MCGREGOR, County Collector, v. MILLER,
County Treasurer. (No. 329.)

Supreme Court of Arkansas. April 4, 1927.

Rehearing Denied April 25, 1927.

1. Time 4-Fiscal year for determining whether allowances by county court exceeded county revenues held to begin January and end December 31 (Acts 1925, p. 608; Const. Amend. 11).

Acts 1925, p. 608, enacted to make effective the provisions of Const. Amend. 11, authorizing counties, cities, and towns to refund their existing indebtedness by issuing bonds, having declared in section 7 that fiscal year shall begin on January 1 and end on December 31 for such purposes, the fiscal year as thus declared will be held to be the fiscal year for all purposes under the amendment, including determination whether allowances by county court exceeded county revenues during fiscal year.

2. Counties 167-County warrants are not "negotiable instruments," and are taken with notice of purpose for which issued and order authorizing issuance.

County warrants are not negotiable instruments in the sense of the law merchant, and

persons acquiring them take with notice of the purpose for which they were issued and of the order of the county court authorizing their is

suance.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Negotiable Instrument.]

3. Counties 165-Warrants issued, and other obligations incurred in excess of county revenues for fiscal year, are void (Const. Amend. 11).

Under Const. Amend. 11, county warrants issued, as well as obligations incurred, in excess of revenues for fiscal year, are void, and the action of the county court in issuing such a warrant or in making an allowance on which such a warrant might later be issued is coram non judice.

4. Counties165-County warrant, only part of which was in excess of revenues for year, held void only as to excess, and might be reissued to extent valid.

Warrant for $30 issued by county court, which was $12.50 in excess of the county's revenues for the fiscal year, was not entirely void, but was void only to the extent of such excess, and county court may therefore reissue warrant for sum of $17.50.

On Rehearing.

5. Counties 165-Warrant issued for obligations incurred in preceding year in excess of revenues of that year is void (Const. Amend. 11).

Under Const. Amend. 11, county warrant issued for obligation incurred in the preceding year in excess of revenues of that year is void, though revenues of year in which it was issued had not been expended when it was issued.

6. Counties 170(1)—Holder of valid warrant may compel payment thereof to exclusion of invalid warrant, and collecting officer receives invalid warrant at his peril (Const. Amend. 11).

Holder of valid county warrant may, by appropriate action, compel receipt and payment of invalid under Const. Amend. 11, and may, if his warrant to exclusion of warrant which is necessary, enjoin redemption of invalid warrant, and collecting officer of county receives invalid warrant at his peril and is not entitled to take credit for it in any settlement of his accounts.

Appeal from Circuit Court, Woodruff County; W. D. Davenport, Judge.

Mandamus proceedings by A. C. McGregor, County Collector, against Edgar Miller, County Treasurer. From an adverse judgment, the collector appeals. Affirmed.

W. J. Dungan, of Augusta, for appellant. R. D. Smith, of Marianna, J. F. Summers, of Augusta, and Roy D. Campbell, of Little Rock, for appellee.

SMITH, J. The judgment here appealed from was rendered upon an agreed statement of facts. After declaring, as a matter of law, that the fiscal year for determining whether allowances made by the county court under Amendment No. 11 to the Constitution exceeded the county revenues begins on January 1st and ends December 31st, the court recited in the judgment the following facts:

Warrants for the fiscal year 1926 were issued in excess of the revenues for that year, and certain of these warrants found their way into the hands of the collector of the county, who sought, by mandamus, to compel the treasurer of the county, to receive them from him in settlement of his collections for Warrant No. 622, the county's account. which was for the sum of $30, was $12.50 in excess of the 1926 revenues. The court found that this warrant was void as to this excess, but might be reissued for the sum of $17.50; that certain warrants were issued in 1926 upon claims arising in 1925, and when issued were in excess of the 1926 revenues. Certain other warrants were issued for such claims as the construction of a bridge (the necessity therefor being urgent), the fees of a juror, and electric current for lighting the courthouse, etc. All these warrants were declared invalid for the reason that their allowance and issuance made the county's expenses exceed the county's revenues, and this appeal is prosecuted to review that judg ment.

construction of Amendment No. 11 to the The present appeal involves the further Constitution, it being contended that the cases of Kirk v. High, 169 Ark. 152, 273 S. W. 389, 41 A. L. R. 782, and Nelson v. Walker, 170 Ark. 170, 279 S. W. 11, in which the amendment was interpreted, are not decisive

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(293 S.W.)

of the questions raised on the present appeal. | herein referred to, and, having declared that So much of the amendment as it is neces- the fiscal year should begin on the 1st day sary here to consider reads as follows:

of January and end December 31st for one purpose, we hold that the year thus defined is the fiscal year for all purposes of the amendment

"The fiscal affairs of counties, cities and incorporated towns shall be conducted on a sound financial basis, and no county court or levying board or agent of any county shall make or au- Counsel recognizes the effect of our decithorize any contract or make any allowance for sions in the cases of Kirk v. High and Nelany purpose whatsoever in excess of the revenue son v. Walker, supra. Indeed, there appears from all sources for the fiscal year in which to be no reason to misapprehend their pursaid contract or allowance is made; nor shall any county judge, county clerk, or any other port. They construe the amendment to mean county officer, sign or issue any scrip, warrant what it plainly says-that is, that counties, or make any allowance in excess of the revenue from all sources for the current fiscal year; nor shall any city council, board of aldermen, board of public affairs, or commissioners, of any city of the first or second class, or any incorporated town, enter into any contract or make any al lowance for any purpose whatsoever, or authorize the issuance of any contract or warrants, scrip or other evidence of indebtedness in excess of the revenue for such city or town for the current fiscal year; nor shall any mayor, city clerk, or recorder, or any other officer or officers, however designated, of any city of the first or second class or incorporated town, sign or issue any scrip, warrant or other certificate of indebtedness in excess of the revenue from all sources for the current fiscal year."

[1] It is pointed out that neither of the opinions above referred to define the "fiscal year" mentioned in the amendment, and we are asked to decide when this year begins and ends.

cities, and towns shall not expend in any year or make allowances covering obligations incurred in excess of the revenues for the year in which such expenses were incurred or obligations made. We recognized and declared the drastic effect of the amendment, and it is unnecessary to repeat here

what was there said.

[2] Counsel for appellant argues that these former decisions do not relate to warrants actually issued although they were in excess of the revenues. It is argued that these warrants are negotiable instruments, and that title thereto passes by delivery, and that if the county issues these negotiable obligations to pay, many innocent purchasers may acquire them, and that it would be a fraud to declare such warrants void.

In answer to these contentions, it may be first said that county warrants are not negotiable instruments in the sense of the law merchant, and persons acquiring them take them with notice of the purpose for which they were issued and of the order of the county court authorizing their issuance. Vale v. Buchanan, 98 Ark. 299, 135 S. W. 848; Watkins v. Finger, 120 Ark. 476, 179 S. W. 653.

The amendment was adopted by the people at the general election in 1924, as declared in the case of Brickhouse v. Hill, 167 Ark. 513, 268 S. W. 865, the opinion in that case being delivered February 16, 1925. Thereafter the General Assembly, which was in session at the time of the rendition of this opinion, passed Act No. 210, which was an [3] But another and more effective anact entitled "An act to facilitate the fund-swer is that warrants issued, as well as obliing of the debts of counties, cities and incorporated towns." This act was approved March 23, 1925. Acts 1925, p. 608.

This was an enabling act to make effective the provisions of the amendment authorizing counties, cities, and towns to refund their existing indebtedness by issuing bonds. Section 7 of this act reads as follows:

"The fiscal year of each county, city and town in this state shall begin with the first day of January and end at midnight on the 31st day of December of each year."

Having declared when the fiscal year shall begin and end for one purpose, we perceive no reason why, within the meaning of the amendment, the year designated should not be the fiscal year for all purposes of the amendment. We do not think the amendment contemplated that there would be one fiscal year for some purposes of the amendment and a different fiscal year for other purposes. The amendment itself did not provide when the fiscal year should begin and end, and this was done by the enabling act

gations incurred, which are in excess of the revenues, are void, and the action of the court in issuing a warrant, or in making an allowance upon which a warrant might later be issued, is coram non judice, and said warrants and allowances are void.

[4] We think the court was correct in holding that the $30 warrant was not entirely void, but was void only to the extent that it was in excess of the revenues of the county for the year in which it was issued, and the county court may therefore reissue that warrant as ordered by the court below.

The judgment of the court below accorded with the views here expressed, and the judgment to that effect is affirmed.

On Rehearing.

[5] Counsel in the petition for rehearing calls attention to the fact that one of the county warrants here involved was issued in 1926 for a claim arising in 1925, and points out that at the time this allowance was made the 1926 revenues had not been expended.

32

In order to sustain a conviction, the fact that there is a high degree of probability that defendant is guilty is insufficient, but guilt must be established by substantial evidence to the

This does not alter our conclusion. This, 2. Criminal law 560-High degree of probability of guilt is insufficient to sustain conclaim was void because it was an obligation viction. incurred in the year 1925 in excess of the revenues of that year. We think we have made it plain that a county cannot incur any obligation in any year which exceeds the revenues of that year, and if this is done such obligations are void and cannot be paid out of the revenues of a succeeding year. If this could be done, obligations could thus be carried from one year to another. "The revenues of one year would be applied to the discharge of obligations of a previous year,

exclusion of a reasonable doubt thereof.
Humphreys, J., dissenting.

Appeal from Circuit Court, White County; W. D. Davenport, Judge.

Bud Cook was convicted of making mash and one of the purposes of the amendment suitable for the distillation of alcoholic liqwas to prevent this from being done. uors, and he appeals. Reversed and re

Mehaffy & Miller, of Little Rock, and Cul

H. W. Applegate, Atty. Gen., and Jno. L. Carter and Darden Moose, Asst. Attys. Gen., for the State.

SMITH, J. [1] Appellant was indicted for making mash suitable for the distillation of alcoholic liquors, and was convicted, and has appealed. For the reversal of the judgment it is insisted that the testimony is not legally sufficient to support the verdict, and we have concluded that this assignment of error is well taken.

[6] The brief on the petition for rehear-manded. ing discusses the question of priority of warrants issued by a county where the total amount of warrants issued exceeds the rev-bert L. Pearce, of Searcy, for appellant. enues. This is a condition which the amendIf such a ment was intended to prevent. condition arises, those warrants issued in excess of revenues are void. Those warrants are valid which at the time of their issuance do not exceed the revenues. All others are void. The holder of a valid warrant may, by an appropriate action, compel the receipt and payment of his warrant, to the exclusion of an invalid warrant, and he may, if necessary, enjoin the redemption of an invalid warrant. More than that, the invalid warrant cannot be received by any collectThe testimony stated in the light most faing officer of the county, and the officer who vorable to the state is as follows: Witnesses does receive it does so at his peril, and is Cowan, Smith, and Ray searched appellant's not entitled to take credit for it in any set-premises, and they found a barrel buried in tlement of his accounts, because the warrant the ground behind a log. is void. It is issued without authority, and covered with a tow sack and some leaves, the action of a collecting officer in receiving and was about two-thirds full of a mash, it cannot give it validity. which was fermenting. Nearby were some rocks with ashes between them. Neither a still nor any part thereof nor any whisky or other intoxicating liquor was found. The top of appellant's house could be seen from the place where the barrel was found. The barrel was about 200 or 250 yards from appellant's house, and nearer still to appellant's residence a hole was found into which mash had been poured, and a metal barrel was found on appellant's premises under which a fire had been built, as was evidenced by the fact that the barrel was smoked. The witnesses testified that the mash appeared to have been made of sour meal and shorts, and there was foam over the top of it, but none of the witnesses knew whether the mash was fit for the distillation of alcoholic spirits.

It is argued that this construction will in some cases work hardships and has done so in the instant case. If this is true, it can only be answered, as we said in the original opinion herein as well as in the previous cases there cited, that the plain and obvious purpose of the amendment was to prevent counties from expending in any year, for any purpose, any sum in excess of the revenues for that year.

The petition for rehearing is therefore overruled.

The barrel was

The barrel was not in appellant's inclosure, but was found in his woodland about 75 yards

COOK V. STATE. (No. 369.) Supreme Court of Arkansas. April 18, 1927. 1. Intoxicating liquors 236(19)—Evidence held insufficient to sustain conviction for mak-from his fence. There was no path to the ing mash suitable for distillation of alcoholic liquors.

In prosecution for making mash suitable for the distillation of alcoholic liquors, evidence showing probability that defendant was guilty held insufficient to sustain conviction.

barrel, but just above where the barrel was found there was a path leading to the house from the creek farm. The farm was on a creek. The barrel was not on the creek, but on a hillside towards the house. The home of a Mr. Palvin was about the same distance

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(293 S.W.)

& Moses' Dig. § 10180, notwithstanding that 84 other taxpayers had recovered refund, under such section, of taxes paid under such assess

ment.

Appeal from Circuit Court, Perry County; Marvin Harris, Judge.

from the barrel as that of appellant and that | tion for refund of such taxes under Crawford of a Mr. Jackson somewhat farther away. From this testimony it is very probable that appellant made the mash, and that it was fit for the distillation of alcoholic spirits, although no witness stated as a fact that it was fit for that purpose. Appellant was not seen at the barrel, or in possession of it, and no liquor was found on his premises. No still was found or instrumentality which could have been employed in making liquor except the smoked barrel. The barrel of mash was on appellant's land, but was not within his inclosure, and was as near the home of Palvin as it was to that of appellant.

[2] We think, therefore, that, while there is a high degree of probability that appellant was guilty, there is nothing more, and this is not sufficient.

In the case of Hogan v. State, 170 Ark. 1143, 282 S. W. 984, we reversed the judgment of conviction because of the insufficiency of the testimony, and in doing so said:

"It devolves upon the state to establish his guilt by legal testimony of a substantive character, and matters of conjecture merely are not sufficient for that purpose."

The judgment in the case of Reed v. State, 97 Ark. 156, 133 S. W. 604, was reversed on the ground of the insufficiency of the testimony, and in the opinion it was said:

"There may be in this testimony some, evidence of suspicion against defendants, but at the most it is a circumstance of bare suspicion. But mere circumstances of suspicion are not sufficient upon which to base the conviction for a crime, which must be established by substantial evidence to the exclusion of a

reasonable doubt."

See, also, Jones v. State, 85 Ark. 360, 108 S. W. 223; France v. State, 68 Ark. 529, 60

Petition in the county court by the Chicago, Rock Island & Pacific Railway Company against Perry County to recover back taxThe petition was denied in both the county and circuit courts, and petitioner apAffirmed. peals.

es.

Buzbee, Pugh & Harrison, of Little Rock, for appellant.

Boyd Cypert, of Little Rock, for appellee.

MCHANEY, J. Appellant has stated the case correctly, and we adopt its statement as follows:

"In April, 1923, appellant herein brought a suit in the Perry circuit court against Oscar Brazil, as sheriff and ex officio collector, to recover $3,957.21, which the complaint alleged had been paid to the collector by the plaintiff on an erroneous assessment of taxes made against the property of the plaintiff for the year 1922, which sum it was alleged the collector had in his possession for the use of the plaintiff. The case was tried in the Perry circuit court on an agreed statement of facts, and a judgment was rendered dismissing the plaintiff's complaint. An appeal was duly prosecuted ment of the Perry circuit court, on the ground to the Supreme Court, which affirmed the judgthat the payment of the taxes illegally assessed was voluntary. This case is reported in 166 Ark. 246, 251, 266 S. W. 66, under the style of the Chicago, R. I. & P. R. Co.

v. Brazil.

"In the meantime, 84 other taxpayers of Pery county filed a petition in the Perry county court, under the provisions of section 10180, S. W. 236. C. & M. Digest, for a refund of the taxes paid We think the testimony set out does not by them under said erroneous assessment, which measure up to this standard, and the judg-claim for a refund was allowed by this court ment will therefore be reversed, and the in the case of Paschal v. Munsey, 168 Ark. cause remanded.

HUMPHREYS, J., dissents.

58, 64, 268 S. W. 849.

"On the 24th day of March, 1925, and subsequent to the decision of this court in the case of the Chicago, R. I. & P. R. Co. v. Brazil, supra, appellant filed its petition in the Perry county court, setting up the erroneous assessment of taxes made against its property for the year 1922 and the payment of same,

CHICAGO, R. I. & P. RY. CO. v. PERRY and asking for a refund of same, under the

COUNTY. (No. 377.)

Supreme Court of Arkansas. April 18, 1927. Judgment 589(1)—Decision denying recovery from county of taxes illegally assessed held res judicata of subsequent action for refund, under statute (Crawford & Moses' Dig. 10180).

Supreme Court's decision denying recovery from county of 1922 property taxes on ground that payment of taxes illegally assessed was voluntary held res judicata of subsequent ac

provisions of section 10180 of C. & M. Digest. The county in response to this claim pleaded the judgment of the court in the case of the Chicago, R. I. & P. R. Co. v. Brazil, supra, as appellant's petition. An appeal was duly perres adjudicata. The Perry county court denied fected to the Perry circuit court, and a judgment was rendered in that court denying said petition, from which judgment this appeal is prosecuted."

The judgments of the county and circuit courts are right. The same point now before

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293 S.W.-3

the court was decided adversely to appel-writer for recording for county, cash basis, lant's contention in the case of Chicago, R. $107.50. Total, $107.50. I. & P. R. Co. v. Brazil, 166 Ark. 246, 266 S. W. 66. Appellee set up this case in a proper plea as res adjudicata, and the circuit court properly so held. No useful purpose could be served in reviewing the facts in the former case, as we hold that the former de-allowed by law or customary charges for simicision was right, and it is decisive of this

"Second. That said case was heard and judgment rendered without any evidence being adduced before the court, in proof of said claim. D. Simpson filed a claim in the county "Third. That said cause was heard and judgcourt for a typewriter furnished to the circuitment rendered in the absence and without the clerk and ex officio recorder of Madison coun- knowledge of J. B. Harris, the attorney emty, which was disallowed, and claimant apployed by the county judge of said county for pealed to the circuit court. The circuit court the purpose of representing said county in conreversed the finding of the county court, and testing the allowance of said claim herein alfound for claimant, and the County appeals. Affirmed.

J. S. Jameson, of Fayetteville, and J. B. county for same, since there was no appropriaHarris, of Huntsville, for appellant.

J. W. Nance and Earl C. Blansett, both of court of said county. Rogers, for appellee.

"Seventh. That for the misconduct of the plaintiff, D. Simpson, in having or procuring "County of Madison to Dick Simpson, Circuit said cause to be heard in the absence of the Clerk and Ex Officio Recorder. 1 Royal type-county judge and the said attorney, which conFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes