« AnteriorContinuar »
the knowledge or consent of appellee, permit- where there has been no demand upon them ted Cahoon to sell the mortgaged chattels to to sue the makers of the note. Colebrook on other parties, who assumed payment of the Col. Securities, $ 208; Friend v. Smith Gin note, but paid only $70 thereof, and that the Co., 59 Ark. 86, 26 S. W. 374. balance of $10 and interest should be cred. Appellee bad a perfect right to pay off the ited on appellee's note. These two credits, debt to appellants at any time, and require a is allowed, are sufficient to extinguish the surrender of the collateral note, but, having balance claimed by appellants to be unpaid failed to do this, or make demand upon on appellee's note. The chancellor found in appellants to sue on the note, he cannot comfavor of the defendant, allowing the cred- plain of mere delay on the part of appellants its, and entered a decree accordingly, from in forcing payment of the collateral note. which decree the plaintiffs, Johnson, Berger The same may be said of the Cahoon note. & Co., appealed.
The evidence does not show that appellants
ever accepted the note as a pro tanto payFrierson & Frierson, for appellants. N. F.
ment, or otherwise than as collateral secuLamb, J. F. Gantney, and J. M. Virgin, for
rity, or that they ever consented to a sale of appellee.
the mortgaged chattels. At most, they were
only guilty of delay in bringing suit to en. McCULLOCH, J. (after stating the facts).
force the security. We think the chancellor According to the pleadings and testimony in
erred in allowing appellee credit for either of the case, the Cox note was delivered by ap
these notes. pellee to appellants as collateral security for
The note sued on stipulated that it should debt owing by the former to the latter. The
bear "interest from date at the rate of ten note bears date of September 27, 1898, and
per cent. per annum,” without any stipulawas payable in 49 days after date, and there. tion for interest after maturity. Under the fore fell due on November 15, 1898. The rule established by many decisions of this evidence is conflicting as to whether appel
court, interest must be computed at the rate lants presented this note to the makers, and of 10 per cent. from date to maturity, and in due time notified appellee of its nonpay
thereafter at 6 per cent. Newton v. Kenment; but it is undisputed that the note was
nedy, 31 Ark. 626, 25 Am. Rep. 592; Pettiindorsed and delivered to appellants by ap
grew v. Summers, 32 Ark. 571; Gardner v. pellee before maturity, or at least some time
Barrett, 36 Ark. 476; Johnson v. Myer, 54 before the date of the execution of appellee's
Ark. 437, 16 S. W. 121. Computing interest note to appellants, December 13, 1898. This according to this rule, and after allowing apbeing true, appellants cannot be held liable
pellee all credits for payments made, includfor a failure to make demand of payment
ing the payment of $56.09 made since the and notice of nonpayment. Appellee, by sub
commencement of this suit, we find that apsequently executing to appellants his note
pellee is still indebted to appellants in the and mortgage for the full amount of his debt,
sum of $124.38, with interest at 6 per cent. waived any liability of appellants to him as
per annum from February 4, 1902, the date indorser by reason of their failure to have
of the last payment. made demand and given notice of nonpay
The decree is therefore reversed and rement. If he intended to insist upon a credit
manded, with directions to enter a decree of the amount of the Cox note, he should
in favor of appellants for the above amount have claimed it before executing his note to
and interest aforesaid, and costs of suit, and appellants for the full amount of his debt.
that the mortgage be foreclosed. By retaining possession of the Cox note as collateral security to appellee's note to them, appellants were bound only to use reasonable diligence to collect it, and are liable only for
LITTLE ROCK RY. & ELECTRIC CO. V. gross neg ence in iling to take the proper
CITY OF NORTH LITTLE ROCK. steps to collect the note and protect appellee (Supreme Court of Arkansas. June 17, 1905.) from loss. Colebrook on Col. Securities, $ 1. INJUNCTION-RECIPROCAL OPERATION. 114; Jones on Pledges & Col. Securities, $8 Kirby's Dig. $ 5522, authorizes parts of 692, 693; 22 Am. & Eng. Ency. L. pp. 901,
one municipal corporation to be annexed to an902; Hanover Nat. Bank v. Brown (Tenn.)
other, and provides that, if a majority of those
voting at the election held to determine the ad53 S. W. 206; Reeves v. Plough, 41 Ind. 204; visability of annexation shall vote in favor of Cooper v. Simpson, 41 Minn. 46, 42 N. W. annexation, the council shall so declare and 601, 4 L. R. A. 194, 16 Am. St. Rep. 667.
record it, after which the consolidated territo
ry shall constitute a municipal corporation. The evidence in this case does not show After an election to determine the question of (the burden of proof being upon the appellee consolidation had been held, the council of the to establish that fact) that appellants faile
annexing municipality was, at the instance of to exercise due diligence to collect the note,
the other municipality and a private corpora
tion, enjoined from declaring the result, which or that any loss resulted from appellants' al- was in favor of annexation. Pending the inleged failure to present the note for payment junction the municipality to which the an and promptly notify appellee of the nonpay
nexed territory had formerly belonged granted
to the private corporation à franchise to conment. Appellants were not liable for mere
struct and operate a street railroad in the andelay in enforcing the collateral, especially nexed territory. Held, that the franchise was
void ; the city having no right to grant it dur- filed a complaint in the Pulaski chancery ing the pendency of the injunction.
court against the town of North Little Rock. 2. MUNICIPAL CORPORATIONS EXERCISE OF INVALID FRANCHISE-ESTOPPEL.
The complaint set forth fully the relation The fact that pending the injunction the
of the Eighth Ward to the city of Little private corporation expended a large sum in Rock, and the alleged effect upon it and the partially constructing its road without objec- city of Little Rock, should the proposed antion from the annexing municipality did not es
nexation to North Little Rock be consumtop the latter from asserting the invalidity of the franchise.
mated. The complaint alleged that the act 3. SAME-ANNEXATION OF TERRITORY-COM- under which the proceedings were progressMENCEMENT OF JURISDICTION.
ing was unconstitutional, for various reasons Kirby's Dig. 8 5522, authorizes parts of one municipal corporation to be annexed to an
set forth therein, and consequently the whole other, and provides that, if a majority of those proceeding under it was void, and sought to voting at the election held to determine the ad- arrest by injunction the election ordered for visability of annexation shall vote in favor of
July 21st. The complaint further alleged : annexation, the council shall so declare and record it, after which the consolidated terri
“Complainants further state that, unless detory shall constitute a municipal corporation. fendants are restrained from holding such Held, the jurisdiction of the annexing munici- election and proceeding further under said pality over the annexed territory commences
act, defendants will hold said election, will when the result of the election is declared, and does not relate back to the time when the elec
declare the result in favor of disannexation, tion was ordered.
and will then proceed to grant all kinds of 4. SAME FRANCHISES - ENJOYMENT—CON- franchises, privileges, licenses, and contracts DITIONS PRECEDENT. Where an ordinance granting a franchise
of public nature; that said franchises, privito a street railway company provided that be
leges, and contracts will conflict with those fore the rights conferred should be enjoyed the heretofore granted by the said city of Little company should obtain from the county court a
Rock; that it will grant street car, lighting, confirmation of the right of way over a bridge, the obtaining of the consent of the county court
and water franchises to parties other than was a reasonable and enforceable condition pre- those to whom they have been granted by cedent to the acquisition of any rights under the said city.” Other probable conflicts in rights franchise.
and jurisdiction were alleged to be imminent. 5. SAME-REASONABLE TIME. Where an ordinance granting a franchise
The prayer was to restrain the holding of to a street railway company provided that, be- said election, and from taking any further fore the rights conferred should be enjoyed, the steps towards annexing the Eighth Ward to company should obtain from the county court
North Little Rock. On July 16th a demura confirmation of the right of way over bridge, the company was required to obtain the rer was sustained to the complaint and the consent of the county court within a reason- injunction refused, and the city of Little able time, but one month was not a reasonable
Rock and its coplaintiffs appealed to the time. Battle and Wood, JJ., dissenting.
Supreme Court. The court was not then in
session, and application was made to Hon. Appeal from Pulaski Chancery Court; | Henry G. Bunn, then chief justice of the SuJesse C. Hart, Chancellor.
preme Court, for an injunction pending the Action by the city of North Little Rock
appeal. The petition to the chief justice against Little Rock Railway & Electric
recited the status of the annexation proceedCompany. From a judgment for plaintiff,
ings and the litigation, and alleged "that for defendant appeals. Reversed.
the reasons and grounds set forth and reOn the 16th of March, 1903, the General | ferred to in said complaint, and for others Assembly passed an act authorizing parts of hereinafter set forth, it is of the utmost imone municipal corporation to be annexed to portance that a temporary restraining order another municipal corporation. This act is should be issued by your honor in vacation contained in section 5522, Kirby's Dig. On of said Supreme Court, to restrain said dethe 11th of May, 1903, petitions were fendants from all further proceedings in the filed with the town council of the town of matters set forth and referred to in said North Little Rock, signed by a majority of complaint and exhibits, during the vacation the citizens of that town and a majority of of said Supreme Court, and until its further the citizens of the Eighth Ward of the city order.” Then other and additional reasons of Little Rock, praying for the annexation were alleged why the injunction should isof the Eighth Ward of Little Rock to the in- sue. This further statement appears in the corporated town of North Little Rock. On petition: “Plaintiffs further state that the the 15th of June, 1903, an ordinance was granting of the injunction herein prayed for passed, calling for an election to be held in will work no injury or detriment to the dethe affected territory on the question of an- fendants; that it will only result, so far as nexation, pursuant to the terms of the act. the defendants are concerned, in a postponeThe election was called for July 21, 1903. ment of the election, if said act is hereafter On the 6th of July, 1903, the city of Little adjudged to be constitutional; that suid inRock, its mayor and aldermen and numer- junction will in all respects merely result ous citizens and corporations-among the in the maintenance of the status quo of the latter, the appellant, which will hereafter parties, property, and interests herein inbe called the “Street Railway Company”- volved.” On July 18th Chief Justice Bunn refused to enjoin the holding of the election, ty court of Pulaski county." The bridge allowing the proceedings to go to the extent was constructed by the county of Pulaski, of holding the election, counting the votes, and not by the city of Little Rock. It was and completing the election returns, but en- further provided that the grant would be joined the declaration of the result, and void unless within 30 days after said confrom entering the same on the record of the firmation by the county court the street car proceedings of the council of North Little company should begin the work of laying Rock, and enjoined North Little Rock from tracks and strengthening the bridge, and doing any act towards the assumption of prosecute the work with reasonable dispatch, jurisdiction or control over the property or and complete it within 18 months; but it affairs of the Eighth Ward, or the exercise was provided that, if the work was stopped of any municipal function whatever over the by judicial proceeding, the time it was so same, and from interfering with the existing suspended should be excluded. The ordijurisdiction of the city of Little Rock, until nance provided that it should not be operathe further orders of the Supreme Court, or tive until the street car company should acone of the judges thereof. It was further cept its terms and conditions in writing, ordered that the ballots and returns of the within 15 days, and deposit with the city election were to be counted and cast up and treasurer $10,000 in cash, or, at its option, transmitted to the council of North Little a good bond in that sum, conditioned to comRock, and, without opening or further ac- ply with the terms of the ordinance, and tion thereon, were to be kept until the fur. containing, among others, this condition: “It ther orders of the Supreme Court, or one of the county court declines to confirm the right the judges thereof.
