text:
    Allen v. Ingalls.
    Opinion delivered December 22, 1930.

      Chas. D. James, for appellant.

      Festus 0, Butt, for appellee.
   Kirby, J.,

(after stating the facts). Appellants insist that the State Board of Health exceeded its power in requiring- vaccination and prescribing the method thereof, and that the certificate of the physician that the children had been vaccinated was' conclusive so far as the school board was concerned.

In Auten v. School Board of Little Rock, 83 Ark. 431, 104 S. W. 130, it was held that a regulation of the school board of a city requiring pupils before admission to the schools to present the certificate of a reputable physician showing that they had been successfully vaccinated, etc., was not unreasonable where smallpox was prevalent and the school board was acting under the orders of the board of health of the city and the advice of physicians.

In State v. Martin & Lipe, 134 Ark. 420, 204 S. W. 622, it was held that the State Board of Health was vested with power under §§ 5 and 6 of act No. 96 of 1913 (page 351), §§ 51201, 5130, Crawford & Moses’ Digest, to adopt and promulgate rules and regulations for the control and prevention of infectious, contagious, and communicable diseases, necessarily including the disease of smallpox, and to prevent its entry into and spread throughout the State by rules and orders preventing unvaccinated persons from mingling with the other inhabitants of the State, and that the authorization of the boards to make such rules was not a delegation of legislative power. It was said there: ‘ ‘ The necessity for, and reasonableness of, the regulations is one- largely within the judgment of the board. Every presumption is indulged in favor of the necessity of the rule, and courts will not interfere with acts of health authorities unless it is apparent that the rule is arbitrary.” In the opinion in that case, which also determined the case of Brazil v. State, 134 Ark. 420, 204 S. W. 622, 625, although the court thought the existing condition in the State at the time the rule was made warranted its adoption during the period of mobilization of Arkansas quota for the A. E. F. in the World War, smallpox being prevalent in the State and soldiers being transported in and out of the State in great numbers, still it was shown by proof, as herein, that no smallpox had been in the schools or neighborhood, and that there was no threatened epidemic of smallpox in the community; nor was it alleged that smallpox was prevalent or threatened in that district, an isolated one.

(1) It is well settled that it is a valid exercise of the police power of the State, the use of which was not restricted by the grant of power to the federal government, to designate local boards of health authorized to require under penalty the vaccination of all citizens when it may be deemed necessary to the public health and safety, such necessity arising when smallpox is present in a community or its appearance may be reasonably apprehended. Note 17 L. R. A. (N. S.) 709; State v. Martin & Lipe, supra.

Although it is undisputed that there was no smallpox in the city of Eureka Springs, nor in the county at the time the appellant’s children were denied the right to attend the'public schools, which they were otherwise entitled to do, except for the failure to present a satisfactory certificate of vaccination to the board in accordance with the rules, and the testimony showed that there was no condition existing* from which its appearance could be reasonably apprehended, the case is not distinguished from, Brazil v. State, supra, where a like condition was shown to exist and the adoption and promulgation of a like rule was held to be neither unreasonable or unnecessary. Such being the case, appellants insist that the vaccination requirement of the school board was arbitrary, unreasonable, and unnecessary, and applying only to school children, was necessarily discriminatory and void, in effect an unwarranted attempt to regulate the practice of medicine, contrary to the provisions of the statute authorizing’ the making of health regulations by .the State Board.

(2, 3). It is true that the State Board of Health in its regulation No. 84 defines vaccination for smallpox as “the introduction, by scarification, of the bovine vaccine virus through the skin, ’ ’ and that there is no definition of the term in the statute granting power to the board, although there is no doubt but that the Legislature had the power to prescribe such method required to be used by the State Board in protection of the public health, when the necessity arose therefor. The'majority is of opinion, in which the Chief Justice and the writer do not concur, that the power to prescribe the method for vaccination against smallpox was necessarily impliedly granted, and the statute granting powers and prescribing the duties of the State Board of Health and that the regulations made by it prescribing the method for vaccination was not arbitrary, but only a reasonable exercise of such power. That the method for vaccination prescribed by the 'board was but an expression of the meaning of the term in accordance with the common knowledge of mankind, and as understood by the consensus of opinion of the medical profession and practiced •by a great majority thereof; the term, itself, meaning the method as defined by the board as effectually as though it had been so defined in the statute. See definition in Webster’s Dictionary, Funk & Wagnall’s Standard Dictionary; Lee v. Marsh, 230 Pa. 351, 79 Atl. 564 ; Abney v. Fox, (Tex. Civ. App.) 250 S. W. 210.

(4, 5). The majority is also of opinion that the school board did not abuse its discretion in requiring, as prerequisite to the entry of pupils in the public schools, which they were otherwise entitled to attend, the presentation of “a certificate from a licensed and competent physician of the State that the pupil has been successfully vaccinated” in accordance with Rule No. 147, prescribed by the State Board of Health, and that such school board was not concluded by the certificate of vaccination presented by the pupils from a licensed physician that they had been vaccinated against smallpox, but could nevertheless inquire into the method used in performing the act of vaccination and deny the children the right to enter school, if it had not been done by the method prescribed by the State Board of Health. Neither does the writer agree to this holding of the court.

There being no prejudicial error in the record, the judgment is accordingly affirmed. «


source: Caselaw Access Project

author: Mehaeey, J.

license: Public Domain

text:
    Jackson v. Richardson.
    Opinion delivered December 22, 1930.

      M. D. Bowers and Walter L. Pope, for appellant.

      W. M. Ponder and W. P. Smith, for appellee.
   Mehaeey, J.

In July, 1902, Gr. J. Owen, a farmer about fifty-three years old, and a citizen of Randolph County, was convicted and sentenced to a term of twenty years in the penitentiary for the murder of his son-in-law, Henry Hall. The killing was alleged to have occurred February 18, 1902. Just prior to Owen’s imprisonment he constituted 'Schoonover & Brown his attorneys in fact to rent his lands and collect the rents amounting to approximately $1,000 a year. He escaped from prison after having served about a year, and after his escape he would at intervals meet one of his attorneys and his tenant, J. M. Hurst, at some place named by him and receive his rents. This continued until June, 1923, when the last settlement was made, and since that time, so far as the evidence shows, he has never been seen. No communication has been received from him since about January 1,1925.

Mr. Owen had three children: Yergie and Hattie, children of his first marriage, and Rubye, appellant, only child of his second and last marriage.

He acquired the lands involved in this suit about the year 1884. He had been separated from his wife at that time about eight years, and his two daughters, Hattie and Yergie, then about eight and twelve years old, went to live with him on the farm.

On December 18, 1894, he conveyed by deed his land to. his two daughters, in consideration of the sum of one dollar and the further consideration of his natural love and affection for his daughters, Hattie and Vergie, three-fourths to Hattie and one-fourth to Yergie. He continued to farm and accumulate money, and at one time after that he had buried $4,000.

In May, 1896, Vergie conveyed her interest in the lands to Hattie. Still later Mr. Owen conveyed by deed another forty acres to Hattie in Randolph County and another forty acres in Clay County. Hattie thereby became the owner of 420 acres.

In 1899 Owen married again, and in 1900 the appellant, Rubye, was born.

In December, 1901, Hattie, who had married Henry Hall, conveyed to her father 120 acres of land which had formerly been deeded to her by her father in consideration of the sum of one dollar and the further consideration of the natural love and affection for the said O. J. Owen, father of the said Hattie Hall.

On the same date, December 27, 1901, Hattie conveyed by deed eighty acres of the land formerly deeded to her and Vergie, to her father for his natural life, and at his death to her sister, Vergie, in consideration of the sum of one dollar and the further consideration of the natural love and affection to her sister, Vergie Siebke, and her father, Gr. J. Owen. At the same time she conveyed back to her father the forty acres of Clay County land which he later sold.

Hattie then had 180 acres of land, Vergie a remainder in eighty acres of land which would be hers upon the death of her father, in addition to the one-fourth interest in the 340 acres of land which she had deeded to her sister, and this left Owen with 120 acres of land. Hattie paid Vergie $500 in cash for Vergie’s interest in 340 acres. This conveyance was in 1896.

In 1914 Vergie conveyed to Hattie her remainder in the eighty acres deeded to her in 1901. It is alleged that if Vergie had kept her land it would have been worth $8,000 in 1894, and that Hattie’s land in 1894 was worth $9,000. It is also alleged that the 120 acres of land which Owen owned at the time of his death was worth $12,000.

Schoonover and Brown hold $4,787.79, money belonging to the estate of Owen, and will receive in addition to this $660, making a total of $5,447.79 in cash.

This suit was begun by the appellant, Rubye Jackson, in the Randolph Chancery Court. She alleged that she and the defendants, Vergie Siebke and Hattie Richardson, were the only surviving children and heirs of Gr. J. Owen, who died intestate, seized and possessed of ■of 144 acres of land in Randolph County; that prior to Owen’s death he had placed his lands in the charge of Schoonover & Brown, that they had collected rents amounting to more than $4,000, which they had not accounted for. She further alleged that her father, during his lifetime, had made certain advancements to Vergie and Hattie, which advancement to each of them was of equal or greater value than the estate left. She asked that her sisters be required to account for the property received by them, and that the property be so divided that each child would get an equal share.

Hattie Richardson answered, admitting that the plaintiff, Vergie Siebke, and herself were the only heirs of Gr. J. Owen. She then described the property she possessed, stated that she was the owner by virtue of a warranty deed, that the land was deeded to her and her sister by her father, and denied that the lands conveyed to her and her sister by her father were advancements.

Vergie filed answer, adopting’ the answer of Hattie as her answer.

The conveyances mentioned above were introduced in evidence, and witnesses were introduced who testified as to the value of the property, and that Hattie and Vergie assisted their father in farming, doing the same kind of work that men do on a farm. There was also evidence introduced showing the educational advantages of Hattie and Vergie given them by their father. A copy of complaint was introduced showing that Gr. J. Owen had brought suit in the Randolph Chancery Court against Hattie and Henry Hall, Randolph County Bank, and Bank of Corning. The suit was never tried, but Hattie and her father made a settlement.

