ARK.] SOUTHERN SURETY COMPANY V. DARDANELLE 75t) . ROAO IMPROVEMENT DISTRICT :.NO. Appellee testified that he had discussed with appellant's adjUster Only the payMent of hospital bills and doctor's . fees and certain other items. That, while he glaneed over the releaSe before sigthlig it, he- • did . not understand that it attempted .to release ,. hiS for damages.... That hellad not slept for nineteen , days except a few minutes at a time,. and • then , only- when under the inflUenee ef an opiate, and at - the tithe he signed the writing there were eleven drainage tlibes in hiS leg and he had aiemperattire running' s a-hig . h, .. a • S 103. • . • • „ Under .theSe , dircumstances. . , it was a question , f6r the jury' to determine whether plaintiff had . the capacity to make-a 'binding . contract : of: 'release:: 'St:-L:• I. M. &- S. R. Co. v. Brawn;73. Ark. 42 ; .. Bearden v. St: L. I. M. S. R. Co..,, 103 Ark: 341 ; St. L . I..M. r& S. : R Co: V: Reilly, 110 Ark. 182 ; Harris Lbr. Motris, 80 Ark:: 260 ; • Tru-man/4 Coopeage Co v.Crye,. 137...AA.. 293 . ; St L I M. Sandidge, 81 Ark. , 264. ; Poinsett Lbr.,& Mfg. Co. v. LOngino, 139 Ark. '69_ • • .• ' have Said disposés'of appellant's-contention that a verdict should have been • dif . e-cted in it favor under: the . undisputed evidence.' not insis . ed that the veidict • is. e .•• x . c • ess . i • v .• e, . and, as we ;find no prejmlieial , error in the judgment, .it is affirmed. . SOUTHERN 'SURETY' COMPANY V:' DARDANELi;E ROAD IMPROVEkENT PISTRICT NO: 1. Opinion delivered,Noyernb • e • r 2, .1925. 1. STATUTES coNg ritucTION.—When the language of, a statute is plain and unambiguous, and conveys a 'clear and definite'meaning, there is no occasion for resorting to the rules of statutory interpretation and construction. 2., HIGH WA YS = RECOVERY OF PREM IUMS ON SURETY BOND—FAILURE OF I ' CON SIDERATI ON. — Premiums paid by a road district for 'a surety I bond • on a construction contract may be recovered where the • contract was illegally entered into before the assessments of bene-
756 SOUTHERN SURETY COMPANY V. DARDANELLE [169
ROAD IMPROVEMENT DISTRICT NO. 1. fits became final; the benefits being finally determined to be less than the cost of the improvement. 3. H ICH WAYS—PROVISION AS TO REVISION OF ASSE SSM EN TS.— A Cts of Special Session 1920, No. 63, § 2, amending Road Laws 1919, No. 244, in providing that the assessment of benefits wae stand "until reVised as provided in said act" of 1919, referred to the' entire act of 1919, and intended to leave to the commissioners all . the powers and duties to revise the assessments that were delegated to them in Road Laws 1919, No. 244. 4. HIGHWAYS—VALIDITY OF CON STRUCTION CONTRACT AND BOND.— Where Acts Special Session 1920, No. 63, enacted after a con-structibn contract and surety bond were executed, 'made material changes in the roads to be improved, the construction company could not be bound by such changes, and no liability, accrued upon the bond securing , performance of such contract.. 5.' HIGHWAYS—RECOVERY . OF PREMIUMS ON SURETY BOND. Where a ' road district was obligee in a surety bond and the construction contract which required the' district to advance premiums for such bond was made part of the bond, and the road district actually advanced money fOr premiums which was paid to the surety company, there was sufficient privity between the district and the surety company entitling the district to recover the premiums paid upon abandonment of the project. APPEAL AND ERROR—NONJOINDER OF PARTY—WAIVER.—Where, on the , abandonment of a road project, a road district sued the contractor's surety to recover premiums advanced,' Objection that the contradtor should lave been made a party was waived bylail-ure to raise it in the trial court. 7. HIGHWAYS—SUIT TO RECOVER PREMIUMS ADVANCED—DEFENSE.—In an action hy a road district, on abandonment of a road project, to recover premiums paid by it to the contractor's surety, it is no defense that the road district was a party to an illegal contract, since it is not the fault of the district, but of the commissioners, that the contract was entered into. 8. CONTRACTS—ILLEGALITY----41ECOVERY.—The rule that parties in pari delicto may not recover upon an illegal contract has no applicatig n to, contracts of a corporation void merely because malum prolvibitum or ultra vires. 9. PRINCIPAL AND SURETY—LIABILITY OF SURETY COMPAN Y.—The total amount of premiums illegally paid' to the agent of a suretY com-. pany by a road district may be recoVered where the agent acted within 'his apparent authority in collecting them, though the company did not receive all the premiums.
