text:
    Universal C. I. T. Credit Corp. v. Lackey.
    5-1317
    305 S. W. 2d 858
    Opinion delivered October 21, 1957.

      Wright, Harrison, Lindsey & Upton and Norton S Norton, for appellant.

      Giles Bearing, for appellee.
   Ed. F. McFaddin, Associate Justice.

This is another case involving the claim of usury in a conditional sales contract. The Chancery Court found that the contract was usurious, and this appeal ensued.

On November 19, 1953 appellee Lackey purchased a new 1954 Chrysler automobile from Bragg Auto Company of West Memphis by trading in an old car and executing a conditional sales contract for the balance due, plus insurance and interest. Here is a tabulation of the transaction:

1. Cash price of new car.$3,536.25
2. Less Allowance for old car. 1,786.25
3. Balance due in cash. 1,750.00
4. Premium on Collision and Comprehensive Insurance . 229.00
1,979.00
5.“Finance Charge (including insurance not in Item 4)”. 364.88
Total due on contract.$2,343.88

The said amount of $2,343.88 was payable in twenty-three monthly payments of $60.00, and one final payment of $963.88. The conditional sales contract was on a form supplied by appellant, Universal C. I. T. Credit Corporation (hereinafter called “Universal”); and the finance charges and insurance charges were determined from information furnished by Universal. Bragg instantly transferred the conditional sales contract to Universal; so we treat Universal as having been the original lender.

It is clearly established that the $364.88 as the “finance charge,” in line numbered 5 in the tabulation above, is usurious on the $1,979.00; and it was likewise conceded by appellee that if $95.75 of the said $364.88 be taken as insurance premiums paid for customer life insurance and limited personal accident insurance, then the remaining $269.13 is not usurious.

1. The Customer Life and Limited Personal Accident Insurance. The first point in the case is, whether Lackey can be legally charged for $95.75 for premiums for the said customer life and limited personal accident insurance. Lackey admitted signing the contract; bnt he testified that he never agreed to take any such life and accident insurance and would not have taken it if he had been told about it. He testified that he never received the life and accident insurance policies; and contended that the $95.75 was a cloak for usury.

On the other hand, appellant established: (a) that Lackey signed an instrument requesting the customer life insurance and limited personal accident insurance; and (b) that Universal paid the premiums on these policies in the total amount of $95.75. The premium on the customer life insurance was $93.75 for the 24 months of the contract, and the premium on the limited personal accident insurance was $2.00 for the 24 months of the contract.

(a) The Request for Insurance. There was introduced in evidence the original conditional sales contract signed by Lackey, and in the face of that instrument there was a blocked off section headed in large capital letters: “Insurance Election.” It was separately signed by Lackey; and read: ‘ ‘ Customer elects to include the cost of customer life and limited personal accident insurance in the time balance. ’ ’ It was stated in bold capital letters that the insurance election was not applicable unless signed; and appellee Lackey signed this insurance election as the “person to be insured as above.” Lackey did not deny that he signed the insurance election in addition to signing the conditional sales contract; but he claims that he was in a hurry and did not read what he was signing. That was his fault. In Texas Co. v. Williams, 178 Ark. 1110, 13 S. W. 2d 309, we quoted from Upton v. Tribilcock, 91 U. S. 45, 23 Law. Ed. 203, as follows:

“ ‘It will not do for a man to enter into a contract and, when called upon to respond to its obligations, to say that he did not read it when he signed it, or did not know what it contained. If this were permitted, contracts would not be worth the paper on which they are written. But such is not the law. A contractor must stand by the words of his contract; and, if ho will not read what he signs, he alone is responsible for his omission.’ ” ¡

So, since Lackey did not deny signing the request for insurance and did not establish, that his signature was obtained by fraud, we take it as established that Lackey ordered the customer life and limited personal accident insurance.

(b) The Premiums on the Life ancl Accident Policies. It was established by overwhelming evidence that Universal paid $93.75 as the premium on the life policy, and $2.00 as the premium on the accident policy. Mr. Korn, the executive vice-president of the National Casualty Company, testified that his company had in effect an accident policy insuring Joe Lackey; that the policy was for two years; that the premium was $2.00; and that the Universal C. I. T. Credit Corporation paid the premium on the policy. Mr. Allen, the general manager of the sales department of the Old Republic Life Insurance Company of Chicago, Illinois, testified that his company had in effect a policy insuring the life of Joe Lackey from November 19,1953 to November 19,1955, in the sum of $2,343.88; that the premium on that policy was $93.75; and that Universal C. I. T. Credit Corporation paid the premium on said policy.

Lackey says that he never received the policies; but, even so, the companies testified that they issued them, that they were in effect for the time stated, and that appellant paid out $95.75 as premiums. Appellant’s officers testified — and there is no evidence to dispute it- — ■ that these life insurance and accident insurance policies were optional with a person buying a car, and in no sense compulsory.

II. The Result: No Usury Proved. In this case the appellant has established that it paid out the insurance premiums of $95.75; and it is not shown or intimated that Universal or Bragg received any “kick-back” or commission on the insurance premiums; so there was nothing to be added back from the insurance premiums of $95.75 to the interest charge. When the $95.75 is deducted from the $364.88, the balance is $269.13; and that balance is admitted by appellee to be less than ten per cent per annum.

In Briggs v. Steele, 91 Ark. 458, 121 S. W. 754, this Court, speaking through Mr. Justice Fratjenthal, said of usury:

‘ ‘ To constitute usury, there must either he an agreement between the parties by which the borrower promises to pay, and the lender knowingly receives, a higher rate of interest than the statute allows for the loan or forbearance of money; or such greater rate of interest must be knowingly and intentionally ‘reserved, taken or secured’ for such loan or forbearance. It is essential, in order to establish the plea of usury, that there was a loan or forbearance of money, and that for such forbearance there was an intent or agreement to take unlawful interest, and that such unlawful interest was actually taken or reserved.”

Tested by the above definition, and by our other cases, we conclude that, after deducting the insurance premium of $95.75, Universal did not receive a higher rate of interest than ten per cent per annum: so, there was no usury in this transaction.

III. The Burden of Proof. Even though we find no usury in this particular transaction, we think it well to mention the matter of burden of proof in cases like this one. In Commercial Credit Plan v. Chandler, 218 Ark. 966, 239 S. W. 2d 1009, we said:

“ . . . where one resists payment of a prima facie obligation on the ground that the contract is tainted with usury, such defense must be established by clear and convincing evidence. Baxter v. Jackson, 193 Ark. 996, 104 S. W. 2d 202.”

But in Jones v. Jones, 227 Ark. 836, 301 S. W. 2d 737 (opinion of May 13, 1957), we modified that rule — as to the burden of proof in cases like this one — to some extent by this language:

“When, as here, the lender writes the contract he has the opportunity to put down in black and white an intelligible description, and the exact amount, of every charge that is being added to the principal of the debt. Last week we pointed out that the practice of attaching meaningless labels to such charges weakens the lender’s position when usury is asserted. Whiddon v. Universal C. I. T. Credit Corp., 227 Ark. 824, 301 S. W. 2d 567. The same criticism can he fairly made of a contract that gives the borrower no information at all about the deferred charges being exacted by the lender. In either case the trier of the facts is justified in assuming, until he is convinced by proof to the contrary, that the difference between the principal of the loan and the face amount of the contract represents interest on the debt.”

In short, where there is included with the carrying charges or interest charges some hidden and unitemized item — like the life insurance and accident insurance premiums in this case — then the lender has the burden of explaining in detail such hidden item, or the result will be to take the hidden item as a part of the interest. In the case at bar, the lender (Universal) satisfactorily met this burden by explaining the hidden item, and it was not intimated that Universal or Bragg received any “kickback” or commission for the insurance premiums. So, there was nothing from these items to be added back to the interest charge.

It follows that the decree of the Chancery Court is reversed and the cause is remanded for further proceedings not inconsistent with this opinion.

Millwee and Robinson, JJ., dissent.

       For some of our more recent cases on usury, in addition to those mentioned herein, see Blalock v. Blalock, 226 Ark. 75, 288 S. W. 2d 327; Whiddon v. Universal C. I. T. Credit Corp., 227 Ark. 824, 301 S. W. 2d 567 (opinion of May 6, 1957); and Griffin v. Murdock, 227 Ark. 1018, 303 S. W. 2d 242 (opinion of June 17, 1957). See also the two articles in 8 Ark. Law Review, being, “The Usury Law of Arkansas,” page 399; and “The Impact of Usury Laws,” page 420.

       Appellee admitted that this insurance item was explained to him at the time of signing the contract and that he ordered this particular insurance and thoroughly understood it. The insurance he is here contesting is that included in item numbered 5 in this tabulation.

       See Hare v. General Contract Purchase Corp., 220 Ark. 601, 249 S. W. 2d 973; and Griffin v. Murdock Acceptance Corp., 227 Ark. 1018, 303 S. W. 2d 242 (opinion of June 17, 1957).

       It was testified that this would be interest at 12.185 per cent per annum.

       It was testified that the rate of interest under such circumstances would be 8.79 per centner annum. .


source: Caselaw Access Project

author: MiNor W. Millwbe, Associate Justice.

license: Public Domain

text:
    Brown v. Mitchell.
    5-1351
    305 S. W. 2d 854
    Opinion delivered October 21, 1957.

      James G. Cole, for appellant.

      Henry B. Means, for appellee.
   MiNor W. Millwbe, Associate Justice.

This is a suit by appellees to vacate an order disapproving and setting aside a sale of a portion of the property involved in a partition suit brought by the appellants. The chancellor on exchange sustained the motion to vacate and this appeal followed.