In the complaint by Owen against his daughter it was alleged that the deeds made to her were in trust, and that the daughters were to hold title during the time they remained unmarried, and that the grantor was to retain possession. It was alleged that, if either of the daughters married, she was to convey her interest to the other, and, if both of them married, then the land should be reconveyed to the father. There was no evidence offered tending to establish these facts, except the complaint which was filed by Owen.

Hattie Richardson testified that there were no such agreements made, and that her father got angry because she married Hall, and that this was the reason that h§ brought suit. This contention of Hattie is strengthened by the fact that her father afterwards was convicted of murdering her husband, Hall.

There was an intervention filed by Pearl Walley, claimed to be a grandchild of G. J. Owen, but the chancellor found that she was not his grandchild and dismissed her interventiob for want of equity.

And the chancellor stated in his decree that there was a large amount of testimony directed to the intervention as to whether or not Pearl Walley was the grandchild of G. J. Owen, Sr., but there was very little, if any, conflict as to the other proof in the case, a good portion of which is documentary evidence.

The chancellor stated in his decree that the evidence tending to prove that the death of G. J. Owen, Sr., was circumstantial. It appeared that in January, 1902, he killed his son-in-law, Henry Hall, the husband of Hattie; was convicted and sentenced to 20 years in the penitentiary, escaped and became a fugitive; but he had given Schoonover & Brown a power of attorney about the time of his conviction, and communicated with them periodically until the final meeting in 1923, and that since that time he had never been seen or communicated with; that if living now he would be eighty years of age, and the court therefore finds that the evidence is sufficient to prove the death of G. J. Owen.

The chancellor, however, required an indemnifying bond to run for five years to be given by the parties held entitled to the funds; that the bonds should be approved by the chancellor. The decree also recites that the final issue to be passed upon rests upon the answer to this question: “Was the deed executed by Gr. J. Owen in 1894, conveying' all his property, consisting of some 340 acres of land, to his only then heirs, three-fourths to Hattie and one-fourth to Yergie, intended by him to be an advancement?”

Then, after discussing the facts, the chancellor found that thé suit and settlement contradicts the idea of an advancement, and that, if the conveyance was intended as an advancement, the same could be revoked and rescinded, and a new agreement entered into during the lifetime of the parties, and the court held that the conveyance to Hattie and Yergie was not an advancement; to reverse this decree this appeal is prosecuted.

The court found that the evidence was sufficient to show that Gr. J. Owen was dead. "It is true, as stated by the chancellor, that the evidence was circumstantial; but, as found 'by the chancellor, he would, if living, be more than 80 years of age, and he has not been heard of in several years. If the evidence is sufficient to justify the finding that one is dead, courts will so find whether the evidence is direct or circumstantial. “A well connected train of circumstances is as cogent of the existence of a fact as any array of direct evidence, and frequently outweighs opposite direct testimony.” 23 C. J. 48.

This court, in discussing the scintilla rule, said: “While this rule is not to be ignored, it is equally well settled that any issue of fact in controversy may be established by circumstantial .evidence where the circumstances adduced in evidence are such that reasonable minds might draw different conclusions therefrom.” St. L. I. M. & S. R. Co. v. Fuqua, 114 Ark. 112, 169 S. W. 786 ; Paragould & M. R. Co. v. Smith, 93 Ark. 224, 124 S. W. 776 ; St. L. I. M. & S. R. Co. v. Owens, 103 Ark. 61, 145 S. W. 879 ; Mo. Pac. Rd. Co. v. Hull, ante p. 873.

"Of course, where circumstantial evidence is relied on "to establish any fact, the circumstances must agree with and support the hypothesis which they are adduced to prove and the circumstances themselves must he proved.

The finding* of the chancellor on this issue is supported by a preponderance of the evidence. The statute provides that under certain circumstances a person shall be presumed to be dead in any case in which his death may come in question unless proof be made that he was alive within that time. C. & M. Digest, § 4111.

In this case, however, there is something more than the presumption of death, there is proof of circumstances which we think justified the finding of the chancellor. He would be more than eighty years old; had been in the habit of calling on his attorney and tenant periodically to collect his rents; his rents had accumulated; and all these circumstances, together with his absence, are sufficient proof of his death.

Since the chancellor found that the circumstances showed Gr. J. Owen was dead, there was no reason for requiring an indemnifying bond. If proof of death had been made by direct evidence, of course no bond would have been required, and since a fact may be established by circumstantial evidence as well as by direct evidence, there was no occasion to require bond in this case.

The other question in the case is whether the conveyances by Gr. J. Owen in his lifetime to his daughters, Hattie and Vergie, were advancements or whether they were absolute gifts. It is argued that the settlement of the lawsuit establishes the fact that Owen contracted with these girls as a part consideration for the conveyance that they remain single, and they say, if that be true, the gift from the parent of the child must be absolute, and that the compromise is a part of the res gestae and therefore clearly admissible under the authorities. There is no evidence in the record about anything Owen did or said with reference to this settlement except what is contained in a complaint that was filed in court. The statements in this complaint contradict the terms of the deeds; the complaint was not sworn to; it was filed by the attorneys of G. J. Owen, who doubtless prepared the complaint, and there is no evidence that Owen himself ever saw it; so, if it is conceded to be competent and admissible, it would be very slight evidence under the circumstances. All it could possibly amount to is a statement by the attorneys of what they understood was the claim of Owen.

As against this evidence, there are the conveyances themselves and the testimony of Hattie Richardson, who testified that her father did not like the man she married, Henry Hall, and was angry because she married him, and that that is the reason he brought the suit, and there is no evidence other than the statements in the complaint to contradict Hattie Richardson. It is contended that Hattie and Vergie worked like slaves on these farms, and that that was the reason Owen conveyed' the land to them. This also contradicts the written instruments themselves.

If Owen had intended to convey the property to his daughters in payment for the work they had done, he doubtless would have so stated in the deeds, but the consideration was one dollar and natural love and affection.

It is entirely reasonable that the fact that his daughters did work and help him was the foundation, or at least increased his love and affection for them, but the conveyances did not mention the fact that the daughters had worked and assisted their father, but the only consideration mentioned was the one dollar and natural love and affection.

While it is true that his daughters performed labor and assisted their father, it is also true, as the record shows, that their father cared for them, maintained them, and educated them. There is nothing in the record to indicate that he cared more for these daughters than for the appellant, and she was deprived of the care and guidance of her father which the other daughters received.

The presumption is that the conveyances were intended as advancements, and we do not think there is sufficient evidence in the record to overcome this presumption.

Appellees quoted from 1 R. C. L. 665. The section quoted from, however, contains the following statement, among others: “The party asserting that it was the intention of the donor to make an advancement makes a prima fade case where he shows that the facts surrounding the supposed advancement are such that a presumption arises that the gift by the donor was an advancement. It then becomes necessary for the party claiming that the transaction was not an advancement to introduce evidence to overcome this presumption.”

In this State the presumption is that a conveyance or gift by the father to his daughters is an advancement. Eastham v. Powell, 51 Ark. 530, 11 S. W. 823.

“It was admitted that plaintiff bought the land and paid the purchase money therefor, and caused his vendors to convey it to the defendant; and the defendant is the son of plaintiff. In the absence of other evidence, the presumption from these facts is that the conveyance was intended to be an advancement and not a trust.” Robinson v. Robinson, 45 Ark. 481.
The court also said in the Robinson ease: “The evidence necessary to overcome the presumption of an advancement, in a case like this, and prove a resulting trust, must not only be distinct and credible, but preponderate.”

In another case decided by this court the evidence showed that the father conveyed to his son, who was a minor, and that after the son became of age and until he married he continued to reside with his father as a member of the latter’s family. The father testified that he had the deed made to his son because he was advised that the deed could be better defended in his son’s name, and that he had no intention of giving the land to his son, and one witness testified that a deed was exhibited to him, and it was stated that it was made as a deed of trust to avoid trouble about the title, and there was evidence tending to show that the son had not claimed to be the owner of the land until a short time before bringing the suit. The court said: “The presumption of the law is that the purchase of the land in controversy was by way of an advancement to the son. The proof does not overcome this presumption.” White v. White, 52 Ark. 188, 12 S. W. 201.

In the case of Goodwin v. Parnell, 69 Ark. 629, 65 S. W. 427, the court said: “The evidence adduced at the hearing of the cause clearly proved that the land conveyed to the defendant was a gift, but was conflicting as to the intention of the grantor to convey it as an advancement. * * *

“The conveyance of land by G. P. Goodwin to his son, Leon Goodwin, being voluntary, in the absence of evidence to the contrary, is presumed to be an advancement, the presumption being that a parent intends Ghat all his children shall equally share in his estate, not only in what remains at his death, but equally in all that came from him.’ The doctrine of advancement is invoked to effectuate this intention.”

The rule is well stated in R. C. L. as follows: “For the doctrine that a parent desires to distribute his estate equally among all his children is so strong that, in the absence of clear and convincing evidence to the contrary, it will be presumed that a parent who during his lifetime makes a substantial gift to a child intended such gift to be an advancement; and hence it is often stated that a gift to a child or an heir by an ancestor in his lifetime is prima facie an advancement. A transfer of land by a parent during his lifetime to a child will be presumed to constitute an advancement of a portion or the whole of that child’s share in the parent’s estate, where the consideration expressed is nominal, and natural love and affection.” R. O. L. 668.

The consideration expressed" in the deeds by Owen is nominal, that is one dollar and natural love and affection. No evidence in the record anywhere tends to show that it was not the intention of Owen to treat all his children alike, that is to so distribute his estate that his heirs would share equally.

Section 3485 of C. & M. Digest provides that, if an advancement is made, the value of such advancement shall be reckoned, and, if such advancement be equal or superior to the amount of share which such child would be entitled to receive of the real and personal estate of the deceased, then such child shall be excluded, etc.

