356 LEWIS V . FORREST CITY SPECIAL IMP. DISTRICT. [156 LEWIS v. FORREST CITY SPECIAL IMPROVEMENT DISTRICT. Opinion delivered January 8, 1923. MUNICIPAL CORPORATIONS — IMPROV EMENT DI STRICT. — S p eCi al Acts 1921, p. 1358, providing for the formation of a special improvement district to take over the property of three previously organized improvement districts in a city, is not invalid on the ground that the Legislature cannot authorize the creation of a local improvement district with power to pay the debts incurred by the city in the operation of the improvements constructed by the old districts; nor on the further ground that such indebtedness includes interest on the city's obligations, which is forbidden by law, since the act contemplates that only legal obligations of the city shall be paid. 2. MUNICIPAL CORPORATION S—ORDI NAN CE—FAIL URE OF MAYOR TO SIGN RECORD.—Failure of the mayor to authenticate a duly passed and recorded ordinance, as provided by Crawford & Moses' Dig., § 7499, does not defeat the ordinance; the statute merely pro-- viding for the method of making a record. 3. MUNICIPAL CORPORATIONS — PROOF OF ORDI NAN CO.—Introduction of a certified transcript from a city clerk's record, showing the passage of a certain ordinance, held sufficient to establish the legal enactment of the ordinance, though the record was signed by the mayor after his term of office expired. 4. MUNICIPAL CORPORATIONS—ORDINANCE—PAROL ArrACK.—Where the record of city ordinances kept by the city clerk, together with the journals showing the progress of the ordinances through the council, show a valid ordinance, they cannot be attacked by parol evidence. 5. Mu NICIPAL CORPORA TIO N S—ORDIN AN CE--RECORD. — The record of a municipal ordinance was not invalid because, instead of actually transcribing it on the record, the pages containing the copy were pasted into the record. 6. MUNICIPAL CORPORATION S—ORDI NAN CE—DISQUALIFI CAT ION OF MEMBERS OF couNcIL.—The fact that some of the members of a city council had signed a petition for the formation of a local improvement district did not disqualify them to join in the action of the council in passing the ordinance creating the district; as the members acted in a - legislative capacity, and personal interest did not disqualify them. 7. MUNICIPAL CORPORATIONS—LOCAL I M PROVE MEN T—PET IT ION S.— Where a special act providing for the creation of a municipal improvement district in accordance with the general statute contained a special limitation of indebtedness, it was not nec-
ARK.] LEWIS V. FORREST CITY SPECIAL hi p . DISTRICT. 357. sary that the petitions for the improvement required by the general statute should express the limitation of indebtedness provided by the special act, as the petitions carry with them the limitation expressed in the special act. 8. MUNICIPAL CORPORATIONS—VARIANCE BETWEEN PETITIONS.— Where the first petition for the formation of a local improvement district did not express the statutory limitation of expenditures, the fact that the second petition stated the maximum total cost did not constitute a variance from the first petition nor invalidate the proceedings for the formation of the district. 9. MUNICIPAL CORPORATIONS—UNAUTHORIZED SIGNATURE OF CORPORATION.—Where a petition. for a special local improvement district was signed in the name of the corporation by its president and manager, without express authority from the board of directors, the board of directors could not, after enactment of the ordinance pursuant to the petition, validate the signature by ratification, since there must be a majority in value of the property represented by authorized signatures before the council could pass the ordinance. 10. MUNICIPAL CORPORATIONS—SIGNATURE OF CORPORATION—AUTHORITY.—Where the president, manager and principal stockholders of a corporation signed the name of the corporation to a p -eti-tion for a special local improvement district without express authority from the directors, the corporation was bound where such officer had the exclusive management of the affairs of the corporation, and was permitted to exercise full authority to do anything which in his judgment called for action for its benefit, in effect amounting to a holding out of such officer as the corporation itself. 11. MuNICIPAL CORPORATIONS—PETITION FOR IMPROVEMENT—PRESUMPTION AS TO SIGNATURE.—The appearance of a signature on a petition for a local improvement district raises a presumption that it was placed there by authority. 12. Mu NICIPAL CORPORATIONS—LOCAL IMPROVEMENT—PRESUMPTION OF BENEFIT.—There is a presumption that a proposed local improvement to be made through the organization of a local improvement district under the terms of a special statute would result in a benefit to all of the real property in the district. Appeal from St. Francis Chancery Court; A. L. Hutchins, Chancellor; affirmed. Walter Gorman, for appellant. The ordinance laying off the district was not legally passed. 80 Ash. 108; 28 Cyc. 355; 71 Atl. 211; 10 Atl,