The pleadings, stipulations and admissions of the parties disclose the following facts. In the suit brought by appellants a decree of partition was entered March 16, 1954, a day of the December, 1953, term of court. The three appellees were highest bidders as to two of the several tracts subsequently sold pursuant to said decree. Judge James A. Bowles, the regular chancellor, took no formal action on the reports of sale at the next two regular days of the December term of court. On July 6, 1954, a day of the June term of court, the chancellor announced that he would act on the reports of sale the next day. On July 7, 1954, Judge Bowles, who resides at Benton, Arkansas, announced in open court his disapproval of all the reports of sale; that he was setting aside the decree of partition to the extent of requiring a new hearing to determine if said lands should be sold; and that he would take the docket sheet and file with him for the purpose of preparing the order. Judge Bowles became ill and did not hold court again in Hot Spring County prior to December 31, 1954, when his term expired.

Shortly after January 1,1955, Judge F. D. Goza, who succeeded Judge Bowles, obtained from the latter and returned to the clerk’s office the court files in the case which contained a written order dated July 7, 1954. The order recited that the partition sales were contrary to the law, the court’s order, all interests of the litigants and a constructive fraud upon the court. The sales were ordered set aside and it was further directed that another hearing be had to determine whether a sale of the property should be held. No appeal was taken from this order but in January, April and October, 1955, appellees filed verified motions to set it aside and asking that the Commissioner be ordered to deliver deeds to appellees. On April 20, 1957, a day of the December, 1956, term of court, the chancellor on exchange sustained appellees’ motion to vacate the order of July 7, 1954, “for the reason that it was entered without notice to any of the parties, and without pleadings or evidence to warrant the entry of the order.”

We agree with the trial court’s finding that the order of July 7, 1954, was void and ineffective insofar as it ordered another hearing to determine whether or not a partition sale or sales should be held. It is noted that the original partition decree of March 16, 1954, ordered sale of the lands in question and the court lost jurisdiction to set aside this portion of the decree upon the lapse of the December, 1953, term of court except under some proceeding pursuant to Ark. Stats., §§ 29-506, et seq. No such proceeding was ever instituted as to the original partition decree which was never appealed. But the court’s power to confirm or disapprove the reports of sale which had not then been acted upon did not cease upon the lapse of the December term.

We are of the opinion that the trial court incorrectly held the order of July 7, 1954, void insofar as it disapproved and set aside the partition sales held in April and May, 1954. A purchaser at a judicial sale becomes a party to the proceedings and subject to the orders of the court, and such sale is not complete until confirmed by the court. Miller v. Henry, 105 Ark. 261, 150 S. W. 700. The trial court may confirm or refuse to confirm a partition sale in the exercise of sound judicial discretion. In reviewing such action to see if there has been an abuse of such discretion, we do not substitute our own decision for that of the trial court, but merely review the case to see whether the decision was within the latitude of decisions which a judge or court could make in a case like the one reviewed. Mulkey v. White, 219 Ark. 441, 242 S. W. 2d 836. According to the stipulation of the parties, appel-lees were fully apprised of the proceedings taken at the various sessions of court with reference to the reports of sale prior to and including the judgment rendered July 7, 1954, and filed in the clerk’s office early in January, 1955. Instead of appealing from said order, appellees filed motions to set it aside on the ground that the removal and withholding of the files by Judge Bowles amounted to an unavoidable casualty which prevented them from appearing and defending the entry of the order.

But the record evidence does not sustain appellees’ plea of unavoidable casualty, nor was such plea upheld by the trial court. In Parker v. Sims, 185 Ark. 1111, 51 S. W. 2d 517, we reaffirmed the following rule announced in Trumbull v. Harris, 114 Ark. 493, 170 S. W. 222: “It is the duty of a litigant to keep himself informed of the progress of his case, and a party seeking relief against a judgment on the ground of unavoidable casualty or misfortune preventing him from defending must show that he himself is not guilty of negligence, and he cannot have relief if the taking of the judgment appears to have been due to his own carelessness.” There was no concealment of the proceedings from appellees by Judge Bowles. On the contrary it appears that he went out of his way to apprise them of his actions and that their failure to appear and contest the proceedings was dne to their own carelessness or lack of interest.

That part of the decree appealed from which holds the order of July 7, 1954, void insofar as it directed another hearing to determine whether a partition sale or sales should be held is affirmed. Bnt that portion of the decree which held the order of Jnly 7, 1954, void insofar as it disapproved and set aside the partition sales is reversed and the cause remanded with directions to proceed with a resale of the lands in question.


author: CeoRge Bose Smith, J.

text:
    Saugey v. Saugey.
    5-1354
    305 S. W. 2d 856
    Opinion delivered October 21, 1957.

      Briner & Briner, Jack Holt and John F. Park, for appellant.

      Langston & Walker and Wayne Foster, for appellee.
   CeoRge Bose Smith, J.

The appellee brought this suit for divorce, asserting personal indignities and the failure of her husband to support her. By cross-complaint the appellant sought a divorce on the ground of indignities. Sangey appeals from a decree granting a divorce to his wife and contends that the court should instead have awarded a divorce to him.

The couple were married in 1925 and lived together until Mrs. Saugey left the family home on March 3, 1956. Saugey formerly operated a sawmill; later he inherited land from his parents and, with additional purchases, owned 538 acres in Saline county at the time of trial. Until Saugey underwent an eye operation in 19.55 he seems to have been a successful farmer, earning a reasonably good income from the sale of hay, cattle, chickens, eggs, timber, and other farm products. Mrs. Saugey worked with her husband on the farm until she took a business course in 1951. Since completing that training she has obtained clerical employment during the day in Little Rock and Benton.

The testimony is insufficient to justify the award of a divorce to either party. With respect to Mrs. Saugey’s charge of nonsupport, the statute requires proof that her husband willfully failed to provide her with the common necessaries of life. Ark. Stats. 1947, § 34-1202, subsection nine. Her testimony, even if it could be accepted without corroboration, falls decidedly short of establishing a cause of action under the statute. It is shown without dispute that Saugey always maintained a home for his wife; indeed, at her insistence he built a new house on the farm in 1953. Mrs. Saugey complains that she tired of eating chicken, that she did not care for eggs, that she was not permitted to pick fresh vegetables in the garden, and that she was required to buy groceries from her own salary. Much of this testimony is denied by Saugey, but in any event it does not show that Mrs. Saugey at any time during the marriage lacked the common necessaries of life.

On the issue of personal indignities Mrs. Saugey’s own testimony is directed largely to her husband’s extreme frugality, his failure to attend church, and his disinclination to leave the farm in order to participate in the social life of the community. Without narrating this proof in detail it is enough to point out that Mrs. Sau-gey’s testimony is altogether wanting in corroboration and therefore cannot form the basis for a decree of divorce. Ark. Stats., § 34-1207; Stearns v. Stearns, 211 Ark. 568, 201 S. W. 2d 753. The corroborating proof, it is true, may be fairly slight in contested cases, bnt even that standard has not been met in the case at bar.

Nor has the appellant proved the existence of personal indignities rendering his condition intolerable. There is some proof that Mrs. Saugey has occasionally used profanity in speaking of her husband. In complaining of the fact that Mrs. Saugey has often not gotten home until ten o ’clock at night, long after the end of her workday, Saugey does not charge his wife with immorality; he merely suggests that she has deliberately retained possession of the family truck in order to prevent him from using it on the farm in the late afternoon. Both parties testify that they did not engage in marital relations for eighteen months preceding their separation, but this is attributed to Saugey’s affliction with a skin disease which his physician had not been able to treat successfully. Other points, of minor importance, covered by the appellant’s proof need not be set forth in detail.

Despite the fact that both parties seek a termination of their marriage we are not authorized to grant either a divorce in the absence of proof that one of the statutory grounds exists. The decree must therefore be reversed and the case dismissed. The appellee is entitled to recover her costs, but the request for an attorney’s fee in addition to that allowed by the chancellor is denied.

Holt, J., not participating.


author: Paul Ward, Associate Justice.

text:
    Anderson v. Walker.
    5-1355
    306 S. W. 2d 318
    Opinion delivered October 21, 1957.
    [Rehearing denied November 25, 1957.]

      James It. Campbell and Holt, Parle & Holt, for appellant.

      B. W. Thomas and Richard W. Hobbs, for appellee.
   Paul Ward, Associate Justice.

This litigation is over the title to a parcel of land, 50 feet by 150 feet, on which is located a combination cafe and dwelling.

This laud was purchased by appellee and Nivia H. Walker (his then wife) in 1945 as an estate by the entirety. On September 30, 1947, Nivia H. Walker secured a divorce from appellee on the ground of desertion. Service on appellee was obtained by warning order, and appellee had no personal knowledge, at the time, of the divorce proceedings.

Incidental to the divorce decree the court ordered the estate by the entirety dissolved, and ordered appellee’s one-half sold to satisfy an award it had made to Nivia against appellee. At the sale Nivia became the purchaser, and in this manner, became (as she considered) the fee simple owner of the entire interest in the land in controversy.

Nivia at once went into possession of the property and continued in possession until her death on February 28, 1954. Thereafter her heirs, the appellants, continued in charge and possession of the property (paying taxes, as Nivia had also done) until August 26, 1955.

On the last mentioned date appellee brought a suit against appellants in which he asked the court to declare null and void the purported dissolution and sale of the estate by the entirety, to invest him with a fee simple title in said lands, and to order an accounting of all rentals received from the property. The trial court, after a full hearing, held with appellee on all points, after making the following pertinent findings of facts: (a) “No attachment was ever made upon the land in the said divorce action, . . (b) “. . . Raymond Walker first learned of the entry of a decree of divorce in favor of Nivia Walker in 1949”; and (c) “No property settlement agreement was ever entered into between the plaintiff (appellee) and Nivia Walker and . . . there was no agreement whereby Nivia Walker was to receive a deed from plaintiff (appellee) to the property in question. ’ ’

Although there are some phases of this case which enlist our sympathies in behalf of appellant, we must say that the testimony supports the findings of the Chancellor.

There are suggested to us only four possible grounds on which to base a reversal of the decree of the trial court, viz., (1) The Chancery Court, in the divorce action, had authority to dissolve the estate by the entirety; (2) The Chancery Court, in the divorce action, had a right to find there was a property settlement whereby appellee gave his wife the property in question; (3) The Chancery Court, in the divorce action, had a right to sell appellee’s interest in the land to satisfy the judgment against him; and (4) Appellants acquired title to the property by adverse possession. These will he discussed in the order mentioned.