Section 3487 of the Digest provides: “The value of any real or personal estate so advanced shall be deemed to be that, if any, which was acknowledged by the person receiving the same by any receipt, in writing, specifying the value; if no such written evidence exists, then such value shall be estimated according to its value at the time of advancing such money or property.”

The decree of the chancery court is reversed and remanded with directions to hear evidence, determine the value of the advancements, and also of the estate, and enter a decree disposing of the property, so that each, child will share equally.

Humphreys and M cHaney, J J., dissent.


author: McHaney, J.

text:
    Hill v. Crater.
    Opinion delivered December 22, 1930.

      H. K. Toney, for appellant.

      E. W. Brochmcm, for appellee.
   McHaney, J.

Appellant brought this action against appellees, Fred Crater, Allen Jones, Will Robison and John H. Smith, on the following complaint:

“Comes the plaintiff for his cause of action herein alleges that he is the legal pastor of the Pine Hill Colored Baptist Church, which church is located on Spruce Street immediately north of Pine Bluff, and that he has been the pastor of said church for the last past fifteen years.
“That on the 9th day of September, 1929, the above defendants assembled at the door of the above-named church just before the hour of services and when the pastor arrived he was prevented from entering said church by said defendants and from holding services. That said defendants threatened plaintiff, and when it was apparent that said services could not be held without a breach of the peace and a disturbance of the religious worship the congregation was prevented from holding services.
“That, unless the defendants are restrained and enjoined from interfering with the plaintiff and the members of his congregation, it will be impossible to hold sendees in the future, and the' plaintiff will suffer irreparable injury. That the said defendants are insolvent. That said plaintiff has no adequate remedy at law herein.
“That said church is indebted to plaintiff in the sum of $800 and under plaintiff’s contract with said congregation he has a right to remain the pastor o'f said church until said money is paid, and that he has a lien on said church to secure the payment of the above-mentioned debt.
“Wherefore, premises considered, plaintiff prays that a temporary restraining order be issued restraining and enjoining the defendants and all other persons from’ interfering with plaintiff in' any manner as the pastor of the above-mentioned church and that upon a final hearing- said injunction be made permanent.
“But, in case the court should find that a permanent injunction should not be granted, then plaintiff asks judgment herein in the sum of $800, and that the same he declared a lien on said church, and for all other proper and equitable relief.”

To this complaint a demurrer was interposed and sustained. Appellant declined to plead further, and his complaint was dismissed for want of equity.

The court correctly sustained the demurrer as the complaint failed to state a cause of action. Appellant alleges that he is the legal pastor of the Pine Bluff Colored Baptist Church and he seeks to enjoin the appellees, who, so far as the complaint discloses, are not connected with said church either as officers or members, from interfering with him as pastor. He alleges that they had prevented him from holding services, which might amount to a misdemeanor, such as disturbing the peace, but chancery court will not ordinarily enjoin the commission of a crime. Lyric Theatre v. State, 98 Ark. 437, 136 S. W. 134, 33 L. R. A. (N. S.) 325.

The final allegation is directed against the Pine Hill Baptist Church, and is to the effect that the church is indebted to him, that under his contract with the church he has the right to remain the pastor until the debt is paid, and that he has a lien on the church to secure the debt. But the Pine Hill Baptist Church is not a party to the action. It has not been sued, nor served, and of course the court could not render a judgment against it or declare or enforce a lien on its property, as it had no jurisdiction of the person against whom judgment was sought.

Affirmed.


author: Butler, J.

text:
    Crow Creek Gravel & Sand Company v. Dooley.
    Opinion delivered December 22, 1930.

      8. H. Mcmn, for appellant. ■

      G. B. Knott and John M. Prewett, for appellee.
   Butler, J.

The appellant entered into a contract with the appellees to purchase from them certain lands at an agreed price upon the tender of a deed which would convey a marketable title free of liens. The appellant refused to accept the deed.and pay for the lands on the ground that the title of the appellees was “not a good and sufficient title.” Appellees thereupon brought suit for a specific performance of the contract, and the only question here presented for our determination is whether the title offered was such as the appellant contracted for.

Dr. H. P. Dooley was the owner of the lands in controversy in his lifetime. He was a childless widower, having a number of living brothers and sisters, who were very old people. He also had a number of nephews and nieces, children of brothers and sisters who were dead. All the children of his living brothers and sisters and all the children of his deceased brothers and sisters were adults during the lifetime of Dr. Dooley and at the time of the execution of a will by Dr. Dooley shortly before his death. By this will Dr. Dooley attempted to create a trust for the benefit of one brother and three sisters by which they were to- receive the income from certain funds, which funds were to he distributed and equally divided after their deaths among Dr. Dooley’s nephews and nieces then living, some of these being the children of the brother and sisters named in the will as beneficiaries and others being the children of deceased brothers and sisters. W. G. Dooley and his heirs were mentioned in the will to whom nothing- was devised for reasons stated therein. After the death of Dr. Dooley his will was duly probated, and a bill was filed in the chancery court seeking a construction of said will, the brother and three sisters then living and all the children of the deceased brothers and sisters being parties plaintiff and the trustees being the parties defendant. On a trial of the case the court found that the trust attempted to be created failed “because the settlor imposed an impossible condition that prevented the execution of the trust,” either by the trustees or by judicial action of any court, and because under the terms of the will no title vested in the trustees, and the said will was void. The court further found that the complainants were the heirs at law of Dr. H. P. Dooley, deceased, ordered that the trustees be discharged, and that the property of the testator be distributed among the complainants in the proportion and in the manner set out in the decree. There was no appeal -from that decision of the court.

The appellees in the case at bar set out in their complaint the decree of the court above mentioned, alleging that they are the heirs at law of H. P. Dooley, deceased, and that the title offered complied with the contract. The appellant answered and contended that the decree of the chancery court was erroneous, that the trust attempted to be created by Dr. Dooley was valid and enforceable, that the will was and is valid, and that the decree invalidating the will is subject to collateral attack by any of the ultimate beneficiaries under the will, not parties to that proceeding.

The following stipulation was entered into by the attorneys for appellant and appellees, to-wit: ‘ ‘ That.the title of Dr. H. P. Dooley to the lands involved in this action was- absolute at the time of his death and free from all liens; that 'George M. Dooley was a brother of EL P. Dooley and Mrs. Mollie Horney and Mrs. Ida B. McCain are the sisters of H. P. Dooley (these were the brother and sisters named in the will to whom the life estate was devised) and are now living and have children now living who are the nephews and nieces of H. P. ■ Dooley, deceased, and said nephews and nieces are not .named as parties in the action lately pending in the St. .Francis Chancery Court brought 'by the heirs at law of H. P. Dooley, deceased, against the trustees named in the will of the said Dr. H. P. Dooley to avoid the said will and abrogate and annul the trust attempted to be created thereby, being case No. 5228; and said children are not parties to the present suit except T. W. Horney, son of Mrs. Mollie Elorney, who was a deféndant as trustee in the said suit to void the will. ’ ’

The complainants in this ease proceed on the theory that the will is invalid, and was so held by the chancery court, and that they as heirs of Dr. Dooley have good title to the lands involved. They concede that no person •is bound by a judgment or decree except those who are parties or stand in privity with others who were parties, and further, that the children of George M. Dooley, a brother, and of Mrs. Mollie Horney, Mrs. Laura-Mallory ' and Mrs. Ida B. McCain, sisters, were not named as parties plaintiff or defendant in the action to construe the will. They insist that these nephews and nieces, as called by counsel “ultimate beneficiaries,” were virtually represented by the trustees who were parties defendant, and come within the exception of the general rule that all persons concluded by a decree -must have been parties tó the suit, and to sustain this view quote from 15 R. O. L. 1026, par. 500, which in effect declares the rule to be that the doctrine of virtual representation, by which persons may be bound by a judgment although not parties to the suit, is on the theory that they are sufficiently represented by those who are parties on the record, and that they will fairly represent the interests of all standing in like character and responsibility, and a judgment against them will have the effect of res judicata against all who were thus represented.

In the construction of wills the exception to the general rule has no application where the ultimate beneficiary is in being, as he, or they, do not stand in privity to those to whom the present estate is devised, although they may be their children because their claim is not based on, nor comes through, any right of the parent, but by virtue' of the will, and, being in esse, they are necessary parties and not having been made such are not bound by the decree (20 R. C. L. p. 670-71, Curd v. Finch, 142 N. C. 149, 54 S. E. 1009), and, if it was erroneous, they might in another proceeding have the same annulled in so far as their rights were affected.

If, however, the will is indeed invalid, and the decree binding on the ultimate beneficiaries, on the doctrine of virtual representation, as contended for by appellees, they are in no better situation in this case because there is no proof or admission that they are the sole heirs of Dr. EL P. Dooley, but there is a strong intimation that they are not. W. G. Dooley and his heirs mentioned in the will and excluded from its benefits for the reasons therein stated are presumably some- relation to Dr. Dooley, deceased; first, because they are of the same name, and, second, because they are mentioned in the will by name, and these persons are not accounted for. They were not parties to the contract or to this proceeding, and, in the absence of a showing to the contrary, they must be presumed to be still living. The complainants are, therefore, in this dilemma: if the validity of the will may be again brought in question by the ultimate beneficiaries, the children of the brother and three sisters named in the will, (and it can be), the title offered the appellant would be subject to whatever construction might be given the will in another proceeding, and the rights of the ultimate beneficiaries there established; and, as these were not parties to the contract herein involved nor to this suit, the title would be questionable. If the ultimate beneficiaries were concluded by the decree of the court holding the will void, the title would still not be a merchantable one, because it is apparent that some of the heirs of H. P. Dooley are not parties to this proceeding, and their title would not be conveyed by the deed of appellees.

A title to land may be such that it might not be successfully assailed, and yet not be a merchantable title, for by that term more is implied than a good title; it must be one that can be held without reasonable apprehension of its being assailed and one which can readily be transferred in the market. Hinton v. Martin, 151 Ark. 343, 236 S. W. 267 ; Dalton v. Lybarger, 152 Ark. 195, 237 S. W. 694.

