text:
    Burton v. Sanders.
    5-1780
    321 S. W. 2d 209
    Opinion delivered February 16, 1959.
    [Rehearing denied March 23,1959]

      J. Kenton Cochran, for appellant.

      Williams d Gardner, for appellee.
   Paul Ward, Associate Justice.

This litigation involves the title to 154 acres of land in Pope County. Lillie (Duvall) Burton, and Alpha O. Duvall, are daughter and son, respectively, of J. E. Duvall, deceased. Appellees are E. C. Sanders and Grace V. Sanders, who are ilow in possession of the land and claim title thereto by entirety by virtue of a deed executed to them by Neil E. Jackson, and also by adverse possession.

Immediately following is a brief summary of the background facts and some of the issues raised in this litigation. On January 7, 1908, Sallie Ashley executed a deed conveying said lands to the said J. E. Duvall and his two children. Because of the peculiar wording of the deed, there may be some doubt as to just what interest appellants received under said deed. There is also a contention that the deed was not recorded exactly as it was written. The said J. E. Duvall died December 16, 1930. There was an administration of the estate through the Probate Court, and on September 30, 1935, an administrator’s deed was executed to the Bank of Atkins. This deed conveyed all of the lands in question except a part of the North Half of the Northeast Quarter of Section 2, consisting of 74 acres. It is appellants’ contention that said administrator’s deed was void. It also appears from the record that the lands involved had been mortgaged, that there was a foreclosure proceedings, and that the Commissioner in Chancery executed a deed to the said Bank of Atkins on February 23, 1937, conveying all of the lands involved except one 40-acre tract. The record further shows that this 40 acres was included in the administrator’s deed to the Bank of Atkins, and that both of said deeds conveyed all of the said land here involved.

On April 8, 1957, appellants filed a complaint against the Clerk of Pope County in which it was stated that they were the joint owners of said lands and that the said deed had been improperly recorded. The prayer was that the recordation of said deed be cancelled. Thereafter, on May 17, 1957, appellants filed an amendment to their complaint, making Mr. and Mrs. Sanders defendants on the ground that they claimed some interest in said land and were in possession thereof. Appellants’ complaint was amended again on December 23, 1957, to allege that they were joint owners of said lands and that the original deed executed in 1908 had been erroneously recorded.

After numerous motions were made by appellants and overruled by the trial court there was a final submission of the cause of action on its merits in May 1958. The trial court found, among other things, that Mr. and Mrs. Sanders were the lawful owners of the land for the reason that they had been in adverse possession for more than seven years, and so decreed. For reversal of this decree, appellants have appealed, relying on several grounds.

Waiving for present consideration the objections raised by appellants to the rulings of the trial court on matters of procedure, we hold that the decree of the trial court must be affirmed on the ground of adverse possession.

The Sanders had color of title dating back to 1935. In that year the land was deeded by the administrator to the Bank of Atkins; in 1937 there was a Commissioner’s deed to the Bank of Atkins; in 1948 the Bank of Atkins deeded all of said lands and all the interest therein to Justin M. Barker; on February 3, 1951, the said Justin M. Barker deeded all the lands and all the interest therein to Neil M. Jackson, and; on March 22, 1952, the said Jackson conveyed all of said lands to appellees, Mr. and Mrs. Sanders, and they were in possession under said deed at the time this litigation began. It was stipulated by the parties that all of the taxes were paid on said lands by the Bank of Atkins from 1936 to 1945; that Justin M. Barker paid the taxes on all of said lands from 1945 to 1951; that Neil Jackson paid the taxes until 1954, and that Sanders has paid the taxes from that date until date of trial. It was undisputed that the Sanders and Neil Jackson have lived on this land, occupied and farmed it since 1951. The testimony is undisputed that when Jackson bought the land in 1951 it had been occupied and farmed by Delmer Matchett who had rented the land from Justin M. Barker.

We are not convinced by appellants’ contention that the possession of said land by the Sanders and their predecessors in title was not adverse. In appellants’ brief they make this statement: “Jackson testified that he did not hold adversely to these appellants.” We do find a statement in the record to the above effect, but it appears from other parts of Jackson’s testimony that he did not understand the legal implications of adverse possession, and that he never meant to disclaim ownership of the lands he had bought for $3,500. After testifying he “was in possession of the property from the time the deed was signed,” Jackson was asked the following question on cross-examination: Q. “Well, we are talking about being in actual possession on the land. Mr. Jackson, did you move into there with any types of acts or any hostile attitudes toward the plaintiffs in this case?” Obviously, his only answer was “No,” because he had already testified that he did not even know either of the plaintiffs. In all events, we cannot say the trial court’s finding of adverse possession was against the weight of the evidence.

Appellants appear to take the position that this cause should have never been considered on its merits by the trial court, and should, therefore, be reversed by us. We are unable to agree with this position or contention. The several grounds relied on by appellants are, however, discussed briefly below.

(a) When appellants filed their first amendment and made the Sanders parties defendants, Mr. Sanders filed a plea of res judicata based on the administrator’s deed and the foreclosure proceedings and commissioner’s deed referred to heretofore. Also, after appellants’ second amendment was filed, Sanders again filed the same plea. Appellants’ first objection was and now is that the first plea was not filed within 20 days as provided by statute, but appellants waived this objection by filing their amended complaint later. The second objection was that the court should have required appellees, Sanders, to elect between the plea of res judicata and their answer on the merits. The trial court was correct because the two pleadings are not inconsistent.

(b) No personal service was had on Mrs. Sanders when she was first made a party defendant by the first amendment to the complaint. When the second amendment was filed she was served by warning order. .It was appellants’ contention that Mrs. Sanders did not file her answer within 30 days after the court ordered such method of service. The statute involved is Section 27-1135 Ark. Stats. Supp. The pertinent parts of this section read:

“A defendant to any complaint or cross complaint must appear or plead either generally or specifically the first day after expiration of the periods of time set forth below as the case may be . . .
Third. In the case of constructive service where publication of the warning order has been made as required by law, and thirty (30) days has elapsed since the making of the order and the appointment of the attorney ad litem.” (Emphasis ours.)

Ark. Stats. Section 27-355 provides that “Warning Orders shall be published weekly for at least four (4) weeks.” Appellants state that the order was made November 26, 1957, and that Mrs. Sanders filed her answer on January 3, 1958, but they do not show that the publication was according to law nor do they show the appointment of an attorney ad litem as required by the statute.

It follows, therefore, from what we have said heretofore that the decree of the trial court must be, and it is hereby affirmed.

Affirmed.


source: Caselaw Access Project

author: Sam Robinson, Associate Justice.

license: Public Domain

text:
    Aluminum Co. of America v. Lipke.
    5-1653
    320 S. W. 2d 751
    Opinion delivered February 16, 1959.

      Rose, Meek, House, Barron <& Nash, for appellant.

      J. H. Carmichael, Jr., Josh W. McHughes, for appellee.
   Sam Robinson, Associate Justice.

The issue is whether certain devisees under the will of G. M. Lipke are contingent or vested remaindermen. The controversial clause in the will provides (Par. 3): “I give, bequeath and devise to my beloved wife, Mamie Lipke for and during her natural life, all the real estate which I may own at the time of my death, and at her death the same shall go to my daughters, Marian and Maxine, share and share alike. In the event either of my said daughters dies without children before the death of my wife, all the remainder shall go to the surviving daughter, but in the event either of them dies leaving children that part that would have gone to such daughter, shall go to her children; and in the event both of my said daughters die without children before the death of my wife, then said real estate shall go according to the laws of descent and distribution of Arkansas.”

The widow, Mamie Lipke, life tenant, and the daughters of the testator, Marian and Maxine, remaindermen, are all living. The appellant, Aluminum Company of America, contracted to buy from them a parcel of land left by Mr. Lipke,- but when the time came to consummate the deal the Aluminum Company refused to make the purchase, contending that the widow and daughters cannot convey a fee simple title. The widow and daughters filed suit to compel specific performance. The chancellor held that the daughters have an indefeasible vested interest and can, along with the widow, convey a good title, and ordered specific performance. The Aluminum Company of America has appealed.

If the remainder is indefeasibly vested in the daughters, they can join with the life tenant and convey a merchantable title. Greer v. Parker, 209 Ark. 553, 191 S. W. 2d 584. But if the remainder is contingent, the remaindermen have nothing to convey. Horsley v. Hilburn, 44 Ark. 458. And, of course, the widow has only a life estate. The only question is, therefore, whether the provision of the will here under consideration creates in the daughters a vested remainder or a contingent remainder or a vested defeasible remainder. And, so far as this case is concerned, it is wholly immaterial whether the daughters have a contingent remainder or a vested defeasible remainder, because in either event they could not, along with the life tenant, convey a fee simple title. Hence it is unnecessary to point out here the distinction between a contingent remainder and a vested defeasible remainder. The question is: Do the daughters have an indefeasibly vested remainder under the above quoted provision of the will?

The rules of construction which determine whether an interest is vested or contingent are “nice, technical and shadowy.” Whether an interest is vested or contingent depends upon the intention of the testator, to be determined from the language of the will when read in the light of surrounding circumstances. Wallace v. Wallace, 179 Ark. 30, 13 S. W. 2d 810. As long as the testator does not violate the rule against perpetuities, the law will permit him to create a contingent remainder, and while a construction which favors early vesting rather than deferred vesting is always preferred, the question is, after all, one of the intention of the testator. Page on Wills, Vol. 3, § 1259.

Prom the provisions of the will in the case at bar, the intention of the testator is clear. He wanted his wife to have a life estate in the property. He wanted the remainder to go to his daughters, Marian and Maxine. But, in the event either of the daughters should not survive the life tenant, such deceased daughter’s interest should go to the other daughter, or her children,- provided, however, if a deceased daughter left children, such interest as would have gone to her had she survived the life tenant would go to her children. If both daughters died without issue during the lifetime of the life tenant, then the property would go to the heirs of the testator according to the law of descent and distribution. In these circumstances it cannot be said the daughters have an indefeasibly vested interest.

