text:
    Murphy v. Graves.
    Opinion delivered January 25, 1926.
    1. Homestead—order vesting in widow.—An order vesting the title to a decedent’s homestead in his widow on the ground that the value of the estate was less than $300 was void where decedent left minor children.
    2. Homestead—conveyance by widow—abandonment.—An attempted conveyance of the homestead by a widow operates as an abandonment of her homestead rights and affords grounds for re-entry by the holder of the title in remainder.
    3. Gifts—enforcement of oral gift.—An oral gift of land is enforceable where there is actual possession delivered, followed by the making o.f valuable improvements by the donee.
    4. Homestead—conveyance by widow—limitation.—Where a widow executed -a conveyance of decedent’s homestead, the fact that she 'had an unassigned right of dower did not bar the right of entry of decedent’s heirs, so as to prevent the statute of limitations from running against such heirs.
    Appeal from Ouachita Chancery Court, Second Division; George M. LeCroy, Chancellor;
    affirmed.

      G. R. Haynie and O. E. Westfall, for appellant.-

      H. G. Compton, T. W. Hardy, Henry Stevens, Pace é Davis, and R. E. Wiley, for appellee.
   McCulloch, C. J.

This appeal is a sequel to the appeal in the case of Hilderbrand v. Graves, 169 Ark. 210. Reference to the opinion in that case is made for a detailed statement of the facts, and it is only necessary to refer to the facts developed, in the record after the decree from which the former appeal came.

The appellant, Ben Murphy, was a party-defendant in the cause originally, and there was a final decree ag’ainst him declaring that he had no interest in the lands in controversy. He was constructively summoned in the case, hut did not appear in person, and prosecuted no appeal with the other defendants; however, he appeared within the statutory period allowed for setting aside judgments rendered on constructive service, and there was a retrial of the issues between him and the appellees, who were the plaintiffs below. The action was instituted by appellees against Hilderbrand and others to cancel conveyances of the land executed by ¡appellees to those parties, and appellant Ben Murphy was made a ¡party-defendant on the allegation that he was asserting an interest in the lands, but in fact had none.

All of the parties to the action claimed title under the same source, Larkin Murphy, who was the original purchaser from the United States and died intestate in the year 1878, leaving his widow, Mary Murphy, and two children, Joe and Drucilla. The property 'constituted the homestead of Larkin Murphy, and was occupied by his widow Mary, after his death, as her homestead. She subsequently married a man named Graves, and there were three children, Luther, Mary and Martha, the issue of that marriage. 'They were plaintiffs in the trial below and are appellees here.

Appellant was the illegitimate child of a young woman named Hattie Farris, who intermarried with Joe Murphy a few months after appellant’s birth. This was in the year 1897, and appellant’s claim to an interest in the land is based upon the assertion that Joe Murphy was his father, and that, after having intermarried with Hattie Farris, he recognized appellant as his child. In other words, appellant’s claim is based upon the operation of the statute of this State which reads as follows:

“Section 3473. If a man have by a woman a child or children, and afterwards shall intermarry with her, and shall recognize such children to be his, they shall be deemed and considered as legitimate.” Crawford & Moses’ Digest.

It is seen from the above recital that the title in Larkin Murphy descended upon his death to his two children, Joe and Drucilla, subject to the widow’s homestead right of occupancy and her dower right, and that the undivided half interest of Joe Murphy, subject to the aforementioned rights of the widow, descended to appellant if he was legitimatized as an heir under the operation of the statute quoted above.

There was ia great mass of testimony introduced in the trial below on the issue as to whether or not appellant was in fact the child of Joe Murphy, and, if he was, whether or not Joe Murphy recognized him as his child after the intermarriage with appellant’s mother. After careful consideration of the testimony, we have reached the conclusion that the preponderance of the evidence on this issue is in favor of appellant, and that the court erred in its finding on that issue, but our conclusion upon that issue is not decisive of the whole case, therefore it is unnecessary to set out in detail the testimony upon which our conclusion is based. We content ourselves merely by saying that, after consideration of the testimony, we find that it preponderates in favor of a finding that Joe Murphy.was.appellant’s father, and that shortly after appellant’s birth he married appellant’s mother and,thereafter -recognized appellant as his child, The question. of the statute of limitation is involved, however, and it becomes necessary to consider the facts with reference to that plea.

In the year 1884 the probate • court of Ouachita County, -on the application of Mary Graves, widow of Larkin .Graves, made and entered an order vesting the title to the lands in said Mary Graves on the ground that the value of the whole estate of Larkin Murphy, real and personal, was less than the -sum of $300. We decided on the former appeal that this order vesting title in Mary Graves was void, on the ground that the property constituted the homestead of the decedent, and that he left minor children, land that decision is conclusive of the question on the present appeal.

The tract of land. in controversy consists of 160 acres, being the south half of the south half of a certain section, and lies in the form of a rectangle. Mary Graves, as we have already stated, continued to occupy the land as her dwelling place and homestead, and she executed -to appellee Luther Graves, a son by her last marriage, a deed, or rather two deeds, conveying to him the west one-third of the land in controversy, fifty-three and one-third acres. One of these deeds- was executed in the year 1905, and the other in the year 1911, and purported to convey the absolute title in fee. In the year 1897, Mary Graves conveyed to Will Newton, the husband of Drucilla Murphy, the middle one-third of the tract in controversy, fifty-three and one-third acres, by deed purporting to convey in fee simple. Mary Graves lived on what was called the old home tract, the east end of the land in controversy, and in .the year 1913 she made a gift to her- daughter, Mary, of the west half of the east fifty-three and one-third acres of the homestead, and about the same time she gave the east half of that tract to her daughter Martha. The daughter Mary had at that time recently intermarried with Henry Mnrphy, and she and her husband entered upon the lands conveyed to her, and made improvements and have continued to reside thereon up to the commencement of this action. Martha and her husband took possession of the land conveyed to Martha and made improvements thereon, and have continued to occupy the same. Mary Graves has lived since that time with her two daughters on the lands which she had given to them. Mary Graves did not execute a deed to her daughters until May, 1922, when she executed proper deeds to both of her daughters, Mary and Martha, to the tracts above mentioned, purporting to convey the title in fee simple.

It has long been held to be the law in this State that an attempted conveyance of the homestead by a widow operates as an abandonment of her homestead rights and affords grounds for re-entry by the holder of title in remainder. Garibaldi v. Jones, 48 Ark. 230; Warren v. Martin, 168 Ark. 682. It is plain, therefore, that the conveyances executed by Mary Graves in the years 1905 and 1911, respectively, operated as a complete abandonment of the portions of the lands described in those deeds. Likewise, the deed of Mary Graves to Newton, executed in the year 1897, constituted an abandonment of that portion of the homestead. The question presents itself whether or not the oral gift of the remainder of the land to the two daughters of Mary Graves constituted an abandonment. We are of the opinion that it did. An oral gift of land is not enforceable unless there is actual possession delivered followed by the making of valuable improvements by the donee. Young v. Crawford, 82 Ark. 33; Brown v. Norvell, 96 Ark. 609; Williams v. Neighbors, 107 Ark. 473; Causey v. Wolfe, 135 Ark. 9. The executed oral gifts of land were as effectual to divest title as a written conveyance, hence it operated as an abandonment of the homestead right, the same as a deed of conveyance.

Appellant’s right of entry as heir was complete upon the abandonment of the homestead right by the widow, and the statute of limitations began to run against him at that time. The widow also had an unassigned dower right, but this did not bar the right of entry of the heirs so as to prevent the statute of limitations from running. Griffin v. Dunn, 79 Ark. 408; Fletcher v. Josephs, 105 Ark. 646.

According to the undisputed evidence, appellant was born in the year 1897, and was therefore more than twenty-five years of age when this action was commenced. His disability of infancy was removed when he ¡attained full age, more than four years before the commencement of this action, hence the bar of the statute was complete. Crawford & Moses’ Digest, § 6942. Appellant was, as to Drucilla Murphy and her grantees, a tenant in common, but there was a complete and notorious ouster and disregard of his rights, which was sufficient to put the statute in operation. There was an actual adverse occupancy. Drucilla Murphy and her husband, Will Newton, conveyed the middle one-third of the tract to Minerva Brister in the year 1909, and moved away, and the property was thereafter occupied continuously by Minerva Brister. It follows therefore that as to all the tracts appellant was barred, and that the decree of the chancery court was correct, although based upon untenable grounds.

It follows from what we have said that the decree in the case against appellant must be affirmed, but this affirmance does not inure to appellees to the extent of vesting in them the title of an interest of appellant, for they have all heretofore conveyed all of their right and .interest in the lands to the other defendants in the original action, Hilderbrand and others, and this court in the former decision directed the chancery court to render a decree against appellees in favor of said defendants. The effect of the affirmance is merely to deny the appellant any present rights in the lands, and not to vest any rights in appellees which have already been adjudged to the other defendants in the original action.

Decree affirmed.


source: Caselaw Access Project

author: McCulloch, C. J.

license: Public Domain

text:
    Winter v. Fly & Hobson Company.
    Opinion delivered January 25, 1926.
    1. Justice of the peace—jurisdictional amount.—A judgment in a justice’s court for an amount exceeding $1,000 was not void where it was based upon several promissory notes, none of which exceeded $100 in amount.
    2. Execution—intervention—evidence.—Evidence held to sustain a finding that property, levied upon as that of the execution defendant belonged to him., and not to his wife, who intervened claiming it.
    Appeal from St. Francis Circuit Court; E. D. Robertson, Judge;
    affirmed.

      Norfleet & Norfleet, for appellant.

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

Appellee obtained a judgment before a justice of the peace in St. Francis County against W. A. Winter for the recovery of money due on promissory notes, and, upon the return of the execution indorsed nulla bona by the officer, the transcript of the judgment was filed in the office of the clerk of the circuit court, whence another execution was issued, and levied on an automobile found by the officer in the garage at the dwelling occupied by Winter and his wife, the appellant, Viola Winter. Mrs. Winter made claim to the automobile and executed a bond pursuant to the statute (Craw: ford & Mjoses’ Digest, § 4311), conditioned that, if it be adjudged that the property is subject to execution, she would pay to the plaintiff in execution the value thereof with interest,, etc. The bond was by the officer returned with the execution, and at the next term of the court appellee moved for judgment against appellant, Mrs. Winter and her sureties, for the value of the automobile taken under execution and released under the bond. Crawford & Moses’ Digest, § 4314; Norton v. McNutt, 55 Ark. 59. There was a trial of the issues before a jury, which resulted in a verdict in favor of appellee for the sum of $750, found to be the value of the automobile.

The amount of the judgment recovered by appellee against W. A. Winter was $1,078.44, and it is first contended that the judgment and the execution issued thereon were void for the reason that the sum recovered was beyond the jurisdiction of the justice of the peace. It appears from the record that while the'gross amount recovered is beyond the jurisdiction of a justice of the peace, it was composed of separate counts on promissory notes not exceeding $100 each, and the justice of the peace therefore had jurisdiction. Brooks v. Hornberger, 78 Ark. 595.

It is next contended that the evidence is not legally sufficient to sustain the verdict of the jury. The sole issue in the trial of the case was whether or not the property belonged to W. A. Winter, the defendant in execution, as contended by appellee, or whether it was the property of his wife, Viola Winter. This issue was properly submitted to the jury, and we are of the opinion that the evidence was at least sufficient to sustain the verdict. It appears from the evidence that the automobile was purchased by W. A. Winter from a dealer in Memphis, and that he traded, in part payment, a car which, he testified, belonged to his wife. She did not testify in the ease. The car was purchased, however, in the name of W. A. Winter, and was insured by his consent, in his name, and the Arkansas license was obtained in his name. There was evidence also to the effect that the automobile was assessed for taxation in the name of W. A. Winter and not in the name of Mrs. Winter, who carried an assessment on the taxbooks, but not on the automobile. The cash payment was made by a check on an account in a Forrest City bank, carried in the name of Mrs. Winter, but there was proof to the effect that this account was used jointly by W. A. Winter and his wife. Considering all these facts and circumstances, we are unable to say that the jury could not reasonably draw the inference that the car was the property of W. A. Winter.

The .judgment is therefore affirmed.


author: Wood, J.

text:
    Stotts v. State.
    Opinion delivered January 25, 1926.
    1. Criminal law—evidence—res gestae.—Where an officer was shot by defendant while endeavoring to arrest defendant for selling whiskey and the defense was that defendant did not recognize the officer, but thought that he was attempting to make a felonious entry into defendant’s habitation, a remark by defendant’s wife, made in defendant’s presence, immediately preceding the shooting, that she had tried to get her husband to quit that business, was admissible tooth as part of res gestae and as tending to prove that defendant knew that the person shot was an officer.
    2. Criminal law—competency op evidence.—All evidence is admissible which tends to prove the issue, and no facts are forbidden to be shown, except such as are incapable of affording any reasonable presumption or inference in elucidation of the matters involved in the issue.
    3. Criminal law—instruction—general objection.—A case will not be reversed upon a general objection to an instruction not inherently erroneous and which, when construed with the other instructions, is not susceptible to an objectionable interpretation; if particular phraseology is objected to, special exception should be saved thereto.
    Appeal from Crittenden Circuit Court; W. W. Bandy, Judge;
    affirmed.

      Galloway & Weinstein, for appellant.

      H. W. Applegate, Attorney General, and Darden Moose, Assistant, for appellee.
   Wood, J.

This is an appeal from a judgment sentencing George Stotts to the- penitentiary for fifteen years for the offense of assault with intent to kill one Grady Harlan.

Harlan testified in substance that he was deputy sheriff of Crittenden County; that on the 7th of March, 1925, he and two others went down on the gravel road to No. 96, where they had received information that Stotts was selling liquor. They went to Stotts’ house and sent a negro in to purchase some liquor. The negro called out that he wanted one, and Stotts brought it out. As he went to hand it to the negro, witness demanded hi's arrest, and he broke and ran. It was a dark night, but the moon was shining, and witness saw appellant handing the negro the liquor, and witness said to appellant, “Throw up your hands,” whereupon appellant ran back in the house, and the light in the house went out. Appellant’s wife was crying and taking on in there. Witness tried to tell her there wasn’t anybody there to hurt them, and did so tell her. The appellant at this point objected to any conversation between the witness and appellant’s wife.

It was shown that the conversation between the witness and appellant’s wife was in the presence of appellant. The court thereupon overruled the objection of appellant, and permitted the witness to continue his testimony, which was substantially as follows: The house where appellant and his wife were was about twelve or sixteen or eighteen feet. It was narrow and built straight. Witness explained to appellant’s wife when she went into hysterics that he was not going to hurt anybody, 'but that he was an officer of the law. He told appellant to come on and make bond; that it wasn’t a serious offense. Appellant’s wife heard witness state this. She told witness that she had been “trying to get the old man to quit that. ’ ’

Upon objection being made by the appellant’s counsel the court said to the jury, “I want to tell the jury now that there is some testimony here that this defendant’s wife made the remark that she had been trying to get her husband to quit that business, the supposition being that it was the liquor 'business. Under our law you oan not convict a man for one crime because he has committed another, and you are told to disregard that testimony only in so far as it may show that this defendant knew what these officers were and their business being there. You may consider it for that, but because he has sold liquor doesn’t shed any light as to whether or not he shot this man with intent to kill.”

Witness, continuing his testimony, said that he told appellant it was not such a serious crime he was charged with, and that he could come on to Marion and make bond. Appellant made no reply. Witness then told him, if he didn’t come out, witness would have to come in and get him, and witness started in after him, and just as witness got to the door, he snapped on his flashlight, and as soon as witness put it on, appellant shot witness twice. Witness pointed out where the shots took effect. Witness fired in the direction in which he saw appellant’s gun flash, and then stepped off of the porch and walked off. This occurred in Crittenden County. Witness got away as quickly as he could, and went to Marion to a hospital, where he was confined fifteen days. AYitness could hear what was being said by appellant and his wife, but appellant was not talking loud, and appellant’s wife was crying and taking on and making considerable noise.

Other testimony was introduced which substantially corroborated that of the witness Harlan. One of the witnesses stated that all he remembered hearing the appellant’s wife say was, “Go ’way—go on away and don’t come in.” He didn’t hear appellant’s wife make any statement that she knew Harlan was an officer. He heard Harlan tell appellant that he was a deputy sheriff, but appellant’s wife continued to scream, “Go away,” whereupon Harlan stated that if appellant did not come out he would go in, and Harlan started in, and the shooting began.

The appellant testified that he was horn in Crittenden 'County, and that with the exception of three years had lived there all of his life. He was hard of hearing. He lived at No. 96, close to Pinckney. On the night of the shooting he had retired. It occurred sometime after dark. He had never known Harlan, and had no feeling whatever against him. He was awakened by some one calling “Hello!” and a negro came to the door and wanted a half pint, which witness procured for him, and just as he got to the door some man stepped around the corner of the house and said, “Stick them up,” and witness immediately jumped back into the boat and put out the light, not knowing that it was an officer, and thinking that he was a “hi-jacker” as there had been considerable trouble on the river with hi-jackers, and witness crossed to his bed and got his shotgun and loaded it. He said that his wife was screaming and crying, and that he was badly frightened, and when the door opened and Harlan’s flashlight flashed on, he tried to shoot it out of his hand, and fired two shots only, whereupon the party seeking to enter his home began firing upon him very fast. After firing two shots, witness left, and after the party had left witness’ house witness got his car and he and his wife went to the store, where he was arrested. Witness told them at the store that somebody had tried to rob and kill them. The first time witness knew that he had shot an officer was when one of the party told him, after his arrest, that he had shot an officer. Witness was 45 years old, had a family, and had never been convicted of a criminal offense.

Appellant moved the court to direct a verdict in his favor, which request the court refused, and to which ruling the appellant excepted. The court gave the jury seventeen instructions, to each of which appellant duly objected, and excepted to the ruling of the court in giving same. Instruction No. 10 is as follows: “You are told, gentlemen of the jury, that an attempt to commit any felony upon either the person or property of any person shall be justification of a homicide. Section 2373 of Crawford & Moses ’ Digest of the Statutes reads as follows: ‘A manifest attempt and endeavor, in a violent, riotous or tumultuous manner, to enter the habitation of another, for the purpose of assaulting or offering personal Violence to any person dwelling or being therein, shall be a justification of homicide. ’ Therefore, you are instructed in this case that if you find from the proof in the case, beyond a reasonable doubt, that the defendant, at the time the shot was fired which wounded the prosecuting witness, actually and honestly believed, without fault or carelessness on his part, that his habitation was about to be entered by somebody attempting to commit a felony, and, so acting and believing, he fired the shot to protect his property from a felon, it would be your duty to acquit him.”

1. Learned counsel for appellant in their oral argument and printed brief urge first that the court erred in permitting witness Grady Harlan to testify to what appellant’s wife 'said to him after appellant had run back in the house. The purport of the conversation was that, after appellant was ordered to throw up his hands, he ran back in the house, and his wife was in the house and began crying and taking on in there, whereupon Harlan tried to tell them that nobody was there to hurt them, and did tell them. They were both in the house while Harlan was talking, and, when she went into hysterics, he explained to her that he was not going to hurt anybody, but was an officer of the law, whereupon she stated that she had been trying to get the old man to quit that. The court instructed the jury to disregard that testimony only in so far as it might show that the appellant knew that Harlan was an officer and the nature of his business in being at appellant’s house. The ruling of the court was not prejudicial to appellant. What was said and done by Harlan and appellant’s wife was in the presence of the appellant, and the instruction of the court told the jury that they could consider the testimony only for the purpose of determining whether appellant knew that Harlan was an officer. What was said and done by Harlan and appellant’s wife was immediately preceding the shooting by the appellant and was of the res gestae. It was but a part of the surrounding circumstances, and tended to throw light upon the immediate occurrence and to prove that when appellant fired he knew that Harlan was an officer. What the appellant’s wife said under the circumstances was not in the nature of testimony against her husband, but what was said and done by her was the same as if it had been said and done by some other person. The court ruled correctly in holding that the testimony of which appellant complains was relevant to the issue involved.

In Austin v. State, 14 Ark. 555, at page 559, we said: “It is certainly true as a general rule, both in civil and criminal cases, that the evidence must be confined to the point in issue; and in criminal eases there is perhaps a greater necessity, if possible, than in civil proceedings to enforce the rule; but in neither class of cases does this rule exclude all evidence that does not bear directly upon the issue; on the contrary, all evidence is admissible which tends to prove it, and no facts are forbidden to be shown, except such as are incapable of affording any reasonable presumption or inference in elucidation of the matters involved in the issue.” See also Carr v. State, 43 Ark. 99; Spivey v. State, 114 Ark. 267; Combs v. State, 163. Ark. 550.

2. Counsel insist in the second place that the court erred in giving that part of instruction No. 10 which reads as follows: ‘ ‘ Therefore you are. instructed in this case that, if you find from the proof in the case beyond á reasonable doubt that the defendant, at the time the shot was fired which wounded the prosecuting witness, actually and honestly believed, without fault or carelessness on his part, that his habitation was about to be entered by somebody attempting to commit a felony, and, so acting and believing, he fired the shot to protect his property from a felon, it would be your duty to acquit him.” Counsel argued that the instruction as thus phrased placed the burden of proof upon the appellant to establish his innocence beyond a reasonable doubt. We do not so construe the wording of the instruction.

The court, in instruction No. 1, given on its own motion, after defining the issue raised by the indictment and the appellant’s plea of not guilty, concluded as follows: ‘ ‘ That plea puts in evidence all the material allegations of the indictment and casts upon the State the burden of introducing proof which convinces you beyond a reasonable doubt of the defendant’s guilt.” The court’s instruction No. 3 reads as follows: “The defendant is presumed to 'be innocent, and this presumption clings to him throughout the entire trial, and is sufficient to acquit him until land unless the State introduces proof which convinces you of the defendant’s guilt beyond a reasonable doubt.” The instructions must be considered as a whole. Instruction No. 10 did not purport to be, and was not, on the burden of proof.. The instruction is not inherently erroneous, and when taken in connection with all the other instructions in the case, as we view it, is not fairly susceptible of the interpretation which counsel for appellant here seeks to give it. If they conceived that the instruction carries the meaning which they now urge upon us, they should have first called the attention of the trial court to the peculiar phraseology of which they here complain. Doubtless, if they had done so, the trial court would readily have changed the wording of the instruction to conform to their views. But their objection in the court below was only a general one, and did not suffice to draw the attention of the court to any objectionable phraseology. Griffin v. State, 141 Ark. 43; Jackson v. State, 142 Ark. 96; Stevens v. State, 143 Ark. 618; Miller v. State, 160 Ark. 469.

The record presents no reversible error, and the judgment is therefore affirmed.


author: Hart, J.,

text:
    Elkins v. Aliceville.
    .Opinion delivered January 25, 1926.
    1. Contracts—evidence.—Contracts may be made by letters and telegrams, and, when so evidenced, it is the duty of the trial court to interpret the contract and declare its terms.
    2. Contracts—modification.—A contract may .be varied by the parties before performance, as the power to enter into the contract equally authorizes them to abrogate or modify it, and this right to change or modify the contract equally extends to a change in the time of performing it.
    3. Contracts—modification—consideration.—Where the parties to an agreement agree to rescind it in whole or in part, and make a new agreement in lieu thereof the substitution of the new obligation constitutes a sufficient consideration.
    Appeal from Pulaski Chancery Court; John E. Martmeau, Chancellor;
    affirmed.
    STATEMENT BY THE COURT.
    M. W. Elkins brought this suit in the Pulaski Chancery Court against the Southern Trust Company to restrain it from paying to the town of Aliceville, Ala., his check for $1,000, payable to said town and certified 'by said bank.
    The ground upon which the injunction was asked was that the town of Aliceville had breached a contract whereby he was to purchase certain bonds issued by it, and the $1,000 certified check had been given by him to secure the faithful performance of said contract on his part.
    The town of Aliceville wais allowed to file an intervening petition in which it denied that it had breached the contract and averred a breach of contract on the part of the plaintiff. By way of cross-complaint, the town of Aliceville sought to recover against M. W. Elkins the sum of $1,000 as damages for breach of said contract by him.
    It appears from the record that on the 25th day of January, 1923, M. ~W. Elkins, who is a bond broker in the city of Little Bock, wrote a letter to the town of Aliceville, Alabama, inclosing a bid for certain school bonds which were advertised to be issued and sold by said town. "We copy that part of the letter which is material to the issues in the case, which is as follows:
    “For your $11,000 of school bonds and $10,000 of waterworks bonds, bearing 6 per cent, interest, payable semi-annually at the Chase National Bank, New York, all the bonds maturing March 1,1923, we bid you 98 cents and accrued interest, upon the following conditions: That you furnish us with the unqualified approving opinion of John C. Thompson of New York, or Wood & Oakley of Chicago; that the bonds are payable from an ad valorem tax, and that you deliver us the bonds in Little Rock, as provided above, within sixty days from this date, accompanied by the final approving opinion and non-litigation certificate. ’ ’
    On February 2 the proper authorities of the town of Aliceville sent ia telegram to M. W. Elkins at Little Rock, which informed him that his bid for Aliceville bonds was accepted, and he was directed to send a certified check for $1,000.
    On the 16th day of February, 1923, Elkins wrote to the town council of said town that he was sending a certified check for $1,000, to be held in accordance with the contract .for the purchase of bonds, dated February 2, and added that, should he fail to take the bonds as provided in said contract, the certified check would be forfeited to said town as full and liquidated damages. It was also suggested in the letter that the town should get up a complete transcript of its proceeding’s in- the matter, and send it to Wood & Oakley, at Chicago, for examination. The letter also contained the following’:
    “We are indeed glad to have this business with you and assure you there will be no delay on our part in taking up the bonds when we secure Wood & Oakley’s opinion. Wood & Oakley can furnish us with -bond form, and we can have the bonds printed here and sent direct to you for execution.”

      On March 7, 1923, Elkins wrote to the town of Alice-ville the following:
    . “In reply to yonr letter of the 5th on the above matter, in which you quote Wood & Oakley’s letter, it seems that it would be an easy matter to comply with their requirements. We are perfectly willing to accept serial bonds. In fact, we prefer them. We take it from your letter that you are willing to sell us'the bonds at 96 cents and that you furnish no legal opinion whatever. In other words, leave the opinion up to us. We would not want the bonds at any price without some recognized bond attorney’s approving opinion. You must bear in mind that the district has made a contract with us for the sale of the ‘bonds. We note that you want -a check for $1,000 that you canuse. You have a check now for $1,000 certified by the Southern Trust Company of this city, to be forfeited to the district if we fail to comply with our contract. We are willing to do anything that is reasonable and right, hut we would not be willing for you to throw out our bid. We would suggest that you go ahead and comply with Wood & Oakley’s requirements and miake delivery of the bonds to us as soon as you can.”
    The town delivered Elkins’ letter and told him that he could have the bonds at 96 cents on the dollar 'and the accrued interest, provided he would pay the attorney’s fees and other expenses.
    On March 12, 1923, Elkins wrote to the town. of Aliceville the following:
    “In reply to your letter of the 21st, we will tlake the above bonds at 96 cents and pay the attorney’s fees and printing the bonds. We suggest that you write Wood & Oakley at once to prepare such papers as they require. By proceeding in this way, in our opinion, you will save time. We are anxious to secure delivery of the bonds, and suggest that you furnish Wood & Oakley the information they require, and, as indicated above, suggest you have them draw such papers as they want passed. ’ ’

      On the 3rd of April, 1923, Elkins wrote the town to ascertain what progress it had made towards securing the final approving opinion of Wood & Oakley on the bond issue, and stated that he was anxious to secure the delivery of the bonds.
    On May 3, 1923, Elkins wrote to the town as follows: “In reply to your letter of the 1st, inclosing schedule of the above bonds, will state that the maturities are satisfactory to us, and we are ready to take up the bonds as soon as Wood & Oakley give their final approving opinion. We would suggest that as soon as the bonds are ready you ship them to the Southern Trust Company, of this city, with Wood & Oakley’s opinion attached, or instruct Wood & Oakley to send the transcript and their opinion direct to us.”
    On May 21, 1923, the town wired Elkins that it had secured the approving opinion of- Wood & Oakley, and asked instructions in regard to the printing of the bonds. Under the date of May 22, 1923, Elkins wrote that it was satisfactory to him for the town to have the bonds printed. On June 16, 1923, the town wrote Elkins that the bonds had been printed and sent by registered mail to the Southern Trust Company at Little Rock, Ark., for delivery. On June 21, 1923, Elkins wrote to the town of Aliceville that he was not sure he could use the bonds at 96 cents for the reason that the bond market had declined materially in the last thirty days. On June 28, 1923, Elkins wrote to the town of Aliceville that the time for delivering the bonds upon the terms of the contract was up on MSareh 12, 1923, and that he was under no moral obligation whatever to take the bonds. Subsequently Elkins declined to take the bonds at all except at a reduced price. Proof was made by the town of Alice-ville to the effect that the damages suffered by it on account of the breach of the contract by Elkins amounted to more than $1,000.
    The chancellor found the issues in favor of the intervener, the town of Aliceville, and from a decree in its favor M. W. Elkins has duly prosecuted an appeal to this court.

      John F. Clifford, for appellant.

      Cockrill £ Armistead and John W. Newman, for appellee.
   Hart, J.,

(after stating the facts). Contracts may he made hy letters and telegrams, and, when so evidenced, it is the duty of the trial court to interpret the contract and declare its terms. Mann v. Urquhart, 89 Ark. 239; Cage v. Black, 97 Ark. 613; Porter v. Gossell, 112 Ark. 380; Hart v. Hammett Grocer Co., 132 Ark. 197; and Mantle Lamp Co. v. Read, 160 Ark. 355. The principles of law decided in these eases are recognized as controlling by counsel for the plaintiff, 'but he claims that under the original contract the time for performance expired at the end of sixty days, and that after this time the plaintiff was under no legal obligation to take the bonds. In carrying out and applying the rule of law above announced, the parties to a contract may modify'or waive their rights under it and engraft new terms upon it by letters, and in such case the promise of one party is the consideration for that of the other. In other words, a contract may be varied by the parties before performance for the reason that the power to enter into the contract equally authorizes them to abrogate nr modify it, and this right to change or modify the contract equally extends to a change in the time of performing it. Parmelee v. Thompson, 45 N. Y. 58, 6 Am. Rep. 33.

It will be noted from the letters quoted and referred to in our statement of facts that, after the expiration of the sixty days, Elkins treated the contract as continuing in force, and finally secured a change in its terms by proposing to accept the bonds at a lower price and pay the attorney’s fees, which proposal was accepted by the town of Aliceville. Subsequently, on May 3,1923, Elkins wrote to the town of Aliceville a letter in which he stated that the maturities of the bonds to be issued were satisfactory to him, and that he was ready to take up the bonds as soon as Wood & Oakley gave their final opinion. Thus he recognized that the modified contract was still in force, and their correspondence shows that the town of Alice-ville, in reliance upon his letters, proceeded with the matter, had the bonds printed and signed by the proper authorities, and secured the approving opinion of Wood & Oakley in June.

There is no rule of law forbidding the relinquishment of an existing contract and the substitution of a new one in its stead, and that is what was done in the ease at bar. Under the original contract, Elkins was to give the town of Aliceville 98 cents on the dollar for the bonds issued by it." Under the substituted agreement he was to give the town 96 cents on the dollar for the bonds and to pay the attorney’s fees for examining them. It is well settled that the parties to a contract may at any time rescind it in whole or in part by mutual consent, and the surrender of their mutual rights and the substitution of new obligations is a sufficient consideration. Ozark & Cherokee Central Railway Co. v. Ferguson, 92 Ark. 254, and Cook v. Cave, 163 Ark. 407 and cases cited.

The town of Aliceville, by agreeing to take a less sum for the bonds, and Elkins by extending the time for securing’ the approval of the bonds by the town of Alice-ville, waived performance of the contract as originally made,- and the parties substituted a new agreement in its place. The mutual promises of the parties in respect to the substituted agreement constituted a good consideration for its execution.

It follows that the decree will be affirmed.


author: Smith, J.

text:
    Bowen-Oglesby Milling Company v. Hall.
    Opinion delivered January 25, 1926.
    1. Sales—payment of draft to collecting bank.—Where a carload of merchandise was shipped with draft attached to the bill of lading, and the purchaser, having sufficient funds in the bank to which the shipper sent the draft for collection, gave his check on such bank, which marked the draft “paid,” but never forwarded the money to the shipper, held that, if the bank did not have the money to pay the shipper, its act in marking the draft •paid did not constitute payment.
    2. Sales—purchaser’s liability.—Where an order for a carload of merchandise stipulated that the purchaser should be responsible for final payment to the shipper, it ..was error to charge the jury that such stipulation would not render the purchaser liable if the bank to which the purchaser made payment and which failed to forward the money to the seller was in fact the . latter’s agent.
    Appeal from Polk Circuit Court; B-. E. Isbell, Judge;
    reversed.

      Norwood & Alley, for appellant.

      Pipkin & Frederick, for appellee.
   Smith, J.

On August 7, 1923, appellant’s traveling salesman took a written order from appellee for a oar of flour and feed to be skipped within sixty days. The amount of the flour was designated in the order, and it was provided in the order that the balance of the oar should be in feed at market price when ordered out. The car of flour and feed was shipped to and received by the appellee about October 9,1923, and the principal question of fact in the case is whether the shipment was made under this written order or pursuant to a verbal order.

The written order covered 10,000 pounds of flour, in sacks of 48 pounds each, at the price for $5.-60 per barrel. This order, which was signed by appellee, contained the following recital: “Bal. car in other feed at market price when ordered out. Terms of payment A. D. draft with shipper’s order bill of lading attached through Hatfield Bank of Hatfield. Where buyer designates the bank through which draft is to be presented, and to whom payment is to be made, buyer will be responsible for final payment to the seller. Time of shipment 60 days, destination Hatfield. ’ ’

The car of flour and feed amounted to $935, and a draft for that amount was drawn on appellee, with bill of lading attached, .and sent to the Bank of Hatfield, at Hatfield, for collection. Appellee was a depositor in this bank, and had on deposit with it to his credit a sum of money in excess of the draft, and when the draft was presented to him he drew a check on the Bank of Hatfield for the amount of the draft, which was marked “paid” by the cashier of the bank. The bill of lading was surrendered by the bank to' appellee, and, upon the presentation of the bill of lading to the railroad company, the consignment of flour and feed was delivered by the carrier to appellee.

The following testimony was offered on behalf of appellant, the plaintiff below: A written order for a car of flour and feed was received and accepted. The order was not conditional. The phrase, “when ordered out”, appearing in the order, meant that the purchaser had the right to order the shipment made at any time within sixty days from the date of the order, and to have the flour charged at a price not exceeding the market quotation at the time of the acceptance of the order. Telephone direction was given 'by appellant on October 1, 1923, to ship pursuant to the written order, at which time specifications as to character of feed to complete the car were given, and across the face of the order the words, “Filed 10-1-1923,” were written.

The cashier of the bank testified that the draft was marked “paid” when the bill of lading was surrendered, but the draft was never charged to appellee’s account. The cashier admitted that the bank had never remitted the amount of the draft to appellant, and, when asked if the bank was short of funds, answered “that was-the reason of the delay.” On the cross-examination of the cashier he was asked if appellee had sufficient money on deposit with the bank to play the draft, and the cashier answered that appellee had on deposit a sum in excess of the draft.

The bank closed its doors on October 17, 1923, and was taken over by the Bank Commissioner, but neither appellant nor- appellee ever filed the draft in question as a liability to be allowed against the bank.

Appellee testified that the consignment in question was shipped under a verbal order which did not relate to the written order, and that he was not asked to specify, and did not specify, the bank through which the draft was to be presented.

The manager of the appellant company testified that it was the custom of his company to choose its own bank for collection of drafts, but where the selection was mlade by the consignee it was specified in the order that the buyer would be responsible for the final payment. The order of August 7, 1923, contained a provision to that effect.

