Opinion
No. 34582.
March 24, 1941. ON MOTION.
1. APPEAL AND ERROR. Drains.
A "drainage district" is a separate, distinct, legal entity, with power to sue and be sued as such in its corporate name, and it is not excepted from necessity of giving bond for appeal to the Supreme Court under statute excepting state, and any county, city, town, or village thereof, from necessity of giving bond, though it is within discretion of Supreme Court to permit appeal bond to be executed by drainage district on such terms as court may deem proper (Code 1930, secs. 28, 29, 3375, 4450; Laws 1938, chap. 356).
2. APPEAL AND ERROR.
Where there has been an effort in good faith to perfect appeal to Supreme Court within six months after rendition of judgment as required by statute, and there has been only a short delay in filing record with Clerk of Supreme Court, with no prejudice to movant, Supreme Court is vested with discretion to overrule motion to dismiss appeal on ground of inexcusable delay in filing transcript in Supreme Court (Code 1930, secs. 2323, 3382).
3. EVIDENCE.
It is common knowledge that heretofore appeals by drainage districts have been had without appeal bonds.
4. APPEAL AND ERROR.
Where it appeared that appellant drainage district made effort in good faith to perfect appeal to Supreme Court within six months after rendition of decree as required by statute, that it filed petition for appeal within six months period, but did not execute an appeal bond because of erroneous belief that it was not required to do so, and that there was only a short delay in filing record with Clerk of Supreme Court, with no prejudice to appellee, Supreme Court overruled motion to dismiss appeal on grounds that appellant had not executed appeal bond, and an inexcusable delay in filing transcript, and granted appellant permission to file proper appeal bond within ten days (Code 1930, secs. 28, 29, 2323, 3382; Laws 1938, chap. 356).
ON THE MERITS. (In Banc. May 26, 1941.) [2 So.2d 573. No. 34582.]1. DRAINS.
The payment by drainage district of principal of bonds issued by it into court, after holder had brought suit on bonds, as a tender in full of both principal and interest, which holder declined to accept, did not stop interest thereafter on both unpaid principal and unpaid interest coupons.
2. DRAINS.
Failure of holder of bonds issued by drainage district to present its bonds and interest coupons for payment at bank at which bonds and coupons were made payable did not relieve district from liability for interest on both unpaid principal and unpaid interest coupons, where undisputed evidence showed that it would have been a fruitless thing to have presented them at such bank, in that district had no funds in such bank to its credit, and in addition was denying liability to extent claimed by holder for accrued interest on principal of bonds and interest coupons.
APPEAL from chancery court of Calhoun county, HON. L.A. SMITH, SR., Chancellor.
C.R. Bolton, of Tupelo, for appellee, on motion to dismiss.
The question is presented as to whether or not a drainage district has the right to appeal without bond. By the petition for appeal, the Drainage District claims the right to appeal without bond. The statutes upon which the Drainage District claims this right are expressly stated as Sections 76 and 77 of Code of 1930.
Section 77 certainly does not give such right, as it is limited to appeals from judgments of a justice of the peace and in cases of unlawful entry and detainer. It therefore has no application to this case which was a decree from the chancery court.
Section 76 does not include drainage districts. When a drainage district is organized by the court, it becomes a corporation with power to sue and be sued. (Section 4450, Code 1930). It is neither the state, a county, city, town or village, as named in Section 76, nor is it either an incorporated charitable or educational institution as described in Section 76. It has a separate corporate existence with power to sue and be sued and neither the state nor county is responsible for any of its debts. By Chapter 356 of Laws of 1938, Section 76, was amended to include "And all corporate instrumentalities wholly owned by the United States government." Certainly, a drainage district is not in that class. Therefore, a drainage district is not included in those who might appeal without bond under the terms of Section 76 or as amended by Chapter 356 of Laws of 1938.
Section 28 of Code of 1930 requires bond for all appeals (unless excepted by Section 76). Failure to file bond requires dismissal of appeal.
Howell v. Miller, 151 Miss. 372, 118 So. 178.
Section 40, Code 1930, provides that "an appeal shall not be considered as perfected, . . . unless the bond required shall have been given." This court has recently held that an appeal is not taken until a bond has been filed.