To sustain the decree of the trial court, appellees rely on several cases, some of which appear to hold that conveyances similar to the provision of the will here under consideration created a vested remainder. McKinney v. Dillard & Coffin Co., 170 Ark. 1181, 283 S. W. 16, does support appellees. But Judge McCulloch wrote a strong dissent in that case, and in similar cases decided since the McKinney case Judge McCulloch’s dissenting opinion appears to have been followed. One of the cases relied on in the McKinney case, and one relied on here by appellees, is Black v. Bailey, 142 Ark. 201, 218 S. W. 210. In his dissent in the McKinney case, Judge McCulloch pointed out that in Black v. Bailey “The question involved was whether or not the title passed to a trustee, for, if there was no title vested in the trustee, there was no remainder, and the title passed in the first instance to the cestui que trust. In other words, the effect of the decision was that, there being no prior estate created by the will, there could be no remainder, either vested or contingent.”

Appellees also cite Jenkins v. Packingtown Realty Co., 167 Ark. 602, 268 S. W. 620. But that case does not sustain appellees’ position. There it was merely held that the remainder vested upon the birth of the remaindermen named in the will. Neither does Greer v. Parker, 209 Ark. 553, 191 S. W. 2d 584, cited by appellees, support the view that appellees in the case at bar, Marian and Maxine, now have a vested remainder. In the Greer case the testatrix left part of her property as a life estate to a daughter, with remainder to the daughter’s children. It was held that the fee vested on the birth of a child to the daughter. Booe v. Vinson, 104 Ark. 439, 149 S. W. 524, is also cited by appellees, but that case is in point only to the extent of saying that the “law favors vesting of estates” and where the will is susceptible of dual construction the one which vests the estate will be adopted. In McCarroll v. Falls, 129 Ark. 245, 195 S. W. 387, a long will was involved, and it was emphasized that the devise was in the present tense. The Court points out that undoubtedly a vested remainder was given in paragraphs 9, 10, 11 and 12, and it was the opinion of the Court that the vesting was not changed by paragraph 14.

In support of the view that in the case at bar the remainder is not indefeasibly vested, the case of Dyer v. Lane, 202 Ark. 571, 151 S. W. 2d 678, is directly in point. There the Court said: “Looking to the entire contents of this will and thus construing the words ‘heirs of my son, Haskell A. Dyer,’ to mean the children of this son, necessarily Haskell A. Dyer’s interest must be contingent because it cannot be known what children would survive the son until the death of the mother, who holds the life estate. Haskell A. Dyer is still alive and, of course, he may or may not have children during his mother’s lifetime. (Exactly the same situation exists in the case at bar.) The remainder could not vest in Haskell A. Dyer until the death of the mother, Grace G. Dyer. That is the time fixed for his remainder interest to take effect.”

Other cases in point are: Adams v. Eagle, 194 Ark. 171, 106 S. W. 2d 192; Harrington v. Cooper, 126 Ark. 53, 189 S. W. 667. In both cases it was held that the .remainder did not vest until the death of the life tenant. ,. v

It is our conclusion that our own eases in point to the effect that the remainder does not indefeasibly vest until the death of the life tenant are supported by the weight of authority. Page on Wills, 3rd Ed., 1941, ■§ 1266, Restatement, Property — Future Interests, § 253. In 96 C. J. S. 451, it is said: “It has been said that whether the remainder interest be treated as vested subject to be divested by the death of the remainderman before the death of the life tenant, or as being a contingent remainder, makes no difference, because the devise does not create an absolute or indefeasibly vested estate in the remainderman.” And in 33 Am, Jur. 590, it is said: “A substantial gift in favor of the issue of any legatee dying before tbe time of distribution may make the remainder a contingent one. A remainder after a life estate is contingent if it is to tbe children of tbe life tenant living at bis death and to tbe issue of such children as may be dead.”

And, finally, if tbe testator bad wanted tbe remainder to vest so that tbe remaindermen, along with tbe life tenant, could sell tbe property and convey a good title, no doubt paragraph 3 would have ended with tbe first sentence, and that result would have been accomplished. But other provisions were added which are convincing that tbe testator did not intend that tbe remainder should indefeasibly vest until tbe death of the life tenant.

Reversed.

Mr. Justice George Rose Smith, not participating.


text:
    USF&G Co. v. Downs.
    5-1735
    320 S. W. 2d 765
    Opinion delivered February 16, 1959.

      Mahony <& Yocum, for appellant.

      McKay, Anderson & Grumpier, for appellee.


author: Jim Johnson, Associate Justice. Geobge Rose Smith, J.,

text:
    Downs v. Maryland Casualty Co.
    5-1735
    Opinion delivered February 16, 1959.

      McKay, Anderson & Grumpier, for appellant.

      8. Hubert Mayes, for appellee.
   Jim Johnson, Associate Justice.

This matter is before the Court on appeal from the Columbia Circuit Court from an action in which the plaintiffs below sought a declaratory judgment to determine the obligations of two insurance companies, under their liability policies, and to require one or the other, or both, to defend a damage suit within the limits of either of said policies.

The cause was heard before the judge, sitting as a jury, under Section 34-2501, et seq. of the Ark. Stats., known as the “Uniform Declaratory Judgment Act.”

By stipulation of counsel for all parties, there were introduced into evidence the liability policies of both insurance companies.

In 1948, J. P. Downs purchased a Hobbs 1948 semitrailer, and in 1953 be purchased a 1953 Dodge truck, 2% bon tractor. He used them in his own business until about June 1955, when he turned them over to his brother, W. F. Downs. Since June 1955, W. F. Downs has had continuous possession of this truck and trailer and has used them in his business except on one or two occasions. For two or three days at a time, J. P. Downs took the truck and trailer and used them with his own drivers in his own business.

On November 24, 1956, J. C. Martin, an employee of W. F. Downs, was driving this truck and trailer in El Dorado, Arkansas in connection with W. F. Downs’ business and was involved in an accident with an automobile owned by Y. Y. Meeks and then driven by Ann Dean, daughter of Y. Y. Meeks. That accident is the basis of a personal injury action by Ann Dean against W. F. Downs and J. C. Martin, filed in the Circuit Court of Union County.

This present action was brought by the plaintiffs below to determine which insurer should defend W. F. Downs and J. C. Martin against the action brought by Ann Dean. The plaintiffs in their complaint allege that Maryland’s policy issued to J. P. Downs specifically describes the truck and trailer involved in the accident as covered by it; and that U. S. F. & G’s. policy, issued to W. F. Downs, while not specifically describing that truck and trailer as covered by it, nevertheless covers them as a “Hired Automobile.”

U. S. F. & G. denies liability on the ground that the truck and trailer are not included in its policy and that the insurance coverage therein provided does not apply to them and further that if J. P. Downs (Maryland’s Named Insured) was the owner of that truck and trailer at the time of the accident, U. S. F. & G’s. only liability is that of excess insurance after all damages, costs and expenses, within the limits of Maryland’s policy, have been paid by Maryland.

Maryland denies liability on the ground that the truck and trailer, at the time of the accident, were not owned by J. P. Downs, but by W. F. Downs.

The facts concerning the purchase and use of the truck and trailer by J. P. Downs and his transfer of them to W. F. Downs and the latter’s, use of them are pertinent to show whether J. P. Downs or "W. F. Downs was the owner of the truck and trailer at the time of the accident and hence which of the insurance policies, if either, covered them and that accident.

The trial court held that the insurance policy issued by U. S. F. & G. to W. F. Downs covers the accident which is the basis of the damage suit filed by Ann Dean. The court further held that the insurance policy issued by Maryland Casualty Company to J. P. Downs does not cover the accident.

From this declaratory judgment, U. S. F. & G. appeals and both the Plaintiffs, J. P. Downs and W. F. Downs, also appeal “insofar as said judgment holds that the policy issued by Maryland Casualty Company to J. P. Downs, d/b/a Downs Service and Supply Company does not cover the truck and accident.”

The grounds urged by Appellant, U. S. F. & G., for reversal are:

1. Trial court erred in holding U. S. F. & G’s. policy covered accident and truck and that Maryland’s policy did not cover them.
(a) If W. F. Downs was the owner, neither policy provides coverage.
(b) If J. P. Downs was the owner, Maryland’s policy provides primary coverage under its “omnibus” clause and U. S. F. & G’s. policy provides excess coverage only.

The grounds urged by Cross-Appellants, J. • P. Downs and W. F. Downs, for reversal, are:

1. J. P. Downs was the owner of the automobile (truck) at the time of the collision.
2. The policy issued by Cross-Appellee, Maryland Casualty Company, covered the automobile (truck) under the “omnibus” clause.

The testimony and exhibits reflect that the truck and trailer here involved were purchased by J. P. Downs; he had them entered as assets on his books of account and in each year thereafter charged off as expenses in his own business the depreciation of each — finally completely depreciating the trailer in 1956 and the truck in 1957; he listed them for taxes in each year and paid the taxes on them; he registered them in his business name with the Motor Vehicle Division of the Department of Revenues and obtained a certificate of title (in his business name as owner subject to lien in favor of First National Bank of Magnolia) which is still in the possession of his mortgagee, First National Bank of Magnolia; each year he paid the license fees and obtained Registration Certificates also in his business name; he obtained and has continuously maintained in his own name, as the Named Insured, comprehensive liability insurance with Maryland specifically covering this truck and trailer as owned by him and has paid the premiums each year on the policies and also on upset, collision, etc., insurance with the Firemen’s Insurance Company of North New Jersey.

