(248 S.W.) others. From a decree in favor of defend- It will be observed that the emergency ants, plaintiff appeals. Reversed and re- clause is not attached to the act. manded with directions. WOOD, J. This is an action by the appellant, a resident taxpayer in Dermott-Collins Road Improvement District, against the district and its commissioners to restrain them from collecting assessments, selling bonds, and from proceeding with the construction of the improvement for which the district was created. The district and its commissioners will hereafter be called appellee. The appellant, after alleging that he is a landowner and taxpayer within the boundaries of the district, set up that the appellee was attempting to collect the first installment of assessment of benefits that had been levied by the appellee against his land. Appellant challenged the authority of the appellee to collect the assessment on the following grounds, to wit: "(1) The act creating the district has never become operative. (2) The district has no right to spend more than $200,000 in the construction of the road. (3) If the plans and specifications are changed, the assessments already made will be void." After a consideration of the record, the conclusion we have reached makes it unnecessary to consider any but the first ground. [1] Under article 5, § 1, of the Constitution of the state of Arkansas, as amended by constitutional Amendment No. 7 (Crawford & Moses' Digest, p. 131), and put into effect by Act No. 2 of the General Assembly (Ex. Sess.) of the state of Arkansas, approved June 30, 1911, no act becomes operative unless the emergency clause is attached thereto until 90 days after the adjournment of the General Assembly. "All legislative enactments except those necpublic peace, health and safety, are subject to essary for the immediate preservation of the the operation of the initative and referendum and do not go into effect until the expiration of ninety days after final adjournment of the Legislature." Ark. Tax Commission v. Moore, 103 Ark. 48, 145 S. W. 199; Amend. No. 10, digested as Amend. No. 7, Crawford & Moses' Digest, supra; Fenolio v. Sebastian Road Dist., 133 Ark. 380, 200 S. W. 501. Until the expiration of such time, the voters under the referendum clause of the Constitution had the power to refer the act to the people as a whole for approval or rejection thereof at the next general election. Crawford & Moses' Digest, p. 131; article 5, 1, Amend. No. 7; Thompson v. State, 151 Ark. 369, 236 S. W. 608. See, also, Hodges v. Dawdy, 104 Ark. 583, 149 S. W. 656; Tomlinson Bros. v. Hodges, 110 Ark. 528, 162 S. W. 64; Hodges v. Board of Imp., 117 Ark. 266, 174 S. W. 542. [2] It is conceded by counsel for the ap pellee that the election, under which the act Appellee district was created by Act No. creating the district was to become opera240 of the extraordinary session of the Gen- tive, was held on March 27, 1920. This eleceral Assembly of the state of Arkansas, ap-fore void because at the time it was held tion was without authority of law and thereproved February 20, 1920. The last two sections of the act are as follows: "Sec. 36. This act shall not become effective until the same has been approved by a majority of the qualified electors residing within the district and voting at a special election to be called by the chancery judge of the Second chancery district of the state of Arkansas. Said chancery judge shall have full power to call said election on a day to be fixed by him, and he shall designate the polling precincts, appoint judges and clerks, and make such other orders as are necessary for the proper conduct of the election. Returns from said election shall be presented to said chancery judge within three days after said election and any contest of the election shall be heard before him, provided same is filed within ten days after the election, and his certificate of the return of the election filed with the chancery clerk of Drew and Chicot counties shall be conclusive proof upon all parties as to the result of the election." "Sec. 37. All laws and parts of laws in conflict herewith are hereby repealed, and this act shall take effect and be in force from and after its adoption at the special election hereinbefore referred to." the act authorizing such an election itself had not become a law. Since the act itself, which authorized the people to approve the same by an election, did not go into effect until after such election, it is manifest that the chancery judge had no authority under the act to call the election for March 27, 1920, and that the election held under such call was premature and void. Van Hook v. Wallace, 143 Ark. 203, 220 S. W. 37. In Thompson v. Trice, 145 Ark. 143, 223 S. W. 367, we held that "The Legislature cannot delegate to another its power to enact laws, but may make the enforcement 串串串 of the law dependent upon a condition or contingency. The law was made by the Legislature, to become operative upon condition of its adoption by a majority of the qualified voters in the district." In that case the constitutionality of the act now under review was challenged; also the constitutionality of the act and the validity of the assessments thereunder were attacked in the recent case of Bulloch v. Dermott-Collins Road Imp. Dist. (Ark.) 244, lant cannot maintain