ARK.] SOUTHERN SURET Y COMPAN Y .V. 'DARDANELLE • '757
ROAD IMPROVEMENT DISTRICT No: I. Appeal: from . Yell 'Chancery . Court,- Dardanelle Dis-' trict ; W. E. Atkinson, Chancellor ;.:affirmed.. Sal4 Jennings and Buzliee, Pugh & Hai-'rison; fo'r appellant. Ben W ard, Hays, Priddy & Hays, and C oleman, Rob-inon, Rouse & Riddick; f(or appellee. ' • TOM W. CAMPBELL, SPE:CIAL JUSTICE. This snit *.wa's brought in . the Yell 'ChanCery -Court, , fOr the Dardanelle bistkict, by appellee against appellant, 'to recoVer Money alleged to have been paid-appellant by appellee 'a.S.-pre mium on certain conStruction bonds executed by appellant as s suretrfor Rich COnstruCtion Comtlany whiCh bonds, appellee was . obligee: Rich Construction 'Company .At'as notmade a• party to. the suit. Appellant interposed . a general demurrer °to the: complaint, but did not raise any: objeCtion, by demur-rer ,or answer,. tO the .failure :of appellee . td make. Rich Construction Company • A. party,. nor . did appellantask to have• said construction 'company Made a-party. .• , The °facts- disclosed by the 'record in this case are substantially as follows: The Dardanelle Road•District of Yell ,Connty WaS created by . 'act 244, passed by the regular session: of the 1919 Legislature, and approved March 11, 1919: The roads to . be improved by said • di g -trict,. as described in that act, were as follows :;.:"A'road starting at the pontoon bridge in the town of Dardanelle and running on streets to be selected by the 1 . cbminis-sioners and Southwesterly -to Mosely . and Chickalah. O `.A. roa6 beginning on the western border .6f .section seVen (7), township seven (7)° north; .range tWenty-one (21) west, 'and running-southeasterly through Dardanelle mi streets to be selected by the cOmmisSioners, 'and thence south on the west line of sections five (5) and eight (8), tOwnsbip six (6) north, 'range t*enty (20) Niest, to the southwest corner of section eight' (8), andthenee to the southeas . t 'corner of said: section, thence south to the southea gt corner of . Section thirty-two (32), of 'said township and range ; thence ' southeasterly: and . easterly- and
758, SOUTHERN SURETY COMPANY V. DARDANELLE [169
ROAD IMPROVEMENT DISTRICT NO. 1. northeasterly through Neely and Fowler to the southeast corner of section twenty-three (23), township six (6) north, range . nineteen (19) west, thence north . to the northeast corner of said section. 'A road leaving the last-named road on . the outskirts of Dardanelle and runping southwesterly and southerly to the center. of _ section thirty (30),, township six (6) north, range twenty (20) west. "A road starting from some point in the town of Dardanelle to be selected by. the commissioners and run• ning west to the top of Mt, Nebo ; and said district shall: consist . of • the following territory in Yell County, and shall include all towns within the territory.' :On January 21, 1920,.the board of. commissioners of said district entered into a contract with Rich Construe- . tion Company for the construction of the roads within theAistriet for the total sum of $792,27815ft On January 26, 1920, the..assessment of . benefits was filed in the offiCe of the county clerk.. The amount of benefits assessed, as shown by the. assessment filed on said date,. was $1,716910: . • , On February 6, 1920, act 63 of the 1.920 Special Session, of the General ASsembly was approved. :•This act . 63 amended the original . act-244 by making substantial changes in. the roads to be improved by:the diStrict, the roads to:be improved being &Scribed in said amendatory act as follows : • "A road beginning on. the western border. of sectioh 7, township 7 north, range 21 west, at a point where the present Dardanelle and Paris road crosses the west.line of 'said section 7, and running southeasterly along established highways through Dardanelle on streets to. be selected by the commissioners to the northeast corner section . 1 5, in township • 6 north,. range 20 west, thence,in southerly,: southeasterly,' and easterly direction to the southeast 'corner . of •section . 8, in . township 6 north, tange 9 0 weSt; thence in a southerly direction to a point at or near the southeast .corner of section 32 of said township
ARK.] SOUTHERN SURETY COMPANY V. DARDANELLE 759