Johnson v. Miss. Power Co., 189 Miss. 67, 196 So. 642.
By Section 2323, Code 1930, appeals must be taken within six months next after rendition of decree "and not after." The six months expired on November 20, 1940, and no bond having been filed, as held in the Johnson v. Mississippi Power Company case, supra, no appeal has been taken and the attempt of the appellants must be dismissed.
The appellants have failed to file a record in the Supreme Court within the time required by law and have been guilty of negligence.
W.J. Evans, of Calhoun City, and W.I. Stone, of Coffeeville, for appellant, on motion to dismiss.
First, our answer to the motion is that no bond is required as Sabougla Drainage District is like all others, a political subdivision of the State by which they are created, and under the plain holdings of the law in the case of Standard Oil Company v. National Surety Company, 143 Miss. 841, 107 So. 560, do not have to give bond. This very district has been to the Supreme Court more than once and has never had bond mentioned before. The appeal was granted in the decree in May, 1940, notice given to the stenographer, and there is no provision of the law for the filing of the Supreme Court appeal in six months. Petition for appeal was filed, but this is not necessary and was simply filed as a matter of routine. The allowance of appeal by decree was sufficient, but it is a routine matter when we are filing for an appeal like this to file a formal petition for appeal.
As to the record not having gotten there in six months, there is no such requirement but if reason is sought we refer to the affidavit of the court stenographer who made up the record, not only of the stenographer's notes but of the other, and the chancery clerk. There is nothing unreasonable about the delay and, as shown, counsel not only waived the citation but made suggestions for certain additions to the record which were satisfactory and were complied with, but which operated to delay the record. However, we are given the right to amend if bond were required.
Sec. 3375, Code of 1930.
W.I. Stone and W.J. Evans, for appellant, on merits.
Appellee could have appealed if he had accepted the money.
Currie v. Bennette, 108 Miss. 854, 67 So. 484; Meaders v. Gray, 60 Miss. 400, 45 Am. Rep. 414; Currie v. Bennett, 111 Miss. 228, 71 So. 324; Gordon v. Gibbs, 3 S. M. 473; 3 C.J. 678; note to McKain v. Mullen, 29 L.R.A. (N.S.) 22; State Highway Com. v. Buchanan, 165 So. 795, 175 Miss. 157.
The general rule is that he who tenders into court money parts with the title thereto, and that the money so tendered becomes the property of the party to whom it is tendered.
Sims v. Hardin, 132 Miss. 137, 95 So. 842; Baker v. Bldg. Loan Assn. of Jackson et al., 168 Miss. 808, 152 So. 288; 1 Griffith's Chancery Practice, p. 568, sec. 526.
The District is not liable for interest on past due coupons. It is almost a universal rule that where the same party owns and holds the bonds and coupons that the interest coupons, though negotiable in form, are merely an incident to the principal indebtedness, to-wit: the bonds. And to permit the owners and holders of bonds and interest coupons to collect interest on both the past due bonds and past due coupons at the same time would certainly be the collection of interest on interest.
Miss. P. L. Co. v. A.E. Kusterer Co., 156 Miss. 22, 125 So. 429.
Where a place of payment is designated in a negotiable instrument the same must be presented at the place as designated for payment; otherwise, it is not properly presented, and a legal demand would not be made.
Secs. 2726-2731, Code of 1930.
It was the duty of the bondholders to present their bonds and coupons to the Capitol National Bank of Jackson, Mississippi, and their failure to do so would certainly not render the district and taxpayers liable for any interest after the maturity date of the bonds and coupons.
9 C.J. 68, sec. 114.
The District was trying to pay the money all the time and take up some of their bonds and coupons, but they were refusing to accept the money and surrender any bonds or coupons. Certainly, under the drainage law the Commissioners would not have any authority to pay out money to different ones unless those parties would surrender the evidence of indebtedness, and they had a perfect right to request that that be done. Not only were these offers made at various times but a tender of the principal amount due was made good by a tender in court of the principal amount due on the bonds, and the complainant would not accept this amount even after paid into court but is now claiming on this sum up to the present date.
A formal tender is never required where it appears that the money, if tendered, would not have been received.
McLain v. Melitio et al., 166 Miss. 1, 147 So. 878; Griffith's Chan. Practice, p. 564, sec. 523.