. We are of the opinion that under the condition of the title it would not be such that the purchaser could take without reasonable apprehension of its being assailed, nor do we think he could readily sell it on the market because of the fear that at some future time the ultimate beneficiaries in the will of P. Gf. Dooley or his heirs, not parties to the contract, might appear and assert some claim to the property. Under the rule announced we therefore hold there was no merchantable title tendered, and that the decree of the court below must be reversed and the cause remanded with directions to dismiss the plaintiffs’ complaint.

Mr. Justice Smith not participating.


text:
    Wilkerson v. White.
    Opinion delivered December 22, 1930.

      N. A. McDaniel, for appellant.

      W. A. Utley, for appellee.
   Butler, J.

W. W. White and J. I. Wilkerson are farmers, each owning forty acres of land adjoining and separated by a partnership fence. Wilkerson had a small com field in a corner next to the division fence into which hogs entered and destroyed a quantity of corn. He brought suit against White alleging that the hogs causing the damag-e to his corn belonged to White and that they had gained entrance through the cross-fence which White had negligently failed to maintain so as to prevent hogs from breaking through.

It appears from the evidence that on or about the tenth of October, White and Wilkerson had a settlement for damage to Wilkerson’s corn prior to that date. It seems that Wilkerson had killed one of White’s hogs in his field, and he settled with White for this by paying the difference between the value of the hog killed and the value of the crop destroyed. Because of this settlement the court limited the jury to a consideration of the alleged damage accruing after that date.

The evidence was in dispute regarding the condition of the fence around Wilkerson’s forty and particularly as to the condition of the partition fence and as to the ownership of the hogs which destroyed the com. There was testimony to the effect that the condition of the fence was such as to permit hogs to break through from the outside, and there is some testimony that a very notorious* hog in that community was one of the principal offenders. This old sow was not the property of White, but belonged to Grandma White who lived on a different tract of land. There is nothing to show that this sow was not ordinarily a very quiet and well-conditioned old animal, but she had one bad habit and bore a very 'bad reputation in that community for breaking’ into farms, and it was said that she could go through almost any fence and did, in fact, depredate on Wilkerson’s property. The evidence is in conflict as to what was done to repair the partition fence, White testifying that he had fixed the fence sufficiently, while other witnesses testified that White admitted having overlooked one hole through which hogs might go and having failed to stop the same.

The character of the corn crop and its value was also a matter of dispute. Some testified that it was a good crop—would make from fifteen to twenty bushels per acre, and that about three acres were destroyed— and others testified that it was planted in raw new ground where green trees were still standing and had but little value.

In submitting the case, the court, at the request of the plaintiff, instructed the jury that if they should find from a preponderance of the evidence that the defendant negligently and carelessly left an opening in his fence, and that hogs of the defendant entered through the same and destroyed the crop of the plaintiff, it would be their duty to find for the plaintiff for the amount which the evidence showed he was damaged. The jury returned a verdict for the defendant, and Wilkerson appeals here and urges as error the action of the court in admitting certain testimony and misconduct on the part of the jury.

The abstract of the record furnished us by the appellant fails to show where any objection was made to the introduction of evidence or any exceptions saved to the ruling of the court. Therefore, we cannot consider any here. •

One of the grounds for reversal set up in the motion •for a new trial and here argued was that the jury wholly' disregarded the law given by the court, and that several members of the jury, while considering the case, stated that they had been justices of the peace and knew the law, and that, as the plaintiff did not have a lawful fence, he was not entitled to recover, and offered the affidavit of one Garner, who was in attendance upon the court and a member of the regular panel of petit jurors, to establish the above allegation. It is well settled that the verdict of the jury cannot be impeached by evidence of statements made by the jury, or any one of them, after the trial. Griffith v. Moseley, 70 Ark. 244, 67 S. W. 309 ; Barnett v. Western Assitrance Co., 126 Ark. 562, 191 S. W. 226 ; Arnold v. State, 150 Ark. 27, 233 S. W. 818. The reasons for this rule are stated in the cases cited and are so manifest that a re-statement is unnecessary. In our opinion the instructions of the court were more favorable to the appellant than he was entitled to. It was no more White’s duty to maintain the partition fence so as to prevent animals from passing through than it was the duty of Wilkerson. In the absence of any agreement, the obligation to maintain the fence was mutual and equally operative upon both (§ 4654, C. & M. Digest), and Wilkerson, finding that hogs were getting into his field, should have looked for the holes and stopped them himself.

The judgment of the trial court is correct, and it is therefore affirmed.


text:
    McIlroy v. Fugitt.
    Opinion delivered December 22, 1930.

      J. V. Walker and Pearson & Pearson, for appellant.

      Karl Greenhaw, for appellee.
   Butler, J.

This suit originated in an action by the First National Bank of Fayetteville against Kate Fugitt, E. C. Fugitt, J. H. McIlroy, and J. H. McIlroy as trustee. The Fugitts had executed to the bank a note securing a debt of $17,000, one note for $15,000 and two notes for $1,000 each. These last two notes had been assigned by the bank without recourse to McIlroy with the understanding, that they were inferior to the lien of the mortgage on the $15,000 note. After this transaction the Fugitts ¡borrowed more money from McIlroy who was representing himself and others and to secure the same executed a second mortgage. The Fugitts conveyed to McIlroy as trustee by warranty deed the property contained in the two mortgages aforesaid, the property being identical in each of the mortgages, and contemporaneous with the deed there was a contract between McIlroy as trustee and the Fugitts by which the Fugitts were to repurchase the property. The Fugitts were to pay $250 a month and a sufficient sum in- addition to be deposited in what was called a sinking fund to take care of the taxes and insurance, and upon the payment of a stipulated sum McIlroy was to reconvey the property to the Fugitts.

As subsequently found by the chancellor, the deed made to McIlroy was in effect a mortgage, and the lease contract mentioned above was in reality the method by which the indebtedness owing by the Fngitts to McIlroy was to be repaid. There was a decree of foreclosure of the mortgage made by the Fugitts to the bank and the rights of McIlroy as second mortgagee were ascertained and the balance of the indebtedness owing to him by the Fugitts adjudged. The property conveyed by the mortgages was ordered sold by the commissioner appointed for that purpose, and at the sale the appellee, George Appleby, purchased the property for the sum of $20,000. A number of persons intervened seeking a share of the fund arising from the commissioner’s sale. After paying the sum due the bank there was a surplus which was not sufficient to pay McIlroy, who was adjudged to be the second mortgagee. '

The property was included in a number of local improvement districts lying within the city of Fayetteville, and the mortgaged property was delinquent for the assessments levied against it in the several districts, which, at the time of the decree, amounted to the sum of $1,011.12. The court, in its order distributing the fund remaining after the satisfaction of the debt to the bank, ordered that the commissioner pay these delinquent assessments and that the residue be paid to McIlroy, which, after the assessments were paid, lacked $1,994.45 of the amount necessary to pay McIlroy’s debt. It is from the order directing the commissioner to pay out of the proceeds the past due municipal improvement assessments that this appeal has been prosecuted, the parties in interest to this appeal being McIlroy on the one hand and Appleby on the other, and, if the order of the court below is sustained, Appleby will acquire the lands free from the incumbrance of the special assessments, while, if the order was erroneous, McIlroy will receive an additional $1,011.12 to be applied to his debt against the Fugitts.

To support the order of distribution made, Appleby insists first that it was the duty of McIlroy as second mortgagee in possession and receiving rents from the property to have paid the local assessments, especially as he says that it was the contention of McIlroy throughout the litigation that he was in fact the owner of the property by reason of his deed from Fugitt dated August 1, 1928, and as such entitled to the fund remaining after the satisfaction of the bank’s debt, as it was shown that McIlroy received through payments from Fugitt sums amounting to $4,000—more than sufficient to pay the taxes and assessments on the property. To sustain this contention, he cites the cases of Cotton v. White, 131 Ark. 273, 199 S. W. 116 ; Security Mortgage Co. v. Harrison, 176 Ark. 423, 3 S. W. (2d) 59 ; and Flower v. Bricker, 178 Ark. 764, 12 S. W. (2d) 394.

In the case of Cotton v. White, supra, the court said : “One in possession of lands and receiving the rents and profits thereof under claim of ownership will not be permitted to strengthen his title by allowing the lands to forfeit for taxes and purchase it at a tax sale.” In Security Mortgage Co. v. Harrison, supra, the following language is used: “Of course, where one is in possession receiving rents and profits from mortgaged property, he has money to pay the taxes, and it has been held that under such circumstances he owes the duty to pay the taxes”; and, in the case of Flower v. Bricker, supra, it was held that under the peculiar circumstances of that case the second mortgagee who had purchased the title of the mortgagor on paying the taxes could not be subrog’ated to the State’s lien so as to obtain a lien paramount to the first mortgagee, for the court held that as between the second mortgagee and the first mortgagee under the facts in that case it was the duty of the second mortgagee to pay the taxes.

To-support the principles above announced, the cases of Frierson, etc., v. Branch, 30 Ark. 453 ; Jacks v. Dyer, 31 Ark. 334 ; Guynn v. McCauley, 32 Ark. 97 ; and Ross v. Frick Co., 73 Ark. 45, 83 S. W. 343, are cited by the court in the cases supra. We have made a careful examination of the cases referred to in appellee’s brief and the cases cited by the court, supra, and are of the opinion that they do not support the contention of the appellee here made. The effect of these decisions is simply that, where several claim title or have an interest in lands, one cannot strengthen his title by allowing the lands to forfeit and buy them in at a tax sale when he himself is in possession or is receiving the profits arising from the lands sufficient to discharge the tax burdens. The rule in those cases does not inure to the benefit of a stranger to the title, as he had no interest in the property which might be adversely affected by any action, or failure to act, on' the part of another who had claimed an interest in the lands. In the case at bar it would be immaterial, in so far as the rights of Appleby are concerned, whether McIlroy’s claim to the surplus fund arose from the ownership of the title or as second mortgagee, for there was no duty resting upon any one to do anything for his benefit. His relationship to the property began at the time of his purchase at the judicial sale, and his rights must be governed by the rules applicable to such purchasers.

It is the general rule that purchasers of land at judicial sales take only such interest as that of the owner whose title is foreclosed and subject to all the liens resting thereon, including the lien for unpaid taxes. He takes subject to the rule caveat emptor. Guynn v. McCauley, 32 Ark. 112 ; Black v. Walton, 32 Ark. 321 ; 35 C. J. 78, § 121 ; Farmers’ & Planters’ Bank v. Martin, 61 Am. Dec. 350, 7 Md. 342 ; Creps v. Baird, 3 Ohio State 277 ; 42 C. J. § 1909 ; Pate v. Peace, ante p. 618 ; Cook v. Panich, ante p. 982. In this State taxes on real estate are not personal obligations of the owner, but liens which follow the land, and under the rule of caveat emptor the purchaser at a judicial sale would take the land burdened therewith. It is contended, however, that this rule has been changed by statute, of which § 10,056 of the Digest is a part, and which provides that ‘ ‘ whenever any land so held by tenants in common shall be sold upon proceedings in partition, or shall he taken by the election of any of the parties to snch proceedings, or whenever any real estate shall be sold at judicial sale or by administrators, executors, guardians or trustees, the court shall order the taxes and penalties and the interest thereon against such lands to be discharged out of the proceeds of such sale or election.” This section is the authority cited for the action of the court in making the distribution in the instant case and was a part of act No. 114 of the Acts of 1883. It is obvious from an examination of the entire act that its purpose was to provide for the assessment and collection of State revenues. This was a comprehensive and complete statute, its purpose being definitely and precisely stated in its title, namely, “An Act to Revise and Amend the Revenue Laws of Arkansas.” Therefore it is clear that the language quoted above, § 166 of that act, and the reference made to the taxes, “taxes, penalties and interest thereon,” referred to the general revenues of the State and not to assessments for local improvements. It is the rule in this State, and that most, generally followed by courts of the other States and of the United States, that where the word “taxes” is used in a statute, it is construed to have reference to taxation for general purposes and not to local assessments. Lewis v. Delinquent Lands, ante p. 858, and cases therein cited. As there was no expression in the statute under consideration by which any intention on the part of the Legislature could be inferred to make it apply to improvement district assessments, the general rule of construction would exclude such taxes, for, as is stated in Miners’ Bank of Joplin v. Churchill, 156 Ark. 191, 245 S. W. 829, this statute is in derogation of the common law and must therefore be strictly construed. Placing this construction upon it, it becomes apparent that the learned chancellor erred in ordering the local assessments paid out of the fund in court. K|

It is insisted by the appellee that the act of 1883, supra, was lifted out of the statutes of the ¡State of Ohio and that we must adopt the construction placed upon it by the courts of the state from which it is borrowed. Appellee cites the case of Macldey v. Whitmore, 61 Ohio St. 587, and interprets that decision as authority for his contention that assessments for local improvements come within the terms of that part of the act which is now § 10,056 of our Digest. Without determining whether the appellee has correctly interpreted that decision, it suffices to say that that case was not decided until the year 1900 and we adopt only the construction placed on the statute at or before the time of its adoption- and not the construction placed upon it thereafter, and if the import of Mackley v. Whitmore, supra, is that contended for, it would then be in .conflict with the rule heretofore stated. Moreover, this court has construed the statute under consideration in the light of the then existing decisions of the Ohio courts, and as the rule announced conforms to the general rule as to the construction of taxes and taxation as used in revenue statutes, we now adhere to the principle there laid down. In Miners’ Bank of Joplin v. Churchill, supra, we said: “In the cases cited the Ohio court construed the statute to mean that all taxes due and unpaid up to the date of the sale’should be paid out of the proceeds of the sale and should be paid by the commissioner when so ordered by the court.

“It is also decided by the court that the statute, being in derogation of the common la-w, should be strictly construed, and that it did not embrace redemption from tax sale, but only embraced the discharge of tax liens due the State. In a later case it was decided by the court that the statute did not include local improvement assessments.”

Appellee contends that the court in that case misunderstood and wrongly interpreted the holding of the Ohio court, but, if so, the conclusion was justified by the general rule that “an assessment of benefits for local improvements has never been regarded as a tax or termed such in legislative proceedings in our public or private laws, or in popular -intercourse,” and * * * “assessments ■upon real estate for local improvements have no connection whatever with the general taxing powers mentioned.”

It follows that the judgment of the court below must be reversed, and the cause remanded for further proceedings according to law and not inconsistent with this opinion.


author: Per Curiam.

text:
    McGehee v. State.
    Opinion delivered December 22, 1930.
   Per Curiam.

This is a petition duly verified by Harney McGehee for reinstatement to practice law upon his promise of future good conduct. The facts upon which his suspension are based are stated in the proceedings for disbarment in our opinion delivered on November 3, 1930, ante p. 603. We all agree that he should not be reinstated in the general practice from which he was suspended for the period of one year; but, inasmuch as he was elected to the office of prosecuting attorney at the general election held on the first Tuesday in November, 1930, a majority of the court is of the opinion that the suspension should not apply to his official duties as prosecuting attorney, and that he be reinstated, so far as his suspension might apply to the discharge of the duties of that office.

Smith, Humphreys and MoIIaney, JJ., dissent.


author: Hart, C. J.,

text:
    Oliver v. Oliver.
    Opinion delivered January 12, 1931.

      John F. Clifford, for appellant.

      Lawrence Auten, Phillip McNemer and R. E. Wiley, for appellee.
   Hart, C. J.,

(after stating the facts). It is conceded that chancery has jurisdiction in the assignment of dower. Maxwell v. Autrey, 151 Ark. 85, 235 S. W. 384, and cases cited.

It is insisted, however, that the basis of this suit is to declare a trust in favor of the estate of R. B. Oliver, deceased, in the ’248 shares of stock in the Little Rock Revilo Hotel Company, and that chancery was without jurisdiction of said suit. We do not agree with counsel in this contention. The subject of the trust- sought to be declared in the 248 shares of stock in the hotel was personal property; and, being personal property, the trust might be created by parol and established by parol evidence. This court has held that the statute of frauds does not extend to trusts of personal property, and that such trusts may be created and proved by parol. Of course, the evidence to establish the trust must be clear and convincing. Scott v. Miller, 179 Ark. 7, 13 S. W. (2d) 819.

Tested by this well-established rule, we are of the opinion that the trust in favor of the estate of R. B. Oliver, deceased, in the 248 shares of stock in the Little Rock Revilo Hotel Company, which was issued to Joe H. Oliver, was established by clear and satisfactory evideuce. It is true that J. H. Oliver testified that the stock was issued to him in consideration of between $15,000 and $20,000, which he loaned to his brother, R. B. Oliver. He introduced proof tending to show that between 1920 and.1921 he lived in Oklahoma and was worth at least $20,000. He also proved by one of his 'brothers that on a visit to Little Rock in the spring of 1924 R. B. Oliver told him that his brother, J. H. Oliver, had loaned him money and that he had paid him therefor 'by issuing to him stock in the Little Rock Revilo Hotel Company.

The testimony bearing on this phase of the case is very voluminous, and in some respects is somewhat ambiguous. But we are of the opinion that, when the whole transaction is considered in the light of the attendant circumstances, it is established by clear and convincing testimony that R. B. Oliver owned the Revilo Hotel. The record shows that, after he and his associates came to the State of Arkansas, he engaged in road construction work and at times made considerable amounts of money. Out of the profits of his construction work, he established and operated a hotel in the city of Little Rock known as the Revilo Hotel and also hotels in Conway and in Stuttgart. The undisputed evidence shows that from the time the Revilo Hotel on West Markham was taken charge of by R. B. Oliver in 1920, he had the exclusive management and operation of it until his death. He purchased the lots on which the hotel was situated and paid a consideration of $35,000 for them. He bought all the furniture and other furnishings which were placed in the hotel. He made all contracts for the repairs which were made on the hotel and paid the taxes on it up to the time of his death in 1928. His 'brother, Joe H. Oliver, had nothing whatever to do with the operation of the hotel, and did not claim any interest in it until after his brother’s death. After the death of his brother, he told several people that he had no interest in the hotel.

The record does show that J. H. Oliver loaned his brother, R. B. Oliver, in about 1921, $5,000; but it also shows that this amount was repaid him. The bookkeeper of R. B. Oliver testified that J. H. Oliver came from Oklahoma to Arkansas in 1922 and was an employee of the Oliver Construction Company at the sum of $250 per month. He had no interest whatever in the construction company and did not participate in its profits. She kept his account with the construction company; and at the time she quit as bookkeeper in 19'25, R. B. Oliver owed him something like $1,900. At no time did the books show that R. B. Oliver owed him any considerable amount of money. The account of the Revilo Hotel Company was kept in the name of R. B. Oliver, who managed and operated it as his own. J. H. Oliver had nothing to do with the operation and management of it, but was only present on the day the corporation was organized and the 248 shares of stock were issued in his name. R. B. Oliver took the shares of stock on that occasion and kept them in his safe with his private papers until his death in 1928. At no time does the record show that J. H. Oliver claimed any interest in the shares of stock in the Revilo Hotel Company. Nor does the record show that J. H. Oliver made any profits in road construction work after he came to the State of Arkansas in 1922. On the other hand, it tends to show that he was dependent upon his brother, R. B. Oliver, for employment, and he told the son-in-law and daughter of R. B. Oliver after his death that he did’ not know what he would do now.