ROAD IMPROVEMENT DISTRIOT IVO. 1. and range; thence southeaSterly and easterly and northeaSterly through Neely and Fowler to the southeast cot-ner of section 23, township 6 north, range 19 west, thence north and to the northeast corner of -said section, seCtiOn 23 of said• township and range; a road beginning at •a point in the above described route whete •he present Centerville and Neely road intersects the above described rOad and running in a general westerly direction to a peint on the west line of Section 5, township 5 notth, range 20 west, where the • present Centerville . and Neely road crosses the 'said west line of said . section 5." • ' Said aniendatory act also purported to ratify and confirm all the official,acts of the commisSionets of said district up to its enactment,. including the - contract .With Rich Construction • Company; and § 2 of said . arnenda-tory ad further provided as follows : . . "The assessment of . benefits against . each tract and parcel of yeal estate, railtoad right-of-way, and tram-roads heretofore made by the coMinissioners of said dis7 trict on the basis of the improvement conteniplufed .in said act, as hereby . amended . and . filed with the cogfity clerk of Yell 'County, is hereby ratified and confirmed and declared to be just, equal, and proportionate arld the saine shall stand as the assessment of benefits of. said diStrict until revised as provided in said act." On March 25, April 1, and .April 8,. 1920, notice Of the filing of the assessment of benefits in said :district. with the county clerk was published in a newspaper havT ing general circulation in the district, setting APril 23; 1920, as the day for hearing on said assessments before the coMmissioners of said district in the court honse at Dardanelle. . On April 23, 1920, a large ni y mb. et of the . laridoWners of said road district met at the court house' at Dardanelle for the purpose of protesting against the assessment Of benefits of said district. The meeting was adjourned to May 20, 1.920, when two of the connnissioners re-Signed and their successors were aPpointed, after. whieh, the
760 SOUTHERN SURETY COMPANY V. DARDANELLE [169
ROAD IMPROVEMENT DISTRICT NO. ,1. board of .commissioners heard. and considered the protests which lad been filed against the assessment of bene-fits-and reduced , all benefits which had been assessed against the property.of said district 75 per cent. At said meeting: the board of commissioners also adopted the following..resolution: f!Whereas, the board of commissioners . of Dardanelle Road Improvement District . of . Yell County, after•.an investigation,,is of the, opinion . that the cost of constructing the improvement contemplated largely exceeds the benefits which would be derived by the lands, lots and improvements of the district from said construction, and, •. "Whereas, the.board is unwilling to impose the bur.- den . upon the , landowners ,of the district. . therefore, be it . resolved: That it is the sense of the board that the proPosedimprovement ought to. be abandoned,. and that the same is hereby abandoned; that the . seCietarY' . is hereby directed to adYertise, by inserting a notide Pi some Paper having a' general circulation in the distriet, once a week for two consecutive weeks, call: ing upon all PersonS ; having claims against the district to file same with ; the' secretary, at his office in Darda-nelle, Arkansas, within thirty days." The contract between the commissioners of the rOad district and Rich Construction . Company proiiided , that said company should "cover the entire contract .with satisfactory surety bonds on ten-mile . 'sections," and the road district agreed. in said centract to advance .the prethiurnS on the surety bonds,' such advances to be repaid to the district .out of the 15 ,per cent. retained on the monthly estimates under said Construction contract. On February 3, 1920, the commissioners . of the road district issued certificates of indebtedness aggregating $17,800, and sold them to E. J. Hahn for that amount of cash. . . • On February 11, 1920, the district issued its check payable to Rich Construction 'Company for $17,800, being the amount tbe attorney for the district was told
ARK.] SOUTHERN 'SURETY COMPAN V V. DARDANELLE 761
ROAD IMPROVEMENT DISTRICT NO. 1. would be required to pay the premiums on the surety bonds which were to support the construction contract: This check was delivered by the' commissioners of the district, to the attorney for the district, • who took it.to Louis Rich of Rich Construction Company, who indorsed it, and the 'attorney for •the road district then took the check to the office of ,appellant in Little Rock, gave it to appellant's agent in charge, of said ; office and informed said 'agent what the check was for. Appellant's said agent:told said attorney for the district the bonds would be 'sent . up, which was, later, done.• • Copies of the.construction contract were -attached to and made a part of the surety bonds executed by appellant. • No work waS ever done under the . construction contract.. The Legislature of 1921;by act 275, 'approved March 17, 1921, 'repealed act 244, which created' said road district, and also . amendatory act . 