this action, because of S. W. 327. But the issue here raised was section 11 of the act, which reads as follows: not drawn to the attention of the court in those cases. In Fenolio v. District, supra, we had under review an act creating an improvement district and containing provisions for an election to be held within two years from the passage of the act for the approval of the act by the people of the district. In that case the court said: "The act was approved February 26, 1913, but it did not declare the existence of an emergency, and therefore went into effect 90 days after the adjournment of the Legislature, according to the referendum clause of the Constitution." [3, 4] This court cannot take judicial knowledge of the time when elections are held under special acts of the Legislature. Therefore, since our attention was not called' to the time when the election was held for the approval of the act now under review by the people of the district, the former cases in which we upheld the validity of the act are not decisive of the issue here for the first time presented. But the appellee contends that the Legislature itself ordered the referendum on the act; that sections 36 and 37, providing for the special election for the adoption or rejection of the act by the majority of the voters of the district, were tan "Any party who may have complained in writing of any of said assessments of benefits or damages, and who feels aggrieved by the action of the commissioners after the hearing herein provided for, and any other person whomsoever who may have any objection to any assessment of benefits or damages, or to any other proceedings under this act or action of the commissioners, shall file his complaint thereof in the chancery court having jurisdiction within thirty days after the hearing by the commissioners herein provided for and any party not complaining within that time shall be deemed to have waived any objection he may have thereto of any assessment of benefits or damages, and shall not be heard to complain in law or equity thereafter; and no suit shall thereafter be brought in any court attacking the validity of any of said assessments or benefits or damages." This section cannot avail appellee as a defense to appellant's action because, as we have shown, the act itself has not yet become effective. Before the act can become operative, there must be an election held at which a majority of the qualified electors Such an election has not yet been held. The residing within the district approve the act. holding of an election before such time and before there was any law under which an election could be held was not a mere ir tamount to a referendum of the act by the regularity, but a fundamental step, wholly Legislature. Section 9767 is as follows: "The General Assembly may order the referendum upon any measure enacted thereby, and the same shall be voted upon and the result of the vote thereon declared in the same manner as measures upon which the referendum has been ordered by petition, or at such time and in such manner as the General Assembly may direct." The act under review, of which sections 36 and 37 are a part, was the subject of a referendum to the voters of the whole state under Amendment No. 7, supra, of the Constitution, because the emergency clause was not attached to the act. Thompson v. State, supra. It is not within the power of the Legislature to deprive the people of the right under the Constitution to have all laws referred to them, except those laws necessary for the immediate preservation of the public peace, health, or safety. Since the emergency clause was not attached to the act showing the existence of an emergency, the act was the subject of a referendum under Amendment No. 7 of the Constitution, supra, and did not become operative until 90 days after the Legislature adjourned. To hold that sections 36 and 37 were equivalent to a referendum by the General | Assembly would render the whole act unconstitutional. [5] Appellee further contends that appel unauthorized by law, and therefore not binding on the taxpayers of the district upon whose property assessments have been levied to pay for the contemplated improve ment. We conclude, therefore, that the assessment which the appellee is attempting to collect from the appellant is without authority of law and void. The decree of the chancery court holding otherwise is reversed, and the cause is remanded, with directions to enjoin the appellee from collecting any assessment against appellant and from further proceeding under Act 240 until same shall have become effective in the manner therein provided. McCULLOCH, C. J., and SMITH, J., dis senting. McCULLOCH, C. J. (dissenting). The holding of the election before the statute became effective was a mere irregularity, and it was too late, after the approval of assessments and notice thereof, to raise the question of the election not having been properly held. The manifest purpose of the lawmakers was to base the operation of the statute upon obtaining the consent of the electors, and an election held before the expiration of the referendum period was just as effective for that purpose as one held thereafter. SMITH, J., concurs. (248 S.W.) current in the city of De Queen, and that DE QUEEN LIGHT & POWER CO. v. CUR- it was efficiently performing