358 LEWIS V. FORREST CITY SPECIAL IMP. DISTRICT. [156 162; 80 N. W. 564; 50 N. W. 316; 71 N. W. 189; 54 N. E..1081; 90 N. E. 583 ; 25 N. J. Law 399 ; 19 R. C. L. 892. The signing of the ordinance by the mayor, after his term of office expired, was of no effect. 93 N. W. 510. Courts will not take judicial notice of ordinances. 68 'Ark. 483; 108 Ark. 24. The ordina•e was never recorded as provided by law. C.. & M. Digest, § 7499 ; 3 Pa. -Co. Ct. Rep. 480. It is improper and illegal for • a member of a municipal council to vote upon any question in which he is personally interested. 1.9 R. C. L. 897 ; 67 Atl. 564; 44 L. R. A. 728; Cooley's Constitutional Limitations (7th ed.) 392. Mann & Mann, for appellee. A mere delay in the mayor affixing his signature tO an ordinance will nOt defeat the express wishes of the taxpayers. His ' signature is merely a ministerial act as a means of authenticating the record. C. & M. Digest, § 7499; -28 Cyc. 357; 19 R. C. L. 892. The presumption is_that the signing of the petition by the officers of the corporations was authorized. 144 Ark. 249; 79 Ark. 338 ; 89 Ark. 435; 116 Ark. 520; 103 Ark. 283. MCCULLOCH, C. J. It appears that there have been organized in the city of Forrest City three local improvement districts under general statutes (Crawford & Moses' Digest, § 5647 et seq.), designated, respectively, as Forrest City Improvement District No. 1, Improvement District No. 2 of 'Forrest City, and Improvement District No. 3 of Forrest City, for the purpose of constructing a waterworks plant, an electric light plant, and a sewer system within the territory of the respective districts, and, after the completion 'of the improvements, they were taken over, for operation,. by the city council. The city has incurred in the operation of said districts an unpaid indebtedness of $51,013.76. The General Assembly of 1921 enacted a statute authorizing the organization, under general statutes, supra, of the real property in the city of Forrest • City, or in any part which includes the whole of the territory em-
ARK.] LEWIS V. FORREST CM: SPECIAL IMP. DISTRICT. .359 braced within the three districts heretofore referred to, into an improvement district to be known as " The For-rest City Spe3ia1 Improvement District," and with authority to "take over and be the owner of all the real and personal property and property rights and choses in action now belonging to Forrest City Improvement District No. 1, ImprOvement District No. 2 of Forrest City, and Improvement District No. 3 of Forrest City, and shall assume all debts and Obligations of said districts, and shall have power to repair; enlarge, overhaul, erect and in every manner equip the present plants belonging to said three improvement districts heretofore existing, or to purchase and install new machinery and power plants, erect •a14- suitable buildings, to purchase real or personal property, to sell or trade any real or personal property now owned by : either of said districts or hereafter acquired by it, to enlarge and extend water, sewer and light facilities, lay additional water-pipes or erect additional electric lines, or lay additional: sewers, as needed." Another section provides that • the new district "shall assume and discharge all liabilities incurred by the city of Forrest City . in the operation of any of said plants, and in the improvement thereof." The statute provides that the district shall be organized pursuant to the general statutes and be controlled by said statutes, except as otherwise specifically provided in the new statute. The statute contains a recital that "it has been found advantageous to consolidate the operations of said districts, treating them as a single district for the purpose of economy and efficiency in their operation," and that, on account of the growth of the city, "there is much territory requiring water, electric light and sewers which . is not served by said districts, and the water, electric light and sewer plants need large repairs, reconstruction and great extensions in order to serve the people of said city." Special Acts, 1921, p, 1358. Pursuant to the terms of this statute, Forrest City Special Improvmeent District was created by ordinance
