text:
    Billings, Gdn. v. Ladd
    5-3356
    385 S. W. 2d 649
    Opinion Delivered January 11, 1965

      James L. Sloctn, for appellant.

      John Harris Jones, for appellee.
   Jim Johnson, Associate Justice.

This is an appeal from denial of a motion to set aside a divorce decree.

Appellee Talmage Ladd filed a complaint for divorce in Jefferson Chancery Court on March 15, 1963, against appellant Marjorie Ladd, his wife. Appellant executed a power of attorney appointing an attorney to represent her, waiving notice, “recommending” that custody of the parties ’ four minor children be given to appellee, stating that there had been a property settlement between the parties under which appellee was to occupy the home owned by the parties so long as he desired with the understanding that if the place were sold appellant is to receive one-half of the net proceeds of the sale. The decree was taken June 11, 1963, and the court after finding that appellee was entitled to a divorce granted custody of the children to appellee and gave appellee possession of the home.

On August 8,1963, during the term of court in which the divorce decree ivas rendered, appellant, by her father. E. G. Billings, who had since been appointed her guardian, filed a motion to set aside the decree. She alleged, in effect, that she was of unsound mind at the time she signed the power of attorney which enabled appellee to get an uncontested divorce; that appellee had practiced fraud upon her by representing that the power of attorney was for the purpose of giving him custody of the children during appellant’s illness, and not to enable him to get' a divorce. Appellant also alleged in her motion that she and appellee had lived together subsequent to the signing of the power of attorney. Shortly after the beginning of the next term of court, appellant’s counsel was permitted to withdraw. With present counsel the motion was heard January 27,1964. The trial court found that there was no proof of fraud upon the court regarding the decree; that there was no allegation or proof by appellant of a meritorious defense to the action in which the decree was entered; that appellant was competent to ■know what she was doing when she executed the power of attorney; and that no proof was offered that the best interest of the children would be served by changing their custody, and dismissed the motion. From the order comes this appeal.

There is no allegation in the motion to set aside the decree which, if true, would render the decree absolutely void. The motion can be construed as alleging three grounds for setting aside the decree under the provisions of Ark. Stat. Ann. § 29-506 (Eepl. 1962), which provides,

“The court in which a judgment or final order has been rendered or made, shall have power, after the expiration of the term, to vacate or modify such judgment or order, . . .
“Fourth. For fraud practiced by the successful party in obtaining the judgment or order.
“Fifth. For erroneous proceedings against an infant, married woman or person of unsound mind, where the condition of such defendant does not appear in the record, nor the error in the proceedings. . . .
“Seventh. For unavoidable casualty or misfortune preventing the party from appearing or defending. ’ ’

The allegation in tlie motion to set aside the decree that the parties had lived together as man and wife subsequent to the acts alleged as grounds for divorce can be construed as stating a meritorious defense to appellee’s complaint asking for a divorce. An allegation stating a meritorious defense is nécessary in a motion to set aside a judgment after the term has expired. Osborne v. Lawrence, 123 Ark. 447, 185 S. W. 774; Hill v. Teague, 194 Ark. 552, 108 S. W. 2d 889; Haville v. Pearrow, 233 Ark. 586, 346 S. W. 2d 204.

Appellant has raised six points to be relied on, but the case boils down to three issues: (1) Was fraud practiced by the successful party in obtaining the decree; (2) 'Was appellant of unsound mind at the time she signed the power of attorney; (3) AVas there an unavoidable casualty preventing appellant from appearing and defending.

Review of the testimony on the first issue reveals: ajipellant testified that appellee told her that the power of attorney was for temporary custody only, that no divorce was intended (which was corroborated by appellant’s father), and that when she went to the lawyer’s office she stayed barely two minutes, just long enough to sign the power of attorney. Appellee on the other hand testified that he explained to both appellant and her father the purpose of the power of attorney; appellee’s former attorney testified that appellant discussed it at some length with him before it was dictated and while it was being typed, that the attorney assured appellant she did not have to sign it and if she didn’t want to sign it, not to sign it. This was corroborated by his secretary and another secretary in the office. The attorney further testified that appellant made no attempt to withdraw the power of attorney during the three months between its execution and the date of the divorce decree.

On the second issue, that appellant was of unsound mind at the time she signed the power of attorney, appellee had the benefit of testimony of a psychiatrist who saw appellant between February 22nd and March 1st while she was hospitalized and several times after March 15th., when she executed the power of attorney. He testified that while appellant had a low intellect and functional level, she was not psychotic, that she was slow, not insane. Appellant’s father testified that appellant was as smart then as when she finished high school. Appellee’s former attorney testified in detail that in his opinion appellant completely understood what she was doing when she signed the power of attorney.

On trial de novo on the record before us, we cannot say the Chancellor’s findings that no fraud was practiced by appellee in obtaining the divorce and that appellant was not of unsound mind at the time she signed the power of attorney are against the weight of the evidence. It follows, therefore, having disposed of the issues of fraud and unsound mind, there is no showing of unavoidable casualty, and the decree of the trial court is, therefore, affirmed.


source: Caselaw Access Project

author: Frank Holt, Associate Justice.

license: Public Domain

text:
    Wright v. DeWitt School District.
    5-3408
    385 S. W. 2d 644
    Opinion Delivered January 11, 1965

      Tom Gentry, for appellant.

      Macom é Moorhead, for appellee.
   Frank Holt, Associate Justice.

The issue presented, in this case is whether a state health regulation is in conflict with freedom of religion as ordained by the First Amendment to the Constitution of the United States.

The appellants, adults and school age children, are members of a church known as the General Assembly and Church of the First Born. The appellee, DeWitt School District #1 of Arkansas County, pursuant to a state health regulation, required all students to be vaccinated against smallpox as a prerequisite to attending the school. This requirement contravenes appellants ’ religious beliefs. As a result the appellants instituted this action to enjoin the appellee school district from enforcing this regulation as to themselves and other similarly situated, alleging that such regulation would require appellants to do an act opposed to their religious beliefs and is in violation of their religious freedom as guaranteed by the First Amendment to our Federal Constitution; that the school age appellants had been attending the schools operated by appellee for many years without being vaccinated and as a result no one had suffered any adverse effect; that there had been no smallpox in Arkansas County for 'more than fifty years and that no immediate, grave or present danger existed which justified any infringement upon their constitutional right of the free exercise of their religious views. This appeal is from the decree of the chancellor sustaining appellee’s demurrer and dismissing the complaint.

The sole point relied upon by appellants for reversal is that: “These appellants may not be required to submit to vaccination as a prerequisite to attend the schools operated by appellee under the facts in this case as such would be in violation of their rights of the free exercise of their religion as guaranteed to them by the First Amendment to the Constitution of the United States.”

We think the chancellor was correct in sustaining the demurrer and dismissing the complaint. The appellants do not have the legal right to resist oh religious grounds the enforcement of this health regulation requiring the vaccination of all children as a prerequisite to 'attendance of the schools operated by the appellee. Cude v. State, 237 Ark. 927, 377 S. W. 2d 816. There we held:

“* * According to the great weight of authority, it is within the police power of the State to require that school children be vaccinated against smallpox, and that such requirement does not violate the constitutional rights of anyone, on religious grounds or otherwise. In fact, this principle is so firmly settled that no extensive discussion is required.”

The questioned state health measure, quoted in the Cude case, is Regulation #21, Rules and Regulations Pertaining to Communicable Diseases, 1960 Revision, approved by the State Board of Health July 28, 1960. The State Health Department has the authority to promulgate health regulations having the effect of law for the purpose of efficiently controlling communicable diseases. Ark. Stat. Ann. § 82-109 — 110 (Repl. I960). We. have long recognized the health regulation requiring vaccination of all school children as being a valid exercise of the police power of the state. State v. Martin, 134 Ark. 420, 204 S. W. 622; Seubold v. Fort Smith Special School Dist., 218 Ark. 560, 237 S. W. 2d 884.

It is well settled that a demurrer admits facts well pleaded in a complaint. Therefore, appellants argue their allegation that no immediate, grave or present danger exists must be taken as true since the appellant children have been attending school without being vaccinated and no case of smallpox has occurred in Arkansas County for more than fifty years. Appellants insist that these elements of imminent danger must exist before there can be any valid interference with their religious liberties and that the trial court should have overruled the demurrer and required such proof. We do not agree with this contention. Seubold v. Fort Smith Special School District, supra.

It is well known that smallpox is a contagious disease which is a scourge to mankind. Furthermore, it cannot be said that the boundaries of a county present any barrier to the spread of this infectious disease. Our courts, both state and federal, take judicial notice of the very nature of this loathsome disease and that it presents a clear and ever present danger -which is best controlled by health measures such as the one in question. In Gude v. State, supra, we said:

“It is a matter of common knowledge that prior to the development of protection against smallpox by vaccination, the disease, on occasion, ran rampant and caused great suffering and sickness throughout the Avorld.” ,

In Jacobson v. Massachusetts, 197 U. S. 11, 25 S. Ct. 358, 49 L. Ed. 643 it was argued, as in the case at bar, that the court erred in sustaining the demurrer to the complaint questioning the validity of a health regulation. There the state put in evidence only the health regulation requiring vaccination and that the offer of free vaccination was made to the appellant. The appellant made various offers of proof, none of which were allowed by the court. Appellant offered to submit proof that three-fourths of the states did not require vaccination; that “Smallpox has ceased to be the scourge which it once was,”; that “The states which make no provision for vaccination are not any more afflicted with smallpox than those which compel vaccination,”; and that “The Board of Health is entrusted with arbitrary power, and determines the necessity for, and methods of, vaccination”. In rejecting all of these contentions and upholding the trial court’s refusal of this proffered proof the court said:

“* * If the defendant had been permitted to introduce such expert testimony as he had in support of these several propositions, it could not have changed the result. It would not have justified the court in holding that the legislature had transcended its power in enacting this statute on their judgment of what the welfare of the people demands. * * * According to settled principles the police power of a State must be held to embrace, at least, such reasonable regulations established directly by legislative enactment as will protect the public health and the public safety.”