About June of 1955, J. P. Downs turned this truck and trailer over to his brother, W. F. Downs, saying, “Well, just go ahead and take it and we will settle for it after I get it out from under the mortgage.” In response to the above, W. F. Downs testified — “If he (J. P. Downs) didn’t need the truck any more I would buy it from him.” Thereafter, W. F. Downs has had possession and control of the truck and trailer except on one or two occasions when J. P. Downs took them for two or three days at a time. No money was paid by W. F. Downs to J. P. Downs and there was no agreement, either oral or in writing, about price or payment. J. P. Downs, moreover, continued to carry the truck and trailer on his books as assets; continued to charge off their depreciation in each succeeding year; continued to assess' them and pay the taxes on them; continued to maintain them registered in his own business name and to pay the license fees; and, continued to report them as owned by himself to his insurance carrier and to pay the policy premiums each year. He never reported to Maryland’s agents that he turned the truck and trailer over to his brother, W. F. Downs. On one occasion, when J. P. Downs took the truck and trailer back and was using it in his own business, they were upset while being driven by one of his own drivers, and he reported that accident to his insurance carrier (Firemen’s Insurance' Company) although there was nothing payable under his policy because the damages were less than the $100.00 deductible. When the accident herein involved occurred on November 24, 1956, he reported it on November 26, 1956, to Maryland’s agents immediately after hearing of it from W. F. Downs’ employees.

W. F. Downs has never paid any taxes on the truck or trailer; never bought any licenses for them; never listed them with his insurance carrier; never notified the carrier that he had them in his possession; never paid U. S. F. & Gr. any premium on this truck and trailer although he has renewed the policy (taken out originally in 1948) several times after he got the truck and trailer; never had the truck and trailer recorded in his office as owned by him; and never charged off any depreciation on them in any of his financial statements. W. F. Downs did not report the accident of November 24, 1956, to U. S. F. & Gr., but one of his employees did notify his brother, J. P. Downs, of the accident on November 26, 1956, knowing that he would report it to his own insurance carrier.

Even if this transaction could be considered an executory contract to sell, the contract is so vague and lacking in the required elements that it could not be enforced by either party against the other without further agreement on their part.

The Uniform Sales Act is in force in Arkansas (Act 428 of 1941-Ark. Stats., Sec. 68-1401 et seq). Section 1 of that Act is as follows:

“(1) A contract to sell goods is a contract whereby the seller agrees to transfer the property in goods to the buyer for a consideration called the . price.
“(2) A sale of goods is an agreement whereby the seller transfers the property in goods to the buyer for a consideration called the price.
“(3) A contract to sell or a sale may be absolute or conditional.
“(4) There may be a contract to sell or sale between one part owner and another.”

In our opinion this transaction was not a sale as defined in that Act — there was no present transfer and there was not intended to be any present transfer of the title or property in. the truck and trailer and, moreover, J. P. Downs could at any time take back the truck and trailer without any recourse by W. F. Downs. As a contract to sell, the transaction lacks the essential provision of agreed price and time of payment, even if it be conceded that the transaction was to be consummated when J. P. Downs had paid Ms mortgage indebtedness at the bank and secured the release of his lien (a thing he had not done at the time of the trial — nearly three years after the transaction). The courts have often held that such a transaction, lacking those essentials is no sale and is unenforceable as a contract to sell. See: Biggers v. Johnson, 106 Ark. 89, 152 S. W. 291.

We point out that the trial judge made no specific finding as to whether or not there was a sale of the truck.

Since J. P. Downs was the owner of the truck and trailer; and since they were being used by W. F. Downs and his employees with the permission of J. P. Downs, it follows that the Maryland Casualty Company, under its “omnibus” clause, heretofore set out in footnote, is liable (within the limits of its policy) for any damages which may be awarded to Ann Dean.

U. S. F. & G. admits that if J. P. Downs was in fact the owner and W. F. Downs at the time of the accident was using it as a non-owned automobile (truck) then its policy insures W. F. Downs and his employee, J. C. Martin, but only as excess insurance after all damages, costs and expenses, witMn the limits of its policy, have been paid by Maryland. It, therefore, must follow from what we have already said, that U. S. F. & G. is liable to the extent indicated above.

Reversed on appeal and cross-appeal.

Mr. Justice Geobge Rose Smith dissents.

Geobge Rose Smith, J.,

dissenting. The appellant, in a contention that the majority find it unnecessary to consider, insists that it is not liable if W. F. Downs was the owner of the truck-trailer. I regard this contention as unsound. The policy insured Downs against loss caused by accident and arising out of the ownership of any automobile, which is defined as a land motor vehicle or trailer. It is also provided that the original premium is an estimate only, that the earned premium will be determined after the expiration of the policy year, and that to determine the premium the insurer may examine the insured’s books within three years after the termination of the policy.

I find no requirement that a vehicle must be listed in the policy to be covered. The only suggestion of this kind is in an endorsement, which reads in part: ‘ ‘ This endorsement supplements the ‘ Declarations ’ of the policy and contains a correct description of the automobiles to be covered. The insurance afforded is only with respect to such and so many of the coverages as are indicated by specific premium charge or charges.” It seems plain from the contract as a whole that the restriction “to such and so many of the coverages” refers not to the vehicles described but to the various available coverages for bodily injury and property damage, and the rest of the endorsement confirms this view beyond any doubt.

I disagree with the majority for the reason that I think there is substantial evidence to justify a finding by the trial court that J. P. Downs sold the truck-trailer to his brother. J. P. testified more than once that he intended to sell the vehicle to his brother in June, 1955. For example: “Well, actually, I sold it to him then, with the understanding that as soon as it could be cleared, why, then I would give him the title to it.” W. F. Downs testified that he bought the truck-trailer “conditionally,” the condition being that the title certificate would be turned over to him when the mortgage was paid. After the transfer W. F. had almost continuous possession of the vehicle, painted his business name on it, used it as he liked, paid the costs of operation, kept it in repair, bought new tires for it, replaced its wheels, etc. To every outward appearance it became W. F.’s property.

The Sales Act provides that the property in the goods is transferred to the buyer “at such time as the parties to the contract intend it to he transferred.” Ark. Stats., 1947, § 68-1418. ‘ The price may he fixed by the contract, or may be left to be fixed in such manner as may be agreed. . . . Where the price is not determined in accordance with the foregoing provisions the buyer must pay a reasonable price.” § 68-1409.

That the transaction was loosely handled is understandable, since the buyer and seller were brothers. Doubtless they suffered from a misapprehension common to laymen, that the certificate of title is the title, and for that reason the final settlement was left to the future. But there is an abundance of evidence to show that they intended for the property in the vehicle to pass to W. F., and I think that should conclude our inquiry in reviewing a decision of the circuit court.

        Maryland Casualty Company issued to J. P. Downs, d/b/a Downs Service and Supply Company, its Comprehensive Liability Policy (Automobile and General Liability) with limits under Coverage A — Bodily Injury Liability of $100,000.00 for each person and $300,000.00 for each accident, covering among other automobiles, trucks, and motor driven equipment, a truck described as one 1953 Model Dodge 2% ton with one 1958 Model Hobbs Semi-trailer, as a truck and trailer owned by J. P. Downs, d/b/a Downs Service and Supply Company and involved in the accident hereinabove mentioned, agreeing:
      “To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person and caused by accident.”
      The “omnibus” clause of this policy also includes as the insured thereunder “any person while using an owned automobile or a hired automobile and any person or organization responsible for the use thereof provided the actual use of the automobile is by the named insured or with his permission.”

        United States Fidelity and Guaranty Company issued to W. F. Downs, d/b/a W. F. Downs Oil Well Service its Comprehensive Liability Policy with limits under Coverage A — Bodily Injury Liability of $100,000.00 for each person and $300,000.00 for each accident, covering among other automobiles, trucks and motor driven equipment listed in said policy “any automobile used under contract in behalf of, or loaned to the named insured provided said automobile is not owned by or registered in the name of (A) the named insured, or (B) an executive officer thereof, or (C) an employee or agent of the named insured who is granted an operating allowance of any sort for the use of such automobile”, and agreeing,
      “To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person and caused by accident.” and also covering,
      “Hired automobiles, if any, and non-owned automobiles, if any, provided, however, the insurance under this policy with respect to loss arising out of the maintenance or use of any hired automobile insured on a cost of hire basis or the use of any non-owned automobile shall be excess insurance over any other valid and collectible insurance.”


author: Jim Johnson, Associate Justice. Paul Ward, Associate Justice,

text:
    Going v. Amos, Excr.
    5-1763
    321 S. W. 2d 212
    Opinion delivered February 16, 1959.
    [Rehearing denied March 23,1959]

      E. L. Holloway, for appellant.

      W. J. Schoonover, Robert H. Dudley and James A. Robb, for appellee.
   Jim Johnson, Associate Justice.

Appellant, Sterline Going, as the widow of Lambert Going filed this suit against her mother-in-law, Appellee Sarah Going, to recover realty to which Sarah Going held a deed.

Trial in the Chancery Court resulted in a decree in all respects adverse to Sterline Going. From this decree Sterline Going appeals, assigning five points for reversal.

The learned Chancellor issued a written opinion which so clearly states the issues and conclusions that we copy excerpts from it as follows:

“The plaintiff was twice married to the son of the defendant. The name of the son was Lambert Going.
“Lambert and Sterline were married in 1936 and lived for about nine years in Anderson, Indiana. Sterline did not work before her marriage but after she moved to Indiana with her husband they both worked and bought bonds and accumulated other funds in their joint names.
“In 1944 Lambert and Sterline returned to Corning and purchased a filling station and tourist court, taking title in the names of both parties, thereby creating an estate by the entirety. Shortly thereafter they acquired another piece of property (which is now in controversy) for a recited consideration of $3,250.00 and took title in their joint names also.
“In October 1945 there was issued to Lambert a policy of life insurance in the sum of $5,000.00 with Sterline as beneficiary.
“In 1946 they sold the first property that they acquired for a recited consideration of $13,000.00, .cash in hand paid and within a few months began construction of a cafe on the west 100 feet of the property, the east 50 feet being their residence. Lambert and Sterline operated the cafe built on .this property and in 1946 or 1947 Lambert became ill with cirrhosis of the liver . . .
“On. April 14, 1948, Lambert filed a suit for divorce against Sterline in the Western District of Clay County, alleging indignities, a separation on March 20th, and all property rights had been settled in said cause and the written property settlement was confirmed and approved. By the terms of the property settlement Sterline released and relinquished all claims which she had in and to the real property and the cafe and agreed that she would execute whatever papers and instruments were necessary to vest the fee simple title in Lambert. As a matter of fact, on April 13, 1948, the day before the divorce action was filed, the property settlement was entered into and Lambert and Sterline joined in a deed conveying the property to Bryan J. McCallen and the deed was purportedly acknowledged by both grantors before J. P. Arnold, a Notary Public. Arnold has since died and Sterline denies having acknowledged the execution of the deed. On the same day Bryan J. McCallen, single, executed a deed to the same property to Lambert Going and this deed was also acknowledged before Mr. Arnold. Both deeds were promptly recorded.
“In September 1948, Lambert and Sterline were remarried and on October 7, 1949, Lambert and Sterline executed two promissory notes payable to the defendant, Sarah A. Going, in the sum of $3,200.00 each. Sterline denies that there were two notes, but claims that one was but a copy of the other.
“In April of 1950 the Corning Bank, holder of a mortgage on the property was threatening foreclosure and on May 1, 1950, Sarah Going paid the indebtedness owing by Lambert and Sterline to the bank and on the same date paid various other bills owing by Lambert and Sterline totaling nearly $1,000.00. Sarah Going paid additional debts of Lambert after his death in the amount of $545.62.
“On May 1, 1950, the same day that Sarah paid the $2,600.00 to the Corning Bank and the other bills owing by Lambert and Sterline, Lambert and Sterline executed a warranty deed to Sarah, purportedly aeknowledged. before Bryan J. McCallen, a Notary Public, and tbe deed was duly recorded.
“Lambert Going died on April 19, 1951, and tbis suit was not commenced until August of 1952.
“Tbe plaintiff bases ber claims on tbe allegations tbat tbe deed executed by ber and Lambert to Bryan J. McCallen was not acknowledged and without consideration, leaving tbe lands involved in ber and ber bus-band as an estate by tbe entirety, of which sbe is tbe ultimate survivor; tbat sbe did not read tbe property settlement tbat she executed; tbat there was only one debt of $3,200.00 represented by tbe two notes of $3,-200.00 each; tbat tbe naming of Mrs. Sarah Going as beneficiary of the' insurance policy (it was changed a few days after tbe divorce decree of 1948) was merely to secure tbe various indebtednesses mentioned above; tbat tbe deed executed on May 1, 1950, was intended merely as additional security for tbe indebtedness, and tbat, therefore, it was in effect, a mortgage and tbat tbe same was not acknowledged before Bryan J. Mc-Callen.
“As to tbe plaintiff’s contention tbat sbe did not acknowledge tbe execution of tbe deed to Bryan J. Mc-Callen on April 13, 1948, tbe Court is of tbe opinion tbat sbe has not produced tbe quantum of proof necessary to overcome tbe legal presumption to tbe effect tbat tbe recorded instrument is what it purports to be and tbat tbe certificates of acknowledgment are presumed to be true and correct. Sbe does not contend tbat anyone took advantage of her, nor tbat sbe did not have an opportunity to read tbe property settlement and in view of tbe fact tbat she signed a property settlement agreeing to execute such instruments as would be necessary to convey fee simple title to ber husband and tbat such settlement was confirmed and approved by tbe Court, ber simple denial tbat sbe acknowledged the same before a Notary Public who has since died is insufficient to overcome the legal presumption.
“As to the deed executed by Lambert and Sterline on May 1, 1950, which she now contends was intended only as a mortgage, it will be remembered that Lambert signed the same deed at the same time and showed Sterline, according to her testimony where to sign her name. She says that perhaps Lambert’s sister told her where to sign and that the first page of the instrument was pushed up to where she could not see anything but the second page where she signed her name. Yet, the original deed, introduced in evidence, shows that it is marked plainly on its face as a Warranty Deed and consists of only one page. The testimony as to whether or not she acknowledged the execution of the instrument over the telephone is in sharp conflict, she being corroborated on the one hand by her relatives and the defendant being corroborated on the other hand by her relatives . . .
“The laws in this state are well settled to the effect that in cases of this kind the burden of proof is on the plaintiff in every particular and that the evidence necessary to overthrow the presumption of regularity of a recorded instrument must be clear, cogent and convincing. The testimony of the plaintiff fails to meet these requirements.
“Referring again to the- plaintiff’s contention that she did not acknowledge the deed to Bryan J. Mc-Callen, it will be noted that she does not deny that she entered into the property settlement and that her signature thereto was acknowledged before a Notary Public. As indicated by the terms of that instrument, she agreed to execute any instruments necessary to convey fee simple title and she now undertakes to avoid entirely the effect of that agreement. This, she will not be permitted to do.”

The preponderance of the evidence supports the Chancellor’s findings and decree.

Affirmed.

Ward and Robinson, JJ., dissent.

Paul Ward, Associate Justice,

dissenting. There is one issue in this case which was not considered by the trial court or the majority making the opinion, and I think that issue calls for a reversal.

The overlookedv issue to which I refer is set out in appellant’s brief as the 5th point: That the court erred in refusing to hold that if executed and acknowledged, the deed in question was in fact a mortgage.

This court has held numerous times to the effect that if a deed (regular in form) was intended to secure a loan for money, equity will construe it to be a mortgage. In the recent case of Ehrlich v. Castleberry, 227 Ark. 426, 299 S. W. 2d 38, the court in speaking of the execution of a deed stated: “If such transaction is security for a debt, then it is a mortgage.” A headnote in Beloate v. Taylor, 202 Ark. 229, 150 S. W. 2d 730, expresses the rule this way: “If there be a debt subsisting between the parties to a deed, and it is their intention to continue the debt, the deed will be a mortgage. ’ ’ In Hudgens v. Taylor, 206 Ark. 507, 176 S. W. 2d 244, the court quoted from another decision, with approval, that- — “. . . in determining whether a deed absolute on its face is such, indeed, or only to be considered as a mortgage, the real question for the court’s determination is what was the intention of the parties at the time.” In this same connection the court said in Holman v. Kirby, 198 Ark. 326, 128 S. W. 2d 357, that if a deed is an equitable mortgage when executed it continues to be so.

Applying the well-established rule that the testimony to change a deed to an equitable mortgage must be clear and convincing, it is in order to examine the testimony in this case.

As I read the record the testimony here is not only clear and convincing but is uncontradicted, unchallenged, and admitted. On the point in question we have the testimony of only two witnesses. One is the grantor in the deed, appellant, and the other is the grantee in the deed, Mrs. Sarah Going.

Appellant’s testimony is copied from the abstract:

‘ ‘ On the day before May 1st, 1950, Lambert told his mother he did not have any money and the bank was to foreclose the next day, May 1 and she said she would loan us the money and he could pay her back when he could.
“He was up at that time and in high hopes of getting well.
' ‘ She agreed to let us have the money and that had to be brought on the next day. At that time they were to give her a mortgage. This was to be on the part of the property on which the Cafe was located and the little house would not be included in the mortgage. ’ ’

Mrs. Sarah Going’s testimony with relation to the issue, as copied from the abstract was: (speaking of her son Lambert).

“He came over and told about the loan and would rather bump his brains out than ask for more money. If you would pay the bank off he would be awfully glad as he didn’t have a place to go. He said if you will I will deed you the property.
“I feel that I can get it started and we CAN PAY YOU A LITTLE along and if we don’t you can put us out. ’ ’
Mrs. Going further testified:
‘ ‘ Q. They were both present?
“A. Yes, sir.
“Q. What was the talk about?
‘ ‘ A. He said (referring again to Lambert): ‘ Mother, they are going to foreclose on the property in Corning and I had rather bump my brains out against the wall as to ask you for more money for I have asked for so much.’ Sterline and both of them come and he said, ‘If you could pay the bank off I would be awfully glad for we won’t have a place to go.’ I said, ‘Well, I don’t know whether I can or not. ’ But anyway he said, ‘If you will, I will deed you the property and then we will have a place to stay for certain. We know you wouldn’t put us out and we can pay you maybe when I am able. ’ ’ ’

The only sensible conclusion I can draw from the above is that when Mrs. Going accepted the deed she did so knowing that appellant and her husband thought they had the right to pay her back and redeem the property. If I am right then the majority opinion condones and rewards Mrs. Going’s deception. An additional reason why I don’t like that result is that the entire dealings were among close relations, and also appellant, being under severe economic pressure was in no position to deal at arms length.

Justice Robinson joins in this dissent.

       Pending this appeal, Mrs. Sarah Going departed this life. The cause was revived in the name of Guy Amos, Executor et al.

       Lambert had a right to give away his insurance policy and his motives in doing so are legally immaterial provided that the assignment did •not involve an illegal, fraudulent or wager transaction. Webster v. Telle, 176 Ark. 1149, 6 S. W. 2d 28.

       We said in Polk v. Brown, 117 Ark. 321, 174 S. W. 562: “. . . The acknowledgment is an official act done under an official oath and is protected under the presumption the law necessarily indulges in favor of the acts of its own officers. Under our statute one of the means of evidence upon which a deed can be admitted to record is a certificate of proof or acknowledgment of an officer authorized by our statute to take such proof or acknowledgment. The burden of proof undoubtedly rests upon the person denying that one signed a deed or acknowledged it to show the falsity of the certificate which carries with it the usual presumption that the officer making it has certified to the truth, and has not been guilty of a wrongful or criminal action. ...” Also see: Miles v. Jerry, 158 Ark. 314, 250 S. W. 34; Clifford v. Federal Bank and Trust Co., 179 Ark. 948, 19 S. W. 2d 1026; Anthony v. Pennington, 182 Ark. 1039, 34 S. W. 2d 219; Jolly v. Meek, 185 Ark. 393, 47 S. W. 2d 43.

       . . . the law presumes that the certificate of acknowledgment is what it purports to be . . . (See Footnote No. 3 supra.)

      For cases determining whether a deed is a mortgage, see: Beloate v. Taylor, 202 Ark. 229, 150 S. W. 2d 730; Tyler v. Morgan, 214 Ark. 667; 217 S. W. 2d 606; Newport v. Chandler, 206 Ark. 974, 178 S. W. 2d 240; Fox Brothers Hardware Co. v. Phillips, 210 Ark. 483, 196 S. W. 2d 754; Watson v. Clayton, 203 Ark. 1097, 160 S. W. 2d 849.

       The rule that to reform a written instrument requires clear, convincing unequivocal and cogent testimony is so well known as to require no citation of authority.


author: Carretón Harris, Chief Justice.

text:
    Snavely v. Snavely.
    5-1629
    320 S. W. 2d 934
    Opinion delivered February 23, 1959.

      Claude F. Cooper and T. J. Crowder, for appellant.

      William S. Rader, for appellee.
   Carretón Harris, Chief Justice.

Irene R. Snavei'y, appellee herein, instituted suit against Max L. Snavely, appellant herein, for separate maintenance. Appellant filed a cross complaint seeking an absolute divorce. On final hearing, the court entered its decree finding that Mrs. Snavely was entitled to separate maintenance, fixed the amount of such maintenance at $200 per month, further ordered the payment of certain bills incurred by appellee prior to the separation, and granted an additional attorney’s fee in the sum of $100. Appellant’s cross complaint was dismissed. From the decree of the court, comes this appeal.

The parties were married in Salt Lake City, Utah, on March 2, 1957, having known each other for approximately two years. Appellee had been employed as Chief Stewardess for Western Airlines in Salt Lake City, and appellant was employed as Field Service Representative for Curtis-Wright Aeronautics Corporation. Mr. Snavely was regularly assigned to the Blytheville Air Force Base, but at the time of the marriage, was on special duty in Wendover, Utah. Mrs. Snavely testified that within four days after the marriage, and after receiving a telephone call from Blytheville, Mr. Snavely became cool and indifferent, and the uncontroverted proof shows that the parties had no sexual relationship after ten days or two weeks. Appellee testified that the day after the marriage, her husband took out of his brief case a picture of himself and Miss Anne Lowery, a resident of Blytheville, which had been taken a few weeks before the marriage. However, she testified that he gave assurances that Miss Lowery meant nothing to him, and appellee was satisfied at the time. About the 26th of the month, appellee found in appellant’s brief ease, two letters from Miss Lowery, dated March 12th and March 23rd. According to her testimony, Miss Lowery expressed her love for appellant, and stated “If you will come back single, we will take on where we left off.” Mr. Snavely admitted receiving the letters, and according to his wife, when sometime subsequently asked if he was in love with Miss Lowery, stated, “I don’t know. I would like to see her again, but I don’t know.” Mrs. Snavely further testified that on the same date, he received a call from Blytheville, and told her that he talked with. Anne. Appellant denied talking to Miss Lowery over long distance, but stated that the conversations were with two friends in Blytheville, Troy Graham and Joe Laney. Relative to the letters, he stated that he had nothing to do with writing them, did not know they were going to be written, and did not answer them. On March 30th, appellant returned to his regular assignment at the Blytheville Air Force Base. Appellee went to Idaho Falls to leave her car with her mother, following which she came to Blytheville, arriving on April 5th. There, a motel room was obtained, which the parties shared, but no marital relations were engaged in, nor for that matter, as previously stated, after the first ten days or two weeks of the marriage. Mr. and Mrs. Snavely subsequently registered in at the Noble Hotel, but Mr. Snavely refused to stay with his wife, and obtained a ■ room with his friends, the Grahams.

According to appellant, the difficulty between the parties was largely occasioned by their dissimilar religious beliefs. He stated that the reason for terminating sexual relationships was because appellee would not permit the use of contraceptives. Mr. Snavely testified that she stated their children were to be reared in the Catholic church, and that he “* * * would have absolutely nothing to do with the raising of them and their spiritual welfare. * * *” He further stated that for these reasons, he told her “* * * that we would just not have marital relations until this was settled.” However, appellant admitted that prior to the marriage, the matter of her religion and belief had been thoroughly discussed, and he had talked with the Catholic priest. He further admitted that he had signed an agreement and an oath prior to the nuptials to the effeet that he would support her beliefs as a Catholic. From his testimony:

‘ ‘ Q. You were fully aware of what you were doing?

A. Yes, sir, under the theory, what I signed, I was familiar with, but that did not include the practical side of it after we married.

Q. What do you mean, it did not include the practical side of it?

A. You think everything is fine until you get into it and begin to realize it.”

Accordingly, it is obvious that appellant was already cognizant of the views of his wife, and had full knowledge of what to expect, before the marriage. There was no effort on the part of appellee to conceal her feelings, and certainly her position came as no surprise to him. Mr. Snavely stated he felt that her religion was a barrier because it “ * * * will always be above her love for me,” and further testified that he had lost his love for appellee. He denied any improper relations with Miss Lowery, and stated that he had not been with her alone since his marriage. The evidence clearly reflects, and appellant admits, that he and Miss Lowery were together on several occasions in the company of other persons. On one occasion, a trip was taken to Memphis in appellant’s automobile, by Mr. Snavely and the young woman, together with a married couple. When asked if he had given a gift to Miss Lowery on her birthday, he replied:

“A. Nothing. When is her birthday? Nothing.
Q. To refresh your memory, was not her birthday in the month of June, and didn’t you give her an electric razor?
A. Yes, sir, sorry.”

Miss Lowery denied any misconduct with appellant, denied being with him alone since his marriage, and denied that she had received any gift.

After reviewing the evidence, we feel that the Chancellor was entirely justified in entering the order for separate maintenance. Mrs. Snavely testified that her husband stated he did not want to live with her, and wanted a divorce, that he was not in love with her,— and the evidence reflects that he moved in with friends rather than live with her. Nor are we overly impressed with Mr. Snavely’s statement that their troubles were caused by religious differences. There is nothing in the record that would indicate Mr. Snavely to be a deeply religious man. In fact, the record does not reflect his religious affiliation, nor any suggestion that he has attended church at any place. If religion were really the barrier, one would expect to find testimony relating his own deep-seated beliefs, and faithful attendance at the church of his choice. In our view, the evidence rather reflects that appellant entered into the nuptials without being sure of his own feelings (as between appellee and Miss Lowery); evidently decided within a few days that he had made a mistake, and wanted to be free of the marriage.

"We likewise agree with the Chancellor that appellant did not present evidence that would justify a divorce. He principally complains that his wife went through his brief case, and stated that on one occasion she read papers of a secret nature connected with his work. Human nature, being what it is, and appellee having earlier found the letters from Miss Lowery, it would be most remarkable if she had not again gone through the brief case. We daresay, that most any bride or groom, having found amorous communications directed to the other from one who had previously dated the spouse, and already distressed by the indifference of the marriage partner, would not be able to resist the temptation to “look further.” The evidence does reflect one act on the part of Mrs. Snavely that she could have better left undone. After the hearing for temporary maintenance, appellee wrote Mr. Snavely’s company a letter advising that he was married, and stating that his conduct since arriving in Blytheville from Wendover “# * * has been grossly unbecoming to a firm of the status of Curtis-Wright.” While this letter served no good purpose, and should not have been written, we certainly do not consider that it would constitute grounds for divorce. Here again, enters the human factor — a woman, angry and hurt, because her husband refused to live with her. It is also noted that this letter was only written after court litigation was underway.

Appellant complains of the amount of the award for Mrs. Snavely’s maintenance. The record reflects that he has a net salary of $478 per month (deductions being made for income tax, retirement, health benefits, and life insurance), plus an allowance of $120 per month from the company for “social obligations.” In other words, the wife was given one-third of his total net income. Under the evidence in this case, we consider the award entirely proper. At the time of her marriage, Mrs. Snavely gave up a job which paid .in excess of $400 per month, and she is presently unemployed. According to her testimony, she is now too old to regain a job as stewardess, and has been unable to find employment in Blytheville. It would also appear that appellant’s expenses can be somewhat reduced; for instance, the record reflects that he pays $100 per month room rent, and it appears that a room could be obtained at a much smaller figure.

Appellant also complains that the attorney’s fee was excessive, and that appellee had funds of her own with which to employ an attorney. We do not agree. Mrs. Snavely testified that she had $600 when she married, of which some portion had already been spent before the litigation. Admittedly, she was unemployed from the time of the marriage. Since we have concluded that appellee was justified in instituting the suit for separate maintenance, and since she was certainly entitled to the services of an attorney to defend against the cross complaint for divorce, we hold appellant’s contention to be without merit.

Appellee has moved that she be allowed an additional attorney’s fee for services rendered on this appeal. We are of the opinion that such motion should be granted, and appellant shall pay an additional $100 as such fee.

Affirmed, together with the additional attorney’s fee.

       Attorney for appellee had previously been awarded a $200 fee, thus making the total fee $300.

       According to appellee’s testimony, they went together “From April of ’55 until my husband came to Blytheville in November of that year, and then he came back to Salt Lake City just before New Years of ’56, and stayed there until March, and from then on, the courtship was carried on by air mail and telephone.”

       Mrs. Snavely testified that appellant never offered to use a contraceptive during their married life. “* * * In fact, the only one I ever saw was in the glove compartment of his car.”

       Mrs. Snavely denied making this statement, but did say, “When we were courting, we discussed the probability of children, and at that time I told my husband that regardless of whomever I married, Catholic or otherwise, the children would have to be reared as Catholics, but as to raising children, that is the duty of the parents, not one or the other, but so far as religion was concerned, they would have to be Catholics, and he understood that.”

       From her testimony: “* * * and then my husband said, ‘I have only made two mistakes in my life, one was buying the Oldsmobile, and the other was marrying you.’ ” A further statement by appellant: “I’m miserable. I want out.”

       Miss Lowery stated she only wrote one letter.

       He also receives an advance from the company of $200 per month, but the record is not entirely clear as to whether this amount has to be repaid. For purposes of this discussion, we consider his net income to be $598 per month.

       He stated that this amount was meant to also include board, but he takes most of his meals away.


author:
J. Seaborn Holt, Associate Justice.
      Ed. F. McFaddin, Associate Justice

text:
    Cole v. Hendry Corporation.
    5-1715
    321 S. W. 2d 377
    Opinion delivered February 23, 1959.
    [Rehearing denied March 30,1959]

      J. B. Wilson and Paul K. Boberts, for appellant.

      Wright, Harrison, Lindsey & Upton, for appellee.
   J. Seaborn Holt, Associate Justice.

This is a Workmen’s Compensation case. The primary and decisive question presented is one of fact, — that of dependency. On a hearing before a single commissioner appellant, Mrs. Lela Cole, was, on March 12,1954, awarded $2.50 per week for a period of 450 weeks. On an appeal by Mrs. Cole to the full Commission the findings and the order of the single commissioner was reversed, Mrs. Cole’s claim of dependency was disallowed and dismissed. On appeal to the Circuit Court the action of the full Commission was affirmed. This appeal followed.

Claude Stevenson (the deceased) was born in 1920. While in the employ of appellee, Hendry Corporation, and during the course of his employment, he lost his life by drowning on September 4, 1951. He had no children. M. F. Stevenson was his father and appellant was his mother. They were divorced and his mother (now Mrs. Cole) was awarded Claude’s custody. Mrs. Cole married her present husband in 1947. Claude married Ruth Mayes in 1942 and they were divorced in 1947. They were reconciled on the day the divorce was granted and lived together for some time. On November 10, 1947 Claude went through a marriage ceremony with Frankie Powell in Bentonville but lived with her only a few months when he left her and went back to his mother in El Dorado where he worked intermittently. The record discloses that Claude worked six months in 1950 for which he was paid $841.83. His total earnings for 1951 were approximately $500.00, which covered a period of nine months.

The findings and conclusions of the full Commission, which we have concluded were supported by substantial testimony, were: “There remains only for consideration the question as to whether or not Lela Cole was partially dependent upon the deceased and if she was, to what extent. We are of the opinion that she was not a dependent, even partially, within the meaning of the Act. She is married and has been for several years and is supported by her husband. She told one story at the hearing of this case on October 5, 1951, and later changed her testimony. Deceased was not regularly employed and was apparently out of work a considerable part of the time and could not have regularly contributed to the support of anyone. It seems clear that claimant (deceased) was from time to time supported by other persons.”

On appeal to this court of Workmen’s Compensation cases, our rule is well established that we must affirm the action of the commission if we find any substantial evidence to support it. As recently as December 22,1958, in Ship v. Tanner, 229 Ark. 815, 318 S. W. 2d 821, we summarized the scope of review as follows: “Since the enactment of our Workmen’s Compensation Law, we have consistently held that we do not try compensation cases here ele novo, we are, therefore, not concerned with where the weight of the evidence may lie. When we find any substantial evidence to support the findings of the commission, we must affirm. — Findings of fact by the Workmen’s Compensation Commission are given the same verity as attach to the verdict of a jury and this applies on appeal to the circuit court as well as to the Supreme Court from the judgment of the circuit court ... On appeal, the Supreme Court must view testimony in its strongest light in favor of the commission’s findings . . . Where the commission acting upon sufficient evidence sustains or rejects an award, such findings will not be disturbed on appeal. —. . . there is no prima facie presumption that the claim comes within the provisions of the law, (Workmen’s Compensation Act),” Duke v. Pekin Wood Products Company, 223 Ark. 182, 264 S. W. 2d 834. “The question of dependency is one of fact in the determination of which all the circumstances of the particular case are to be considered,” Nolen v. Wortz Biscuit Company, 210 Ark. 446, 196 S. W. 2d 899. “The testimony of an interested party will not be regarded as undisputed in determining the legal sufficiency of his evidence, and in weighing his testimony, his conduct and the attendant circumstances may be considered,”. Meyer v. Seismograph Service Corporation, 209 Ark. 168, 189 S. W. 2d 794.

After a careful review of the evidence presented, and without attempting to detail it here, we have concluded, as indicated above, that there was substantial evidence upon which to base the Commission’s findings, and accordingly, we affirm.

MoFaddin and Johnson, JJ., dissent.

Ed. F. McFaddin, Associate Justice

(dissenting). I am firmly of the opinion that, at all events, Lela Cole is entitled to receive $2.50 per week from September 4,1951, and continuing for a period of 450 weeks. This is because: (a) the Single Commissioner, Hon. Dave Peel, made such an award in her favor; (b) neither the employer, Hendry Corporation, nor its insurance carrier, Travelers Insurance Company, ever appealed or filed any petition for review from that award; and (c) no additional evidence of any kind was heard by the Full Commission on review. The fact that Lela Cole filed a petition for review, seeking more money, did not allow the Full Commission to deprive her of the amount that the Single Commissioner had awarded to her.

Lela Cole claimed to be the mother of the deceased, Claude Stevenson, and partially dependent on him for support. (§ 81-1315(i), Ark. Stats.) Her claim was heard by the Hon. Dave Peel, sitting as a Single Commissioner (§ 81-1325, Ark. Stats.) ;* and he found that Lela Cole was the mother of, and partially dependent on, the deceased, Claude Stevenson. Hon. Dave Peel allowed Lela Cole the amount of $2.50 per week. This opinion by the Hon. Dave Peel was filed March 12, 1954; and here are pertinent excerpts from his opinion:

“The Commissioner, in arriving at a fair estimate of what the contributions might have been in this case to this mother, feels that $2.50 per week reasonably represents the value of all such contributions resolved to an amount that would come with any degree of regularity. . . . and the respondents are directed to pay to the claimant mother, Lela Cole, the sum of $2.50 per week from September 4, 1951, representing the amount of contributions made to her for her partial support, to continue subject to the provisions and limitations of the Act, not to exceed 450 weeks.”

As aforesaid, I find nothing in the record to show— and it is not insisted by appellees in this Court — that either the Hendry Corporation, as the employer, or Travelers Insurance Company, as the insurance carrier, ever filed any petition for the Full Commission to review the order of the Single Commissioner (§ 81-1325, Ark. Stats.).* Rather, the dispute was all the time between the various parties who claimed dependency on the deceased, such as the common law wife, the “lawful” wife, the father, and the mother. At all events, Lela Cole, the mother, claimed that she was entitled to $5.00 per week instead of $2.50 per week and claimed that her allowances should bear interest: so she filed her petition for review by the Full Commission. And on August 26, 1954, the Full Commission rendered its opinion in which it allowed Lela Cole nothing.

I find no authority in our statute holding that the Full Commission may disallow a claimant even what the claimant had received from the Single Commissioner, when no additional testimony was taken before the Full Commission, and when neither the employer nor its insurance carrier ever appealed. I think the most the Full Commission could have done as regards Lela Cole was to say that she could not get any more than the Single Commissioner had allowed her. I think it was beyond the power of the Full Commission to take away from her what had been allowed her by the Single Commissioner, and against which neither the employer nor its insurance carrier had ever appealed.

I frankly state that I can find no authorities in Arkansas on this question. In Rocha’s Case, 300 Mass. 121,14 N. E. 2d 133, the Massachusetts Court held that the jurisdiction of the Reviewing Board to reverse the finding of a Single Commissioner is purely statutory and rests upon a claim for review seasonably filed. Since neither the employer nor its insurance carrier filed for review, I cannot see how either is entitled to the windfall victory awarded by the Full Commission in the case at bar. In Barlau v. Minneapolis-Moline Power Implement Co., 214 Minn. 564, 9 N. W. 2d 6, the Minnesota Court held that •when an appeal is taken from the Referee’s decision to the Full Commission, the Full Commission exercises appellate jurisdiction and not original jurisdiction. The Minnesota Court held that the Referee’s decision was final unless reversed on appeal. These are the nearest cases in point that I have been able to find. But my sense of fair play impels me to say that Lela Cole, by appealing, should not be forced to lose what she had already received, since neither the employer nor its insurance carrier appealed, and since no additional testimony was taken before the Full Commission. I think that the judgment of this Court should be that Lela Cole is entitled to receive the $2.50 per week, just as awarded her by Hon. Dave Peel, the Single Commissioner.

Mr. Justice Johnson joins in this dissent.

       These references to the statutes are to the sections as found in the Cumulative Pocket Supplement, containing the 1948 Initiated Act No. 4.

       In 100 C. J. S. 1033 some cases from other jurisdictions may be found.


author: Ed. F. MoFaddin, Associate Justice.

text:
    Lemm v. Sparks.
    5-1662
    321 S. W. 2d 388
    Opinion delivered February 23, 1959.
    [Rehearing denied March 30, 1959]

      Virgil Roach Moncrief and John W. Moncrief, for appellant.

      Coleman, Gantt & Ramsay, E. Harley Cox, Jr., for appellee.
   Ed. F. MoFaddin, Associate Justice.

The appellees (plaintiffs), J. W. Sparks and Herbert Hunter (doing business as Gregg Oil Company, a partnership), filed action against the appellants (defendants), George P. Lemm and Jerry Maiatico, to recover a claimed balance of $15,798.89 for labor and services alleged to be due under both written and oral contracts. In addition to a general denial, the defendants denied any oral contract, claimed that plaintiffs had not fully performed the written contract, and denied owing any amount to the plaintiffs. The jury’s verdict was for the plaintiffs for $6,000.00; and defendants bring this appeal, assigning 25 errors. Most of these relate to instructions; and we group and dispose of the twenty-five points in suitable topic headings.

I. The Alleged Oral Contract. In 1956 John H. Hall acquired oil and gas leases on more than twelve thousand acres of land in the western part of Arkansas County, and was desirous of finding someone who would finance the drilling of exploratory wells. The territory was entirely “wildcat.” Hall met the plaintiff, Hunter, who was anxious to do the actual drilling, if someone would finance the operations. Hunter’s partner, Sparks, knew a Mr. Kibler in Washington, D. C., who, in turn, knew parties ithat might be induced to provide the finances. So Sparks and Hall went to Washington and were introduced to the defendants, Lemm (an attorney) and Maiatico (a building contractor). Hall sold Lemm and Maiatico leases covering ten thousand acres.