After the payment of the principal sum they cannot recover interest thereon.
C.R. Bolton, for appellee, on merits.
An examination of the record discloses that this money was not paid into court as an unconditional tender and was not made available to the complainant without restrictions to complainant in the court below, and therefore the appellants are not entitled to have it treated as an unconditional payment of the money into court. The money which was paid into court was not paid into court until after the court below had held on the former trial that the complainant was not entitled to recover interest on the bonds after maturity. This money was not tendered into court with the answer filed by the defendants. It was paid into court on the same date that the decree was rendered by this court for judgment for the complainant for $2445.74 reciting "for balance due on the bonds and coupons held by it and which were set out in the supplemental petition and amendments thereto, upon the surrender thereof the clerk, and that the petitioner or claimant, The Peoples Bank Trust Company have and recover nothing for the interest claimed to have accrued on said bonds and coupons as set out in said petition and claim."
The decree made it a condition of the recovery of this money by the complainant that it surrender to the clerk the bonds on which the claim was made and which bonds the court adjudged bore no interest. When the court required as a condition of recovery that the claimant surrender the basis of claim, part of which had been adjudicated by the court against the claimant, it interposed a condition on the acceptance of the recovery of the money tendered into court which would have barred any further claim thereon and the acceptance of which would have supported a plea in bar of the appeal in the supreme court. While this condition was in the decree, the respondents are chargeable with it for the reason that the court was induced to so provide on account of the position taken by the respondents.
We know of no right that a party has to make a tender of money to an opposite party coupled to a demand for a receipt in full. Under the law, when a party tenders an amount, such tender must be unconditional. In the case at bar, the tender was coupled with a condition which would have precluded the other party from thereafter asserting a right.
Clayton v. Clark, 74 Miss. 499, 21 So. 565, 22 So. 189, 37 L.R.A. 771, 60 Am. St. Rep. 521; Cooper v. Y. M.V.R. Co., 82 Miss. 634, 35 So. 162; Miss. P. L. Co. v. Ross, 168 Miss. 400, 150 So. 831; Maris v. Lindsey, 134 Miss. 399, 99 So. 130.
The complainant was entitled to recover interest on past due coupons.
City of Indianola v. Gates, 181 Miss. 145, 179 So. 284; Town of Lexington v. Union Nat. Bank, 75 Miss. 1, 22 So. 291, 15 R.C.L. 13, sec. 11; Bennett v. Fed. Coal Coke Co., 40 L.R.A. (N.S.) 595.
The fact that the maker or acceptor of a negotiable instrument was at the place at the time designated and was ready and offered to pay the money due is a matter of defense which said maker or acceptor when sued upon the instrument must plead and prove. A plea of readiness to pay at the time and place designated must allege not only such fact, but also that the defendant has ever since been ready with the money then and there to pay the note. Such a plea is rendered bad by an allegation that interest was paid on the note after maturity.
8 Am. Jur. 580, sec. 982; Wallace v. McConnell, 13 Pet. 148; City of Aurora v. West, 19 L.Ed. 42, 7 Wall. 82; Town of Walnut v. Wade, 13 Otto 683, 26 L.Ed. 526.
There was no defense raised in this case that the money was on hand for the payment of the bonds and coupons on the date of maturity. In fact, it was charged in the bill that there was a deficiency of money to pay the bonds at maturity and that this deficiency was caused by failure of the commissioners to levy a sufficient tax. The answer denied the failure to levy a sufficient tax, but did not deny the deficiency in the money, and the court ruled that this was an admission of the charge that the default was caused by reason of there being no money in the treasury. Under the rule above, which is clearly the law, the proof of presentation by the complainant is not necessary and no sworn defense on that ground has been raised by the defendant, and certainly no proof made. To the contrary, the deficiency is admitted. Therefore, as a matter of law, we say that the question of presentation of the bonds has no effect on the running of interest on these bonds after maturity.
Appellee moves to dismiss this appeal on the grounds (1) that appellant has not executed an appeal bond, and (2) inexcusable delay in filing the transcript in this court. Appellants resist the motion on the grounds, first, that appellant is not required, under the law, to execute an appeal bond; and, second, the delay in filing the transcript is excusable for the reasons hereinafter set out.
