Arkansas Foundry Co. v. Stanley

• Decision Date: 10 October 1921
• Docket Number: 151
• Citation: Arkansas Foundry Co. v. Stanley, 233 S.W. 922, 150 Ark. 127 (Ark. 1921)
• Parties: ARKANSAS FOUNDRY COMPANY v. STANLEY
• Court: Arkansas Supreme Court

233 S.W. 922

150 Ark. 127

ARKANSAS FOUNDRY COMPANY v. STANLEY

No. 151

Supreme Court of Arkansas

October 10, 1921

Appeal from Pulaski Chancery Court; J. E. Martineau, Chancellor reversed and affirmed.

STATEMENT OF FACTS.

The Arkansas Foundry Company, an owner of real property lying within the limits of the Broadway-Main Street Bridge District of Pulaski County, brought this suit in equity against the commissioners of said district to restrain them from employing agents in selling and disposing of the bonds of the district, and from proceeding further with the construction of the bridges contemplated by the passage of the act.

The complaint, amongst other things, alleges the following:

"Par 2. Said commissioners, in order to raise money to construct said bridges, are now threatening to borrow money from the banks in the City of Little Rock by issuing, or executing ordinary evidences of indebtedness, and are threatening to pledge and mortgage the assessments for the security of said loans. That the commissioners are not authorized to so borrow money, the only method being pointed out by section 9 of the act, which method is by the issuance of negotiable bonds at a rate of interest not to exceed six per cent.

"Par 3. Said commissioners, having offered and failed to dispose of the bonds of the district, are also threatening and arranging to employ agents to dispose of said bonds, and to pay such agents a commission therefor; that said bonds bear interest at the rate of six per cent. per annum; and if the commissioners are permitted to pay to said agents a commission for disposing of said bonds, the commissioners will receive from the sale thereof less than the par value of the bonds. Plaintiff avers that under the limitations of the power and authority of the commissioners, contained in said act, said commissioners have no power or authority to employ such agents and pay the commission for such purposes.

"Par 4. That the board has no power or authority to construct the two bridges under a single improvement district. The General Assembly had no power to pass an act creating a district to make two separate improvements, and the act is void for want of power.

"That the construction of two bridges as proposed by the commissioners would entail a large and unnecessary expense upon the taxpayers in the district, one bridge being sufficient to accommodate the traffic between the cities of Little Rock and North Little Rock."

The bridge commissioners filed a demurrer to the paragraphs of the complaint above set forth, and the court sustained the demurrer to the second and fourth paragraphs of the complaint, and overruled it as to the third paragraph of the complaint. The defendants elected to stand upon their demurrer to the third paragraph and refused to plead further. Accordingly it was decreed that the defendants be enjoined from employing agents or brokers to sell the bonds of said district, or to pay any commissions for services in that behalf. And, plaintiff declining to plead further, it was decreed that the prayer of the complaint for an injunction against defendants restraining them from borrowing money and issuing evidence of indebtedness in the form of notes and from proceeding with the construction of the proposed bridges across the Arkansas River, be denied, and paragraphs two and four of the complaint be dismissed for want of equity.

Both parties have duly prosecuted an appeal to this court.

George A. McConnell, for appellant.

The construction of the two bridges four blocks apart, is not a single improvement, and cannot be likened to a road district such as found in 125 Ark. 325. The legislative finding that the improvement is a single one is a mere presumption, and is not conclusive. 141 Ark. 288. If the statute including certain territory in the district is arbitrary and discriminatory, it is void. 139 Ark. 574; 143 Ark. 203; 142 Ark. 52; 142 Ark. 73; 118 Ark. 294.

The act provides the method of raising money, which is by issuing bonds, not notes, and the board has only such power as is expressly granted by said act. 106 Ark. 39. This case is different from that in 79 Ark. 229.

The commissioners have no authority to employ brokers and pay them commissions to sell the bonds, as the act requires that the bonds shall not be disposed of at less than par and shall not bear more than six per cent. interest. In 86 P. 75 and 150 S.W. 90, the agency being dealt with was a city council, which has more implied authority than a special improvement district, as is shown by 79 Ark. 234. The practice of a city paying brokers' fees is condemned in 156 P. 825. Par value is defined in 50 N.E. 973, as a dollar in money for a dollar in security. See also 53 N.E. 1116. Where the statute provides that bonds shall sell at par, nothing less can be accepted, even by way of paying brokers' commission. 151 P. 117; 160 S.W. 1161; 160 N.W. 425; 82 P. 601.