of way herein granted, then the council reThe act under which this proceeding was serves the right to revoke this ordinance at held provided that, if a majority of those such time as it sees fit, or wait on said convoting at the election should vote in favor of firmation at its option.” In another section annexation, the council “shall so declare and it is provided that such confirmation shall enter [it] upon its record book of proceed- not be necessary if there is obtained a final ing." And “thereafter the said consolidated judgment of the Supreme Court holding the territory, and the inhabitants thereof, shall right of way valid without such confirmation. constitute a municipal corporation of this It is conceded that no litigation has been bestate," etc. The declaration of the vote in gun or had wherein this question could be favor of annexation, and the record thereof, finally passed upon by the Supreme Court. constituted the point where the jurisdiction The final section is that the ordinance should of the enlarged corporation began. The be a binding contract between the city of chief justice allowed the proceedings to go Little Rock and the street car company upon to this point, but arrested the changes of ju- | its passage, and the acceptance in writing, risdiction until the appeal was heard and and depositing the cash or bond. The ordidetermined. The vote at the election July nance was duly passed. It was accepted in 21st resulted in 475 votes for annexation, writing within the time, and the bond duly and 44 against it. The returns were count- made and delivered. On the 10th of August, ed, cast up, and delivered pursuant to the 1903, the city council of Little Rock materialorder, but the declaration and record of the ly amended this ordinance. The part imporresult stayed by this injunction. On Feb- tant here is that the provision requiring conruary 6, 1904, the Supreme Court affirmed firmation of the grant of right of way by the the decision of the chancellor, and on Feb- county court of Pulaski county to be obtained ruary 22d time for filing motion for recon- before any rights therein conferred became sideration was waived, the injunction dis- operative was stricken out, and the company solved, and the annexation proceedings then given an absolute franchise to construct and completed. On the 25th of June, 1903—the maintain a street car line over certain same being after the election was ordered streets in the Eighth Ward. Similar proviand before it was held—the council of the sions were made as to acceptance in writ. city of Little Rock granted to the street car ing, the giving of bond, and other matters company a franchise to build and maintain not entering into this case. This was passed, a street railway over certain streets in the as stated, on the 10th of August, while the Eighth Ward. The franchise, however, con- injunction suit was pending in the Supreme tained conditions, so far as material, in sub- Court, and while the temporary injunction of stance as follows: That before the rights Chief Justice Bunn was in force. After the conferred should be enjoyed the free bridge passage of this ordinance, and before the over the Arkansas river (the Eighth Ward case was finally determined, the street car being on the north side of the river) should company began the construction of its line be so strengthened to bear with safety the in the Eighth Ward, laid considerable track, weight of the cars. Details in regard to this and spent in all about $27,000 on the work. were provided for in the ordinance. The It was not completed in any part or ready next condition is: “Nor shall said rights for operation when the decision in the inherein granted be enjoyed until the grant junction suit was rendered by the Supreme hereby made of a right of way over the said Court. After the latter event the town of free bridge has been confirmed by the coun- North Little Rock, which had been advanced to the grade of a city of the first class, barred, or right to execution lapses; and in brought this suit to annul the franchises, many other cases, when an injunction wrongand succeeded in the chancery court.
fully prevents the assertion of a right or Ashley Cockrill and Rose, Hemingway &
causes it to lapse, then the court treats the Rose, for appellant. James P. Clarke, for
plaintiff wrongfully causing this effect to appellee.
be reciprocally bound by the injunction. Mercantile Trust Co. v. St. L. & S. F. Ry.