The question of whether a drainage district is exempt from the general requirement to execute bond on an appeal to this Court is presented to us for the first time.
Sections 28 and 29, Code of 1930, require bonds, and prescribe the terms thereof, in appeals, with and without supersedeas.
Chapter 356, Laws of Mississippi 1938, reads as follows:
"Section 1. Be it enacted by the Legislature of the State of Mississippi, That section 76, Mississippi code of 1930, be and the same is hereby amended to read as follows, to-wit:
"`The state, and any county, city, town or village thereof, and the officials representing the state, county, city, town or village, in any suit or action, and any state, county, city, town or village officer who is a party to any suit or action in his official character, in which suit or action the state, county, city, town or village is beneficially interested, and the several incorporated charitable or educational institutions established and maintained by the state, and all corporate instrumentalities wholly owned by the United States government shall be entitled to appeal from a judgment, decree, decision, or order of any court or judge, from which an appeal may be taken, without giving an appeal-bond; and in such case, if an appeal-bond would operate as a supersedeas in favor of a private person, the appeal, without bond, shall have the same effect in the cases herein provided for; and this provision shall apply to all the courts of the state.'"
There appears to be no exception, other than this, applicable to the case at bar, to the general requirement for the giving of bond as a prerequisite to appeals to this Court in civil cases. It will be noted that drainage districts are not named in the foregoing exceptions. They are not within the definition or meaning of those specified. It is true that this Court held in Standard Oil Co. v. National Surety Co., 143 Miss. 841, 107 So. 559, that a drainage district is a political subdivision of the state; but that case dealt with a statute requiring, "That any person entering into a formal contract with this state, any county thereof, municipality therein, or any political subdivision whatsoever therein . . ." should execute a bond conditioned as the statute requires.
We are not here considering a department, division, branch, instrumentality, or integral part, of the state, county or municipal governments, or the agents or officers thereof, in their official capacities.
A drainage district is a separate, distinct legal entity; with power to sue and be sued as such in its corporate name (section 4450, Code of 1930), and is not excepted from the necessity of giving bond for appeal to this Court.
But under section 3375, Code of 1930, as construed in Hudson, Ex'r, et al. v. Gray, 58 Miss. 589; State v. Coahoma Co., 64 Miss. 358, 1 So. 501; and Cleveland State Bank v. Cotton Exchange Bank, 118 Miss. 768, 79 So. 810, it is within the power and discretion of this Court, in such cases, to permit bond to be executed on such terms and conditions as the Court may deem proper.
On the second point, section 2323, Code of 1930, requires appeals to be taken within six months after rendition of decree or judgment from which the appeal is taken. The decree in this case was rendered May 20, 1940, which decree granted the appeal, and also a petition for appeal was filed November 1, 1940, reciting that the district was not required to execute bond. It appears from the record that the clerk and the official stenographer from time to time had conferences with counsel on both sides on what the record should contain, and received suggestions from both as to its contents; and that counsel for the movant, in the latter part of January, 1941, after examining the transcript of the evidence, requested the clerk not to forward the record to this Court until he could get the reporter to make some corrections therein. The record was filed here February 20, 1941. The return day of the appeal was the first Monday in January. It therefore appears that there was an effort in good faith to perfect the appeal, and no intentional delay by the clerk or counsel for appellant in having the record filed with the clerk of this Court, and there has been only a short delay in filing it, with no damage or prejudice to movant. Section 3382, Code of 1930, vests this Court with discretion in such circumstances.
This case differs materially from Johnson v. Mississippi Power Co., 189 Miss. 67, 196 So. 642. There the appeal was from a judgment in the Circuit Court, and the only thing done within six months of the date of the judgment was the giving of notice of a desire to take an appeal. No bond was attempted to be filed, and no summons was issued on the appeal within the six months, and there was no question but that appellant was required to give bond. Here the appeal was granted by the Chancery Court in the same decree from which the appeal was taken; this was followed by a petition for appeal, and on November 1, 1940, counsel for appellee waived the issuance of summons on the appeal; and it is common knowledge that heretofore appeals by drainage districts have been had without appeal bonds, the right to do so not having been challenged until now.
It is the earnest desire of this Court to have cases heard upon their merits, exacting, nevertheless, diligence and compliance with the law on the part of litigants. Each case, where we are permitted to use discretion, must be controlled by its own facts.
Permission is given appellant to file here, within ten days, proper appeal bond, approved by the clerk below; failing in which, this appeal will stand dismissed.
Overruled, with leave to file bond within ten days.
ON THE MERITS.
The appellee, The People's Bank Trust Co., filed its bill in the chancery court of Calhoun County against appellant, Sabougla Drainage District No. 2, to recover the balance of the principal due it on bonds of the district held by it, being the sum of $2,445.74, and interest thereon from the maturity of the bonds as well as interest on the unpaid interest coupons. The cause was heard on original bill, amendments thereto, and exhibits, answer of the drainage district, exhibits thereto, and oral testimony, resulting in a decree for the principal of the bonds but denying interest on the principal and unpaid interest coupons. From that decree the bank appealed to this Court. After the rendition of the decree and before the appeal was passed on, the drainage district paid into the chancery court the principal sum involved, $2,445.74, without interest, either on principal or interest coupons. In the decree of the chancery court the payment into court was referred to in this language: "Thereupon the Sabougla Drainage District No. 2 of Calhoun and Webster Counties, Mississippi, paid into Court as due the Complainant or Petitioner as holder of past due bonds and coupons of said District the sum of $2445.74, being the unpaid balances due on the principal amount of said bonds and coupons, the said sum so paid into Court to be held for the payment of the balance of principal due on said bonds and coupons held by The People's Bank Trust Company, and it appearing to the Court that said sum of $2445.74 is the balance due by the said Drainage District on the bonds and coupons held by the Complainant or Petitioner, it is therefore ordered that The People's Bank Trust Company of Tupelo, Mississippi, do have and recover the sum of $2445.74, which is paid into Court and held by the Clerk thereof, for the balance due on the bonds and coupons held by it and which are set out in the supplemental petition and amendments thereto, upon the surrender thereof to the Clerk, and that the Petitioner or Complainant . . . have and recover nothing for the interest claimed to have accrued on said bonds and coupons as set out in said petition and claim."
The Supreme Court reversed the decree. See the case under the same style, 186 Miss. 539, 191 So. 93, 824. The syllabus to the case shows what the Court decided. It is in this language: "Interest is recoverable on bonds and interest coupons of a drainage district after maturity and until paid." When the cause went back to the chancery court, the main question involved and decided by that court was whether the payment by the drainage district of the principal of the bonds into court without interest stopped interest thereafter on both unpaid principal and unpaid interest coupons. The court held that it did not, and we think correctly. The recitals in the decree having to do with the question copied above simply mean that the drainage district paid the amount into court as a tender of all that it claimed was due. In other words, it was a tender in full of both principal and interest upon condition of its acceptance by the bank as such. The bank declined to accept the tender and prosecuted an appeal from the decree with the result as shown above. No authority directly in point is referred to in the briefs. We think the same principle would control as would if the parties were individuals and the tender made in person instead of being paid into Court. To illustrate: B owes A $1,000. A claims that the debt bears interest. B for certain reasons claims that it does not. B tenders A $1,000 in full of the entire liability. A declines to accept it and sues B for the debt with interest. Was A entitled to recover interest on the note notwithstanding the tender? We think so. What is the difference between a tender in court to an adversary and a tender in person. We think there is none.
The bonds and interest coupons were payable at the Capital National Bank in Jackson. The evidence showed that the bank never presented its bonds and coupons for payment at that bank. The drainage district argues that for that reason it was relieved from liability for interest. There is no merit in that contention under the facts. The evidence showed without dispute that it would have been a fruitless thing to have presented them at that bank. The district had no funds in that bank to its credit, and in addition was denying liability to the extent claimed by the bank for the accrued interest on the principal of the bonds and interest coupons. The other questions in the case raised by the drainage district are not of sufficient merit to require discussion.
The bank claimed it was entitled to something less than $100 for unpaid interest on surrendered coupons. The court denied the liability of the district for that. The bank prosecuted a cross-appeal from that part of the decree. We are of the opinion the court was right, and, further, that a discussion of the question in this opinion would be of little, if any, value to the bench and bar.
Affirmed.