63, and conferred jurisdiction on the chancery court of Yell County for 'the DarT. danelleDistrict 'to wind' Up the affairs of said district. Demand was made on 'appellant to pay back the $17,800 which had been paid to its agent, from the fundS of said district, which demand was refused," and hence this suit was 'brought. • It is contended by counsel for appellee that the construction contract, in support of which the surety bonds were executed, was not legally effective when entered into because the assessment of benefits had not then'been filed, so that it had not been determined that ' the benefits would exceed the cost of the improvements; and that said construction contract never became legally' effective, because, 'when final action was taken by the commissioners of said district upon the assessment of benefits, the benefits were found to be much less than the cost of the improvements to be made; that therefore the surety bonds never became effective, that no liability ever accrued, thereon, and that, the purpose • or which the
762 SOUTHERN SURETY COMPANY V. DARDANELLE [169
ROAD ' IMPROVEMENT DISTRICT No. 1. $17,800 was paid to appellant having failed, appellant should refund said money to appellee. •. • Counsel : for appellant . contended that act 63, ap-proved- February 6, 1920, 'confirmed and made final the assessment of benefits filed January 26, 1920; and, since the benefits as shown by said:assessment exceeded the cost: of the imProvement, the construction . contract, and the surety bonds in support thereof, became legal and binding;•and that the premiums on said 'bonds were then -• earned ;• and, further; that . 'said •act . 63 confirmect and legalized said construction contract and thereby made said surety bonds. effective: Appellant's counsel fnr-ther. :contend that, : even if said construction: contract was never effective, appellee cannot recover from appellant the money paid as ,premium on said bonds, first, because 'they contend there is no privity between appellant and appellee, and,:second,.because they •contend that, if t the.transaction in• whieh •The money belonging to the road district was .paid to appellant • was illegal, then appellee: would be in, pari delicto and cannot invoke the aid •of , ! the cdurts..tO recover : the money So paid. And appellant contends . that in no event can_ hppellee- recover thatportion of thc . $17,800 which was in excess of the actual amount of.the premiums on said bdnds, which •is shown by the proof to have been only $11,888.64. • • ,The construction contract, having been entered into before the assessment .of benefits had become .final, was not effective when made. Ilad•it been finally determined that the benefits exceeded the cost of the improvement, thacontract might have become binding. But, when the commissioners heard the protests, they reduced the- benefits until they were: far below • the coSt of • the improvements to be .made. • . Section .7 of act 244, which created this district, is hs folIow.• . - "The assessment: of benefits of said district shall . be filed with the county, clerk of Yell County, and the secretary :of • the board shall • thereupon give notice of its
ARK.] SOUTHERN SURETY COMPANY V. DARDANELLE 763
ROAD IMPROVEMENT DISTRICT 4 \1-'0. I. filing by : publication for two weeks in a newspaper published and having a bona . fide circulation in. that county: This notice may be in the following form: " The Dardanelle Road Improvement District Of Yell County. . "Notice is herebY given that assessthent of , benefits and damages of the above distria has been filed in the Office of the county clerk of 'Yell' County, Where it is open fo inspection. The' following land's, 'not in' the clistriet as originally laid out, have been assessed for the improvement: (Here will follOw description of the lands beyond the,. borders of the . district which have been ASsessed)'. , "All persons wishing to be heard on said. assessment will be heard lby the commissioners of , Said :di's:- trict 'at the county court room at Dardanelle, Yell ,County, on 'the day of. 192 - Secretary.." "On the day named' in said notice it shalLbe the dnty of the commissioners to meet .at the place named, and to !hear all complaints against said assessment, and to equalize and adjust• the same, and their determination shall be final, unless suit is . brought in the . chancery. court of the county where the lands lie within thirty days thereafter to set aside their finding." Section 8 of said act 244 is as follows:- "The . commissioners May, not oftener than once a year, reassess the benefits in said district; but in the event- the district shall have incurred an indebtedness or isSued bonds the total amount of assessed benefits 'shall : never' -be diminished." It is contended by counsel for apPellee that the phrase "until revised as provided in said act," at' the end of § 2 of act 63, amendatory of Said act , 244, refers 'to the revision of the assessment of benefits authorized in § 7 of said act 244 and that said act 63 did not Make final the assessment of benefits as filed, but : left the CoMmissioners empowered to hear protests and tio revise 'the assessment, as was done later.