Decree reversed and cause remanded.

Vaughan & Rector, Moore, Smith, Moore & Trieber, for appellee.

The power of the Legislature to create districts for the purpose of making local improvements is not open to question. 59 Ark. 513. When so exercised, it is a legislative determination, in the exercise of its power, which can not be disturbed by the courts unless the power has been exercised arbitrarily. 93 Ark. 113; 85 Ark. 12; 130 Ark. 507; 95 Ark. 496.

The court will take judicial notice of geographic and commercial conditions in connection with bridges. 125 Ark. 553; 106 Id. 83; 88 Id. 37; 181 P. 223.

The two bridges constitute one improvement. The same principle was upheld in 142 Ark. 73; White v. A. & M. Highway Dist., 147 Ark. 160; 137 Ark. 355, and various other cases.

The board, under the statute, has the general power to borrow money and may do so by issuing notes, as well as by bonds. The power to issue negotiable bonds is permissive, and does not have the effect to limit the commissioners to that form of security. 79 Ark. 229.

The board was authorized to employ and pay brokers for the sale of the bonds. 145 S.W. 8; 130 S.W. 90, Ann. Cas. 1913 E p. 83 and cases in note on p. 86. See also 2 Dillon on Municipal Corp. sec. 895 (5th Ed.); 22 N.E. 24; 11 N.E. 1120; 1 A. 88; 86 P. 75; 78 N.W. 115; 8 Paige 527; 53 N.E. 1116.

OPINION

HART, J., (after stating the facts).

On the part of the plaintiff, it is contended that the two bridges contemplated in the act are four blocks apart, and that the construction of one has no relation to the other. Therefore counsel insists that the construction of the two bridges constitutes independent improvements, and that the act of the Legislature in creating the district as a single improvement district was arbitrary, and the act is consequently void. The act is entitled, "An Act to Create a Broadway-Main Street Bridge District of Pulaski County," and was approved February 5, 1919. Act 49 of the Special Acts of 1919, page 74.

Section 1 of the act creates the district, defines its territory, and names the commissioners. It authorizes the commissioners to build a bridge across the Arkansas River from a point on Broadway Street, in the city of Little Rock, to a point across the river in the city of North Little Rock to be selected by the commissioners. It also authorizes the construction of a bridge from a point on Main Street in the city of Little Rock to a point on the opposite side of the Arkansas River in the city of North Little Rock. The proposed bridges are four blocks apart, and the court will take judicial notice that there are connecting streets between Broadway and Main Streets in the city of Little Rock and between the corresponding streets on the opposite side of the river in the city of North Little Rock.

Under our former decisions bearing on the question, the statute can not be assailed on the ground that it embraces more than one improvement. The Legislature, in passing the statute creating the district, must have found, as a matter of fact, that two bridges were necessary to carry the traffic between the two cities, and that the business centers of the proposed district were so situated, with respect to the contemplated improvements, as to justify treating them as parts of a common enterprise and as a single improvement. With the expediency of the proposed improvement in its present form, we have no judicial concern. It is sufficient for us to say that the Legislature must have found that the construction of the two bridges was necessary to secure a convenient and useful means of approach between the two cities, and that by uniting them in a single improvement they could best promote the improvement of the property within the district. When the topography of the proposed district is considered in connection with the density of population, it can not be said that the action of the Legislature providing that the construction of both bridges should be undertaken and prosecuted as one improvement is arbitrary and void. We consider the question no longer an open one in this State, and that it has been settled by the decisions cited below as well as many other decisions of this court. Bennett v. Johnson, 130 Ark. 507, 197 S.W. 1148; Easley v. Patterson, 142 Ark. 52, 218 S.W. 381; Johns v. Road Imp. Dist., 142 Ark. 73, 218 S.W. 389; Tarvin v. Road Imp. Dist. No. 1, 137 Ark. 354, 209 S.W. 81; and White v. Ark. & Mo. Highway Dist., 147 Ark. 160, 227 S.W. 261.

It follows that the chancery court did not err in holding that the construction of the two bridges constituted, under the circumstances, a single improvement.

In the third paragraph of the complaint it is alleged that the commissioners are arranging to employ agents or brokers to dispose of the bonds to be issued under the provisions of the act for the...