1. Appellee and his wife acquired title (by the entirety) in 1945, hut it was not until 1947 (by Act 340) that the Chancery Courts were given the power to dissolve such an estate. Jenkins v. Jenkins, 219 Ark. 219, 242 S. W. 2d 124, 27 A. L. R. 2d 861, held that said Act 340 was not retroactive. Therefore the 1947 decree dissolving the estate by the entirety was a nullity, and is no bar to appellee in this collateral attack. McDonald v. Fort Smith & Western Railroad Co., 105 Ark. 5, 150 S. W. 135, and Laflin v. Drake, 218 Ark. 218, 237 S. W. 2d 32.

2. Appellant’s proof falls far short of showing Mrs. Walker acquired the interest of appellee by a property settlement. In fact, in her divorce action, Mrs. Walker made no such claim and the Chancellor, in attempting to dissolve the estate by the entirety, made no mention of such. In this record there is nothing which would have justified the Chancellor, in this case, in holding contrary to the above. On the other hand, he made the positive finding “that no property settlement agreement was ever entered into between” appellee and his wife. This finding is amply supported by the testimony. Moreover, the only settlement that is even suggested by the testimony is oral, and that would not have divested appellee of his title nor would it have invested the court with jurisdiction to do so.

3. Little need be said about the sale of appellee’s property/in the divorce proceeding, to satisfy a judgment obtained against him on a warning order. As shown by the return of the attorney ad litem, appellee was not personally served and had no personal knowledge of the divorce proceeding. The record affirmatively shows that no attachment was issued against appellee either before or after the divorce suit was filed. Therefore the personal judgment rendered against appellee and the sale based thereon were null and void.

4. The Chancellor was correct in holding that appellants had not acquired the property by adverse possession.

This suit was filed by appellee on August 26, 1955. So, before appellants could prevail, on this ground, they would have to show adverse possession since, at least, August 26, 1948. It is not disputed that appellants (and Mrs. Walker before her death in 1954) were in actual possession of the property for more than 7 years but they have failed, as found by the Chancellor, to show their possession was adverse.

It is not seriously contended appellee had actual knowledge that appellants were holding adversely for 7 years. The Chancellor found as a matter of fact that appellee did not even know of the divorce until some time in 1949 (less than 7 years before this suit was filed). The finding is fully sustained by the testimony. It should be noted also that knowledge of the divorce in no way implies knowledge of adverse possession of the land involved.

Moreover, the testimony fails to show such character of possession by appellants as was reasonably calculated to bring home to appellee the knowledge that they were holding adversely to his interest in the land, and certainly this was true during the lifetime of his former wife who lived till 1954 (only one year and a half before this suit was filed). During Mrs. Walker’s lifetime she had the same right to occupy the property that appellee had since they were owners by the entirety. The occupancy of one could not be considered adverse to the title of the other in the absence of proof of some special incidents of occupancy reasonably calculated to so inform the other. There is no proof of such incidents in this record. The very most shown by the proof here is that appellee left his wife and permitted her to live on the property. We have frequently and consistently held that, “where entry upon land is permissive, the statute will not begin to run against the legal owner until an adverse holding is declared and notice of such change is brought to the knowledge of the owner.” (Quotation from Harp v. Christian, 215 Ark. 833, 223 S. W. 2d 778.) See also Bailey, Trustee v. Martin, 218 Ark. 513, 237 S. W. 2d 16.

Appellants rely heavily on the decision in Bride v. Walker, 206 Ark. 498, 176 S. W. 2d 148, but certain distinguishing facts make it inapplicable here. In the cited case an estate by the entirety was not involved. Also the husband knew his divorced wife had been occupying the land for 10 years, and the court said “He must have known that she was not occupying this land as his wife, and that, since she had obtained a divorce from bim, her possession was adverse to him.” The facts mentioned in the Bride case are not present in the case under consideration.

Affirmed.

Holt, J., not participating.

Rehearing denied November 25, 1957; Millwee and Robinson, JJ., think the petition for rehearing should be granted.


author: Sam Robinson, Associate Justice.

text:
    Interstate Grocer Company v. Southern Shell Fish Co., Inc.
    5-1356
    305 S. W. 2d 850
    Opinion delivered October 21, 1957.

      Dinning & Dinning, for appellant.

      A. M. Coates, for appellee.
   Sam Robinson, Associate Justice.

The appellee, Southern Shell Pish Company, Inc., filed this suit to collect an open account. The appellant, Interstate Grocer Company, asserted as a defense an alleged breach of warranty on merchandise previously purchased from appel-lee. A jury was waived; and the court found for appel-lee. On appeal, appellant contends that the court erred in finding that appellee had not breached the previous sales contract.

On the 11th day of July, 1952, appellant bought one hundred cases of canned blackberries from appellee, and bought an additional twenty-five cases on the 8th of September, 1952. A little over a year later, appellant still had fifty-one cases of the berries on hand; and an inspector for the United States Pood and Drug Administration picked up samples for a laboratory examination and it was found that the berries were undergoing decomposition; as a result they were condemned and confiscated by the Government.

Appellant had paid $255.00 for the berries which were confiscated, and attempted to get appellee to make good this loss; but appellee refused, maintaining that it had warranted the berries for six months only and that it was long after the six-month period of warranty had expired that the berries went bad. Appellant then bought merchandise from appellee valued at $231.00; but did not pay for such merchandise after it was delivered, attempting to set off the account by the alleged breach of warranty on the blackberries.

The trial resulted in a judgment for appellee. In our opinion, the judgment is sustained by substantial evidence. It is not shown that the berries became unfit for human consumption during the first six months after they were delivered to appellant. The warranty is as follows:

‘‘Canned goods covered by this invoice are guaranteed to conform to National Pure Food laws and against leaks and swells for six months from date unless otherwise. specified.”

According to the testimony, canned berries are difficult to keep in an edible condition for any considerable length of time because they contain an acid which forms a gas when it comes in contact with the steel can. The cans are coated with a substance that protects the berries for some time, but this substance eventually deteriorates, allowing the berries to come in contact with the steel can; as a result gas forms and swells the can.

Although appellant sold about 75 cases of the berries in the usual course of business, it does not appear that there was a complaint from any customer as to the quality of the berries.

Of course, as we held in Hydrotex Industries v. Floyd, 209 Ark. 781, 192 S. W. 2d 759, the law implies a warranty that the article sold shall be reasonably fit for the purpose for which it is sold. If there is a breach of wárranty the purchaser may rescind the contract; or may affirm it, keep the property, and; when sued, set up the broken warranty by way of recoupment. Neel v. West- Winfree Tob. Co., 142 Art. 505, 219 S. W. 326. But liere there does not appear to have been a breach of warranty.

Mr. Max Moore, president of the appellant company, testified that canned berries are susceptible to swelling, and be presumed that was the reason for the limited six-months warranty.

Affirmed.


author: CauletoN Harris', Chief Justice. Geoeue Rose Smith, J.,

text:
    Emberson v. Buffington.
    5-1357
    306 S. W. 2d 327
    Opinion delivered October 28, 1957.
    [Rehearing denied November 25, 1957.]

      .Donald Poe, for appellant.

      Hard-in, Barton, Hardin & Garner, for appellee.
   CauletoN Harris', Chief Justice.

This appeal involves the constitutionality of Section 75-915, Ark. Stats. (1947) Anno., which was passed by the 1935 General Assembly as Act 179. The pertinent part of this statute which is under attack, provides as follows:

“* * * And in no event shall any person related by blood or marriage within the third degree of consanguinity or affinity to such owner or operator, or the husband, widow, legal representative, or heirs of such person have a cause of action for personal injury, including death resulting therefrom, against such owner or operator while in, entering, or leaving such motor vehicle, provided this act shall not apply to public carriers.”

Dave Buffington, on September 7, 1955, was the owner of, and operating on the highway, a 1950 Chevrolet, on his way from Waldron to Benton. Riding with him as passengers were his wife, Julia Buffington, his mother-in-law, Mrs. Martha Emberson, his father-in-law, Horatio B. Emberson, his sister-in-law, Bertha West, and his nephew, Donald Ray West, a minor. During the course of the journey, the automobile was wrecked, and subsequent thereto, complaints for damages were filed against Buffington by Martha Emberson, Bertha West and Leon West, her husband, Leon West as administrator of the estate of Horatio B. Emberson (who died December 24, 1955), Leon and Bertha West as next friends of Donald Ray West, a minor, and Leon West in his own right. The Logan Circuit Court dismissed the complaints on the basis of the language in the statute quoted above. From such order of dismissal comes this appeal.

Section 13 of Article II of the Arkansas Constitution (1874) provides as follows:

“Every person is entitled to a certain remedy in the laws for all injuries or wrongs he may receive in his person, property or character; he ought to obtain justice freely, and without purchase, completely, and without denial, promptly and without delay, conformable to the law's.” ’ ‘ -

Oddly enough, though the statute in question vras passed over twenty-two years ago, the constitutionality of same has not been attacked in any case reaching this Court.’1 In the case of Roberson v. Roberson, 193 Ark. 669, 101 S. W. 2d 961, this Court passed upon the validity of Act 61 of 1935, commonly known as the “Guest Liability Act,” (See. 75-913, Ark. Stats. Anno.), and made mention of Act 179; under the facts in that litigation, however, it was not necessary to pass upon the validity of Act 179 in disposing of the case. The two acts are very similar. Section 75-913 (Act 61) provides as follows :

“No person transported as a guest in any automotive vehicle upon the public highways of this State shall have a cause of action against the owner or operator of such vehicle for damages on account of any injury, death or loss occasioned by the operation of such automotive vehicle unless such vehicle ivas wilfully ancl wantonly operated in disregard of the rights of the others.”

