author: Hast, J.

text:
    Robbins v. Fuller.
    Opinion delivered April 4, 1921.
    1. FRAUDULENT CONVEYANCES — BULK SALES LAW — STORE NOT A “FIXTURE.” — Under the Bulk Sales Law (Crawford & Moses’ Dig., § 4870), rendering void the sale in hulk of any part, or of the whole stock, of merchandise and the fixtures pertaining to the conduct of a mercantile business otherwise than in the ordinary course of trade, unless the provisions of that act are complied with, held that a store building in which a mercantile business is conducted is not a “fixture” within the statute.

      2. Fraudulent conveyances — knowledge of insolvent’s condition. — A finding that certain conveyances from an insolvent son to his father of land for inadequate consideration were fraudulent will be sustained where the circumstances warranted the inference that the father at the time of the purchase knew of his son’s insolvent condition.
    3. Vendor and purchaser — title bond — effect.—The effect of an agreement to sell land and the execution to the purchaser of a bond for title is to create a mortgage on the land in favor of the vendor to secure the balance of the purchase price; the purchaser becoming the equitable owner.
    4. Vendor and purchaser — assignment of contract. — Where a purchaser of land under an executory contract, directed the vendor to execute deed to his father,'the effect of the transaction was an assignment of the purchaser’s equitable interest to his father..
    5. Fraudulent conveyances — effect of conveyance voluntary in part. — Where a conveyance is only constructively fraudulent, as where it is in part voluntary, it will be allowed to stand as security for the money advanced by the grantee to pay off incum-brances.
    6. Fraudulent conveyances — conveyance in part voluntary.— While a deed to a father of his insolvent son’s land for an inadequate consideration is fraudulent as to the son’s creditors, it will be allowed to stand as security for the amount paid by the father on the purchase price of the land; but, on the son’s creditors reimbursing the father for the amount so paid, the land will be sold for the benefit of the creditors.
    Appeal from Montgomery Chancery Court; J. P. Henderson, Chancellor;
    affirmed.
    STATEMENT OE EAOTS.
    C. M. Fuller and others brought this suit in equity against W. 0. Robbins and B. Robbins to set aside the sale by W. 0. Robbins to B. Robbins, of lots 2 and 3, in block 22, in the town of Womble, as in violation of the bulk sales law. Subsequently the complaint was amended só as to allege that the sale of said lots was made with the intent to hinder and defraud the creditors of W. 0. Robbins in the collection of their debts against him.
    The defendants denied the material allegations of the complaint.

      According to the testimony of W. E. Womble, W. 0. Robbins made a contract with him to purchase lot number 2, in block 22, in the town of Womble, and Womble executed to Robbins a bond for title. A storehouse was situated on the lot, and Robbins carried on a mercantile business in it. Subsequently Robbins borrowed some money from Womble and gave him a mortgage on the building that was on the lot, and, in order to make him more secure, surrendered to him the bond for title. Womble, however, felt that he was under obligations to make a deed to W. 0. Robbins upon the payment of the purchase price and the mortgage indebtedness. In January, 1919, B. Robbins, the father of W. 0. Robbins, proposed to Womble that he would pay off his son’s debt if Womble would make a deed to the lot to him. Womble agreed to do this if it was all right with W. 0. Robbins. W. 0. Robbins also agreed to it, and then Womble executed a warranty deed to the lot to B. Robbins. B. Robbins paid to Womble $425, which was the balance due Womble by W. 0. Robbins. The lot and building was worth about $800' at the time Womble executed the deed to B. Robbins. Womble was threatening to foreclose his lien on the building and lot at the time B. Robbins procured him to make the deed to the lot to him. In January, 1920, the property was worth $1,000. Lot 3, in block 22, in the town of Womble was worth $150 or $200, in January, 1919. '
    Another witness testified that W. 0. Robbins borrowed $410 from him in the fall of 1918, and told him that he would be closed up if he could' not borrow some money, .
    ' • A witness stated that W- 0. Robbins’ store was close to his store, and that B. Robbins was at the. store of W. 0. Robbins almost daily, and that he frequently saw father and son in close and apparently earnest conversation. . : ,
    '•' ■ 'Other ■ evidence- showed - that -Robbins-was;-insolvent all during'the month of Januaiy, I9Í9, and that'he closed . his business on account of insolvency on about the first of February, 1919.
    According to the testimony of B. Bobbins, in addition to the sum of $425, which he paid Womble when he bought said lot 2 on which was situated the storehouse in which his son carried on his business, he also paid his son an additional consideration of $85. He had, also, gone on the note of his son at the bank for $500 and later had to pay off this note. His son was indebted to him at the time he purchased said lot 2, on the 5th day of January, 1919. . On the same day he bought the adjacent lot, which is numbejr 3, and which is vacant. He bought lot 3 from W. 0. Bobbins and agreed to allow him $50 on his indebtedness as the purchase price.
    The chancellor found that W. 0. Bobbins was still the equitable owner of said lots numbers 2 and 3, in block 22, in the town of Womble, Arkansas, and that B. Bobbins, having paid to W. E. Womble the balance of the purchase price for lot number 2, stood in the position of an equitable assignee to the extent of $425, the amount paid to W. E. Womble.
    The court further found that the creditors of W. 0. Bobbins might subject said property to the payment of their debts, and that the deed from W. 0. Bobbins to B. Bobbins to said lot 3 should be canceled.
    It was therefore decreed that B. Bobbins should have a lien on lot 2 for $425, and that, upon payment of said' amount by the creditors, lots 2 and 3 should be sold for the payment of their debts.
    The creditors, who are the plaintiffs in this action, tendered B. Bobbins in open court the sum of $425 which . B. Bobbins refused. The plaintiffs kept the tender good by paying that amount in United States currency into the registry of the court.
    The case is here on appeal.

      Gibson Witt, for appellants.
    ' When all the facts and' circumstances in this case are considered, it is clear that B. Bobbins bad a clear, legal right to purchase both lots, and that he paid full value for them.
    Inadequacy of price alone is not sufficient to establish fraud. 118 Ark. 229. It is the intent that makes the conveyance fraudulent, and the fraudulent intent must be participated in by both parties. 31 Ark. 554; 41 Id. 316; 63 Id. 232.
    A creditor may purchase of an insolvent debtor in satisfaction of his debt. 60 Ark. 425; lb. 63, 412. At the time B. Robbins purchased lots 2 and 3, no one thought W. 0. Bobbins was financially embarrassed, so far as the evidence discloses. The decided weight of the testimony shows that B. Robbins was by far the largest creditor of W. 0. Robbins, and that B. Robbins did nothing to hide or conceal his transactions, and that he had a moral and legal right to purchase lot 3 on his own account.

      Isaac L. Autrey, for appellees.
    1. No sufficient abstract was filed by appellant.
    2. The sale of lots was void, under act 88, Acts 1913.
    3. Under the amendment to the complaint the sale of the lots should be canceled as in fraud of creditors. 73 Ark. 174; 71 Id. 161; 86 Id. 225; 56 Id. 73.
    Every voluntary conveyance of property by an embarrassed debtor is fraudulent as to existing creditors. 50 Ark. 46. If he is insolvent, the persumption of fraud is conclusive. 52 Ark. 493; 55 Id. 116; 59 Id. 614; 69 Id. 224; 76 Id. 509.
    Where the title to land passes by delivery and acceptance of a deed of conveyance, the same can not be revested in the grantor by surrender or cancellation of the deed. 80 Ark. 11; 21 Id. 80; 42 Id. 170; 43 Id. 203; 52 Id. 493; 53 Id. 509.
    When the owner sells land, takes the notes of the vendee for the purchase money and executes a bond for title to the vendee, the effect is to create a mortgage on the land to secure the purchase money. 13 Ark. 533; 27 Id: 61: 29 Id. 357: 34 Id. 126: 14 Id. 633. See, also, 15
      Id. 188; 91 Id. 33; Browne on Statute of Frauds, § 229; 7 Cranch. 176.
   Hast, J.

(after stating tíre facts). It is first insisted that the conveyance of lot 2 on which the store building was situated was void because it was in violatipn of our bulk sales law. Under it the sale in bulk of any part of, or the whole stock of merchandise and the fixtures pertaining to the conduct of any such business otherwise than in the ordinary course of trade is void against the creditors of the seller, unless the provisions of the act in regard to such sale are complied with. Crawford & Moses’ Digest, section 4870.

It is contended that the storehouse is a fixture under the statute. The statement of the proposition negatives its soundness, and we need only say that the statute refers to the trade fixtures connected with the business and not to the building in which the business is carried on. The building itself is a part of the ground on which it is situated.

It is also sought to set aside the conveyance of lots 2 and 3 in block 22 in the town of Womble, on the ground that they were made in fraud of creditors, and in this contention we think counsel is correct.

In regard to lot 3, but little need be said. W. 0. Robbins made a deed to it to his father, B. Robbins, on the 5th day of January, 1919, and closed his store on account of insolvency on the first of February of the same year. His father allowed him $50 for the lot to be applied on the indebtedness which the son owed the father. The evidence showed the-lot was worth'from $150 to $200. The father visited the store of his son almost daily, and •father and son were seen in frequent-and apparently earnest conversations.

It is fairly inferable,'under the circumstances, that the insolvent condition of- the son must have been known to the father at the -tiine-he made the purchase, although .the father denies'this-to-be the faet.- Therefore, the-court was: correct in" holding' the conveyance fraúdulént.' Den nis v. Ball-Warren Commission Company, 72 Ark. 58, and Godfrey v. Herring, 74 Ark. 186.

The chancellor was also correct as to his finding with regard to lot 2. This was the lot upon which the storehouse in which W. 0. Robbins carried on his business was situated.

W. E. Womble, who sold the property toW. 0. Robbins, testified that it was worth $800. For the reasons above given, B. Robbins must have known that his son was insolvent at the time that it was agreed that the deed to said lots should be made to him upon the payment to Womble of the balance of the purchase money. The transaction was had at a time when Womble was threatening to foreclose his lien and when the undisputed proof shows that W. 0. Robbins was insolvent. The only other consideration paid was the sum of $’85 which B. Robbins said that he allowed to his son for Womble dn the son’s indebtedness to him.

W. 0. Robbins owed Womble $425 as balance of the purchase money. When Womble agreed with W. 0. Robbins to sell him lot 2 and executed to him a bond for title, the effect of the contract was to create a mortgage upon the lot in favor of Womble to secure the balance of the purchase money. Mamoaring v. Farmers’ Bonnie of Commerce, 139 Ark. 218. When W. 0. Robbins purchased lot 2 and received a bond for title from Womble, he became the equitable owner of the lot, and his executory contract was assignable in equity. Corcorren v. Sharum, 141 Ark. 572.

Therefore when he agreed that Womble should make the deed to his father upon the payment by the latter to Womble of the balance of the purchase price, the effect of the transaction was the assignment by W. 0. Robbins of his equitable interest in the lot to his father. The lot was worth substantially more than the balance of the purchase price due upon it, and the sale under the circumstances detailed above was in fraud of the creditors of W. 0. Robbins. See, in addition to the authorities above cited, Wilks v. Vaughan, 73 Ark. 174.

B. Bobbins paid the balance of the purchase price at the time the conveyance was executed to him.. The payment was made with money of his own, and he had an equity to be substituted to the rights of Womble to that extent.

It is well settled that when a conveyance is only constructively fraudulent as, for instance, where it is in part voluntary — it will be allowed to stand as security for the money advanced by the grantor to pay off incum-brances.

In Boyd v. Dunlap, 1 Johns. Ch. 478, Chancellor Kent states the law on this question as follows: “A court of law can hold no middle course. The entire claim of each party must rest and be determined, at law, on the single point of the validity of,the deed; but it is an ordinary case, in this court, that a deed, though not absolutely void, yet, if obtained under inequitable circumstances, should stand only as a security for the sum actually due. * * * A deed, fraudulent in fact, is absolutely void, and is not permitted to stand as a security for any purpose of reimbursement or indemnity; but it is otherwise with a deed obtained under suspicious or inequitable circumstances, or which is only constructively fraudulent.”

In Clements v. Moore, 6 Wall. U. S. 299, Justice Swayne states the law as follows: “When the proceeding is in chancery, the jurisdiction exercised is more flexible and tolerant. The equity appealed to, while it scans the transaction with the severest scrutiny, looks at the facts, and, giving to each its due weight, deals with the subject before it according to its own. ideas of right and justice. In some instances it visits the buyer with the same consequences which would have followed in an action at law. In others it allows a security to stand for the amount advanced upon it. In others it compels the buyer to account only for the difference between the under price which he paid and the value of the property. In others, although he may have paid full value, and the property may have passed beyond the reach of the court, it regards him as trustee, and charges him accordingly. When he has honestly applied the property to the liabilities of the seller, it may hold him excused from further liability. The cardinal principle in all such eases is that the property of the debtor shall not he diverted from the payment of his debts, to the injury of the creditors, by means of the fraud.”

Many other cases of proving the rule are cited in a case note to 8 A. L. R. at pp. 535-536.

As we have already seen, lot 2 was worth at least $800, and the father only agreed to pay the balance of the purchase price, which was $425, and the sum of $85 to his son. Under the circumstances there was a considerable inadequacy of price, and the court correctly allowed the deed to stand as security only for the $425 and ordered the lot sold in payment of the creditors of W. 0. Bobbins upon their reimbursing B. Bobbins for the amount advanced by him.

The plaintiffs, who are the creditors of W. 0. Bobbins, deposited $425 in the registry of the court upon the refusal of B. Bobbins to accept that amount when it was tendered to him.

It follows that the decree must be affirmed.


source: Caselaw Access Project

author: McCulloch, C. J. McCulloch, C. J.

license: Public Domain

text:
    Henslee v. Mobley.
    Opinion delivered April 11, 1921.
    1. CONTRACTS — DEFECTIVE HIGHWAY WORK — EVIDENCE.—In a suit by a subcontractor for the amount due him from the original contractor for highway improvement work, evidence held not to sustain the chancellor’s finding that the subcontractor’s work did not substantially comply with the contract.
    2. Contracts — forfeiture of subcontract. — A contractor for improvement of a highway can not forfeit a subcontractor’s contract if his work substantially conforms to the contract, though minor defects had to be corrected.
    3. Contracts — recovery of extra costs from subcontractor.— Where a contractor committed the first breach of the contract with his subcontractor by wrongfully withholding payments due on account of the subcontractor’s refusal to correct defects in the work for which the subcontractor was not responsible, he can not recover from the subcontractor, after the latter’s refusal to continue the work, the cost of completing it in excess of the contract price.
    4. CONTRACTS — deduction OP EXPENSE OP COMPLETING WORK. — Where a subcontractor was bound to correct certain minor defects in his work, he was chargeable with the actual cost of making such repairs, but it was' error to allow an amount therefor largely in excess of the cost thereof.
    5. Appeal and error — refusal to sustain garnishment prejudicial. — The erroneous refusal of the court to sustain plaintiff’s garnishment of funds due to defendant contractor from a highway improvement district was prejudicial where it did not appear from the record whether the amount so paid into court was sufficient to pay all the claims, since, unless the plaintiff obtained priority in that manner, he might not recover the full amount of his debt.
    6. Highways — garnishment op funds of district. — A subcontractor is entitled to garnish the funds due the principal contractor from a highway improvement district where it appears that the work has been completed and that the district has no claim against the contractor.
    7. Costs — right to recover. — A subcontractor who recovered from the principal contractor a substantial part of the amount claimed to be due should not be required to pay the costs of the suit, though the contractor was allowed deductions for correcting certain minor defects in the subcontractor’s work.
    8. Contracts — burden op proving additional expense. — In an action by a subcontractor for the amount due under his contract, the burden is on the principal contractor to establish his right to deduct the extra cost of completing the work to conform to the contract, and he can not recover an additional amount as increased expense of furnishing rock to complete the work where the record fails to show the amount thereof.
    9. .Garnishment — when equitable garnishment sustained. — A stipulation that a certain highway contractor had not sufficient funds or property with which to discharge his indebtedness to another creditor established his insolvency, essential to sustain an equitable garnishment of funds due the contractor from the district.
    Appeal from Woodruff Chancery Court, Northern District; A. L. Hutchins, Chancellor;
    reversed.

      Caldwell & Triplett, for appellant.
    1. ■ The court erred in holding (1) that retained percentages of a contractor in the hands of a road district are subject to gamisbment. Road districts' are not subject to garnishment. 90 Ark. 236; 31 Id. 387; 56 Id. 451.
    2. Appellant should have had priority in the funds of the district for the reason that the facts in this case are the facts in the Plummer case. 90 Ark. 236.
    3. Appellant did not breach the contract. Mobley had no right to refuse to pay Henslee’s estimates. 152 Ill. 59; 30 L. R. A. and note; 88 Ark. 422, 491; 38 Id. 174; 78 Id. 336, 341; 64 Id. 228.
    A few defects in the work did not justify the withholding of payments, where there is a percentage retained until final completion of the work. The contractor, notwithstanding such defects, recovers the contract price, less the cost of correcting the defects. 105 Ark. 356.
    4. The evidence shows a substantial compliance with the contract and performance by appellant, and Mobley’s demands were unwarranted.
    5. The costs should not have been adjudged against appellant, and it was error to do so, as this suit was thrust upon him in spite of his willingness at all times to comply with his contract, as shown by the engineers and by his continuing at work after Mobley’s breach, until forced off the work. Appellant is entitled to payment for $7,663.36 and interest and his costs.

      Carmichael & Brooks, for appellee.
   McCulloch, C. J.

Cotton Plant Road Improvement District No. 1 of Woodruff County was organized for the purpose of improving a public road running west from the corporate limits of the town of Cotton Plant to the Prairie County line. The road was to be drained and graded and covered with a crushed rock base and then topped or surfaced with asphaltum in accordance with the plans and specifications prepared by the engineer of the district and approved by .the State Highway. Commission. ‘ ..........

Appellee, R. Mobley, entered into a contract with the improvement district in August, 1917, to construct the improvement on stipulated terms and prices, and in September, 1917, appellee entered into a subcontract with appellant for the latter to do the work of clearing and grubbing preparatory to the construction of the road, the removal of fences and other obstructions, the grading of the roadbed and hauling, spreading, filling and rolling of the crushed rock used as a base, thus preparing the road for the asphalt top. Appellant was also to haul and place the material for culverts. In other words, appellant contracted to do all the work of constructing the improvement in accordance with the plans and specifications except the work of laying the asphaltum top, which was to be done by appellee himself. The contract between appellant and appellee specified'the terms and prices, and that it was to be done in accordance with the contract of appellee with the improvement .district and under the directions and supervision of the engineer. The contract provided for monthly estimates of the work to be made by the supervising engineer, and payments to be made thereon, retaining fifteen per centum until the completion of the contract, in accordance with a similar provision in appellee’s contract with the improvement district. Appellant proceeded with the work shortly after the execution of the contract and pursued it until the following August when a controversy arose between the parties as to alleged defects in the work done by appellant. The work began at the corporate line of the town of Cotton Plant and proceeded westward by stations numbered from zero upward^ At the time appellant quit work he had completed his work on the road up to and including station 433 and the asphalt had been placed on the road up to and including station 111. The remainder of the work was thereafter completed by ap-pellee. Payments were made to appellant on the estimates, exclusive of the retained percentage, up to the estimate' made on August 6, 1918, for the July work which appellee refused to pay to appellant on the ground that Ms work was defective and not np to the standard specified in the contract. Appellee refused to pay the amount called for in this estimate unless appellant would go hack over the work and remedy the alleged defects. Appellant contended that he had done the work in accordance with the specifications, with the exception of certain minor matters which will he referred to later, and he refused to go back over the work for the purpose of bringing it up to the standard of the contract. His contention was then and is now that the defects in the roadbed were caused by delay of appellee himself in failing to follow up the work and put on the asphalt before the roadbed was worn away by traffic and bad weather. At this point of the controversy appellant did not quit work, but instituted the present action in the circuit court of Woodruff County against appellee to recover the amount due on the estimate for the July work and also for the retained percentage on the work for the months prior thereto. Appellant continued to work until some time in November, 1918, when, on account of lack of funds and the continued refusal of appellee to make payments until appellant should, pursuant to demand, go back over the work and remedy the alleged defects, he quit the job altogether, and the suit also embraced the claim of appellant for work done under the contract subsequent to July, 1918, as well as the amount alleged to be due prior to that time.

It was alleged in the complaint that appellee broke the contract by refusing, without justification, to make payments in accordance with the terms thereof. Appel-lee answered, denying that he had broken the contract, but alleged, on the contrary, that appellant committed the first breach by failing to do his work in accordance with the terms of the contract and in refusing on demand to go back over the work and remedy the defects. Appellee alleged that the defects were caused by the failure on the part of appellant to grade the road up to the height specified in the plans and by failing to lay sufficient rock for the base and to properly roll the same and by failure to cut the ditches as specified. He also alleged that it was the duty of appellant, under the contract, to go back over the work and grade up to the shoulders of the embankment. Appellee presented a counterclaim against appellant for the cost of curing the defects and also for the extra cost of completing the road after appellant quit work. Appellant alleged in his complaint that appellee was insolvent, and at the commencement of the action sued out a writ of garnishment and caused the same to be served on the improvement district.

James & Echols, a firm of merchants at Cotton Plant, filed an intervention in the cause against appellant asking for judgment against the latter in the sum of $1,-175.90 with interest, and interventions were also filed by the Standard Oil Company of Louisiana and the Southern Trust Company of Little Eock, asserting claims against appellee Mobley, and the last-named intervener set forth an assignment to it by appellee of the funds due by the improvement district.

The cause was transferred to the chancery court on motion of appellee, and without objection from any of the other parties. The cause proceeded to final decree in which the claim of appellant against appellee was adjudged in the sum of $7,983.92, 'but the court found that appellant had broken the contract, and that appellee was entitled to a set-off against said amount in the sum of $4,-931.62, leaving a balance due by appellee to appellant of the sum of $3,052.30, for which a personal decree was rendered in favor of appellant against appellee. The court also decreed in favor of James & Echols against appellant for the recovery of its account of $1,175.90, and also rendered decrees in favor of the other inter-veners against appellee. The court also directed the improvement district, as garnishee, to pay into court the sum due by the district to appellee under the contract, and decreed that appellant and said interveners share pro rata in accordance with the amount of their respective claims, in the distribution of said funds.

The court in its recital of the findings in the face of the decree listed the following items as constituting the credits to which appellee was entitled as a counterclaim against appellant’s debt, as follows:

For additional stone to bring up base up to even grade.$1,042.92

For completing grading and open ditches. 3,242.90

For excavation (John Rollers)... 407.92

For clearing and grubbing. 137.14

For fence moving. 89.94

For culverts. 10.80

Appellant Henslee is the only party who is prosecuting an appeal, and the correctness of the court’s finding as to the amount of his claim against appellee is not questioned. The only controversy here with respect to the status of the account between the parties arises upon the counterclaim of appellee, and this involves primarily a determination as to which of the parties committed the first breach of the contract. Appellant quit work before completing the road in accordance with the terms of his contract, and he seeks to justify himself in this action by showing that appellee broke the contract by refusing to make payments in accordance with the terms thereof. On the other hand, appellee contends that appellant broke the contract by refusing without just cause to comply with its terms. After careful consideration of the testimony in the voluminous record before us, we have reached the conclusion that the chancellor erred in his finding that appellant committed the first breach of the contract.

There is a conflict in the testimony as to whether at the time appellee refused to pay appellant for the July estimate the work had been imperfectly done by appellant, or, in other words, that he had not performed the work in accordance with the contract up to that time. Appellant conceded at the time the controversy arose and concedes now that there were minor defects in his work which he was willing to rectify so as to bring the work up to the standard of perfection specified in the contract, but he was unwilling to accede to the unwarranted demands of appellee that be go back over the work and repair damage to the roadbed which had resulted from the wear of traffic and weather during the period of delay caused by appellee himself in the failure to promptly put on the asphalt top.

The principal point in the controversy between the parties at that time was as to who should dress the shoulders of the roadbed on that part of the work which appellant had already done and for which estimates had been made. The contention of appellant was that he had graded the road up to the proper standard, and that it had worn down by traffic and weather, and that under the contract he was not compelled to repair that damage; The testimony tends to show that most of the damage to the roadbed was done by the exposure of the roadbed to traffic and to bad weather without the asphalt top being on it. According to the preponderance of the testimony, the work done by appellant under the supervision of the engineer was substantially in compliance with the terms of the contract. The testimony of the engineers who inspected the’ work shows that and they only claimed that there were minor defects, in the work — that it was done substantially in accordance with the contract. The testimony also shows that the work was passed by the engineers and estimates handed in for the purpose of paying the subcontractor, without any objection made to the work. This does not mean that the work was, so far as concerns the rights of the improvement district, finally accepted so as to preclude the district from raising the question of the sufficiency of the work, but it was a strong circumstance to show in this controversy that appellant had substantially performed the work, otherwise he would not have been entitled to a preliminary estimate for the purpose of collecting for the work he had done. The testimony shows that it was not customary for the engineers to estimate the work unless it was done in substantial compliance with the terms of the contract. There is testimony also by disinterested engineers and contractors, who have had considerable experience in work of this sort, that it was not customary, in the absence of a specific contract on the subject, to require a subcontractor to go back over his work, which had been estimated and received, for the purpose of dressing up the shoulders of the graded road. The testimony shows that the repairing of such defects falls on the principal contractor for the reason that the subcontractor, when he completes his part of the work in accordance with the contract, is entitled to compensation at the contract price. If damage to the work occurs from any source before the work is finally accepted by the owner, the loss falls on the principal contractor. It is not claimed that there is any clause in the contract between’ appellant and appellee which specifically required him to go back over the work for the purpose of repairing'damage done after he had completed his work. There was also a controversy about the ditching, and appellant concedes that he had not completed the ditching, but claims that part of it was incomplete because of the fact that appellee had left rock along the space where the ditches were to be dug.

Appellee had the right to insist on appellant correcting the defects in his work, but, inasmuch as the work was substantially done in accordance with the contract, he could not rightfully demand anything more, and, since his demands upon appellant were unwarranted, he can not claim a forfeiture by reason of appellant’s failure to correct the minor defects which appear to have existed in the work. Appellee is, of course, entitled to credit for the cost of correcting the defects in appellant’s work, and since appellee was entitled to have the work done at the prices specified in his contract with appellant, he is now entitled to credit for the advance costs which he was required to pay over and above the contract price.

The items in appellee’s counterclaim must be divided into two classes, one for the cost of performing additional work left undone by appellant prior to the time he quit, and the other for the costs of the completion of the road in accordance with appellant’s contract. The latter class of items must he excluded, for, since we have reached the conclusion that appellant did not commit the first breach of the contract, he is not liable for the additional cost of completing the road. The items of cost for the completion of appellant’s work on that part of the road on which appellee put on the asphalt top — i. e., the stations from 0 to 111, inclusive — were deducted from appellant’s prior estimates and must therefore be excluded from the present consideration. The first item in the list allowed by the court is the sum of $1,042.92 for1 additional stone used in bringing up the base of the road to the standard of the contract. We are of the opinion that the testimony is sufficient to show that this was necessary in order to complete the rock base, but the court allowed an excessive amount. The price of the work was fixed according to the quantity of rock used and the distance it had to be hauled. There had been a decided advance in the cost of this kind of work between the date of appellant’s contract and the date this work was done by appellee in order to remedy the defects. But the advance was not, according to the testimony of disinterested witnesses, sufficient to justify the prices which ap-pellee charged and which the court allowed. For instance, under appellant’s contract he was allowed $1.40 per cubic yard on a haul of from two to three miles, whereas appellee charged $3.60 per cubic yeard. The testimony of disinterested witnesses shows that at that time $1.85 was a fair price for that work. The same proportion exists throughout the whole of appellee’s account for the cost of doing the additional work. Computing this work according to the prices fixed in the testimony of disinterested witnesses, the amount which appellee should be allowed is $201.80, and the allowance will be reduced to that amount.

The next item allowed by the chancellor is the sum of $3,242.90 for “completing grading and opening ditches.” The court must have included in this item the additional work of completing the road after appellant quit, for there is no testimony to justify the conclusion that anything like that amount of work was done on that part of the road which appellant had passed as complete. All of this work was done on a yardage basis, and, of course, appellee was entitled to credit for all the additional work of completing that part of the road which appellant had passed at the difference between what appellant’s contract price was and the advance cost of doing it at that time. A statement of the account made by Mr. Maskburn, the engineer of the road district, shows that there were 41,336 cubic yards of earth up to and including section 433, and that appellant had handled 39,397 cubic yards before he quit. Appellee could only have handled the difference between these two amounts, which would be 1,936 cubic yards. Appellant was to be paid, under the contract, twenty-four cents per cubic yard and it cost appellee, according to the testimony, forty cents per cubic ward to have the work done,' a difference of sixteen cents per cubic yard, at which price appellee is entitled to compensation. This would amount to $309.76, for which appellee is entitled to credit. The item of $10.80 for culverts is not contested by appellant. All the other items are for work done to complete that part of the road which appellant had not worked on, and for the reasons already stated appellee is not entitled to make any claims against appellant for that. The aggregate of the items for which we find appellee is entitled to credit is $522.52, which leaves a balance due appellant of $7,461.40, with interest from September 11, 1918, as fixed by the court.

It is also contended that the court erred in refusing to sustain appellant’s garnishment against the road district, and we are of the opinion that this contention should be upheld. 'Counsel for appellee answer that this is not important for the reason that the court ordered the district to pay the balance due to the contractor into court and then ordered it distributed to the different claimants in this action. But the record does not show how much was paid in under this order, as the court made no specific finding as to the amount due to the. contractor; it can not be determined whether there is a-sufficient amount to pay appellant the full amount of his debt if he is to share the proceeds pro rata with the other creditors. It therefore becomes material to adjudicate the question of the right of appellant to an equitable garnishment of the funds, for, unless he obtains priority in that manner, the full amount of his debt may not be recovered. It is conceded that appellee is insolvent, and that appellant has no other means of securing payment . except by subjecting to its payment the funds due from the improvement district.

The application of the principles announced by this court in the case of Plummer v. School District, 90 Ark. 236, establishes appellant’s right to priority through the remedy of an equitable garnishment. He is, according to the doctrine of that case, entitled to priority in payment, because the commencement of his action was prior in point of time to that of the other creditors. The point is made that the amount due from the improvement district is for the retained percentage. Conceding that this is not subject to garnishment until the liability of the district for its payment matures by the completion of the work, it appears in this case that before the final decree the work had been completed and there was no further reason for withholding the retained percentage of the contract price. In fact, the court ordered the funds turned into court and distributed among.the creditors. Appellee is in no attitude to raise the question that the rights of the improvement district would be invaded by compelling it to answer a garnishment for the retained percentage.

It is also contended that the court erred in decreeing the payment of a portion of the costs against appellant, who recovered below a substantial sum. If the decree of the court had been correct in adjudicating the rights of the parties in other respects, then it would have been just and equitable to impose a portion, if not all, of the costs on appellant. The court found that appellant had broken the contract and was liable for the aggregate amount of the items set forth in ap-pellee’s cross-complaint. If this conclusion were found to he correct, then we would sustain the chancellor in his decree for costs, hut, since we have reached the conclusion that appellant did not break the contract and is entitled to the recovery of the contract price of his work after deducting the cost of correcting the minor defects, then it follows that he should not he required to pay any of the costs of the litigation. It comes down to simply a question of appellant recovering less than he sued for, and that affords no reason why he should not he entitled to recover his costs expended in the litigation.

The decree is therefore reversed and the cause remanded with directions to enter a decree in accordance with this opinion, awarding appellant recovery of the amount herein specified against appellee and giving his claim priority in the distribution of the funds paid over by the improvement district.

OPINION ON REHEARING.

McCulloch, C. J.

It is contended now that, since we allowed appellee a credit of $201.80 for the additional cost of hauling and spreading rock for the base, we ought also to have allowed him credit for the cost of the rock, for the reason, as it is claimed, that it was necessary to furnish additional rock to supply the shortage of earth in bringing up the grade to the standard provided in the contract. We failed on the original consideration of the case, and fail now, to find any testimony to warrant an allowance for the cost of furnishing additional rock. The conflict in the testimony was to advanced cost of hauling and spreading the rock. The burden was on appellee to prove the additional cost of supplying omissions in the work of appellant, and he showed that, on account of advanced cost of labor, he had to pay more than the contract price with appellant, and he claimed and was allowed for this difference. The testimony of expert engineers introduced as witnesses by appellant was directed to that point. That was the point of controversy between counsel in presenting the case on the original hearing. It was not claimed, as we understood the respective contention of counsel, that additional rook had been furnished, but that appellant had not used enough rock in the base and had not properly spread it.

We see no reason now for changing the conclusion on the original hearing.

Again, it is contended that the garnishment should not have been sustained for the reason that the insolvency of appellee was not proved. Appellant’s counsel asserted in their brief that appellee’s insolvency was conceded, and counsel for appellee did not dispute the assertion. We now find in the record an express admission of facts which established appellee’s insolvency. There is a stipulation to the effect that appellee had not sufficient funds or property with which to discharge his indebtedness to a certain creditor to whom he had assigned his claim under the contract against the road district. This made out a case of insolvency without other proof of that fact. This was an equitable garnishment, and proof of insolvency was essential to a resort to that remedy. This action was originally instituted at law, and the garnishment could not have been sustained, but the cause was transferred to the chancery court, and the remedy of garnishment thus became available. Hayes-Thomas Grain Co. v. Wilcox Cons. Co., 144 Ark. 621..

We have held that in a suit in equity' against a public agency, such as a- school district or an improvement district, there may be a garnishment of funds of the district, and that in a suit against the creditor of an improvement district the district is subject to equitable garnishment ; but in either case insolvency is the basis of the equitable remedy. Plummer v. School District, 90 Ark. 236; Sallee v. Bank of Corning, 134 Ark. 109; Bayou Meto Drainage District v. Chapline, 143 Ark. 446.

Our attention is called to the fact that, in reversing and remanding the cause, we failed to state, in express words, at least, that the claim of James & Echols against appellant should he allowed out of the funds in court, as awarded by the court. There was no controversy between appellant and James & Echols on that point, and our directions to the chancery court implied that that part of the original decree should be carried out. It is so directed now.

The rehearing is therefore denied.


author: McCulloch, C. J.

text:
    Interstate Business Men's Accident Association v. Sanderson.
    Opinion delivered April 11, 1921.
    1. Appeal and ERROR — harmless error. — The erroneous admission in evidence of a check, objected to as being in the nature of a compromise, was harmless where it was apparent that the cheek was intended to cover an amount admitted to be due, and that the jury could not have accepted it as an admission of liability for a greater amount.
    2. Insurance — recovery on policy — attorney’s fee. — Insured, suing on a health policy, was not entitled to the statutory penalty and attorney’s fee on recovering an amount less than sued for.
    Appeal from Miller Circuit Court; George R. Ilay-nie, Judge;
    reversed in part.

      Robert M. Sames, of DesMoines, Iowa, and Arnold & Arnold, for appellant.
    1. The verdict of the jury is contrary to the law and the evidence. The law of this case is settled by the former appeal. 222 S. W. 51. The evidence is not substantially the same and is not sufficient to sustain the verdict. Appellee Sanderson was not compelled to remain continuously and strictly within the house within the meaning of the policy from July 5, 1918, to January 1, 1919, and admits liability for $175. This case is not inconsistent with the law in 99 Me. 390; 59 Atl. 535.
    A stipulation in a policy that there can be no recovery except during continuous confinement to the house is reasonable and valid where the rate of premium is based on the unlikelihood of such confinement. 110 N. E. Rep. 972. The policy calls for no indemnity for partial disability; there must be a total disability.
    2. The court erred in giving instruction No. 3 for appellee and in refusing No.* 4 for appellant and in admitting testimony as to the compromise. 85 Ark. 337.
    3. It -was error to render judgment for the penalty and attorney’s fees. 92 Ark. 378; 93 Id. 84.' Also in the amount of the attorney’s fees. Acts 1905, c 115; 88 Ark. 550.

      M. E. Sanderson, for appellee.
    1. The question of law was settled on the former appeal. There is no error in the instructions, and the verdict is supported by the evidence.
    2. The penalty and attorney’s fees properly allowed. 92 Ark. 378 is not in point. 17 A. & E., p. 809.
   McCulloch, C. J.

The facts in this case are fully recited in the opinion of this court on a former appeal (Interstate Business Men’s Acc. Assn. v. Sanderson, 144 Ark. 271, 222 S. W. 51). The evidence adduced at the two trials is not materially different. It is an action to recover on an insurance policy “against loss of time by disease not due to accidental injury. ’ ’ There are two clauses in the policy, one provides insurance in case of disability at $50 per week for not exceeding twenty-nine weeks “in the event that the disease shall compel the insured to remain continuously and strictly within the house for a period of exceeding two full weeks and be under the constant treatment of a regular physician; ’ ’ the other clause provides insurance of $15 for the first week and $20 per week for eight succeeding weeks “in the event the disease shall compel the insured to refrain from performing every act of business and be under the constant treatment of a regular physician.” Appellee sued for the maximum amount, allowed- under the second clause of the policy ($175) and for the sum of $1,250, being for twenty-five weeks under the first clause of the policy. There was a recovery for the full amount.

The principal contention on the present appeal is that the evidence is not sufficient to warrant the recovery under the first clause, in that it does not show that appellant was confined within the house as specified in the policy. We decided on the former appeal that the evidence was legally sufficient to warrant a submission of the issue to the jury, and, as 'before stated, the evidence is not materially different as adduced in the two separate trials. Appellant admitted liability for the maximum amount under the second clause of the policy, but the admission was based upon appellee’s illness after he went to Texas. This is the same period which appellee claims confinement within the house, and for which the jury allowed the full amount sued for under the confinement clause of the policy.

On the last trial of the cause the jury also allowed the maximum amount recoverable under the second or nonconfinement clause, and it is now insisted that the testimony is not legally sufficient to support the finding that appellee was compelled by illness “to refrain from performing every act of business” prior to the time he went to Texas. Of course, appellee could not recover under the two separate clauses for the same period of. time, as it is obvious from the language of the policy that liability under the two clauses should not cover the same period. After a careful consideration, we have reached the conclusion that appellant is correct in its contention that the evidence is not sufficient to show that appellee ’s disease compelled him to refrain from performing every act of business. The evidence shows that he was seriously ill during the period mentioned before he went to Texas, but that he went to his place of business nearly every day and remained there nearly the whole of the business hours and performed the usual duties of his occupation. It is true that this was done under adverse circumstances, as appellee was seriously ill at the time. But the evidence establishes the fact beyond question that appellee’s disability at that time was partial and not total, and the policy does not insure against partial disability.

Error of the court is assigned in permitting appel-lee to testify concerning the tender to him by appellant of a check drawn for the sum' of $200 in payment of the. claim. The ground of objection is that the check was sent in the nature of a compromise, and for that reason, under well settled rules of evidence, the testimony was incompetent. We are of the opinion that the testimony was not competent, but we think it was not prejudicial under the peculiar circumstances of this trial. Appellant in the pleadings admitted liability in the sum of $175 under the second clause of the policy for appellee’s illness during the period-of his stay in Texas. After the proof was sent in, appellant mailed a check to appellee for $200, accompanied by a letter which failed to say anything about a compromise. Other writing introduced in evidence shows that the check was made out for $200 through mistake, as it was intended only to cover the maximum under that clause of the policy, but the mistake of making the check for $200 instead of $175 arose by reason of the fact that appellee held another policy under which the maximum was two hundred dollars. It is clear, therefore, from an inspection of all the papers introduced that appellant did not offer the $200 as a payment in part of an amount in excess of the maximum amount allowable under the nonconfinment clause, and that the jury could not have accepted this as an admission of liability for a greater amount than the maximum under the nonconfinement clause. The error of the court in allowing this testimony was therefore not prejudicial.

The objection now urged against instruction number three given by the court at the instance of appellee should have been specifically pointed out at the time the instruction was offered, but it appears that there was only a general, objection, which is insufficient to raise the question now presented.

It follows that the judgment must be affirmed as to the -amount of $1,250 recovered under the first clause of the policy, but tbe judgment for tbe additional amount of $175 under tbe second clause must be reversed, and, as tbe testimony is fully developed, it is necessary to remand for a new trial. ' Tbis reduction of the judgment in favor of tbe appellee is less than be sued for, and be is therefore not entitled to recover tbe penalty and attorney’s fee, and tbe judgment for penalty and attorney’s fee is also reversed.


author: Wood, J.

text:
    Robnett v. Cotton States Life Insurance Company.
    Opinion delivered April 11, 1921.
    1. INSURANCE — NONPAYMENT OF PREMIUMS — FORFEITURE.—A life insurance policy based on the consideration of the payment of the premiums when they fall due is forfeitable for nonpayment of such premiums, though there was no provision in the policy declaring a forfeiture for that cause.
    2. Insurance — “blue notes” — validity.—“Blue notes,” or notes accepted by a life insurance company for the amount of premiums due on the policy, which provide for the continuance of the policy in force until the due date of the notes, are valid.
    3. Insurance — nonpayment of premium note. — Where a “blue note,” accepted by an insurance company as the balance of' a life insurance premium, provided that it was so accepted on the express agreement that if it was not paid on the due date the company could retain the cash already paid as compensation for having continued the insurance, such provision was inconsistent with the contention that the cash payment should be applied to extend the life of the policy beyond the due date of the note.
    4. Insurance — grace for payment of premium. — A provision in a life policy giving thirty days’ grace for the payment of any premium does not extend a similar period of grace for the payment of a premium note, accepted by the company on condition that the policy should be forfeited if the note was not paid when due.
    5. Insurance — forfeiture of policy — waiver.—The fact that an insurance company waived its right to forfeit the policy for nonpayment of the first “blue note” given by the insured for an annual premium when it fell due by accepting a second note did not constitute a waiver of the right to forfeit the policy for nonpayment of the second note when it fell due nor estop it from asserting such forfeiture.

      Appeal from Arkansas Circuit Court, Northern District; W. B. Sorrells, Judge;
    affirmed.

      Chapline & Morrison, for appellant.
    The court erred in directing a verdict for appellee.
    The terms of an insurance contract are construed strictly against the insurer, since the policies are issued on printed forms prepared by the insurer, and the insured has no voice in the preparation. 217 S. W. 462. An insurance company is not required to declare a forfeiture on the failure of the insured to pay a premium note when due, but the .rule is different where the policy merely provides that on insured’s failure to pay the premium within a specified time after it becomes payable the company shall be. at liberty to cancel it without further notice. In such cases the policy does not become void merely by nonpayment of the premium, but remains in force until affirmative action is taken by the company to cancel it. 112 Ark. 171; 3 Oooley’s Briefs on Ins., p. 2278. The general rule has no application here, for the policy contains no mandatory provision, and no affirmative action was taken by the company until after the tender of the balance due on the premium.
    Forfeitures are odious in the eyes of the law, and a default in payment of a life premium does not forfeit a policy where there is no stipulation to that effect. 159 Ill. 476; 6 Jones, L., 51 N. C. 558; 7 Ohio Dec. 118. There is no express stipulation for forfeiture in the policy because of failure to pay the annual premium on the date fixed, nor any provision of like import from which an inference might be drawn that a failure to pay the premium ad diem would automatically cancel or render the policy void. 84 Neb. 682; 19 A. & Eng. Ann. Cases 59-64. See 93 U. S. 24; 21 U. S. (1 ed.) 789. The policy here did not lapse but continued in force until affirmative action was taken to declare -a forfeiture, and none was ever taken before the tender, and the company is now estopped.

      The automatic cancellation in the note is in direct conflict with the terms of the policy.. Payment of an annual premium is not a condition precedent but subsequent only. 104 U. S. 303; 144 Id. 430-51.
    Part payment (as here), accepted by the company after maturity, waives a forfeiture. 25 Cyc. 870, note b.; 41 S. W. 680.
    Where there is a conflict between the policy and the note, the policy governs. 4 Mo. 386; 36 Okla. 733; 44 L. R. A. (N. S.) 376.
    After a company has once waived its right to declare a forfeiture, can not subsequently avail the effects of such waiver. 53 Ark. 494; 19 Cyc. 872.
    The evidence shows payment of the first and second annual premiums. A note marked paid is conclusive. 104 Ark. 367. The tender was made within the customary period'made by agreement and the company is estopped from declaring the policy lapsed. 104 Ark. 288; 62 Ga. 250.
    Appellant is entitled to judgment for the amount sued for and interest, penalty and costs and attorney’s fees. 133 Ark. 223.

      Holmes & Canale and C. E. Pettit, for appellee.
    Appellant complains (1) because the court enforced the provisions of the “blue note” and (2) because the trial court did not hold that the company waived the lapse of the policy. Our own court, and practically all others, have decided adversely to the contentions of appellant. The “blue note” has been often upheld. 104 Ark. 288; 220 S. W. 803; 89 S. E. 445; 86 N. E. 928; 177 Fed. 842; 228 U. S. 364. See, also, 74 Ark. 508; 75 Id. 25; 85 Id. 337.
   Wood, J.

This is an action brought by the appellant against the appellee to recover the sum of $5,000 on a policy of life insurance issued by the appellee to the husband of appellant, and in which the appellant was the beneficiary. The appellant set up the policy, alleged the death, of the insured and a compliance with all the terms of the policy necessary to create liability against the ap-pellee.

The appellee answered and denied that the insured had complied with the terms of the policy--by paying the second annual permium, and set up that the policy was forfeited because of that fact. The undisputed testimony showed the issuance of the policy by the appellee to the husband of appellant, and that the appellant was the beneficiary in the policy; that the insured was dead, and that the appellant was entitled to recover on the policy, provided the provisions of the insurance contract as to the payment of premiums had been complied, with. The testimony on that issue is substantially as follows.: The annual premium on the policy was $154. The first premium was paid. The second was due October 19, 1919. At that time the insured was unable to pay the second premium, and he arranged with the appellee to extend the time for the payment of this premium by paying the sum of $14 in cash and executing a note for the balance of $140, dated October 20, 1919, and payable on or before January 1,1920. When the note became due, the insured was still unable to pay. After several letters had passed between the insured and .the appellee with reference to the payment of the note evidencing'the. balance due on the second premium, the insured paid to the appellee tne further-sum of $100 in .cash; and. executed, the foiloydng note;.

“$42.36. ... ... January 30,1920.

“-On..or before. March. 1,.. 1920,_ after date without demand or notice I promise-to' pay to. the. order, .of the Cotton -States .Life Insurance Company forty-two and 36/100 dollars at its home office in Tupelo, Miss., value received, with interest at the rate of six-per cent, per annum. ' This note is accepted by the said' company at the request of the maker as balance on premium • on-the following express agreement: That, although no part of the premium due on the 19th day of October, 1919, on the policy No. 3103, issued-by said company on the life of Allie E. Robnett, tas been paid, tbe insurance thereunder shall be continued in full force until midnight of the due date of said note; that, if this note is paid on .or before the date it becomes due, such payment, together with said cash, will then be accepted by said company as payment of said premium, and all rights under said policy shall thereupon be the same as if said premium had been paid when due; that, if this note is not paid on or before the day it becomes due, it shall thereupon automatically cease to be a claim against the maker, .and said company shall retain said cash as part compensation for the rights and privileges hereby granted, and all rights under said policy shall be the same as if said cash had not been paid nor this agreement made; that said company has duly given every notice required by its rules or by the laws of any State in respect to said premium, and in further compensation for the rights and privileges hereby granted the maker hereof has agreed to waive, and does hereby waive, every other notice in respect to said premium or this note, it being well understood by said maker that said company would not have accepted this agreement if any notice of any kind were required as a condition to the full enforcement of all of its terms. ’ ’

After receiving the above nóte the appellee mailed the insured the former note, which was marked paid. On the 23d day of February, 1920, the appellee wrote to the insured as follows:

“Tour premium extension note for $42,36 (which includes accrued interest) given on account of policy No. 3103 in this company will be due March 1, 1920, and payable at this office. Please remit promptly, as this obligation provides that the policy will lapse unless payment is made by the date due. ’ ’

This letter was received at the postoffice at Almyra, Arkansas, in due course. The insured at that time, however, was not at his hime in Almyra, and the appellant did not personally receive the notice until March 3,1920.

On March 4, 1920, the appellee received from appellant through one Paul W. Daniels of Stuttgart, Arkansas, a check for $42.64, dated March 3, 1920, drawn on the Exchange Bank of Stuttgart, Arkansas, signed by H. G-. Miens, which was tendered in payment of the blue note above mentioned, and on March 4, 1920, the appellee returned the check in a letter to Daniels which was received by him on March 5, 1920. In the letter to Daniels the appellee stated that it refused to accept the check for the reason that the policy ceased to be in force at midnight on March 1, 1920, at which time also the note of the insured automatically according to its terms ceased to be a claim against him — that the policy had lapsed. In this letter the appellee enclosed a blank for reinstatement, and stated that it would be pleased to reinstate the policy upon proper settlement of the premium and satisfactory evidence of the good health of the insured. On March 6, 1920, the insured died, and on March 8, 1920, the ap-pellee first heard of his death.

Among others, the policy contained the following provision:

“If any premium shall not be paid on or before the date when due, and if there be no indebtedness to the company, the insurance will automatically continue from said-due date as term insurance during the term, including the period of grace; specified in column three (3) of the accompanying table.

The accompanying table showed that, upon the nonpayment of the premium when due at the end of one year, the insurance was automatically continued for one month. There was a grace of one month for the payment of all premiums except the first.. The policy was nonforfeitable from the date of issue except for nonpayment of premiums. The payment of premiums in advance on the 19th day of October of every year continued the policy in force during the life of the insured for twenty years, after which the policy was continued during the life of the insured without further payment. The plan of premium payments could be changed so that premiums might be paid in quarterly or semi-annual installments. or changed from such form to annual, on any anniversary of the policy by application in writing to tbe borne. office of tbe company. In case of default in tbe payment of any premium or interest tbe company would reinstate tbe policy at any time * * * upon written application by tbe insured to tbe company at its borne office witli evidence of insurability satisfactory to tbe company and tbe payment of all premiums that would bave been paid in tbe intervening time if no default bad been made, etc. Tbe policy bad no cash reserve or loan value until after tbe beginning of tbe third policy year.

The court instructed tbe jury over tbe objection of appellant to return a verdict in favor of the appellee, to which ruling tbe appellant duly excepted. Tbe verdict was returned as directed, and a judgment was rendered in favor of tbe appellee from which is this appeal.

"While there is no provision in tbe policy expressly declaring a forfeiture or that tbe policy .shall lapse or be null and void in case of tbe nonpayment of premiums at their due dates, yet tbe various provisions of tbe policy concerning tbe payment of premiums show clearly that such payments at the date when due were essential to tbe continuance of the contract of insurance. These payments were a consideration for tbe contract, and, unless they were made at tbe time specified therein or their payment at such time waived by tbe appellee, there was no enforceable contract of insurance beyond the term provided for in tbe policy. Tbe first premium was paid, and under tbe policy tbe insurance automatically continued for one month after tbe due date of tbe second premium, whether such premium was paid or not. Beyond this term, inasmuch as tbe policy at that time bad no cash reserve or loan value, whether or not tbe insurance was to continue and for bow long until tbe second premium was paid, was a matter purely to be determined by tbe contract between tbe parties, if they entered into a contract concerning it. This they did by tbe execution on tbe part of tbe insured, and tbe acceptance on the part of tbe company, of what is commonly known in insurance terminology as “blue notes.” Tbe validity of these blue notes, or notes of like character, providing for the extension of time of the payment of premiums and the continuance of the insurance contract during such time, have been frequently recognized and upheld by our own and other courts. Citizens’ National Life Ins. Co. v. Morris, 104 Ark. 288; N. Y. Life Ins. Co. v. Allen, 143 Ark. 143. See, also, American Life Ins. Co. v. Hornbarger, 85 Ark. 337; Fidelity Mutual Life Ins. Co. v. Bussell, 75 Ark. 25; Jefferson Mutual Life Ins. Co. v. Murray, 74 Ark. 508; Slocum v. N. Y. Life Ins. Co., 228 U. S. 364; N. Y. Life Ins. Co. v. Slocum, 177 Fed. 842; White v. N. Y. Life Ins. Co., 86 N. E. (Mass.), 928; Hudson v. Knickerbocker Life Ins. Co., 28 N. J. Eq. 167; Simons v. Jefferson Standard Life Ins. Co., 89 S. E. 445. It would unduly extend this opinion, and it is not necessary, to review here the various cases cited by learned counsel in their excellent briefs to support their respective contentions.

The blue note set forth in the statement evidences the contract between the parties for the extension of the time for' the payment of the second premium. The insured signed the blue note and was bound by its terms. The undisputed -testimony shows that the insured did not comply with its terms, and therefore the appellee is not liable unless it waived noncompliance on the part of the insured, or by its conduct has estopped itself from claiming that the policy was not in force at the time of the insured’s death. While the note recites on its face that it is accepted by the company “as balance on premium,” its further recitals show that it was so accepted upon the “express agreement” that, if the'note was paid on or before the date it became due, such payment of the note together with the cash previously paid would be accepted by the company as the payment of the premium; but, if the note was not paid on or before the due date, then the company was to retain the cash already paid as compensation for having continued the insurance, notwithstanding the failure to pay the premium, from the time the premium was due, October 19, 1919, until the due date of the note, March 1, 1920.

The contract was one which the parties had the right to make, and it is certainly unambiguous in its provisions. In White v. New York Life Ins. Co., supra, the Supreme Court of Massachusetts, in construing a note which in principle can not be distinguished from the note in controversy, said: “The note was not paid, and for that reason by virtue of the agreement it ceased to be a claim against the maker. The $31.25 in cash was treated as a consideration for the privilege which the insured had enjoyed, and the rights of both parties with reference to the policy were precisely the same as if this note had never been given and the payment in cash had never been made.” See, also, to the same effect, Simms v. Jefferson Standard Life Ins. Co., supra.

The appellant contends that the $114 cash received by the appellee should be considered as a part payment on the annual premium, but this contention is contrary to the provisions of the blue note in controversy as we construe it. Appellant further contends that, if he is mistaken as to this, then the $114 cash should at least be applied as a quarterly or semi-annual payment in order to extend the life of the policy. But this contention is likewise contrary to the provisions of the blue note as well as to the provision of the policy, which provides that .the plan of premium payments can be changed to quarterly or semi-annual payments by application of the insured in writing to. the home office of the company. This was not done. Besides, the parties have expressly provided in the blue note that the cash received should be considered, in the event of the nonpayment of the note, as part compensation or consideration for continuing the insurance and the rights and privileges of the insured under the policy during the period of extension.

Counsel also contend that the provision of the policy allowing one month’s grace for the payment of premiums would have the effect of extending- the time for the payment of the premium one month after the due date of the blue note. But this contention can not be sustained for the reason that the blue note covers the provision for grace contained in the policy and extends the time for the payment of premiums for longer than one month. See Bank of Commerce v. N. Y. Life Ins. Co., 54 S. E. 643; Missouri State Life Ins. Co. v. Fry, 130 Ark. 424.

The only remaining question then is, Did the appel-lee waive the nonpayment of the blue note when it was due, or has it by its conduct estopped itself from setting up that the note was not paid? The testimony shows that, at the request of the insured, about the time the second premium became due the appellee allowed the insured to pay the sum of $14 in cash and to execute a blue note for the balance of the second premium similar to the one above set forth, extending the time for the payment of the premium to January 1, 1920, and after this note became due the insured and the appellee had considerable correspondence concerning it, which finally resulted in the execution of the second blue note. The correspondence with reference to the first blue note and the execution of the last blue note undoubtedly show that the ap-pellee waived the payment of 'the first blue note when the same was due and extended the time of the payment of the second premium until March 1, 1920, as expressed in the last blue note upon the terms therein specified. But because the appellee waived the nonpayment of the first blue note and further extended the time of the payment of the second premium to March 1, 192Ó, as evidenced by the last blue note, is no reason for saying that the appel-lee waived the nonpayment of the last blue note at the time same was due, or that its conduct with reference to the prior blue note was such as to justify the insured in believing that the appellee would not insist upon the payment of the second blue note at the time same was due, and that its conduct was such as to justify him in failing to pay this note when it was due. On the contrary, while the appellee was not required to notify the insured of the date when this note was due, it nevertheless did write to him on February 23, stating in thé letter that the note would be due March 1,1920, and requesting him to remit promptly, as bis obligation provided that “the policy will lapse unless payment is made by the date due. ’ ’

In Citizens’ Life Ins. Co. v. Morris, supra, we quoted from Mr. Cooley, as follows: “Indulgence on one or two, or a very few, occasions is certainly insufficient to show a custom or course of dealing which will justify the insured in believing that indulgence will, as a matter of course, be granted as to subsequent premiums.” When the company extended the period of grace for the payment of the second premium as provided in the first blue note and then again extended the time for the payment of such premium as provided in the second blue note, the insured presumably was in good health; at least there was nothing in the record to the contrary. But the insured died a few days after the due date of the last blue note, and the testimony shows that he was sick three weeks before he died, so he must have been critically ill at the time the last blue note was due.

The continuance of the policy under the provisions of the first blue note on the failure to pay the second premium when due, and likewise upon the failure to pay the first blue note when it became due, the insured then being in good health, certainly would not estop the ap-pellee from refusing to continue the policy when the second blue note became due, at which time the insured was seriously ill. Thompson v. Ins. Co., 104 U. S. 2591. See, also, Thompson v. Fidelity Mutual Life Ins. Co., L. R. A. (N. S.) 1041. It follows that the ruling of the court in directing a verdict in favor of the appellee is correct, and the judgment is therefore affirmed.


author: Hart, J.

text:
    Fair Store No. 32 v. Hadley Milling Company.
    Opinion delivered April 11, 1921.
    1. Appeal and error — credibility op witness. — The credibility of a witness, whose testimony in the present case is contradicted by his testimony in a prior Suit, is for the jury, and not the court.

      2. Appeal and error — verdict.—It is only where the facts proved in evidence are contrary to some well-known law of nature or mathematics and the like that it is demonstrated beyond controversy that the verdict is based on what is untrue, and what can not be true; in such cases the Supreme Court will declare as a matter of law that the testimony is not legally sufficient to warrant the verdict.
    .3. Appeal and error — verdict.—Where the testimony in a case related to matters, situations and conditions which might or might not have existed, the evidence in regard thereto is of a substantial character, and sufficient to support a verdict.
    4. Evidence — parol evidence rule. — In a suit by a seller of flour for the buyer’s breach, where the contract was partly written and partly printed, one of its terms reciting, “Specifications one week before date of shipment,” parol evidence for defendant buyer that the contract was not to become binding unless the specifications were made by it was inadmissible as varying the written contract.
    5. New trial — newly discovered evidence — diligence.—In an action by the seller of flour for the buyer’s breach, it was not an abuse of discretion to deny the defendant a new trial for newly discovered evidence where defendant had notice of the evidence two months before the trial, and did not exercise due diligence in procuring it.
    Appeal from Lonoke Circuit Court; Geo. W. Ciarle, Judge;
    affirmed.
    STATEMENT OE EA.CTS.
    ■The Hadley Milling Company sued the. Fair Store No. 32 to recover damages in the .sum. of $148.50 for the breach of a contract for the sale of-flour by,the former .to the. latter. .
    The parties • entered into a written contract for. the sale of the flour, which,reads as follows: .
    “Contract between the Hadley Milling Company, Olathe, Kansas, and ship to Fair- Store at England, Arkansas : ,
    When, 30 days, f. o. b. ... Terms: Arrival draft, B. L. attached. ' ■
    , Through, Bank of England,.,
    «•■No. bbl's, . .. Brand. .. . SizeJPkg,. . • If rice ■ ■ ■210 , White. Róse Basis. . 48 .•■•-■- 11.30
    “Specifications one week before date of shipment.

      These goods áre sold ¿t prices, :on'terms, and time of shipment specified above, and are not subject to change or countermand without the written consent of both parties. Should either party refuse' to fulfill their part of this transaction, the- other party shall.buy or sell as the ease may he, charging the loss to the defaulting party. No verbal- conditions- or modifications -are- valid. Shipping instructions to he1 furnished ten days before shipping date. This order is subject to confirmation by the Had-ley Milling Company at their Olathe, office.
    “The Fair Store.No: 32, Buyer,
    “C. R. "Wood, Salesman.”
    The. plaintiff company received the order and confirmed it.
    The defendant refused to send in specifications to the plaintiff. Hence this lawsuit.
    The jury returned a verdict for the. plaintiff, and from the judgment rendered the defendant has appealed.

      Troy Pace, for appellant.
    1. There is a total lack of evidence to support the verdict.'
    2. Before an instrument of writing as evidencing a contract becomes binding and enforceable, it must have been executed and delivered as á completed contract. Parol evidence is admissible to show that a writing signed and delivered for the purchase of goods was not in fact signed and delivered as a completed contract, but was conditional only. Our court so holds, ¿nd it is sustained by the great weight of authority. 100 Ark. 360; 225 S. W. 326; 140 Id. 132; 48 S. E. 768. gee, also, 82 N. W. 258; 104 Mo. 549; 104 N. W. 1069; 50' S. E. 262; 75 Pac. 643; 71 Am: St. 235. The writing was . ambiguous, and parol testimony was admissible.

      Morris., Morris & Williams, for appellee.
    1. The evidence fully sustains the verdict;
    2.- The general rule as to the measure of damages was properly'applied here. 92. Ark. 116. A new trial was properly refused, as the verdict is not against the clear preponderance of the evidence. 6 Ark. 86; 94 Id. 567.
    3. Where the contract provides for the buyer to furnish shipping instructions, his failure to do so constitutes a breach of contract and excuses the seller from making shipment. 207 S. W. 72; 1 N. Y. Supp. 351; 50 N. H. 307; 126 Ill. 294; 75 S. W. 959; 89 Id. 544.
   Hart, J.

(after stating the facts). It is first contended that there is no substantial evidence to support the verdict as to the amount of damages sustained by the plaintiff.

The contract provided that, should either party refuse to fulfill it on his part, the other should buy or sell, as the case might be, charging the loss to the defaulting party. Thus the contract itself fixed the method of ascertaining the damages resulting from a breach of it.

The plaintiff is a corporation. Its secretary and treasurer gave his deposition in the case, and testified that the plaintiff purchased wheat with which to manufacture the flour that it had contracted to sell to the defendant; that the same was manufactured into flour and sold to other parties at a loss of $148.50. He gave the names of the firms to which the flour was sold, the amount purchased by each firm, and their places of business.

Prior to bringing this suit, the plaintiff had assigned its claim to another person, and the assignee had brought suit on the claim. The treasurer of the plaintiff gave his deposition to be used on the trial of that case. In it he testified that the plaintiff had purchased wheat with which to fill the order of the defendant at the time it accepted the order, but that the wheat was held in the elevator and sold on December 12,1917. He said that it was never manufactured into flour at all. Subsequently that suit whs dismissed, and the present one instituted.

On his cross-examination in the present case the witness was asked to explain the inconsistency between his testimony as shown by the two depositions. He attempted to explain the inconsistency between them, bnt his explanation is not satisfactory.

It can not be said, however, that his testimony in the present case has no probative force. His credibility was a question for the jury, and they might have believed his testimony in the present case, and disbelieved his testimony in the former case. It is only where the facts proved in .evidence are contrary to some well known law of nature or mathematics and the like that it is demonstrated beyond controversy that the verdict is based upon what is untrue, and what can not he true. In such cases the court will declare as a matter of law that the testimony is not legally sufficient to warrant the verdict. Where the testimony relates to matters, situations and conditions which might or might not have existed, the evidence in regard thereto is of a substantial character, and, if believed by the 'jury, is sufficient to support the verdict. St. L. S. W. Ry. Co. v. Ellenwood, 123 Ark. 428.

Counsel for the defendant offered to prove at the trial that the contract sued on was not signed by the defendant and delivered to the salesman of the plaintiff as a completed contract, but that it was delivered to the agent of the plaintiff upon an agreement between such agent and the defendant that the contract was.not to become binding until and unless specifications of the shipment of the flour were made.

The court excluded this testimony from the jury, and the ruling of the court is now assigned as error calling for a reversal of the judgment.

To support his contention, counsel relies on the cases of American Sales Book Co. v. Whitaker, 100 Ark. 360, and Standard Sewing Machine Co. v. Rainwater, 146 Ark. 81. We do not think that either of those cases has any application to the case at bar. In the first mentioned case, appellee was permitted to prove that there was a parol agreement that he could return the goods in the event they did not prove to be satisfactory after a thirty-days’ trial. It was objected that such testimony would add to or vary the terms of the written contract. The court held, however, that it was competent to show by parol testimony that it- was understood between the parties that the written instrument, although signed, should not be a binding contract until certain precedent conditions should be fulfilled. In other words, the court said that the parol testimony was admissible to.show that the written instrument was not delivered as a concluded contract, but was to be held pending the thirty days’ trial of the goods to ascertain if they were satisfactory. In the latter case the parol testimony was admitted to show that the sale was not unconditional, but that there was a writing attached to the signed contract,, making it a conditional contract. Under the terms of the condition referred to, the seller agreed to put on a sewing machine sale for the buyer and help the buyer until all the machines were sold satisfactory to him. It was further agreed to remove all machines unsold after sixty days.

It will be observed that in neither of these cases did the parol testimony tend to contradict or vary the terms of the written agreement. It only tended to show that the sale was not an unconditional one, but was made upon the conditions shown by the parol evidence.

In the present case the record shows an essentially different state of .facts. The contract was partly written and partly printed. One of the written terms was the following: ‘ ‘ Specifications one week before date of shipment. ’ ’ The parties wrote this into the contract, and the evident purpose was to provide that the specifications should be a part of the contract, and that they should be given to the plaintiff one week before the plaintiff was required to ship the goods. To allow the defendant to prove by parol evidence that the contract was not to become binding “until and unless specifications of the shipment of flour were made.” would be to contradict or vary the terms of the written contract. The written contract having provided that specifications should be made, it is evident that this provision of the- contract would be varied'by allowing the defendant to prove that the contract was not to become a binding one unless tbe specifications were made by it. Therefore, the offered testimony came within the well-known rule that parol evidence should not be admitted to contradict or vary a written contract and the court properly refused to allow it to go before the jury.

It is also insisted that the court erred in not granting a new trial on account of newly discovered evidence. The secretary of the plaintiff company testified at the trial that the flour intended for the defendant was sold at 'a loss on certain days to certain other firms by its traveling salesman. The newly discovered testimony was to the effect that this traveling salesman would testify that the flour sold to the firms mentioned above was sold by him to them in .the usual course of business, and that it was not the flour intended for shipment to the defendant.

The deposition of the secretary of the plaintiff was taken on the 14th day of June, 1920, and the trial of the case was had on the 16th day of August, 1920. The defendant’s place of business was at England, Arkansas, and the trial was had at Lonoke, Arkansas. Each place was only about twenty miles from Little Rock, where the traveling salesman referred to resided. He was well known to the manager of the defendant. The defendant was put on notice as to the plaintiff’s claim in the matter when the deposition of its secretary was taken on the 14th day of June, 1920. Therefore, it had two months within which to ascertain the truth about the matter. This it could easily have done by talking with, or writing to the traveling salesman of the plaintiff at Little Rock. Not having done so, the defendant can not be said to have exercised due diligence in the matter. It is not even shown, by this evidence was not discovered before the trial. . - • ! -'-i • -1

Therefore, the trial court did not abuse its discretion in refusing the defendant a new trial on this account. Hughes v. Sebastian County Bank, 129 Ark. 218; Webb v. Kansas City Southern Ry. Co., 137 Ark. 107; Williams v. Williams, 112 Ark. 507; Dickie v. Henderson, 95 Ark. 78.

We find no reversible error in tbe record, and the judgment will be affirmed.


text:
    Smith v. Maberry.
    Opinion delivered April 11, 1921.
    1. Curtesy — husband’s estate. — Upon the death of a wife, her hus-. hand became tenant by the curtesy of her land for his life.
    2. Adverse possession — life tenant and remainderman. — The possession of a husband as tenant by the curtesy, or of his grantee, is not adverse to the wife’s heirs, and limitation does not run against such heir until the death of the life tenant.
    3. Adverse possession — conveyance by life tenant. — An attempted conveyance by a life tenant of the fee does not work a forfeiture of the life estate or start limitations running against the owners of the reversion.
    4. Life estate — laches of life tenant. — The laches of a tenant by the curtesy would not prevent recovery of the land by the wife’s heirs after the death of the life tenant.
    5. Equity — laches. — The doctrine of laches has no application • where the plaintiffs, though suing in equity, are not seeking equitable relief, and the action is not barred by the statute of limitations.
    Appeal from Woodruff Chancery Court, Southern District; A. L. Hutchins, Chancellor;
    affirmed.
    STATEMENT OE FACTS.
    A. F. Maberry brought an action in the circuit court against Ira Smith and Christine Nelson to recover forty acres of land situated in Woodruff County, Arkansas.
    The defendants .answered, setting up title in themselves, pleaded the statute of limitations, and invoked the doctrine of laches. They asked that the cause be transferred to the chancery court, which was done.
    After the cause was transferred to equity, it was tried upon an agreed statement of facts, as follows:
    On October 1, 1845, the land in controversy was granted by the United States to Charles Newman and a patent was issued to him. On October 2, 1865, after his death intestate, the heirs of Charles Newman conveyed said land to Elizabeth Newman. Elizabeth Newman married Thos. J. Bentley and died in 1866, leaving sur-, viving her Thos. J. Bentley, her husband, and her infant daughter, who was the issue of said marriage, and who is now Ada Bentley Morrison. Thos. J. Bentley died on the 25th day of July, 19191. On the 24th day of January, 1919, Ada Bentley Morrison executed a special warranty deed to said land to A. F. Maberry. The deed recites that it is made in lieu of a lost deed, dated August, 1884. Some time prior to 1876, J. W. Aiken went into possession of said land, claiming to be the owner thereof, and remained in possession until his death, about the first of the year 1876.
    On May 2, 1876, the probate court ordered the administrator of the estate of J. W. Aiken, deceased, to sell the land for the purpose of paying the debts of his estate. There were no bidders at the-first sale, and the land was duly advertised for sale again in the manner provided by statute. Thos. J. Bentley became the purchaser at said sale upon paying the purchase price thereof, and on April 27, 1877, the administrator executed to him a deed to the land. Subsequently. Thos J. Bentley and wife executed a warranty deed to said land to DeWitt C. Ashley, which was duly filed for record. DeWitt C. Ashley and wife, by warranty deed, conveyed said land to William Hysmith, and this deed was duly filed for record. William' Hysmith died in 1885, and his wife became administratrix of his estate. The probate court granted her an order to sell tlie land for the purpose of paying the debts of her deceased husband. E. Copeland became the purchaser at said sale, and the sale was duly approved by the court. E. Copeland conveyed the land to Jane Hysmith and she died in June, 1900. Under the terms of her will, the land was devised to Christine Nelson, Ira Smith and others, who in turn conveyed their interests to Christine Nelson and to Ira Smith. Ira Smith and Christine Nelson took possession of the land in 1904, and have been in possession of it ever since. Their grantors have been in possession of it since 1876 np to that time.
    The chancellor found that the plaintiff, A. F. Ma-berry, has the legal title to the land and was entitled to the immediate possession thereof. It was decreed that Said- plaintiff have and recover from the defendants, Ira Smith and'Christine'Nelson, said land and his costs.
    The-defendants have appealed.

      Bogle & Sharp, for appellants.
    1. Plaintiff in ejectment must recover on the strength of his own title and not upon the weakness of -defendant’s. 76 Ark. 244, 477. Elizabeth Newman was married to Thos. J. Bentley in 1865 and died in 1866, leaving surviving her husband and one child, Ada. This was prior to the Constitution of 1868 and of 1874 and under the common law, Thos. J. Bentley took estate by curtesy initiate in her property. 17 C. J., pp. 416-417. Bentley never abandoned his rights. After the adoption of the Constitution of 1874 the homestead right of Ada Bentley -became superior to the curtesy right of her father, for she was yet a minor, and had no right to bring suit. 54 Ark. 9. Thos. J. Aiken was in possession in 1876 and prior thereto. His possession and that of those claiming under him has not been disputed. There was no abandonment by him or those claiming under him.
    ,2. Appellee is barred by limitation and laches. 45 Ark. 25; 1 English Rep. 14; 13 Ark. 291. Where the statute makes limitations, must create also the exceptions; the courts can make none. 113 U. S. 4491; 68 Ark. 449. Appellee is barred by laches. 22 Ark. 263. See, also, 64 Ark. 345 ; 54 Id. 580- 72 Id. 101, 451; 83 Id. 490; 101 Id. 230. See, especially, 121 Ark. 613. The chancellor erred in his findings. 49 Ark. 75; 70 Id. 483.

      Harry M.. Woods, for appellee.
    1. Thos. M. Bentley had an estate by curtesy initiate in his wife’s realty, and no right of action accrued to appellee until the death of the holder of the life estate and the statute did not begin to run until the death of the life tenant, and there is no 'bar by limitation. 53 Ark. 400; 115 Id. 400; 79 Id. 408.
    2. Appellee is not barred by laches. This is settled by the agreed statement of facts. No right of action accrued to Maberry until the death, of the life tenant. The suit was brought in apt time.
   Hart, J.

(after stating the facts). The record shows that on October 1, 1845, the land in question was granted by the United States to Charles Newman and a patent was issued to him. After his death intestate in October, 1865, his heirs conveyed said land, by deed, to Elizabeth Newman. She married Thos. J. Bentley, and in 1866 died, leaving surviving her Thos. J. Bentley, her husband, and infant daughter, the sole issue of their marriage. The infant daughter who was the issue of the marriage of Elizabeth Newman with Thos. J. Bentley is now Ada Bentley Morrison. On the 24th day of January, 1919, the latter executed a special warranty deed to A. F. Maberry. So that it will be seen that the legal title to the land is in A. F. Maberry.

The defendants and other grantors have been in possession of the land since some time prior to 1876 and claim title to the land by adverse possession. Their •claim is not tenable. Thos. J. Bentley did not die until the 25th day of July, 1919. In 1866 he became tenant by the curtesy, and by virtue thereof he obtained an estate in the land for his life. Neelly v. Lancaster, 47 Ark. 175. It is true he conveyed his interest in the land to the grantors of the defendants, but he did not die until the 25th day of July, 1919.

It is well settled in this State that prior to the death of a tenant for life, neither his possession nor the possession of his grantee is adverse to the remainderman or reversioner. Hence the statute of limitations does not begin to run against the remainderman or reversioner until the death of the life tenant,- The reason is that no one can be in default in not bringing an action which, he could not have maintained, if brought; and that no statute of limitations can commence to run until the time comes when the person claiming title or right of possession can successfully maintain his action. Neither the possession of the life tenant nor his grantee can by any possibility become adverse to the reversioner or remain-derman for the reason that such possession is not an interference with the rights of the latter. Jones v. Freed, 42 Ark. 357; Moore v. Childress, 58 Ark. 510; Gallagher v. Johnson, 65 Ark. 90; Ogden v. Ogden, 60 Ark. 70, and Stricklin v. Moore, 98 Ark. 30.

It is contended, however, that the facts of this case constitute an exception to the general rule. The record shows that J. "W. Aiken was in possession of the land when he died the first of the year 1876. It is not shown what paper title, if any, he had. As already seen, he could not have acquired title against 'the remainderman by adverse possession.

The probate court ordered the land of Aiken to be sold for the payment of his debts. Thos. J. Bentley became the purchaser at the sale and entered into possession of the land. He conveyed the land by warranty deed to DeWitt C. Ashley. The deed purports to convey the fee in the land. This, it is claimed, constituted an abandonment by Thos. J. Bentley of his life estate and puts the statute of limitations in motion. During the continuance of the life estate of Bentley, possession by his grantee under a deed purporting to convey the fee would not be adverse to the remainderman, so that the statute of limitations would be set in motion against him because the re-mainderman would have no right of action to recover the possession of the land during the continuance of the life estate. As said in Christie v. Gage, 71 N. Y. 189, the conveyance by the tenant for life of a greater estate than he possessed does not work a forfeiture, and the remain-derman after the conveyance, as before, has no right to possession during the continuance of the life estate. See, also, Pickett v. Pope, 74 Ala. 122; Pendley v. Madi son’s Admr., 83 Ala. 484; Mallus v. Snowman, 21 Me. 201; Stevens v. Winship, 1 Pick. 318; 11 Am. Dec. 178; Jackson v. Mancius and Vanderheyden, 2 Wend. (N. Y.) 357; Barrett v. Stradl, (Wis.) 9 Am. St. Repts. 795; Mettler v. Miller, 129 Ill. 630, and Constantine v. VanWinkle, 6 Hill (N. Y.) 177, and case note to 19 L. R. A. at p. 841.

Connsel for the defendants also invoke the doctrine of laches as a defense to the suit. It is well settled that the estate of the heirs of the wife as remainderman is distinct from that acquired by her husband as tenant by the curtesy. Hence they can not be affected by any act of the life tenant or his grantee.

The rule is stated by Chief Justice Kent in Jackson v. Schoonmaker, 4 Johns. N. Y., p. 390, at 402, as follows:

“Neither a descent cast, nor the statute of limitations, will affect a right, if a particular estate existed at the time of the disseisin, or when the adverse possession began, because a right of entry in the remainderman can not exist, during the existence of the particular estate; and the laches of a tenant for life will not affect the party entitled. An entry to avoid the statute must be an entry for the purpose of taking possession, and such an entry can not be made during the existence of the life estate.” (Citing cases.)

In Tiedeman on Real Property (2 ed.), par. 400, it is said: ‘ ‘ The tenant can not do anything to defeat a vested remainder; a disseisin of the tenant affects the remainder in no manner. Nor can the possession of the tenant be deemed adverse to the remainderman, either for the purpose of preventing the latter from conveying his interest or with a view to defeat it under the statute of limitations, unless the possession be continued after the termination of the particular estate. The statute of limitations does not begin to run until the remainderman takes effect in possession.”

The rule was recognized by this court in Lesser v. Reeves, 142 Ark. 320, where the court held that the doctrine of laches has no application where the plaintiffs are not seeking equitable relief, and the action is not barred .by tbe statute of limitations. . To tbe same effect, see Anders v. Roark, 108 Ark. 248, and Galloway v. Battaglia, 133 Ark. 441.

There is nothing in tbe record tending to show that the defendants were induced to change their condition with respect to the land-by any conduct on the part of the plaintiff, -and the plaintiff is not guilty of laches.

It follows that the decree must be affirmed.