111 Ark. 421 | Ark. | 1914
(after stating the facts).. The finding of the court “that the contract between the district and Hahn & Carter, entered into on October 30, 1912, was legal and binding upon the parties,” is in accord with the undisputed evidence.
The court erred in finding that the act of March 8, 1913, was void as being an attempt on thé part of the Legislature to impair the obligation of a contract. That act provides, “that hereafter it shall be unlawful for the commissioners of the Kirsch Lake and Grady Drainage Districts to issue any bonds whatever without first being petitioned by a majority of the land owners and a majority of the owners in acreage and in value, asking that said bonds be issued, and all bonds issued without such petition shall be void as against said district.” (Sec. 1.)
At the time this act was passed, the testimony shows that there had been no completed contract for the borrowing of money by the sale of bonds for cash to the party who was proposing to loan the money for the purchase of the bonds. It is true that the members of the board testified that there was a contract between the board and Hahn & Carter to purchase the bonds, and while in their testimony they speak of having' “sold the bonds to Hahn & Carter for cash,” and while they say that they had “closed with Hahn for the bonds at par and 5y2 per cent interest,” the real facts, as developed by the testimony of Hahn and the cashier of the Bank of Pine Bluff, were that at the time of the passage of the act of March 8, 1913, no money had been borrowed and no bonds had been sold for cash, but there was pending at that time negotiations for the borrowing of money and the sale and purchase of the bonds, which had not been fully consummated.
Clearly the .commissioners had only agreed to sell the bonds to Hahn & Carter provided they could pay cash for the same. But the undisputed evidence shows that Hahn & Carter did not have the cash to pay for the bonds, and they were undertaking to negotiate for their sale to another for cash, and before they had completed such sale, the act was passed. The board, before the act was passed, did not, in fact, sell any bonds to Hahn & Carter, and Hahn & Carter had not, in fact, sold any bonds to bond buyers in Cincinnati, who were expected to furnish the money.
The cashier of the Bank of Pine Bluff, with which the bonds were deposited, stated that they were placed with the bank to be delivered to the purchasers. He had never received any money on them. On the contrary, his testimony shows that the proposed purchaser of the bonds refused to pay for them on account of the Legislature passing an act after the bonds had been placed with the bank “which they thought might affect the legality of the bonds.”
The testimony of Hahn shows that he had not in reality purchased the bonds himself, but was only attempting to have some one else purchase them. He says: “So I went east and negotiated a sale of the bonds with the bond buyers so that I could get cash on the bonds to proceed with the work. By that time the act of the Legislature of March 8, 1913, had passed, and the bond people wanted that act tested as to whether it involved the bonds which were issued and delivered on March 1,1913. ’ ’
This testimony conclusively shows that Hahn & Carter, at the time of the passage of the act of March 8,1913, had not entered into a completed contract with the board whereby it had sold to them for cash the bonds of the district. The whole proceeding, as we view the evidence, in regard to the borrowing of the money and the sale and purchase of the bonds, was m fieri.
The commissioners, under the former opinion, on rehearing, were not prohibited from borrowing money from, and selling the bonds to, the contractors, but there can be no issuance and sale of bonds in the sense of the statute authorizing the board to issue and sell the same except when there has been a completed contract by which the money has been borrowed on such bonds. Section 15 of the act, under which the board was authorized to proceed, provides that “in order to hasten the work, the board may borrow money, * * * and may issue negotiable bonds therefor.”
Under the plain terms of the statute, it does not appear from the evidence in this record that the board of commissioners had borrowed any money or issued and sold any bonds for money borrowed prior to the passage of the aot of March 8,1913.
Our conclusion on the facts, therefore, makes it unnecessary to enter further upon a discussion of the interesting questions of law so ably presented in the briefs of counsel. It follows that the decree dismissing the complaint for want of equity is erroneous, and the same is reversed and remanded with directions to enter'a decree granting so much only of the prayer of appellant’s complaint as seeks to cancel the outstanding bonds.