Lemm and Maiatico entered into a drilling contract with the Gregg Oil Company by which they agreed to pay Gregg Oil Company $18,000.00 for drilling the first well and $17,000.00 for drilling the second well. The location of each well was stated. Gregg Oil Company agreed, inter alia, to drill each well to a depth of 4200 feet “. . . unless oil and gas in paying quantities is encountered at a lesser depth,” or unless it became impossible to drill because of the formation encountered. Also, Gregg Oil Company agreed, inter alia, to take three drill stem tests in each well and to “. . . take up to twenty side well cores.”

The plaintiffs claimed that immediately after the signing of the drilling contract, Sparks told the defendants, Lemm and Maiatico, that if a showing of oil should be encountered in either of the wells covered by the contract, then considerable additional expenses would be entailed, such as casing, cementing, delay time, etc.; and plaintiffs claimed that an oral contract was made between the parties as to such additional items of expense. The first well provided for in the contract was duly commenced within the time and at the location stated in the contract. John H. Hall was at the drilling location during most of the time. When the well reached a depth of about 1600 feet there was a slight showing of oil. The driller obtained cuttings and showed them to Hall, thinking that he was representing Lemm and Maiatico. Here is Hunter’s testimony as to the occurrence:

“We were drilling in an unproven area and we didn’t know what we might run into at any depth so when that cutting came to the surface oil was on top of the pit — not in large quantities but a good large scum. Dr. Hall was there ... We looked that over and then we carefully looked at the next hundred feet that we drilled just a little at a time ... we would circulate out and watch it, . . . and it looked like it was possible that we might have something worth keeping at that point. We had the samples and we put them in individual bags and numbered the depth that they came from and turned them over to them, and Dr. Hall recommended to set up pipe at that depth; and I said you get in touch with the people in Washington but we have a contract to keep here, to go deeper than this unless we do get orders to set pipe; ... I am going to continue to make hole until I get orders to stop, so we continued drilling . . .”

When Mr. Lemm came down from Washington the well was at a depth of 3917 feet. Lemm decided to set casing and test the horizons between 1600 and 1700 feet. At all events, beginning on August 31st and continuing until the second well was abandoned oilthe plaintiffs spent thousands of dollars for easing, cementing, shut-down time, etc.; so that the written contract calling for $35,000.00 for two wells grew (with the disputed oral contract) into expenditures totalling in excess of $100,000.00. The defendants do not deny that they have paid the plaintiffs a total of $96,500.00 on the two wells; and the plaintiffs claim that there remains due a balance of $15,798.89.

Thus, we come to the matter of the oral contract for casing, cementing, shut-down time, etc. It is well recognized that when the written contract is plain and unambiguous and complete in its terms, then parol contemporaneous evidence is inadmissible to contradict or vary the terms of the valid written instrument. (Outcault Adv. Co. v. Bradley, 105 Ark. 50, 150 S. W. 148; Anderson v. Wainwright, 67 Ark. 62, 53 S. W. 566; and Cox v. Smith, 99 Ark. 218, 138 S. W. 978.) But, here, it is not a matter of a contemporaneous oral contract varying the terms of a written contract; rather, this is a case of an oral contract being in addition to the written contract. As such, the evidence was admissible concerning the oral contract. (Burgie v. Bailey, 91 Ark. 383, 121 S. W. 266, 18 Ann. Cas. 389.) In Cox v. Smith, 99 Ark. 218, 138 S. W. 978, Mr. Justice Frauenthal stated the rule: “. . . a separate verbal agreement relating to a matter not embraced in the written contract may be proved by parol testimony.”

Certainly the parties had some sort of understanding in addition to the written contract heretofore copied, because it only required the defendants to pay a total of $35,000.00, and yet they do not deny having paid the plaintiffs a total of $96,950.00. Some explanation was proper as to the payments; and the evidence established that labor, services and materials were furnished under an oral contract in addition to the written contract. So the Court was correct in allowing evidence to be heard concerning the oral contract.

II. Plaintiffs’ Instruction No. 1. Over the defendants’ objection, the Court instructed the jury:

“If you find from a preponderance of the evidence, that the plaintiffs and defendants entered into a contract in writing for the plaintiffs to drill on behalf of the defendants two oil wells in Arkansas County, Arkansas, and that after that contract in writing the plaintiffs and defendants entered into one or more additional agreements orally, and if you find that the plaintiffs have completed all their obligations under these contracts, and if yon further find that there is a balance remaining unpaid under these contracts when considered together, then yon shall find for the plaintiffs in the amount remaining unpaid, if any.”

Much of what we have said in Topic I, supra, applies to this instruction. The defendants say that this instruction was a “roving commission” to the jury; but we do not consider the instruction fatal as against the defendants’ objections. The plaintiffs assumed the tremendous burden of establishing that they had completed “. . . all of their obligations under these contracts.” They filed an itemized account of thirteen single-spaced typewritten pages, which purported to show each item of debit and credit from July 1956 (the signing of the written contract) to and including November 14, 1956, which was after the abandonment of the second well. This account showed a claimed balance due plaintiffs of $15,798.89. The plaintiffs were interrogated at length about the various items; the jury had the account and all evidence about it, together with the instruction No. 1; and the verdict of the jury was for the plaintiffs for $6,000.00. There was substantial evidence to sustain the verdict.

III. Waiver. During the presentation of the evidence, and also in several requested instructions, defendants insisted that the plaintiffs had never completely performed the written contract. Some instances of non-performance, as urged by the defendants, were: (a) the first well was only drilled to 3917 feet instead of 4200 feet: and (b) the written contract called for three drill stem tests in each well and none was made. Because of these matters (and others of which these are typical), defendants urged that an instructed verdict should have been given in their favor.

The defendants also requested an instruction which read:

“The Court instructs the jury that under the contract sued on by plaintiffs, it was the duty of plaintiffs to make three drill stem tests in hole or well number 1 and it was also the duty and obligation of the plaintiffs, Hunter and Sparks, to make three drill stem tests in well or hole number 2, and it was the duty and obligation of plaintiffs to take twenty side wall cores in well or hole number 1, and it was the duty and obligation of plaintiffs to take twenty side wall cores in hole or well number 2, . . .”

The Court refused the instruction as requested; but modified it and gave it by adding these words at the conclusion of the requested instruction:

“. . . unless you further find from a preponderance of the testimony that the defendants had an authorized agent who had the authority to waive such conditions, unless you further find the defendants themselves waived such conditions.”

Likewise, in another instruction, the defendants insisted that the plaintiffs had not located the second well at the place provided in the contract; and the Court added these words to the requested instruction: “. . . unless the provisions of the contract were waived by the defendants or some person authorized to make such change in the contract.”

To both of these additions and modifications, the defendants most strenuously objected; but we see no error in the modifications made by the Court. The defendants could waive the provisions for depth, drill stem testing, location, etc. A contract for the drilling of an oil well, while involving a highly technical and skilled undertaking, is, nevertheless, to be interpreted by the same rules used in interpreting other contracts. Whether Hall was the implied agent of the defendants is to be determined by the same rules as in other cases of agency by holding out. There was testimony that when the well reached the depth of 3917 feet Mr. Lemm directed that casing be set so the horizons could be tested from 1600 to 1700 feet. Because of the absence of clear wording in the contract, a question of fact was made, as to whether the driller was to make the tests and side wall cores on his own initiative, or was to do those things only when directed by the defendants or their agent. The question of whether the plaintiffs exercised due and proper care and skill in drilling the well was a matter for the jury to decide. Also, the matter of waiver as to further depth after testing was, under all the evidence, a matter for the jury to decide.

On this matter of waiver, the defendants insist that the Court should not have used the words, “waive” or “waiver,” without defining these words. The defendants say, “. . . it leaves to the jury the determination of the legal elements of waiver and the legal elements of what is necessary to constitute ‘waive,’ ‘waived,’ and ‘waiver.’ ” If the defendants had thought that the words, “waive” or “waiver,” were so highly technical that they needed definition, then the defendants should have requested an instruction to that effect. They did not offer any such instruction, and therefore, are not in good position to complain about the use of the word.

We find nothing that makes the use of the words, “waiver” or “waive,” in this case different from the use of the words, “waive” or “waiver,” in any other matter of life. Webster’s International Dictionary defines “waiver” as, “An act of waiving or intentionally relinquishing or abandoning some known right.” That is the general definition. Black’s Law Dictionary defines “waiver” as, “The intentional or voluntary relinquishment of a known right ... or when one dispenses with the performance of something he is entitled to exact. It will be observed that the definition in Webster’s Dictionary is practically the same as that in the Law Dictionary. This fact, coupled with the fact that the defendants did not offer an instruction defining “waiver,” disposes of the objection which they made to the instruction as given.

CONCLUSION

As previously stated, there are twenty-five assignments urged by the appellants (defendants). We have reviewed all of them, and conclude that they do not require a reversal of the judgment.

Affirmed.

Johnson, J., dissents.