The language in the first part of Section 75-915 (Act 179) reiterates the intent of Section 75-913, and then proceeds to add the language quoted at the outset of this Opinion. In the Roberson case, supra, the late Justice FraNK 0. Smith, in a very comprehensive opinion, discussed the constitutional provisions from other states which are similar to the provisions of our own constitution herein cited. In the Oregon case of Stewart v. Houk, 127 Ore. 589, 271 Pac. 998, 272 Pac. 893, the Oregon Supreme Court held unconstitutional a statute of that state which provided that “The acceptance of a free ride as a guest in a motor vehicle shall be presumed to be a waiver of said guest for liability of accidental injury caused by the owner or driver of such motor vehicle.” The act was held to be violative of Section 10, Article I, of the Oregon constitution. On rehearing, the attention of the Oregon court was called to the Connecticut case of Silver v. Silver, 108 Conn. 371, 143 Atl. 240: Justice Smith quoted the Oregon opinion on rehearing as follows :

“* * * The court interpreted the act as freeing the host from liability to a nonpaying guest for injury caused by ordinary negligence only. * * * Since the act preserved liability in instances where, the injury was inflicted intentionally, heedlessly, or through reckless disregard for the rights of others, and withheld liability only to a nonpaying guest for ordinary negligence, the court reasoned that the purpose of the act was to fix the measure of care a host owed to his guest. * * *

•In our previous decision we pointed out wliat we believe are unreasonable features of the Oregon act. It seems to us that these identify our act, not as an effort of the police power to regulate the operation of automobiles by prescribing the duty of host to guest, but as one wherein this element of the situation remains untouched, and the sole change effected is the denial of the remedy to the injured guest. We are persuaded to this conclusion by the fact that all injured guests are denied access to the courts, regardless of their capacity or incapacity to care for themselves, and regardless of the degree of carelessness exhibited by the injuring act. Such being the purpose of the act, we felt it was in conflict with Article I, Sec. 10, of our Constitution. The Connecticut .constitution contains a similar provision. Article I, Sec. 12. No contention, apparently, was advanced in the Connecticut court that the act violated this constitutional guaranty, and the decision makes no mention of that clause. The reason for this silence, no doubt, lies in the fact that, since the Connecticut act prescribes a degree of care which was deemed reasonable, and thus accomplishes an objective, within the police power of the state, Article I, Sec. 12, was inapplicable. Such provisions, as we pointed out before, prohibit the Legislature from withholding a remedy, where the breach of a well-established duty has injured one who now seeks relief. In our case, the act does not endeavor to readjust the duty, but attempts to abolish the remedy; in the Connecticut ease, the act revised the duty, and afforded redress to ail injured through a breach thereof.

We find no conflict between the Connecticut decision and the one Ave previously announced. * * *”

Justice Smith then said:

“* * * It will thus be observed that the Supreme Court of Oregon in effect approved the Connecticut ease, but distinguished the one case from the other upon the difference in the provisions of the statutes construed, .one of .Avhich AAdiolly denied the right to sue, Avhile the other prescribed the conditions upon which the suit might be maintained. In this connection it may be said that Sec. 10 of Article I, of tbe Oregon Constitution and Sec. 12 of Article I, of tbe Connecticut Constitution, referred to in tbe Oregon opinion, were said to be, and, in fact, are, similar, and neither is substantially different from Sec. 13, Article II of our Constitution, all being to the effect that every person is entitled to a certain remedy in tbe law for all injuries or wrongs be may receive in bis person, property, or character. * * *”

Further:

“* * * jf this Connecticut case of Silver v. Silver is sound law, as tbe Supreme Court of Oregon conceived it to be (in which view we concur), it is decisive of tbe constitutionality of our Act 61. In that case tbe Supreme Court of Errors of Connecticut upheld as constitutional a statute of that state which relieved tbe owner or operator of an automobile from liability to a guest ‘unless tbe accident shall have been intentional on bis part or caused by his heedlessness or bis reckless disregard of tbe rights of others.’ * * *”

Justice Smith also cited tbe Delaware case of Coleman v. Rhodes, (Del.) 5 W. W. Harr. 120, 159 Atl. 649, wherein the Supreme Court of Delaware declared unconstitutional a statute of that state relieving the operator or owner of a motor vehicle from any liability whatsoever for injuries suffered or sustained by any person while riding with the owner or in the owner’s car free of charge. The same court, in the latter case of Hazzard v. Alexander, (Del.) 6 W. W. Harr. 212, 173 Atl. 517, held valid a subsequent statute which provided there should be no cause of action against an operator of an automobile for death of, or damage to, a gratuitous guest unless the accident was intentional or caused by willful or wanton disregard of the rights of others. Justice Smith then made this pertinent observation:

“* * * Under the reasoning of these and other cases cited, in the note to the text quoted, it might be that Act 179 is unconstitutional, whereas Act 61 is valid, the difference being that Act 179 denies the right of re covery to certain persons under any circumstances, whereas Act 61 denies the. right of recovery to all persons riding as guests ‘unless such vehicle was wilfully and wantonly operated in disregard of the rights of others, But if Act 61 is constitutional and is applicable to the facts of this case, it is unnecessary to consider Act 179 or to pass upon its constitutionality, for the reason that Act 61 defeats a recovery in this case, it not being alleged or shown that appellant had wilfully and wantonly operated his ear in disregard of the rights of others. * * *”

Appellee cites the case of Tilghman, Administrator v. Rightor, 211 Ark. 229, 199 S. W. 2d 943, in which case this Court approved an instruction that had been given to the jury quoting Act 179 in its entirety. However, that case involved hitchhikers, unrelated to the driver or owner of the vehicle, and the only pertinent portion of the instruction was that part relating to gratuitous guests. At any rate, that part of the statute here under attack wras not relevant in the Tilghman case, nor was the constitutionality of the act questioned. Appellee cites tv7o federal cases, Harlow v. Byland, which was heard in the district court for the Eastern District of Arkansas, Western Division, later appealed to the U. S. Circuit Court of Appeals, and the case of Hale v. American Fire & Casualty Company, 81 F. Supp. 273.

In the first case, Mrs. Harlow was injured in an automobile accident -while riding as a guest wdth her nephew. She instituted suit against the nephew in the Federal District Court. -In dismissing the suit because of the Act here in question, the court said:

“* * * Federal courts are slow to hold the statutes of a state in conflict with the state constitution, where there has been no decision of the court of last resort of that state upon that issue. * *

In affirming, the Circuit Court of Appeals used the following language:

“ * * *■ The Supreme Court of Arkansas held that Act 61, Sections 1302 and 1303 of Pope’s Digest, was constitutional. The Court expressed doubt as to the constitutionality of the provision of Act 179, Section 1304 of Pope’s Digest, which deprives guest passengers who are close relatives of the owner or operator of a motor vehicle, of all causes of action against him for personal injuries, regardless of the degree of negligence involved. The Court, however, found it unnecessary to decide the question of the constitutionality of Act 179, since the plaintiff was a guest of her husband and had not alleged that the ‘vehicle was willfully and wantonly operated in disregard of the rights of the others,’ and her action was therefore barred by Act 61. * * *
“It is conceded that the constitutionality of the provision of Act 179 which is challenged by the plaintiff in the instant case has never been ruled upon by the Supreme Court of the State of Arkansas. The provision has survived for nearly fourteen years. So far as we are advised, no court in Arkansas has held it to be invalid. * * *
“The Supreme Court of Arkansas is, wo think, entitled to have the first and last word with respect to the validity, under the State Constitution, of the statutory provision in suit. It is our conclusion that the District Court and this Court are justified in assuming and deciding that the provision is constitutional unless and until the Supreme Court of Arkansas shall have ruled otherwise. * * *”

In the Hale case, supra, which was before the Federal District Court for the Western Division of Louisiana, Monroe Division, the court said:

“* * * This case is governed by the law of Arkansas, where the accident occurred, and from the language last quoted, it would appear that ‘in no event’ *' * * (meaning substantially the same as ‘in no circumstances’) except where the owner or operator of the vehicle is a public carrier, shall the injured persons have any cause of action against one so related. Of course, in order to recover against the insurer, the complainant must have a right of action against the insured, which in this instance, in view of the relationship of the parties, is denied to the mother as against her son. * * * ?)

It, of course, as pointed out in the Ryland case, supra, generally accepted that it is within the province of the state courts to first pass upon the validity of state acts, and their construction will he controlling unless such construction be in conflict with provisions of the Federal Constitution. Federal courts would not be expected to take the initiative in declaring state legislative acts invalid as conflicting with a state constitution. These cases are accordingly not persuasive.

In Blashfield’s Cyclopedia of Automobile Law and Practice (Yol. 4, part 1, Chapter 64) is found a rather exhaustive discussion of the subject generally of the host’s liability to a guest, and a number of cases are cited. On page 363 is found this language:

“While statutes of this character, which look primarily to abolition of guest’s remedy for injuries, have been held unconstitutional as violative of constitutional provisions that every man shall have a remedy by due course of law for injury done him in his person, property •or reputation, where the legislation emphasizes the restriction on the operator’s duties rather than on the guest’s remedies, statutes in this form have in general been held good as against constitutional objections, and regarded as a proper exercise of the police power and not violative of the process clause; hut statutes of more comprehensive nature which undertake to relieve an automobile operator from all liability for injuries suffered by a non-paying passenger, whatever the degree of negligence, have been held unconstitutional. ’ ’

From American Jurisprudence, Volume 5, Section 238, page 633:

“The view has been taken, however, that the guest cannot, by statute, be deprived of all remedy against the owner or operator. Such abolition violates a constitutional provision giving every man a remedy by due course of law for injury done Mm in Ms person or property.”

Tire statute cannot be upheld as a proper exercise of police power. In Fiser v. Clayton, State Treasurer, and Clayton, State Treasurer v. McAmis, 221 Ark. 528, 254 S. W. 2d 315, the late Chief Justice Briffin Smith said :

“* * * Cf course the legislature, in exercising the state’s police powers, has a wide discretion within which it may determine what the public interest demands, and what measures are necessary to secure and promote such requirements. The only limitation upon power to enact statutes tending to promote the health, peace, morals, education, good order, and welfare of the public is that the legislation must reasonably tend to correct some evil and promote some interest of the commonwealth not violative of any direct or positive mandate of the constitutionJ * * *”

Here, the contested portion of the statute is plainly vio-lative of the constitutional provision, and, accordingly, though with some reluctance, we deem and hold such part to be unconstitutional. The first part of Section 75-915 is not affected by this holding, for it is not in violation of Section 13 of Article II (under the same reasoning applied to Act 61 in Roberson, supra), and its provisions are able to stand alone without that part, herein held to be invalid. As early as 1881, Chief Justice ENglish, in the case of State of Arkansas v. Kate Marsh, 37 Ark. 356, said:

“* * * if some of the provisions of a statute violate the constitution, while others are consistent with it, the latter will be maintained, if they can be separated from and stand without the unconstitutional and void parts of the law. The court will treat the unconstitutional parts as if they were stricken out of the statute. * * * Nor does it necessarily follow that because part of a section of an act is unconstitutional the whole section is therefore void. * * *”

This holding has been reiterated in many subsequent decisions.

The judgment of the Logan Circuit Court is reversed, and the case is remanded with instructions to proceed in a manner not inconsistent with this Opinion.

Justices Holt, McFaddiN, and George Rose Smith, dissent.

Geoeue Rose Smith, J.,

dissenting. For the most part the guaranties contained in the bill of rights are expressed in language deliberately general in scope. Typically broad is the wording of the clause involved in this ¡ case: ‘ ‘ Every person is entitled to a certain remedy in the: laws for all injuries or wrongs he may receive in his person, property or character. . . . ” Const., Art. 2, § 13.' Language as sweeping as this linavoidably gives rise to difficult problems of construction when it must be applied in testing the validity of a statute.

In construing similar language the Supreme Court of Oregon went, I think, too far in the case of Stewart v. Houk, cited by the majority. There the court said in substance that such a constitutional provision is intended to preserve all causes of action recognized at common law. Iu holding the Oregon guest statute invalid the court declared that ‘1 if prior to the enactment of the Constitution a host, who transported without charge a guest, owed to the latter a duty to exercise care, and if the law recognized that a breach of that duty, with a resultant injury, afforded the guest a cause of action, this jural right the Constitution preserved against legislative abolishment.” This ultra-litoral reading of the bill of rights crystallizes all common law rights of action, putting them beyond the reach of legislative change to meet new conditions.

We have not in the past followed this extreme view, nor does the present majority opinion indorse it. In the Roberson case, for instance, we held that by the guest statute the legislature might abolish a guest’s cause of action for injuries resulting from ordinary negligence on the part of his host. Since that canse of action existed at common law it is clear that we have not construed the constitution as denying to the legislature all power to abolish established rights of action.

The question is how far the constitution permits the legislature to go in this direction. The majority say that the guest’s remedy against his host may be restricted, as it was by the statute upheld in the Roberson case, but the constitution prevents the legislature from depriving the guest of all remedy against the owner or operator. Upon that premise Act 179 is declared to be unconstitutional.

To begin with, I think clarity of thought requires the issue to be stated in terms of causes of action and not in terms of remedies as between the guest and the host. When, for example, a guest is injured by the operator’s ordinary negligence, the only cause of action that he ever had is abolished by Act 61 of 1935. It is misleading to say that his remedy against the host has merely been restricted; for he had only one remedy, and it has been done away with altogether. That some other guest injured by willful negligence may still have a cause of action does not alter the fact that the first guest, injured by ordinary negligence, has been completely deprived of his remedy. Thus it will not do to say that the legislature can restrict the remedy but cannot withdraw it entirely; we are talking about two different remedies instead of just one.

It seems plain that the guest statute sustained in the Roberson case abolished the cause of action for injuries resulting from simple negligence. The question now before us is whether the legislature can abolish the guest’s cause of action altogether when he is related to the host within the third degree of consanguinity or affinity. I am unable to say that this step is forbidden by the constitution.

It is probable that every session of the legislature adopts one or more statutes doing away with some cause of action, however minor, that previously existed. Even fairly drastic measures have been upheld in the face of constitutional provisions similar to ours. In New York the court upheld an act abolishing civil actions for alienation of affections, criminal conversation, seduction, and breach of promise to marry. Fearon v. Treanor, 272 N. Y. 268, 5 N. E. 2d 815, 109 A. L. R. 1229. In Texas tlie common law permits suits against municipal corporations for negligence, but a statute abrogating such causes of action j was sustained. Lebohm v. City of Galveston, 154 Tex. 192, 275 S. W. 2d 951. In the latter case the court announced^, what seems to me to be the correct rule: ‘ ‘ Thus it may be ■ seen that legislative action withdrawing common-law remedies for well established common-law causes of action . . . is sustained only when it is reasonable in substituting other remedies, or when it is a reasonable exercise of the police power in the interest of the general welfare. Legislative action of this type is not sustained when it is arbitrary or unreasonable.” >

I think the only question here is whether the legislature acted arbitrarily in abolishing the guest’s cause of action for willful and wanton negligence (which is all the present complaint alleges) when there is the required degree of kinship between the parties. I cannot say that! the statute is so unreasonable that fair-minded men might) not consider it a proper exercise of the state’s police power.. The original guest statute was upheld as being designed to prevent collusive suits. The danger of collusion is evidently much greater when the plaintiff and defendant are j closely related. It is true, as the court observed in the j Fear on case, supra, that the act may also prevent the/ maintenance of specific cases that are justified. The same criticism can equally well be made of the act denying the guest a cause of action for ordinary negligence. Whether the act will in the long run accomplish more good than harm is a matter of judgment, on which I think we should defer to the legislature in the absence of a clear showing that the statute is arbitrary.

Holt and McFaddiN, JJ., join in this dissent.

       Emphasis supplied.

       This case was appealed to tlie Supreme Court of the United States where it was affirmed in an opinion by Justice Stone in 280 U. S. 117.

       Emphasis supplied.

       78 F. Supp. 488.

       See 172 F. 2d 784.

       Our own Court, in Harlow v. Ryland, 218 Ark. 659, 238 S. W. 2d 502, held the judgment rendered in the Federal District Court and affirmed by the Circuit Court of Appeals, to be res judicata and therefore conclusive on appellant.

         Emphasis supplied.


author: J. SeaborN Holt, Associate Justice.

text:
    Laster v. Pruniski.
    5-1484
    306 S. W. 2d 123
    Opinion delivered October 28, 1957.

      Dare E. Witt and Kenneth Coffelt, for appellant.

      J. Frank Holt, Prosecuting Atty., and Eugene R. Warren, for appellee.
   J. SeaborN Holt, Associate Justice.

The facts in this case appear not to be in dispute. On December 31, 1956 Judge Murray 0. Reed, the then Judge of the Little Rock Municipal Court, Second Division, resigned which created a vacancy in the office. January 2, 1957 the Governor of Arkansas appointed John L. Sullivan to succeed Reed. This was more than nine months prior to the next general election, and on the same date the practicing attorneys in attendance on that Court attempted to elect Sullivan for Reed’s unexpired term. On September 23, 1957 the Governor reappointed Judge Sullivan and on September 30, 1957 the attending attorneys again attempted to elect him. September 21, 1957 appellant, R. W. Laster, delivered in apt time to the Pulaski County Election Commissioners a proper petition nominating himself as an independent candidate for this office in question. It appears that no primary had been held and no election notice had been issued. The Board of Commissioners refused to certify the name of appellant so his name could be placed on the ballot for the alleged reason that November 5, 1957 was not the legal or proper date for the election of a judge to the office in question. Appellant then sought a Writ of Mandamus to force the commissioners to place his name on the. ballot. John L. Sullivan intervened. A hearing resulted in an order denying this writ and this appeal followed.

The Second Division of Little Rock Municipal Court was created by Act 49 of 1951, which Act became effective February 8, 1951 and contains these provisions:

(1) “Section 1. Section 4 of Act 87 of the Acts of 1915, as amended by Section 1 of Act 312 of the Acts of 1919 is hereby amended to read as follows: ‘Section 4 . . . Immediately after the effective date of this act, the Governor shall appoint a Judge of the Second Division who shall hold office until his successor is elected at the next general municipal election and installed according to law. Such appointee-shall be ineligible to succeed himself.” (Italics our own)
(2) “ ‘The judgeship of each division is hereby declared to be a separate office; and at the next general municipal election each judge shall be elected for a 4 year term and shall take office at the time and. in the manner provided by law . . ” (Italics our own)
(3) “Section No. 3 of Act 49 of 1951 Acts of Arkansas amends Section No. 6 of 1915 Acts and provides: ‘Whenever the office of judge of the Municipal Court is vacant and before a successor has qualified as such, or . . . , then the regular practicing attorneys in attendance on such court may, on notice from the clerk of said court, elect a judge to preside at such court, . . .; hut his authority shall cease after final judgment in the particular cause in the trial of which he is at the time engaged upon the qualification of a successor to the regular judge in the case of vacancy in office of the latter, . .
(4) Section 6 of this act provides: “All laws and parts of laws in conflict herewith are hereby repealed. ’ ’

This Act 49 was passed by three-fourths majority of each House of the Legislature so this act would in fact repeal any part of initiated Act 2 of 1926 in conflict with this Act 49 in so far as such initiated act affected the election of judges of municipal courts.

Appellant earnestly contends that, “The only question to be determined by this court is whether or not the coming general municipal election on November 5, 1957 is the proper year to hold a general municipal election to fill a vacancy in the office of the Little Bock Municipal Court.” He earnestly contends that the vacancy should be filled at the first general election held more than six months after the vacancy occurred which would be November 5, 1957, an odd number year and not an even number year as contended by appellees. As strongly indicating that the legislature intended that the election should be held at the next general municipal election, which was in 1951, is the fact that Act 49 of 1951 when first introduced read: “At the next general election.” It was called back by the senate and the word municipal inserted between general and election and as so amended, was enacted into law. We think it was clearly the intention of the legislature to fix the date in odd numbered years for the election of municipal court judges in the Act here involved.

Appellee contends that the provision in Act 49 of 1951 as to “General Municipal Election” was impliedly repealed by Act 8 of 1957, being the City Manager Act. The fact that Little Rock is to vote for directors under the city management plan on November 5, 1957 does not prevent that day from also being the day for the ‘ ‘ General Municipal Election” as provided by Act 49 of 1951. In other words, the Act 8 of 1957 does not accomplish the repeal by implication as urged by appellee.

"We have reached the conclusion that appellant’s contention should be sustained. Article 7 of the Constitution of Arkansas provides for the creation of Municipal Corporation Courts and Section 50 of the Article provides: “All vacancies occurring in any office provided for in this article shall be filled by special election, save that in case of vacancies occurring in . . . other offices nine months before the next general election, such vacancies shall be filled by appointment by the Governor.” In Means v. Terral, 145 Ark. 443, 225 S. W. 601, in construing the above Article of the Constitution it was said: “. . . An election by the people to fill a vacancy, whether at a special election or at the succeeding general election, is for the unexpired term, but, as before stated, any appointment made by the Governor is, under the Constitution, temporary . . . The words ‘next general election,’ could not reasonably be construed to mean the general election at the expiration of the term, . . .”

Municipal elections, under the Act of March 9, 1875, No. 1, Section 51, now Ark. Stats. § 19-1002, provided for the election of one Mayor, one Alderman from each Ward, one Police Judge, etc., should be held on the first Tuesday in April, 1875 and every two years thereafter, or in every odd year. The section provides, ‘ ‘ The qualified voters of cities of the first class, fehall, on the first Tuesday ... in April, in the year 1875, and (on the Tuesday following the first Monday in November) every two (2) years thereafter, elect one (1) Mayor, and two (2) Aldermen (at the first election only) from each ward, as members of the City Council, one (1) City Treasurer and one (1) Police Judge, all of whom, except the Aldermen, shall hold their offices for the term of two (2) years, and until their successors are elefeted and qualified, and shall have such powers and perform such duties as are required by this act, or may be prescribed by any ordinance of the city not inconsistent with this act, and which may not be incompatible with the nature of their respective offices.”

Municipal elections have been held under this Act in odd number years on through 1955. "We hold, therefore, that a vacancy exists in the office of Judge of the Little Rock Municipal Court, Second Division, that November 5, 1957 is a General Municipal Election date on which the unexpired term of Judge Reed should be filled and that November 5, 1957 is the first General Municipal Election following the vacancy. Accordingly, the judgment is reversed and the cause remanded with directions to grant the prayer óf appellant’s petition. An immediate mandate is ordered by this Court.

Ward, J., concurs.

Robinson, J., not participating.


author: Ed. F. McFaddin, Associate Justice.

text:
    Leonard v. Thompson.
    5-1329
    306 S. W. 2d 869
    Opinion delivered October 28, 1957.
    [Rehearing denied December 9, 1957.]

      Robert F. Stahala, Ft. Worth, Tex.; William H. Arnold III, William II. Arnold, Jr., for appellant; of -counsel for appellant: Jenldns Garrett, Ft. Worth, Tex.; Richard L. Arnold, Thomas S. Arnold and John 0. Moore.

      A. F. Triplett and Ned Stewart, for appellee.
   Ed. F. McFaddin, Associate Justice.

This suit involves lands located in McKinney Bayou Drainage District in Miller County; and, primarily, challenges the legal sufficiency of the published notice in the 1950 foreclosure suit of the District for the 1947 and 1948 delinquent assessments.

Appellee Vance M. Thompson was the plaintiff, and appellant O. F. Leonard, Trustee, was the defendant. Thompson claimed to he the owner of the lands, and prayed that certain deeds from the McKinney Bayou Drainage District (hereinafter called “Drainage District”) to O. F. Leonard, Trustee (hereinafter called “Leonard”) should he cancelled; and that Thompson should he allowed to pay any taxes and assessments found to he delinquent. Leonard claimed, inter alia, that the Drainage District had validly foreclosed in 1950 its delinquent assessments on the lands for the years 1947 and 1948 and had acquired a valid deed; that the deed from the Drainage District to Leonard was valid; that all title of Thompson had been extinguished; and that Thompson was barred by laches and estoppel.

The McKinney Bayou Drainage District was organized on May 4, 1923 under and pursuant to the general drainage law as now found in Sec. 21-501 et seq. Ark. Stats. It is clear from the evidence that prior to 1948 Thompson held deeds to the lands; that Thompson failed to pay the annual assessments due the Drainage District for the years 1947 and 1948; that the Drainage District conducted a foreclosure suit (case No. 299 in Miller Chancery Court) against the lands for the delinquent assessments of 1947 and 1948; that the notice of such suit was given by publication (and the notice will be discussed later); that a decree of foreclosure was rendered on September 27, 1950; that at the commissioner’s sale on November 18, 1950 the lands were purchased by the Drainage District; that the sale was confirmed on December 1, 1950; that the time for redemption expired on November 18, 1952; and that by deed dated March 5, 1953 the Drainage District conveyed the lands to Leonard, who forthwith began improvements on some of the lands.

The basis of Thompson’s attack on the title of Leonard involves the validity of the Drainage District foreclosure suit in 1950 for the delinquent assessments due for the years 1947 and 1948: if that suit was in every respect valid, then Thompson lost his title because of that foreclosure. So we examine the facts regarding that suit.

On July 14,1950 the McKinney Bayou Drainage District filed suit No. 299 in the Miller Chancery Court seeking to foreclose the 1947 and 1948 delinquent assessments due the District on the lands here involved, and other lands. Several thousand acres were delinquent. The notices published in the newspapers prior to the decree of foreclosure (as required by Sec. 21-546 Ark. Stats.) listed the “supposed owner” of these lands to be “Dorsey Land & Lumber Company.” In the present suit Thompson claimed — and the evidence fairly establishes — that the attorney conducting the foreclosure for the Drainage District had good reason to know that Vance M. Thompson was the “supposed owner” of the lands, since the title of the Dorsey Land & Lumber Company had been extinguished in a foreclosure several years prior, and the Drainage District had dealt with Thompson as the owner. Because the published notice in the foreclosure suit named the Dorsey Land & Lumber Company as the “supposed owner,” Thompson claimed in the present suit that the entire foreclosure suit of the Drainage District was void and that Thompson still had the right to redeem for the delinquent assessments of 1947, 1948, and subsequent years.

The Chancery Court agreed with Thompson’s contention and allowed him the right of redemption, the effect of which was to require Leonard to receive certain funds, and thereby have his title extinguished. The trial court found that the McKinney Bayou Drainage District, in failing to name Thompson as the “supposed owner” of the lands in the said foreclosure suit, had failed to comply with our holding in the case of Simpson v. Reinman, 146 Ark. 417, 227 S. W. 15; that the said 1950 foreclosure suit was void for lack of notice naming Thompson as the “supposed owner”; and that the Act No. 534 of 1921 did not change the rule of Simpson v. Reinman. Leonard has appealed.

I. The Holding In Simpson v. Reinman, 146 Ark. 417, 227 S. W. 15. In Simpson v. Reinman the delinquent assessments were foreclosed under a statute substantially identical with Sec. 21-546 Ark. Stats, (the one here claimed to be applicable in the 1950 foreclosure of the Drainage District). In Simpson v. Reinman, in the petition for foreclosure and. in the published notice of sale, the district named A. E. Adams as the “supposed owner” of the 90 acres involved, whereas it was shown that J. C. Budd was at that time actually the owner and in possession, and there was nothing to show that A. E. Adams ever owned the 90 acres or had any interest therein. This Court held that in that case the District had been guilty of “gross carelessness” in failing, to name J. C. Budd as the owner of the 90 acres, since he was in actual possession through his tenant. This Court also held that the failure to list J. C. Budd as the “supposed owner” prevented the published notice from being in compliance with the statute. So this Court allowed the owner of the lands to redeem from the foreclosure of the delinquent assessments. In the case at bar, Thompson claims that the published notice of the suit was as fatally defective as in Simpson v. Reinman; and Thompson insists that under the rule in Simpson v. Reinman, Thompson be entitled to redeem in the present case.

The case of Simpson v. Reinman was decided by a divided Court, and has subsequently been limited to its own facts; and the bench and bar have been put on notice that the holding in Simpson v. Reinman will not be extended to any case in which the material facts are different. In Taylor v. Heinemann, 199 Art. 1101, 137 S. W. 2d 742, this Court, in a unanimous opinion, said:

“This statute is in all essential respects identical with the statute construed in Simpson v. Reinman, supra. That case was decided by a divided court, and without expressing any opinion as to the correctness of the reasoning of the majority, we declines to overrule it. However, we decline to extend the holding there announced, which we feel we would be compelled to do, in order to affirm the decree here in question . . . “In this case appellee testified he had no actual knowledge of the suit to foreclose, but that lie knew the land was in tbe district and that the taxes had not been paid. “We are, therefore, of the opinion that the statute above mentioned relating to the publication of the notice was substantially complied with and that Simpson v. Reinman, supra, is not controlling here. Appellee’s loss is due to his own negligence, and he had no just complaint. His land was sold according to law. ’ ’

If there had been no changes in the applicable statutes, and if the facts in the case at bar were “on all fours” with those in Simpson v. Reinman, then Thompson could successfully urge that case as a basis for his claimed right of redemption in this case. But: (a) there have been changes in the statutes; and (b) the facts here are different from those in Simpson v. Reinman.

II. Statutory Changes. There are two such changes: one in 1921 and the other in 1929. The case of Simpson v. Reinman was decided on December 13, 1920 and the petition for rehearing was denied on January 13, 1921. Within sixty days thereafter, the Legislature adopted Act No. 534 of 1921. (See Sec. 20-1126 et seq. Ark. Stats.) The 1921 Act was captioned: “An Act to Provide for the Piling of a Delinquent List of Lands . . . in Road and Drainage Districts, and for the Collection of Delinquent Taxes Thereon. ’ ’ Section 1 of the Act provides that if the Drainage District taxes be not paid by April 10th each year, then the tax collector of the county shall “. . . make out and file with the clerk of the chancery court of the county a list of said real property so delinquent, which list shall include the name of the supposed owner as the same appears on the tax boohs, a description of the property and the amount of the tax due thereon . . .” (Italics our own.)

Section 2 of the 1921 Act provides that the said list shall be filed with the clerk of the chancery court, who shall record the said list in a well-bound book kept by him for that purpose, and the clerk shall certify that the same is a true copy of the list filed by the collector. Section 4 of the 1921 act provides that when the district files snit to foreclose for the delinquent assessments it shall obtain “. . . a certified copy of said list from the said clerk Avhich shall be filed with the complaint and taken as a part thereof . . .”

It will be noticed that this 1921 Act provides that the list shall “. . . include the name of the supposed owner as the same appears on the tax books . . and we will subsequently refer to the fact that Thompson’s own failure to comply with the 1929 Act caused his name not to be listed as the supposed owner. In Sec. 7 of Act No. 172 of 1929 (see Sec. 84-414 Ark. Stats.) the Legislature prescribed:

“All persons owning real or personal property, or both, shall at said time and place aforesaid deliver to the assessor, either in person or by agent, a verified list of his real and personal property; . . .”

III. Factual Differences Between Simpson v. Reinman And The Case At Bar. It is clearly established by the evidence that the lands here involved had been owned by Dorsey Land & Lumber Company when the McKinney Bayou Drainage District was organized; that Dorsey Land & Lumber Company lost its title by foreclosure; that the lands were subsequently acquired by the McKinney Bayou Drainage District by foreclosure proceedings for delinquent assessments due the District in the years 1933 to 1944; that Thompson received deeds to the lands from the McKinney Bayou Drainage District in 1945 and 1946; that in May 1948 Thompson paid the delinquent assessments due for 1945 and 1946; and that Thompson never complied with the provision just quoted from the Act No. 172 of 1929: that is to say, Thompson never assessed these lands in his name so as to have his name appear as owner on the tax books in the place of the Dorsey Land & Lumber Company, which had been the owner when the district was organized.

It is also clear that in 1947 and 1948 the Dorsey Land & Lumber Company was listed on the tax books as the owner; that the tax collector certified the delinquent list to the chancery clerk in keeping with Section 1 of the Act 534 of 1921; that the chancery clerk duly recorded the list; as provided by Section 2 of the said Act; and that the Drainage District, in conducting the 1950 foreclosure proceedings for the 1947 and 1948 assessments against the lands here involved, attached to the complaint the certified copy of the list, just as required by Section 4 of the Act No. 534 of 1921. Thus it is clear that the attorney conducting the 1950 foreclosure suit for the Drainage District was of the opinion that he should follow the Act No. 534 of 1921, (providing that the list should include “. . . the name of the supposed owner as the same appears on the tax books”) rather than to proceed on his own independent investigation as to the “supposed owner” as was required in the old law (Sec. 21-546 Ark. Stats.) as construed in Simpson v. Reinman.

Thompson points out that in the case of Beasley v. Hornor, 173 Ark. 295, 292 S. W. 130, we held that the Act No. 534 of 1921 did not repeal the original 1909 Act (Sec. 21-546 Ark. Stats.) We did so hold: but we did not say that compliance with Act No. 534 of 1921 failed to be sufficient compliance with the law. Thompson claimed to be the owner of the lands prior to 1947; and so he should have complied with the law (Sec. 84-414 Ark. Stats.) which required him to have the lands assessed in his name. He did not comply with that law: he left the lands assessed in the name of the Dorsey Land & Lumber Company. Now he comes into court and seeks to void an improvement district foreclosure sale because he was not named in the published notice as the owner of the land, when it was his own failure to comply with the statute on the assessing of property (Act No. 172 of 1929 as found in Sec. 84-414 Ark. Stats.) that prevented him from being listed as the owner. In short, he asks a court of equity to grant him relief when he failed to obey the law that brought about the situation from which he seeks relief.

The Legislative enactments of 1921 and 1929, herein discussed, distinguish the case at bar from Simpson v. Reinman, because in that case there was nothing to show that A. E. Adams had .ever been the owner or that J. C. Bndd had ever failed to comply with any assessing law; and there was at the time of Simpson v. Reinman no existing statute stating that the list would contain “. . . the name of the supposed owner as the same appears on the tax hooks.”

There is another fact in the case at bar that distinguishes it from Simpson v. Reinman; and it is disclosed by our opinion in Greer v. Blocker, 218 Ark. 259, 236 S. W. 2d 68. Yance M. Thompson was one of the plaintiffs in that case in the lower court, and was one of the appellants in that case in this Court; and in our opinion in that case (decided by this Court on January 22, 1951) it was stated as regards the delinquent assessments for 1947 and 1948 (the same delinquent assessments here involved): “In the oral argument before this Court it was stated by all parties that these delinquencies had now been foreclosed.” Thus, in a case in which Thompson was a party, it was conceded in January, 1951 that the 1947 and 1948 delinquent assessments on all the lands in the district had teen foreclosed. Thompson, as a party to that suit, still had time to effect a redemption because — as previously recited • — • the time for redemption did not expire until November 18, 1952 and the District did not convey to Leonard until March 5, 1953.

In Simpson v. Reinman, Mr. Justice Hart said as regards the reason for listing the supposed owner:

“The object of constructive notice is to put the owner in possession of such facts as will lead to actual notice and thereby enable him to make his defense . . .
“As we pointed out, there is a good reason for requiring the supposed owner to he named in the notice. If the former he named in the notice, there will he more likelihood of actual notice being received by the owner. The notice will inform him of what is alleged against him in the complaint. ’ ’

We are not holding — independent of all other matters — that notice to Thompson’s attorneys in the case of Greer v. Blocker was notice to Thompson in the case at bar; but we are stating that the opinion in Greer v. Blocker, in which Thompson was a party, recited the fact of the foreclosure sale; and such recital was sufficient, along with all the other facts and circumstances in this case, to clearly distinguish the case at bar from Simpson v. Reinman. There is also the matter of actual possession, emphasized in Simpson v. Reinman and not found in the case at bar, but it would unduly extend this opinion to go into that phase of the case.

IY. Conclusion. We hold that the rule of Simpson v. Reinman is not applicable to the case at bar ; and that Thompson is not entitled to effect a redemption as against the deed held by Leonard. There are other points argued in the excellent briefs in this case: such as Thompson’s laches and estoppel, and also the validity and sufficiency of Leonard’s deed from the Garland Levee District; but holding — as we do — that Simpson v. Reinman affords Thompson no relief, it becomes unnecessary to discuss the other points.

The decree is reversed and the cause is remanded for further proceedings not inconsistent with this opinion.

       Other cases in this Court involving the McKinney Bayou Drainage District are: Board of Comm. of McKinney Bayou Drainage Dist. v. Board of Directors of Garland Levee Dist., 181 Ark. 898, 28 S. W. 2d 721; Greer, Trustee v. Blocker, Receiver, 218 Ark. 249, 286 S. W. 2d 77 and 218 Ark. 259, 236 S. W. 2d 68; and Greer, Trustee v. Wine, Receiver, 219 Ark. 425, 243 S. W. 2d 13.

       Leonard had acquired deeds from the Garland Levee District which he claimed were sufficient in themselves to extinguish all of Thompson’s title. Regarding the Garland Levee District deeds held by Leonard, Thompson claimed that these deeds were merely redemption deeds which would inure to Thompson’s benefit when he redeemed from the Drainage District and thereby would extinguish Leonard’s title. Because our decision is in favor of Leonard on other points, it is unnecessary to consider his claim on this point.

       The Drainage District has been in receivership for many years. Hon. C. C. Wine has been the Receiver since February 9, 1951 and executed the deeds to Leonard pursuant to directions of the Miller Chancery Court. Leonard paid the District a total of $160,358.11 cash for the lands here involved and other lands.

       The statute fixing the time for redemption is Sec. 21-547 Ark. Stats.

       The attorney who conducted the foreclosure was Hon. Frank S. Quinn of Texarkana, now deceased. He was an honorable lawyer arid a splendid gentleman, and conducted the foreclosure suit in strict compliance with Act No. 534 of 1921, as hereinafter to be mentioned.

       Although not mentioned in the briefs herein, we call attention to the President’s address to the Arkansas Bar Association by Hon. J. L. (Bex) Shaver, and entitled: “A Commentary on State and Improvement District Tax Sales”. See 8 Ark. Law Review, page 886.

       The date has been changed to October 1st. See Sec. 20-1124 Ark. Stats.


author: MiNoe W. Mill wee, Associate Justice.

text:
    Willis v. Denson.
    5-1359
    306 S. W. 2d 106
    Opinion delivered October 28, 1957.

      Moses, McClellan & McDermott, for appellant.

      Switzer & Switzer, for appellee.
   MiNoe W. Mill wee, Associate Justice.

The principal issue here is whether a dwelling the appellees contracted to purchase was vacant or unoccupied beyond a period of sixty consecutive days immediately prior to its destruction by fire under a policy of insurance issued by the appellant, St. Louis Fire & Marine Insurance Company.

The question arose in this way. On December 15, 1949, the appellees, Luther Denson and Callie Denson, purchased a house and lot in Fountain Hill, Arkansas from Mr. & Mrs. Brooks H. Willis under a written contract calling for a down payment with the balance of the purchase price payable in monthly installments. Pursuant to the contract appellees procured a fire insurance policy on the dwelling in the amount of $3,000 with the vendors named as beneficiaries in the standard mortgage, or loss payable, clause. All premiums bad been paid when the house was totally destroyed by fire on June 2, 1953. After the loss the appellant insurance company paid Mr. and Mrs. Willis the $1,075.97 balance due them by appellees under the written contract and took an assignment of their rights as subrogee under the policy. However the company denied appellees’ claim on the ground that the dwelling was vacant for more than sixty consecutive days prior to the fire.

On September 13,1955, the insurance company joined Mr. and Mrs. Willis in this suit against appellees to foreclose the company’s alleged lien for $1,075.97 as sub-rogee under the mortgage clause of the policy. In their answer and cross-complaint appellees asked judgment against the appellant insurer for their alleged equity of $1,924.03 in the proceeds of the $3,000 policy, plus the statutory penalty and attorney’s fee. The chancellor found for appellant on its complaint and for appellees on their counterclaim for $1,924.03 plus 12 per cent penalty, attorney’s fee of $625.00 and costs.

As a preliminary argument appellant says the burden of proof was on appellees to show that the insured house was occupied within sixty days prior to its destruction under the rule that, when a fact is peculiarly within the knowledge of a party, the burden is on him to prove it. But we are committed to the rule that, when proof is made of loss or damage apparently within a policy of insurance, the burden is on the insurer to show that the loss or injury was from an excepted risk or cause. Life & Casualty Ins. Co. of Tenn. v. Barefield, 187 Ark. 676, 61 S. W. 2d 698; Southern National Ins. Co. v. Pillow, 206 Ark. 769, 177 S. W. 2d 763. This is the rule ordinarily applied where the insurer claims vacancy or nonoccupancy and the burden is clearly upon it to prove such affirmative defense. Appleman, Insurance Law and Practice, Sec. 12, 226.

The chancellor found that the appellant failed to show by a preponderance of the evidence that the house was vacant for more than sixty days immediately prior to its destruction on June 2, 1953. This factual issue presents a close and difficult problem. On behalf of the appellant Mr. and Mrs. J. B. Swain testified they moved from the dwelling in question on November 29, 1952, to a home across the road or street where they resided until about May 29, 1953. During this period Mr. Swain taught school in Fountain Hill and Mrs. Swain attended college in Montieello, Arkansas. While they did not visit the premises in question during this period they did not see any one around the house nor did they observe any other signs of occupancy during such period. Mrs. Callie Denson testified she rented the house to Henry Jiles, an elderly Negro who had been with the Densons for many years, from the latter part of January, 1953 to the first week in May, 1953, and that he occupied the house during that period. She saw him there when she visited the premises about May 1, 1953. While they tried to keep his presence a secret from the white people of the community she named three Negroes who knew he was living there. Mr. Swain stated on cross-examination that there were other houses occupied by Negroes not very far from the house in question. Henry Jiles died before the trial and the other three persons named by Mrs. Denson were not called as witnesses.

While we might have reached a different conclusion on this sharply conflicting testimony if we had observed and heaial the witnesses, we cannot say the finding of the chancellor who enjoyed that privilege is against the weight of the testimony. We try chancery cases ele novo, but where the proof is evenly balanced or is in such hopeless conflict and the state of the record such as to leave us in doubt as to where the preponderance of the evidence lies, we follow the chancellor’s finding unless he has erroneously applied the law. Brunson v. Reinberger & Collier, 134 Ark. 211, 203 S. W. 269. As we said in Greenlee v. Rowland, 85 Ark. 101, 107 S. W. 193: “It is the duty of this court to try chancery cases de novo, and in doing so the court gives much weight to the finding of the chancellor upon conflicting evidence; and where the testimony is evenly poised, or nearly so, the finding of the chancellor is accepted as conclusive.” Under the rule we do not feel that we are warranted in disturbing the chancellor’s finding on this factual issue.

Appellant next contends the decree is not in accord with the pleadings and findings of fact in that the court failed to set off the amount of $1,075.97 paid the vendors against the amount of $1,924.03 prayed for in appel-lees’ cross-complaint. According to the pleadings and the undisputed proof appellant owed appellees $3,000 less the amount paid the vendors unless there was a breach of the vacancy provision of the policy. While it perhaps might have been more appropriate for appel-lees to have prayed for judgment for $3,000 less the amount already paid instead of asking for dismissal of the complaint and judgment for $1,924.03, the net result reached by either method of pleading is the same. It is the statement of facts in a complaint or cross-complaint, and not the prayer for relief, that constitutes the cause of action, and a court may grant whatever relief the facts pleaded and proved may warrant, in the absence of surprise to the complaining party. Grytbak v. Grytbak, 216 Ark. 674, 227 S. W. 2d 633. In addition, appellant made no objection to any of the proof offered and the court had authority to treat the pleadings as amended to conform thereto.

We find no merit in appellant’s final contention that the statutory penalty and attorney’s fee should not have been allowed or, if so, that the fee is excessive. The court determined the principal amount of appellant’s liability to be $1,924.03, which was the amount claimed due by appellees. While the fee is liberal, it was perhaps fixed on the basis of additional services necessitated by this appeal, and we do not find it excessive.

Affirmed.


author: George Rose Smith, J.

text:
    Brooks v. Burgess.
    5-1328
    306 S. W. 2d 104
    Opinion delivered October 28, 1957.

      Wiley A. Branton, for appellant.

      Robert Meurer and Spitzberg, Bonner, Mitchell & Hays, for appellee.
   George Rose Smith, J.

This is a suit brought by E. E. Burgess to foreclose two mortgages upon land owned by the appellant. The principal defense is a plea of usury. The chancellor rejected this plea, fixed the amount of the indebtedness at $13,050.30, and entered a decree of foreclosure. Burgess died during the penden-cy of the appeal, and the cause has been revived in the name of his executor.

The debt sued upon represents money and supplies advanced by Burgess over a period of years for the cultivation of land being farmed by the appellant and her husband. The account goes back to the fall of 1946 and was at first secured by the yearly execution of a chattel mortgage on the crop. In March of 1951 the debt exceeded the estimated value of the crop for that year, and the debtors executed the first of the two real estate mortgages in issue. It secures a note for $4,000, with interest at 10 per cent per annum. On January 1, 1953, the Brookses executed the other mortgage sued upon, to secure a note for $6,588.47. This note recites an interest rate of 10 per cent, though it is described in the mortgage as bearing only 8 per cent before maturity and 10 per cent thereafter. It does not appear that either note was meant to represent the exact amount then owed. The lender’s son, Marvin Burgess, testified that the $4,000 mortgage was given “to cover a part of what they owed at that time.” It is not clear whether the second mortgage was a renewal of the first, nor is it shown how the principal amount of $6,588.47 was determined.

Each note recites the maximum legal rate of interest and is not ostensibly usurious. Before the suit was filed, however, the appellant requested and was given a statement of the account. This statement covers the years 1946 through 1954, contains some 640 items of debit and credit, and must have been prepared from the lender’s records. It discloses that the lender invariably calculated the interest on September 1 of each year and simply entered an interest charge amounting to 10 per cent of the sum then owed, regardless of when the advances had been made. In the first year, for example, a total of $3,389.99 was advanced from time to time between October 25, 1946, and September 1, 1947. On the latter date an interest charge of exactly 10 per cent, amounting to $338.99, was entered. Needless to say, this method of computing interest is usurious.

In view of the lender’s itemized statement the appellant’s attorney raised the question of usury before the suit was' filed. Burgess then offered to delete the illegal charges and later brought suit for the amount of the principal only, though the complaint was subsequently amended to ask for interest in accordance with the terms of the mortgages. At the trial Marvin Burgess testified that he kept his father’s books and followed “a practice of ours for years” in making the 10 per cent interest charge every September. This is from his testimony:

“A. I charged interest the first of each September.
‘ ‘ Q. How much interest did yon charge ?
“A. Ten per cent.
“Q. Suppose a man obtained $100.00 on the first of August, how much interest would you charge on that item the first of September?
“A. Ten per cent.
“Q. Even though he had it only one month?
“A. That is right. I charged 10 per cent on the dollar the first of September, regardless of wrhen he got it. ’ ’

In attempting to excuse his practice the witness stated that he had no training in accounting, that he was under the impression that he was charging the interest rate prescribed by the mortgages, and that he offered to correct the account when he learned that his charges were unlawful. It is now argued that the lender merely made a mistake of fact in the calculation of interest. Since suit was not actually brought on the usurious account it is contended that the mortgages should be enforced according to their terms.

We do not find this reasoning impressive. It is immaterial that the debtors did not participate in the unlawful computations. “It is not necessary for both parties to intend that an unlawful rate of interest shall be charged, but if the lender alone charges or receives more than is lawful, the contract is void.” Wilson v. Whitworth, 197 Ark. 675, 125 S. W. 2d 112. Here the lender made excessive interest charges for more than eight years — from the inception of the account in 1946 to the submission of the itemized demand in 1955. It is plain enough that the notes, despite their failure to state the exact sum owed, were based upon a calculation embodying usurious interest. It is impossible to ascertain the sum due by merely examining the notes and mortgages; the lender’s records must be consulted before the correct balance can be determined. That the suit was brought only for interest at the legal rate amounts in substance to no more than an effort to remit the excess, which cannot validate the contract. Habach v. Johnson, 132 Ark. 374, 201 S. W. 286.

Nor is this a situation that permits a finding of excusable mistake. We have often recognized that a lender who attempts to compute his charges according to law is not to be penalized for an inadvertent mathematical error or for a true mistake of fact, such as the inclusion of an incorrect charge for insurance. Garvin v. Linton, 62 Ark. 370, 35 S. W. 430, 37 S. W. 569; Cox v. Darragh Co., 227 Ark. 399, 299 S. W. 2d 193; Griffin v. Murdock Acceptance Corp., 227 Ark. 1018, 303 S. W. 2d 242. That is not the case before us. Here the lender made no effort to compute the interest at the legal rate, nor was there a mathematical error in his calculations. At the most Burgess made a mistake of law, that of thinking that his method of charging interest was lawful. If the usury laws are to mean anything at all it is plain enough that those who engage in the business of lending money must at their peril familiarize themselves with those laws. Otherwise there is nothing to prevent every lender from habitually collecting excessive interest charges, as long as he purges the account of usury when it becomes necessary to go into court.

Reversed and remanded for the entry of a decree canceling the notes' and mortgages.

Harris, 0. J., disqualified and not participating.