Court Opinion

ID: 7812615
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:14:33.492926+00
Date Added: 2024-06-11T16:28:31.048579
License: Public Domain

-McCulloch, C. J., (dissenting). My conclusion is that the court erred in directing a verdict against the district for the recovery of the sum of money ($12,500) advanced on the purchase of bonds. If there was a valid contract for the sale and purchase of the bonds, as contended by the district, and as a majority of the judges now hold, then the district was entitled to submit its counterclaim for damages on account of the breach of the contract by appellee. On the other hand, if there was no valid contract for the sale of the, bonds, as I believe to be the case, then appellee is not entitled to recover the amount mentioned, for the reason that it refused to comply with the agreement to purchase the bonds. And since the money was advanced, not as a loan, but as a mere advance on the purchase of bonds, appellee should not be permitted to demand the return of the money without complying with the agreement upon which the money was advanced. It seems clear to me that, whether the contract for the purchase of the bonds was valid or not, appellee should not be permitted to repudiate its agreement and, at the same time, demand a return of the money advanced conditioned upon that agreement. I have failed to see any contradiction of terms involved in this feature of the controversy, as stated by the majority. It is a simple principle of justice that a party cannot repudiate his contract and at the same recover upon it, and, even if tho> contract was valid for any reason, and the money was advanced on the contract, the party who refuses to perform cannot recover it back. The party should not permitted to repudiate one part of the contract and claim the benefits under another part. It is unimportant to determine from the evidence whether Turner was appellee’s agent or no't, for it is undisputed that the money was advanced on the purchase of bonds, and, even if Turner acted for himself in the transaction, appellee knew that the money was not a loan, but was merely an advance on the purchase of bonds. In fact, the written instrument upon which appellee instituted this action shows on its face that it was for money advanced on the purchase of bonds. I am further of the opinion that the majority reached the wrong conclusion in holding that there was a valid contract for the sale of the bonds, and that there was an issue to be submitted to the jury as to the right of the district to recover damages for the alleged'breach of the contract by appellee. My interpretation of the decision of this court in Hopson v. Hellums, 111 Ark. 421, is that, under the statute authorizing the commissioners of the district to borrow money and issue bonds, there was no authority to enter into an executory contract for the sale of bonds. The authority thus conferred is limited to the borrowing of money and the issuance of bonds as the evidences of the indebtedness. In the case referred to there had been a contract between a drainage district and Hahn & Carter for the construction of an improvement, which the court held, in the second opinion in the case, to be a valid contract, and there was also a contract for the sale of the bonds. The bonds had been prepared and signed and1 delivered to a bank in Pine Bluff for delivery. Subsequently the Legislature enacted a statute making it unlawful for the commissioners of the district to issue bonds except upon petition of a majority of the landowners, and it was contended (in fact the trial court so held) that the statute was void because it impaired the obligation of the contract. We held, however, that there was no impairment -of the obligation of the contract, for the reason that the contract was not binding on the district until the money was actually loaned and the bonds delivered. We held, in effect, that there was no authority to create an obligation by making an executory contract to borrow money and. sell bonds. In disposing of the matter, we said: “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 in 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 4in 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 act of March 8, 1913. ’ ’ After careful reconsideration of the matter with the other judges, I am unable to escape the conclusion that the plain and necessary effect of that decision was to hold that there was no binding obligation until there was an actual lending of money and issuance, and delivery of bonds. I think that is the correct interpretation of the statute, for mere authority to borrow money and issue evidences of the debt does not authorize a preliminar}7 executory contract to borrow money. In other words, there is no contract between the parties until the money is actually borrowed, and that is precisely what was said in the opinion in Hopson v. Hellums, supra. My conclusion upon the whole case is that appellee was not entitled to recover for the money advanced, for the reason that it refused to accept bonds which had been tendered, and that, on the other hand, appellee is not liable for damages for breach of the contract, which was invalid, and that the case should be disposed of here by reversing the judgment and dismissing both the original complaint of the district and the counterclaim of appellee. Mr. Justice Hart concurs in these views.