Co. (C. C.) 69 Fed. 193; Hutsonpeiler's HILL, C. J. (after stating the facts). 1. Adm'r v. Storer's Adm'r, 12 Grat. (Va.) 579; The franchise sought to be enjoyed was Marshall v. Minter, 43 Miss. 666; Work v. granted by the council of Little Rock Au- Harper, 66 Am. Dec. 549; Sugg v. Thrasher, gust 10, 1902, when the jurisdiction of the 30 Miss. 135. Chief Justice Schofield, in apcity of Little Rock over the Eighth Ward | plying this doctrine in a case in Illinois, thereof, where the franchise was to have said: “The only function of an injunction been enjoyed, would have ceased for all is to stay threatened action and suspend the purposes but for the injunction granted at conflicting claims of right of the respective the instance of the city of Little Rock, this parties where they are until they can be appellant company, and other parties to the properly adjudicated. 2 Daniell, Ch. Pr. (5th suit. One of the grounds relied upon for Ed.) 1639, and note. And so it must necesthe injunction was the probability that the sarily follow that to allow one party to obother municipality seeking to absorb this tain any advantage by acting when the territory would grant therein street car fran- hands of the adverse party are thus tied by chises conflicting with those theretofore the writ, or the order for it, is an abuse of granted by the city of Little Rock. So far legal process which cannot be tolerated." as this record shows, the franchise to this Lake Shore Ry. Co. v. Taylor, 134 Ill. 603, company, granted subject to several condi- 25 N. E. 588. While the hands of the city tions set out in the statement of facts, was of North Little Rock were effectually tied the franchise sought to be protected against | by the injunction sought at the instance of encroachment and conflict. This franchise the city of Little Rock and the street car was amended after the injunction so as to company, then the street car company obtake out the conditions which prevented it tains from its coplaintiff the franchise in from becoming at once operative. The in- question in territory over which the city of junction was granted upon this and other Little Rock would not have had at that time allegations, and unquestionably was intend- a vestige of jurisdiction except by reason of ed to preserve the status quo of the two mu- the injunction preserving the status quo in nicipalities, so far as the Eighth Ward was regard to franchises as well as police and concerned, pending the appeal to determine municipal control. The statement of the whether or not the proceedings for its an- situation shows more clearly than argument nexation to North Little Rock were valid. that it is inequitable to allow rights to be Lord Chancellor Eldon held that where a thus acquired. party obtained an injunction which prevent- It is argued that these cases proceed upon ed his adversary from pursuing and enjoying the ground that the party obtaining the rights, and the injunction was finally dis- injunction has violated its spirit, or that solved, the party could not take advantage the restraining party took advantage of of any rights which he had thus wrongfully | something he could not have had before, or prevented his adversary from enjoying. The that the position of the party enjoined was Lord Chancellor said: "If there be a prin- more favorable before the injunction. Many ciple upon which courts of justice ought to of the cases do proceed on such propositions, act without scruple, it is this: To relieve but the underlying principle is that the inparties against that injustice occasioned by | junction acts reciprocally, and binds in spirit its own acts or oversights at the instance of the moving party, while binding expressly the party against whom the relief is sought. the other. While the city of Little Rock That proposition is broadly laid down in could have granted an absolute franchise some of the cases." In such cases it is rea- the day it obtained the injunction, it did soned by the great chancellor that the plain- not do so, and when it did grant the absolute tiff seeking relief by the mere circumstance franchise the city of North Little Rock was of filing the bill would be required to submit then under injunction from granting such to everything conscience and justice requir- franchise. If it had not been under such ed; that the plaintiff seeking the relief im- injunction, it could have then granted a pliedly says he asks it on the terms of put- franchise over these streets, and the city of ting his adversary in exactly the same sit- Little Rock could not have done so. The uation if it be determined in his favor. Pul- court is of the opinion that the principles tenay V. Warren, 6 Vesey, Jr., Chan. Rep. of these cases apply to this case. 73. This principle has found secure lodg. 2. Counsel for the appellant contends that ment in equity jurisprudence, and is applied the city has no property interests in the to varying kind of cases involving its ap- streets; that it is a mere agent of the state, plication. Frequently it is applied when an to whom the state has delegated control of injunction stays an action and it becomes the streets, and the state in the first instance, and the city in the second instance, there cited; La Fayette Bridge Co. v. Streatis but a trustee for the public. Many au- or (C. O.) 105 Fed. 729; United States v. La thorities are cited on this proposition, and it Chapelle (C. C.) 81 Fed. 152. In the case of is summed up in a recent case in the Su- Indiana v. Milk, supra, Judge Gresham said: preme Court of the United States in this "Resolute good faith should characterize the language: “The statutes show that there conduct of states in their dealings with inwas lodged by the Legislature of Ohio in dividuals, and there is no reason in morals the municipal council of Cleveland compre- or law that will exempt them from the dochensive power to contract with street rail- trine of estoppel." If the state may be way companies in respect to the terms and estopped, certainly the agent of the state, conditions upon which such roads might be who prolongs the power of the state in itself, constructed, operated, extended, and consoli- may be estopped by reason of its action in dated.
