Western Randolph County Road Improvement District v. First National Bank

• Decision Date: 25 June 1923
• Docket Number: 70
• Parties: WESTERN RANDOLPH COUNTY ROAD IMPROVEMENT DISTRICT v. FIRST NATIONAL BANK
• Court: Arkansas Supreme Court

252 S.W. 928

159 Ark. 578

WESTERN RANDOLPH COUNTY ROAD IMPROVEMENT DISTRICT v. FIRST NATIONAL BANK

No. 70

Supreme Court of Arkansas

June 25, 1923

Appeal from Randolph Circuit Court; E. G. Schoonover, special judge reversed.

Judgment erroneous, and cause reversed and remanded.

Pope & Bowers, for appellant.

The claim of appellee was included within the provisions of the act, and not being presented in time, was barred. 95 Ind 228; 78 Ark. 392. No new promise or acknowlegment by appellant so as to remove the bar of the act. Brown v. State Bank, 10 Ark. 134; Ringo v Brooks, 26 Ark. 540; 18 S. Dak. 454. The provision in the decree did not affect the certificate sued on, but only protected the certificates hypothecated. Hypothecated defined. 24 Ark. 27; Black's Law Dictionary. The listing of the claim did not remove the bar of the statute. 13 Gray (Mass.) 381; 10 F. Cas. No. 5, 354; 18 Abb. Pr. (N. Y.) 305; 10 Pa.St. 129; Ann. Cas. 1916-E 434; 133 S.W. 1095; 12 Ark. 763; 187 P. 454; 13 S.W. 269 is precisely in point. It was grounded on 112 U.S. 150; 61 N.Y.S. 689. The act 208 of 1921 limited the claims to be paid to those filed within three months after its passage. 116 Ky. 403. The court erred in giving judgment for more than rate specified in certificate, 6 per cent. C. & M. Digest, § 7361.

John L. Bledsoe, for appellee.

The certificate of indebtedness sued on was regularly issued to the General Construction Company for work done for appellant, was sold to appellee for a valuable consideration before maturity, and has never been paid. The claim was presented by the construction company within less than three months after passage of the act, and rejected. Suit was then filed in Federal court and decree agreed on, and claim was not barred. W. U. Tel. Co. v. Jones, 95 Ind. 228; Bouvier's Law Dictionary; 107 Iowa 525; 143 N.Y.S. 241; 84 Neb. 86. Statute relative to unliquidated claims. If statute had run, the agreed decree removed the statute bar. 61 N.Y.S. 689 cited by appellant not applicable to facts herein. 136 N.Y. 403 states the rule in New York correctly. The acknowledgment was made to the construction company, an indorser on the certificate, and was sufficient. 26 Ark. 540; 10 Md. 50; 9 Mass. 488; 2 E. D. Smith (N. Y.) 112; 5 Wood N. Y., 257. Nothing in objection to call specific attention to the rate of interest. 167 S.W. 851.

Pope & Bowers, in reply.

A similar statute of limitations was construed in 154 Ark. 420. The statute herein is really a statute of nonclaim; 23 Ark. 604; 112 Ark. 15.

OPINION

WOOD, J.

This is an action by the appellee against the appellant. The appellee alleges that the appellant issued to the General Construction Company (hereafter called company) its certificate of indebtedness No. 26 for the sum of $ 1,000, bearing interest at the rate of six per cent. per annum; that the company was a contractor, and that the certificate of indebtedness was issued to it for work performed for the appellant; that the appellee purchased the certificate of indebtedness from the company on July 24, 1920; that the company indorsed said certificate and became liable as an indorser to the appellee; that, in an agreed decree in the District Court of the United States for the Eastern District of Arkansas, rendered at its November, 1921, term, in a case between the company and the appellant, the appellant expressly allowed and approved the certificate of indebtedness; that in compliance with act 208 of the Acts of 1921 the appellant, through its commissioners, made a report to the county court of Randolph County setting forth the claims allowed by the appellant, and the certificate of indebtedness which is the foundation of this action was expressly set forth in said report. This report was filed December 15, 1921. It prayed for a levy of a tax sufficient to take care of the indebtedness evidenced by this certificate and other indebtedness; that said report was approved by the county court on Dec. 15, 1921, and taxes were levied for the purpose of paying this certificate and other indebtedness; that any purported defenses are barred by the aforesaid acknowledgments of the appellant. There was a prayer for judgment for the sum of $ 1,157, principal and interest on the certificate.

The appellant denied the material allegations of the complaint, and set up act 208 of the Acts of 1921 as a bar to the appellee's action, and alleged that the appellee had not in any way complied with the provisions of said act, and denied that it had acknowledged any indebtedness to the appellee. Appellant denied that the appellee filed its claim with the district within ninety days after the passage of act 208, and denied that the appellee brought suit within the time allowed by law. It alleged that the company claimed that it had hypothecated certain certificates of indebtedness with certain persons at the time the decree in the United States court was taken; that it was stipulated that execution should not issue on a certain portion of that decree until the company took up the certificates of indebtedness which it had hypothecated; that a large sum of money was deposited in the Pocahontas State Bank; that the fund was held by the Pocahontas State Bank for the convenience of persons to whom the company owed debts; that the appellee claimed the company owed it between $ 4,500 and $ 5,000, and claimed this amount out of the deposit; that this sum was paid the appellee, and appellee had made no further request for further payment; that, after the appellee collected such sum, all other funds on deposit with the Pocahontas State Bank were withdrawn by the company; that the appellee did not ask that the certificate sued on be paid until many months after appellee had been paid all that it claimed and many months after the company had withdrawn the balance on deposit with the Pocahontas State Bank.

The undisputed facts are as follows: Appellant road district was created by act 135 of the Acts of 1919. After letting a contract and incurring considerable indebtedness, the work of improvement for which it was created was suspended by act 208 of the Special Acts of 1921. That act, among other things, provides as follows: "Within three months after the passage of this act all persons having claims against the district shall present the same to the president or secretary of the board of commissioners thereof, and all claims not presented within that time shall be forever barred." That act was approved March 2, 1921. The claim on which the appellee's cause of action is based was a certificate of indebtedness issued by the district on June 10, 1920, to the company, and was sold by the company to the appellee on July 24, 1920. On May 21, 1921, the company presented a claim against the district which was on that day rejected by the appellant. In this claim the company asserted that it still owned all the certificates that had been issued to it.

At the November term, 1921, of the United States District Court sitting at Jonesboro, a judgment was rendered in favor of the company against the appellant. This judgment recited as follows: "Likewise, by consent, it is considered, ordered and adjudged that the plaintiff have and recover of and from defendant the further sum of $ 16,828.30, with interest thereon at the rate of six per cent. per annum from the 27th day of May, 1921, until paid, but no execution shall be issued on said sum of $ 16,828.30, or any steps be taken to enforce its collection, until the plaintiff shall deliver to the secretary of the Western Randolph County Road Improvement District the following certificates of indebtedness issued by the defendant to the plaintiff and hypothecated by the plaintiff to various parties, to-wit: (Certificate No. 26 for $ 1,000 is...