.764 SOUTHERN SURETY COMPANY V. DARDANELLE [169 ROAD IMPROVEMENT DISTRICT No. 1. It is. the contention of counsel for appellant, however, that this concluding phrase "until revised as provided in said act," refers only to the annual reassessment provided for in § 8 of act 244. The following well known rule for construing statutes is applicable here : "The intention and meaning of the Legislature must primarily be determined from the language of the statute itself, and not from conjectures . alitoide.. When the language of a statute is plain and unambiguous and conveys a clear and definite :meaning, there is no occasion for resorting to the rules of . statutory interpretation and construction; the statute must be given its plain and obvious meaning. This principle is to be adhered to, notwithstanding the fact that the court may be Convinced by extraneous circumstances that the Legislature intended to enact something very different from that which it did enact. The current of authOrity at the present day iS in favor of reading stat-'utes accOrding to the natural and most obvious import Of the langnage without resorting to subtle and forced 'constructions for the purpose of either limiting or extend-s ing their operation . . If the words of the act are plain and the legislative purpose manifest, a contrary cOnception of it, however produced, cannot legitimately be permitted to create an obscurity to be 'cleared lip by construction, influenced by the history of the legislative labors which constructed the law. .No motive, purpose, or intent can be imputed to the Legislature in the enactment of a law other than such as are apparent upon the face and to be gathered from the terms of the law itself. A secret intention of the lawmaking body cannot be legally interpreted into a statute which is plain and ,unambiguous, and which does not express or imply it. Seeking hidden meaning at variance with the language ' nsed is a perilous, undertaking which is quite as apt to lead to an amendment of a law by judicial construction as it is t6 arrive at the actual thought in the legislative mind." 2:5 R. C. L. p. 961, § 217.
ARK.] SOUTHERN SURETY COMPANY V. DARDANELLE 765
ROAD IMPROVEMENT DISTRICT No. 1'. The language Of this statute is plain and unambiguous. The assessment of benefits as filed were to stand "until revised as provided in said act," not as provided in § 7 of said•act or in § 8 thereof, but "as provided in said act." To limit the application of ,this phrase to any one section of act 244, it is.necessary to read into it words of ; limitation not written therein by the legislators. .. The fact that the concluding phrase of the section of said act 63, which deals with the confirmation of assessments, is couched in language substantially different from that used in corresponding sections of other curative acts, showS that the Legislature did not intend • the confirma= 'tion in said act 63 to haVe the same effeet as in other Cura-hVe actS. In , act 115 of the I917Legislature, passed upon bY this . court in Faver V., -Wayne, 134 Ark. 30, the assessmentS, is couched in language substantially different frofn be ' ordered according . to law." ' Identically ihe same language , is used in aCt 43, approved February 4, 1020, Cons , tr . u ed in Gibson v Spikes, 143 Ark. 27.4. . , In act 398 of 1021, construed in Road Imp.Dist. No: 6 v. St. L. S. F. R. Co., 164 Ark. 444, it was provided that the hssesSments shonld stand "until a new dssesment hiay be made as provided 'by laW." And in Western Latarence Road Dist. v. Friedman-D'Oench Bond'Co:, 162 Ark. 362, the language waS "until a new ra'ssessMet is 'ordered bY the board in the Manner prOvided by the law by which said district was Created." But in the curative and arnendatOry act, NO. 63 involved in the instant case, 'the assessments . were : * tO stand, not until a new assessment was made, but "until revised as provided in said act" creating the .diArict. [lad it been intended by said act to . cht off thO jibmier Of 'the coramissioners to revise the aSsessinents' as' pr'i)- vided in'§ 7 of the creative : act, and leave 'only the po*.er -to make the annual re-assessments provided for in § 8 Of said creative act, the Legislatare would, doubtless,