That, in passing ordinan- so prolonging this power. Passing, however, ces based upon the grant of power referred from the governmental agency of the city to to, the municipal council of Cleveland was the result of the action of the city in purexercising a portion of the authority of the suance of this agency:
In the recent case, state, as an agency of the state, cannot in heretofore referred to, of Cleveland v. Cleve reason be disputed.” Cleveland v. Cleveland land City Ry. Co., 194 U. S. 517, 24 Sup. Ct. City Ry. Co., 194 U. S. 517, 24 Sup. Ct. 756, 756, 48 L. Ed. 1102, the court said "that in 48 L. Ed. 1102. The argument of counsel on the courts of Ohio the acceptance of an ordithis line is fully conceded as established in nance of the character of those just referprinciple and by authority. But it does not red to is deemed to create a binding confollow from this status of the city that it tract.” Citing authorities. Then the court may by its own act prolong its governmental considered the question as one of general agency, and grant rights otherwise divested law, without treating the decisions of Ohio from it by the state. In this case the state, as binding, and reached the same conclusion. by appropriate legislation, authorized the A like view is taken of the question in this transfer of the control of the streets in ques- state. "Now, a grant which has been action from one agent to another agent. The cepted and acted upon by the grantee is a holding agent prolonged its holding by this contract, within the meaning of the Constiinjunction, contrary, as it was afterwards tution of the United States, which forbids determined, to the act of the Legislature. laws impairing the obligation of contracts." Can it be said that on account of these gov- Hot Springs Elec. Light Co. v. Hot Springs, 70 ernmental functions it is freed of the ordi- Ark. 300, 67 S. W. 761. There is the general nary rules governing litigants? In City of rule. McQuillan, Mun. Ord. $ 238. The Ft. Smith v. McKibben, 41 Ark. 45, 48 Am. grants in this case were duly accepted, and Rep. 19, the statute of limitations was in- constituted contracts; and hence it follows, voked against the city's control of an alley aside from any estoppel of the governmental of the city of Ft. Smith. The doctrine of agency, that the grant in question was a governmental agency was there presented, contract right, and subject to all the protecbut this court held, on a conflict in the au- tion and liability of other contractual rights, thorities, that the weight of authority and and among the latter is the sound equitable the better reason were in favor of applying rule that such rights cannot be acquired in the statute. In Town of Searcy v. Yarnell, violation of an injunction obtained for the 47 Ark. 269, 1 S. W. 319, this court quoted benefit of the contracting parties. All of approvingly from Bailey V. Mayor of New these reasons would be applicable if a stranYork, 3 Hill, 551, 38 Am. Dec. 669, as fol- ger had obtained the franchise, but when it lows: "A municipal corporation, when in is obtained from one party to the injunction the exercise of franchises and the prosecu- in favor of a coplaintiff therein they are tion of works for its emolument or advan- doubly applicable. Without pursuing the tage, and in which the state in its sovereign question further, the court is of opinion that capacity has no interest, is answerable as neither the city of Little Rock nor the a private corporation, although such works street car company can hold rights acquired may also be in the nature of great enter- over the streets of the Eighth Ward during prises for the public good; and 'powers the life of the injunction. granted exclusively for public purpose be- 3. An estoppel is sought against the city of longing to the corporation in its public, po- North Little Rock on account of its permitlitical, or municipal character.' Powers ting the street car company to partially congranted for private advantages, though the struct its line over these streets, and expublic may also derive benefit therefrom, pend about $27,000, without protest or resist. are to be regarded as exercised by the mu
The city of North Little Rock was nicipality as a private corporation." In that enjoined from interfering in any manner case an estoppel was invoked against the with the jurisdiction and control of the city town of Searcy. In fact, an estoppel may of Little Rock over the Eighth Ward. The be invoked against the government of the street car company was acting with open United States, the government of a state, or eyes. If it won its injunction suit its rights a municipality. State of Indiana v. Milk (C. were perfect, and necessarily it knew that if C.) 11 Fed. 389, and numerous authorities it lost that its rights were builded solely on