text:
    Lockhart v. Spencer.
    5-1269
    306 S. W. 2d 109
    Opinion delivered October 28, 1957.

      Wood, Ghesnutt d Smith and David B. Whitting-ton, for appellant.

      G. W. Lookadoo, for appellee.
   Paul Ward, Associate Justice.

In 1947 Henry Smith executed a deed conveying three parcels of land, consisting of 8 1/2 acres, to Herman Spencer. Part if not all of the land was divided into town lots. Prior thereto the land had forfeited for taxes and was sold to the State. Several people held deeds from Spencer and others held deeds from the State to separate portions of the land.

On January 23, 1948 Henry Smith died, leaving four surviving heirs, three of whom are the appellants here. On January 26, 1955 the said four heirs, through their attorneys, filed suit against all the above mentioned grantees to recover the land here involved. Five of the defendants employed attorneys and filed answers. The other defendants, who were served by Warning Order, did not appear or file any pleading. It appears from the record that the complaint of the Smith heirs was based upon the allegations that Spencer acquired his deed by fraud and that the tax forfeitures were void.

On the day set for trial (June 2, 1955) the attorneys representing both sides held a conference and reached a compromise settlement, which was presented in open conrt. Thereupon, on the same day, the Trial Court rendered a decree (filed six days later) based upon the agreed settlement. By this decree the four heirs received more than one half of the land and the defendants who had answered received the balance. On the occasion and date of the said compromise settlement only one of the Smith heirs was present in person. Those defendants who received nothing from the decree are not involved in this litigation.

Almost exactly one year after the entry of the above mentioned decree (on June 7, 1956) the three Smith heirs who were not present when the settlement was reached and the decree rendered, through another attorney, filed a petition for a Bill of Review to set aside the original decree. The abstract does not disclose the grounds on which the three Smith heirs sought to have the decree set aside, but we do find from the record that they relied on newly discovered evidence relative to adverse possession and that the settlement was based on a mistake of facts.

After a full hearing, at which the testimony and exhibits introduced make up over 180 pages of the record, the Trial Court denied the petition and refused to set aside its former decree. It is from this order denying their petition that appellants are now appealing.

Appellants suggest only two grounds for a reversal; One, newly discovered evidence and mistake, and; Tivo, their attorneys were not authorized to consent to the original decree.

One. Apparently appellants have abandoned this ground, as will be seen later, although it was the principal one mentioned in their petition to set aside the original decree. At any rate the abstract of the testimony fails to reveal the essential elements necessary to justify a trial court in setting aside a decree after the lapse of the term at which it was rendered. Not only is the alleged new evidence insufficient, bnt there is no showing that it could not have been obtained at the time of the original hearing, bnt it is not shown that appellants would benefit from a new hearing. In other words, it is not shown that appellants have a meritorious cause of action.

Two. The only point relied on by appellánts for a reversal is stated in this language: “An attorney has no authority to compromise his client’s case without his client’s consent.” By this we assume appellants’ contention here to be that the original decree should be set aside, after term, merely because they did not positively authorize their attorneys to agree to it. A former attorney for appellants expresses it this way in their brief: “Under that set of facts.it would appear that if such a compromise were made it was made without the consent of the plaintiffs in the case and is therefore void and would be another ground for setting aside the decree.”

The above contention is not sustained by our decisions or the text writers. Appellants rely on the case of Saleski v. Boyd, 32 Ark. 74, from which they quote: “An attorney-at-law acting under a general retainer, and without special authority, has no right to compromise his client’s case and consent to a judgment or decree against him.” Following the above however, the court also said: “But the court will not set aside a decree entered by consent of an attorney, merely because he had no special authority from his client to compromise the case and give such consent; but will look into the facts and circumstances of the case and ascertain whether it be such a decree as the attorney might well have consented to in the exercise of his general authority, to prevent further litigation and expense. If it appear that the attorney consented to the decree in fraud, or by collusion with adverse counsel, or under a mistake or misapprehension of law or facts, and that the rights and interests of his client were thereby seriously com-promitted, the court wall open the decree.” Moreover, Ave call attention to the important fact that the decree in the cited case was challenged at the same term at which it Avas rendered, while here the term had of course lapsed. Tlie cases of Moore v. Murrell, 56 Ark. 375, 19 S. W. 973 and Cullin-McGurdy Const. Co. et al. v. Vulcan Iron Works, 93 Ark. 342, 124 S. W. 1023 relied on by appellants are not applicable here because in neither was the questioned compromise reduced to a decree or judgment.

Possibly because judgments and decrees based on compromise settlements by attorneys are so common that they have become accepted practice accounts for the fact that they have not been frequently challenged in this court. However we do find this head note in the early case of Price v. Notrebe’s Heirs, 17 Ark. 45; “A bill of review cannot be maintained upon allegations that the decree, on the original bill, was entered without the assent of the complainant . .

In Black on Judgments, Yol. 1, page 484-485, under the title of “Consent Judgments” we find: “So, a judgment regularly entered pursuant to an agreement of the attorneys filed in the case, cannot be opened, after final adjournment of the term, on the ground that agreement was not authorized. ’ ’

In view of the above it is unnecessary for us to consider appellees’ motion to dismiss the appeal.

Affirmed.


source: Caselaw Access Project

author: Sam Robinson, Associate Justice.

license: Public Domain

text:
    Aetna Casualty & Surety Co. v. Simpson.
    5-1305
    306 S. W. 2d 117
    Opinion delivered October 28, 1957.

      Armstrong, McCadden, Allen, Braden & Goodman, Memphis, Tenn.; Barrett, Wheatley, Smith & Deacon; Mehaffy, Smith & Williams; John T. Williams & Robert V. Light, for appellant.

      Rieres & Smith and Henry S. Wilson for appellees; Pope, Pratt & Shamburger, amici curiae.

   Sam Robinson, Associate Justice.

The appellees, Mary Simpson, Dorothy Lagos, and Gary Lagos, a minor, by his next friend, Dorothy Lagos, obtained small judgments against James E. Knight, Jr., for damages sustained by appellees when involved in an automobile collision. An automobile occupied by appellees had collided with an automobile owned by James E. Knight, Jr. and operated by James E. Knight, Sr. The judgments against James E. Knight, Jr. were not satisfied, and in an attempt to enforce the judgments, appellees filed this suit against the appellant herein, The Aetna Casualty & Surety Company, the carrier of James E. Knight, Jr.’s liability insurance. The appellant insurance company filed an answer alleging:

“Defendant for further answer avers that its insurance policy referred to in the complaint and exhibited thereto provides under the heading ‘CONDITIONS,’ as follows:
“ ‘9. Assistance and Cooperation of the Insured Coverages A, B and D
“ ‘The insured shall cooperate with the Company and, upon the Company’s request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of accident.
Í ( ( * * *
“ ‘11. Action Against Company Coverages A, B and D
“ ‘No action shall lie against the Company unless, as a condition precedent thereto, the Insured shall have fully complied with all the terms of this policy, nor until the amount of the Insured’s obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company.’
“For further answer defendant avers that its insured, James E. Knight, Jr., as well as James E. Knight, Sr., breached the above conditions. Immediately following said accident giving rise to the complaint in said cause No. 5471, defendant undertook to investigate said accident, including the facts and circumstances under which the automobile in question was being used at the time of the accident. In the course of this investigation, James E. Knight, Jr. and James E. Knight, Sr. made deliberate, false and highly material representations of fact concerning the use to which the insured automobile was being put at the time of the accident. These false statements of. fact were also made to representatives of plaintiffs with the intention on the part of James E. Knight, Jr. and James E. Knight, Sr. of aiding plaintiffs in procuring a settlement or recovery from defendant and with the further intention of providing coverage for James E. Knight, Sr. under the Omnibus provision of said policy.
“Upon defendant’s discovery of the above false and deliberate representations of fact, it immediately gave notice to James E. Knight, Jr. that further defense would be provided under full reservation of rights and without waiver of any of the rights of the defendant under the provisions of said policy. Also upon the discovery of said false representations, defendant gave immediate notice to James E. Knight, Sr. that no coverage or defense would be provided him unde]- the terms of said policy.
“Therefore, defendant avers that James E. Knight, Jr. and James E. Knight, Sr. breached the conditions of said policy, as above set out, and that defendant was greatly prejudiced thereby, and that under the terms and provisions of said policy the defendant was not obligated to pay any judgments rendered against either James E. Knight, Jr. or James E. Knight, Sr., and, therefore, defendant is no! liable to the plaintiffs in this cause.”

The appellees, plaintiffs in circuit court, demurred to the answer. The trial court sustained the demurrer. The appellant, defendant in circuit court, stood on the answer and refused to plead further. Whereupon, the court entered judgments for the plaintiffs. The defendant insurance company has appealed.

It is appellant’s contention that the answer states a valid defense; that neither the statutes nor the policy of insurance makes the insurance company liable as a matter of law when the facts alleged in the answer are assumed to be true, as they must be in testing the demurrer.

Act No. 347 of the 1953 Acts of the General Assembly is the ‘ ‘Motor Vehicle Safety Responsibility Act. ’ ’ It appears in Airkansas Statutes as V 75-1401 to 75-1493, inclusive. Appellees rely on Section 75-1466, which is paragraph (f) (1) of Section 66 of the Act. It provides:

“The liability of the insurance carrier with respect to the insurance required by this act [our italics] {% 75-1401-§ 75-1493) shall become absolute whenever injury or damage covered by said motor-vehicle liability (policy) occurs; said policy may not be cancelled or annulled as to such liability by any agreement between the insurance carrier and the insured after the occurrence of the injury or damage; no statement made by the insured or on his behalf and no violation of said policy shall defeat or void said policy.”