One witness testified that he was with R. B. Oliver at a club house on a hunt sometime prior to his death, and that R. B. Oliver told him in the presence of two other witnesses who were named by him that the stock in the Revilo Hotel belonged to J. H. Oliver. The witnesses named, however, denied that R. B. Oliver made any such statement in their presence. They admitted that they were all together on the hunt. After considering the whole record, we have come to the conclusion that it is established by clear and convincing testimony that the 248 shares of stock belonged to R. B. Oliver, and were held in trust for him by J. H. Oliver. It is true that the record does not disclose why the shares of stock were issued in the name of J. H. Oliver, 'but it does show plainly and unequivocally that R. B. Oliver paid for the whole of the hotel property, including the furnishings in it, and exercised complete and exclusive control over it until his death. J. H. Oliver at no time made any claim to any interest in it and gives no satisfactory and definite account of any money advanced by him to R. B. Oliver except the $5,000 which was repaid to him.

It is next contended that the court had no jurisdiction to try the title to the steam shovels and Ford trucks in this proceeding. It is well settled in this State that, where a court of equity acquires jurisdiction of a matter in controversy, it will retain the case for the settlement of all rights between the parties growing out of and connected with the subject-matter, whether legal or equitable, so as to do complete justice. Having taken jurisdiction of the case for the equitable relief upon any phase of it, equity will retain the cause to administer the legal and equitable relief. McGaughey v. Brown, 46 Ark. 25 ; Home Life Ins. Co. v. Masterson, 180 Ark. 170, 21 S. W. (2d) 414 ; and Held v. Mansur, 181 Ark. 876, 28 S. W. (2d) 704.

But little need be said upon the facts upon this branch of the case. R. B. Oliver and D. B. Hill had formed a partnership as D. B. Hill & Company. The firm had sold to J. H. Oliver the steam 'shovels and Ford trucks in question, and had taken his title notes for the payment of the purchase money. There is a dispute between D. B. Hill, the surviving partner, and J. H. Oliver as to the payment of the purchase price, but the chancellor was justified in finding from the testimony and from the attendant circumstances that J. H. Oliver owed the- amount found to be due on the balance of the purchase price of the property, and that the plaintiff was entitled to her dower interest therein.

We find no reversible error in the record, and the decree will therefore be affirmed.


author: Hart, C. J.

text:
    Sloss v. Taylor.
    Opinion delivered January 12, 1931.

      Barber •£ Henry and Troy W. Lewis, for appellant.

      Robinson, House & Moses and Harry E. Meek, for appellee.
   Hart, C. J.

A. W. Sloss prosecutes this appeal to reverse a decree of the -chancery court dismissing a complaint filed by him against Walter E. Taylor, State Bank Commissioner, to compel the allowance of a set-off upon a note due by him to the American Exchange Trust Company, which had been placed in the hands of said hank commissioner for liquidation.

According to the allegations of the complaint, A. W. Sloss was the president of the Southern Life Insurance Company, and, in compliance with a statute of the State, had on deposit with the State Insurance Commissioner of Arkansas certain certificates of deposit in the American Exchange Trust Company in the aggregate sum of $5,100. On the 17th day of November, 1930, the American Exchange Trust Company elected to exercise the five days’ suspension period allowed under § 717 of Crawford & Moses’ Digest. On the same day, the State Insurance Commissioner demanded'of the Southern Life Insurance Company that it substitute other securities for the certificates of deposit of said bank on deposit with the insurance department. In compliance with the demand of the Insurance Commissioner, A. W. Sloss took an assignment of the certificates of deposit of the bank in the sum of $5,100 and deposited with the Insurance Commissioner his own private securities in place thereof. The exchange of the securities was made in due course of business with the approval of the Insurance Commissioner on the 19th day of November, 1930, being a date two days after said bank had elected to exercise the five days’ suspension rights given it under the statute. A. W. Sloss was indebted to the bank in the sum of $16,100, balance due on a certain note given by him to the American Exchange Trust Company. The note was past due, and A. W. Sloss offered to pay it, but demanded that he be allowed to set off the certificates of deposit aforesaid aggregating $5,100. The State Bank Commissioner, who took charge of the bank at the conclusion of the five days’ suspension period and who is still in charge of its affairs as an insolvent bank, declined to accept said certificates of deposit as a credit and part-payment of the note from plaintiff to the American Exchange Trust Company.

The chancery court sustained a demurrer to the complaint of the plaintiff praying for the allowance of said set-off and, upon the plaintiff’s refusal to plead further, dismissed his complaint for want of equity.

The correctness of the decision of the chancery court depends upon the construction to be placed upon § 717 of Crawford & Moses’ Digest. The part of the section necessary to a determination of the issues raised by the appeal reads as follows:

“A bank shall be deemed insolvent within the meaning! of this act upon the existence of the following facts: (1) If it suspends payment of checks drawn against deposits payable on demand and fails to resume payment thereof within five days; provided, that any clearinghouse association or any other similar association of banks or bankers, by and with the consent and approval of the bank commissioner, may agree to suspend payment of demand obligations for such length of time as may be deemed proper when such action is deemed necessary or proper by a majority of such banks or bankers forming such association, in order to protect the stockholders and creditors of any bank or banks, or to avert financial panics.”

In the construction of this statute, this court has held that where a bank becomes insolvent, a depositor who is indebted to the bank may offset the amount of his deposit in an action by the receiver or assignee to recover on the indebtedness due the bank. Steelman v. Atchley, 98 Ark. 294, 135 S. W. 902, 32 L. R. A. (N. S.) 1060 ; Funk v. Young, 138 Ark. 38, 210 S. W. 143, 5 A. L. R. 79 ; Hughes v. Garrett, 150 Ark. 404, 234 S. W. 265 ; and United States Fidelity & Guaranty Co. v. Maxwell, 152 Ark. 64, 237 S. W. 708. In the case last cited, it was held that where a bank commissioner, as receiver of an insolvent bank, sued a guaranty company on the fiduciary bonds of two of its employees, defendant was not entitled to offset the amount of a deposit it had in the bank which it had guaranteed the depositor and had paid to him after the bank’s insolvency, taking an assignment of the depositor’s claim. The reason was that to permit a debtor of an insolvent bank to offset a claim assigned to it after the bank passed into the receiver’s hands would be allowing a preference against an insolvent corporation, which is forbidden by § 1798 of Crawford & Mioses’ Digest. Thus it will be seen that the general rule in this State is that the right to set-off against an insolvent bank is governed by the state of facts existing at the time of insolvency and not by the conditions that might be created afterwards. 'See also Scott v. Armstrong, 146 U. S. 499, 13 S. Ct. 148 ; and Yardley v. Philler, 167 U. S. 344, 17 S. Ct. 835.

The effect of these decisions above cited is that the State Bank Commissioner is the statutory assignee of the bank, and, like a\ receiver of an insolvent bank, takes the funds in the plight in which they were held by the bank immediately prior to his appointment. See also Davis v. Elmira Savings Bernik, 161 U. S. 275, 16 S. Ct. 502.

Under % 1798 of Crawford & Moses’ Digest, which forbids preference by insolvent corporations, the moment a bank or other moneyed corporation becomes insolvent the rights of all its creditors attach equally to- all its assets, and whoever takes an assignment of its certificates of deposit afterwards, being indebted to such bank, takes them subject to this right of all the creditors to share equally in the assets of the bank. The statute intends to secure to the creditors collectively and exclusively all the assets of the corporation the moment the insolvency takes place. When a receiver is appointed or the bank commissioner takes possession of the assets of the bank under the statute, there is a conclusive presumption of insolvency.

In the case at bar, the bank suspended business for five days, as it had a right to do under § 717 of the Digest. After the bank had suspended business and closed its doors, the plaintiff, A. W. Sloss, took an assignment of certificates of deposits of said bank in the sum of $5,100, and, by this suit, attempts to use them as a set-off to a note which he owed the bank. Before Sloss procured an assignment of the bank certificates, the bank held the note against him; and, if the bank was insolvent, the note belonged equally to all the creditors of such bank and the certificates of deposit could not he used as a set-off in whole or in part by 'Sloss in the payment of his own debt to the bank. If Sloss could be allowed to purchase or receive certificates of deposit of an insolvent bank and with them satisfy a debt of his own to the bank and take from the assets of the bank this amount, then the policy of the statute forbidding preferences and intending to secure equality between all the creditors of insolvent corporations would be defeated. It is not claimed that the bank was not insolvent in fact at the time it suspended payment and closed its doors for five days under the provisions of § 717 of the Digest, When the bank closed its doors and suspended business for five days under the statute, this of itself was sufficient evidence to warrant a finding of insolvency of the bank, when taken into consideration with the further fact that the bank never opened its doors and went into liquidation as an insolvent bank afterwards. Gillett v. Moody, 3 N. Y. 479 ; and Markson v. Hobson, 2 Dill. 330.

In the latter case it was held that a banker who allows his drafts to go to protest, suspends payment and closes his doors against depositors, proclaims to the world that he is insolvent, and a creditor who, with knowledge of these facts, receives payment of his debt secures an illegal preference, and is liable to* the assignee for the amount thus received. In Dodge v. Mastín, 17 Fed. 660, it was held that the ordinary acceptation of the term “insolvent,” when applied to a bank, means “inability to meet its liability in the usual course of business.” The principle is that, “where there is a statute prohibiting preferences or assignments after insolvency, the date of insolvency sets the time, and claims purchased thereafter cannot be set-off regardless of the date when a receiver is appointed.” Miller v. Audenried, 67 N. J. Eq. 252, 57 Atl. 1076 ; affirmed 68 N. J. Eq. 658, 60 Atl. 1134.

It follows that the decree of the chancery court was correct, and it will be affirmed.


author: Smith, J.

text:
    Huddleston v. Home Life Insurance Company of New York.
    Opinion delivered January 12, 1931.

      Huddleston $ Hughes, for appellant.

      Oliver $ Oliver, for appellee.
   Smith, J.

