collateral attack on the prior district.
    Appeal from Jackson Chancery Court; A. 8. Irby, Chancellor;
    reversed.

      Robinson, House & Moses, for appellant.
   Kirby, J.

This is a proceeding by appellants, landowners within the alleged Drainage Improvement District No. 11 of Jackson County, against the commissioners of Drainage District No. 14, the validity of which is challenged, because the entire territory thereof, except 80 acres of land, was first included in Drainage District No. 11, which, it was alleged, was legally organized. It was alleged that confirmation of the assessment of benefits in District No. 14 constituted a lien on the lands and a cloud on the title of the plaintiffs, and temporary injunction was asked and issued, restraining the confirmation of assessment of benefits, the contract for construction, and the sale of bonds.

It appears from the agreed statement of facts that a petition for the formation of Drainage District No. 11 was duly filed on September 3, 1921, and included in the description of lands the north one-'half northwest one-quarter section 20, township 13 north, range 2 west. An engineer was appointed to make the preliminary survey, and filed his report on the 8th of October, 1921, which did not include said 80 acres of land as benefited. On that day there was filed another petition, claimed to be signed by a majority of the real property owners of the district, including said 80-acre tract. Notice was duly published showing said 80 acres as included within the proposed boundaries of the district, and on November 1, 1921, the county court duly entered an order establishing said Drainage District No. 11, not including within it the said 80-acre tract, and in all subsequent proceedings same was not included as a part of the district.

On February 3, 1926, the county court entered an order creating Drainage District No. 14, the boundary lines of which were coterminous and identical with the boundary lines of Drainage District No. 11, as described in the order of the county court creating that district, except that the 80-acre tract that was left out of District No. 11 was included in District No. 14, No. 14 being created for the same purpose as No. 11 was attempted to be created, and all proceedings for the establishment of the district being regular, if Drainage District No. 11 was invalid.' The contention of the parties, as stated, being, on the one hand, that District No. 14 is void, since District No. 11 was first organized and was a valid district, and, on the other hand, that District No. 11 was invalid, and District No. 14 legally organized.

The court held that the inclusion of the said 80-acre tract in the notice of the day set for the creating of said District No. 11, as its exclusion had been recommended in the report of the preliminary survey of the engineer, constituted a variance fatal to the organization of the said district, and held District No. 11 to be void, and dismissed the complaint, from which this appeal is prosecuted.

It has long been settled that the notice required given hv § 3607 of C. & M. Digest of the statutes is jurisdictional, and that no lands can be included within the boundaries of such district that are not included within such notice. Paschal v. Swepston, 120 Ark. 230, 179 S. W. 339; Jones v. Fletcher, 132 Ark. 328, 200 S. W. 1034.

The statute only contemplates that a preliminary survey and estimate shall he made by the engineer of the territory proposed to be included in the district, showing which of the lands will be benefited by the proposed improvements, and giving a general idea of its character and expense, and make such suggestions as to the size of the drainage ditches and their location as he*may deem advisable. Ayers v. Crittenden, 123 Ark. 246, 185 S. W. 285.

This report is not conclusive, and necessarily would not exclude the land not recommended as benefited from the boundaries of the proposed district, but the county court would hardly be expected to approve the report and exclude such territory before the final hearing on the petition, after notice, to determine whether it should be granted and the district established.

The court properly included this tract of land in the notice given for the establishment of the district, requiring all the persons within same to show cause in favor of or against its establishment. After such hearing1, by order duly made, it established the district, excluding from its boundaries the said 80-acre tract of land, notwithstanding same was embraced in the petition and notice as proposed to be included in the district. This was done after all the property owners within the proposed district had been given opportunity to appear and advocate or resist the establishment thereof, and the district as established was valid, and necessarily the ■second District No. 14 thereafter attempted to be organized of all the territory included in said District No. 11, with the addition only of the said 80 acres left out of its boundaries, for the same purpose and the construction of the same improvement, with little difference in the amounts of the estimated cost and expense thereof, was invalid, being in effect but a collateral attack upon the organization and establishment of said District No. 11, which was in all respects a valid organization.