Appellees also rely on Item 5 of the policy. It provides:

' “Such insurance as is afforded by this policy for bodily injury liability or property damage liability with respect to any automobile owned by the named Insured shall comply with the provisions of the motor vehicle financial responsibility law of any state or province which shall be applicable with respect to any such liability arising out of the ownership, maintenance or use of the automobile during the policy period, to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits of liability stated in this policy. The Insured agrees to reimburse the Company for any payment made by the Company which it would not have been obligated to make under the terms of this policy except for the agreement contained in this paragraph.” [our italics]

The appellees maintain that the statute when considered in connection with the provisions of the policy precludes the insurance company from asserting a defense of non-cooperation on the part of the insured.

There is no Arkansas statute which required Knight, the insured, to carry insurance prior to the collision. The Arkansas financial responsibility law is applicable only after a mishap has occurred. It is then that an automobile owner or operator must establish his financial responsibility. The Financial Responsibility Act is rather long, containing 95 sections, but it is clear that the Act does not apply to an owner or driver who has not been involved in an accident for which he may be liable in damages.

Section 24 of the Act provides:

“The provisions of this act, requiring deposit of security and suspensions for failure to deposit security, subject to certain exemptions, shall apply to the driver and owner of any vehicle of a type subject to registration under the motor-vehicle laws of this State which is in any manner involved in an accident within this State, which accident has resulted in bodily injury to or death of any person or damage to the property of any one person in excess of $100.”
“SECTION 43. Application of Article V. The provisions of this act requiring the deposit of proof of financial responsibility for the future, subject to certain exemptions, shall apply with respect to persons who have been convicted of or forfeited bail for certain offenses under motor-vehicle laws or who have failed to pay judgments upon causes of action arising out of ownership, maintenance or use of vehicles of a type subject to registration under the laws of this State.”

Section 63 is as follows:

“Certificate of insurance as proof. Proof of financial responsibility for the future may be furnished by filing with the department the written certificate of any insurance carrier duly authorized to do business in this State certifying that there is in effect a motor-vehicle liability policy for the benefit of the person required to furnish proof of financial responsibility. Such certificate shall give the effective date of such motor-vehicle liability policy, which date shall be the same as the. effective date of the certificate [our italics], and shall designate by explicit description or by appropriate reference all vehicles covered thereby, unless the policy is issued to a person who is not the owner of a motor vehicle. ’ ’

If a person becomes subject to the provisions of the Act as provided by Section 43, on account of .his failure to satisfy a judgment, as in the ease at bar, then he must furnish proof of “financial responsibility.” One method of doing this is set out in Section 63 of the Act. It provides for filing with the Department of Revenues a written certificate of an insurance carrier certifying that there is a policy of insurance in effect for the benefit of the person required to furnish proof of financial responsibility.

Section 66, par. (a) of the Act provides:

“ ‘ Motor-vehicle liability policy’ defined.
“a. Certification. A ‘motor-vehicle liability policy’ as said term is used in this act shall mean an ‘owner’s policy’ or an ‘operator’s policy’ of liability insurance, certified as provided in Section 63 or Section 64 as proof of financial responsibility for the future, and issued, except as otherwise provided in Section 64, by an insurance carrier duly authorized to transact business .in this State, to or for the benefit of the person named therein as insured.”

Paragraph (f) (1) of Section 66 applies only to insurance required by the Act, and it is explicit in that regard. This paragraph provides, further, that “no statement made by the insured or on his behalf and no violation of said policy shall defeat or void said policy. ’ ’ What policy? The same section and paragraph of the Act answers-the question: “The insurance required by this act” The only insurance required by the Act is insurance to prove financial responsibility after an accident has occurred and the person involved has, therefore, come within the provisions of Section 43 of the Act, such as by the failure to satisfy a judgment.

The Arkansas financial responsibility law has no application whatever to an insurance policy which has not been used as proof of financial responsibility in the future. There is nothing in the pleadings in the case at bar to indicate that the policy had been used for that purpose at the time of the happening of the collision for which the policyholder was held liable in damages.

Item 5 of the policy, relied on by appellees, merely provides that the insurance afforded by the policy shall comply with the provisions of the financial responsibility law to the extent of the coverage and limits of liability. This means that after the insured has by his conduct brought himself within the purview of the Act, the policy shall comply with the Act. It does not mean that the policy must comply with the Act before the Act applies to the insured.

Many of the states have financial responsibility laws similar to ours, and the courts in a few of those states have rendered decisions supporting the contention made by appellees in the case at bar. Continental Ins. Co. v. Charest, 91 N. H. 378, 20 A. 2d 477; Hartford Acc. & Ind. Co. v. Wolbarst, 95 N. H. 40, 57 A. 2d 151; New York Cas. Co. v. Lewellen, 184 F. 2d 891. However, the New Hampshire case of American Mut. Liab. Ins. Co. v. Ocean Acc. Guarantee Corp., Ltd., 87 N. H. 374, 180 A. 249, is not in harmony with the two above mentioned New Hampshire cases.

But the weight of authority is in accord with McCann v. Continental Cas. Co., 6 Ill. App. 2d 527, 128 N. E. 2d 624, where the court said:

“* * * The provisions of the Financial Responsibility Act of Illinois are not applicable unless the insured has by his previous conduct brought himself within its purview. There was no evidence in the record that the insured had had a previous accident or that there was any unsatisfied judgment growing out of an accident against him, nor is there any contention that in any way by his previous conduct the insured came within the scope of the Act. Only if his prior conduct had been such that he was required to make proof of financial responsibility under the Act would the provisions contained in paragraph 58k have been of necessity, under clause 8 of the policy, incorporated therein.
Í ( * * *
íí* * * rpiie conclusion which we have reached is sustained, not only by reason, but by overwhelming authority. Farm Bureau Mut. Auto. Ins. Co. v. Georgiana, 14 N. J. Super. 459, 82 A. 2d 217; Ocean Accident & Guarantee Corp. v. Peerless Cleaning & Dyeing Works, 162 A. 894, 10 N. J. Misc. 1185; Rasinski v. Metropolitan Casualty Ins. Co., 117 N. J. L. 490, 189 A. 373; Hill v. Standard Mut. Casualty Co., 7 Cir., 110 F. 2d 1001; State Farm Mut. Auto. Ins. Co. v. Arghyris, 189 Va. 913, 55 S. E. 2d 16; Farm Bureau Mut. Auto. Ins. Co. v. Hammer, 4 Cir., 177 F. 2d 793; Sutton v. Hawkeye Casualty Co., 6 Cir., 138 F. 2d 781; Cohen v. Metropolitan Casualty Ins. Co., 252 N. Y. S. 841; State Compensation Ins. Fund v. Bankers Indem. Ins. Co., 9 Cir., 106 F. 2d 368; American Mut. Liability Ins. Co. v. Ocean Accident Guar. Corp., 87 N. H. 374, 180 A. 249; Anderson v. American Automobile Ins. Co., 50 R. I. 502, 149 A. 797; Travelers Ins. Co. v. Boyd, 312 Ky. 527, 228 S. W. 2d 421.”

Appellees make the further point that the appellant insurance company is estopped to assert a breach by the insured of the contract of insurance because the insurance company defended the insured in the action against him. The answer alleges:

“Upon defendant’s discovery of the above false and deliberate representations of fact, it immediately gave notice to James E. Knight, Jr. that further defense would be provided under full reservation of rights and without waiver of any of the rights of the defendant under the provisions of said policy. * * *”

It is appellees’ contention that the insurance company is liable as a matter of law, notwithstanding the reservation of rights as set out in the answer. In support of this contention appellees cite Spann v. Commercial Std. Ins. Co., of Dallas, Texas, 82 F. 2d 593, but the facts in that case are easily distinguished from the allegations in the answer in the case at bar. In the Spann ease the question was whether there had been a cancellation of the policy subsequent to the happening of the accident. The court held that such a cancellation would not affect the rights of the injured party. Here, the answer alleges that under the terms of the policy it was the duty of the insured to cooperate with the insurance company, but instead of giving such cooperation the insured fraudulently represented the facts. The complaint alleges that the insurance company proceeded with the defense of the case only after giving the insured notice that no rights under the policy were waived.

Appellees cite, also, Western Casualty & Surety Co. v. Independent Ice Co., 190 Ark. 684, 80 S. W. 2d 626. There, it appears that the insurance company defended the original suit against the ice company without any reservations whatever. Appellees rely, also, on Francis v. London Guarantee & Acc. Co., 100 Vt. 425, 138 A. 780, and Moses v. Ferrel & Indemnity Co. of America, 97 Pa. Super. 13. These cases appear to be in point and sustain appellees ’ contention.

The great weight of authority, however, sustains the contention of appellant and we believe it is the better rule. It is stated in 29 Am. Jur. 673, as follows:

“No estoppel arises against a liability insurer where, although defending a suit against the insured, it insists on its non-liability under the policy, and its defense of the suit is merely to protect itself and comply with its agreement.”

There is a long annotation on the subject in 38 A. L. R. 2d 1148. There, at page 1161, it is said:

“As noted in the original annotation, [81 A. L. R. 1382] it is a well-established rule that a liability insurer will not be estopped to set up the defense that the insured’s loss was not covered by the insurance policy, notwithstanding the insurer’s participation in the defense of an action against the insured, if the insurer gives timely notice to the insured that it has not waived the benefit of its defense under the policy. Support for this principle is to be found in the following cases: * * * ” Numerous cases from the U. S. courts and 27 states are cited in support of the text.