Three instructions were given, one at the request of appellant and two at the request of appellee. The instruction given at the request of appellant reads as follows: “You are instructed that if you believe from a preponderance of the evidence that the defendant gave the plaintiff a written order for a car of merchandise to consist of 10,000- pounds of flour and balance of car to be filled with feed, at market price when ordered out, and the defendant telephoned plaintiff what kind of feed to fill the car with, and the shipment was made pursuant to such written order and telephone directions, and that defendant designated the Bank of Hatfield through which draft was to be presented, and defendant agreed to be responsible for final payment to plaintiff, and the draft was drawn and presented as directed, and plaintiff never received playment, you will find for the plaintiff.”

Appellant insists that the facts upon which this instruction was predicated are undisputed, land that it was e^ror on the part of the court not to direct a verdict in its favor. One of the errors assigned in the motion for a new trial is the insufficiency of the evidence to support the verdict in appellee’s flavor.

We think this instruction correctly declares the law, and, if we could say that the facts were as there hypothesized, appellant would have been entitled to a directed verdict. In other words, if the shipment w&s, in fact, made under the written order of August 7, appellant was entitled to a directed verdict, because this order did direct the bank through which the draft should be paid, and the order specified, when this was done, that the buyer would be responsible for final payment to the seller. Under the terms of this order, which appellee admits signing, it is unimportant to determine whose agent the bank was, as the buyer agreed to become responsible for final payment to the seller. But, inasmuch as appellee testified that the shipment was under a verbal order, and not under this written order, we cannot say that a verdict should have been directed for appellant on the theory istated.

Appellant insists that it was entitled to a directed verdict because the undisputed testimony showsi that when the draft was marked paid the bank did not have money enough on hand to pay the draft. It may be said that, if we could find that the undisputed facts support appellant’s contention in this respect, we would hold that it was entitled to a directed verdict on that account, but the answer of the cashier as to the funds of the bank on hand at the time the draft was marked “paid” is reasonably susceptible to the construction that it had money in hand in excess of the draft. If he meant to say only that ¡appellee’s deposit at the bank exceeded the draft, but that the bank itself did not have funds in hand exceeding the amount of the draft, then there was no payment.

Appellee’s theory of the case is that the bank was the agent of the shipper; that the collection was in fact made when the draft was marked ‘ ‘ paid ’ ’; that this was in legal effect an assignment of so much of the money as appellee had on deposit from the credit of appellee to that of appellant, and that this was a payment of the draft, and that the sum thus 'assigned became the money of appellant, and the bank beciame its agent to remit the collection, and any loss occasioned by the failure of the bank to remit should be sustained by the party whose agent the bank was. To sustain this theory of the case, and in support of the instructions given in his behalf, appellee cites the case of Darragh Co. v. Goodman, 124 Ark. 532. In this case it was stated that “it is Uniformly held that an agent having for collection obligations due to his principal, can receive only money in payment, unless otherwise directed, and these principles of course apply to banks holding driafts for collection.”

There is no testimony whatever that appellant sent the draft to the- bank as a deposit. There was no intention on appellant’s part of becoming one of the bank’s general creditors by becoming a depositor. There was therefore ho authority whatever on the part of the bank to attempt the collection by charging the draft to appellee and crediting the proceeds thereof to appellant. So that, if the bank did not have money on hand with which the draft could have been paid, there was never, in fact, any payment, although the draft was marked “paid.”

Instruction numbered 1 given at appellee’s request required on this question only that the jury find that appellee’s deposit exceeded the draft. This was not sufficient. It was essential also that the bank have in hand money exceeding the draft.

Over appellant’s objection the court gave an instruction numbered 2, reading as follows: “You are instructed that the fact that the signed order of the defendant contained la clause stating that defendant should be responsible for final payment to the plaintiff does not change the fact that payment to the bank would be final payment to the plaintiff if said bank was plaintiff’s agent.”

This instruction is in conflict with what we have herein said. It permits the jury to find that final payment was made if the bank was appellant’s agent, although the signed order contained a clause making appellee responsible for final payment. The instruction defeats the whole purpose of this clause in the order, and for the error in giving this instruction the judgment will be reversed, and the cause remanded for a new trial.


text:
    Eadie v. Carnes.
    Opinion delivered January 25, 1926.
    Trial—instruction not applicable to pleadings.—In an action for injuries received in a collision between two automobiles, where defendant offered testimony tending to prove an accord and satisfaction which was competent as an admission of liability on plaintiff’s part, it was error to permit the jury to consider that affirmative defense when it was not pleaded.
    Appeal from Sebastian Circuit Court, Fort Smith District; John E. Tatum, Judge;
    reversed.

      Joseph R. Brown, for appellant.

      Roy Qean and J. A. Gallaher, for appellee.
   Smith, J.

Plaintiffs brought suit to recover damages on .account of a collision which occurred between a truck owned by them and Ian automobile owned by defendant. Both the truck and the .car were being used for business purposes, and each was being driven by an employee of the .owner. The plaintiffs allege the collision was due to the negligence of defendant’s employee. Defendant denied negligence and alleged the injury was caused by the negligence of plaintiff’s driver, and defendant prayed judgment on account of the damage to his car.

As is usual in such cases, the employee of each party excused himself and blamed the other, land the testimony would have supported a recovery for either party, but the jury found for the defendant without (assessing any damages in his favor.

Over the 'objection of plaintiffs the defendant was permitted to testify that, soon after the collision, Castling, one of the plaintiffs, came to him, and -stated that he had gone over the -situation and had concluded that it was an accident and was unavoidable. That Castling asked witness if his car was insured, and he ¡answered that it was not, and that Castling stated that he carried insurance, and suggested that if witness would file a claim with the insurance company he might get something for his damage, and that, in response to Castling’s suggestion, he filed a claim, but it was rejected by the insurance company, and that he and Castling agreed they would -consider the matter settled by each paying the cost -of making his own repiairs.

All of this testimony was objected to on the ground that it tended to show an accord and -satisfaction, a defense which had not been pleaded. This objection was overruled, and this action of the court is assigned as error. '

' The testimony of this witness tended to show that he -and Castling had compromised the matter by each agreeing to -pay the -cost of repairing his own machine, and the court gave an instruction on this subject over the -objection of the plaintiffs, yet, notwithstanding the testimony of the witness that the matter had been -compromised and settled, he prayed judgment in his cross-complaint for the damages to his own dar.

It may be said that the defense of an accord and satisfaction is an affirmative one, which should have been -specially pleaded if the defendant wished to rely upon it. Defendant did not ask to amend his answer to set up this defense, and the court did not rule that the answer would be treated as amended to set it up.

The plaintiffs did not plead surprise, but we -cannot say that they should have done so in support of their Objection, for the reason that the testimony might have been admitted on the theory that it was an admission that there was no negligence on defendant’s part causing the collision. It was not until the instructions were given that it appeared that the court was holding that the testimony might also be considered in support of the affirmative defense of accord and satisfaction, which, as we have said, was never pleaded.

The court, in ruling on the admissibility of this testimony, should either have given the defendant le'ave to amend his answer to set up this defense or have stated that the answer would be treated as being so- amended, in which event plaintiffs might have made any showing of surprise they thought proper to make in the admission of the testimony. But plaintiffs could not have pleaded surprise if the testimony had been intended only to show an admission on plaintiffs’ part that defendant was not responsible for the collision, for the evidence objected to was competent for that purpose.

We conclude therefore that, upon objection being made to this testimony, the court should have required defendant to 'amend his lanswer or have ruled, as a condition to the admission of the testimony, that the answer be treated as amended, if defendant wished this done, in which event plaintiff's would have been in position to plead surprise, if- such were the fact, as Castling w*as not present at the trial.

We conclude therefore that the court was in error in admitting this testimony under the circumstances of the case.

Other errors assigned relate to matters which will become unimportant or will not likely be repeated in view of the new trial which must be ordered.

For the error indicated the judgment is reversed, and the cause will be remanded for a new trial.


author: Humphreys, J.

text:
    Rose v. King.
    Opinion delivered January 25, 1926.
    1. Evidence—private memoranda.—In a suit upon an account it was not error to permit defendant, in connection with his testimony, to introduce check stubs, where he testified that they constituted the only record he made of the transactions, and that the notations thereon were made by him contemporaneously with the several transactions.
    2. Evidence—books op account.—Crawford & Moses’ Dig., §§ 4134, 4135, apply to the books of deceased persons, and have no application to transactions between persons in being.
    3. Trial—jury taking papers with them.—It is within the discretion of the trial court to permit the jury to take with them papers which have been exhibited to and examined by them during the trial, and whose authenticity has not been questioned.
    Appeal from Sebastian Circuit Court, Fort Smith District; John E. Tatum, Judge;
    affirmed.

      W. L. Curtis, for appellant.

      Webb Covington, for appellee.
   Humphreys, J.

Appellant instituted suit against appellee in the circuit court of 'Sebastian County, Fort Smith District, to recover the alleged balance of $2,015 on open account for administering anesthetics to and making x-rays of appellee’s patients.

Appellee filed lan 'answer denying any liability and any indebtedness on account of services rendered to his patients by appellant.

The cause was submitted to the jury upon the pleadings, testimony introduced by the .parties, and the instructions of the court, which resulted in a verdict and judgment against ¡appellee for $60, from which is this appeal.

A reversal of the judgment is sought upon two grounds: first, that there is no substantial evidence in the record to support it; and second, that prejudicial error was committed in permitting appellee to introduce stubs with the entries thereon to checks which ¡appellee had given appellant in payment of services rendered, and in permitting the jury to call for and take the stubs to its own room after retiring to consider the case.

Appellant and appellee are physicians, and for a number of years, beginning in 1915, they had offices with a common reception room. They had a working agreement by which appellant was to receive a stipulated sum for administering anesthetics to the private patients of appellee. They had a settlement in April, 1920, showing that appellee owed appellant $1,405, lat which time appellee paid $1,000 on the account. Their testimony is in conflict as to whether the balance was subsequently paid. Appellee was elected chief surgeon of the Union Miners’ Hospital Association in 1905, and has continued to hold that position. Appellant was selected as his assistant in 1920, and retained that position until a short time before he brought this suit. These physicians rendered services to the members of that association and to charity patients in the institution under their employment. Appellant was an x-ray expert. In addition to the professional services they rendered the hospital, each had his private or charge patients. The old arrangement was continued as to the private patients of appellee after appellant’s employment at the hospital. Neither of the physicians kept a regular set of books. Appellant kept a card index called a loose-leaf or slip system. Appellee made notations on the stubs of his check showing the purpose for which the checks were given. After appellant severed his connection with the hospital, he made up a statement of account from the card index, showing a balance due him by appellee of $2,015 for administering anesthetics to and making x-rays of appellee’s private patients from the date of their settlement in 1920 to March 1, 1924, and made same the basis of this suit. Appellant testified to a total indebtedness of $2,650, with credits amounting to $635 leaving a balance due him of $2,015. Appellee testified that he had paid appellant all he owed him except $60, which he owed for administering anesthetics from December 5, 1923, to March 1, 1924. He was permitted to introduce a number of check stulbs upon which notations had been entered by appellee, showing the months for which he had paid appellant. The notations on the last stub he introduced showed thlat check No. 173 had been issued to appellant by appellee on December 5, 1923, amounting to $120 for July, August, September, October and November, 1923, for anesthetics. Appellee testified that he depended upon appellant to keep the account between them, and would pay the bills when presented, noting at the time on the stubs of the checks for what they were given. These stubs-were introduced over the objection and exception of appellant. After the jury retired to consider the case, they called for the checks, and were permitted by the court, over the objection and exception of appellant, to take the stubs to their room.

(1) . There is sufficient testimony of a substantial nature in the record to sustain the verdict and judgment. Appellee testified positively that he had paid appellant for the professional services rendered to his patients after their arrangement. In support of his testimony, he produced a large number of check stubs showing that the checks were issued to appellant for services during the period the arrangement covered. The last stub showed that the check covered services rendered in the months of July, August, ^September, October, and November, 1923. It is unlikely that he would have paid for these services before paying for services rendered at an earlier date. The stubs introduced showed payment for viari-ous months during the several years covered by the arrangement. These stubs strongly corroborated the testimony of appellee to the effect that he paid appellant for the services rendered prior to December 5, 1923, and that he only owed appellant for services rendered after that date.

(2) . Appellant makes the contention, however, that the stubs were inadmissible because in no sense an account book. The stubs were introduced in connection with appellee’s testimony, showing that they constituted the only and original record he made of the transactions, and that the notations thereon were made by him contemporaneously with the several transactions. Appellant makes the further contention that they were inadmissible under §§ 4134 and 4135 of Crawford & Moses’ Digest. Those sections apply to books of deceased persons and have no application to the character of evidence in question. Appellant contends, however, that it was reversible error to allow the, jury to take the check stubs to their room after retiring to consider their verdict. This court said in the case of Dodwell v. Mound City Sawmill Co., 90 Ark. 287 that (quoting syllabus 3), “it is within the discretion of the trial court to permit the jury to take with them papers which have been exhibited to and examined by them during the trial and whose authenticity has not been questioned. ’ ’

No error appearing, the judgment is affirmed.


text:
    Murrell v. Rawlings.
    Opinion delivered January 25, 1926.
    Appeal and error—premature decree—restitution.—A decree by default in a mortgage foreclosure suit entered into before expiration of 20 days after service of summons on the defendant, as required by Crawford & Moses’ Dig., § 1290, is erroneous, and a sale thereunder to the mortgagee will be set aside on appeal, and an order for restitution will be entered.
    Appeal from Arkansas Chancery Court, Northern District; John M. Elliott, Chancellor;
    reversed.

      John W. Moncrief, for appellant.

      M. F. Elms, for appellee.
   Humphreys, J.

This suit was brought by appellee against appellants in the chancery court of Arkansas County, Northern District, for the purpose of obtaining a decree upon a promissory note executed to him by appellants, and to foreclose a mortgage on real estate described therein executed to secure said note. The suit was filed on the 23rd day of May, 1924, and the summons issued thereon was served upon appellants on the 30th day of May, 1924. The court convened in adjourned session on the 18th day of June, 1924, upon which day a decree and order of sale was rendered in the case. Subsequently, the real estate, worth between $2,000 and $3,-000, was sold pursuant to the order of court to pay the notes, interest, and costs. Appellee purchased the real-estate at the sale, paying $526.45 for it. On October 6, 1924, a day of the regular fall term of said court, the commissioner appointed to make the sale presented his' report of the sale of the lands, and same, was confirmed, and a deed ordered by the court to be executed. During the afternoon of that day appellants filed a motion to vacate the original decree and order of sale, and to set aside the sale and confirmation thereof, for the purpose of redeeming the land, which motion was overruled by the court. Appellants prayed and were granted an appeal from the order denying the motion to vacate said decree and orders made pursuant thereto, and refusing to allow them to redeem said real estate. Within six months after the rendition of the original decree and order of sale, appellants prayed- and were granted an appeal therefrom by the clerk of this court.

It will be observed that the court entered a decree and order of sale by default in the case before twenty days had elapsed after service upon appellants. This was error. Henry Quallmalz Lbr. & Mfg. Co. v. Roche, 145 Ark. 38; American Ins. Co. v. Perry, 167 Ark. 198; Harnwell v. Miller, 164 Ark. 15.

Section 1285 of Crawford & Moses’ Digest is as follows: “Judgment by default shall be rendered by the court on any day of any regular or adjourned session in any case where the defense has not been filed within the time allowed by §§ 1208 and 1209; provided, that the court may for good cause allow further time for filing a defense.”

Section 1290 of Crawford & Moses’ Digest is as follows: “The plaintiff shall he entitled to a trial in all actions by equitable proceedings on the first day that the court meets in regular or adjourned session after twenty days after service of summons on all defendants, as provided by § 1265 as herein amended, where no issue of fact is made by the pleadings, or where the plaintiff consents that the statements of the answer may be taken as true.”

Under the provisions of these sections the judgment was prematurely entered, and this action of the court constituted reversible error, which may be corrected on appeal.

Appellee purchased the property at the sale under a premature judgment of his own-, and for this reason appellants are entitled to a restitution of the property. The reversal of the original decree and order of sale therefore has the effect of setting aside the sale and all proceedings had and done thereunder.

On account of the error indicated, the decree and all the proceedings had and done thereunder are reversed, and the cause is remanded, with directions to the court to permit appellants to redeem the property by the payment of the debt, interest to date, and the costs which accrued up to the rendition of the original decree herein.


text:
    Craig v. Simpson.
    Opinion delivered January 25, 1926.
    Reformation of instruments—pleadings.—A complaint in a suit by tenants to reform a lease which alleged that, during the negotiations for the lease, it was agreed that the tenants should have an option for an extension of the lease, which was to be incorporated in the written lease, and that plaintiffs read the lease hurriedly and relied upon the statement of defendants’ attorney that the option was incorporated in the written contract, held, demurrable as being too indefinite to charge either mistake or fraud.

      Appeal from Pope Circuit Court; J. T. Bullock, Judge;
    reversed.

      Robert Bailey, for appellant.

      Ward & Caudle, for appellee.
   Humphreys, J.

This suit was brought in the circuit court of Pope County by appellant to evict appellees from a certain store building and warehouse in Russellville, under the provisions of the forcible entry and detainer statute. The material allegations of the complaint are as follows:

First, that appellant is the owner of certain business property, including a warehouse, in the city of Russellville, and is lawfully entitled to the possession of same.

Second, that appellee occupied said premises under a written lease executed on the 10th day of May, 1920, for a term of four years, three months, and twenty days, or until the 1st of September, 1924, at a monthly rental of $125.

Third, that the rent on said premises is now worth $150 per month, exclusive of the warehouse in the rear of said building, for which appellant has been offered $25 per month.

Fourth, that appellant gave appellees a three-days’ notice to vacate on the 13'th day of October, 1924, and that they refused, to give possession, and unlawfully held said property.

Fifth, that appellees are indebted to appellant in the sum of $175 as rent accrued on said premises for the month of September, and that he is entitled to recover rent at the rate of $175 per month until possession is surrendered, together with $500 damages for the unlawful detention of said premises.

Appellees filed an answer, the material parts of which are as follows: They expressly admit appellant’s ownership of the property in question, and the execution of the alleged lease, and impliedly admit receiving a three-days’ notice in October, 1924, to vacate tbe premises. They then deny that the premises, including the warehouse, are worth $175 per month, and that they are indebted in the sum of $175 to appellant for the use of the premises for September, 1924, that he is entitled to $175 per month subsequently thereto, and that appellant has been damaged in the sum of $500 or in any other sum for the alleged unlawful detention of said premises.

By way of further defense they allege that, during the negotiations for the lease to the property, it was agreed that appellees should have an option for the extension of the lease for a term of five years at a rental equal to what any other bona fide applicant would pay for the premises, that the option would be incorporated in the written lease, and that they hurriedly read the lease prepared by appellant’s attorney, and relied upon the statement of appellant that this option was incorporated in the contract. The complaint and answer were both sworn to. Exhibits were filed to the pleadings, but it is unnecessary to refer to them., as the case was finally determined on the pleadinggr Exhibits do not control the pleadings at law, as they do in equity.

Appellant filed a general demurrer to the answer, which was overruled by the court, over his objection and exception. He then refused to produce any testimony in support of the allegations of the complaint, but elected to stand upon his demurrer, whereupon the court dismissed his complaint, from which is this appeal.

When the case was called for trial, it was agreed by and between appellant and appellees that the rent on said premises was then worth $175 per month, payable in advance, and the rents should be paid, beginning September 1, 1924, until this case is finally determined in the Súpleme Court.

Appellant’s contention for a reversal of the judgment is that the appellees’ answer was not sufficient to challenge appellant to proof of the allegations of his complaint. As the answer admitted the alleged ownership of the property and the execution of the lease, since the parties agreed on the rental value of the premises, and since the demurrer waived damages for a detention of the property other than the payment of the rent, the only allegation in the answer which pretends to tender any issue calling for proof related to the understanding between the parties that appellant should have an option for a five-years extension of the lease, and the representation by appellant that the option was incorporated in the contract. This allegation was in the nature of mistake or fraud, calling for a reformation of the written instrument. We do not think the allegation was sufficiently definite to charge either mistake or fraud. Reformation was not asked upon either ground, so the demurrer should have been sustained.

The judgment will therefore be reversed, with directions to sustain the demurrer, and for further proceedings not inconsistent with this opinion.


text:
    Meisner v. Pattee.
    Opinion delivered February 1, 1926.
    1. Limitation op actions—joint contractors—acknowledgment.—Under § 6966, Crawford & Moses’ Digest, a joint contractor is not bound by a written acknowledgment or promise made and signed by the other joint contractor, so as to stop the running of the statute of limitations.
    2. Limitation op actions—joint contractors—payment.—Under § 6966, Crawford & Moses’ Digest, providing in effect that a payment by a joint contractor stops the running of the statute of limitations as to the other contractor, the statute refers to a payment that is voluntary, and the application of the proceeds arising from the foreclosure of a mortgage, or the surrender of mortgaged property for foreclosure by a joint contractor, does not stop the running of the statute of limitations as to the other contractor.
    3. Fraudulent conveyances—conveyance to wife.—Where the consideration for a conveyance of land to a married woman was partly money furnished by her and partly a gift to her from a brother-in-law, the fact that, by mistake, the deed was made to her husband and subsequently was conveyed to her by him would not make the land subject to her husband’s debts, where there was no permission on her part for him to hold himself out as the owner of the property.
    Appeal from Union Chancery Court, First Division; J. ¥. Stevens, Chancellor;
    reversed.

      McNalley & Sellers, for appellant.

      Henry Stevens, for appellee.
   McCulloch, C. J.

A. L. Meisner, one of the defendants below, executed a promissory note to appellee on September 5,1917, for the sum of $1,040, due and payable six months after date with interest at eight per cent, per annum from maturity until paid. The name of appellant A. H. Stolz appears as an indorser on the'note. A. L. Meisner also executed to appellee a chattel mortgage on a lot of Holstein cattle to secure payment of the note. There was á foreclosure of the chattel mortgage early in the year 1919, and there was a credit of $241.04 placed on the note, the proceeds of the foreclosure sale. Appellee contends that the credit on the note is not sufficiently identified as being the proceeds of the mortgage, and that this credit represents another and voluntary payment, but we are of the opinion that it is fairly inferable from the testimony that this credit represents the proceeds of the foreclosure of the mortgage. No one testified that any other payment was made. This was all that was paid on the note, and on October 12, 1923, appellee instituted this action in the chancery court of Union County against A. L. Meisner and appellant A. H. Stolz to recover the amount of the unpaid balance on the note, and also against appellant Hattie W. Meisner, wife of A. L. Meisner, to set aside a conveyance of real estate made by the latter to the former, which is alleged to have been done to defraud creditors.

All of the defendants answered, pleading the statute of limitation on the note. Appellant Stolz also denied that he had personally signed the note as an indorser, but alleged that, on the contrary, the indorsement was by a corporation called tbe “Realty & Colonization Company,” of which he was secretary, and that he signed his name intending merely as secretary to certify to the signature of the corporation. He prayed for affirmative relief in the reformation of the form of indorsement so as to show that he signed merely in his official capacity and not individually. Appellant Hattie W. Meisner answered denying that the conveyance of land to her by her husband was fraudulent, but alleged on the contrary that the property was purchased with her own funds, and that it originally belonged to her.

On final hearing, the court rendered a personal judgment in favor of appellee, against Stolz and A. L. Meisner for the amount of the unpaid balance of the note, and also rendered a decree against Mrs. Meisner setting aside the conveyance of land to her by her husband and subjecting the land to the payment of appellee’s debt. A. L. Meisner has not appealed, but appeals have been prosecuted both by Hattie "W. Meisner and A. H. Stolz.

So far as concerns the appeal of Stolz, we have reached the conclusion that his plea of the statute of limitation ought to have been sustained. It is therefore unnecessary to discuss the other defense which he tendered. The note in suit fell due on March 5, 1918, at which time the statute of limitation began to run, and this action was not instituted until October 12, 1923; hence, on the face of the note, it is barred by the statute of limitation. It is not contended that Stolz himself did anything to interrupt the running of the statute, but the contention is that there was a voluntary payment of the proceeds of the chattel mortgage made by Meisner, and also a written acknowledgment of the existence of the debt made by him, both of which interrupted the statute of limitation, not only as to himself but also as to Stolz, who was jointly and severally liable with him. This contention is based upon a letter written to appellee on January 13, 1919, by A. L Meisner, as follows:

“I wish to advise you that, as I am unable to pay the note which you hold for the Naponee Nebraska Bank, also mortgage you hold showing Holstein cattle as security. I am ready to let you have the Holstein cattle except those which have died since the mortgage was made in September, 1917. After Monday, February 3, I will not be held responsible for them or their feed, as I am unable to care for them.”

Conceding, without deciding, that the language of this letter was sufficient to constitute an unequivocal acknowledgment of the subsisting obligation, so as to interrupt the running of the statute as to the writer of the letter (Morris v. Carr, 77 Ark. 228), the acknowledgment did not serve to interrupt the running of the statute in favor of Stolz. We have a statute on this subject, which reads as follows:

“Section 6966. No joint contractor or executor shall lose the benefit of this act by reason of any written acknowledgment or promise made and signed by any of the other joint contractors or executors. Nothing in this section contained shall be so construed as to alter, take away or lessen the effect of any payment of any principal or interest made by any person whatever on any such joint contract.” Crawford & Moses’ Digest.

It is plain under the terms of this statute that appellant Stolz was not bound by the acknowledgment of the debt made by Meisner. He was, however, under the terms of the statute, bound by any payment on the debt made by his joint obligor, and the further question to be determined is whether or not the crediting of the proceeds of the sale of the mortgaged property amounted, under the circumstances, to a voluntary payment by one of the obligors. It is settled by practically unanimous authority that the application of the proceeds arising from the foreclosure of a mortgage does not interrupt the running of the statute of limitation. Note to 25 A. L. R. 62. We do not think that the facts in this case take it out of the doctrine announced above, for the letter was a mere surrender of the property for foreclosure under the mortgage. It was not, either in form or substance, a voluntary payment on the debt, so as to interrupt the running of the statute of limitation. That being so, the debt was barred as against Stolz, and his plea of the statute of limitation should have been sustained.

The facts with respect to the ownership of the tract of land in controversy are, according to the great preponderance of the evidence, as follows: The tract contains eighty acres of land, situated in Union County, and was purchased from the Realty & Colonization Company, a corporation. There was a cash payment of $400 made by Mrs. Meisner, and the vendor made a conveyance to A. L. Meisner, reserving a lien for the balance of the purchase price. According to the testimony adduced, the conveyance made to A. L. Meisner was made erroneously to A. L. Meisner, instead of his wife. Subsequently, appellant A. H. Stolz, who was a brother-in-law of Mrs. Meisner, acquired control of the corporation, and he released the debt against the land in consideration that A. L. Meisner would convey it to his wife, which was done. We are of the opinion that, under these circumstances, the conveyance was not fraudulent, and that the court was in error in setting it aside. The proof was sufficient to establish the fact that the land was in fact the property of Mrs. Meisner, and that it was conveyed to her in good faith by her husband to correct the error in the original conveyance, and for the purpose of carrying out the agreement with Stolz, which constituted a sufficient consideration for the conveyance. The circumstances are the same as if the property had been a gift from Stolz to Mrs. Meisner. Nor can it be said under the circumstances that the effect of the transaction was a permission on the part of Mrs. Meisner for her husband to hold himself out as the owner of the property so as to bring the case within the doctrine of Driggs & Co.’s Bank v. Norwood, 50 Ark. 42, and like cases which followed it.

The decree of the chancery court is therefore reversed as to appellants Hattie W. Meisner and A. H. Stolz, and the cause remanded with directions to dismiss appellee’s complaint for want of equity as to them.


text:
    School Districts Nos. 28 and 29 v. Massie.
    Opinion delivered February 1, 1926.
    1. Depositaries—additional bond—estoppel.—Where the county court required a depositary bank to execute a second bond, as provided by Acts 1915, p. 126, § 6, and the bond was accepted by the county court, the sureties were thereafter estopped to dispute the authority under which it was accepted.
    2. Depositaries—additional bqnd—defense.—Where the county court required a depositary bank to execute a new ¡bond as provided by Acts 1915, p. 126, § 6, and such bond was accepted by the county court, it is no defense, in an action on the bond against the sureties of the new bond, that the sureties on the prior bond were the original stockholders of the bank, and that the sureties on the new bond were stockholders in the bank who were fraudulently induced to buy their stock, and that the county judge was one of the original stockholders, as the county was not responsible for such fraud.
    3. Depositaries—liability on bond.—Sureties upon the bond of a depositary under Acts 1915, p. 126, are liable thereon, though at the time it was executed the bank was insolvent.
    4. Election of remedied—effect.—Where the county brought suit against defendants in their capacity as stockholders in an insolvent depositary bank, and as sureties upon such depositary’s bond, and the trial court ordered the county to elect in which capacity it would sue the defendants, whereupon it elected to sue them as stockholders, and dismissed without prejudice the suit against them as sureties, such election will not debar interested school districts from subsequently suing upon the bond.
    Appeal from Prairie Cliancery Court, Southern District ; John E. Mwrtineau, Chancellor;
    reversed.

      Bogle & Sharp, for appellant.

      Gregory & Holtzendorff, Trimble S Trimble and Chas. A. Walls, for appellee.
   McCulloch, C. J.

The New Bank of Hazen, an incorporated banking institution doing business at the town of Hazen, in Prairie County, was, on April 23,1923, selected and designated by the county court of Prairie County as the depository of public funds, pursuant to a special act in force in that county. Acts 1915, p. 126. A bond was executed pursuant to the statute, and was signed by I. T. Sims, J. F. Sims and J. M. Zike as sureties, and this bond was approved by the county court.

On December 26,1923, there was a sale of the shares of stock in said bank -by the then owners to certain other persons, including appellee, and on that day a new depository bond was executed by the bank and signed by appellees. This bond was immediately filed, and on January 11, 1924, duly approved by the county court.

It is shown by the evidence in the present litigation that the bank was in fact insolvent on December 26,1923, and that this state of insolvency was later discovered by the Bank Commissioner, and the assets of the bank were taken over by the Commissioner and the bank closed on January 19, 1924. Among other public funds deposited in the bank and not withdrawn were the funds of School District No. 28' and School District No. 29 of Prairie County, and this is an action instituted by those two districts against appellees as the sureties on the last bond executed by the bank to recover the amount of the funds held on deposit.

■ Appellees filed an answer setting forth several defenses, hereinafter discussed. Appellants demurred to the answer, and after the court overruled it they elected to stand upon the ruling of the court; they appealed from the judgment of the court dismissing the action, and all of the pleadings and the facts stated therein are to be considered in determining the sufficiency of the answer to which appellants demurred.

It is undenied that the bond was executed by appellees, and that it was filed with the county court and approved, but liability is denied on several grounds. In the first place, it is contended that there was no authority under the statute for receiving more than one bond, and that the execution of the last bond was void. The statute in question provides for the selection of a depository annually and the giving of a bond, and, of course, this bond runs for the full annual period during which the depository serves; but § 9 of the statute provides that the county court may, at any time it “deems it desirable, or necessary, require a new and additional bond to be filed by said depository.” There is certainly nothing in the statute that limits the number of bonds which may be received, but, on the other hand, the statute authorizes the county court to require a new or additional bond. Having executed a bond in due form as provided by statute, and the same being accepted by the county court, the sureties are now estopped to dispute the authority upon which it was accepted. Talley v. State, 121 Ark. 4. There is no question involved in the present case about the liability of the sureties on the first bond, hence we have nothing to decide in regard to the liability of those sureties. We simply hold that the fact that this was a new and additional bond, given during the annual period, does not render it invalid so as to afford grounds upon which the sureties may escape liability. It is further contended that the sureties on this bond are not liable, for the reason that they were the purchasers of the stock of the bank from the former owners, and that they were induced to make the purchase by" fraud and misrepresentation of the former stockholders. In other words, the contention is that the alleged fraud in the sale of the stock of the bank affords a defense against liability on the bond which was executed in consequence of the sale of the stock. This argument is unsound in assuming that there is any connection between the change .of ownership in the stock and the execution of the new bond. The sale of the stock was a transaction between individuals, whereas the execution of the bond was a transaction between the bank and the county. The fact that the sureties on the first hond were the original stockholders of the bank, and that the sureties on the new bond are the stockholders who were fraudulently induced to buy the stock, is not important in testing the validity of the new bond. The county is not responsible for the alleged false misrepresentations which induced the purchase of the shares of stock in the bank. J. R. Watkins Medical Co. v. Montgomery, 140 Ark. 486. This is so, even though the county judge who was presiding over the county court at the time of the acceptance and approval of the last bond was one of the original stockholders of the bank, who, it is alleged, were guilty of false and fraudulent representations in inducing the purchase of the stock. Our conclusion is that this defense is unsound.

. Again, it is contended that, because the bank was actually insolvent at the date of the execution of the new bond and there were not. sufficient funds actually on hand to meet the liabilities of the bank, the new bond did not cover the defalcation. The facts which we glean from the proceedings in the case, and which we must assume to be true, were that the bank was in fact insolvent on the date of the execution of the bond, but that there was no refusal to pay over on demand—no unpaid checks on the public funds—and the bank continued to do business until it was closed by the Bank Commissioner on January 19, 1924. The deposit of the public funds was a general deposit and not special. Talley v. State, supra. By virtue of the general deposit the relation of debtor and creditor was created between the bank and the depositor of the public funds, and there was no preference under the statute for the public funds. State use Prairie County v. McKee, 168 Ark. 441. There was no defalcation until the bank ceased doing business and passed under the control of the Bank Commissioner, hence the execution of the bond created liability for the defalcation which subsequently occurred. The fact that the. bank at the time was insolvent, and did not have sufficient funds to meet drafts drawn upon the public funds, if any had been drawn, is not important in determining the liability of the sureties.

Finally, it is insisted that the school districts are bound by an election, made in a former action, to sue the stockholders, of the bank as such instead of the sureties on the bond, and that the order of the court requiring the election constituted an adjudication against the dis tricts of the right to sue on the bond. The facts upon which this contention is based are as follows: There was an action instituted in the circuit court of Prairie County by the State of Arkansas, for the use of the county, against both the old and the new stockholders of the bank to hold them liable for all the public funds, including the school funds. In a separate paragraph liability was asserted against the appellees as sureties on the bond now in suit, and, as before stated, these sureties were also stockholders under their purchase of the shares of stock from the former stockholders. On motion of the defendants to require the plaintiff to make an election, the court made and entered the following order:

“It is therefore considered, ordered and adjudged by the court that said motion be, and the same is, hereby sustained by the court. And on the same day comes the plaintiff, by its attorneys, J. G., C. B. and Cooper Thweatt, and W. J. Waggoner, and in open court elect to rely on each defendant as stockholder, and the plaintiff having elected to rely on each defendant as stockholder as party defendants, the court doth order said cause of action dismissed in so far as it attempts to recover judgment upon the depository bond sued on wherein J. E. Massie et al were sureties, and which bond was filed in county court on January-11, 1924.”

The circuit court decided that the stockholders were liable for the public funds deposited, but this court held that there was no liability by reason of the fact that there had been a repeal of that portion of the statute which imposed liability upon the stockholders, and the judgment was reversed for that reason.

If the stockholders, as such, had been liable under the statute, the remedy against them was not inconsistent with the liability of the sureties on the bond. There would, under that state of the law, have been contemporaneous remedies not inconsistent with each other; hence there were no grounds for requiring an election. The effect of the court’s order was to hold that the two rights of action, one against the stockholders and the other against the bondsmen, could not be joined together in one action. The plaintiffs in that action submitted to the order of the court and dismissed the action. Whether or not the order of the court was correct is not important, and appellants are not bound by the election, for it was only an election to withdraw from that action and pursue the asserted remedy against the stockholders. There was no adjudication of the merits of the action by this order of the court, for the dismissal was, in effect, one entered by plaintiffs themselves, and was without prejudice to the maintenance of a separate action.

Our conclusion upon the whole case is that there was no defense stated in the answer, and that the demurrer should have been sustained.

The judgment is reversed, and the cause remanded with directions to sustain the demurrer to the answer, and for further proceedings not inconsistent with this opinion.