Thus, the courts are not required to listen to conflicting evidence as to the need of vaccination against smallpox. The legislature, acting through its duly constituted agency, is the proper forum to determine by a reasonable enactment what the health, morals and safety of the public require for the common good.

Also, in Jacobson the court took judicial notice of the need for vaccination:

“A common belief, like common knowledge, does not require evidence to establish its existence, but may be acted upon without proof by the legislature and the courts. * * * While we do not decide and cannot decide that vaccination is a preventive of smallpox, we take judicial notice of the fact that this is the common belief of the people of the State, and with this fact as a foundation we hold the statute in question is a health law, enacted in a reasonable and proper exercise of the police power.”

The authority to supervise and control the activities of children is broader than that over similar actions of adults. Prince v. Massachusetts, 321 U. S. 158, 64 S. Ct. 438, 88 L. Ed. 645. In that case a child labor law was upheld against the claim that it impinged upon the First Amendment. There the child was distributing magazines of a religious nature. The court said:

“But the family itself is not beyond regulation in the public interest, as against a claim of religious liberty. Reynolds v. United States, 98 U. S. 145; Davis v. Beason, 133 U. S. 333. And neither rights of. religion nor rights of parenthood are beyond limitation. Acting to guard the general interest in youth’s well being, the state as parens patriae may restrict the parent’s control by requiring school attendance, regulating or prohibiting the child’s labor and in many other ways. Its authority is not nullified merely because the parent grounds his claim to control the child’s course of conduct on religion or conscience. Thus, he cannot claim freedom from compulsory vaccination for the child more than for himself on religious grounds. The right to practice religion freely does not include liberty to expose the community or the child to communicable disease or the latter to ill health or death.” [Emphasis added]

In Zucht v. King, 260 U. S. 174, 43 S. Ct. 24, 67 L. Ed. 194, the court held that a city ordinance that made vaccination a prerequisite to school attendance did not impinge upon the Fourteenth Amendment to our Federal Constitution. There the court said:

“* * Long before this suit was instituted, Jacobson v. Massachusetts, 197 U. S. 11, had settled that it is within the police power of a State to provide for compulsory vaccination. That case and others had also settled that a State may, consistently with the Federal Constitution, delegate to a municipality authority to determine under what conditions health regulations shall become operative. ’ ’

In that case, as in the case at bar, a demurrer wras sustained to the suit to enjoin the enforcement of the ordinance.

Appellants rely upon West Virginia v. Barnette, 319 U. S. 624, 63 S. Ct. 1178, 87 L. Ed. 1628, and Sherbert v. Verner, 374 V. S. 398, 83 S. Ct. 1790, 10 L. Ed. 2d 965. In the Barnette case the supreme court struck down a state law requiring students to salute the flag and recite the pledge of allegiance as being an unnecessary invasion of the right of free speech. In the Sherbert case the court upheld the right of a member of the Seventh-day Adventist Church to be eligible for unemployment componsation although, she refused to work on Saturday which was in violation of her religious beliefs. The activities sought to be regulated in both of these cases had nothing to do with public health measures. We do not construe these cases as being applicable to the facts in the case at bar.

There is no necessity for unduly lengthening this opinion by again reviewing the numerous cases cited by us in the Cude case holding that rights of religious freedom cease when they transgress upon the rights of others. This principle is well expressed in U. S. v. Willard, 211 F. Supp. 643 (Ohio 1962) where the court said:

“ [12] Under the First Amendment of our Constitution, freedom to believe in and to adhere to one’s chosen form of religion cannot be restricted by law, but freedom to act in accordance with one’s religious beliefs necessarily ‘remains subject to regulation for the protection of society.’ Cantwell v. State of Connecticut, 310 U. S. 296, 303, 304, 60 S. Ct. 900, 903, 84 L. Ed. 1213.”

Another recent case resolving the conflict between religious freedom and the rights of society as a whole is In Re Jenison, 120 N. W. 2d 515 (Minn. 1963). There the court held that a woman juror was not relieved of jury duty because it conflicted with her religious beliefs in the Biblical stricture ‘ ‘ judge not, that you will not be judged ’ ’. The court said that ‘ ‘ refusal to serve is inconsistent with the peace and safety of the state. ’ ’ In Crowley v. Christensen, 137 U. S. 86, 11 S. Ct. 13, 34 L. Ed. 620, the court aptly said:

“But the possession and enjoyment of all rights are subject to such reasonable conditions as may be deemed by the governing authority of the country essential to the safety, health, peace, good order and morals of the community. Even liberty itself, the greatest of all rights, is not unrestricted license to act according to one’s own will. It is only freedom from restraint u ader conditions essential to the equal enjoyment of the same right by others. It is then liberty regulated by law.”

Appellants are at liberty to enjoy unrestrained their religious' opinions and beliefs. However, their freedom to act according to their religious beliefs is subject to a reasonable regulation for the benefit of society as a whole. We affirm that the health regulation in question is a reasonable exercise of police power on a subject of paramount and compelling state interest and, therefore, is valid.

The decree is affirmed.


author: Carleton Harris, Chief Justice'

text:
    Milner v. Marshall.
    5-3437
    385 S. W. 2d 800
    Opinion delivered January 18, 1965.

      Ben M. McCray, for appellant.

      Hall, Purcell & Bosiuell and House, Holmes <& Jewell, for appellee.
   Carleton Harris, Chief Justice'

On December 25, 1961, at approximately 6:30 P.M., Bill Milner, one of the appellants herein, was returning to his father’s home on Highway No. 183, traveling west, between Benton and Bauxite. Milner was operating a 1959 Chevrolet Belair, the property of the father. "When reaching the point where the elder Milner’s driveway intersected the highway on the south side, and while making a left turn, preparatory to entering the driveway, the Milner vehicle collided with a 1952 Chevrolet pickup truck which was traveling east on the highway, and driven by appellee, Exie Marshall. Both vehicles were damaged, and Marshall received leg injuries. Appellee instituted suit in the Saline Circuit Court against the Milners, and appellants answered, denying liability; J. K. Milner counterclaimed for the amount of damage done to his automobile. The cause was tried before the court, sitting as a jury, and at the conclusion of the evidence the court found that the collision was due to 1 ‘ the sole negligence of Bill Milner,” and judgment was entered in favor of Marshall against this appellant in the amount of $2,000.00. From such judgment comes this appeal. For reversal, appellants rely upon a single point, vis, that the evidence was not sufficient to support the judgment.

Only three witnesses testified at the trial, appellant Bill Milner, the appellee, and Bobby Gunn, a trooper with the Arkansas State Police. Milner testified that he was nineteen years of age at the time of the collision, and had visited a friend in Little Rock during the day (Christmas). He returned after dark, and turned his lights on when leaving Little Rock. Upon reaching the location of his father’s home on the highway, he slowed, or stopped, to allow an approaching car to pass, and then, seeing no further vehicle, started his left-hand turn toward the driveway. Suddenly he observed an oncoming tr-uck, without headlights burning, not more than five or ten feet away, “Very close. Just a moment before the collision.” The car struck the truck, and Milner contends that the wreck was a result of, and caused by, appellee ’s negligence in driving without headlights.

Marshall testified that his headlights were on when he left home about 6:20 P.M., and that the lights were still on at the time the accident occurred.

Trooper Gunn testified that he investigated the collision, and examined the vehicles involved. He found that the Chevrolet automobile was heavily damaged on the left front. As to the truck, the left front was heavily damaged; the dash lights were burning; the taillight was burning; the left headlight was broken out, and the right headlight was not burning. The officer was asked if he questioned Marshall as to whether his lights were on at the time of the collision, and Gunn replied, “I asked if he had lights and what happened. He said he did not know what happened.” On cross-examination, the officer reiterated this testimony with the statement, “My question was, ‘What happened, did he have his lights on?’ He said he did not know.” Trooper Gunn stated that he did not break the question down into two parts, but only asked the one question. He further testified that Marshall had suffered injury. The trooper was unable to determine why the bulb in the right headlight was not burning, and he could not say that it was not caused by the jolt of the collision.

The court, in its “finding of fact,” observed that,

“The evidence introduced presents a problem of considering the credibility of the witnesses.
“The testimony of Patrolman Gunn concerning admissions made by the plaintiff is not controlling for the reason that Gunn testified that he inquired of the plaintiff, how the accident happened and whether he had his lights on. He testified that the plaintiff answered, ‘I don’t know, or I don’t know how it happened.’ This testimony would be subject to two constructions.
“This court finds it difficult to believe that any person could drive in the night time for a distance of three or more miles without having his lights on, or without having an accident earlier.”

„ Appellants contend that appellee, in response to the question from the State Policeman, should have emphatically replied, “Yes, my headlights were burning and this man just pulled in front of me. ” It is argued that Marshall ’s failure to answer each part of the question explicitly constituted an admission that his lights had not been burning at the time of the collision. We do not agree. It is true that the question was “double barreled, ’ ’ and the answer is therefore somewhat ambiguous. However, a copy of Trooper Gunn’s report (which the officer used to refresh his memory on some questions)' was placed in the record, and this report only denotes that Marshall stated that he “did not know what happened.” Let it also be remembered that Marshall had been injured, and one’s answers to interrogation at such a time are not always clear. Certainly, there was as much reason, if not more, for the court to feel that appellee’s answer referred to that portion of the question relative to how the accident occurred, rather than to that portion of the question concerning the lights.

Appellants assert that the court was engaging in speculation in finding “it difficult to believe” that a vehicle with no lights burning, could be driven for three or more miles after dark without having a prior accident. We do not agree that this is such speculation as to constitute error, since it was a pertinent circumstance in considering the credibility of the witnesses. The court’s initial statement was to the effect that the litigation presented “a problem of considering the credibility of the witnesses,” which is, of course, to say that only a fact question was involved, and the court was considering all circumstances as a matter of determining which of the conflicting accounts (given respectively by appellant and appellee) was correct.

Of course, it is well settled that the finding of the trial court, as a trier of the facts, has the same binding effect as a jury verdict, and will be sustained if there is any substantial evidence to support the judgment. American Metal Window Co. v. Watson, 238 Ark. 418, 382 S. W. 2d 576. Marshall stated positively that his lights were on; and, though he was a party to the suit, and his testimony is considered disputed as a matter of law, such testimony constituted substantial evidence to support the judgment of the court, sitting as a jury. Turchi v. Shepherd, 230 Ark. 899, 327 S. W. 2d 553.

Affirmed.


author: Ed. F. McFaddin, Associate Justice.

text:
    Baker, Adm’r v. Leigh.
    5-3385
    385 S. W. 2d 790
    Opinion delivered January 18, 1965.

      Gentry & Gentry, for appellant.

      E. B. Stubblefield, for appellee.
   Ed. F. McFaddin, Associate Justice.

This case involves a trusteeship. Mr. Ralph H. Baker, Sr., departed this life in March 1963, and the appellant, Ralph H. Baker, Jr., is the administrator of said estate with will annexed. The present litigation grows out of a real estate transaction wherein Mr. Baker, Sr. acted as trustee for himself and the appellee, Mr. W. W. Leigh; and Mr. Baker, Sr. died without having settled his trusteeship. Mr. Leigh brought this suit, and his difficulty in making proof was because the administrator pleaded the dead man statute, as he had a perfect right to do. Mr. Leigh was thus unable to testify as to any of bis transactions with Mr. Baker; and tlie evidence in Mr. Leigh’s behalf as to such transactions had to be established by written instruments, cancelled checks, bank statements, and the testimony of third persons.

On December 16, 1958, Mr. Baker, as Trustee, paid Messrs. Ellis $4,250.00 for a 6-months option to purchase a tract of 40 acres at a total consideration of $40,000.00. In exercising the option, a fee of $2,000.00 was paid an attorney. The option was exercised, and on June 19,1959, a deed was executed by Messrs. Ellis to “Ralph H. Baker, Trustee ’ ’, reciting the total consideration to be $40,000.00, paid and payable as follows:

$11,600.00 in cash;

$12,400.00 vendor’s lien notes to Messrs. Ellis;

$16,000.00 Hoffman lien notes assumed by Baker, Trustee.

On June 22, 1959, Ralph H. Baker, Sr. signed and delivered to W. W. Leigh an instrument reading as follows:

DECLARATION OF TRUST

“STATE OF ARKANSAS 1 COUNTY OF PULASKI J ss

“Whereas Ralph H. Baker, Trustee, has this the 22 day of June 1959 purchased:

“The Northwest Quarter of the Southeast Quarter (NW 14 SE 14) Section Three (3), Township One North (Twp. 1 N.), Range Thirteen West (R 13 W), in Pulaski County, Arkansas

for the account of the following persons, and in the proportion set opposite their respective names, to-wit:

“William W. Leigh, Fifty per cent (50%)

“Ralph H. Baker, Fifty per cent (50%)

and upon the following terms of purchase:...................•................. cash, balance over a period of .................. years, amortized at..............................and balance bearing interest at..................%.

“Now be it known that Ralph H. Baker, Trustee, acknowledges that he holds the title to said lands for the use and benefit of the persons named, but upon the following terms and conditions, to-wit:

‘ ‘ As this land is purchased on terms, the above parties shall pay their respective portions of the balance due thereon.

“It is specifically understood between all the parties hereto, that all of the interested, parties shall promptly pay to the Trustee their proportionate part of all State and County taxes, and any special taxes, levied against said lands.

“Trustee, Ralph H. Baker, covenants to exercise such trust in good faith on his part.

“Witness my hand and seal at Little Rock, County of Pulaski, State of Arkansas this the .................. day of June, 1959.

“/s/ Ralph H. Baker

Ralph H. Baker, Trustee

“/s/ Ralph H. Baker, Jr., Witness.”

In September 1963 Mr. Leigh filed the present suit. He alleged the trusteeship of Mr. Baker Sr., as shown by the above instrument, and claimed that he (Leigh) had paid a total of $48,775.22 on the trust property and that Mr. Baker Sr. had paid only $520.18. On the basis of these figures Mr. Leigh prayed that he have judgment against the estate of Mr. Baker and a lien on the one-half interest of Mr. Baker Sr. in the land for $24,-127.52, being the amount Mr. Leigh had paid for the protection of the interest of Mr. Baker Sr. The answer was a general denial and plea of limitations. Trial in the Chancery Court resulted in a decree for Mr. Leigh for all the prayed relief; and this appeal resulted, in which appellants2 urge two points:

“I. The Court erred in awarding judgment against Ralph H. Baker, Jr., Administrator of the Estate of Ralph Baker, Sr., deceased in the amount of $24,127.52, the amount of such judgment should have been $15,259.43.
“II. The Court erred in declaring the fixing any lien on the undivided interest of the estáte of Ralph H. Baker, deceased.”

I. Amount Of The Judgment. This is appellant’s first point. In the trial there were introduced Mr. Leigh’s cancelled checks, identified by witnesses, as to the amounts paid by him in connection with this land transaction, as follows:

Item Date To Whom Paid Amount
A. Jan. 22, 1959 Ralph H. Baker $11,061.18
B. Dec. 5, 1958 Ralph H. Baker 250.00
C. Dec. 5, 1958 Ralph H. Baker 6,000.00
D. Aug. 8, 1959 W. B. Worthen Co. 714.65
E. Aug. 3, 1959 William W. Leigh 5,000.00
F. Feb. 16, 1960 Worthen Bank & Tr. Co. ' 409.79
G. June 20, 1960 Ralph H. Baker, Tr. 6.944.00
H. Aug. I, 1960 Worthen Bank & Tr. Co. 5,762.50
I. Sept. 8, 1960 Ralph H. Baker 72.44
J. Oct. 18, 1960 Ralph H. Baker 241.50
K. Apr. II, 1961 Ken S chuck 425.00
L. June 19, 1961 T. E. Ellis & Gilbert A. Ellis, Trustees 6.572.00
M. Aug. 1, 1961 Worthen Bank & Tr. Co. 5.125.00
TOTAL $48,578.06

The payment of $520.18 by Mr. Baker, Sr. seems to be undisputed. If we add the amounts shown above alleged to have been paid by Leigh..............................$48,578.06 to the amount paid by Baker................................................ 520.18’ we get a total of................................................................................. 49,098.24 Mr. Baker’s half of that amount as the cost of the 40 acres would be............................................................ 24,549.12 Mr. Baker had paid......................................................................... 520.18 so according to the evidence Mr. Leigh had paid for the account of Mr. Baker..............................$24,028.94

In their first point the appellants claim that Mr. Leigh should have an unsecured judgment for only $15,259.43 instead of the amount rendered by the Court. The appellants reach this figure of $15,259.43 by deducting from the total amount paid by Mr. Leigh the items “A,” “B,” and “C,” and Item “K,” as identified and shown in the tabulation of Mr. Leigh’s checks above. Appellants claim that the items “A,” “B,” and “C,” should be stricken because it was not until the Declaration of Trust was signed that Mr. Baker became bound to Mr. Leigh to pay half of the cost; and appellants claim that Item “K” should be stricken because it was a surveying item and not within the purview of the Declaration of Trust. ¥e cannot agree with appellants as to Items “A,” “B,” and “C.” There was introduced into evidence another instrument, shown to have been signed by Mr. Baker Sr. and delivered to Mr. Leigh, which recited:

“Dear Bill:
‘ ‘ The attached memorandum will serve as a complete record of this transaction as far as payments are concerned. Of the eight thousand paid down, you put up $6,000.00. As I remember it you gave me a check on L. B. Leigh and Co. for $5,000.00 and another personal check for $1,000.00. I put up the other $2,000.00 completing the down payment.
“You have, put up all the rest of the money except I paid the semi-annual interest due on 1st lien 8-1-59 of $262.50. If you will pay the semi-annual interest on this item due 4-1-60 this will even up this item. In addition you paid the accrued interest before that when we closed the deal amounting to $533.34. Don’t forget to charge this item in your 1959 INCOME TAX REPORT.
“/s/ Ralph
“P.S. You actually advanced $12,133.34 on 6/19/59 broken down as follows:
$11,600.00 “Payment
533.34 Interest
$12,133.34”

There was also introduced the closing figures when Mr. Baker Sr., Trustee, closed the transaction with Messrs. Ellis at the Beach Abstract Company. Prom these, and from other proof in the case, it is thus clear that Mr. Leigh has paid far more than the amount which he was to pay; that is, his half of the purchase price and interest. Because of failure to introduce some checks, we find that the proof on this point justifies a judgment for Mr. Leigh for only $24,028.94, as previously explained ; so we affirm the judgment in favor of Mr. Leigh for $24,028.94.

II. The Lien On Baker’s Interest In The Land. This point consumes the larger portion of appellants’ brief. They insist that Mr. Leigh cannot acquire a lien on Mr. Baker’s interest merely by showing that Mr. Leigh has paid money that Mr. Baker should have paid, and they undertake to show that Mr. Leigh cannot obtain a lien by subrogation, equitable lien, or resulting trust. We agree with appellants that the mere payment by Mr. Leigh of more than his half of the cost did not, standing-alone and in the absence of other factors, give Mr. Leigh a lien on Mr. Baker’s half interest in the land. The case of Dowdy v. Blake, 50 Ark. 205, 6 S. W. 897, is on this point. But there are many other factors in this case and after considering- all of these we hold that Mr. Leigh is entitled to a lien on Mr. Baker’s interest in the land because of the application of the equitable doctrine of subrogation. In Southern Cotton Oil Co. v. Napoleon Hill Co., 108 Ark. 555, 158 S. W. 1082, this Court discussed at some length the equitable doctrine of subrogation, saying:

“The doctrine of subrogation is an equitable one, having for its basis the doing of complete and perfect justice between the parties without regard to form, and its purpose and object is the prevention of injustice. Cyc. also says, ‘And generally, where it is equitable that a person, not a mere stranger, intermeddler, or volunteer, furnishing money to pay a debt, should be substituted for or in place of the creditor, such person will be so substituted.’ 37 Cyc. 371. ...”

Quoting from an earlier case, this Court also said as regards subrogation:

. “ ‘It rests upon the maxim that no one shall be enriched by another’s loss, and may be invoked wherever justice and good conscience demand its application in opposition to the technical rules of law, which liberate securities with the extinguishment of.the original debt. This equity arises when one not primarily bound to pay a debt, or remove an incumbrance, nevertheless does so; either from his legal obligation, as in case of a surety, or to protect his own secondary right; or upon the request of the original debtor, and upon the faith that, as against the debtor, the person paying will have the same sureties for reimbursement as the creditor had for payment. And this equity need not rest upon any formal contract or written instrument. Like the vendor’s lien for purchase money, it is a creation of a court of equity from the circumstances. ’ The theory of equitable assignment, as laid down by Pomeroy is: ‘In general, when any person having a subsequent interest in the premises, and who is therefore entitled to redeem for the purpose of protecting such interest, and who is not the principal debtor, primarily and absolutely liable for the mortgage debt, pays off the mortgage, he thereby becomes an equitable assignee thereof, and may keep alive and enforce the lien so far as may be necessary in equity for his own benefit; he is subrogated to the rights of the mortgagee to the extent necessary for his own equitable protection. The doctrine is also justly extended, by analogy, to one who, having no previous interest, and being under 'no obligation, pays off the mortgage, or advances money for its payment, at the instance of a debtor party and for his own benefit; such a person is in no true sense a mere stranger and volunteer.’ Pomeroy, Equity Juris., vol. 3, § 1212.”

Subsequent cases have applied this doctrine of subrogation in a variety of circumstances. In Cowling v. Britt, 114 Ark. 175, 169 S. W. 783, Justice Hart said: “Subrogation is a doctrine of purely equitable origin, and in its operation is always controlled by equitable principles.” In Federal Land Bank v. Richland, 180 Ark. 442, 21 S. W. 2d 954, Justice Butler said:

‘ ‘ But, as the doctrine of subrogation was evolved by courts of equity fox the prevention of injustice, it is administered not as a legal right, but the principle is applied to subserve the ends of justice, and to do equity in the particular case before the court. Therefore no rule can be laid down for its universal application, and whether it is applicable or not depends upon the particular facts and circumstances of each case as it arises, and is subject to that most ancient maxim, ‘he who seeks equity must do equity.’ ”

In Commonwealth v. Martin, 185 Ark. 858, 49 S. W. 2d 1046, Justice Butler said:

“In many cases it has been our policy to apply the doctrine of subrogation, where by so doing the ends of justice will be met (Chaffee v. Oliver, 39 Ark. 531; Cohn v. Hoffman, 45 Ark. 376; Neff v. Elder, 84 Ark. 277, 105 S. W. 260, 120 Am. St. Rep. 67; Beauchamp v. Bertig, 90 Ark. 351, 119 S. W. 75, 23 L. R. A. (N. S.) 659; Southern Cotton Oil Co. v. Napoleon Hill Cotton Co., 108 Ark. 555, 158 S. W. 1082, 46 L. R. A. (N. S.) 1019); . . .”

See also Webster v. Horton, 188 Ark. 610, 67 S. W. 2d 200; and Cooper v. Home Owners Loan Corp., 197 Ark. 839, 126 S. W. 2d 112.

Text writers and cases from other jurisdictions also show the force of this equitable doctrine of subrogation. In 50 Am. Jur. p. 692 et seq., “Subrogation” § 14 et seq., the following appears:

“§ 14. Maxims Applicable.' — -The various maxims of equity, elsewhere considered, are brought into play when subrogation is sought. It frequently calls for an application of the maxim that ‘no one shall be enriched by another’s loss.’ ...
“§ 15. Favored Doctrine. — As observed above, the doctrine of subrogation, which in its beginning was somewhat strictly and narrowly applied, was later liberalized and expanded and came to be recognized as a wholesome and highly meritorious doctrine. Being founded on principles of natural reason and justice and being one of the benevolences of the law, it is a highly favored doctrine and one which has been most liberally dealt with in the courts. Perhaps no doctrine of equity jurisprudence is more beneficent in its operation, and perhaps none stands in higher favor.”

As to some of the persons entitled to subrogation the same volume of Am. Jur. states on pages 695 and 696:

“Recognized inclusions are of those who, like sureties or guarantors, pay the debt to another in the performance of a legal duty imposed by contract or rules of law; those who pay the obligations of another for the purpose of protecting their own rights or interests, including supposed interests; those who pay the debt of another under an agreement for subrogation to the right of the creditor; those who pay on the invitation of the public and whose payment is favored by public policy; and persons whose funds or property have been misapplied by an agent or other fiduciary, or have otherwise been used in such a way as to enrich others unjustly.” And on page 739 of the same volume of Am. Jur. there is this statement:
“One whose money has been wrongfully or fraudulently used by another in the purchase of real property may work out a remedy by subrogation to the lien of the vendor. Thus, subrogation to a vendor’s lien has been allowed where a trust fund in the hands of a vendee of land is used to pay the purchase price or to discharge the lien on the lands under such circumstances as to amount to a fraud on the beneficiary.”

In 83 C. J. S. p. 604, “Subrogation” § 9, the text reads:

“Payment to protect own rights and interests. Subrogation will arise in favor of those who act under the necessity of self-protection. One who pays another’s debt to protect his own rights and interests, or who pays another’s debt in order to protect some interest which he represents, is not ordinarily considered a volunteer and may be subrogated to the creditor’s rights. Likewise, one who has an interest which is jeopardized by the continued existence of the debt of another is not a volunteer in paying that debt, and he may obtain subrogation.” And on page 630 of the same volume of C. J. S. the text reads:
“Where one having an interest in property pays off an encumbrance on the property' in order to protect his interest, he is ordinarily entitled to be subrogated to the rights and remedies of the person paid.”

As to the right of a cestui to be subrogated to the interest of the trustee, the American Law Institute’s Restatement of the Law of Trusts, Second Edition, p. 448, § 202, says:

“Discharging trustee’s individual obligation. Where the trustee wrongfully uses trust funds in discharging an obligation owed by the trustee individually to a third person, the beneficiary is entitled to be subrogated to the rights which the obligee had before the obligation was discharged. A court of equity will afford relief to the beneficiary by putting him in the position occupied by the obligee before the obligation was discharged. If the obligation was a secured obligation, the beneficiary is entitled to the security interest held by the obligee. If the obligation was of such a character that the obligee was entitled to priority over other creditors of the trustee, the beneficiary is entitled to a similar priority.”

With the equitable doctrine of subrogation thus understood, we revert to the tabulation of Items “A” to “M”, inclusive, as found in Topic I of this Opinion. It was shown that all of the items in the tabulation except Items “A,” “B,” “O,”' and “K,” were amounts advanced, by Mr. Leigh to pay the principal and interest of the vendor’s lien notes to Messrs. Ellis ($12,400.00) and the Hoffman lien notes ($16,000.00). As to payment by Mr. Leigh of these items (totalling $28,400.00, plus interest) there can be no' doubt of Mr. Leigh’s right of subrogation and a lien against Mr. Baker’s interest in tbe land for the amount that Mr. Leigh paid to protect Mr. Baker’s interest. “Where one having an interest in property pays off an encumbrance on the property in order to protect his interest, he is ordinarily entitled to be subrogated to the rights and remedies of the person paid.” (See C. J. S. above cited.)

Items “A,” “B,” and “C,” of the said tabulation (in Point'I of this Opinion) relate to the amount paid by Mr. Leigh shortly after the exercise of the option by Mr. Baker. These items total $17,311.18 paid to Mr. Baker as the down payment to Ellis and the expenses incident to the sale. Appellants claim that Mr. Leigh is only an unsecured creditor against Mr. Baker’s estate for Mr. Baker’s half interest of this $17,311.19. We disagree with appellants in this contention. The declaration of trust was dated June 22, 1959; and the undated memorandum (written soometime after August 1,1959) signed by Mr. Baker says: “You actually advanced $12,133.34 on June 19, 1959.” Thus, Mr. Baker admitted that the advance was used to pay for the trust property. Mr. Leigh thus made the advance to Mr. Baker, as Trustee, in order to protect Mr. Leigh’s own rights; and there is ample authority that one who pays money to protect his own rights is not a volunteer, and is entitled to subrogation in a case like this. As to Item “K” (a payment to Ken Schuck of $425.00 on April 11, 1961), the proof is rather inconclusive, and we prefer to omit this item from the rule of subrogation.

Reverting again to the tabulation of Items “A” to “M” inclusive, as found in Topic I, when we exclude Item “K” ($425.00), there is left a total of $48,153.06 definitely established to have been paid by Mr. Leigh on the trust property. Mr. Baker paid $520.18, making a total of $48,773.23 paid by both. One half of said total would be $24,386.62 which Mr. Baker should have paid. Since he only paid $520.18, it follows that Mr. Leigh is entitled to a lien against Mr. Baker’s interest in the property for $23,866.44, being the amount of Mr. Leigh’s overpayment.

The decree of the Chancery Court is affirmed as to Leigh being entitled to a judgment and a lien on Baker’s interest in the property; but the decree is modified as to the amounts; the amount of Leigh’s judgment being $24,028.94 and the amount of Leigh’s lien on Baker’s interest in the land being $23,866.44; both amounts to bear interest from the date as stated in the Chancery decree. As so modified, the cause is remanded for further proceedings not inconsistent with this Opinion. All costs of all courts are to be paid by appellants.

       The “dead man statute” is found in § 2 of the Schedule of the Arkansas Constitution, and reads: “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. . . .”

       The defendants below and appellants here are Ralph H. Baker, Jr., as administrator with will annexed of the estate of Ralph H. Baker, Sr., Deceased, and also Mrs. Ruth Baker, being the widow of Ralph H. Baker, Sr., Deceased.

       The complaint alleged payment of two other checks totalling $197.16, but these checks were not introduced, so we disregard them.

       This is previously copied in Topic I of this Opinion.


author: Ed. F. McFaddin, Associate Justice

text:
    Young v. Young.
    3396
    384 S. W. 2d 469
    Supplemental opinion on denial of Petition for Rehearing delivered January 18, 1965.
   Ed. F. McFaddin, Associate Justice

(Additional Opinion on Rehearing). In his petition for rehearing Mr. Young calls attention to a matter which was contained in his original brief, but which we did not discuss in our Opinion of December 14, 1964.

The Chancery decree permanently enjoined Mr. Young from selling, during Mrs. Young’s lifetime, the property at No. 3121 Olive Street in Pine Bluff, where Mrs. Young is now living. Mr. Young 'claims that this property is in a section fast becoming commercial, and that he should be allowed to furnish Mrs. Young a home for her lifetime at some other suitable location and then be allowed to sell the property at 3121 Olive Street.

Of course, Mr. and Mrs. Young may negotiate between themselves, if they so desire, as to another suitable home for Mrs. Young for her lifetime. Should they be unable to reach a mutually satisfactory agreement, thea Mr. Young, if lie should think that Mrs. Young was being arbitrary in the matter, would be free to ask the Jefferson Chancery Court to hear the dispute and decide as to whether Mrs. Young should be required to accept another suitable home for her lifetime in lieu of the present one. The Chancery Court which granted the injunction in the first instance is always empowered to modify it.

With this explanation, the petition for rehearing is denied. Harris, C. J., not participating.

(Original opinion delivered December 14, 1964, P. 795.)


author: G-eorge Bose Smith, J.

text:
    Caldwell v. Shoptaw.
    5-3445
    385 S. W. 2d 799
    Opinion delivered January 18, 1965.

      Coclcrill, Laser, McGehee & Sharp, for appellant.

      Martin, Dodds é Kidd, by J. L. Kidd, for appellee.
   G-eorge Bose Smith, J.

In December of 1962 the appellee was injured in a collision between the car in which she was riding as a passenger and a car that was owned by the appellant and was being driven by his minor son. Mrs. Shoptaw brought suit for her injuries and received a verdict and judgment for $24,000. The appellant’s only contention is that the award is excessive.

There is no question about Mrs. Shoptaw’s having been seriously injured in the accident. She suffered a broken collarbone, seven fractured ribs, a severe and painful neck sprain, and a back injury. On the day of the accident she was given emergency treatment at a hospital and was permitted to return to her home. After ten days, however, the neck sprain had not responded to treatment, and the pain was so severe that her physician placed her in a hospital for eight or nine days. The hospital and medical expenses have amounted to almost a thousand dollars.

At the time of trial, some sixteen months after the collision, the plaintiff was still experiencing sharp pain. According to the doctors who testified, there is a separation in the left shoulder joint and a grating of the bones upon movement. This condition is accompanied by pain and may continue for years. There is a remote possibility that surgery may become necessary.

Mrs. Shoptaw was 41 when the accident occiirred. She had enjoyed water sports with her family and had engaged in part-time work as a book salesman. Her injuries caused a permanent partial disability which prevents her from continuing to participate in these activities. In addition, she can no longer do her housework and must employ outside help.

The plaintiff suffered a great deal before the trial and is confronted with the prospect of further suffering in the future from injuries that are partly disabling. The primary responsibility for fixing the amount of compensatory damages rested upon the jury. It might be thought that their award is liberal, but we are unanimously of the opinion that it is not so excessive as to call for corrective action in this court.

Affirmed.


author: Paul Ward, Associate Justice.

text:
    Hopper v. Wolfe, Judge.
    5-3415
    385 S. W. 2d 783
    Opinion delivered January 18, 1965.

      R. Julian Glover, for petitioner.

      Bruce Bennett, Attorney General, Robert Shaw, Prosecuting' Attorney, Daily <£ Woods, for respondent.
   Paul Ward, Associate Justice.

In this petition for a writ of prohibition, Lavada Hopper, asks this Court, by declaring Act 49 of 1963 unconstitutional, to prohibit the Montgomery Circuit Court (as presently constituted) from trying a damage suit filed against her by Jack Whisenhunt.

An adequate understanding of the decisive issue here involved and the manner in which it arises calls for a summary of the factual background.

In June, 1960 Lavada Hopper (petitioner herein), while driving her automobile on Highway No. 8 in Montgomery County, collided with an automobile being driven by Jack Whisenhunt, allegedly damaging his car. Suit ivas filed in the Circuit Court of Montgomery County by Whisenhunt against petitioner. After an answer and other pleadings were filed the petitioner filed a motion in which it was alleged:

that the Circuit Court of Montgomery County was without jurisdiction to try the cause of action; that said court is organized and acting under Act 49 of 1963 which removed Montgomery County from the Eighteenth Judicial Circuit and placed it in the Ninth Judicial Circuit (leaving only Garland County in the Eighteenth Judicial Circuit); and, that said Act 49 is unconstitutional, being in violation of Article 7, § 12; Article 7, § 13; and Article 2, § 10, all of the Constitution of the State of Arkansas. The prayer was for the relief indicated above.

Whisenhunt filed a response, agreeing that the above motion should be adjudicated. The prosecuting attorney of the Ninth Judicial Circuit (later joined by the attorney general) was permitted to intervene and defend the constitutionality of said Act 49 and the validity of the Ninth Judicial Circuit as organized under the said act. For the same purpose Ode Maddox and R. W. Dillard, citizens and residents of Montgomery County (representing other citizens and residents of said county), were also allowed to intervene.

Pursuant to statute the presiding judge of the Ninth Judicial Circuit executed an exchange agreement with Judge Paul Wolfe of the Twelfth Circuit. The matter was presented on the above pleadings, and Judge Wolfe, in a comprehensive written opinion, found that Act 49 is constitutional and that the Circuit Court of the Ninth Judicial Circuit (as constituted at that time) has jurisdiction to try the damage suit in question.

On July 21, 1964 Lavada Hopper filed this petition for a writ of prohibition. The decisive question presented to us is the constitutionality of said Act 49 of 1963.

All issues raised by petitioner stand or fall on the constitutionality of said act. If the act is unconstitutional, then the legislature had no power to take Montgomery County out of the Eighteenth Judicial Circuit and place it in the Ninth Judicial Circuit. If the act is constitutional it must be conceded that the legislature had the power to place Montgomery County in the Ninth Judicial Circuit, and, consequently, the trial court would have jurisdiction to try the damage suit.

It is forcefully argued by the petitioner that since the effect of Act 49 is to make a judicial circuit out of one county — G-arland County — it runs afoul of our former decisions and several provisions of the State Constitution. These provisions are set out below.

Article 7, § 12 reads:

"The Circuit Courts shall hold their terms in each county at such times and places as are, or may be, prescribed by law.”

Article 7, § 13 reads:

"The State shall be divided into convenient circuits, each circuit to be made up of contiguous counties, for each of which circuits a judge shall be elected, who, during his continuance in office, shall reside in and be a conservator of the peace within the circuit for which he shall have been elected.”

The pertinent part of Article 2, § 10 reads:

"In all criminal prosecutions the accused shall enjoy the right to a speedy . . . trial by impartial jury of the county in which the crime shall have been committed; provided that the venue may be changed to any other county of the judicial district in which the indictment is found, upon the application of the accused, in such manner as now is, or may be, prescribed by law ...” (Emphasis by petitioner.)

The burden of petitioner’s argument is that the plain language of the quoted sections leaves no reasonable doubt it was the intention of the framers of the constitution that a "circuit” was to be composed of more than one county. It is pointed out that to ascertain the intent and purpose of the constitution all sections must be considered together, citing Shepherd v. City of Little Rock, 183 Ark. 244, 35 S. W. 2d 361, and State ex rel Gray v. Hodges, 107 Ark. 272, 154 S. W. 506. This being true, petitioner believes the case of The State of Arkansas v. Flynn, 31 Ark. 35, strongly supports her position here. Flynn was indicted for murder in Garland County. When he filed a proper affidavit he was granted a change of venue to Pulaski County which was in another judicial circuit. On appeal to this Court we held the transfer to Pulaski County violated Art. 2, § 10 quoted above. In so holding, we said:

“Under the present Constitution [1874] the venue in a criminal case, can for no cause he changed to a county out of the judicial circuit in which the indictment is found.”

Petitioner argues that the only logical conclusion deducible from the above decision is that Act 49 of 1963 (which creates the Eighteenth Judicial Circuit with only one county) is unconstitutional, otherwise it would he impossible for a defendant in Garland County to secure a change of venue under any circumstances.

Although petitioner’s argument appears plausible, it has been specifically rejected by this Court.

In the case of Cockrell v. Dobbs, Judge, 238 Ark. 348, 381 S. W. 2d 756 (decided after the petition herein considered was filed in this Court) we specifically'upheld the validity of Act 49 of 1963, and gave the Circuit Judge of Garland County the power to transfer the trial of a criminal case to an adjoining county (and out of the Eighteenth Judicial Circuit). In that opinion we took cognizance of Article 7, § 13 and Article 2, § 10 of the State Constitution, and also the case of State v. Flynn, supra.

It follows therefore from what we had said above that the petition for a writ of prohibition must be, and it is hereby, denied.

Denied.


author: Sam Robinson, Associate Justice.

text:
    Earp v. Hunt.
    5-3411
    386 S. W. 2d 492
    Opinion delivered January 18, 1965.
    [Rehearing denied March 1, 1965.]

      Williams & Gardner, for appellant.

      White é Young, for appellee.
   Sam Robinson, Associate Justice.

In November, 1961, appellee, Earl H. Hunt, Jr., purchased from A. B. Earp, doing business as Earp Equipment Sales Company, four coin operated dry cleaning machines for the purchase price of $13,500.00. Hunt lives at Clarksville where he opened a dry cleaning business. Earp’s place of business is at West Memphis.

In March, 1963, Hunt filed suit in the Pope Circuit Court against Earp alleging breach of contract. It was alleged that Earp had warranted the machines to last 10 years without major repairs; that in the operation of the machines in the ordinary manner they had deteriorated due1 to corrosion to the point that they were worthless. The case was tried on the issue of whether Earp had breached the contract, and if so, the amount of damages, if any, suffered by Hunt as a result of the breach. There was a jury verdict and judgment for Hunt in the sum of $6,403.75. Earp has appealed.

First, it was shown by substantial evidence that working parts of the machines had become so corroded as to render the machines worthless for the intended use. Several parts of the machines were introduced in evidence. It is clearly obvious that the parts had been ruined by corrosion. The corrosion is caused by a cleaning material known as perchlorethylene forming an acid. This was the cleaning material recommended by the manufacturer of the machines. Appellant claims that the cleaning material broke down into acid because of excessive heat. Appellee denies that the machines got too hot. He testified that he had thermometers installed to enable him to know at all times the amount of heat that was being generated; that he did not allow the heat to become greater than that recommended by the manufacturer of the machines. Of course this was simply a jury question.

Appellant also contends- that the ruined parts could be replaced for about $340.00. The jury could have found that it would do no good to replace parts which had been ruined in a very short time by ordinary use of the machines ; that if replaced, they would again deteriorate in the same manner. It was shown that some parts had been replaced and the new parts were soon ruined by the acid. In fact, the jury could have arrived at a verdict of something over $6,000.00 by taking into consideration the number of new parts and the cost thereof that would be required to enable Hunt to operate the machines for the period of the warranty.

Now we come to the proposition of whether there is any substantial evidence that appellant warranted the machines to last 10 years without major repairs, and if so, is there substantial evidence of a breach of the warranty. It appears that after appellee decided to go into the dry cleaning business with coin operated machines, he made a deal to purchase machines from an Oklahoma concern and paid $200.00 down on the purchase price. Appellant, who sold, among other things, coin operated dry cleaning machines, heard about appellee going into this kind of business and got in touch with him and prevailed upon him to break his contract with the Oklahoma concern and buy the machines sold by appellant. Appellee got ont of the Oklahoma contract by forfeiting the $200.00 he had paid ©n the purchase price of the Oklahoma machines.

Appellee testified positively that appellant warranted the Hammond machines sold by him to last at least 10 years without a major breakdown. Appellee i» corroborated by the testimony of John T. Laneer. Ark. Stat. Ann. § 85-2-313 (a).

The evidence is convincing that Earp’s affirmation of fact that the machines would last 10 years without a major breakdown had a natural tendency to influence Hunt to break his contract with the Oklahoma people and buy the Hammond machines sold by Earp. In Harris v. Hunt, 216 Ark. 300, 225 S. W. 2d 15, the court quoted from Ives v. Anderson Engine & Foundry Co., 173 Ark. 112, 292 S. W. 111, as follows: “ ‘To constitute an express warranty it is not necessary that the word ‘warrant’ be used, but may be based on the statements of the seller as to the quality or condition of the chattel he is selling. . . .’ ” To the same effect is § 85-2-313 (2).

Appellant also contends that the contract was reduced to writing; that it does not contain a warranty, and that evidence was not admissible to vary its terms. The instruments appellant claims to constitute a contract are the order prepared by appellant and signed only by appellee, and the bill of sale. The order does not purport to be a contract at all, it is simply an order given by appellee for the machines; it creates no obligation whatever on the part of the seller. Neither is the bill of sale a contract; it is evidence of title and was delivered by the seller to the Peoples Exchange Bank of Russellville after the machines had been shipped so that the bank would loan Hunt a substantial portion of the purchase money. The bill of sale did state that the Earp Equipment Company would warrant the title to the machines. The bill of sale does not purport to be a sales contract; it is signed only by the seller and creates no obligation on the part of the purchaser.

There was no attempt to vary the terms of the purchase order or the bill of sale. In fact, it is shown that as a part of the purchase contract Hunt gave Earp his promissory note in the sum of $2,625.00. Nothing is said in the aforesaid instruments about the note, yet, no doubt it was an important part of the purchase contract. Of course evidence is not admissible to vary the terms of a written contract; here, however, it cannot be said that there was a written contract of purchase.

Appellant makes the further argument that the record does not show appellee relied on the alleged warranty made by Earp. The warranty was very material. The purchaser could not hope to make any profit out of coin operated machines costing $13,500.00 unless the machines would last a long time. It has been held that when a misrepresentation is material in a contract it is presumed that the party to whom the misrepresentation was made relied on it. Manhattan Credit Co. v. Burns, 230 Ark. 118, 323 S. W. 2d 206. We think the same rule should prevail here. Furthermore, we believe that the evidence establishes a reasonable inference that the purchaser relied on the warranty.

Appellant also argues that the court erred in giving appellee ’s instruction defining á warranty and in failing to give appellant’s instruction 2-A defining the measure of damages. We have examined all the instructions given and refused and find that the instructions given properly submitted the issues to the jury.

Affirmed.


text:
    Charlesworth Pontiac Co. v. Walker.
    5-3417
    385 S. W. 2d 797
    Opinion delivered January 18, 1965.

      Charles W. Atkinson, for appellant.
    No brief filed for appellee.
   Sam Robinson, Associate Justice.

Appellant, Charlesworth Pontiac Company, Inc., recovered a judgment against appellee, W. E. Walker, in the sum of $5,294.36; execution on the judgment was placed in the hands of the Sheriff who levied on certain laundry equipment purportedly belonging to appellee. The property was sold by the Sheriff under the execution. Later, J. I. Walker, uncle of W. E. Walker, intervened in the case at bar alleging that he is in fact the owner of the laundry equipment sold by the Sheriff under the execution, and asked that the sale be set aside.

A hearing was held on the motion to set aside the sale; the Circuit Court made a finding that the laundry equipment belonged to the uncle, J. I. Walker, and granted the motion. The judgment creditor has appealed.

First appellant contends that J. I. Walker is a nonresident of the State of Arkansas and should not have been permitted to intervene because he gave no bond as required by Ark. Stat. Ann. § 27-2301 (Repl. 1962). The record reveals that intervenor is a non-resident of the State; for all practical purposes he is a plaintiff, and the cause should have been dismissed as provided by Ark. Stat. Ann. § 27-2302 (Repl. 1962).

In regard to the merits, it is clear from the record that the instrument J. I. and W. E. Walker claimed to be a bill of sale is nothing more than a mortgage, and it has not been recorded.

A judgment constitutes a lien on personal property from the time an execution is placed in the hands of the Sheriff. Ark. Stat. Ann. § 30-116 (Repl. 1962).

A judgment which has ripened into a lien by virtue of an execution thereon having been placed in the hands of the Sheriff is superior and paramount to an unrecorded mortgage. Hawkins v. Files, 51 Ark. 417, 11 S. W. 681; Arkansas Bank & Trust Co. v. State Bank of Poplar Bluff, 166 Ark. 538, 266 S. W. 977.

Reversed with directions to overrule the motion to set aside the sale. ’


author: Jim Johnson, Associate Justice.

text:
    Wood v. Wright.
    5-3423
    386 S. W. 2d 248
    Opinion delivered January 18, 1965.
    [Rehearing denied February 22, 1965.]

      Kirsch, Cathery $ Brown, for' appellant.

      Frierson, Walicer & Snellgrove, for appellee.
   Jim Johnson, Associate Justice.

This appeal involves property rights and attorneys’ fees of a wife divorced on the ground of insanity.

Appellee A. D. Wright filed suit for divorce on November 8, 1962, in Greene Chancery Court against his-wife, Jessie M. Wright, on the ground of three years separation by reason of her incurable insanity. After appointment of a guardian ad litem, various motions and hearings, and appointment of a guardian by the probate court, appellee filed a ‘ supplemental, substituted • and amended” complaint for divorce on July 8, 1963. Appellee alleged, inter alia, that the parties were married in 1929 and had not lived together since 1951, that they had no children, that they owned property, that Mrs. Wright was incompetent and had been for more than five years, was admitted to the State Hospital on June 20, 1960, where she has been confined ever since. The complaint aslced that appellant Hattie Wood, Mrs. Wright’s sister who had been appointed her guardian, defend the suit, that the court grant appellee a divorce, and make other proper orders for the wife’s future care and support. Appellant answered, alleging that the parties owned property as tenants by the entirety, some acquired before and some after the adoption of Ark. Stat. Ann. § 34-1215 (Repl. 1962) in 1947, and prayed division of the rents and income from the property acquired before 1947 and partition of • the property later acquired, in the event of divorce. Appellant also prayed for one-third of all of appellee’s personal property, one-third interest for life in all of appellee’s separate real property, dower interest in some hotel property conveyed through a straw man, and for alimony. Appellant also asked for an accounting of all the rents and income received by appellee from the entirety property during’ the preceding eleven years, since Mrs. Wright first became incompetent. Appellee thereafter filed an accounting for the year 1963 which reflected a net income from the entirety property of $4,853.28 for the year.

In its memorandum opinion of March 2, 1964, the trial court found (1) that proof is sufficient to award appellee a divorce on the grounds alleged; (2) the real property held by the entirety acquired after March 28, 1947, should be partitioned, in kind if possible; (3) appellee would be permitted to continue to rent and manage the real property held by the entirety acquired before 1947, and to pay one-half of the net income to appellant guardian; (4)' an accounting of the income from the entirety property would date forward from January 14, 1963, the date an accounting was first asked by appellant; (5) appellant’s ward was not entitled as a matter of right to an award of one-third of appellee’s separate real and personal property; (6) the ward’s financial needs for the present do not exceed $100.00 per month, she has an income as her share from the entirety property of some $2,000 per year and owns property worth in excess of $100,000 and, in addition, in the event the ward outlives appellee she would own in fee all of the entirety property acquired before 1947; (7) ordered appellee to pay $100 per month during their joint lives for the ward’s maintenance at the State Hospital, with the court retaining jurisdiction to make such further orders as may be later required. The court found that the fair value of legal services-rendered by appellant’s attorneys to date was $4,500, that appellee had already paid $1,000 of this plus costs, and because of the ward’s independent financial resources appellant, not appellee should, be required to pay from -the ward’s estate the additional $3,500 attorneys’ fee. From orders on these findings comes this appeal.

Appellant’s first point urged for reversal is that the chancery court should have awarded appellant one-third of appellee’s personal property absolutely and one-third of his individually owned real estate for the ward’s life.

Appellee sought his divorce under the eighth cause for divorce in Ark. Stat. Ann. § 34-1202 (Eepl. 1962), which provides for divorce following separation because of incurable insanity and specifies how this must be proved, requirements for the lifelong care and maintenance of an insane wife, with retention of jurisdiction by the chancellor to enforce this provision. All the particularities of the statute were meticulously complied with by the trial court.

The principal statute dealing with division of real property, in a divorce is Ark. Stat. Ann. § 34-1214 (Eepl. 1962) which provides, inter alia, that where a divorce is granted to a wife against the husband the wife is entitled to one-third of the husband’s separate personal property absolutely and one-third of the husband’s real property for life. This is not applicable in the case at bar. The wife was not granted the divorce. But — on the other hand — the husband was not granted the divorce for the fault of the wife. No question of fault or guilt arises here. Thus the primary concern of all involved, including the plaintiff once his or her grounds are proved, is protection of the rights and best interest of the insane spouse.

This court, following our statutes, has adhered to the principle of allowing trial courts wide discretion in allowance or disallowance of alimony and property to a wife, Narisi v. Narisi, 233 Ark. 525, 345 S. W. 2d 620, and we are loath to disturb this practice. In the case at bar three doctors’ testimony (which for medical testimony had remarkable definiteness and unanimity) was to the effect that appellant’s ward’s condition is incurable and. chances of her improvement are at best remote. The trial court stated that the ward would never be able to enjoy what she already owned (not counting the additional entirety property she will own in fee in the event she survives appellee) and, after requiring appellee to pay for her care and maintenance for life, denied her any part of appellee’s separate property. We fail to see that the chancellor abused his discretion in this regard.

The second point urged for reversal by appellant is that the chancellor erred in limiting appellant’s right to an accounting from the time of her filing a counterclaim seeking such relief. The court ordered appellee to account for income from the entirety property only from the filing date of appellant’s original answer and counterclaim which contained the first demand for such an accounting. Appellant had sought an accounting of the income from the time her ward first became incompetent, some eleven years ago.

Between tenants in common and joint tenants an accounting is proper [See Ark. Stat. Ann. §§ 50-101, 50-102 (1947)] because in such estates there are two or more tenants involved and each owns only part of the property. However, as the trial court pointed out here, this is not the nature of an estate by the entirety in Arkansas. “ Tenancy by the entirety is a joint tenancy modified by the common law doctrine that husband and rvife are one person in law, and can not take by moieties.” Parrish v. Parrish, 151 Ark. 161, 235 S. W. 792. Thus neither spouse oAvns an undivided one-half interest in any entirety property — the entire entirety estate is vested and held in each spouse. Roulston v. Hall, 66 Ark. 305, 50 S. W. 690.

Appellant asks for an accounting ‘ ‘ since the separation of the parties in November, 1951.” The evidence is undisputed that appellee over a period of ten years sought treatment to rehabilitate his Avife and the parties were separated only in the sense that she was away from home undergoing treatment. They were physically apart, but this is no more a separation than if Mrs. Wright had been in a hospital undergoing treatment for some other ailment with the intention of returning home, or than if she had been away for an extended visit. It should be observed that it does not follow, because Mrs. Wright began to require mental treatment in 1951, that she was henceforth completely and wholly incompetent to agree to her husband’s management of their affairs. The evidence shows that from 1951 to 1960 appellee took her to a number of places — clinics and hospitals — throughout the south for treatment and that from 1955 until 1960 appellee maintained his wife in Little Rock in an apartment, which she took care of herself, while she was under treatment by Little Rock doctors, and was not required to be confined until 1960. Under the facts here presented, the chancellor did not err in requiring appellee to account only from the date of appellant’s counterclaim. Brimson v. Brimson, 227 Ark. 1045, 304 S. W. 2d 935.

Appellant’s final point urged for reversal is that appellee should have been required to pay appellant’s attorneys’ fee in the chancery court and should be required to pay her attorneys’ fee on appeal. With this contention we heartily agree. Appellee sought the relief from his marriage to an insane spouse which only equity can give. His insane spouse, however, is entitled to every reasonable protection of her interests, including the finest legal services that can be obtained for her at her husband’s expense. The decree of the trial court is therefore reversed for entry of an order requiring appellee to pay the balance of appellant’s attorneys’ fee in the sum of $3,500.00, all costs and an additional $1,000.00 for services rendered on this appeal.

Affirmed in part, reversed in part.


text:
    Manhattan Factoring Corp. v. Orsburn.
    5-3391
    385 S. W. 2d 785
    Opinion delivered January 18, 1965.

      Wayne W. Owens of Moses, McClellan, Arnold, Owen & McDermott, for appellant.

      Dale L. Bumpers and Smith, Williams, Friday and Bowen, By: W. A. Eldredge, Jr,, for appellee.
   Frank Holt, Associate Justice.

This appeal results from a business transaction between appellant and appellees. The appellees are in the poultry processing business. For several years they had borrowed their necessary capital from a bank where their line of credit was $100,000.00. Two of appellees’ customers became questionable credit risks. Upon advice of the bank, the appellees responded to appellant’s advertisement offering to guarantee or purchase accounts receivable. After several conferences, the appellant and appellees entered into an “Accounts Receivable Agreement”, also known as a factoring agreement.

Briefly, by the terms of this contract the appellant agreed to purchase without recourse from appellees their customer Hall’s accounts not to exceed the credit limit of $50,000.00 provided Hall’s failure to pay was due to his financial inability. As shipments were made by the appellees to their customer, Hall, copies of the invoices were mailed to the appellant. Upon receipt of such evidence of shipment the appellant deducted its factoring charge, or fee, of .85 of 1%. Also, 10% of the net amount of the invoice was deducted as a reserve fund to cover any refusal of Hall to pay an invoice because of reasons other than financial inability. The balance then was remitted to the appellees. A settlement of this temporary reserve fund account was required on or about the 1st or 15th of each month by an addendum to the contract.

After a duration of this agreement for about six months it became necessary for the appellees to discontinue shipment of its products to the customer, Hall, because of his delinquent payments. During this time appellat had purchased the Hall accounts to the total extent of approximately $250,000.00. Hall owed a balance of $39,356.72 when this litigation ensued. The appellees brought an action to recover from appellant the balance of the reserve fund totaling $20,128.68. Appellant admitted holding the reserve fund. By cross complaint the appellant alleged that the appellees owed appellant the $39,356.72 on six invoices which Hall had not paid. Appellant asserted that it had accepted and paid each of these six invoices at a time when the Hall guaranteed account exceeded the credit limitation of $50,000.00 and, therefore, the invoices were purchased with recourse or at the client’s risk. The appellant sought to retain and apply the reserve fund of $20,128.68 as a credit on the alleged indebtedness of $39,356.72 and then recover the balance from the appellees. A jury resolved the issues-in favor of the appellees by awarding them the full amount of the accumulated reserve fund.

For reversal appellant first contends that the court erred in giving appellees’ Instruction No. A. This instruction told the jury that since it was undisputed the contract between the parties was prepared by the appellant, if the jury found any portion of the contract equally susceptible of different interpretations, then the interpretation most favorable to the appellees should be adopted. This is a correct pronouncement of the law. Where a written contract is ambiguous in any respect, it is construed most strongly against the party preparing it and its meaning becomes a question of fact for the jury. Travelers Indemnity Co. v. Hyde, 232 Ark. 1020, 342 S. W. 2d 295; Bailey v. Sutton, 208 Ark. 184, 185 S. W. 2d 276; Swift v. Lovegrove, 237 Ark. 43, 371 S. W. 2d 129; Pate v. Goyne, 212 Ark. 51, 204 S. W. 2d 900; Triska v. Savage, 219 Ark. 80, 239 S. W. 2d 1018.

The appellant argues that the terms of the contract are plain and unambiguous and, therefore, it is not susceptible to different interpretations. We cannot agree. For example, in paragraph two of the disputed agreement the appellant agreed to bear the credit loss on an uncollected invoice if the customer [Hall] “fails to pay in part or full because of financial inability.” In paragraph five, however, the contract provides that the appellant must make remittances on the appellees’ reserve account on the first and fifteenth of each month ‘ ‘ on all accounts receivable that have been completely collected. ’ ’ Thus, the ambiguity is obvious. The account might never be “completely collected” because of the debtor’s “financial inability.”

The guarantee of Hall’s “accounts receivable” under certain conditions also results in the opposing theories of the appellant and the appellees. The appellant’s interpretation of the contract is that each invoice of the “accounts receivable” guaranteed must be treated separately and as each individual invoice was accepted it was or was not without recourse depending upon whether the $50,000.00 credit limit of the Hall account was exceeded at the time of its purchase by appellant. If in excess of the credit limit when the invoice was accepted, then that individual invoice was with recourse and remained so even though the Hall account was thereafter reduced below the $50,000.00 credit limit. There is language in the contract to this effect. On the contrary, the theory of the appellees is that under the contract the invoices were to be treated as “accounts receivable”, or a running total of the invoices purchased by appellant and that the appellant is required to pay for all credit losses “on approved shipments” up to and including the $50,000.00 credit limit. In other words, appellees contend that they were responsible for the accounts receivable purchased by appellant only to the extent that the remaining unpaid balance was in excess of the credit limit. Appellees argue that the guarantee of “accounts” requires such interpretation. We think the trial court was correct in submitting to the jury the issue of ambiguity.

The appellant next asserts that the court erred in giving appellees’ Instruction B and C. Instruction B constitutes appellees’ interpretation or theory of the contract. It was, in effect, a statement of how the jury might construe the contract if it believed appellees ’ version that Manhattan was to guarantee the Hall accounts up to and including the $50,000.00 credit limit. Appellees’ Instruction C fully and fairly covered the appellant’s theory or interpretation of the agreement. Thus, by these two instructions the two opposing theories were fairly presented to the jury. Further, since the trial court held the contract ambiguous, it was the court’s duty to submit to the jury these alternative instructions. Agey v. Pederson, 191 Ark. 497, 86 S. W. 2d 930; Paepcke-Leicht Lbr. Co. v. Talley, 106 Ark. 400, 153 S. W. 833. The court was correct in giving Instructions B and C.

We now consider appellant’s points numbers 4, 5, 6, and 8A together. Appellant contends the court erred in refusing these instructions. The court properly rejected these instructions since, as stated by appellant, they were in effect requests for instructed verdicts. As stated previously, the court was correct in submitting to the jury the issue of ambiguity.

The appellant also argues in points 7 and 8 that the court erred in refusing appellant’s requested Instructions 7 and 7 as amended. Appellant states in his brief that:

“ * # The instruction, as submitted before modification, was a request that the Court declare that Manhattan [appellant] was justified in holding this reserve and that the verdict should be for the defendant. As amended, the instruction merely recited that until there was a final accounting between Hall and plaintiffs [appellees] Orsburn, Manhattan would be justified in holding this reserve.”

Therefore, • the first instruction would be, in effect, instructing a verdict for Manhattan insofar as this reserve fund was concerned; and the modified instruction was, in effect, telling the jury it should hold for appellant since Hall and appellees had not had a final acounting between them. This would be permitting appellant to retain the disputed reserve fund account because Hall’s financial inability to pay the account prevented a final accounting. Appellant also argues that these two instructions should have been given in order to permit the jury to find that appellant was enttiled to deduct from the disputed reserve fund certain attorney fees and court costs. Suffice it to say that the issue of attorney fees and court costs was fully covered by appellant’s Instruction No. 10 given by the court. The trial court was correct in refusing-appellant’s Instruction Nos. 7 and 7 as amended.

We discuss appellant’s points 9, 10, and 11 together as they relate to the refusal of the court to give appellant’s Instructions Nos. 11, 11 as modified, and 12. The subject matter of these instructions was sufficiently covered by instructions given by tbe court. Tbe trial court is not required to duplicate instructions. Goodin v. Boyd-Sicard Coal Co., 197 Ark. 175, 122 S. W. 2d 548.

Appellant’s final contention is that the jury verdict is contrary to the undisputed evidence and unsupported by the facts. On appeal we review the evidence in the light most favorable to the appellee and we must affirm if there is any substantial evidence to support a jury’s verdict. Jarrett v. Matheney, 236 Ark. 892, 370 S. W. 2d 440.

According to the appellees’ evidence, the contract .was made with the appellant for the purpose of minimizing the risk of losing a large sum of money at any one time since its reserves were not large enough to withstand a substantial loss from nonpayment of accounts receivable; that after several lengthy conferences the contract was made guaranteeing the credit of appellees’ customer, Hall, not to exceed $50,000.00 due only to Hall’s financial inability to pay his accounts. Witnesses testified that from their business experience with Hall he was financially unable to pay his accounts. Appellant requested appellees to continue shipping to Hall, even though delinquent, in order to give appellant more time to collect the delinquent accounts purchased by appellant. Remittances on the reserve fund were not made twice a month as required. It is undisputed that at the time of this litigation the total amount owed by Hall was $39,-356.72. According to the appellees’ evidence and their theory of the contract, this balance was guaranteed by the appellant since it was below the $50,000.00 credit limit. According to the appellant, this indebtedness was with recourse and could be charged back to its client, the appellees, because the six invoices representing this total were accepted at a time when the Hall account exceeded the credit limit. These conflicting versions were submitted to the jury under proper instructions and the jury resolved the issues in favor of the appellees. We think there were substantial evidence to support its verdict.

On cross-appeal the appellees contend that the accounts receivable agreement, or factoring contract, constitutes a contract of credit insurance; that the court erred in holding to the contrary, and since the appellees recovered the exact amount sought, the trial court should have awarded a 12% penalty and attorney’s fee as required by Ark. Stat. Ann. § 66-3238 (Supp. 1963). In support of this contention the appellees, cross-appellants, rely upon Ark. Stat. Ann. § 66-2002 and § 66-2405 (Supp. 1963). We cannot agree with this contention.

In the case at bar the appellant agreed to purchase without recourse the Hall accounts receivable not to exceed the amount of $50,000.00 for a charge of .85 of 1% of the net amount of the accounts so purchased provided Hall’s nonpayment was due to his financial inability. We are of the view that the appellant is engaged in a type of financing business rather than in the insurance business.

The business of credit insurance (orginally called “commercial insurance”) has existed for many years. The usual form is that for a stated premium paid by the insured, the insurer guarantees the payment, in whole or in part, of the account which the insured has listed under the policy. See Black’s Law Dictionary, “Commercial Insurance”; Cowles v. Guaranty Co. (Wash.), 72 P. 1032, 98 A. S. R. 838, 44 C. J. S. p. 494, “Insurance”, § 48; and 44 C. J. S. p. 547, “Insurance”, § 68. The factoring business, as involved in this case, is of comparatively recent origin, and is entirely different from the word “factor” which has long been understood as slightly different from agency. G. H. Hammond Co. v. Joseph Merc. Co., 144 Ark. 108, 222 S. W. 27; Burke v. Napoleon Hill Co., 134 Ark. 580, 202 S. W. 827. See, also, “Factors” in 35 C. J. S. p. 494 et seq.

“Factoring”, such as the appellant’s business, is defined in Webster’s New Third-International Dictionary as ..follows: “The purchase of accounts receivable from a business by a factor who thereby assumes the 'risk of loss in return for some agreed discount.” In 35 C. J. S. 493 there is this statement: “Factoring. A practice or system of commercial financing, confined principally to the textile industry, which involves notice to trade debtors, being thus distinguished from the business of 'non-notification financing.’ ” The only case cited in C. J. S. to support the above quotation is Corn Exchange Bank v. Klauder, 318 U. S. 434, 87 L. Ed. 884, 63 S. Ct. 679, 144 A. L. R. 1189, and that case affords us no aid in distinguishing between credit insurance and financing of accounts.

We are of the view that factoring is the “purchase of accounts receivable” and that “purchasing” is certainly different from “insuring”. We think that appellant is engaged in the system of financing by purchasing accounts receivable just as many finance companies are engaged in the purchase of notes, sometimes with recourse and sometimes without recourse, and in such transactions frequently there is a reserve maintained for the protection of the finance company and this reserve, or part of it, is subject to being returned to the dealer or individual who sold the note to the finance company. Some of the cases with respect to finance companies are: General Motors Acceptance Corp. v. Jerry, 181 Ark. 771, 27 S. W. 2d 997; General Motors Acceptance Corp. v. Sanders, 184 Ark. 957, 43 S. W. 2d 1087; Hare v. General Contract Purchase Corp., 220 Ark. 601, 249 S. W. 2d 973; Schuck v. Murdock Acceptance Corp. 220 Ark. 56, 247 S. W. 2d 1; General Contract Corp. v. Dodge, 223 Ark. 476, 266 S. W. 2d 816; and Commercial Credit Corp. v. Kitchens, 231 Ark. 104, 328 S. W. 2d 355. The only difference between the method of business of the appellant, Manhattan Factoring Corporation, in the ease at bar, and the finance companies in the adjudicated cases, is that in the finance cases the dealer always took a note which was assigned to the finance company, whereas, here, the dealer merely sells or assigns an open account.

It is somewhat significant there is nothing in the record to indicate that the Insurance Commissioner of Arkansas has ever considered a factoring corporation; such as the appellant, to be engaged in. the insurance business.

The judgment is affirmed on both direct and cross-appeal.