The court erred in holding otherwise, and its decree will be reversed, and the cause remanded with directions to enter a decree in accordance with this opinion. It is so ordered.


author: MpHAPEY, J.

text:
    Lee v. Beauchamp.
    Opinion delivered December 5, 1927.
    1. Evidence — judicial notice, as to rate of interest. — It is a matter of common knowledge that the amount of interest paid varies according to circumstances, among other things, the character of the loan, the kind and amount of security required, the time of the loan, and the general condition of the country at the time.
    • 2. Guardian and ward-liability of curator for interest. — Under Crawford & Moses’ Dig., §§ 5059-5061, 5066, making it a curator’s duty to lend his ward’s money, under order of the court, at the highest rate obtainable on unincumbered land, a curator is not liable for failure to keep money loaned at all times where the .security offered is rejected by the probate court, if he has used reasonable care in trying to lend the money and in obtaining proper security therefor, and the curator was therefore not liable for any deficiency in interest because he deposited money in a bank at 4 per cent, interest, which was as high or higher than he would have obtained on government bonds.
    3. Guardian and ward — care in handling ward’s funds. — It is the duty of a guardian or curator to act, not only honestly, but with due care, in handling the funds of his ward, and, if he does not do so, the sureties become liable for interest on the money because of his negligence.
    4. Appeal and error — conclusiveness of court’s findings. — Findings of fact by the circuit court sitting as a jury are binding on the Supreme Court on appeal in the same manner and to the same extent as the verdict of the jury, and, if there is any substantial evidence to sustain the findings, they cannot be disturbed.
    Appeal from Greene Circuit Court, First Division; G. E. Keck, Judge;
    affirmed.

      Chas. Jacobson and M. P. Huddleston, for appellant.

      Appellee pro se.

   MpHAPEY, J.

D. G. Beauchamp was appointed curator of tbe estate of Opal Josephine Lee, March 15, 1915, and did not file any settlement until after Opal Josephine Lee attained her majority. After she became of age she caused a citation to be issued, and on April 6, 1926, Beauchamp appeared and filed a settlement. The appellant filed exceptions to the settlement, and the court heard the cause on said exceptions, and found that Beauchamp was due his ward the sum of $1,136.04, instead of $794.80 as claimed in his settlement.

The case was appealed to the circuit court, where it was tried by the court sitting as a jury, and the circuit court overruled the exceptions, and approved Beau-champ’s report as filed, and directed that the same be certified back to the probate court, there to be entered.

Motion for a new trial was filed and overruled, and exceptions saved and appeal taken to this court.

The settlement filed by Beauchamp is as follows:

“Comes the curator, and for his final settlement he charged himself:
With money received........................................................................$1,000.00
Interest on $250 8 per cent. 1 yr........................................... 20.00
Interest on $200 8 per cent. 10 yrs..................................... 160.00
Interest on $790 4 per cent. 8 yrs.................................... 252.80
Total received..............................................................................$1,432.80
Takes credit with:
Amt. furnished John Hasley for books and
clothes for ward.............................................................................j$ 30.00
Costs in this court...................................................,.................................. 8.00
Amt. paid ward after she became of age........................ 500.00
Amt. of commissions to curator............................................... 100.00
Total paid.............................................................................................$638.00
RESTATEMENT.
Amount received.......................................................................................$1,432.80
Amount paid out............:....................................................................... 638.00
Balance ......................................-........................................................$ 794.80
“Respectfully submitted,
“D. Gr. Beauchamp, Curator.”

Opal Josephine Lee filed exceptions to the final settlement as follows:

“She excepts to item No. 1, which states that the sum of $250 was loaned fox the space of one year at 8 per cent, per annum, and asks that said final settlement be made to show when said amount was loaned, to whom, and whether done under the direction and authority of the court.
“She excepts to item No. 2, which states that the sum of $200 was loaned for ten years at 8 per cent., the interest amounting to $160, for the reason that it is not shown when said amount was loaned, to whom loaned, and whether it was done under or by authority of the court, and fails to show whether the interest was payable annually, or when, and does not show whether the interest was reloaned, reinvested, or what became of it.
“She excepts to item No. 3, which is a loan of $790 at 4 per cent, interest per annum, for a period of eight years, interest thereon amounting'to $252.80, for the reason said final settlement does not show to whom the money was loaned, when, and whether or not it was done under and by direction of the eourt, and does not show what became of the $252.80, whether it was reloaned, reinvested, or what was done with it.
“She further excepts to said final settlement, and says that the curator, D. Gr. Beauchamp, herein, has never furnished her, either directly or through her relative, John Hasley, any moneys for books or clothing, and excepts to the item charged of $30.
“She further excepts to the item of $8 for court costs, and asks that the curator be required to show what this amount was paid out for and how said costs were incurred in the management of said estate.
‘ ‘ She excepts further to the item of $100 charged by D. Gb Beauchamp, curator, as commissions, for the reason that it is exorbitant and not in compliance with statute, and said commissions should be fixed by the eourt.
“She further excepts to said final settlement, and states -to the court that, during the time her curator had control and the management of her estate, by reasonable care and attention to said estate he could have loaned all of her said moneys to reliable and responsible persons, upon good approved real estate security, and all of the accumulations thereof, at 10 per cent, per annum, and that said final settlement shows on its face that the same has not been done. ’ ’