such service, TIS. (No. 172.) (Supreme Court of Arkansas. Feb. 19, 1923.) Electricity 4-Railroad Commission cannot grant certificate of convenience and necessity to public service electric company operating in city. Acts 1919, No. 571, § 13, empowering the Corporation Commission to grant public service corporations a certificate of convenience and necessity, being repealed by Acts 1921, No. 124, § 25, and the latter act by section 17 conferring jurisdiction on municipalities to regulate public service corporations operating within their limits, and by section 3 specifying the public service corporations over which the jurisdiction of the Railroad Commission, substituted for the Corporation Commission, shall extend, the Railroad Commission cannot grant such a certificate to a company distributing electricity in a city under franchise from it. and that the appellee, for various reasons stated in the petition, was not rendering the service it should to the inhabitants of the city of De Queen, and that appellant was chartered and received its franchise from the city of De Queen for the purpose of remedying the condition' caused by the failure of the appellee to render proper service. The appellant alleged in its petition that the "public convenience and necessity of the city and the inhabitants thereof imperatively requires that a certificate of convenience and necessity be issued to the petitioner" and the petition concluded with a prayer that such certificate be issued to it. The appellee, through its receiver, appeared specially, and filed its demurrer and motion to dismiss. Among other things it alleged: "That the Arkansas Railroad Commission has Appeal from Circuit Court, Pulaski Coun- no jurisdiction over either the person or propty; W. B. Brooks, Judge. Petition by the De Queen Light & Power Company to the Railroad Commission for a certificate of conveniency and necessity, op posed by the Commonwealth Public Service Company, through its receiver, W. L. Curtis, was, on appeal from the commission, dismissed by the circuit court, and petitioner appeals. Affirmed. Abe Collins and Lake & Lake, all of De Queen, for appellant. Pryor & Miles, of Ft. Smith, for appellee. WOOD, J. De Queen Light & Power Company, hereafter called appellant, is a domes erty sought to be affected by such petition." The Railroad Commission overruled appellee's demurrer and motion to dismiss, and issued the certificate to appellant. The appellee appealed to the Pulaski circuit court, where the appellee's demurrer and motion to dismiss the petition of appellant was sustained, and a judgment rendered dismissing the petition. From that judgment is this appeal. The only question for determination on this appeal is whether or not the Railroad Commission had jurisdiction to issue a "certificate of convenience and necessity" to ap upon certain conditions therein specified, a furnish public utilities. The section concertificate authorizing such corporations to cludes as follows: pellant. Section 13 of Act 571 of the Acts of 1919 creating the Arkansas Corporation tie corporation under a charter issued to it Commission and defining its powers and by the state on the 16th day of May, 1921. On the 13th day of June, 1921, it was granter to grant to public service corporations, duties, vested such commission with the powed a franchise by the city of De Queen, Ark., authorizing it to sell and distribute electric current in that city. Commonwealth Public Service Company, hereafter called the appellee, is a foreign corporation authorized to do business in this state. It had a "Every license, permit, contract or franchise franchise authorizing it to distribute and sell hereafter granted to any public service corpoelectric current, power, and water to the in-ration by the state or any municipality and all habitants of the city of De Queen as early and orders entered into or made by any mufuture contracts, ordinances, rules, regulations as the year 1918. W. L. Curtis was apnicipality relating to the use or enjoyment of pointed receiver for the appellee on May 25. 1920. He surrendered the franchise which appellee held authorizing it to do business in the city of De Queen and on January 22, 1921, applied for, and was granted by the Arkansas Corporation Commission, "an indeterminate permit" authorizing it to continue the public utilities mentioned above, to the inhabitants of the city of De Queen. On March 14, 1922, the appellant filed its petition before the Arkansas Railroad Com-titled: mission setting up its franchise above men- "An act to amend Act No. 571 of the General tioned, authorizing it to distribute electric Acts of the General Assembly of the state of rights and franchise granted to any public utility shall be subject to the exercise, by the Corporation Commission, of any and all of the powers of regulation provided for in this act." Section 31 of the act abolished the Railroad Commission then existing and conferred all the powers and duties of that commission upon the Corporation Commission. The General Assembly of 1921 passed Act 124, en For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes Arkansas, for the year 1919, entitled, 'An act [mission, and unless the application for reto create the Arkansas Corporation Commis- instatement is made within said time it shall sion and to define its powers and