Appellant contends that Arkansas Statute § 66-514, providing for the payment of attorneys’ fees, does not apply in this case because a Tennessee contract is involved, although it matured in Arkansas. Notwithstanding the policy of insurance is a Tennessee contract, procedural matters must he in accord with the Arkansas statutes. The statute provides that attorneys’ fees shall be taxed as part of the costs. Where the policy matured in Arkansas and the action is brought in Arkansas, the Arkansas statute providing for attorneys’ fees and penalties applies. John Hancock Mut. Life Ins. Co. v. Ramey, 200 Ark. 635, 140 S. W. 2d 701; Watson v. Employers Liability Assur. Corp., 348 U. S. 66, 99 L. Ed. 74, 75 S. Ct. 166; U. S. v. H. R. Henderson & Co., 126 F. Supp. 626.

Our conclusion is that the answer is good as against the demurrer. The case is, therefore, reversed and remanded.

Millwee, J., dissents.


author: CaeletoN Harris, Chief Justice.

text:
    Merrell v. Smith.
    5-1363
    306 S. W. 2d 700
    Opinion delivered November 4, 1957
    [Rehearing denied December 2, 1957.]

      J. G. Sain and Tom Kidd,, for appellant.

      Shaver, Tachett & Jones, for appellee.
   CaeletoN Harris, Chief Justice.

John F. Merrell died in March, 1928, intestate as to an undivided one-half interest that he owned in 220 acres of land in Howard County. Maymie E. Whitmore, a niece, owned the other undivided one-half interest in said lands. Mer-rell was survived by certain sisters (not parties herein), three nephews, Clay Merrell, G-eorge Merrell, and Alger Merrell, and his niece, Maymie E. Whitmore. The sisters of John P. Merrell conveyed their interest in the property to Mrs. Whitmore, as did Clay Merrell, leaving only her brothers, Alger and George Merrell, with, an interest in the property. On September 7, 1945, George Merrell and wife, Iva M. Merrell, executed a qnit-claim deed to Maymie Whitmore, conveying their interest in said land, and on September 28, 1945, Alger Merrell and wife, Florence, likewise executed a qnit-claim deed, conveying their interest in the land. On November 10th of the same year, Joe Whitmore, hnsband of May-mie, died, and she moved to the home of her brother, George, residing there for a few months, then moving to herself. Mrs. Whitmore died testate on Angnst 31, 1954, leaving surviving her the two brothers, Alger Mer-rell and George Merrell; however, Mrs. Whitmore had executed a will on November 12, 1945, naming one A. L. Davis as sole beneficiary of her estate, and naming Dr. W. Decker Smith as executor. George Merrell died November 2, 1954, leaving his widow, Iva, and three children, Laura Mae Sieveka, Polly Ladenberg, and Edwin C. Merrell, who, together with Alger Merrell, constitute the appellants herein.

Following Mrs. Whitmore’s death, the will was admitted to probate, and Dr. Smith was named executor; on December 6, 1954, appellants (excluding Iva Merrell) filed pleading contesting the will on the basis that the execution of same had been obtained through “influence, persuasion, promises, fraud, and means unknown to the contestants,” by A. L. Davis, and further, that Alger Merrell and George Merrell had executed the aforementioned deeds to Maymie Whitmore under an oral agreement or contract, “the consideration being that if the said lands were not sold, the title to same was to revert to them at her death, but if the lands were sold, the proceeds from such sale were to be used by her for necessary living expenses, if needed by her, only, and the remainder of money on hand at her death was to be and become the property of Alger and George Merrell.” On hearing the cause, the Probate Court held the will to be valid, and properly admitted to probate; found that Mrs. Whitmore had testamentary capacity to execute the will, did execute same without improper influence, and further found that appellants had failed to adduce competent testimony to establish the contract. On appeal, this Oonrt upheld the action of the Howard Probate Court in admitting the will to probate, but remanded the case with directions that it be transferred to equity for further proceedings, since the Probate Court had no jurisdiction to determine whether specific performance of the alleged agreement should be ordered. In accordance with the mandate, this cause was transferred to the Howard Chancery Court, and after the filing of additional pleadings, was heard by that tribunal. On April 11, 1957, the court dismissed appellants’ complaint for want of equity, and from such decree comes this appeal.

Several points are raised in urging a reversal, but practically all relate to the refusal of the court to admit the testimony of appellants at the trial of this cause. Our constitution, under “Schedule”, Section II, provides as follows:

“In civil actions no witness shall be excluded because he is a party to the suit or interested in the issue to be tried. Provided, that in actions by or against executors, administrators, or guardians in which judgment may be rendered for or against them, neither party shall be allowed to testify against the other as to any transactions with or statements of the testator, intestate or ward, unless called to testify thereto by the opposite party * * *”

It is first argued the court erred in ordering, upon motion of appellees, that Iva M. Merrell be made a party in the case. As stated, Mrs. Merrell is the widow of G-eorge Merrell, and mother of appellants, Laura Mae Sieveka, Polly Ladenberg, and Edwin C. Merrell. Under a deed dated December 1, 1954, Iva Merrell conveyed all of her interest in her deceased husband’s estate to the three children. While the deed shows the above date, the notary who took the acknowledgment testified that to the best of her recollection, same was acknowledged on January 7, 1957, and the record reflects that the deed was recorded in Howard County on January 10, 1957. January 7th, incidentally, was the same date that appellees filed their motion asking that Mrs. Mer-rell he made a party to the proceedings. On January 16th, Mrs. Merrell affirmed this deed by executing a second quit-claim deed to the same parties and Alger Merrell. Appellants contend that Mrs. Merrell should not have been made a party because she had no interest in the estate, and was accordingly a competent witness. Appellees argue that the conveyance was only executed for the purpose of enabling Iva Merrell to testify. The trial court took the position that permitting Mrs. Mer-rell to testify would certainly indirectly violate the constitutional prohibition. In the words of the court, “Will the courts allow a person to do indirectly what our law prohibits?” Appellants also contend that Mrs. Merrell had no interest because her husband was never seized, nor in possession, of any part of Mrs. Whitmore’s estate. It is argued that he only had a half interest in a contract for the property, and that any rights under the contract had never been recognized by Mrs. Whitmore, her executor, or her beneficiary. Actual possession was not required. Seisin, in law, is defined by Bouvier’s Law Dictionary, Yol. II, 3rd Bevision, as “A right of immediate possession according to the nature of the estate.” If appellants’ contentions are valid, George Merrell had such a right, consistent with the rights of his brother, Alger. It seems rather inconsistent for appellants to contend, on the one hand, that their father was not seized of whatever interest he had in Maymie Whitmore’s properties, and on the other hand, to vigorously contend that they are entitled to a part of the estate . . . which would be through their father. It is immaterial, of course, that his interest was limited, nor did the attitude of Mrs. Whitmore, her executor, or beneficiary, affect in any manner his legal status in regard to her properties. Since George Merrell lived for something over two months after the death of his sister, his widow, Iva M. Merrell, was entitled to her statutory rights in any property that her husband might be entitled to receive from the sister. We are of the opinion that logic and sound practice would require that Iva Merrell be made a party to the action. To hold otherwise could well create considerable confusion and possible evasion of the constitutional requirement. For instance, let us say that A, B, C, and D contend that they entered into a contract with E, now deceased, during his lifetime. In order to avoid the constitutional provision, and thus prove their agreement, A, B, and C all convey any interest they might have in the contract to D. There would then be no reason why the three could not testify as to agreements and transactions with the deceased, and thus establish facts otherwise inadmissible. We hold there was no error in making Iva M. Merrell a party to the cause.

It is next contended that appellees waived their motion to make Mrs. Merrell a party. The motion was filed on January 7, 1957, and an answer, denying the material allegations of the complaint, was filed on January 15th. Appellants contend that when the answer was filed, the motion was waived. Suffice it to say that on January 23rd, appellees filed an amendment to their answer expressly reserving all rights under the motion. Appellants did not object to the amendment nor seek to strike same from the pleadings. They did not question the authority of appellees to amend the answer. In fact, it was only after Mrs. Merrell had been made a party to the suit, and after the trial had commenced, that appellants raised the point that ap-pellees had filed an answer before the court had passed upon the original motion to make Iva M. Merrell a party. Since the validity of the amended answer was not challenged in the trial court, we are not called upon to pass upon the matter.

It is likewise contended that appellees, because they did not ask that Iva Merrell be made a party to the probate proceedings, were estopped from asserting that she was a necessary party in this case. We do not consider the argument valid. Additional questions were before the Probate Court, i. e., the issues were not the same. Appellants have not been misled nor caused to change their position because Mrs. Merrell was not a party to the probate action. This suit for specific performance is an entirely different case, having no connection with the matter that was properly heard, by the Probate Court (whether the will should be admitted to probate). We therefore, are not presently concerned with the pleadings in that cause.

It is further argued that the trial court should have permitted the introduction into evidence of the transcript of the probate case, including depositions of appellants herein taken on interrogatories, it being contended that since appellees crossed the interrogatories, the constitutional provision was waived. In addition to the fact that this case was an entirely different proceeding, relating to an entirely different cause of action, it is observed that every appellants’ witness who testified in the probate case, either testified in person or by deposition in this cause; further, objections were made and exceptions saved to questions and answers relating to the alleged contract.

This brings us to appellants’ argument that the court improperly excluded pertinent portions of the depositions of Alger Merrell, Iva M. Merrell, and her children, Laura Mae Sieveka, Polly Ladenberg, and Edwin Clay Merrell, taken in the instant cause. Here, ap-pellees did not cross the interrogatories, and they made timely objections to all testimony concerning the alleged oral contract. Such evidence was clearly inadmissible under the “dead man’s statute.”

The only competent evidence on behalf of appellants was that of Mrs. Florence Merrell, wife of Alger Mer-rell. She testified that:

“* * * Joe told Alger and George that he and Maymie wanted to sell the farm and move to town-, so as to be near a doctor, as he said he was in very bad shape physically, both Joe and Maymie said if Alger and G-eorge would make them deed to the lands that May-mie would will all her possessions to Alger and George at her death. Both Alger and George told that they would make the deeds if she would do as she said. She raised her hand and said, ‘If there is a God in Heaven, I will do as I have said.’ * # * She was to live with George Merrell. * * * Alger and George were to get all her estate. * * *”

Unanswered by her testimony, is the question of disposition of the property if Maymie Whitmore should have died before Joe. Would Joe have made a like will? Was he to live with one of the brothers? Even more puzzling is the fact that though Mrs. Whitmore lived for approximately nine years after the alleged contract was entered into, the record does not show that any demand was ever made upon her during that period to execute a will in fulfillment of the alleged agreement.

Appellants contend that the court erred in admitting the testimony of one D. L. Cassady, whose evidence dealt with possible reasons for Maymie Whitmore leaving the property to A. L. Davis. Irrespective of the competency of this evidence, it carries no weight with us in determining this litigation.

To establish a contract to make a will, the proof must be clear, satisfactory, and convincing. Jenson v. Housley, Administrator, 207 Ark. 742, 182 S. W. 2d 758; Sheffield, Executor, et al, v. Baker, 201 Ark. 527, 145 S.W. 2d 347; Kranz v. Kranz, 203 Ark. 1147 (unreported), 158 S. W. 2d 926. In the latter case, a son sought to specifically enforce an alleged oral contract with his father, wherein the father, in consideration of care given him, was to leave to the son. the home. This Court, in rejecting the claim of the son, said:

“* * # .This court has many times announced the rule that in order to establish a contract, of the nature present here, the burden is on the one attempting to establish the contract, and that it is not sufficient that he establish it by a preponderance of the testimony, but that he must go further and establish the contract by evidence so clear, satisfactory and convincing as to be substantially beyond a reasonable doubt. * # * 3 5

The competent evidence in this record falls short of meeting the test.

Affirmed.

       Died in 1952, leaving no children.

       See Merrell v. Smith, Special Administrator, 226 Ark. 1016, 296 S. W. 2d 624.

       Appellants amended their complaint alleging further that May-mie Whitmore agreed to make a will leaving all her property to Alger and George Merrell in consideration of their executing the Í946 deeds to her.

       Emphasis supplied.

       Whether Mrs. Merrell conveyed this property in good faith is entirely immaterial in this case.


author: J. Seabobn Holt, Associate Justice.

text:
    Adkins v. Moody.
    5-1358
    306 S. W. 2d 333
    Opinion delivered November 4, 1957.

      Fiéis & McAdams and Frierson, Walker & Snell-grove, for appellant.

      J. Brinkerhoff and L. A. McLin, for appellee.
   J. Seabobn Holt, Associate Justice.

This is a suit (filed March 18, 1954) by Hazel Adkins Moody against her son, Dalton Adkins, appellant, for an accounting.

Mrs. Moody, in effect, alleged in her complaint that she was the owner of a certain Hardware Store located in Harrisburg, Arkansas, and that she had acquired title to same by an Order of tbe Probate Court of Poinsett County, Arkansas, setting off tbe same to ber as ber separate property to be applied on ber dower and statutory allowance in tbe personal estate of J. P. Adkins, deceased.

Sbe also alleges that all of tbe beirs of J. P. Adkins, ber deceased husband, eacb, including tbe Defendant, Dalton Adkins, executed to ber Bills of Sale to all of their right, title and interest in and to all tbe personal estate and personal property of every kind and nature owned by tbe Estate of J. P. Adkins, deceased, at tbe time of bis death and that sbe employed tbe Defendant, Dalton Adkins, ber son, to take over tbe operation of tbe store under an agreement that be was to operate it and take out a salary eacb month, and what other expenses be might have; that Dalton did take over and operate said hardware store for ber until tbe present suit was filed (3-18-54).

Sbe prayed for judgment for tbe cash value of said Hardware Store as fixed by said Probate Court Order in tbe sum of $4,617.75, with tbe profits thereon for the years 1947 to 1953, both inclusive, and for the value of tbe assets of tbe said estate of J. P. Adkins, deceased, which sbe acquired by said Bills of Sale from tbe beirs, all of which tbe Defendant wrongfully converted to bis own use and refused to deliver to the Plaintiff, and for a total judgment of $52,826.50. Appellant answered, in effect, admitting bis mother’s title to tbe hardware store building and fixtures under tbe Probate Court Order, but denied all other material allegations and denied that appellee was entitled to recover any sum from him. In a cross-complaint, making bis mother along with bis brothers and sisters defendants, be alleged that on February 14, 1953, he purchased the hardware store building and fixtures, and also the stock of hardware therein, all for $10,000.00 and that of this amount, $8,000.00 was for tbe building and fixtures and $2,000.00 for tbe stock of goods. Appellee interposed a general denial to this cross-complaint. On a trial, during which a voluminous record was compiled, there was a decree in favor of appellee for $26,859.51. This appeal followed.

In this case, it appears undisputed that Dalton Adkins, on February 14, 1953, acquired by deed the hardware building and fixtures. He stoutly contends that he also acquired the stock of goods as above alleged at the time he bought the building and fixtures, and that since his father’s death, as alleged in his cross-complaint, the hardware store had been operated by him under an agreement with his mother, his brothers and sisters, as a family business for the benefit of them all. The mother denied this and testified, in effect, that she owned the stock of goods in question and had employed her son, Dalton, to operate the store and to take out a monthly salary and any necessary expenses; that she, individually and personally, acquired the hardware stock of goods which her husband owned at his death by the following Probate Court Order above referred to: “It is therefore by the Court considered, ordered and adjudged that all right, title and interest of the estate of J. P. Adkins in the merchandise and stock of hardware and liquor stock of the value of $8,780.21, be and the same is hereby vested in Hazel Adkins individually as her separate property. This June 4, 1947. Francis Cherry, Judge (R. 13 and 14).”, that Dalton was to operate the store and account to his mother. Appellee further testified that she placed her son in charge and that she never derived anything from the store during her son’s management; that he had been operating the store ever since that arrangement. The first time that she knew that Dalton claimed to own the stock of goods was when the government, in 1954, required additional money on the 1950 income tax and Dalton told her she would have to pay it because the hardware store was assessed in her name but that he owned it. 11 How he got it I don’t know.” There was other evidence that ap-pellee did not sell, or agree to sell, the stock of merchandise to appellant.

The evidence presented is in irreconcilable conflict. The trial court found it necessary to appoint a Master to make an audit of the hardware business but the Master, after considerable effort to carry out Ms duty, reported to the Court, in effect, that he found appellant’s records and files in such a confused, tangled and inadequate state that he was unable to make an audit that would reflect the business and condition of the hardware store. He therefore tendered his resignation which the Court accepted. No other appointment of a Master was made and in fact, no request appears to have been made by either side that another Master be appointed. There was evidence that the value of the stock of hardware delivered to appellant’s mother by Probate Court Order was of the value of $4,617.75 and that she put large sums of money into the business, amounting to some $40,000.00 or more, in an effort to sustain it and make it profitable. There was also evidence that total gross sales from 1947 to 1953, inclusive, amounted to about $397,997.00 and unaccounted profits realized to which appellee was entitled, but did not receive.

In the circumstances, it was clearly the duty of appellant (and the burden was on him) as appellee’s agent and employee in charge of the business to keep an accurate record of the store’s business; to account for money and property coming into his hands; all receipts and disbursements and render an accounting to his principal, appellee. This he completely failed to do. In the very recent case of Lynch v. Garnes, 227 Ark. 767, 301 S. W. 2d 739, we said, “As stated in 2 Am. Jur. 226 (“Agency” § 286) on the duty of an agent to keep and render accounts: ‘The duty of an agent to account for moneys of his principal coming into his hands is well recognized. As stated by the American Law Institute, unless otherwise agreed, an agent is subject to a duty to keep, and render to his principal an account of, money or other things which he has received or paid out on behalf of the principal.’ ”

As indicated, when all the evidence is considered, and absent an accounting and report by a Master, and the failure of appellant to keep adequate records and files, we hold that the findings and decree of the trial court in the circumstances are not against the preponderance . of the testimony and accordingly, we affirm.


author: Ed. F. MoFaddiN, Associate Justice.

text:
    Brown v. Wells.
    5-1314
    306 S. W. 2d 865
    Opinion delivered November 4, 1957.
    [Rehearing- denied December 9, 1957.]

      J. B. Gillison and Owens, McHaney, Lofton & Mc-Haney, for appellant.

      Carneal Warfield and John F. Gibson, for appel-lee.
   Ed. F. MoFaddiN, Associate Justice.

This is a lawsuit between rival claimaints for lands in Chicot County. The case was originally filed in the chancery court, but by consent was transferred to law and ivas tried on an agreed statement of facts. Wells, as plaintiff, claimed title to certain lands by reason of (a) a deed from Daisy Edwards, an alleged former owner, and (b) a deed from the Cypress Creek Drainage District. Brown, as defendant, claimed title under a deed from the Southeast Arkansas Levee District and also an attempted redemption by him from the Cypress Creek Drainage District. The Circuit Court found that Wells was the owner of the land; and from that judgment there is this appeal.

WELLS’ TITLE.

The lands are located in the Southeast Arkansas Levee District and the Cypress Creek Drainage District. Delinquencies due these Districts, as well as delinquencies for State and County taxes, give rise to this litigation. Since Brown claims through a 1952 deed from the Southeast Arkansas Levee District, we may start our recital of Wells’ title with Daisy Edwards’ deed.

On January 3, 1947 Daisy Edwards received a' general warranty deed from Lester Golden and wife describing the lands herein conveyed; and on the same day Daisy Edwards received a deed from the Southeast Arkansas Levee District. This Levee District deed recites that all State, County, and Southeast Arkansas Levee District taxes have been paid “. . . up to and including the year of 1945, payable in 1946.” Daisy Edwards also paid the State, County, and Southeast Arkansas Levee District taxes (assessments) for 1947; but no one paid the 1947 assessments due on the lands to the Cypress Creek Drainage District; and that District foreclosed its delinquent 1947 assessments in Case No. 7769 in the Chicot Chancery Court. The foreclosure decree was entered April 3, 1950; the sale was on October 20, 1950; the sale was approved by the Court on November 6, 1950; and the commissioner, with Court approval, conveyed the lands herein involved to the Cypress Creek Drainage District by deed dated December 15, 1952.

Daisy Edwards conveyed the land to Wells by deed dated November 8, 1952; and on December 18, 1952, the Cypress Creek Drainage District executed a deed to Wells, which deed also recited: “. . . this deed being a complete release for all liens granted by law to this district for unpaid taxes or assessments upon the above described lands for the year 1951 and prior years”. Thus, after December 18, 1952 Wells had a deed from Daisy Edwards and a clearance of all old delinquencies from the Cypress Creek Drainage District; but had outstanding against his title the delinquent State and County taxes and assessments due the Southeast Arkansas Drainage District for 1948 and subsequent years.

BROWN’S TITLE.

As aforesaid, the State and County taxes, as well as the assessments due the Southeast Arkansas Levee District on the lands herein, remained delinquent for the years 1948 to 1951; and on November 26, 1952, the Southeast Arkansas Levee District executed a deed to Brown, describing the lands; and this deed recited: “. . . that Southeast Arkansas Levee and State and County taxes are fully paid up to and including the year of 1951, payable in 1952”. Thus, Brown’s title is based on his said 1952 deed from the Southeast Arkansas Levee District.

The Circuit Court entered judgment for Wells, and Brown has appealed. We affirm the Circuit Court judgment for the reasons herein stated.

I. The Laws Creating The Two Improvement Districts. Our decision in this case turns on the uniform provisions of the act creating the Cypress Creek Drainage District, as contrasted with the peculiar provisions of the act creating the Southeast Arkansas Levee District. The Cypress Creek Drainage District was created by Act No. 110 of 1911, which act was amended by Act No. 455 of 1911 and Act No. 80 of 1915. In Section 13 of the Act No. 80 of 1915, there is set out the procedure for foreclosing the delinquent assessments on lands in the Cypress Creek Drainage District. This procedure is very similar to that contained in the general drainage district law, as found in Sec. 21-546 Ark. Stats. The Cypress Creek Drainage District enforces the collection of delinquent assessments by chancery proceedings; and after the lands are sold by the commissioner, there is a period of two years for redemption by the owner or any person claiming under him. There is no provision in the Cypress Creek Drainage District act which joins the State and County tax forfeiture with the delinquent assessments of the Cypress Creek District.

The Southeast Arkansas Levee District was created by Act No. 83 of 1917; and there is a rather peculiar provision regarding the delinquent assessments due that District as tied in with the delinquent State and County taxes. In the recent case of Beck v. DeFir, 227 Ark. 112, 296 S. W. 2d 396, Chief Justice Lee Seam-ster discussed with great clarity the Act No. 83 of 1917 involving the Southeast Arkansas Levee District. It was pointed out that if any lands in the said District became delinquent for State and County taxes and assessments due the Southeast Arkansas Levee District, then — in default of other bidders at the regular tax sale for State and County taxes and Levee assessments — the lands were automatically sold to the Southeast Arkansas Levee District for State and County taxes as well as for the assessments of the Southeast Arkansas Levee District; but the Levee District was not required to pay its bid until the expiration of the time for redemption.

It was also pointed out, in the said opinion, that the Southeast Arkansas Levee District was required to file a suit in the chancery court to confirm its tax title, and that any owner might effect a redemption at any time before final decree of confirmation. It was also pointed out that the Southeast Arkansas Levee District had never filed any such confirmation suit, as required by statute, and, therefore, the land owner still had a right to redeem from the delinquent State and County taxes and delinquent Southeast Arkansas Levee District assessments. Chief Justice Seamster said:

“In the instant case, at the time of the trial, the Levee District had never filed, in the Desha Chancery Court, a suit to confirm its tax title in the land here involved. The Levee District could only convey to appellants such title as it had procured. Its title was subject to redemption by any individual owner at any time before the confirmation decree, confirming its tax title, was finally entered of record.”

The case of Beck v. DeFir has direct application to the case at bar because, here, the lands involved were forfeited to the Southeast Arkansas Levee District for the State and County taxes of 1948 and subsequent years, as well as for the delinquent assessments due the Southeast Arkansas Levee District for 1948 and subsequent years; and the Southeast Arkansas Levee District never filed any confirmation suit at any time. So, Wells, as the owner (claiming under Daisy Edwards, as aforesaid), had the right to effect a redemption from the delinquent taxes due the State and County and the delinquent assessments due the Southeast Arkansas Levee District. He tendered into court in this case such required amount. The deed from the Southeast Arkansas Levee District to Brown conveyed only the “lien-claim” of the Southeast Arkansas Levee District; and Brown was required to have his title confirmed before the equity of redemption of Wells could be cut off. Brown did not have his title confirmed; so Wells, as the owner, was entitled to exercise the right of redemption. As aforesaid, it is the peculiar wording of the Act of the Southeast Arkansas Levee District (Act No. 83 of 1917) that brings about the stated result.

II. Brown’s Attempted Redemption From Cypress Creek Drainage District. The agreed statement of facts recites: ■ ..

“On November 12, 1952, the date of the purchase from Southeast Arkansas Levee District of its title acquired by virtue of sale for non-payment of 1948 general taxes and levee taxes, appellant, W. 0. Brown, also attempted to redeem said lands from all delinquent assessments in Cypress Creek Drainage District. The Board of Commissioners of said Drainage District would not permit redemptions to be made in the office of the Chancery Clerk of Chicot County, Arkansas. Persons desiring to redeem lands were required to go beyond the limits of Chicot County, Arkansas, to the office of the attorney for the District to effect redemptions. Appellant, W. G. Brown, on November 12, 1952, made a trip to the office of the attorney for the District in an attempt to redeem said lands from all delinquent assessments in said District but was advised that said attorney was on a deer hunt and that said redemption could not at that time be effected. Appellant, W. G. Brown, thereupon requested information as to the sum required to redeem and was advised that said sum could not be determined. Whereupon, appellant requested that a statement of said amount be prepared and mailed to him for immediate payment. Such statement was never furnished. ’ ’

Brown claims that his conduct, as reflected by the foregoing recitals, amount in equity to a redemption. He says: “The action of W. G. Brown, in attempting to effect a redemption of the lands involved in this action from all sales and delinquencies of Cypress Creek Drainage District on November 12, 1952, was equivalent to a redemption thereof and said District had no title to convey to plaintiff, H. W. Wells.”

' To support his contention, Brown cites Wilkins v. Lenon, 182 Ark. 953, 33 S. W. 2d 1093; and Botts v. Stephen, 203 Ark. 1031, 160 S. W. 2d 198. But the conduct of Brown in the case at bar falls short of the conduct of the parties who sought redemption in each of the cited cases. In Wilkins v. Lenon, supra, the party seeking to redeem actually inquired of the agent of the improvement districts the amount necessary to redeem from all delinquencies; the agent stated the amount; and same was actually paid. Later it developed that the agent of the district had overlooked an item of $5.90. This Court held that the person seeking to redeem had acted in good faith and should he subsequently allowed to redeem for the $5.90 overlooked by the agent of the improvement district. Likewise, in Botts v. Stephen, supra, the person desiring to redeem inquired of the agent of the improvement district for the correct amount, and paid what was claimed by the district as the full amount necessary to redeem. This Court held that such payment was in fact redemption.

In the case at bar, according to the stipulated facts, Brown merely sought to inquire, on November 12, 1952, how much it would cost to. redeem the lands; he never received a statement of the cost of redemption; never pursued the matter any further; never paid any amount for redemption; and on December 18, 1952 — one month and six days after Brown’s attempted inquiry — the Cypress Creek Drainage District executed a deed to ap-pellee Wells. It will be observed that Brown never paid any money to the Cypress Creek Drainage District; never made any tender of money; and did nothing for over a month after attempting to make his alleged inquiry on November 12, 1952. We hold that Brown did not bring himself within the rule of the two cited cases; that he did not pursue his effort to redeem with sufficient diligence; and that his claim of attempted redemption is without merit.

Affirmed.

RobiNSON, J., not participating.

       Wells also deraigned title from the sovereignty of the soil.

       The Circuit Court reserved for later trial the matter of damages and improvements. Also the Circuit Court judgment allowed Wells to accomplish redemption for recent delinquencies. These matters are not before us on the present appeal.

       Brown paid his money for this deed on November 12, 1952; hut the deed was not executed until November 26, 1952.

       When Brown received this deed from the Levee District, he attempted to redeem from the Cypress Creek Drainage District, but did not succeed, as will be more fully developed in Section II of this opinion.

       Brown’s deed from Southeast Arkansas Levee District was dated November 26, 1962, as previously recited; but he paid his money for that deed on November 12, 1952.