360 LEWIS V. FORREST CITY SPECIAL IMP. DISTRICT. [156 upon the petition of ten owners of real property, in accordance with the general statutes, supra. The second petition asking for the improvement, and purporting to be signed by a majority in value of the owhers of real property in the proposed district, was filed with the city council, and, after notice, it was fomid to contain a majority, and an ordinance was enacted authorizing the construction of the improvement and imposing the cost on -the real property in the district. The two appellants, who are owners of real property in the district, instituted this suit in the St. Francis Chancery Court to restrain further proceedings under the ordinances, and they attack the validity of the statute itself, also the validity of the ordinances of the city, as well as raising the question of the majority in value of the property owners having signed the second petition. On the hearing of the cause on testimony adduced by each side, the chancery court dismissed the complaint for want of equity, and an appeal has been prosecuted. An attack is made. on the validity of the statute on the sole ground that the Legislature could not authorize the creation of a local improvement district with power to pay the debts incurred by the city in the operation of the improvements constructed by the old districts, especially where the indebtedness of the city included interest on notes or other written obligation. As to the qnestion of authority to pay interest, it can be said that no such authority is expressly conferred in the statute. The statute merely provides that the new district, when organized, "shall assume and discharge all liabilities incurred by the city _of Forrest City in the operation of any of said plants, and in the improvement thereof." This language refers, of course, to valid and enforceable obligations of the city, and the new district is not bound to pay any other asserted liability. We cannot adjudicate in advance what will be treated as valid obligations, as the district has never got far enough along to aCtually undertake to assume or pay the obliga-
ARK.] LEWIS v. FORREST CITY SPECIAL IMP. DISTRICT. 361 tions of the City. Owners of propertY would, of course, be entitled to be heard in court to restrain any unauthorized act of the commissioners in attempting to pay an legal obligation of the city. This statute was passed for the purpose of enabling the new district formed under its ferms to take over the affairs of the three former districts and to assume their obligations, and, as a part of the adjustment of equities in taking over the property of the old districts, the new one is required to asSurrie. t,he indebtedness incurred by the city in operating these districts while under its control. There is no legal objection to the inclusion of these things in the taking over of the old districts by the new one, since it is necessary to operating under the new district that the assent of a majority in value of the , owners of property in the district be obtained. The attack upon the validity of the statute is therefore unfounded. it is next contended that the second ordinance of the city council authorizing the construetion of the improvement and imposing the cost on the real property in the district is void because it :was not properly recorded and authenticated by the signature of the mayor, as provided by statute. Counsel for appellants relies on the statute, which reads as follows : "All by-laws or ordinances shall, as soon as may be after their passage, be recorded in a book kept for that purpose, and be authenticated by the signature of the presiding officer of the council and the clerk ; and all bylaws or ordinances of a general or permanent nature, and of those imposing any fine, penalty or forfeitdre, shall be published in some newsParer of general circulation in the corporation. Provided, in incorporated towns where no newspaper is p ublished, written or printed notices posted u p in five of the most public places in said . corporation shall be deemed a sufficient publication of any law or ordinance for incorporated towns; and it shall he
362 LEWIS V. FORREST CITY SPECIAL IMP. DISTRICT. [156 deemed a sufficient defense .to any suit or prosecution for such fine, penalty or forfeiture to show that no such publication was made." Crawford & Moses' Digest, § 7499. The city clerk was introduced as a witness, and produced a certified transcript of the ordinance, purporting to have been taken from the record, and also produced the record itself. The ordinance in question appeared on a typewritten page or pages pasted into the record kept for the purpose of recording. ordinances, and this was signed by the mayor arid city clerk, that is, by Mr. Grobmyer, the person who was maSTor at the time the ordinance was passed. It was shown by oral testimony that Mr. Grobmyer's term of office expired within a day or two after the ordinande was passed,- and that he did not sign the record until after he went out of office. Counsel is mistaken in his assumption that the signature of the mayor to the ordinance is essential to its legal enactment, or that the signature of that officer to the record is essential to its proof. The maYor of a city has authority under the statute (Crawford & Moses' Digest, § 7701) to veto an ordinance, but there is nothing in the statute requiring him to approve it or sign it before' it becomes effective. The