duties,' ap- be a waiver on the part of the public servproved April 1, 1919, and to regulate public ice corporation to insist upon the fulfillment utilities and public service corporations, and for of said franchise or contract rights. Secother purposes." tion 17 provides, in part, as follows: This act was approved February 15, 1921. "The jurisdiction of the municipal council or Section 3 of Act 124, supra, provides that city commission of any municipality shall exthe jurisdiction of the Arkansas Railroad tend to and include all matters pertaining to Commission created by the act shall extend the regulation and operation within the limits of any such municipality of any street railroad, to and include all matters pertaining to the regulation and operation of all common for domestic or industrial purposes, pipe line telephone company, gas company furnishing gas carriers (naming them), and among other company for transportation, distribution or sale public utility corporations mentioned are of oil, gas or water, electrical company, water "pipe-line companies for transportation of company, hydroelectric company or other comoil, gas and water, * electric light-pany operating a public utility or furnishing ing companies, and other companies furnish- public service within such municipality." ing gas or electricity for light, heat or power purposes," and hydroelectric companies and water companies, and provides that nothing in the act "shall vest the commission with jurisdiction as to any rate, charge, rule, regulation, order, hearing, investigation, or other matter pertaining to the operation within the limits of any municipality of any street railroad, telephone company, gas company, pipe line company for transportation of oil, gas or water, electrical company, water company, hydroelectric company or other company operating a public utility or furnishing public service as to which jurisdiction may be elsewhere conferred in this act upon any municipal council or city commission; notwithstanding, however, the jurisdiction of the municipality as to the above matters within the limits of such municipality, the said Arkansas Railroad Commission shall have and is hereby delegated the authority and duty to require all utility companies now furnishing public service within the limits of any municipality to furnish and continue furnishing such service to such municipality, though the right of regulation of such utility as to rates and all other matters within such municipality is herein elsewhere conferred upon the municipal councils or city commissions subject to right of appeal to the courts." Section 25 of the act is as follows: "That sections 13, 14, 15, 20, 26, 29, 31 and 35 of Act No. 571 of the General Acts of the General Assembly of the state of Arkansas, for the year 1919, approved April 1, 1919, hereinbefore referred to, be and the same are hereby repealed." It will be observed that section 13 of Act 571 of the Acts of 1919, which conferred jurisdiction upon the Corporation Commission to grant public service corporations a certificate of "convenience and necessity," is expressly repealed by Act 124 of the Acts of 1921, and the latter act, as shown by the various provisions above quoted, as well as other provisions which it is unnecessary to set out, confers upon municipalities exclusive jurisdiction over public utilities. like the appellant, operating within their limits. In Town of Pocahontas v. Central Light & Power Co., 239 S. W. 1-3, speaking of the jurisdiction of the Railroad Commission under the Acts of 1921, we said: "The public service corporations over which the jurisdiction of the commission shall extend is specifically stated in section 5 of the act, and jurisdiction by municipalities to regulate pubSection 15 of the act gives all public util-ating within the limits of such municipalities is lic service corporations or public utilities operity corporations now operating under in- conferred by section 17 of the act." determinate permits granted by the Arkansas Corporation Commission 90 days after the It follows that at the time of the filing of passage of the act to make application in the petition of the appellant on the 31st of writing to the municipal council or city com- March, 1922, asking the Railroad Commission mission of the municipality which granted to grant it a certificate of "convenience and the original franchise, contract, or lease, necessity," the commission had no jurisdicfor reinstatement of said franchise, contract, | tion to grant such certificate. Having or lease, and when such application is made reached this conclusion, the other interestand filed with the clerk or recorder of said ing questions, presented and elaborately armunicipality it shall be granted as a matter gued in the briefs of learned counsel pro of right and reinstated by the municipal and con, pass out, and we therefore pretercouncil or city commission having jurisdic-mit a discussion and decision of these question, under the same conditions as existed at tions. the time said indeterminate permit was The judgment of the circuit court is corgranted by the Arkansas Corporation Com-rect, and it is therefore affirmed. (248 S.W.) "In consideration of the foregoing and to ELLIS et al. v. BAKER-MATTHEWS LUM- pay for said timber the parties of the second BER CO. (No. 154.) In (Supreme Court of Arkansas. Feb. 12, 1923.) 1. Trusts 35(1)—Accumulated fund hands of purchaser of lumber under agreement with owner to hold stipulated sum for 1,000 feet in lieu of lien on timber for performance of stumpage contract held trust fund for benefit of owner. Where the owner of timber land entered into a stumpage agreement, to secure the performance of which he retained a lien upon all timber, logs, and products thereof, and subsequently released such lien in consideration that the purchaser of the lumber would hold for his benefit a stipulated sum per 1,000 feet on all the lumber cut and delivered, the accumulation of the sum represented by such agreement created a trust fund in the hands of the purchaser of which the owner of the lands was the sole beneficiary, the assignment of which the trustee could not challenge. 2. Set-off and counterclaim 46(1)-Debts against trustee individually cannot be offset against trust fund. A trustee is not a debtor, and any debt owing by him or due to him individually is not due in the same right or capacity as a trustee, and lacks mutuality, and such debts cannot be offset against a trust fund, but must be paid to the beneficiary or the person to whom the trust is properly assigned. part (Rhoads Bros.) agree to clear all said land ready for cultivation and ready for the plow by removing therefrom all standing timber and underbrush and all down timber and logs and all other foreign matter which interferes with farming said land, except only the tract fenced off into a field at the tenant house, which tract is east of the cultivated field and is grown up in young timber but has no saw timber thereon. This tract was formerly cleared but has now grown up in young timber. "The parties of the second part agree that they will begin the work of cutting the timber and clearing said land during the month of October, 1917, and will give said work their time and attention and push the same forward to completion as rapidly as can be, and will finish all said work of clearing within two years from this date, and will thus finish not less than two hundred acres thereof before May 1, 1918. All land when thus cleared is to be turned back to said Yount for cultivation. "They also agree that they will begin at the south side of said land near the present mill site and will cut timber and clear for cultivation as they advance from the south end hundred feet wide, and that they will cut no of said land northward in strips about four timber on more than forty acres of said land in such strips in excess and advance of land cleared for cultivation as aforesaid, and that said Yount shall have a lien on all of the tim Appeal from Craighead Chancery Court; ber, logs and products thereof on the year to Archer Wheatley, Chancellor. Action by the Baker-Matthews Lumber Company against E. B. Ellis and others. From a decree for plaintiff, the named defendant appeals. Reversed and remanded, with directions. Horace Sloan, of Jonesboro, for appel lant. Lamb & Frierson, of Jonesboro, for appel lee! WOOD, J. The appellee is a foreign corporation engaged in the lumber business, and having its principal office in Memphis, Tenn. Dr. W. E. Yount is a physician residing at Cape Girardeau, Mo. He owned some timbered land in Arkansas near Rhoads Bros. & Co.'s sawmill. Rhoads Bros. & Co. was a partnership, composed of J. T., W. W., and S. S. Rhoads, engaged in running a sawmill, near Black Oak, Ark. E. B. Ellis was a merchant of Black Oak, Ark. On October 17, 1917, W. E. Yount entered into a contract with the Rhoads Bros & Co. whereby he sold to them all the timber standing on 880 acres of land, more or less, for the consideration named in the contract of $17,600. No cash was to be paid, but the consideration named represented the value of clearing the lands mentioned in the contract. The provisions of the contract in regard to the clearing are as follows: secure the prompt and faithful performance of this agreement on the part of the second parties; but no lien herein mentioned shall ever be construed to authorize said Yount to prevent or interfere with the selling or marketing of said timber products, so long as second parties are not in default under the terms of this contract; and it is distinctly understood and agreed that the said sum of $17,600.00 is to be paid by second parties by and through their above-described clearing work, and that said sum of $17,600.00 shall be deemed fully paid, when said clearing work has been fully performed by said second parties under this contract." Prior to May 12, 1919, Rhoads Bros. & Co. had entered into a contract with L. D. Leach & Co. of Chicago, Ill., by which Rhoads Bros. & Co. was to manufacture lumber for that company, and it was to make advances to Rhoads Bros. & Co. as the lumber was manufactured. Baker-Matthews Lumber Company took over the Leach & Co. contract and reimbursed it for the advances it had made to Rhoads Bros. & Co. On the 12th of May, 1919, Rhoads Bros. & Co. entered into a contract with the Baker-Matthews Lumber Company. This contract provided for the manufacture of 2,250,000 feet of various kinds of lumber at specified prices, which was supplemented by an agreement of August 12, 1919, changing the prices. On September 22, 1919, Rhoads Bros. & Co. en For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |