author: McHaney, J.

text:
    Cronin v. Unionaid Life Insurance Company.
    Opinion delivered October 26, 1931.

      Streeter Speahman and John D. Arbuclde, for appellant.

      Duty >é Duty, for appellee.
   McHaney, J.

This is a suit upon a foreign judgment, obtained by appellant against appellee in the district court of Creek County, Oklahoma, on February 4, 1928. The only question presented is the validity of the judgment of the Oklahoma court, and this is dependent upon the validity of the service there had. The judgment roll itself recites that “the defendant [appellee here] has been duly served with summons in all respects as provided by the laws of the State of Oklahoma. ’ ’

The facts are that in 1915 the Mutual Aid Union, a mutual assessment insurance company of Arkansas, issued a policy upon the life of Frances Cronin of Depew, Oklahoma, in which appellant was named as beneficiary. In December, 1926, appellee was organized as a stipulated premium company under the laws of this State, and shortly thereafter entered into a re-insurance contract with the Mutual Aid Union by which it re-insured its membership, agreed to collect the assessments and carry out the contracts re-insured. The Mutual Aid Union was dissolved in January, 1927, and ceased to do any business or to exist as a corporation. Frances Cronin died on December 1, 1927, and on December 28, 1927, this suit against appellee was filed and service attempted to be had by serving the Secretary of State of Oklahoma, under authority of § 5442, Oklahoma Stat. Ann. 1921. This statute provides that if any foreign corporation does business in that State and has failed to appoint an agent for service, or has failed to file a duly authenticated copy of its articles of incorporation or charter with the Secretary of State, or has failed'to pay the license fee required, then it may he sued by service on the Secretary of State. Appellee had no knowledge that a suit had been filed until after judgment. The circuit court of Benton County made a finding for appellee and rendered judgment accordingly.

Appellant relies upon the above statute and the decision of the Oklahoma Supreme Court in Title Guaranty & Surety Co. v. Slinker, 42 Okla. 811, 143 Pac. 41, sustaining similar service on a foreign corporation under authority of said statute. The facts in that case are very materially different from this case. There the court said: “The record shows that the surety is a Pennsylvania corporation, and had been duly authorized to do business in the Indian Territory prior to statehood, and did, in pursuance of such authority, engage in business in that territory, and prior to statehood executed the bond in suit; that upon the advent of statehood the surety withdrew all of its agents from, the State, except the one located at Muskogee, and that this agent was retained for the purpose of collecting premiums on bonds that had been executed prior to statehood, and did not have authority to execute any new bonds; that no attempt was made by the surety to have the bonds canceled that had been executed, but that the same were continued in force and the annual premiums collected thereon; that it did not solicit or execute any new bonds in Oklahoma after statehood. ’ ’

Under that state of facts the court held that the corporation was doing business in the State. In this case, however, the undisputed proof is that appellee has done no business in Oklahoma except to collect premiums by mail. It has no agent or office there. It solicits no contracts there and has never done so. The Mutual Aid Union may have done business in Oklahoma in violation of its laws, but appellee has no agent located therein to collect premiums on the old policies, and maintains no office therein. It collects at Rogers, Arkansas, by use of the United States mails. We are therefore of the opinion that appellee was not “doing business in the State of Oklahoma,” within the meaning of said § 5442, and that service upon the Secretary of State in this action conferred no jurisdiction on the Oklahoma court of the person of appellee. Provident Savings Life Assurance Society v. Commonwealth of Kentucky, 229 U. S. 103, 36 S. Ct. 34. In that case Mr. Justice Hughes, speaking for the court, said: “But the continuance of the contracts of insurance already written by the company was not dependent on the consent of the State. It is true that acts might be done within the State in connection with such policies (as, for example, in maintaining an office or agents, although new insurance was not written or solicited) which could be considered to amount to the continuance of local business. In such cases it would be the actual transaction of business that would furnish the ground of the license exaction and in the manner of existence of the obligations under policies previously written. These policies are contracts already made; the State cannot destroy them or make their mere continuance independent of acts within its limits a privilege to be granted or withheld. Neither the continuance of the obligation in itself nor acts done elsewhere on account of it can be regarded as being within the State's control.” Some of our own late decisions on the subject are Linograph Co. v. Logan, 175 Ark. 194, 299 S. W. 609; Equitable Credit Co. v. Rogers, 175 Ark. 205, 299 S. W. 747; Stubbs v. Wright, 176 Ark. 469, 2 S. W. (2d) 1087; Chicago Title & Trust Co. v. Hagler Special School Dist., 178 Ark. 443, 12 S. W. (2d) 881; Security Trust Co. v. Martin, 178 Ark. 518, 12 S. W. (2d) 870. So in this case, appellee acquired the Oklahoma contracts, from the Mutual Aid Union, and it had the right to continue them by acts done in this State, and such acts cannot be regarded as doing business in that State.

This holding does not violate the good faith and credit clause of the Constitution of the United States. As said in the recent case of Lewis v. United Order of Good Samaritans, 182 Ark. 914, 33 S. W. (2d) 53: “The general rule is that the full faith and credit clause of the Constitution and the laws enacted thereunder apply only where the court rendering the judgment had jurisdiction.” It was further held in that case that a recital of service in the foreign judgment was not conclusive, and that it could be impeached for want of jurisdiction by showing that no service was had and that there was no entry of appearance. Such a judgment is conclusive on collateral attack except for fraud or want of jurisdiction.

It necessarily follows from what we have said that the judgment of the circuit court is correct, and must be affirmed. It is so ordered.


source: Caselaw Access Project

author: McIíaney, J.

license: Public Domain

text:
    Connelly v. Hoffman.
    Opinion delivered October 26, 1931.

      E. R. Parham, for appellant.

      Robert Bailey and Jolm G. Rye, for appellees.
   McIíaney, J.

On March 31, 1922, appellees, Huggler and wife, executed and delivered to appellant two promissory notes for $500 each, one due April 1, 1923, and one due April 1, 1924, with interest at 8 per cent, per annum until paid, payable annually, and if not paid when due, to become a part of the principal and bear interest at the same rate. On the same date they also executed and delivered to appellant their mortgage on certain real estate in the city of Russellville, constituting their homestead, to secure the payment of said notes, in which dower and homestead rights of the wife were released. This mortgage recited that it was subject to a prior mortgage not here involved. No part of this indebtedness has ever been paid.' Thereafter, on July 15, 1927, before the statute bar attached on either of said notes, Huggler and wife, being indebted to R. B. and Mary H. Wilson, executed and delivered to them their note secured by mortgage on the same property for $1,750, at 10 per cent., due one year after date, which mortgage recited that it was subject to the same mortgage mentioned in that of appellant, but made no mention of appellant’s mortgage in any way. This mortgage was thereafter assigned to appellee, Hoffman, and, it being in default, Hoffman brought this suit to foreclose on February 28,1930, making appellant, and Huggler and wife, defendants. He alleged that appellant’s mortgage was barred by the five-year statute of limitations, and that his lien was subject only to that mentioned in his mortgage. Appellant filed an answer and cross-complaint in which he alleged that Huggler, although having made him no payments, had acknowledged in writing his indebtedness, and had agreed to pay same within five years. He prayed for judgment against the Hugglers, for a foreclosure and sale of the property. Hugglers separately answered, pleaded the statute as a bar to appellant’s action, and denied they had agreed in writing to pay the debt within five years.

The court granted the prayer of appellee Hoffman’s complaint and dismissed appellant’s cross-complaint for want of equity.

The first question for determination is the priority of mortgages as between appellant and Hoffman. It will be seen from the foregoing statement of facts that appellant’s mortgage was prior in point of time and was a valid, subsisting lien at the time Hoffman’s mortgage was executed. Both mortgages were promptly recorded after execution and delivery, that of appellant on April 5, 1922, and that of Hoffman on July 26,1927. On April 1, 1929, five years after the due date of the second note held by appellant, his mortgage was, so far as the record disclosed, barred by the statute of limitations, as no indorsement appeared on the margin of the record showing any payment on the indebtedness, as required by § 7408, Crawford & Moses’ Digest, or any agreement for the extension of the date of maturity, as required by § 7382, Crawford & Moses ’ Digest, prior to the filing of this suit in February, 1930. The former section has no application to the facts in this case, as it is conceded that no payment was ever made on appellant’s mortgage debt. The latter section provides: “No agreement for the extension of the date of maturity of the whole or any part of any debt or note secured by mortgage, deed of trust, or vendor’s lien, or for the renewal thereof, whether made in writing or otherwise, and no • written or oral acknowledgment of indebtedness thereon shall, so far as the same affects the rights of third parties, operate to revive said debts or extend the operation of the statute of limitations with reference thereto unless a memorandum showing such extension or renewal is indorsed on the margin of the record where such instrument is recorded, which indorsement shall be attested and dated by the clerk. ’ ’

. On August 26, 1930, about six months after this suit was filed, appellant caused the following indorsement to ■be placed on the margin of the record: “The time for payment of the notes secured by this mortgage was extended to the month of November, and the acknowledgment of the indebtedness made in. a written request of Peter Huggler, Jr., dated June 10,1927, and the indebtedness was acknowledged in writing and promise of payment made by Peter Huggler, Jr., on the 30th day of October, 1929. P. F. Connelly, by E. R. Parham, Attorney.” The facts stated in the above indorsement are based on the following: Appellant’s attorney made written demand on Peter Huggler for the payment of said debt on June 4, 1927, to which Huggler replied on June 10, 1927. “In regard to these notes that I owe Mr. P. F. Connelly. This comes just at a time when I am about to recover from financial reverses and at a time when I had a larg’e tax to meet. If this foreclosure could be held off until fall, I will make all efforts to pay the interest in about sixty days;, and the notes by November. Trusting this will meet Mr. Connelly’s approval. Tours truly, Peter Huggler.” • ,

The attorney replied under date of June 18, 1927, ag'reeing to the extension until fall if the interest was paid in sixty days, but insisted that one-half the interest be paid in thirty days. Again on August 11, 1927, Huggler wrote said attorney, in answer to his letter of the 9th, that he had been unable to meet his promise, offered some .shares of stock as collateral, and some steel forms for concrete, and begging additional time. We think the necessary effect of these letters was an acknowledgment of the debt and a promise to pay same, and that there was an agreement to extend the time of payment to the fall of 1927. But the agreement to extend was not indorsed on the margin of the record before the statutory bar as required by said § 7382, and as to third persons on April 1, 1929, it became in effect an unrecorded mortgage.

In Morgan v. Kendrick, 91 Ark. 394, 121 S. W. 278, construing §. 5399 of Kirby’s Digest, now § 7408, Crawford & Moses’ Digest, including the amendment by act May 10, 1911, providing that payments made on mortgage indebtedness must be indorsed on the margin of the record before the bar of the statute, else the rights of third parties will not be affected, it was said: “The effect of that statute, as to strangers to the transaction, is that when the debt secured by a mortgage is apparently barred by limitation, and no payments which would stay the limitation are indorsed on the margin of the record of the mortgage, it becomes as to' third parties an unrecorded mortgage'; and, like an unrecorded mortgage, it constitutes no lien upon the mortgaged property, as against such third party, notwithstanding he has actual knowledge of the execution of such mortgage. ’ ’ Citing a number of cases. This case was cited in Wells v. Farmers’ Bank & Trust Co., 181 Ark. 950, 28 S. W. (2d) 1059, and it was there inadvertently stated that the court construed § 7382 in Morgan v. Kendrick. It was what is now § 7408, Crawford & Moses’ Digest, that was there construed, as § 7382 was not enacted until March 24, 1917. The same rule, however, was applied in the Wells case. There the intervener’s mortgage (Wells) was barred when the bank took its mortgage, whereas, in this case appellant’s mortgage was not barred when the Hoffman mortgage was taken. Does this fact make any difference? Appellant contends that it does — that Hoffman and Wilson had at least constructive notice of his mortgage, and that, having taken a mortgage at a time his was a valid, subsisting lien and after the mortgagor, Huggler, had acknowledged the debt in writing, and an agreement had been made for extension, it continued thereafter to be a valid lien, prior and paramount to the lien of Hoffman’s mortgage, without regard to § 7382 of the Digest. We cannot agree. An acknowledgment of the past-due debt and agreement to pay by the mortgagor, either before or after the statutory bar, constitutes a new point from which the statute begins to run as between the parties, just as a payment made upon the debt does, but unless the agreement for extension or the payment is indorsed on the margin of the record it cannot affect third parties who have not in some manner recognized the validity of the prior mortgage. We have many cases holding that the subsequent mortgagee is estopped by the recitals of his mortgage to plead the statute or question the validity of the prior mortgage, an extreme case, by a divided court, being McFaddin v. Bell, 168 Ark. 826, 272 S. W. 62. See also cases there cited. Or estoppel may arise by agreement 'between the mortgagees as in Merchants’ & Planters’ Bank v. Citizens’ Bank of Grady, 175 Ark. 417, 299 S. W. 753, where the court made the same incorrect reference to the statute construed in Morgan v. Kendrick, supra. There is and can be no estoppel by merely taking a mortgage at a time when there is a valid mortgage of record ahead of it, nor does a positive recital in such mortgage that it is made “subject to incumbrances against the property” estop such mortgagee from pleading the statute. McFaddin v. Bell, supra. It was there said that “nothing short of a certain and definite reference to the particular incumbrance will evidence an intention to recognize it.” The decision of this court in Wadley v. Ward, 99 Ark. 212, 137 S. W. 808, cited by appellant, is not contrary to the principles announced in this and other later cases. Hoffman was therefore a third party, within the meaning of the statute, and was not estopped to plead the statute in bar of the action as against his mortgage.

We are of the opinion, however, that the court erred in dismissing the cross-complaint as against Iluggler. The above letters constituted an express acknowledgment of the debt and a new promise to pay prior to the statutory bar, creating a new point from which the statute began to run. The debt as to him was not barred, and is not now, nor is the mortgage securing it. It is true that Mrs. Huggler did not ask for a renewal of the indebtedness, nor is a personal judgment asked against her. She signed her husband’s mortgage releasing her dower and homestead rights, and this release continues under bis valid and subsisting mortgage, securing a valid, subsisting debt.

The decree will therefore be affirmed as to appellee, Hoffman. As to appellees, Huggler and wife, it will be reversed and remanded with directions to enter judgment against appellee, Peter Huggler, for the amount of the notes and interest according to their terms, and to decree a foreclosure of appellant’s mortgage on his cross-complaint, making it subject to the first mortgage mentioned therein, and also subject to Hoiffman’s mortgage, as above stated. It is so ordered.


author: Butler, J.,

text:
    Cleburne County Bank v. Butler Gin Company.
    Opinion delivered October 26, 1931.

      Brwididge $ Ne-elly, for appellant.

      Miller ■& Yingling and Cochrill & Armistead, for appellees.
   Butler, J.,

(after stating the facts). The first question for our determination is the validity of the mortgage of the Butler Gin Company executed July 11, 19'27, by O. B. Henderson, its president, and J. Q. Adams, its secretary. It is the contention of the appellee corporation and G. R. Butler that this mortgage was void for the reason that it was not authorized at any meeting-of the board of directors, and was made without the knowledge and consent of the stockholders, and that this unauthorized action on the part of the president and secretary had not been ratified by the corporation. There is but little conflict in the evidence on this question. It will be remembered that at the time of the execution of the mortgage there were four directors, Henderson, Adams, Butler and Ghent, Ray having ceased to be a director. Butler and Ghent testified that they never at any time attended a directors’ meeting where the execution of the note and mortgage in question was authorized or discussed, and that they had never received notice of any directors’ meeting called for that purpose. Henderson and Adams admitted that Butler was not present in person at the directors’ meeting, but they did not say whether Ghent was present or not. One of the officers of the bank who looked after this matter of busi-. ness testified that when- the question of the giving of the mortgage and the execution of the note by Butler was discussed witness advised Henderson and Adams that it would be necessary to call a directors’ meeting to authorize the execution of same, and that under his supervision a notice was prepared to be sent to the remaining directors. Adams, the secretary, testified that this notice was prepared, and Henderson testified that it was duly mailed.

Ray testified that he was not a member of the Butler Gin Company when the mortgage was executed, as he had sold the one share of stock he owned to Henderson in 1926.

When the foregoing testimony is analyzed, it is apparent that, whether Butler and Ghent were notified of the directors’ meeting or not, neither attended such meeting. Henderson himself states that Butler was not present, and neither he nor Adams contradicted the statement of Ghent that he was not present. Therefore the meeting was held only by Henderson and Adams, and as these did not constitute a majority of the board of directors under § 1713 of Crawford & Moses’ Digest, and § 28 of act No. 250 of the Acts of 1927, a quorum was not present, and there was no legal meeting of the board of directors for the transaction of business, for the articles of agreement of the Butler Gin Company provided that the business of the corporation should be conducted by a board of five members, all of whom should be stockholders.

It is well settled, as a general proposition, that the president and secretary of a corporation are not empowered to bind it by their signatures to commercial paper unless such authority is expressly conferred by the charter or by the board of directors. City Elec. St. Ry. Co. v. First Nat. Bank, 62 Ark. 33, 34 S. W. 89, 31 L. R. A. 535, 54 Am. St. Rep. 282, and authorities there cited. See also Anderson-Tully Co. v. Gillett Lbr. Co., 155 Ark. 224, 244 S. W. 26. This rule, however, is subject to important qualifications, one of which is that where the act is performed by the officers through whom the corporation usually functions and results in benefit to the corporation, it will be bound where the transaction was had under circumstances by which knowledge might be imputed to it. Where the unauthorized act of officers is clearly beneficial to the corporation, slight circumstances will be sufficient to impute knowledge and will effect a ratification of that act. City Elec. St. Ry. Co. v. First Nat. Bank, supra; Anderson-Tully Co. v. Gillett Lbr. Co., supra; Love v. Metro. Church Assn., 181 Ill. App. 102; Washington Savings Bank v. B. & D. Bank, 107 Mo. 133, 17 S. W. 644, 28 Am. St. Rep. 405; Knowles v. N. T. T. Co., (Tex.) 121 S. W. 232. Especially is this true where the other party to the transaction has acted in good faith, and a repudiation of the transaction will result in harm and disadvantage to him.

In the instant case the mortgage on the machinery executed by the People’s Gin Company was of record and gave Butler constructive notice that the machinery installed at Armstrong was bound for a debt to the appellant bank, and he was not deceived or misled to his prejudice in any just or reasonable sense, nor was the Butler Gin Company. The machinery was the security for the debt due the appellant bank, and the change in the mortgag*e did not alter the substance of' the security, but only changed its evidence. It seems to us that common honesty and fair dealing required the application of the exception to the -general rule, and that all the surrounding circumstances impute to the Butler Gin Company such knowledge as would estop it from disavowing the act of Henderson and Adams, and, as the Products Corporation has succeeded to the rights of the Butler Gin Company, this estoppel must extend to it also. Thompson on C'orp., (3 ed.), vol. 3, § 2077.

Unquestionably the Butler Gin Company benefited by this transaction, and, since to accomplish this, the appellant bank relinquished a valid mortgage on the identical machinery, it would be inequitable for the appellee corporation to take advantage of an unauthorized act of the president and secretary executing it which was intended to, and did, result in its benefit. The 'mortgage is therefore valid, and the appellant bank is entitled to recover its debt, and the learned chancellor erred in holding' otherwise.

This brings us to the question of the relative rights of Butler and the appellee Products Corporation. In the first place, it will be noted that the corporation has lost nothing by this transaction, nor is it placed in a more disadvantageous position than it before occupied. The debt due it by the People’s Gin Company antedated the purchase by Butler of the physical assets of the Butler Gin Company, and it advanced no more money on the faith of that transaction. It is also unquestionable that the mortgage taken by the appellant bank from the Butler Gin Company was a part of a series of transactions which were put in motion at the instance of appellee Products Corporation, and consummated for its advantage. Williams, the agent in charge of the Dixie Oil Mill belonging to the Products Corporation, testified that he knew nothing of the transaction between the Butler Gin Company and the bank, but the circumstances weigh heavily against this statement. It was Williams who pressed for a mortgage on the Pangburn ginnery to secure debts which were before unsecured; he knew of the financial condition of Henderson and of the People’s Gin Company; he was acquainted with' Butler; and the amount of the debt due by the People’s Gin Company to the bank was a matter of public record. Therefore, he must have known that the consideration for the satisfaction by the bank of the Pangburn mortgage was the taking of a new mortgage on the machinery at its new site in Armstrong. Adams and Henderson both testified that he knew of all these transactions and that he was familiar with them. He therefore had grounds for believing that, when Butler bought the machinery and building, it was reasonable to expect a balance due to the appellant bank, and Henderson testified positively that, when he assigned the note, it was as collateral security for the debt already owing by the People’s Gin Company; that he informed Williams of the balance due the bank, and that from the proceeds of the $3,000 note the bank would first be paid and its lien satisfied; that Williams took the note with that understanding and with full knowledge of Butler’s equity. Williams denied all this and testified that he took the note in due course of business without any knowledge or information of the rights of the bank or Butler.

The conduct of Henderson indicates throughout'-these entire transactions that he was honestly attempting to deal justly as far as possible with all those to whom he was obligated, and the evidence clearly shows that, with the exception of the actual operation of the gins, he managed the business of the People’s Gin Company at Pangburn and the Butler Gin Company at Armstrong, and his testimony in regard to the assignment of the Butler note to the Products Corporation accords with his general conduct and with what an honest man would do under the circumstances.

In the concluding statement of appellee’s brief the statement is made that “the great weight of the testimony showed and the chancellor found that the appellee acquired the note of G. R. Butler from O. B. Henderson before maturity for value and without notice of any such equities of Butler as are asserted'by him.” As we view the evidence and the decree rendered by the chancellor, neither supports the contention of appellee. The decree appears to be predicated on the theory that the mortgage of the Butler Grin Company to appellant bank was void, for, although it was prior in point of time to the chattel mortgage given by Butler to Henderson, and was to secure a subsisting indebtedness, the chancellor decreed the latter the paramount lien and did not attempt to adjudicate the question of Butler’s equities. It is clear that Butler ought not to have to pay the note twice, and that the evidence shows that it was not the intention of any one that he should, but that he was protected to the extent of the balance due the appellant bank.

It follows from what we have said that the decree of the chancellor must be reversed, and the cause will be remanded with directions to enter a decree according to the principles of equity herein announced. It is so ordered.


author: Butler, J.

text:
    Norris v. Dunn.
    Opinion delivered October 26, 1931.

      John D. Arbnckle, for appellant.

      Hill, Fitslmc/h $ Brissolara, for appellee.
   Butler, J.

This is an action by the appellant, Capt. Fred H. Norris, to recover custody of a minor child, Thomas Clark Dunn, from his grandmother, Mrs. Mary Dunn, and involves the validity of an adoption proceeding in the County of Cochise in the State of Arizona. Capt. Norris is the stepfather of the minor, who at the time of the adoption proceedings, was approximately 9% years old. His mother died on or about the 17th day of October, 1929, and at her request Capt. Norris attempted to adopt the child. The child had no relatives in the State of Arizona, but its grandmother, the appellee, and two uncles were residents of the city of Fort Smith, in this State.

Capt. Norris instituted adoption proceedings in the Arizona court, and on November 7, 1929, an order of adoption was made by that court granting the prayer of the petition for adoption. Some months after, while the child was on its way to school in the town of Douglas, in Cochise County, Arizona, he was abducted by an uncle and taken to the home of his grandmother in the city of Fort Smith, Arkansas, where he now lives, and was living at the time of the filing of this suit by Norris.

On the trial of the case before the chancellor an exemplification of the record of all the proceedings in the Arizona court relative to the disposition of the person and estate of the minor child after the death of his mother was filed and oral testimony taken. The statutes of Arizona relating to the adoption of minors is found at §§ 117-124 of the Revised Code of Arizona adopted in 1928. Section 117 provides that minor children may be adopted by an adult person at least ten years older than the person adopted with the consent of the child if over fourteen years of age, subject to the rules thereafter prescribed in the statute.

Section 118 provides that the petition shall be filed in the superior court of the county in which the child resides, and that where the petitioner has a husband or wife it is necessary for said husband or wife to consent and join in the petition, and that the attorney of the county in which the child resides, “upon application of the person seeking such adoption, shall draw the petition therefor and act as attorney for such petitioner in all adoption proceedings, without expense to the petitioner. No fees shall be charged in adoption proceedings by the clerk of any court, sheriff or other public officer.”

Section 119 is as follows: ‘‘ The parents of the child, of the survivor of them, shall, except as herein provided, consent in writing to such adoption. If neither parent is living, the guardian of the child, or, if there is no guardian, the next of kin in this State may consent; or if there is no next of kin, the court may appoint some suitable person to act in the proceedings as next friend of the child to give or withhold such consent.”

Section 120 provides for proceedings where either parent is insane or imprisoned.

Section 121 is as follows: “Upon the filing of the petition, the court shall fix a day for the hearing thereof. If the parent, guardian or next of kin does not consent to the adoption of a child, a copy of the petition and of the order fixing the day of hearing shall be served on him as a summons in a civil action, if found in the State, and if not, by publication once a week for three successive weeks in such newspaper in the county as the court may direct, the last publication to be at least four weeks before the time appointed for the hearing. Like notice shall also be published when a child has no parent living, and no guardian or next of kin in this State. The court may order such further notice as it deems proper.”

The order for adoption made on November 7, 1929, is as follows: “This matter having come on regularly for hearing, and, it appearing that said minor, Thomas Clark Dunn, is now present, and the consent of James Logie that petitioner adopt said minor child having been sigmed and filed herein; that said James Logie is the guardian of the person and estate of said minor child; that the father of said minor child, Thomas A. Dunn, died on or about the 16th day of July,-1926, and that the mother of said minor child, Bernice Dunn Norris, died on or about the 17th day of October, 1929; that said minor child is of the age of approximately nine years and six months; that said petitioner has filed herein an agreement with said minor child and with each person whose consent has been filed herein, that said minor, child shall be adopted by said petitioner and treated in all respects as his own lawful child should be treated, including the right of support, protection and inheritance, and it appearing that such adoption will be for the best interests of said minor child; that said petitioner and said minor child and all persons whose consent is necessary, have each appeared herein and were examined as provided by law; that said petitioner resides in this county and that said petitioner desires that the said Thomas Clark Dunn shall take his family name and be known hereafter as Thomas Clark Dunn Norris.

“It is therefore adjudged that the petitioner, Fred H. Norris, adopt said minor child, and from this day forward said minor child shall he treated by him in all respects as his own lawful child should be treated, including the right of support, protection' and inheritance; that said petitioner and said minor child shall bear toward each other the relation of parent and child and that said minor child shall take the family name of said petitioner and be hereafter known as Thomas Clark Dunn Norris.”

The record of the Arizona court with reference to the appointment of James Logie as guardian discloses that James Logie filed his petition for guardianship of the person and estate of the minor in which he alleged that he was a citizen and resident of Douglas, Cochise County, Arizona; that he is not related in any way to the minor; that the minor had no lawful guardian and no relatives within the State of Arizona; that he was within the age of nine years and had an estate in Cochise and Pima counties, Arizona, which needed attention. This petition was duly sworn to, and an order made by the judge of the court on the 24th day of October appointing the 5th day of November, following, as the day for the hearing of the petition. The record shows that a notice was given by the- clerk of the filing of the petition and of the date for the hearing by the court, which notice was dated October 24th, and on.the 5th day of November, following, it is shown that the clerk made a certificate to the effect that he had published the notice on October 24th by posting copies thereof — one on the public bulletin board at the entrance of the county courthouse, one on the public bulletin board in the lobby of the United States postoffiee in the city of Tombstone, and one on the public bulletin board at the entrance of the office of the clerk of the superior court, all in the aforesaid county and State. All of these preliminary proceedings appear to have been in strict conformity with the statutes of Arizona relating to the application and notice for letters of guardianship. On November 5th, the application came on for hearing, when the prayer of the petition was granted, and the court ordered “that the said James Logie be, and is hereby appointed, guardian of the person and estate of the said minor, Thomas Clark Dunn, and that letters of guardianship of the person and estate of said minor be issued to him upon his giving bond to said minor in the penal sum of $1,000, and upon his taking and subscribing an oath according to law.”

The next matter relating to the guardianship appearing in the exemplification of the record is the following:

“Bond
“Know All Men by These Presents:
“That we, James Logie, as principal, and the American Employers’ Insurance Company, as surety are held and firmly bound unto Thomas Clark Dunn, in the sum of one thousand ($1,000) dollars, lawful money of the United States of America, to be paid to the said Thomas Clark Dunn, for which payment, well and truly to be made, we bind ourselves, our and each of our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.
“Signed and dated this 7th day of November, A. D. 1929.
“The condition of the above obligation is such that whereas, by an order of the superior court of Cochise County, State of Arizona, duly given,.made and entered on the 5th day of November, A. D. 1929, the above bounded James Logie was appointed guardian of the person and estate of Thomas Clark Dunn, a minor, and letters of guardianship were directed to be issued to him upon his executing a bond according to law, in said sum of one thousand ($1,000) dollars.
“Now therefore, if the said James Logie as such guardian shall faithfully execute the duties of the trust according to law, then this obligation shall be void; otherwise to remain in full force and effect.
“This bond is herewith substituted for a bond made and executed on the 7th day of November, A. D. 1929, and erroneously made to run to the State of Arizona instead of Thomas Clark Dunn.
“James Logie,
“American Employers’ Insurance Co.
“By Everett J. Jones, its Agent and Attorney in Fact.
“Arizona Southwest Bank, Agents,
“By Everett J. Jones, Manager.
“(Seal of American Employers’ Insurance Co.)
“Approved June 10, 1930.
“Albert M. Sames, Judge of the Superior Court.”

Following this, appear the letters of guardianship issued by the clerk on the 7th day of November, 1929, with the oath’ of James Logie appended thereto, made on the same date.

The statutes of Arizona relating to the appointment of guardians need not be set out here except that part of § 4110 of the Arizona Code relative to the .bond of guardian, for it is conceded that the proceedings were in conformity with the statutes except in that particular. •Section 4110, in so far as it relates to the bond of the guardian, and its necessity, is as. follows: “Before the order appointing such person as guardian takes effect, and before letters issue, the court shall require of such person a bond to the minor, with sureties to be approved by the judge, and in such sum as he shall order, conditioned that the guardian will faithfully execute the duties of his trust according to law. * # * Upon the filing and approval of the bond, letters of guardianship shall issue to the person appointed.”

The evidence adduced at the hearing was to the effect that Capt. Norris married the mother of the minor, and that they lived together until her death about thirteen months after the marriage; that shortly before her death she requested that Mr. Logie, the proprietor of á newspaper in Douglas, Arizona, for whom she had worked, should be appointed guardian of her son, and that her husband, Capt. Norris, adopt the child as his own son; that the proceedings relating to the guardianship and adoption were to carry into effect her wishes. If the order of adoption were valid, he is entitled to the custody of said child.

The rule is well settled that the adoptive father is entitled to all the rights and privileges of a natural one, among which is usually included the custody of his child. 1 C. J. p. 1395. Of course, it is to be understood that the right of custody is not an absolute and indefeasible right,, but must yield on occasion to the paramount interest of the child.

It is insisted, however, that there was no legal adoption of the child by Oapt. Norris in Arizona, but, as this is a collateral attack on the validity of the adoption, the order cannot be ignored because of the mere irregularities in its procurement, but to avoid its effect it must appear that the court had no jurisdiction to render it and the order is not voidable, but void. Is it void?

The jurisdiction of the court to make the order is wholly derived from the authority conferred upon it by the statutes, and, in the absence of decisions of the court of Arizona, we apply to the proceedings, the general principles of law, and the decisions of our own court construing similar statutes.

In Morris v. Dooley, 59 Ark. 483-486, 28 S. W. 30, 430, the court said: “The proceeding to adopt a child as an heir was unknown to the common law, and in this State exists only as a special statutory proceeding. * * * Mr. Black in his work on Judgments, says: ‘It is well settled that a judgment in a summary proceeding must show upon its face everything that is necessary to sustain the jurisdiction of the court rendering it.’ Section 2S0. The rule seems to be, especially in this State, as settled by this court in Hindman v. O’Connor, 54 Ark. 643, 16 S. W. 1052, that ‘where the jurisdiction is conferred on a court by special statute, and which is to be exercised in a special, and often summary, manner, the judgment can only be supported by a record which shows jurisdiction, and no presumptions as to its jurisdiction will be indulged. (Citing cases).

“But it is contended that only those facts which the statute requires to be set out in the petition-need to be made to appear in the record; but we hold, on the contrary, that in a. proceeding of this kind, under'’a special statute, and not according to the course of the common law, the court in which the proceeding is had, quoad hoc, must be considered as an inferior court and that, unless all jurisdictional facts appear in the record itself, the judgment in the proceeding will be void upon collateral attack.”

The rule announced in the above case has been adhered to and followed in all subsequent decisions of this court, and was restated in the recent case of Minetree v. Minetree, 181 Ark. 111, 26 S. W. (2d) 1011.

It was essential to the validity of the order of adoption that the person legally authorized by law appear and give consent to the granting of such order. Willis v. Bell, 86 Ark. 473-78, 111 S. W. 808; In re Gallegos, 21 Ariz. 250, 187 Pac. 573. The jurisdiction of the court where the proceeding is had under § 119 of the Code, as in this case, depends upon the consent of that person authorized by law or the court to represent the minor." Willis v. Bell, 86 Ark. 473, 111 S. W. 808, quoting from page 478: “The jurisdiction of the court depends upon the express consent of the parents of the child unless their residence be shown to be unknown.” In this case both parents of the child were dead, and the consent to the proceedings was given by one who claimed authority as guardian. His right to so appear is challenged.- The question then is: “Was he the legally appointed guardian with authority to consent for the child under the laws of the State of Arizona?” It will be observed that the Arizona statute relating to the appointment of guardian, like our own (§§ 5013 and 5015, Crawford & Moses’ Digest) makes the giving of a bond a condition precedent to the issuance of letters of guardianship and authority to act as guardian. Section 4110, Arizona Code.

We have held that the condition of the statute is imperative, and that there can be no appointment of- a guardian and authority for him to act until the bond required has been given. Guynn v. McCauley, 32 Ark. 97; Bank of Rector v. Parrish, 131 Ark. 216, 198 S. W. 689. “Where the statute requires a guardian to give bond for the faithful performance of his duties as part of his qualification, he cannot qualify as guardian without giving such bond, nor can he act as guardian or take possession of, and control, the property of his ward unless he has complied with this condition .precedent.” 28 C. J. 1090.

Th.e controlling question in this case then is: “Was the alleged guardian who assumed the right to consent to the adoption proceeding, legally constituted such with authority to enter consent?” As we have said, we look to the entire record in order to determine whether the bond was given before Logie assumed to act as guardian. . The bond, which is shown in the exemplification of the record, was approved in June, 1930, long after the adoption proceedings, and, while it contains the recital that it is given in substitution of another bond filed November 7,1929, the date of the adoption proceedings, that original bond is not accounted for either by an exemplification of it, or of any order of the court or .judge in which reference to it is made. The recital in the bond approved June, 1930, to the effect that it was in substitution of a bond executed on November 7, 1929, and erroneously made to run to the State of Arizona instead of Thomas Clark Dunn, is inconsistent with the record as exemplified, for, as we have seen, the record is silent regarding the execution of a bond. As this was a special proceeding, having its authority only in the statute, that statute must be strictly followed, and this must affirmatively appear from the whole record. It is our conclusion that the record fails to disclose a guardian lawfully authorized to give consent, and, “until consent is obtained or personal or constructive service of the adoption proceeding is had or waived by personal appearance, the court is without power to make any order for the disposition of the child.” In re Gallegos, supra.

We are of the opinion that the order of adoption under which Capt. Norris.claims the custody of the child is void, and the court might award the custody of such child to that one who is best fitted to care for it. The record shows that Mrs. Mary Dunn is the child’s grandmother, and while there is some suggestion by counsel that she is a woman of advanced age and in feeble health, that is a mere assumption, for the evidence wholly fails to disclose such state of facts. It does, however, show that she is a woman of splendid reputation and fitted by nature and experience to care for the child, and that she has ample means to rear and educate it. Capt. Norris, on the other hand, has no family or settled home; he is suffering from a disease which has caused his retirement from active service, and although a gentleman of high character, from the very nature of things he cannot give the child the same advantages and care that it would have in the home of its grandmother. It follows that the finding of the chancellor is correct, and the decree is therefore affirmed.

Justices Smith, MEHAEEY.and Kirby dissent.


author: Hart, C. J.,

text:
    Drainage District No. 7 of Poinsett County v. Hutchins.
    Opinion delivered November 2, 1931.

      Chas. D. Frierson, for appellant.

      Ogan & Shaver, S. 11. Mann and Walter N. Killough, for appellee.
   Hart, C. J.,

(after stating the facts). The office of the writ of prohibition is to restrain the exercise of jurisdiction by an inferior court over a subject-matter where it has none or over parties where it can acquire none. Order of Railway Conductors of America v. Bandy, 177 Ark. 694, 8 S. W. (2d) 448, and cases cited.

This brings to our consideration the question whether the chancery court had jurisdiction to proceed further under the allegations of the complaint filed in the Cross Chancery Court by the landowners against Drainage District No. 7 of Poinsett County and the commissioners thereof. The whole question has been ably and exhaustively discussed by counsel on both sides in various forms and numerous authorities cited and reviewed with reference thereto. The conclusion which we have reached renders it unnecessary to consider and determine all the points raised by counsel; and in the determination of the question it will be our aim to confine our discussion to the issues necessarily raised by the plea to the jurisdiction of the Cross Chancery Court.

According to the allegations of the complaint, Drainage District No. 7 was created by the Legislature of 1917, and the lands within its boundaries were all situated in Poinsett County. The dam, levees and other improvements, which it is alleged would divert the waters, were to be erected in Poinsett County, whereby the lands of the plaintiffs in Cross County would be flooded and permanently injured.

In a case note to People v. Selby Smelting & Lead Co., 163 Cal. 84, 124 Pac. 692, Ann. Cas. 1913E, 1267, at 1272, it is stated that the holding in the reported cases to the effect that an action to abate a nuisance maintained wholly in one county may be brought in another county where injury therefrom is suffered, finds no support in the authorities. The general rule is stated that an action to abate a nuisance is local, and must be brought in the county where the nuisance exists. Several cases are cited in support of the text by the annotator.

We do not deem it necessary to review .the authorities there cited or the numerous other authorities on the question cited by counsel in their respective briefs, for the reason that we believe that the question has been decided otherwise by this court in Cox v. Railway Company, 55 Ark. 454, 18 S. W. 630, decided February 13, 1892, where it was held that a suit to restrain defendants from removing earth from plaintiff’s lands is an action “for an injury to real property,” within the meaning of § 4994 of Mansfield’s Digest, and must be brought within the county where the land lies. This was a suit by a landowner to enjoin the defendant railway company from removing earth from certain lands of the plaintiff situated in Prairie County over which the defendant’s railroad passed. The plaintiffs alleged that the defendant had acquired no right-of-way over the land, but was carrying away from his land a large quantity of earth to be used in building its roadbed across Cache River bottom. The suit was brought in Pulaski County, where, it is alleged, the company had its principal office. Upon appeal, the court said that the objection of the defendant to the venue was well taken, and that the complaint was properly dismissed. It was the contention of the defendant that the action was local under our statute, and that it therefore should be brought in Prairie County where the land was situated.

The statute involved in that ease was § 4994 of Mansfield’s Digest, which is § 1164 of Crawford & Moses’1 Digest. The section reads as follows:

“1164. Where the subject of action is situated. Actions for the following causes must be brought in the county in which the subject of the action, or some part thereof, is situated;
“First. For the recovery of real property, or of an estate or interest therein.
“Second. For the partition of real property.
‘ ‘ Third. For the sale of real property under a mortgage, lien or other incumbrance or charge.
“Fourth. For an injury to real property.”

It was claimed by counsel for the landowner that the fourth subdivision of the section applies only to actions for the recovery of damages for trespass and other like injuries. The court said that it observed no distinction between proceedings at law and proceedings in equity in the rule prescribed in determining the venue in actions. It was further stated that a cause of action is local under the Code, because the statute has made it so.

It was further argued that,.as the remedy by injunction acts only upon the person of the defendant, the venue is transitory; but the court held otherwise. It was expressly stated that if the suit was “for an injury to real property,” under the fourth subdivision of the section, then the statute imperatively required it to be brought in Prairie County where the land was situated. The court said:

“The term ‘injury’ is'used in § 4994 in a technical sense, and as meaning every wrong which in legal contemplation is an injury to real property. This embraces, not only injuries committed directly and forcibly for which an action of trespass was the appropriate remedy under the former practice, but such also as nuisances, the obstruction of light or air, diverting water courses and other similar wrongs for which the remedy at common law was an action on the case. Of the latter class was permissive waste, which, being a failure to repair, was a mere nonfeasance; and yet it was classed as an injury to real property, and the venue was local. 1 Chitty, pp. 144, 268. That an act which is only threatened may be an injury to real property is shown by the statutory provisions affording- a remedy in many cases to prevent it. Thus an injunction is granted ‘to restrain the commission or continuance of some act which could produce great or irreparable injury to the plaintiff. Mansf. Dig., § 3730’.”

Continuing, the court quoted with approval from Drinkhouse v. Spring Valley Water Company, 80 Cal. 308, 22 Pac. 252, the following:

“The injury is the same, whether threatened or completed, and the privilegie accorded to the plaintiff to prevent the injury by injunction ought not to be held to give him the right to have the trial in a county where the cause would not have been triable if he had waited the completion of the injury before seeking redress. ’ ’

Counsel for the drainage district claim that this holding was inferentially at least modified by Hogge v. Drainage District No. 7, 181 Ark. 564, 20 S. W. (2d) 887; where an owner of land in Craighead County was allowed to máintain a suit for permanent injury to his land by the construction of the same drainage district in Poinsett County. It is argued that if the Poinsett Circuit Court had no jurisdiction because the action was local, then the case should have been decided upon that ground because the jurisdiction could not be waived. In the first place, the question of jurisdiction was not raised or discussed in that case at all. In the second place, if the question of jurisdiction had been raised, the court might have held that the courts of Craighead and Poinsett counties had concurrent jurisdiction.

The section of the Digest under consideration was an exact copy of a corresponding section of the Code of Kentucky in force when our Code was adopted. Jones, McDowell & Co. v. Fletcher, 42 Ark. 422, which was decided at the November term, 1883, of this court.

In Smith v. Southern Railway Co., 136 Ky. 162, 123 S. W. 678, 26 L. R. A. (N. S.) 927, the Court of Appeals of Kentucky, in discussing the question, said:

“While at common law and by § 62, subsec. 4, Ky. Civ. Code Prac., an action for injury to real property is made local, and must therefore, as a general rule, be brought in the county in which the land is situated, and this rule is not to be arbitrarily enforced where the injury to the real estate results from a cause or act arising or occurring in a county or State other than the one in which it is situated, for in such a state of case the law seems to allow the owner of the real estate the right to elect whether he will sue in the county or State where the land lies, or in that in which the act causing the injury was committed.

It is true that this decision was rendered after we adopted the provisions of the Kentucky statute; and under the rule of adopted construction, the decision of the court of last, resort of Kentucky would not be binding upon us, yet it would be persuasive as construing a similar statute. Such holding’ is in application of the rule, “when the matter in one county is depending upon the matter in. another county, the plaintiff may choose' in which county he shall bring his action.” Barden v. Crocker, 10 Pick. (Mass.) 383. We cite these cases only as holding what might be consistently held by this court on a question of jurisdiction as to an injury sustained which results in one county from an act committed-or 'cause originating in an adjoining county of the same state.

Again, it is insisted that the' Cox case above cited is inferentially, at least, overruled or modified by North Arkansas Highway Improvement District No. 2 v. Home Telephone Co., 176 Ark. 553, 3 S. W. (2d) 307; and Home Telephone Co. v. North Arkansas Highway Improvement District No. 2, 179 Ark. 875, 19 S. W. (2d) 1014. We do not think so. In these eases, it will he rioted from the opinions that the action was treated as a transitory one and not as an action “for an injury to real property.” ■The Highway Improvement District was created by the Legislature of 1917, and § 4 of the act expressly provided that the domicile of the corporation should be in Izard County, and that all suits against it should be by service on the commissioners in that county. Acts of 1917, vol. II, p. 1280. For this reason, it was held that the act itself required service to be had upon the corporation in Izard County; and under the provisions of the Code relating to transitory actions, they must be brought where the defendant resides or is found. Here, as we have already ‘seen, the statute itself makes an action “for an injury to real property,” a local action, which must be brought in the county where the land is situated.

We do not consider the case of Road Improvement District No. 4 v. Ball, 170 Ark. 522, 281 S. W. 5, as authority one way or the other. There the court was dealing with a collateral attack on a decree of the Pulaski Chancery Court upon a road improvement district organized under the general statutes in Saline County, and the court merely held that while a suit against a domestic corporation must be brought in the county of its residence, in a transitory action a voluntary appearance in another county than that of its domicile constitutes a. waiver and confers jurisdiction upon the court.

Hence it will be seen that, if the proposed acts of Drainage District No. 7 of Poinsett County were to be committed by a. railroad corporation^ by a private corporation, or by a private person, the venue of the action would be in Cross County where the land is situated and service would be had upon the defendant in Poinsett County, where the act sought to be enjoined was alleged to be committed. But it is insisted that this rule does not apply to a drainage district. We do not agree with ■counsel in this contention. It is true that drainage districts, levee districts, and road improvement districts are created by statute, and have only such powers as are expressly or impliedly conferred upon them. They are quasi public corporations with power to sue and be sued with reference to the matters conferred upon them. Altheimer v. Board of Directors of Plum Bayou Levee District, 79 Ark. 229, 95 S. W. 140; Board of Directors of St. Francis Levee District v. Fleming, 93 Ark. 490, 125 S. W. 132; and Board of Levee Inspectors of Chicot County v. Southwestern Land & Timber Co., 112 Ark. 467, 166 S. W. 589. According to. these and numerous other decisions of this court, local improvement districts and their commissioners are governmental agencies created as quasi public corporations deriving their powers directly from the Legislature and exercising them as the agent of the property owners in the district whose interests are affected by the duties they perform. They exercise no governmental powers except those expressly or impliedly granted by the Legislature. They are not political or civil divisions of the State like counties and municipal corporations created to aid in the general administration of the government. They are not created for political purposes or for the administration of civil government; Hence no public policy would be violated by applying the same rules for the service of process upon them as are prescribed for private corporations and quasi public corporations, such as railroads, etc.

Section 2 of the original act of 1917, creating the district, expressly declares that a certain named board of directors and their successors shall constitute “a corporate body by the name of Drainage District No. 7 of Poinsett County, Arkansas, and by that name they may have a corporate seal, may perform all acts and have all powers and privileges to which a corporation is entitled under the provisions of this act and under the laws of the State of Arkansas and be subject to all liabilities provided for under the provisions of this act and under the laws of the State of Arkansas.” Acts of 1917, vol. 1, page 1053.

Thus it will be seen that by the very terms of the aet creating the district it is subject to all liabilities provided for under the laws of the State of Arkansas. Hence the venue of actions against it is not changed by the terms of the act creating the district. The act expressly provides that the domicile of the corporation shall be in Poinsett County, and, in addition, that the corporation shall be subject to the liabilities of other corporations under the laws of the State. This would make it amenable to service of process just like other corporations and would make it subject to the venue of actions just like other corporations.

It has been suggested that, being governmental agencies, public improvement districts could not be sued in a county other than that in which it. has its domicile by law. The argument is based upon public policy; and the principle involved is that, like counties and cities, if their officers are subject to suits in other counties, such suits must inevitably hinder and delay the successful conduct of the functions laid upon them. If the Legislature had deemed this to be the best public policy, it could have effectually accomplished that purpose by declaring that the drainage district could only be sued in any action in the county of its domicile. That would have made all actions against the corporation local. Instead of this, as we have already seen, the act creating the corporation locates its domicile in Poinsett County, just as private corporations are located by statute in the county where they have their principal office; but, in addition, the statute expressly provides that the corporation shall be subject to all liabilities provided for under the laws of the State. This would include provisions for venue in actions against the district as well as for service of summons upon the district and the commissioners thereof.

This view is upheld by the rule in the case of Road Improvement District No. 4 v. Ball, 170 Ark. 522, 281 S. W. 5, where the court treated the officers of a road improvement district as having power to enter their appearanee in another county than that in which the district was organized. If all actions against improvement districts and their officers are to be considered as local and only to be brought and tried in the county where the corporation has its domicile, it is evident that they could not enter their appearance in another county, and that the holding in the Ball case would have been different.

It follows from what we have said that, under the allegations of the complaint, the work proposed to be done under the changed plans and specifications of the drainage district will flood the lands of the plaintiffs in Cross County and permanently injure them. Therefore, under the fourth subdivision of § 1164 of the Digest, the venue is in Cross County, and service of process may be had upon the defendants in Poinsett County, and the application for the writ of prohibition must be denied.


author: Smith, J.

text:
    Kirby v. Kirby.
    Opinion delivered November 2, 1931.

      Tom Kidd, for appellant.

      Jas. 8. McConnell, for appellee.
   Smith, J.

Appellant and appellee were married August 11, 1929, and lived together as husband and wife until June, 1930, at which time appellant left appellee’s home and has not since lived with him. Both parties had been previously married,' and Mr. Kirby, appellee, was the father of six children, one of whom resided with him. Mrs. Kirby, appellant, was the mother of two children, both boys, the elder named Gilbert being nine years old at the time of her marriage to Mr. Kirby.

Mr. Kirby is a very substantial farmer, the owner of a 400-acre farm, and has money in bank and out at interest, and owns a large quantity of livestock, yet he worked himself in his fieids. One day while Mr. Kirby was plowing corn, he put the boy Gilbert to work chopping cotton, and when he discovered that the boy was cutting up too much of the cotton, he became angry and whipped the boy in anger. The whipping was unnecessarily severe, and blood was drawn, and bruises were left on the boy’s body. Mrs. Kirby interfered, and Mr. Kirby said he would lay it on her, but he did not offer to strike her. He did tell her, however, that she could take her children and leave. Mr. Kirby had whipped the boy on three previous occasions, but not so severely, and Mrs. Kirby made no complaint of these whippings.

After the boy Gilbert was whipped the last time, Mrs. Kirby left her husband and returned to the homestead of her first husband, the father of her children. Mrs. Kirby was a widow at the time of her second marriage. Her first husband had children by a former marriage, and one of these children, a daughter, resided on his homestead, and Mrs. Kirby took up her residence with this daughter and now resides with her. Mrs. Kirby was pregnant at the time she left the home of her present husband, and in October, 1930, gave birth to a girl child.

Shortly before the birth of this child, Mrs. Kirby brought suit for divorce and alimony and for the custody of this child and for an allowance for its support. Pending the trial of this suit a consent decree was entered whereby Mrs. Kirby was given $200 in money settlement of her property rights in the estate of her husband, Mr. Kirby, and an allowance of $20 per month was made for the support of their infant child.

(Before the final submission of this cause, Mr. Kirby made an attempt to effect a reconciliation with his wife, and attempted to induce her to return to his home. He later filed a petition to modify the decree wherein the allowance of $20: per month had been made for the infant.

It was the opinion of the chancellor that it was Mrs. Kirby’s duty to return to the home of her husband, and in the final decree from which this appeal comes, the prayer for a.divorce was denied, and the former decree was modified to the extent that Mr. Kirby was excused from payments on account of the support of their infant child, and this appeal is from that decree.

We are of the opinion that the decree for divorce which Mrs. Kirby prayed was properly denied. Mr. Kirby had repented his anger with his wife and confessed that he whipped the child with unnecessary severity, and proposed in an effort to effect a reconciliation, to leave the future correction of Mrs. Kirby’s two children by her first marriage to her. He also proposed that the decree awarding her $200 in settlement of her claim against his estate be set aside. The chancellor was evidently of the opinion that Mrs. Kirby should áccept this proposition, and that she would have done so, but for the interference of Mrs. Kirby’s stepdaughter, with whom she now resides, and the decree of the court was rendered upon the theory that Kirby should not be required to make contributions to the infant’s support while he. was in good faith offering to support the child and its mother and her other children at his home.

The testimony establishes the fact that Mrs. Kirby’s stepdaughter was hostile to Mr. Kirby, and that at first he was not permitted to visit his child at her home, but she appears to have modified her attitude in this respect and does not now refuse him permission to see the child at her home.

We have concluded that Mrs. Kirby ought to forgive and forget the conduct of her husband which caused her to leave Ms home, and should now accept the offer which he makes in good faith to effect a reconciliation, ánd for this reason the divorce which she prayed was properly denied.

But the fact remains that she had cause for leaving Kirby’s home; indeed, she was invited to do so, and she appears to be .unable to forgive and forget, and the court is without power to compel her to return to her husband’s home.

Now, while this obstancy on the part of Mrs. Kirby justified the court in refusing her a divorce or an allowance for her separate support, the rights of the infant child are-unaffected by the attitude o'f its parents towards each other. Their duty to it continues. This child, a girl, is only one year old, and its tender age is such that Mr. Kirby does not ask that its mother be deprived of its custody, and we think the father should be required to make contributions to its support. His duty to the child would not be affected, even though he had obtained a divorce.

It was said in the case of Holt v. Holt, 42 Ark. 495, that “the dissolution of the marriage tie and decreeing the custody of the children,- either permanently or temporarily to the mother, do not relieve the father of his obligation to support them. If they are too young to earn their own livelihood, the father must continue to furnish them a maintenance out of his estate, regard being had to his means and condition in life.” This rule has since -been consistently followed and applied by this court, and was expressly reaffirmed in the case of Shue v. Shue, 162 Ark. 220, 258 S. W. 128; and Daily v. Daily, 175 Ark. 163, 298 S. W. 1012.

, In the original consent decree an allowance of $20 per month was made for the support of the child, but in view of the circumstances of the parties this may be somewhat excessive, as the testimony of Mrs. Kirby herself shows that she did not require this sum to support the child. We have concluded, in view of the testimony as to Mr. Kirby’s financial circumstances, that an allowanee on'this account to Mrs. Kirby of $15 per month will not be excessive and is sufficient.

The decree of the court below is therefore modified to the extent of allowing Mrs. Kirby the sum of $15 per month for the support of the infant child; in all other respects the decree is affirmed. _ ‘"

The costs of this case, including those on the appeal, will be assessed against the appellee, the husband.


text:
    Gaster v. Dermott School District.
    Opinion delivered November 2, 1931.
    ' John- Baxter, for appellant.

      Wallace Toimvsend, for appellee.
   Smith, J.

This suit was brought by appellant, a citizen and taxpayer in the Dermott Special School District, to enjoin the directors of that district from selling any additional bonds of the district.

The complaint contains the following allegations. The assessed valuation of all taxable property, both real and personal, within the district is $1,476,163, and on August 1, 1931, the indebtedness of the school district amounted to $194,410.54, consisting of the following items:

Floating indebtedness (including unpaid
warrants) .......................................................................$ 43,813.88
Bonds not matured........................................................... 119,500.00
Contracts to be executed prior to July 1, 1932 .......................................-............................................ 18,924.01.. ■
Accomits payable............................................................... 10,100.00
Other liabilities...........-............................ 1,150.95
Improvement taxes due....................... 921.70
Total ....................................................................................$194,410.54

The floating indebtedness consists of the promissory notes of the district secured by unpaid warrants thereof, attached thereto, drawn by the district. These notes are twenty in number and bear various dates from 7-1-30 to 6-3-31.

On August 8, 1931, the directors of the-school district filed with the Commissioner of Education of the State of Arkansas a petition for the authorization and approval of a. proposed bond issue of $47,000, which peti-. tion conformed to the requirements of § 62 of act No. 169 of the Acts of the General Assembly for the year 1931; and the Commissioner of Education gave his approval to the proposed issue in writing, under the seal of the State Board of Education, authorizing the directors, on behalf of the district, to advertise and sell a bond issue of $47,000.

It was further alleged that the proposed bond issue, together with the bonds of the district now outstanding, will be very greatly in excess of seven per cent, of the assessed valuation of the property of the district, and that the proposed new issue of $47,000 in bonds will not be for the purpose of refunding* the present existing bonded indebtedness, and for that reason the proposed issue is prohibited by § 60 of said act 169.

A demurrer was filed by the directors on behalf of the district, which was sustained by the court, and, as the plaintiff taxpayer refused to plead further, the complaint was dismissed as being without equity, and this appeal is from that decree.

The question presented by this appeal is that of the authority'of the Dermott Special School District to issue additional bonds under the authority of act 169 of the Acts of 1931 (Acts 1931, page 476). This is an act entitled “An act to provide for the organization and administration of the public common schools.’’ The act consists of 198 sections, and is a complete revision of our school laws.

The provisions of this act which are decisive of this appeal are §§ 59 and 60, and they read as follows:

“Section 59. All school districts are authorized to borrow money and issue negotiable coupons for the repayment thereof from school funds, for the building and equipment of school buildings, making additions and repairs thereto, purchasing sites therefor, and for funding any indebtedness created for any purpose and outstanding at the time of the passage of this act, as provided in this act.
“Section 60. No bonds shall be issued at any time that would make the total of outstanding bonded indebtedness of the district at that time, exclusive of- interest, exceed seven per- cent, of the assessed valuation of the real and personal property in the district as shown by the last county assessment. This shall not prohibit bond issues refunding present bonded indebtedness that exceeds seven per cent.”

Read by itself, the provisions of § 59 are very broad. This section authorizes all school districts to borrow money and issue negotiable bonds for building and equipping school -buildings, making repairs and additions thereto-, and purchasing sites therefor, “and for funding any indebtedness created for any purpose and outstanding at the- time of the passage of this act, as provided in this act.”

This section deals with the purposes for which bonds may be issued and authorizes their, issuance, among other purposes, “for funding any indebtedness created for any purpose.”

The following section, No. 60, imposes a limitation as to the amount of bonds which may be issued. Under this section bonds may not be issued that would make the total of outstanding' bonded indebtedness (exclusive of interest) exceed seven per cent, of the assessed value of the property in the district. But this limitation does not “prohibit bond issues refunding- present bonded indebtedness that exceeds seven per cent.”

In other words, school districts may refund their entire bonded indebtedness by issuing new bonds, although the indebtedness exceeds seven per cent, of the assessed valuation of the property in the district, but, except for this purpose, bonds may not be issued in excess of that per cent, of the assessed valuation.

It would appear, therefore, that the Dermott Special School District is without power to issue additional bonds 'which the plaintiff taxpayer seeks to enjoin, for the reason that the district has already issued bonds in excess of seven per cent, of the assessed value of the property in this district, and is therefore without power to issue new or additional bonds except to refund the present bonded indebtedness, and the complaint alleges that this is not the purpose to which the proceeds of the new bond issue will be devoted.

It is insisted, however, that the floating indebtedness of the ■ district, for which the warrants of the district have been issued in payment of the notes of the district are included in the term “bonded indebtedness,” appearing in § AO of the said Act 169. The case of Arkansas State Highway Commission v. Kerby, 175 Ark. 652, 300 S. W. 377, is cited to sustain this contention; but we do not think it is sustained by that case.

In the case cited Kerby sought to compel the State Highway Department to take over and pay certain certificates of indebtedness issued by a road improvement district prior to the passage of act No. 11 of the Acts of 1927.

As appears from the opinion in that case, § 3 of act No. 11 provided that the Highway Commission should “ascertain the amount of the outstanding valid bonds issued by road improvement districts in this State, * * * ‘and that, after obtaining this information, the Highway Commission, beginning with the year 1927, should allot to each road district in the State now having outstanding bond issues an amount equal to its bonds maturing during the year. ’ ’ ’

Payment to Kerby was refused by the Highway Commission, because the indebtedness of the road improvement district in question was evidenced by certificates of indebtedness, and not by bonds. The opinion reviewed the history of this legislation and declared its purpose, and the fact was stated that the road district which had issued the certificates of indebtedness held by Kerby had been taken over by the Highway Department and made a part of the State highway system. It was there said: “The evident and avowed purpose of the act under consideration was to aid road districts, which had become overburdened with debt, in the construction of the improved roads, and we are of the opinion that the word ‘bond’ as used in the act was meant to include promissory notes and certificates of indebtedness issued by the district for the purpose of constructing the improved roads; and that the words ‘bond,’ ‘note,’ or ‘certificate of indebtedness’ are'but convertible terms. In short, we are of the opinion that the expression, ‘bond,’ as used in the act under consideration, was intended to cover all written obligations for the payment of money legally issued by the commissioners for the purpose of constructing the improved roads under the original acts creating the road districts.”

The judgment of the circuit court, directing the Highway Commission to pay the certificates held by Kerby, was therefore affirmed, but this order was affirmed because the Arkansas State Highway Commission had taken over the roads of the improvement district which had issued the certificates of indebtedness, and, having done this, it was held that, under the terms of the act under which the roads had been taken over and made a part of the State highway system, it became the duty of the Commisson to pay all of said certificates of indebtedness involved in that case. It was therefore declared immaterial whether this indebtedness was evidenced by promissory notes, certificates of indebtedness, or negotiable bonds, and that these would be treated as convertible terms, inasmuch as the General Assembly had assumed the payment of the district’s obligations.

Section 60 of act 169 consists of two complete sentences. In the first sentence it is provided that no bonds shall be issued at any time that would make the outstanding bonded indebtedness of the district (exclusive of interest) exceed seven per cent, of the assessed value of the property of the district. The second sentence of § 60 is in the nature of a proviso to the first sentence, that is, that this seven per cent, limitation shall not prohibit bond issues refunding present bonded indebtedness. This second sentence declares the purposes for which the seven per cent, limitation may be exceeded, that is, to pay, not the present indebtedness, but the present “bonded” indebtedness. We cannot read the word “bonded,” here appearing', out of the statute or treat it as being without significance. Section 59 authorizes the issuance of bonds “for funding any indebtedness created for any purpose and outstanding at the time of the passage of this act,’’ whereas, in § 60 the adjective “any,” preceding the word “indebtedness,” is displaced, and the adjective “bonded” is substituted. We cannot assume that the Legislature had no purpose in this substitution. On the contrary, the purpose of the Legislature, in the enactment of § 59, was to authorize the issuance' of bonds to pay any indebtedness, subject to the limitations appearing in § 60, which are ta the effect that bonds may not be issued in excess of seven per cent, of the assessed value of the property of the district except for the purpose of refunding the present bonded indebtedness 'of the" district.

Here, under the allegations of the complaint, the school district has outstanding thousands of dollars of warrants, issued for teachers’ salaries and other current expenses, attached to notes givén for this borrowed money, and, while this is indebtedness of the district, it is not bonded indebtedness, and there is therefore no authority to issue bonds to cover those debts, for the reason that the district has now outstanding bonds in excess of seven per cent, of the assessed value of the property of the district.

The decree of the court below will therefore be reversed, and the cause remanded, with directions to overrule the demurrer to the complaint.


author: Humphreys, J.

text:
    Madison Smith Cadillac Company v. Lloyd.
    Opinion delivered November 2, 1931.

      Ira D. Oglesby, for appellant.

      Partain <& Agee, for appellees.
   Humphreys, J.

Appellees sued appellants in the circuit court of Crawford County for damages on account of injuries each sustained in an automobile wreck alleged to have been caused by the negligence of Carlton Claridy in suddenly turning without warning a Hudson car which he was driving for Madison-Smith Cadillac Company across the highway out south of Fort Smith, thereby forcing them into the ditch paralleling the highway in order to avoid striking him.

Appellant filed an answer denying the alleged act of negligence on their part and pleading as an affirmative defense contributory negligence on the part of appellees.

The cause was submitted upon the pleadings, testimony, and instructions of the court, which resulted in verdicts and consequent judgments in favor of appellees, from which is this appeal.

When the testimony was concluded, the appellants requested an instructed verdict, which was refused over the objection and exception of appellants, and the cause was sent to the jury upon both issues of alleged negligence on the part of appellants and contributory negligence on the part of appellees.

The testimony was conflicting as to whether appellants gave the statutory signals when the Hudson car turned toward the left and it was therefore proper to submit to the jury the issue of negligence on the part of appellants.

The testimony responsive to the issue of contributory negligence was undisputed and is as follows:

Both cars were proceeding in a southerly direction on the right-hand side of the highway leading south out of Fort Smith. The Hudson was owned by the Madison-Smith Cadillac Company and was being delivered for it by Carlton Claridy to the Tankersly Junk Yard situated three and one-half miles south of Fort Smith on the east side of Highway 71. Appellees were on their way to Florida in a Chevrolet car driven by George Lloyd. As Claridy was nearing the junk yard, he reduced his speed to about 15 miles per hour in order to turn to the left into the road leading to the yard. When appellees were within 100 yards of him, he observed that he i^as slowing down, and they likewise slowed down to a speed of 25 or 30 miles per hour. When within thirty feet of him, they saw him turn to the left and blew their horn. He heard their signal and turned back to the right and stopped his car within a distance of four or five feet diagonally across the pavement. They then turned to the left to go around him, and in their effort to avoid striking him, ran into the ditch, turned completely over onto the wheels again, and ran for fifty yards into a store building on the east side of the highway that obstructed and stopped them. After slowing down the first time, they made no further effort to slow down or stop. They proceeded at the same rate of speed, traveling 25 or 30 miles an hour until their car was wrecked, at which time they were injured. The undisputed testimony was to the effect that they could have stopped their car within ten to twenty-five feet at the speed they were going.

The law of the road is that the automobile in front has the superior right to the use of the highway for the purpose of leaving it on either side to enter intersecting roads and passageways, and the traveler behind must, in handling his car, do so in recognition of the superior right of the traveler in front. Government Street Lumber Co. v. Ollinger, 18 Ala. App. 518, 94 So. 177. According to the undisputed facts detailed above, it was appellee’s duty in the exercise of ordinary care to stop their car so that appellants could turn to the left and go to the junk yard on the east side of the highway, and, failing to do so, were guilty of contributory negligence. Appellees argue, however, that they were not guilty of contributory negligence, because, when the Hudson car turned.to the left thirty feet in front of them, they were required to act suddenly without opportunity for deliberation; hence, that they must be excused if they did not adopt the safest course or act with the best judgment or greatest prudence. They might be excused for failure to stop their car had they been confronted with an emergency, but they were not. The undisputed facts reflect that, as far back as 100 yards, the Hudson car slowed down to 15 miles per hour for some purpose, and that they observed it do so and reduced their own speed to '25 or 30 miles an hour. They had ample time to think in covering that distance and could have easily stopped their car until they ascertained what purpose the Hudson car had in slowing down. There was no necessity whatever for them to act hastily in order to avoid striking the Hudson oar. They had control of their car, but rather than reduce their speed and stop if necessary, they deliberately chose to maintain their speed, and by doing- so assumed the hazard of turning- to the left and passing the Hudson car.

On account of the refusal of the court to peremptorily instruct for appellants, the judgments are reversed, and appellees’ actions are dismissed.

Mr. Justice Kirby dissents. •


text:
    Baugh v. Taylor.
    Opinion delivered November 2, 1931.

      Buzbee, Pugh <& Harrison, for appellant.

      C. W. Norton, for appellee.
   Humphreys, J.

This suit was brought by appellant on December 28, 1929, in the chancery court of St. Francis County against appellees to redeem lot 10, block 15 and lot 2, block 50, in Forrest City, Arkansas, from a mortgage thereon executed by her brother, ~W. P. Brandon, on March 30, 1925, to secure an indebtedness of her brother and husband in the sum' of $10,000, which was borrowed from appellee, Taylor, to pay off a like indebtedness and mortgage to the First National Bank of said city. Appellant based her contention for redemption of the property upon a. deed therefor from her brother to herself of date March, 1915, or, in the alternative, upon an option or repurchase contract between herself and Taylor of date February 10, 1927, in words and figures as follows:

“THIS WRITING WITNESSETH:
“That E. P. Taylor, the first party, and Mrs. Lucy L. Baugh, the second party, have agreed as follows to-wit:
“If at the commissioner’s sale now advertised to be held on the 12th day of February, 1927, in the case of E. P. Taylor, plaintiff, against W. P. 'Brandon et al., defendants, No. 4821, in the St. Francis Chancery Court, the said E. P. Taylor shall become the purchaser of the property to be sold, to-wit: “lot 10 of block 15 in the town of Forrest City, and lot 2 of block 50 in the town of Forrest City; and
“If the said second party thereupon and on the same day with the said sale shall pay to the said E. P. Taylor $2,000 as the consideration of this contract; and
“If the said second party shall regularly pay and discharge within the time provided by law for payment without penalty all general and special taxes and assessments now due or becoming due within the period of this contract, against the said property, and shall keep the buildings on the same well insured against loss or damage by fire and tornado in sums satisfactory to the first party and for his use and benefit and at the expense of the said second party; and shall at her own expense keep the buildings . on said lots in good repairs; then
“Upon the conditions aforesaid, and the time shall be of the essence thereof, the said first party hereby gives and grants to the said second party the exclusive right and option to and including the 31st day of December, 1928, to purchase of and from the said first party the real estate above described at a price to be determined as follows:
“That is, the price shall be a sum equal to the decree rendered in favor of the said E. P. Taylor and against W. P. Brandon and others on the 15th day of January, 1927, in the St. Francis Chancery Court in the case above referred to, with interest thereon at the rate named in the said decree to the day of the said exercise of the said option together with all court costs, attorney’s fees, and other expenses incurred by the said E. P. Taylor on account of the said judgment together with any sums paid out by the said E. P. Taylor after the date of this contract for reasonable, necessary repairs and upkeep on the said property and any taxes, special assessments and insurance which he may have paid on the same; which sum shall be subject to credit by the sum of $2,000 plus such further sums as the said E. P. Taylor may receive after the date of this contract as rents or profits out of the said property, which credits shall bear interest at the rate of 8 per cent, per annum from the date of payment respectively; and the balance remaining after application of these payments shall be the purchase price of the said property, and the same shall be payable in cash upon execution and delivery by the first party of a good deed of special warranty conveying the said property free and clear of all liens and incumbrances arising by, through or under him but the first party does not undertake to make a good deed of general warranty.
“Provided, this contract is on condition that the commissioner’s sale first above referred to shall be duly confirmed by the St. Francis County Chancery Court and a deed made to the first party, and if the said sale be not confirmed then the first party is to return to the second party the $2,000 paid for this option contract.
“Time shall be of the essence of this contract iu all particulars.
“This 10th day of February, 1927.
(Signed) “Lucy L. Baugh,
“E. P. Taylor.”

The defenses interposed to appellant’s suit for redemption were that the conveyance of the property to her by her brother, although in form a deed, was in effect a will and that she obtained no present title or interest therein under the instrument, and that she failed to perform the conditions of the option contract within the time specified.

The cause was heard upon the pleadings and testimony, which resulted in a dismissal of the complaint of appellant, from which is this appeal.

There is little or no dispute in the testimony. The facts reflected by the evidence are, in substance, as follows :

The real estate in question had been owned for many years by appellant’s blind brother, who resided with her and her husband. Her husband and brother were partners in business, and conducted a large mercantile establishment in the store building on the property. On March 15, 1915, appellant’s brother executed and delivered a deed for said real estate to her. He said at the time of delivery that he wanted her to have the property, and in order to effect that purpose gave her some money and required her to hand it back to him in exchange for the deed. 'She put the deed with her other papers, where it remained until, upon the advice of an attorney, she recorded it on the second day of February, 1927. The possession of all the real estate was retained by her brother, the store building being occupied by her husband and her brother and the residence rented by her brother. He never accounted to her for rents and continued to keep the property in repair and pay taxes thereon. On the ......day of............, he executed a mortgage thereon to the First National Bank of Forrest City to secure an indebtedness of his brother-in-law and himself. Thereafter he mortgaged same to appellee, Taylor, for $10,000 to obtain money with which to pay the indebtedness to the bank. Later they failed in business and their estate was administered by receivers. The receivers occupied the store building and rented the house without accounting to appellant for rents until appellees took possession for the purpose of foreclosing the mortgage. The foreclosure proceeding was instituted on December 20, 1926. On the 15th day of January, 1927, a judgment was obtained by appellee against appellant’s brother and husband for $10,514.70, and the mortgage lien was foreclosed, and the property ordered sold to pay same. At this juncture in the proceedings, W. P. Brandon and X. D'. Baugh, brother and husband of appellant, had several, consultations with appellee Taylor relative to saving the property, which resulted in the execution of the option contract set out above. Pursuant to the terms thereof, appellee Taylor purchased the property for $8,000 at the commissioner’s sale on February 12, 1927, at which time appellant paid him $2,000 in cash. Thereafter appellee Taylor collected rents on the store and allowed appellant to take possession of and collect the rents on the residences until March or April, 1929, some four months subsequent to the expiration of jthe option contract. Appellant paid appellee Taylor another $1,000 in February, 1928. At the time the option contract expired, appellant was ill and unable to attend to any business until early in 1929. As soon as she recovered sufficiently to attend to business, she requested an accounting and offered to redeem the property, but was informed that the time for redemption had expired.

We deem it unnecessary to consider or discuss appellant’s contention that she is the owner of the property by virtue of the deed, which antedates appellee’s mortgage, and entitled to redeem because she was not made a party to the foreclosure1 proceedings, for we are convinced that the option contract was in effect a new mortgage. It had practically all the characteristics of a mortgage. It carried the same indebtedness and bore the same rate of interest as the old indebtedness and costs of the foreclosure 'and appellee’s attorney’s fees. It also provided that if Taylor should pay out anything for taxes, insurance, or repairs, the amount should be added to the indebtedness. It also provided that rents collected by Taylor should be credited on the indebtedness. It also provided that appellant should pay the taxes, insurance and repairs on the property. It also provided that, if the debt were discharged within the time named, appellee Taylor should deliver the property free of incumbrances under special warranty to appellant. The relationship of mortgagor and mortgagee between appellant and appellee Taylor concerning the property in question was created by the option contract, which necessarily let in the equitj'- of redemption after default in payment. The principle announced in the case of American Mortgage, Co. v. Williams, 103 Ark. 494, 145 S. W. 234, is applicable to and governs the instant case. The clause in the option contract making time of the essence thereof had the effect, perhaps, of waiving the right of redemption conferred -by the statute, but did not dispose of the equity of redemption which antedates any statutory right of redemption. This equity can be disposed of only by foreclosure or a conveyance or by laches.

On account of the error indicated, the decree is reversed, and the cause is remanded with directions to ascertain the amount due on the mortgage and to allow appellant to redeem the property by the payment of same.

Kirby, J., concurs.

■Smith and McITaney, JJ., dissent.