statute quoted above merely provides for a method of making a . record of ordinances of a city or town similar to the record of enrolled bills enacted by the Legislature and deposited with the Secretary of State. The signature of the presiding officer of the council is merely for the p urpose of making a record, but the failure te sign this does not defeat an Ordinance which has been duly passed. Another section of the statute (Crawford & Moses' Digest, § 7497) provides what shall constitute proper proof of by-laws and ordinances of a city council. The Provision is that printed copies of such by-laws and ordinances published . under authority, and transcripts of such by4aws of ordinances recorded in any book or entered on the minutes . or joUrnal "kept nnder the direction
ARK.] LEWIS V. FORREST CITY SPECIAL IMP. DISTRICT. 363 of such municipal corporation, and certified by its clerk, Shall be received in evidence for any purpose," etc. In the present case there was introduced a certified transcript from the record showing the recorded ordinances as passed by the city council. This is sufficient evidence to establish the legal enactment of the ordinance, and its effect is not defeated by showing that the record had not been signed by the Mayor while he was acting as .such. The record of the ordinances is kept in the hands of the city clerk, together with the journals showing the progress of the ordinances through the council, and vhere these records, taken together, show a valid ordinance, they cannot be attacked by. parol evidence. Robert's v. Street Improvemnt Dist. No. 2 of Morrilton, ante p. 248. It is also contended that the record of the ordinance is invalid because, instead of actUally transcribing it on the record, the pages containing the copy were pasted into the record.- This was sufficient compliance with.the statute. Carrier v.-Comstock, 108 Ark. 515. Some of the members . of the city council signed the Petition for the_ construction of the improvement, and it is contended that tbis disqualified them from joining in the action of the council in passing the ordinance pur-.suant to .the petition. The city cow:mil, in passing on the petition and enacting the ordinance, acts in a Jegislative _capacity, a.nd personal interest does riot disqualify the members of the council. We think that there-is nothing in the contention that the fact that some of the members of the council signed tbe petition rendered the action of the council invalid. SeCtion 9 of the statute creating _the_ district provides a limitation in the expenditures. "for the extension, repair and reconstruction Of said water, light and sewer plants tO thirty per cent. of the assessed value of . the real property within the district, as shown by the last county assessment, but said thirty per cent. shall not include the interest on money borrowed, hot debts of the
364 LEWIS V. PORREST OITY SPECIAL IMP. DISTRICT. t156 city of Forrest City or its water and light department heretofore incurred, nor the debts now existing against said" former districts. The original petition for the creation of the district did not express a limitation on the cost, but merely asked fOr the creation of the district in accordance with the statute. It was not essential to the validity of the proceedings that there should be any limitation , expressed in the petition, for the petition followed the law and carried with it any limitations expressed in the law. The seeond petition was identical in language with the original petition, so far as the purpose of the organization was concerned, but it contained the following clause with respect to limiting the cost of the improve— ment: "We further petition and pray that the cost of such improvements so undertaken be assessed and charged upon the real property situated within said district, the total cost of the undertaking herein, exclusive of interest, not to exceed the sum of $11.5,000." * This limitation upon the cost of the improvement certainly did not constitute a variance from the original petition so as to avoid thOproceedings. It is not necessary to limit costs of an improvement in the petition signed by owners of the property asking for the improvement, but the fact that the property owners do express smch a restriction in the petition does not avoid the proceedings. It is unnecessary to discuss the full effect , of the limitation expressed in the petition, for the only question we are called on to decide now is whether the inclusion of that expression constitutes a departure from the purposes expresSed in the original petition, and whether it affects the validity of the proceeding, and we hold that it does not constitute such a departure, and does not affect the validity. The final contention is that the second petition does not contain the signatures of the owners of a majority in value . of the real property in the district.
ARK.] LEWIS V. FORREST CITY SPECIAL IMP. DISTRICT. 365 Appellants introduced proof in an effort to show that. many of the signatures to the petition were unauthorized, and that some of the persons who signed did not own any real property. in the district. During the progress of the trial the parties on each side obtained the consent of the court for three persons who were familiar with the property-in the locality and the persons signing the petition, as well as the ownership of the various pieces of property, to check over the list, in an effort to agree upon the.question as to the valuation of the property of those who had properly signed the petition, so as to eliminate controversy in open court and reduce the controversy to a determination of the qnestions about which there were irreconcilable differences of opinion. Upon the report of these.persons, after examining the list carefully, it was conceded tbat the value of the property owned by tbe persons and corporations whose names appeared Signed to the petition amounted to $536,000, in round numbers, , and that the total valuation of the real property in :the, district was found to be $1,014,000 in round numbers. So, in order to constitute a majority, there must be found the signatures of owners . of property in excess. of $507,000. It appearS froth an examination of the petition. that local business .corporations,. the names of which were signed to the . ,petition, owned property set-opposite the . respective names of each corporation in the following list : Forrest City Grocer Co. $14,000 Fussell-Graham-Alderson Co 2,150 The Vaccaro-Grobmyer Co 2,620 The Merchants Grocer. Co 2,000 Forrest City Compress Co 2,000 Forrest City Box Co 2,400 The Planters' Bank & Trust Co 4,250 The Forrest City Gin Co. 2,600 The Bank of Eastern Arkansas 3,000 The B. P. 0. E. Lodge No. 1219 3,000 The First Nat'l Bank of Forrest City 3,500 Making a total of $41,520
Ran LEviS v. FORREST CITY Si'ECIAL iM P. DISTRICT. [1.56 Appellants contended below, and contend now, that, according to the evidence adduced, persons who signed the nam6s of these corporations had no legal authority • to do so, and that the names should be stricken from the petition, and that the property owned by these -corporations should not be counted in making up the majority. It is thus seen that if_ the contention of appellants is sound and. the total valuation of the property owned by the corporation be stricken from the list, it leaves the petition about $12,000 short of- the requisite amount to cOnstitute a majority. • The proof shows that all the other signatures necessary to make up the amount of approximately $495,000, were authorized, and were properly signed to the petition. It is unnecessary to discuss the circumstances under which the naMes of all these corporations were signed, but we will discuss a sufficient number of the items to be determinative of the present controversy. The largest corporation property owner is the For-rest City Grocer Company, with a valuation on its real - property of $14,000. This is a corporation carrying- on a merchandise business in the city of Forrest City, and Mr. A. B. Nimocks, who signed the name of the corpor-. ation.to the petition, is the president and manager and principal stockholder. There are seven directors, all living in Forrest City except one, who resides in a town a few miles distant. Mr. Nimocks testified that he talked to a majority of the directors, and they approved it. He testified further that he had the management of the general affairs of the corporation and attended to all of its business, including the.assessment of property for taxes. He testified that he usually signed all necessary papers concerning the business and property of the corporation, without obtaining express authority from the other directors. He stated that he did not remember that he had ever had occasion to sign a petition for an improvement before this one. There was no formal meeting .of the
ARK.] LEWIS v. FORREST CITY SPECIAL IMP. DISTRICT. 367 board of directors for the pnrpose of authorizing Nim-ocks to sign the petition,.nor was there any such formal meeting held until during the progress of the trial in the chancery court. During a suspension of the trial this corporation, as well as all the others whose signatures appeared on the-petition, held directors' meetings, . and formal resolutions were passed ratifying -the action of the respective officers who had signed their names. Counsel for appellee insist that that was a timely ratification in each instance, but this court reaches the co• elusion that it was too late to validate the signatures by ratification after the enactment of the ordinance, for the reason that there must be a majority in value of the property represented by authorized signatures before the council can pass the ordinance. We are of the opinion that the evidence is sufficient to show that the signing of the petition was -within the scope of the general . authority which the directors, by continued custom, permitted the person who signed the petition to'exercise, and that the corporation as well as all others are bound by his act. It appears from Nim-ocks' testimony that he had exclusive management of .the affairs of the corporation and was permitted to exercise full authority to do anything which, in his judg-: ment, called for action for the benefit of the corporation. In other words, there was a course, of conduct permitted on his part which amonnted to holding him out as. the corporation itself, and under these circumstances we think that the corporation is bound. Estes v. G.erman Natl. Bank, 62 Ark. 7 ; Stiewel v. Webb Press Co., 79 Ark. 45; Winer v. Rank of Blytheville, 89 Aik. 435; Wales-Rig gs Plantations v. Caston, 105 -Ark. 641 ; C. L. Kraft Co. v. Grubbs, 116 Ark: 520. • This court, in dealing with this subject in the case of Estes v. German National Bank, supra . , speaking of the • authority of . the board of directors, said: " They can do so by permitting the director.S to'-establish a habit or usage of assenting separately to the
368 LEWIS V. FORREST CITY SPECIAL IMP. DISTRICT. [156 making and performance of contracts, by their agents. By permitting such usages or habits to be . formed by a long course of business, they adopt and become bound by them, so long as they acquiesce. If this were not so, great injustice might be done to parties contracting with them in their usual way." In Winer v. Bank of Blytheville, supra; we said: " The rules governing the authority of an agent to act for a private business corporation, and the proof thereof, are in many regards the same as between agents of natural persons. The authority of an officer to act for a corporation may be established by proof that he was held out to the public as possessing those powers which he* exercised in a given case, or that the corporation has acquiesced in or ratified such acts." Applying this rule to the present case, we think it is clear that Mr. Nimocks had authority to bind the corporation. The appearance of the signature on the petition raiSed the presumption that it was placed there by authority. Malvern v. Nunn, 127 Ark. 418 ; Walton v. Light Improvement Dist., 144 Ark. 249. • There is also a presumption that the proposed improvement will result in benefit to all the real property in the . district, and the evidence shows that Mr. Nimocks *as authorized to act for the corporation in all matters in which it was interested or from which it could receive benefit. The addition of the property of this corporation to the amount of other property Which is rePresented On the petition by authorized signatures runs the valuation up to an amount about $2,000 in exoess of a majority of the property in the district,. but there are seVeral other corporations in precisely the same attitude with respect to the manner in which their signatures were attached. For instance, the signature of the Fus-Sell-Graham-Alderson Company was signed by Mr. Al-derson, who testified as a witness in the case, and stated that he was the vice-president and the manager of the busineSs, that he had authority from the directors to
ARK.] LEWIS V. FORREST CITY SPECIAL IMP. DISMRICT. 369 handle any business matter which came up with reference to the property and affairs of the corporation. Mr. James Fussell was the president, and expressly consented to the signing of the petition, as did the other directOrs, except one who was sick at the time and could not be consulted. He testified ;that it had been his custom to sign deeds without any special authority from the board. The testimony of Mr. Alderson was sufficient, we think, to show that 'he was permitted to pursue a course of conduct with respect to the affairs of the corporation which fairly implied the authority to do anything which affected the interests of the corporation in regard to its property and affairs. The name of the Vaccaro-Grobmyer Company was signed by Mr. G-robmyer, who was the actiVe manager of the business. He testified that there were three stockholders and directors — himself, Mrs. Pearl Vaccaro, and Gazzbla Vaccaro,: and that the business was under the active control of himself and Gazzola Vaccaro ; that the latter expressly approved his signing 'the petition, but that Mrs. Vaccaro was not consulted, as she was absent at the time the matter came up. , The testimony of the witness shows that this corporation, in which only three persons were interested as stockholders and directors, was under the active management of two of them, Who did whatever was 'necessary to further the interests of the . corporation in regard to its property and affairs, and that these two participated in signing the petition. We think that; under the rule already announced, there is abundant testimony to show that there was authority on the part of. Grobmyer to sign the petition. This carries the amount of valuation represented by the signatures on the petition considerably above a baie majority, and it is unnecessary' to discuss the circum: stances , under . which the names of the Other corporations were signed. It may . be said, hoWever, in passing, that in most, if not in all, instances, the evidence was sufficient to establish authority for the signatures of the
370 [156 names of the other corporations. It follows that the court was correct in finding that there w ' as a majority-in value shown on the petition. The decree is therefore affirmed. " WOOD and HART, JJ., dissent.
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.