The probate court sustained the exceptions, and found that the curator was indebted to Opal Josephine Lee in the sum of $1,136.04. On appeal in the circuit court, where it was tried before the judge sitting as a jury, the exceptions were disallowed and the settlement as made by the curator approved.

The settlement, together with the exceptions, show the issues, and the evidence of the parties tends to support their respective claims.

At the close of the testimony the plaintiff moved the court to make a special finding of fact regarding the prevailing rate of interest in Greene County, Arkansas, during the time in controversy, and the court found that loans were made as high as 10 per cent, and as low as 6 per cent. — from 6 per cent, to 10 per cent.

The plaintiff excepted to the findings of fact by the court. The plaintiff then moved the court to make a special finding as to whether or not the curator acted with due care in the discharge of the duties of his office, and, in pursuance of this motion, the court found the facts with reference thereto to be as follows :

“I find in this case that the curator has handled this estate in a fair and equitable manner. I find that he has accounted for all moneys that came into his hands. I find that he was not guilty of negligence in failing to loan the funds; that he has handled this property with the same degree of care and attention that he handled his own private affairs, and that he should not be charged for any more than he actually received; that curator did not use any of these funds belonging to his, ward, personally, at any time, but at all times kept funds on hand in the bank in a separate account as curator. I find exceptions to the report should be overruled; that he has handled this estate for the term of practically ten years; that his charge of $100 is not an excessive amount for the care, trouble and work that he had with reference to this estate. It is the judgment of the court that the exceptions be overruled and the report as filed approved. The curator now appears in open court 'and says that he desires to waive and relinquish all claims that he has made for fees and compensation, and asks the court not to allow him anything as compensation for his services in this matter, and, at his request, the report is amended to show that he does not claim or is not allowed any compensation for his services as curator.”

The plaintiff excepted to each finding of the court. Then the plaintiff moved the court to make a special finding of fact regarding the amount of interest the curator would be liable for in the event he did not exercise due care in the performance of the duties of his office, and in answer to this the court finds that, if he had been guilty of negligence and failed to exercise proper care, he would be liable for 6 per cent, interest compounded annually. To this finding the plaintiff also excepted.

In plaintiff’s motion for a new trial it is stated that the court erred in its finding as to the amount of interest the defendant would be liable for upon failure to exercise ordinary care in the performance of his duties, adopting fi per cent, interest, compounded annually, whereas all the evidence shows that the lowest rate of interest in loans of the character which the law required defendant to make was not less than 8 per cent. If there is any such evidence in the record, it is not abstracted by the appellant, and we have failed to find it in the transcript.

The appellant’s first contention is that the current rate of interest is a part of the history of the State, of which the courts will take judicial notice, and refers to numbers of authorities sustaining the contention.

The lower court, while the record does not show this specifically, probably found that the prevailing rate of interest on loans like the curator would have had to make and demanding such security as the law requires, would have been 6 per cent. The record does not show what he found, except that loans and been made in that section from 6 per cent, to 10 per cent. But it is a matter of common knowledge that the amount of interest paid varies according to circumstances, and that many things must be considered; among other things, the character of the loan, the kind and amount of security required, the time of the loan, as well as the general condition of the country at the time.

Appellant says the measure of appellee’s duty, as fixed by law, is found in § 5059 of Crawford & Moses’ Digest, which reads as follows:

“If, at any time, any guardian shall have on hand any money belonging to his ward, beyond what may be necessary for his education and maintenance, such guardian shall, under the direction of the court, loan the same to such person as will give good security therefor, and such money shall be loaned on such time as the court shall direct.”

And § 5060, which is as follows:

“If any guardian shall fail to loan the money of his ward on hand as aforesaid, under provisions of this act, he shall be accountable for the interest thereon. ”

Section 5061 provides:

“Guardians and curators shall loan the money of their wards at the highest rate of interest prevailing in the community that can be obtained on unincumbered real estate security, and then not more than to the extent of one-half the value thereon. The interest in all cases shall be paid annually, and, if not then paid, shall become a. part of the principal and bear interest at the same rate.”

It will be observed that the statute does not require the curator to loan the money 'at the highest rate of interest prevailing in the community, but at the highest rate prevailing in the community that can be obtained on unincumbered real estate security where the loan shall not exceed one-half the value of the real estate.

Another provision in the Jaw is that, if the interest is not paid annually, it becomes a part of the principal and bears the same rate of interest that the principal loan does. But the testimony in this case shows that, on one or two occasions where the curator had found a bor-' rower, the court declined to approve the security. The money had to be loaned under the direction of the court, and, if the court refused to direct the loan or declined to approve the security, then the curator was helpless so far as that loan was concerned.

There is no question about the law nor about the duty of the curator under the law. We think the undisputed proof shows that the curator acted in good faith. In fact, there is no contention that he at any time used any of the money, but the only contention is that he did not lend it out at the prevailing rate of interest and keep it loaned out during the whole time. If the curator would not be responsible for any money loaned under the direction of the court, he would certainly not be liable for failure to make a loan where the security offered was rejected by the court, if he used reasonable care in trying to lend the money and in obtaining proper security therefor.

Section 5066 of Crawford & Moses’ Digest, after prescribing the duties of the guardian with reference to loans and the liability on the bond, says:

“And, if such money has not been loaned out, the court shall order the money to be forthwith invested in United States bonds for the use and benefit of such ward, and it shall remain so invested until such court shall order otherwise, and a report of the action of such guardian or curator shall be made of his proceedings.”

It will therefore be seen that situations like this were anticipated by the legislators when they enacted this law. If the money could not be loaned out on security acceptable to the probate court, then, of course, the curator could not lend it. He would be violating his duty under- the law if he loaned it against the orders and directions of the court, or in oases where the court declined to approve the loan. But, when that situation arose, then it became the duty, not of the curator, but of the court, to order the money to be forthwith invested in United States bonds. There is nothing in the record to indicate that the court made any such order. Instead of purchasing United States bonds, which the curator would have been required to do if directed to do so by the court, he deposited the money in the bank at 4 per cent, interest. This was as high, or probably higher rate of interest than would have been obtained if the funds had been invested in United States bonds.

If the funds had been invested in United States bonds the. interest would have been paid at maturity, but there would have been no compounding of interest. It is certainly the duty of a guardian or curator to act not only honestly but with due care in handling the funds of his ward, and, if he does not do so, he and his sureties become liable for interest on the money because of his negligence. But whether he has done so or not is a question of fact, and the circuit court sitting as a jury was requested to make and did make special findings of fact, and the findings on questions of fact by a court sitting as a jury are binding on this court in the same manner and to the same extent as the verdict of a jury, and, if there is any substantial evidence to sustain the findings, this court cannot disturb them.

It appears that this case was fairly submitted to the court, and that his findings are sustained by the evidence. In addition to this, the appellee in open court waived and relinquished all claims for fees and compensation, and asked the court not to allow him anything for his services, and, at his request, report was amended to show that he did not claim and was not allowed any compensation for his services as curator.

When the findings of fact by the court and this action-on the part of the curator, and the further fact that the guardian or curator is entitled to such compensation for his services as the court shall decide to be just and reasonable, are considered, this court would not be authorized in setting aside these findings of the lower court.

The statute fixing- fees for curators is somewhat different from the statutes with reference to administrators’ and executors’ fees, because the statutes with reference to the curator expressly provide that the court shall decide what will be just and reasonable compensation for the services, and allow him that amount.

There is no dispute about the law in this case. The finding of the trial court settled the facts, and we think that the findings of fact by the court are sustained by the evidence, and the judgment is therefore affirmed.