       As bearing generally on this matter of efforts at redemption, see 85 C.J.S. 231 and 85 C.J.S. 304.


author: Minor W. Millwee, Associate Justice.

text:
    Beck v. Neal.
    5-1367
    306 S. W. 2d 875
    Opinion delivered November 4, 1957.
    [Rehearing- denied December 9, 1957.]

      A. F. Barham and Henry J. Swiff, for appellant.

      John S. Mosby, for appellee.
   Minor W. Millwee, Associate Justice.

This is a suit by the appellant, Ray Beck, doing business as Beck Realty Company, to recover a real estate broker’s commission claimed to have been earned upon the sale of a farm by the owners and appellees, C. S. Neal and wife, after the termination of an exclusive listing contract executed by the parties. Trial resulted in a decree dismissing appellant’s complaint on several grounds.

After the appellees bad previously listed their 160-acre farm with another agent and had advertised it for sale themselves over an extended period without success, the parties executed a written “Exclusive Listing Contract” on November 19, 1955, as follows:

“1. In consideration of the services rendered and to be rendered by Beck Realty Co., hereinafter called the Agent, in selling or exchanging, or assisting in the sale or exchange of, the property described on the reverse side of this contract, C. S. Neal, hereinafter called the Owner, being the sole owner(s) of the property, agrees that the Agent shall have the sole and exclusive agency of sale of the property for a period of until Jan. 1, 1956, from this date, and the Owner authorizes the Agent to sell or contract with the Purchaser for the sale and conveyance of the property by warranty deed according to the price and terms herein given. The Owner may cancel this contract prior to its expiration date by giving 30 day’s written notice and payment of $. to the Agent. The Owner will furnish a complete abstract reflecting title satisfactory to the Purchaser’s attorney or furnish title insurance.
“2. If the property be sold or otherwise disposed of by the agent or any other person, association or corporation or owner during the period of this contract, the Owner agrees to pay the Agent FIVE per cent (5%) of the value at which it may be exchanged for other property.
“3. The Owner further agrees to pay the commission set forth in Paragraph 2 to the Agent if the property be sold or otherwise disposed of by any other person, association or corporation, including the Owner, after the expiration of the above listing period, when such sale or other disposition of the property resulted from or was based upon information given by or obtained through the Agent, with notice thereof to the Owner, during the period of this contract.
“4. In the event of forfeiture the earnest money shall be divided as follows: The Agent shall first be reimbursed all direct expense incurred in connection with the transaction and the balance shall be divided equally between the Agent and the Owner, but in no event shall the Agent receive an amount in excess of the commission which he would have received if the property had been sold on the basis of the Offer and Acceptance. In event of breach of the terms of this contract by the Owner, the Agent shall be entitled to a lien upon the property, so long as title thereto remains in the Owner or some person in behalf of the Owner, to secure payment of sums which may become due under the terms of this contract.”

The back of the written contract contains a description of the farm and other data including the statement, “Gross List Price $80,000.00,” and the fact that there was a prior outstanding lien of $23,656.56 against the property in favor of the National Farm Loan Association.

Appellant advertised the farm for sale and his agent, William Edrington, produced several prospective buyers including the appellee, W. J. Alexander Jr., who was introduced to C. S. Neal and wife, shown the place and became interested in purchasing it with the financial assistance of his father-in-law, Lawrence Woodard, who also participated in the negotiations. During such negotiations from December 15, 1955, to January 1,1956, Woodard, on behalf of'Alexander offered a gross price of $72,000.00 and appellant at one time agreed to accept $79,000.00. The parties were unable to agree on the price within the listing period but Alexander testified that a deal would have been consummated in December if Neal had not demanded a “little too much interest. ’ ’

Shortly after the expiration of the listing period Edrington removed appellant’s signs from the property and the appellant mailed too C. S. Neal a list of the prospects contacted in his efforts to sell the place. A few days later Mr. Neal went to appellant’s office to obtain the appellant’s copies of the written contract. The evidence is in sharp dispute as to just what took place on this visit and whether appellant had previously agreed to surrender the papers. Neal stated that he delivered to Beck a letter which he had first intended to mail in which he requested “the papers”, stated the farm was off the market and rented for 1956; and that the contract time could not he extended but that Beck might get in touch with him again in the fall if he decided to sell. According to Neal, Beck merely handed him the papers and he walked out. Beck testified there was considerable conversation in which Neal used profanity in demanding the contracts. Both Beck and Attorney Malcolm Levenstein who said he was present at the time, testified that Neal said his farm was no longer on the market but he was contemplating a sale to his son in which event he did not intend to pay a commission; that Beck agreed no commission would be due in that event but it was further agreed between them that if a sale was made to one of the prospects furnished by the appellant then Neal would owe and pay the commission. Levenstein appears to be a wholly disinterested witness.

Subsequently direct negotiations between the ap-pellees and W. J. Alexander Jr. and his father-in-law were resumed and the parties were in the process of executing instruments for sale of the place to Alexander for the original gross price of $80,000.00 on or about March 15, 1956, when Mr. Neal stopped the negotiations upon learning that appellant was still contending he was due a commission. On May 22, 1956, there was placed of record a warranty deed dated May 9, 1956, from appellees to W. J. Alexander Jr. and wife conveying the farm for the gross price of $80,000.00 which included the assumption by the grantees of the debt due the loan association of $23,656.30.

In denying a recovery to appellent and dismissing his complaint, the chancellor first found that Paragraph 3 of the written contract was void on its face because it was ambiguous and constituted an inequitable and unreasonable restraint on trade. We do not find it subject to these objections. Even in the absence of a written agreement to that effect, we have held in a number of cases that, where a real estate agent employed to sell land introduces a purchaser to the seller, and through such introduction a sale is effected, the agent is entitled to his commission, although the sale was later made by the owner. See Surbaugh v. Dawson, 185 Ark. 406, 47 S. W. 2d 591, and cases there cited. In several cases beginning with Scott v. Patterson & Parker, 53 Ark. 49, 13 S. W. 419, we have approved the following statement of the Missouri court in Tyler v. Parr, 52 Mo. 249: “The law is well settled that in a suit by a real estate agent for the amount of his commissions it is immaterial that the owner sold the property and concluded the bargain. If after the property is placed in the agent’s hands, the sale is brought about or procured by his advertisements and exertions, he will be entitled to his commissions. Or if the agent introduces the purchaser or discloses his name to the owner, and through such introduction or disclosure, negotiations are begun, and the sale of the property is effected, the agent is entitled to his commissions, though the sale may be made by the owner.”

In Moore v. Holman Real Estate Company, 129 Ark. 465, 196 S. W. 479, the validity of a provision substantially similar to Paragraph 3 was involved where the sale,' as here, was made by the owner about two months after expiration of the exclusive listing period to a purchaser who had been introduced to the owner by the broker. We upheld the contract provision and affirmed a directed verdict for the agent’s commission based thereon. See also, Green v. Ozark Land Company, 204 Ark. 627, 163 S. W. 2d. 325, where the same result was reached under a similar contract provision. Appellees rely particularly on, Holloway v. McArthur, 224 Ark. 461, 274 S. W. 2d 474, where we held that a broker did not earn his commission by procuring a purchaser who was only willing to take the property on terms different from those stipulated in the listing contract. That is not the situation here.

The chancellor next determined that, even if valid, the provisions of Paragraph 3 were waived by the appellant’s agent, Edrington, as an inducement to obtain appellees’ signatures to the brokerage contract. While waiver was not pleaded as a defense, appellees did allege that, in signing the contract, they were laboring under a mistake of fact induced by false and fraudulent statements of Edrington. On this point it is undisputed that Mr. Neal was thoroughly familiar with such transactions and carefully read the entire contract before he signed it. However appellees stated and Edrington denied that, before it was signed, the latter pointed to a wavy pencil mark he had made while drafting the contract in the blank space following the dollar sign in Paragraph 1 and stated that, except for the signatures, the contract from that line on “doesn’t mean a thing,” and that there would be no charges whatever after expiration of the listing period. Even if such testimony were admissible, the fully executed written contract could only have been reformed upon clear, unequivocal and decisive evidence. Realty Inv. Co. v. Higgins, 192 Ark. 423, 91 S. W. 2d 1030. That test was not met here. But this testimony was' inadmissible under the parol evidence rule which precludes the admission of contemporaneous parol evidence to vary or contradict the terms of a valid and unambiguous written contract. Wright v. Marshall, 182 Ark. 890, 33 S. W. 2d 43. Under the rule any prior oral agreements became merged in the subsequent written contract and were incompetent to vary it.

The trial court also found that appellant was only authorized to sell the farm for cash in the amount of $80,000.00 under the contract; that no purchaser known to appellant purchased or offered to purchase on the exact terms upon which he was authorized to sell it; and the evidence did not . warrant the conclusion that appellant was the primary, or procuring cause of the eventual sale. As previously indicated, the contract specified a gross sale price of $80,000.00 but there was no requirement that it be paid all in cash. On the contrary it also specified that there was an outstanding loan against the land of more than $23,000.00. The sale was finally consummated for the exact gross sale price stipulated and on terms clearly contemplated by the parties under their contract. We think a preponderance of the evidence, taken entirely by depositions, supports the conclusion that the sale was based on information given by and obtained through the appellant with notice thereof to appellees as provided in the contract. It was shown that appellant’s agent introduced W. J. Alexander Jr. to appellees, showed the property and conducted extended negotiations with both Alexander and Woodard, and that such negotiations were progressing toward the completion of the transaction when the listing period expired. The sale by appellees to Alexander within a reasonable time thereafter upon the exact terms of the listing contract and upon information given and obtained through the appellant, with proper notice to ap-pellees, rendered them liable to appellant for the commission of 5 per cent.

The decree is accordingly reversed, and the cause remanded with directions to enter a decree for appellant for his commission in the amount of $4,000.00 with interest at 6 per cent from May 9, 1956, and for further proceedings not inconsistent with this opinion.


author: George Bose Smith, J. George Rose Smith, J.

text:
    Coulter v. Anthony.
    5-1245
    308 S. W. 2d 445
    Opinion delivered November 4, 1957.
    [Rehearing denied and supplemental opinion filed January 20, 1958.]

      . Gentry & Gentry, for appellant.

      J. R. Wilson, W. G. Medley, L. B. Smead and L. Weems Truss ell, for appellee.
   George Bose Smith, J.

This is a suit by the two appellants, Murray Whitfield Coulter and George Pro-thro Coulter, to cancel the appellees’ tax titles to several hundred acres of unimproved land in Calhoun county. The chancellor, without reaching the question of Avhether the tax titles are valid, held that the appellants are not the real parties in interest and dismissed the complaint for that reason.

The plaintiffs assert that the lands were formerly owned by Harris Brothers, a partnership which was adjudicated a bankrupt on January 23, 1932. On June 13 of that year, while the bankruptcy proceedings were still pending, the land was sold to the state for nonpayment of the 1931 taxes. The state’s title was subsequently acquired by the appellees and is the basis for their claim of ownership.

The appellants derive their asserted title from the Harris Brothers bankruptcy proceedings. On August 16, 1933, the trustee in bankruptcy was authorized to sell the land to E. W. Prothro, by private sale, and the trustee’s deed to Prothro was executed on the following day. The trustee’s attorney in the bankruptcy proceedings was the appellants’ father, E. H. Coulter. It is contended by the appellees that the elder Coulter was the real purchaser at the bankruptcy sale and that the deed to his brother-in-law, Prothro, Avas a subterfuge. Eleven days after the sale Prothro conveyed the land to his two nephews, the appellants, Avho were then one and three years old respectively. When the present suit was brought one of the plaintiffs Avas twenty-one and ther other nineteen.

It is conceded by the appellants that they have no statutory right to redeem the land from the tax sale, for the period of redemption had already begun to run when they acquired their title and was not extended by reason of. their minority. Tarrence v. Berg, 202 Ark. 452, 150 S. W. 2d 753. If the appellants are to prevail they must show that the 1932 tax salé was void. Since this issue controls almost the whole case we consider it first.

Four defects are relied upon by the appellants to support their assertion that the tax sale was void. First, we are urged to declare the sale void because it was conducted without the consent of the bankruptcy court; Representative authorities cited by the appellants on this point include Dayton v. Stanard, 241 U. S. 588, 60 L. Ed. 1190, 36 S. Ct. 695, In re Eppstein, 8th Cir., 156 Fed. 42, and Remington on Bankruptcy (5th Ed.), § 2359.

We do not conceive the rule to be as far-reaching as the appellants would have it. Doubtless the bankruptcy court could have set aside the tax sale had it chosen to do so, but this merely demonstrates that the sale was voidable, not that it was void. There was no federal statute prohibiting the sale or requiring the tax collector to obtain permission to sell the property! The principle is instead a rule of judicial decision and is derived from the power of the court to protect property in its custody. It seems clear that some affirmative action on the court’s part is needed if the sale is to be avoided. In the Dayton case the bankruptcy court took that action by the entry of an order canceling the certificates of purchase and requiring the purchasers to assert claims against the assets of the bankrupt. A somewhat similar course was followed iii the Eppstein case. We are not aware of any decision holding that the mere failure of the taxing authorities to obtain permission for the sale renders the tax forfeiture absolutely void and open to collateral attack.

In the Harris Brothers matter the bankruptcy court made no effort to set aside the collector’s sale. To the contrary, the order authorizing the trustee’s sale to Prothro expressly made it subject to the delinquent taxes against the land. It is quite apparent that the tax sale did not interfere in any way with the bankruptcy court’s control of the property. • It would' be carrying the rule beyond its reason to say that the absence of prior judicial consent rendered this sale void.

Second, the certificate showing the publication of the notice of sale was not executed by the county clerk until the day of sale, when it should have been executed before that day. In the absence of a curative act this defect renders the sale void. Cecil v. Tisher, 206 Ark. 962, 178 S. W. 2d 655. One of the tracts involved, being a part of the fractional southwest quarter of section 31, township 11 south, range 13 west, was sold by the state after the repeal of Act 142 of 1935 and is not subject to the operation of any curative act. As to this tract the appellants are correct in their contention that the tax sale was void.

All the rest of the land was conveyed by the state during the two years that Act 142 of 1935 was in force, and hence the appellees are entitled to the curative benefits of that act. Wood v. Lovett, 313 U. S. 362, 85 L. Ed. 1404, 61 S. Ct. 983. As to these tracts the question is whether the clerk’s belated execution of the certificate was an irregularity cured by Act 142 or a jurisdictional matter lying beyond the remedial power of the legislature.

Our prior decisions indicate pretty clearly that the defect was a mere irregularity. Act 142 was first construed in the leading case of Carle v. Gehl, 193 Ark. 1061, 104 S. W. 2d 445. There we held that various matters such as the publication of the notice of sale are jurisdictional essentials, that the clerk’s records are the only legal sources of information about these matters, and that consequently a complete failure to make the required record is a jurisdictional defect not cured by Act 142. But with respect to the officer’s mere failure to act at the right time, as opposed to his total omission to act, we said: “Beyond question it is within the power of the Legislature to provide for the rules by which the foregoing exercise of power may be made both as to time mid form, and, having the power in the first place to make such rules, indubitably the Legislature lias the power to alter or dispense with the same.” (Italics supplied.)

The exact point now presented was decided in Wallace v. Todd, 195 Ark. 134, 111 S. W. 2d 472, and, in harmony with the reasoning in the Carle opinion, it was held that the clerk’s failure to make the certificate before the day of sale is an irregularity cured by Act 142. A contrary view was expressed, in a paragraph unnecessary to the decision, in Union Bk. & Tr. Co. v. Horne, 195 Ark. 481, 113 S. W. 2d 1091, but we regard the Carle and Wallace cases as sound and adhere to them.

The appellants’ third ground for attacking the sale presents a point of first impression. The assessment book shows that in three instances the county assessor listed and valued two contiguous forty-acre tracts, under the same ownership, as separate parcels. In each instance the county clerk, in making up the tax book, combined the two forty-acre tracts into one call of eighty acres (such as the E 1/2 NE' 1/4 instead of the NE 1/4 NE 1/4 and the SE 1/4 NE 1/4) and extended the' taxes against the total assessed value of the eighty acres. In the subsequent proceedings, including the collector’s sale, the eighty-acre descriptions were used.

In insisting that this asserted defect is fatal to the sale the appellants rely on a line of cases beginning with Cocks v. Simmons, 55 Ark. 104, 17 S. W. 594, 29 A. S. R. 28. These cases hold that two or more tracts cannot be sold in a body for the sum of the taxes due upon all. It is clear from the opinions, however, that the taxes were separately extended against the various tracts, and it was the collector who lumped them together in making the sale. We have no precedent involving the present situation, where tracts separately assessed were consolidated on the tax book for the extension of the taxes.

In the peculiar circumstances of this case we cannot say that the clerk’s procedure, if it was erroneous at all, was more than an irregularity cured by Act 142. The statute governing the preparation of the tax book dobs not contain detailed directions for describing the property; it merely states that each separate tract shall he listed opposite the name of the owner. Ark. Stats. 1947, § 84-801. In this case each pair of forty-acres tracts was assessed in the name of the same owner; so in consolidating the contiguous parcels into one tract the clerk cannot be said to have deviated from the letter of the statute governing the preparation of the tax book.

It might be argued, however, that the clerk should have followed the more detailed directions contained in the statute applicable to the assessment book. But even in this view the clerk’s procedure was not demonstrably wrong. The assessment book is made up before the first of January of the year in which the property is to be assessed. Ark. Stats., § 84-402. When the assessment book now in question was prepared the controlling statute was Act 172 of 1929, which provided that not more than forty acres should be entered under one call. That statute was evidently followed in the present instance. But the tax book cannot be prepared until the clerk receives the assessment book from the assessor on or before the third Monday in August. Ark. Stats., § 84-447. When the tax book now in issue was prepared in the latter part of 1931 the statute having to do with the assessment book had been changed by Act 72 of 1931, which eliminates the forty-acre maximum for each tract and provides that the subdivisions of each section, up to a whole section, are to be listed as they belong to different individuals. Ark. Stats., § 84-402. Again it does not appear that the clerk’s procedure was contrary to the statute.

In holding that this irregularity, if it amounted to that, was not fatal to the sale we stress the fact that it could not have had any substantial adverse effect upon the rights of the taxpayer. An eighty-acre governmental subdivision can equally well be described as two forties, four twenties, eight tens, and so forth. The total taxes come to the same amount, no matter how the' land is subdivided. In this instance the consolidation was actually favorable, to tbe taxpayer, for the. costs resulting from the delinquency were eighty cents less than they would have been had the two forties been taxed and sold separately. In these circumstances we think it plain that the variation between the assess^ ment book and the tax book was at most an irregularity falling within the purview of Act 142. . . •

As a fourth ground for attacking the sale the appellants assert that some of the tracts were sold for an excessive amount. The excess, however, was less than a cent and does not invalidate the sale. Cowling v. Muldrow, 71 Ark. 488, 76 S. W. 424; Kinney v. Duggan, 199 Ark. 396, 133 S. W. 2d 878.

We conclude that the appellants have failed to establish the invalidity of the tax sale except with respect to the one tract not affected by Act. 142 of 1935. As to this tract it is necessary to consider the other grounds advanced by the appellees for affirmance of the decree.

It is first contended that the appellants are not the real parties in interest. Here the theory is that E, H, Coulter was disqualified as a purchaser at the bankruptcy sale, owing to his being the attorney for the trustee, but that he nevertheless purchased the property and had it conveyed through Prothro to his children. Except for inferences to be drawn from the fact that the conveyances were between parties related to one another there is little or no competent proof that Coulter actually furnished the purchase money. In our opinion, however, the appellees’ position would not be sound even if sustained by proof; so the evidence need not be weighed.

In the first place, the appellees are not entitled to complain of fraud in a transaction to which they are strangers. If Coulter violated a fiduciary duty by purchasing at the bankruptcy sale, the wrong was to the bankrupt partnership and its creditors. They might have enforced a constructive trust upon the property and would then have been required to refund the purchase money paid by Coulter. Pharr v. Fink, 151 Ark. 305, 237 S. W. 728; Rest., Restitution, § 192, Comment i. But the injured persons have not elected to complain, and the appellees are not in a position to do so. They merely hold a void tax title and come within the rule that in a suit to quiet title a defendant who has no title is not permitted to show that the plaintiff’s own deed was obtained from a third person by fraud. Fuller v. Fuller, 228 Mass. 441, 117 N. E. 838; Obermeyer v. Behn, 108 N.Y.S. 289, affd. 195 N. Y. 588, 89 N. E. 1106.

Furthermore, the appellants are in fact the real parties in interest. It is clear that E. H. Coulter, having no title to the property, could not maintain the present suit, nor could he assert his own fraud as a basis for recovering the land from his sons. McClure v. McClure, 220 Ark. 312, 247 S. W. 2d 466. If Coulter was guilty of wrongdoing his own conduct has placed the property irretrievably beyond his reach. This leaves the appellants, who of course were too young to have participated in the asserted misconduct, as the sole holders of the legal title. In New York, whose civil code is the prototype of our own, it is settled that the plaintiff is the real party in interest if he has the legal title and if a recovery or satisfaction by him would protect the defendant against all claims by third persons. Sheridan v. Mayor, 68 N. Y. 30; Borgos v. Price, 140 Mise. Rep. 287, 250 N. Y. S. 457. Both conditions of the rule are satisfied in this case.

The appellees also plead the statute of limitations as a defense to the suit. The land is unimproved, and the appellees rely upon the payment of taxes for more than seven years under color of title. Ark. Stats., § 37-102. That statute is not in itself a statute of limitations. It merely creates constructive possession, and it is necessary to apply the general statute of limitations for that possession to ripen into title. Hubble v. Grimes, 211 Ark. 49, 199 S. W. 2d 313. The general statute contains a saving clause in favor of persons who were minors when the cause of action first accrued. Ark. Stats., § 37-101. The ap-pellees’ constructive possession did not begin until after their purchase from the state in 1937, and since the appellants then owned the land they were entitled to bring the suit within three years after reaching their majority. The complaint was filed well within the time allowed.

Finally, it is contended that the plaintiffs failed to deraign their title to the land, or to prove their ownership in some other manner, and are therefore not entitled to a decree under the holding in Coulter v. O’Kelly, 226 Ark. 836, 295 S. W. 2d 753. The decree in this case was rendered before our decision was announced in the O’Kelly case, and for the reasons stated in Griffin v. Isgrig, 227 Ark. 931, 302 S. W. 2d 777, the appellants will be permitted to offer proof of their title on remand.

Affirmed in part and reversed in part.

ON REHEARING.

George Rose Smith, J.

In a petition for rehearing the appellants contend that with respect to one forty-acre tract the tax sale was for an amount that was excessive by more than a cent. The taxes upon this tract came to $4.3722, which the clerk rounded off as $4.38. When the taxes were not paid the 10% penalty was entered in even figures as 44 cents, making a combined tax and penalty of $4.82. It is now insisted that this charge was fatally excessive, because a tax of $4.3722 plus a penalty of $.43722 would be only $4.80942.

This argument is not sound. The computation of the tax and the computation of the penalty took place several months apart. Under the cases cited in the original opinion it was permissible in each instance for the clerk to round off the fractional amount in even cents, since the difference was less than the smallest coin in our monetary system. Two rights do not make a wrong. It would be manifestly impractical to require the clerk, before entering the penalty in round figures, to recompute the original tax to be certain that the two trivial fractional amounts did not together exceed a penny.

Rehearing denied.


author: Paul Ward, Associate Justice.

text:
    Cantrell v. Vaughn.
    5-1372
    306 S. W. 2d 863
    Opinion delivered November 4, 1957.
    [Rehearing denied December 9, 1957.]

      Alfred Featherston, for appellant.

      G. A. Stanfield and Q. Byrum Hurst, for appellee.
   Paul Ward, Associate Justice.

On March 14, 1956 43 landowners (out of a total of 78) filed a petition in the County Court of Pike County, asking to annex approximately 1,300 acres to the town of Glenwood in accordance with the provisions of Ark. Stats. § 19-301 to 19-306 inclusive. Later the petition was amended to contain only 690 acres and, as so amended, was approved by the County Court over the remonstrance of several affected landowners, including the appellees.

Prom the above order of the County Court the remonstrants perfected an appeal to the Circuit Court, although they made no contention that the petitioners (appellants here) failed to comply with the procedural requirements of the pertinent statutes.

The Circuit Court, after hearing petitioners’ witnesses on direct and cross examination, denied the (amended) petition for annexation. This appeal follows.

In denying the petition to annex, the court made the following findings of facts: Ninety per centum of the territory attempted to be annexed is presently used for agricultural and livestock purposes; None of the lands have been platted and held for sale or use as town lots; None of the property has been held on the market to be sold as town property; Only 5 or 6 homes are located in more than 200 acres attempted to be annexed on the north side of town; Only 3 or 4 homes have been located in the more than 200 acres on the west side of town, and not more than 27 or 28 houses are located on more than 200 acres on the east side of town; The property sought to be annexed is not needed for any proper town purposes such as an extension of its streets, sewer, gas or water systems, or to supply places for the abode of businesses or residents, or for needed police protection, and; The said properties are not needed at the present time by reason of their adaptability for prospective town uses. The court further found that only a very few business houses are located in this area, that very few are served with lights and telephones, and that no streets or roads have been provided except the state highway which runs through the area.

Instead of setting out the testimony of each witness we think it suffices here, in view of the decision hereafter reached, to state that we have read the same and that we find it substantially- as set out above. We are, therefore, convinced that there is substantial evidence to support the judgment of the trial court and that it must be affirmed. In other words, we find that' the testimony set forth above constitutes substantial evidence that the lands here proposed for annexation do not meet the test as stated in Vestal v. Little Rock, 54 Ark. 321, 15 S. W. 891.

The burden of appellants’ argument is that there is a material difference in proceedings under Ark. Stats. § 19-301 to 19-306 (where the property owners initiate the annexation proceedings as they did here) and in proceedings under Ark. Stats. § 19-307 (where the city takes the initiative) and that, in the former case, the substantial evidence rule does not apply. It is conceded, as it must be, that the substantial evidence rule does apply where the city initiates the annexation proceed•ings. See: Burton v. City of Fort Smith, 214 Ark. 516, 216 S. W. 2d 884, and City of Newport v. Owens, 213 Ark. 513, 211 S. W. 2d 438.

There are, we think, at least two reasons why the same evidence rule should apply in both methods of annexation proceedings mentioned heretofore.

First. The wording of the statute which authorizes the exercise of discretion and judgment on the part of the court is practically the same in both procedures. Where the landowners, as here, initiate the annexation procedure, § 19-302 says: “The court shall enter its order granting the petition” . . . “if the court shall be satisfied that . . ., the prayer of the petitioners is right and proper.” (emphasis supplied). When the city initiates the petition under § 19-307, the “proceedings shall be had . . . as is prescribed in ... § 19-101-19-103 . . .” In the last mentioned section the court will grant the petition when it is “deemed right and proper, in the judgment and discretion of the court. . .” From the above we think it is clear that the court is empowered to exercise the same discretion and judgment as to what is “right and proper” in each case regardless of how it was initiated.

Second. Both the landowners and the city need the protection afforded only by the exercise of sound judgment and discretion. As suggested by appellants, without the restraining hand of the courts a city, operating under § 19-307, could reach out and take in surrounding territory “regardless of the will of those mostly affected”. It is equally true however, that, absent the same restraint, property owners could force themselves upon a town regardless of its will.

In line with appellants’ contention that the substantial evidence rule does not apply to proceedings un der § 19-301 — 19-306, they say that “It was the duty of the Circuit Court on appeal to grant the amended petition,” and in support, quote from Call v. Wharton, 204 Ark. 544, 162 S. W. 2d 916. We find nothing in that case, however, which conflicts with what we have said above. The court in the cited case decided only one question of law, viz: Under % 9495 of Pope’s •Digest (in material respects the same as Ark. Stats. § 19-301) the petition must be signed by a majority of landowners of the affected territory who live in the county, and not just a majority of the landowners who live in the affected territory. The language relied on by appellants is found in the next to the last paragraph of the cited opinion. In the first place the language is dictum, and, in the second place, if it were not dictum, appellants are apparently overlooking that the court said “other conditions set out in the section” must be complied with. As we have already seen one of these is that the petition must be right and proper.

Affirmed.