This litigation arose upon the remand of the cause of the Home Life Insurance Company of New York v. Masterson, 180 Ark. 170, 21 S. W. (2d) 414. As appears from the opinion in that case, separate suits were brought against an insurance company upon two insurance policies upon the life of Gilbert Hays, which were consolidated and tried together. One of these, a policy for $5,000, had been assigned to S. P. Blackwood, who, in turn, assigned it-to the First National Bank as collateral security for an indebtedness which Blackwood owed the bank. The assignment to Blackwood was alleged to have been absolute; that to the bank as collateral, and the suit was brought in the name of the bank.

The widow and minor child of the insured filed an intervention, in which they alleged that the assignment to Blackwood was not absolute, but by way of collateral, and there was a prayer that the amount of the indebtedness which it secured be ascertained and paid out of the sum recovered on the policy and that the excess be paid to the interveners. An answer was filed to this intervention, and testimony was taken as to the character of the assignment and the extent of the indebtedness which it secured. The court found that the insured had assigned the $5,000 policy to Blackwood as collateral security to secure a total indebtedness of $1,648.86, which sum was ordered to be paid the -bank, and that the balance due on the policy, amounting to $3,848.64, with interest, should be paid the insured’s administrator for the benefit of his estate.

The decree of the trial court, holding the insurance company liable on the $5,000 policy, was affirmed by us, but the other policy sued on was held void as a wagering contract, and the decree in the consolidated cases was reversed and remanded, “with directions to render a decree in accordance with the views of this opinion, and not inconsistent with the principles of equity. ’ ’

Upon the remand of the cause the suit on the policy which had been held to be a” wagering contract was dis- . missed, and judgment was rendered on the other—the $5,000 policy—for the amount thereof with interest, as in the original decree. The court fixed an attorney’s fee of 20 per cent, of the total recovery, making a fee of $1,103.50, and ordered $773.55 of this amount to be paid the attorneys for the interveners and the balance, $329.95, to be paid the attorney for the plaintiff bank, and the attorney for the bank has appealed.

Upon filing the intervention, the interveners, unasked, made common cause with the plaintiff in that suit in the assertion of the liability of the insurance company, and the interveners filed separate briefs on the appeal to this court. The right of the interveners to share in the recovery was one of the questions involved on the appeal, and was only disposed of finally in our opinion affirming the holding of the chancellor that the policy had been assigned as collateral only.

The question involved on this appeal is therefore the proper division of the attorney’s fee. This fee was assessed under the authority of § 6155, O. & M. Digest, which provides that “In all cases where loss occurs, and the * * * insurance company liable therefor shall fail to pay the same within the time specified in the policy, after demand made therefor, such'company shall be liable to pay the holder of such policy, * * * all reasonable attorney’s fees for the prosecution and collection of said loss; * *

It is the insistence of the appellant attorney that his client, the bank, was the holder of the policy within the meaning of the statute quoted, and that the fee should not have been divided, but should all have been ordered paid to his client for his benefit.

We think, however, that this is not the proper construction of the word “holder,” as employed in the statute which we have quoted. The word has reference, not to custody, -but to beneficial ownership, and the holder is the person, or persons, who, having the right to sue, have exercised that right successfully. Entwistle v. Travelers’ Ins. Co., 202 Pa. 141, 51 Atl. 759.

The interveners were therefore holders of the policy, as well as the bank, because they had a beneficial interest in the policy, which they enforced by their intervention.

We said, in the case of The Mutual Life Ins. Co. of N. Y. v. Owen, 111 Ark. 554, 164 S. W. 720, that it was the purpose of this statute to permit the plaintiff to procure the iservices of a competent attorney, or firm of attorneys, and that the statute did not contemplate the employment of two attorneys, or two firms of attorneys; in other words, that there should be a single fee, and the insurance company would not be required to pay two attorneys. That was a case in which two attorneys, not otherwise associated, prosecuted a suit on a policy to a successful conclusion, and we held that the fee should be fixed as if only one attorney, or one firm of attorneys, had been employed. Here, there was but one fee, and the question for decision is, how shall it be divided?

The court assessed the fee at 20 per cent, of the sum recovered, and divided it between the attorneys in proportion to the amounts recovered by their respective clients.

We have concluded that, in the absence of any agreement between the attorneys as to the division of the fee, it is more consonant with the statute as construed in the Owen case, supra, and with the principles of equity, to divide this single fee of 20 per cent, equally between the two attorneys, and the decree of the lower court will be modified accordingly and, as thus modified, will be affirmed.


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    Anthony v. Pennington.
    Opinion delivered January 12, 1931.

      James E. Hogue, for appellant.

      Chas. W. Méhaffy, for appellee.
   Smith, J.

Appellant, Primos Anthony, who was the plaintiff below, alleged and offered testimony to the following effect: In September, 1904, he contracted to purchase from Garibaldi lots 11 and 12, in block 8, of Hanger’s Addition to the city of Little Bock, for the sum of $850. On February 23, 1905, Garibaldi conveyed these and other lots to appellee, W. J. Pennington, the deed reciting that the sale and conveyance of the two lots above described were subject to the contract between Garibaldi and plaintiff. Upon executing this deed, Garibaldi indorsed all the purchase money notes which Anthony had given him and delivered them to appellee Pennington, after which Anthony made payment of these purchase money notes to Pennington. Anthony has paid to Pennington all the purchase money, and much more. Wherefore he prayed an accounting, and that he have judgment for the excess paid, and that all title of Pennington be divested out of him and vested in Anthony, and that Anthony’s title be quieted and confirmed.

The contract between Anthony and Garibaldi was admitted, as was also Pennington’s purchase of the lots from Garibaldi subject to this contract, but Pennington alleged and offered testimony to the effect that Anthony was unable to complete his payments and conveyed to Pennington his interest in the lots in a deed dated February 12, 1907, and that later a written contract was entered into between them whereby Pennington agreed to convey lot 11 to Anthony for the consideration of $960, and Pennington alleged that this payment had never been completed.

It appears from this brief statement of the case that the issues involved are questions "of fact, and the testimony is both voluminous and conflicting. We will not recite this testimony,-which has been carefully considered, and will only announce our conclusions concerning it.

Anthony testified that he paid forty-eight notes each for $20, but he produced only eleven of them. The others, he said, were paid by deposits in the bank, the name of which he could not remember, to Pennington’s credit, but there was no proof of these payments except Anthony’s •own testimony. Anthony further testified that he made many payments extending up to 1919' which aggregated $2,424, and that in addition he had made payments in cotton and labor amounting to $931. Anthony kept no book of accounts.

On the other hand, Pennington testified that he assisted Anthony in his attempt to purchase the lots, and, after obtaining the deed from Garibaldi, he continued to indulge Anthony until the latter concluded that he could not complete his payments, whereupon Anthony and his wife, on February 12, 1907, executed to Pennington a quitclaim deed for both lots. A house was built on lot 11, which Anthony occupied for some years as a tenant, paying rent, and on February 1,1914, Pennington contracted to convey to Anthony lot 11 for a consideration of $960. Anthony denied the execution of either the deed or the contract to convey and claims his title under his original contract with Garibaldi.

The testimony of Anthony in regard to his payments proves too much, for, according to his testimony, he paid three times the purchase price of the lots before demanding his deed.

We think the testimony on behalf of Pennington is much more consistent. According to this testimony, Pennington furnished Anthony as a share cropper making a cotton crop for a number of years, and many of the payments which Anthony claims should be credited on the lots were credited, by consent, to the farming account, and a balance on that account of $9.64 remains due and unpaid, and a balance of $328.34 remains unpaid on the purchase money due on lot 11.

The deed from Anthony and his wife to Pennington was signed by them by mark, and opposite their names was written: “Witness to Marks: T. W. Wilson. Mary Anthony.” Wilson was the notary public who took the acknowledgments and had died before the depositions were taken in this case. Mary Anthony, the other attesting witness, was the daughter of the grantor, and she testified that she had not witnessed the signature of either her father or mother, and they both denied that they had 'signed or acknowledged the deed. The deed had been duly recorded, and a certified copy of it, as recorded, was offered in evidence. Pennington testified that he was present when Anthony and his wife signed and acknowledged the deed.

The law of this feature of the case was recently considered in Miles v. Jerry, 158 Ark. 314, 250 S. W. 34, where it was held that, when a grantor makes an acknowledgment before an officer authorized to take .acknowledgments, the recitals of the officer’s certificate, regular on its face, are, in the absence of fraud or duress, conclusive of the facts therein recited. But, although the officer may have certified that the grantors appeared and acknowledged the instrument, they may show that they did not in fact appear and acknowledge, but this burden rests upon the grantors who question the certificate of acknowledgment, and may be discharged by a preponderance of the evidence. Clifford v. Federal Bank & Trust Co., 179 Ark. 948, 19 S. W. (2d) 1026.

We are of the opinion that Anthony has not discharged this burden, and the conduct of the parties subsequent to the date of this deed confirms us in that view.

We are also of the opinion that the contract herein-above referred to dated February 1, 1914, for the reconveyance of lot 11 to Anthony was, in fact, executed by him as well as by Pennington. It is insisted that this contract was without consideration, for the reason that Anthony had already bought and paid for this lot, but we do not concur in that view, nor did the chancellor. It was shown by .Pennington’s books of account that Anthony was indebted to Pennington in the sum of about $500 at the time of the execution of this contract, and that Pennington had spent a considerable sum of money building the house on lot 11 in which Anthony then lived and on which he had been paying rent at the rate of $1.50 per week. Upon the execution of this contract to convey, it was agreed that the money which had been paid as rent should be treated and credited as payment of interest on the purchase money.

Much of Pennington’s case was made by the testimony of his wife, and objection was made to the introduetion of this testimony because she was the wife of the defendant, Pennington. It. appears, however, that Mrs. Pennington was acting as the agent of her husband in all the matters about which she testified. She kept her husband’s books, and had kept the account with Anthony, and the 'chancellor appears to have accepted her testimony as a substantially correct statement of the account. According to this account, Anthony owed a balance of purchase money, exclusive of interest, of $328.34, and the chancellor found the balance to be $288.40.