766 SOUTHERN SURETY COMPANY V. DARDANELLE [169 ROAD IMPROVEMENT' DISTRICT : NO. 1. haVe used language clearly ,conireying that meaning, as was done in the 'other curativo acts above xeferred to. But, since the-assessments here were to stand . only "'until revised," and not : until new assessments were made, it obvious the Legislature intended onlY to relieve the nee-essity of Malang a new asSesSment to meet the . ModificAL tions of the improvements provided for in act 63', and to leave to the commissioners '. all the powers and duties to revise the assessments that Were delegated to them in the 'creative act. Moreover, act 63 made very substantial chAnges in the roads that were to be iinprOved. ThiS fact shOnld be considered in determining w " hether the L e s g I a i t ure meant, .by act 63, to make final the assessment of benefits filed before the passage of said act, Or tO leave' the commissioners empowered to revise then" to conform to the roiites Of the roads aS modified by ! said Act 63.. It is n'at probable that the General Assembly intended. to , , cu O ff the power Of , the comMissioners to reviSe the' assess-thents by the very act'which, by making material change§ in the improvements to be made, increased the pr613A-bility that such revision would be necessary. We construe the concluding phrase of § 2 of act 63 As preserving to the commissioners -of said. district all, the power and duty conferred upon , them in . act 244 to revise the assessment of benefits, both as provided in; §!7 and in § 8 of said0 act. We therefore hold that the:act of the commissioners in reducing 75 per cent, pf the 'assessment of benefits, as filed, was legal. It follows that the benefits, as finally deterMined, were less than the ' cost of the improvements to be made, and that the construction .contract and the surety bonds in support thereof ,were. never legally effective, and that no liability on said surety bonds ever attached, and that the payment of the bond premiums by the commissioners was , We hold that said contract and bonds Were never legally binding or effective for another reason: Act '63
ARK.d SOVTHERN• SURETV 'COMPANY v. DARDANELLE' 767
ROAD IMPROVEMENT DISTRICT Nol 1. Was enacted after thiS construction contract was entered into. As has already been said, act 63 substantially changed the roads to be'improved. 'Oertain laterals *ere Otnifted, and one additional lateral was added. While the' Iiegislature might bind the road district, a creature of the LegiSlature, by such a material change, in the Stbject-: Matte , r of th . e contraet, it cetild not bind the construetien company to snch change. • In Western Randolph County Rd. Imp. , pist... y. Clifford 5 ,15, 0 Ark. 94,:it was held: "Where II. agreed in writing to purchase the entire anticipated bond issue of a road improvement district created by a special act, and deposited a: certified check 'to guarantee Compliance with ,the terms of the contract,' .the check to be held 'in trust until the bonds were tendered in compliance with the contract, and subsequently the Legislattire materially changed the act creating the district, and thereby substantially altered the contract itself, ' H's estate 'was absolved ' from liability on the certified: check." .We 'think 'the principle aniMnnced in ' that Case Con-trels this bile : The bonds fel . 'Which aPpellee paid the Preminms never having become binding or effectiVe; and the purpose for which said money waS' paid having failed,' it remains to be determined whether appellee has the, right 'to, recover said 'money frOm. appellant. ' We thihk the execution and delivery of the bend& by appellant;' making appellee the obligee therein and making the:. construction contract between appellee and the' conl struction company a part of each bond, carrYing a clause to the effect that appellee was to advance the 'premiums on the bonds, coupled with 'the : actual 'payment of the meney by a p pellee to appellant, 'establishes privitY betWeen appellant and appellee ; and, so holding,a is' not n'ecessary for us to decide whether privity between the parties is essential to recovery of money from the' persdn into whose hands it has been traced, by the party paying it, where the purpose for which it is paid has! failed:
768 SOUTHERN SURETY COMPAN Y V. DARDANELLE [169 ROAD IMPROVEMENT DISTRICT No. 1. It is contended thy appellant that, if it is held liable to appellee for this money, it might in some future action be held liable for the same money to Rich Construction Company; and that, in the event of any such action against it :by Rich Construction Company,, the judgment in this case could not be pleaded as a defense, said construction company not being . a party:to this suit. But the parties to fhis suit are entitled to have it determined aCcording to their respective rights and equities in- the subject-Matter 'thereof, -without regard to any claims that might be lat6r 'asserted against either of theth in respect to said matter ; and,'if either felt that any other party was essential to : this litigatiOn, that 'objection should have been raised in the trial court. There having , been no objection raised in the lower court on account of defect of parties, that objectiommust be held to have been waived. Less v. English,, 75 Ark..288. Counsel for appellant contend that; if it be held that the • contract was illegal, the read district was' up:tally at fault in being a pdrtY : thereto, and cannot invoke the aid of t4e courts , to recover the money paid out , by , it in pursuance of such illegal contract ; and cite the case of Sr ecur-ity Mutual Life Ins. Co: v. Little, 119 Ark. 498 1; in support of their contention. , , • , But , it was' ne, fault of the district itself—the tax payers—that an illegal. contract was entered into, and money unlawfully expended. ' That was the fault of the commissioners. It is to protect the taxpayers against harmful acts of:their commissioners that such contracts are held to: be illegal. If the beneficiaries of such contracts ;could defeat the recovery of the taxpayers' funds paid them by : the commissioners by setting up as a defense the very fault of the commissioners that caused the loss of funds, then it would afford the district no protection to deny the cominissioners the power to make such contracts. In Seen,rity Mutual Life Ins. Co. v. Little, supra, it Was not the schooldistrict that was suing for the recovery
ARK.] SOUTHERN SURETY COMPAN1 v. DA RDANELLE 769
ROAD IMPROVEMENT DISTRICT No. 1. of the , money, but the directors of the district . suing •personally for their . own private funds which they had expended in pursuance of the contracts'held to be against public policy. It has been generally held that:the rule that the courts will not enforce illegal or immoral contracts where the parties are in pari delicto has no application to contracts of a corporation void merely because malum prohi-bitum, or ultra vires. In re Citizens' Mutual Fire Ins. Co., 162 Mich. 466. It is finally 'contended by counsel for appellant that, since the proof , shows the , actual . premiums on the bonds aggregated only $11,888.64, appellee should not be per-mi.tted 'to recover the. excess abOve ,that anaOunt: .• But the • attorney for the district testified that he delivered the $17,800-check to the agent, Of appellant and 'informed him that . it . Was . to PaY the prethinm on -, these bonds. This agent of appellant testified that he cashed -the check, deducted his commission, and turned the balance over to another agent of appellant, who is now dead. There is ,evidende to show that the net athount . left out of a 'total - premiuna of $11,88 . 8.64 after dedicting the agent's commission of 15 per cent. is' all that was• sent by the agent to the home office of appellant But' there is no evide'nce 'as to what' became of- the residue Of the .$17,800 over , and above the $11,88.64 accOunted for by •appellant'S 4,ie0. This; agent in accepting this Money .was acting „within his. apparent authority. Appellee having traced the entire $17,800 • into the hands of alipeilant's agent and having informed said agent .that it was to pay ihe premium on these bonds, we think it devolved upon appellant to prove that this excess pasSed out of its hands 7 Payment of this MOney to appellant's agent wa§, in legal effect; payment to appellant. If appellant's agent failed to account to appellant properly or misappropriated some of the money, it is a matter between such agent and appellant.
We think the decree of the chancery court, awarding appellee judgment against, appellant for $17,800 with :lawful interest, is correct, and .it is therefore affirmed: SMITH, J., concurs, except as to recovery of :excess over the actual premium of the bonds. HART, J., disqualified.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.