       We copy the entire drilling contract, omitting only the signatures:
      “This Drilling Contract entered into this the 30th day of June, 1956, by and between JERRY MAIATICO and GEORGE P. LEMM as Joint owners hereinafter referred to as owner, and J. W. Sparks and II. Hunter, General Partners d/b/a GREGG OIL COMPANY of Glade-water, Texas, hereinafter referred to as Contractor.
      “In connection with the drilling of a test well for Oil and/or Gas, CONTRACTOR agrees to furnish necessary Rotary Drilling Rig, Derrick, drill pipe, drill collars, and all necessary drilling equipment for to test a well to a depth of 4,200 feet.
      “Contractor agrees to furnish and drill a test well on your lease at the location as shown on the attached Plat in the NE14 of NE% of Section 18, Range 6W, Township 58, Arkansas County, Arkansas, and to drill the same to a depth of 4,200 feet from the surface unless oil and gas in paying quantities is encountered at a lesser depth, or unless a formation such as cannot be economically drilled with a standard Rotary and Standard Hard Rock bits should be encountered at a lesser depth, such formation could be Paleozic in that area.
      _ “Contractor understands this to be a turn key job down to oil string casing point and agrees to furnish in addition to drilling equipment, all labor, fuel, water, State drilling permit, Insurance, drilling mud and chemicals, to furnish pits and roads and to clear location. All necessary Surface Pipe, the Cement and Cementing Surface to set said surface pipe.
      “To furnish equipment and take three drill stem tests, to test likely formations if prospective formations are encountered. To furnish 24 hours’ rig time for circulating samples and to keep an accurate log and samples of formations encountered. To furnish an electric log and take up to twenty sidewall cores.
      “Consideration for this contract is to be $18,000.00. Money to be placed in Escrow to be paid out as follows: One third of $6,000 when a depth of one thousand feet has been reached, balance to be paid when Electric Log has been run and sidewall cores taken.
      “It is understood that this first well will be commenced on or before August 14,1956 and that Contractor will pursue with due dilligence the drilling of same. Contractor, is ready to furnish progress reports to the Owners or their duly appointed representative.
      “It is further agreed and understood that Well No. 2 near the center of Section 11, as shown on the Plat will be drilling immediately following the completion of No. 1 and to be drilled by Contract under same terms and conditions as No. 1, except the consideration is to be $17,000 on No. 2.”

       Here is Plaintiff Sparks’ testimony (as abstracted by defendants) on this matter of the oral contract:
      “On the day we signed that contract, Mr. Lemm had prepared it and we were in Mr. Maiatico’s office and Mr. Maiatico and I had lengthy conversation. Mr. Lemm was in and out of the office as he had several people calling on him. In the course of the conversation it came up that after the well was completed and after we had fulfilled our contract, and additional basis we would work on and at that time that anything run through our books, which is customarily with any contractor and this is not an exception, we would charge twenty-five per cent on the amount that went through our books.
      “That was the agreement with Mr. Lemm and Mr. Maiatico, and it would take care of our overhead and expense of supervision and other expenses.”

       At various places in the testimony Hall is referred to as “Dr. Hall”; and Sparks referred to him as a geologist who “sat on the well” for Lemm and Maiatico. Hall said he held a Master of Science degree from Marshall College in Baltimore, Maryland. Hall said he was not the agent of Lemm and Maiatico; hut his participation, and the issue as to whether there was a “holding out” as to agency, are matters that will be mentioned in Topic III, infra.

       Hunter testified as to this, as abstracted by the defendants:
      “Mr. Lemm was in my room in Hotel Pines when we discussed testing of well that the written contract didn’t cover, and I called his attention that when pipe was set and testing then his expenses would really start and that they were going to be considerably more than they had been; and we would have to pay for that material that would be necessary as they were obtained and would require advances of money and I made a statement and submitted to them a copy . . .”

       The second well covered by the written contract was drilled likewise without commercial production. In spite of all the expenditures, oil was not produced in commercial quantities from either of the wells.

       The defendants’ objection to this instruction reads:
      “Defendants and each of them objected generally to plaintiffs’ requested instruction number one and objected specifically to it because there is no evidence that plaintiffs completed all their obligations under the written contract. This instruction infers that an alleged oral contract claimed by plaintiffs to have been entered into on the same day the written contract was executed and on the same occasion was a subsequent oral contract and allows the jury to so infer or find, and the instruction is uncertain, indefinite, confusing, and misleading in saying ‘one or more additional agreements orally’, and plaintiffs’ pleadings do not declare on such additional oral contracts and the instruction does not point out such oral contract, nor what they were or what they covered or pertained to. The instruction does not contain any definite, or certain or proper guide and is a roving commission, confusing and misleading and vests in the jury the right to decide questions of law. The instruction infers there was one or more additional contracts and that there was one or more oral contracts.”

       The objections covered several pages in the transcript, but we do not summarize them because they ultimately involve the point now discussed.

       In Summers on “Oil and Gas” (Permanent Edition), Vol. 4 § 682, the text states: “The general rules of construction which are applied in ascertaining the meaning of other contracts are applicable to the construction and interpretation of contracts for the drilling of oil and gas wells.” See also Chapter 30 of “Oil and Gas Rights” by MorrisonDesoto. In 58 C.J.S. 602, “Mines and Minerals” § 225, in discussing contracts for testing or working, cases from many jurisdictions are cited to sustain this textual statement: “The rules governing the construction . and operation of contracts generally . . . usually apply in construing and determining the operation of contracts for the testing or working of a mine or mineral deposit or for services to be rendered in connection with the operation of a mine or well . . .”

       In 2 C.J.S. page 1048 “Agency” § 23, the text reads: “Agency may be implied where one by his conduct holds out another as his agent, or thereby invests him with apparent or ostensible authority as agent

       In 88 C.J.S. page 1063, “Trial” § 392, the text reads: “A party-desiring terms or phrases to be defined or explained must ordinarily request an instruction to such effect before it becomes the duty of the Court to define or explain them.”

       In Sirmon v. Roberts, 209 Ark. 586, 191 S. W. 2d 824, Chief Justice Griffin Smith gave a splendid discussion of the word, “waiver”.

       In 53 Am. Jur. p. 489, “Trial” § 630, the text states: “It is not necessary for a Court in its charge to define words in common use which are applied by the trial Judge in his instructions in their conventional sense, since the jury must be presumed to know their general and proper significance.”


author: George Bose Smith, J.

text:
    Gibson v. Ark. Southern Production Co.
    5-1731
    320 S. W. 2d 932
    Opinion delivered February 23, 1959.

      Wayne Jewell, for appellant.

      Mahony £ Yocum, Melvin E. Mayfield, W. L. Jean, C. E. Wright, for appellee.
   George Bose Smith, J.

The appellants, a partnership engaged in servicing oil and gas wells, brought this suit against Arkansas Southern Production Company and upon trial recovered a judgment against that corporation for $3,862.43, for services rendered. Upon filing the complaint the appellants had a writ of garnishment served upon Spartan Petroleum Corporation. The chancellor held that Spartan was not indebted to the defendant, Arkansas Southern, and the correctness of that ruling is the only issue presented for review.

There is little dispute about the facts. On March 27,1957, Arkansas Southern orally agreed to sell to Spartan certain oil and gas leases, which were burdened with a $50,000 oil payment. The agreement did not contemplate that Spartan would pay any money to Arkansas Southern, but Spartan did agree to pay $8,066.13 to sixteen creditors of the seller. The president of the selling corporation testified that he believed at the time that he had listed with Spartan all the debts of the company, except for two loans that are unimportant here.

Spartan paid $2,500 to Warren & Hollyfield, one of the seller’s creditors. Spartan deposited in escrow with the firm of Mahony & Yocum its check for the remaining $5,566.13, together with a list of the fifteen debts totaling that amount. At the same time the seller deposited with Mahony & Yocum an executed assignment of the leases that were being sold. The escrow agreement, which was oral, provided that the transaction would be consummated upon Mahony & Yocum’s approval of the seller’s title to the leases.

In April Mahony & Yocum approved the title, subject to a minor requirement, and the seller’s assignment of the leases was placed of record on April 6. Three of the listed creditors, whose claims totaled $1,128.70, had been paid when the writ of garnishment was served on Spartan on May 3. In response to the writ Spartan denied that it was indebted to the defendant, Arkansas Southern, but admitted that it held the sum of $4,437.43 for the benefit of the creditors who had not yet been paid. Spartan paid the money into court, brought the unpaid creditors into the case, and asked to be discharged as garnishee. Upon final hearing the chancellor held that the garnishment had not captured in the hands of Spartan any money or property belonging to Arkansas Southern; the decree accordingly directed that the $4,437.43 be distributed pursuant to the original list of creditors, twelve of whom were still unpaid. The present controversy arises from the fact that Arkansas Southern’s indebtedness to the appellants was listed as amounting to $625, but, as we have said, the appellants actually recovered judgment against Arkansas Southern for the sum of $3,862.43.

The chancellor’s ruling was correct. The appellants argue that Arkansas Southern really had control of the money placed in escrow with Mahony & Yocum and could have requested that this money be paid over to the selling corporation. The trouble is that the record does not sustain this argument. We can only conclude from the testimony that the purchaser was unwilling to entrust the purchase money to Arkansas Southern and therefore protected itself by the escrow arrangement. When the seller’s title was approved the purchaser became liable to the various creditors. Rice v. Wood, 61 Ark. 442, 33 S. W. 636, 31 L. R. A. 609. Arkansas Southern then had no legal or moral right to demand that the money be paid to it. If it be said that Spartan’s obligation to pay out $8,066.13 was fundamentally a duty owed to Arkansas Southern, the answer is that by the escrow agreement Arkansas Southern assigned to its creditors the right to receive the payment. A writ of garnishment does not reach a debt which the defendant, as creditor of the garnishee, has already assigned to another. Samstag v. Orr, 101 Ark. 582, 142 S. W. 1127.

As a secondary contention the appellants assert that Arkansas Southern is insolvent and that therefore, as a matter of equity, the chancellor should have substituted the appellants’ $3,862.43 judgment for their listed claim of $625 and on that basis have distributed the money in court pro rata among the twelve creditors. The case cited, State Nat. Bk. v. Wheeler-Motter Merc. Co., 104 Ark. 222, 148 S. W. 1033, does not support this contention. That case involved a general assignment for the benefit of creditors, which is a true insolvency proceeding, and the rale of pro rata distribution was applicable.

In the case at bar there was no general assignment for creditors; the contract of sale and the escrow agreement apportioned a specified amount of the purchase money to each of the sixteen named creditors. If, owing to the seller’s insolvency, the arrangement resulted in a preference to some of the creditors, it might have been subject to attack under the federal bankruptcy law, Remington on Bankruptcy (5th Ed.) § 130, but it was not voidable under the law of this state. Gilkerson-Sloss Comm. Co. v. Carnes, 56 Ark. 414, 19 S. W. 1061; Gage v. Chastain, 183 Ark. 641, 37 S. W. 2d 705.

Affirmed.