Numerous cases declare the law to be that, where either spouse acts as agent for the other, testimony by the one acting as agent relative to matters within the scope of the agency is competent. Franks v. Rogers, 156 Ark. 120, 245 S. W. 311 ; Stephenson v. Lewis, 152 Ark. 361, 238 S. W. 61.

The chancellor found that Anthony owed a balance of $288.40 on his contract to purchase lot 11, with interest from February 1, 1919, when the last payment was made. Pennington’s title to lot 12 was quieted. A lien was declared on lot 11 in Pennington’s favor for the balance due on that lot, and time was given for its discharge, Anthony’s title to that lot being declared and quieted if the payments were made. We are unable to say that this finding is contrary to the preponderance of the evidence, and it is therefore affirmed.

Mehaeey, J., not participating.


author: Humphreys, J.

text:
    Ramey v. Baker.
    Opinion delivered January 12, 1931.

      N. F. Lamb and Dudley & Dudley, for appellant.

      Claude B. Brinton, for appellee.
   Humphreys, J.

Appellees brought suit against appellants in the Circuit Court, First Division, Jonesboro District, to reeoyer an alleged unpaid balance of $1,948.34, upon an oral contract to clear certain right-of-way and grub a portion thereof for a 'State road between Bono in Craighead County, and Sedgwick in Lawrence County. A summons was issued upon the complaint and served by a deputy sheriff of said county who made the following written returns thereon:

‘ ‘ State of Arkansas, County of Craighead—ss.
“On the 30th day of October, 1929,1 have duly served the within writ by delivering a copy and stating the substance thereof to the .within named Alex Ramey and Forcum & James, a corporation, by delivering a copy of summons to Alex Ramey, agent of said corporation, as I am hereby commanded.
“W. Y. Nash, Sheriff,
“By W. F. Lane, D. S.”
“State of Arkansas, County of Craighead—ss.
‘ ‘ On the 30tli day of October, 1929,1 have duly served the within writ by delivering a copy and stating the substance thereof to the within-named 'Forcum-James Company, a foreign corporation organized under the laws of the State of Tennessee, by delivering a copy of said writ to Alex Ramey, agent of said corporation, in charge of the business of said corporation at Bono, Arkansas, and duly authorized to receive service of summons at said place. That said service was had at their place of business of the corporation, and he aeknowlledged said service 'for said corporation as I am hereby commanded to do.
“W. T. Nash, Sheriff,
“By W. F. Lane, D. S.”

Appellants appeared for the sole purpose of filing a motion to quash the summons on the ground that the service thereof did not meet, the requirements of § 1152 of Crawford & Moses’ Digest, relative to service on foreign corporations doing business in this State.

Appellees filed a response to the motion alleging that the service was sufficient.

Neither the motion nor the response were sworn to and no testimony was introduced upon the issue joined, return of the summons being the only evidence relating to the service of the summons. The motion was overruled by the court over appellant’s objection and exception, and the correctness of the ruling of the court is one of the questions for determination by this court.

Appellants then filed a joint and separate answer denying the material allegations of the complaint in which they reserve the issue of the sufficiency of the service.

The cause was submitted to a jury upon the pleadings, testimony and instructions of the court which resulted in a verdict and consequent judgment against appellants for $1,367.12, from which is this appeal.

The first contention made by appellants for a reversal of the judgment is the alleged insufficiency of the service. The return upon the summons reflects that it was served upon appellant, Forcum-James Company, a foreign corporation, by delivering a copy and stating the substance thereof, to Alex Ramey at its place of business at Bono, Arkansas, who was duly authorized to receive service of said summons at said place. In serving the summons every requirement of the statute was complied with, and the service thereof was sufficient. It is not necessary for a foreign corporation to own or rent a building in which it conducts its business in order that legal service may be obtained upon it by delivering a copy of the summons to its agent in charge of its business. The requirement of the statute is that summons must be served upon its agent at its place of business, and that means on the agent in charge of its business at any place, irrespective of kind or character, at which it conducts and operates its business. Arkansas Power & Light Co. v. Hoover, post p. 1065, and the cases cited therein.

The next contention made by appellants for a reversal of the judgment is that the court erred in admitting in evidence Exhibit D to the testimony of L. C. Baker, purporting to be a statement of account between the parties. We know of no reason why a party may not make up a statement in writing of debits and credits covering any transaction made the basis of his suit, testify to the correctness or each item and introduce the statement in evidence. It might be objected that the original book entries of the debits and credits were the primary and best evidence if books covering all or any of the items were kept, but this objection was not specifically made to the introduction of the statement.

Appellants’ next and last contention for a reversal of the judgment is that the verdict is not supported by the evidence.

Appellees testified that they entered into a contract with appellants to clear certain right-of-way between given points and to grub a certain portion thereof, at fixed prices per acre for clearing and grubbing, and were to remove the refuse from the right-of-way; that they cleared 82.75 acres for which they were to receive $25 per acre and grubbed 57.75 acres for which they were to receive $75 per acre; that they complied with the contract in every particular until prevented from completing a small part of the work by appellants who employed their dynamiter and other employees. ' They testified to the correctness of each item of debit and credit in their statement and to the balance due them under the terms of the contract.

Witnesses for appellants testified that under the contract with appellees they were required, not only to remove the refuse from the right-of-way, hut were to bum same if required to do so by the highway engineer, and that appellants were required, at great expense, to clear up and burn the refuse left by the appellees near the right-of-way. Also that appellees cleared only 25.87 acres for which they were entitled to $25 per acre and only grubbed 44.63 acres, for which they were entitled to $75 per acre, and that they paid appellees all that they owed them for work.

It will be seen that the evidence was conflicting as to the terms of the contract, the number of acres cleared, the number of acres grubbed, etc. In view of the conflict in the testimony upon all material issues arid that appellees’ version of the contract and the performance thereof is supported by substantial evidence, the verdict and judgment cannot be reversed on appeal.

No error appearing, the judgment is affirmed.

Hart, C. J., and Smith, J., dissent.


text:
    Jennings Motors v. Burchfield.
    Opinion delivered January 12, 1931.

      Barber ■& Henry and Troy W. Lewis, for appellant.

      Dillon <& Robinson, for appellee.
   Humphreys, J.

This is an appeal from a judgment for $250 rendered in the Second Division of the Circuit Court of Pulaski County in favor of appellee against appellant for an alleged malicious prosecution of appellee by appellant in the municipal court of Little Rock for the larceny of an automobile.

According to the undisputed evidence, Paul S. Freeman, vice president of appellant, obtained information from its assistant bookkeeper, Fred McKnight, on the morning of the 16th of July, 1930, that appellee had taken a coupe, Chrysler automobile 60, from its place of business on Saturday night, July 13, 1930, without permission, and that the employees, after searching, had been unable to locate the car or automobile. Freeman made an investigation and ascertained that a salesman had seen appellee with the car Saturday night the 13th. He immediately sent out employees to search for the car, and, not finding it, revealed all the facts in its possession to appellant’s regular attorney, who stated in his opinion a crime had been committed by appellee, and advised that the matter be reported to the authorities. Freeman instructed McKnight to ask the police authorities if they wanted to pick up the car, and they refused to act without a warrant whereupon Freeman instructed McKnight to go to the prosecuting attorney and state all the facts in their possession to him. McKnight obtained an audience with Kenneth W. Coulter, deputy prosecuting attorney for Pulaski County, and stated all the facts in their possession to him. Among other facts, McKnight stated to the deputy that appellee had been discharged by appellant and was not in its employ at the time he took the car, and that he did not take same with the permission of the officials of O. Gr. Walker, who was in'charge of the used car department. The deputy prosecutor said that the facts disclosed were sufficient upon which to base a charge for larceny against.appellee, and that he would prefer such a charge against him. McKnight. gave the deputy prosecutor the motor and serial number of the car and the names of the witnesses. The deputy filed information against appellee, who was arrested at 2:30 p. m. on the 16th. At 5:30 p. m. on the same day the car was found by one of appellant’s employees and brought to its place of business, and Freeman immediately notified the authorities that the car had been recovered. Appellant was not notified of appellee’s arrest nor when the case would be tried. On the morning of the 17th appellee was discharged for failure to prosecute and soon thereafter instituted this suit.

It is a complete defense to an action for malicious prosecution if the defendant in the action instituted the prosecution upon the advice of a prosecutor or counsel learned in the law after truly laying all the facts in his possession before him or them. Randleman v. Johnson, 125 Ark. 54, 187 S. W. 626 ; Hall v. Adams, 128 Ark. 119, 193 S. W. 520. The reason of this rule is that, when one truly lays all the facts in his possession before a prosecutor or an attorney and follows his or their advice, the law conclusively presumes the existence of probable cause, the lack of which is a necessary element in a suit for malicious prosecution. St. L. I. M. & S. Ry. Co. v. Wallin, 71 Ark. 422, 75 S. W. 477 ; L. B. Price Mercantile Co. v. Cuilla, 100 Ark. 316, 141 S. W. 194 ; Price v. Morris, 122 Ark. 382, 183 S. W. 180. In the instant ease this defense was invoked by appellant, and, according to the undisputed evidence, all facts within the knowledge of its officials were truthfully disclosed to its own attorney and the deputy prosecuting attorney. It is argued that appellant’s officials untruthfully informed its attorney and the deputy prosecuting attorney that appellee took the car without permission and that he was not in the employ of appellant at the time he took same. Appellee testified that he took the car with the permission of O. G-. Walker, and that he himself was in the employment of appellant when he took same. But the undisputed testimony reflected that the officials had been informed by Mr. Walker that he did not give appellee permission to take the car and knew nothing pf appellee’s re-employment by Mr. Walker after they discharged him on July 5th prior to the date the car was taken. In other words, the undisputed evidence shows that the officials of appellant acted in good faith by disclosing all the facts in their possession to its attorney as well as the deputy prosecuting attorney.

In view of the undisputed evidence in support of its defense, the trial court should have instructed a verdict in favor of appellant as requested.

The judgment is therefore reversed, and the cause of action is dismissed.