text:
    United States Veterans’ Bureau v. Riddle.
    4-2821
    Opinion delivered February 27, 1933.

      Cleveland Cabler and Partlow i& Rhine, for appellant.

      Barber & Henry, for appellee.
   McHaney, J.

Appellees, Mrs. Esther Biddle and A. E. Bandol, were the lawful guardians respectively of Eddie Becknell and Carroll Lee G-ould, minor children of World War veterans, and each had on deposit, at 4 per cent, interest, in tlie First National Bank of Bector, Arkansas, sums belonging to their respective wards in excess of the amount necessary for their support and education, Mrs. Biddle having $1,167.67 and Bandol $1,925.02, when the bank became insolvent. These funds had come froin the Federal 'Government by reason of the fact that they were dependent minor children of deceased World War veterans. Just when these guardians were appointed and qualified as such is not shown, except Mr. Bandol testified he was appointed guardian in succession in January, 1926, and perhaps Mrs. Biddle was appointed prior thereto. Nor is it shown definitely just how long this money had been on deposit in said bank when it closed— date of closing not being shown, but probably in 1931. As early as June 15, 1928, appellant, through its attorney, began writing appellees, advising that it was their duty to invest said surplus funds in the manner provided by law, and not to permit them to remain in a bank on deposit. A number of letters passed between the parties, and, although appellee Bandol had experienced a bank failure and consequent loss of funds in the Bank of Mar-madnke, he continued to keep the money on hand in the First National at Bector. In a letter to appellant’s attorney of August 27, 1929, in answer to one from it of the 15th, he said: “Now, as to loaning the money I have on hand, I can say if I have the money, you cannot hurt me. And as to the if of the bank failing why we can if on many things. ’ ’ The last letter of appellant to Bandol was dated November 13, 1930. Although appellees consulted with the probate judge, no order was ever made authorizing these deposits to be made in said bank, nor was any other investment approved or rejected by order of the probate court.

After the failure of said bank, appellants filed separate petitions against each guardian, in the nature of exceptions to their annual settlements, in which it was sought to hold each personally liable for the loss sustained in said bank failure, to which responses were filed. The court denied the relief prayed, and, on appeal to the circuit court, the cases were consolidated and tried by consent before the court sitting as a jury. Its findings and judgment were also adverse to appellant, and the case is here by appeal.

The court found, among other things, “that the said guardian did not make an investment as suggested by the said attorney for the reason that he was unable to find a safe and suitable investment for such funds. The court finds that he, as such guardian, acted in good faith and with due diligence with reference to investing the funds of said ward. That he consulted with and advised with the county and probate judge with reference to investing of such funds, and with the knowledge and consent and advice of the county judge loans were not made, Liberty bonds were not purchased, but that such funds were placed in the First National Bank of Rector on time deposit at 4 per cent, interest; that at such time said funds were so placed in said bank the bank was considered and thought to be a safe and solvent institution, and had such a reputation for safety and solvency up until the time that the same closed. That the said guardian was not negligent in the handling of said funds, and that he acted in good faith in an effort to safeguard the funds of the said ward. ’ ’

Like finding’s were made in both cases, and were made upon testimony, admitted over objections by appellant, that the guardians had used due diligence to obtain investments, had consulted with the .judge regarding certain proposed investments and had been advised by him not to make them. Conceding without deciding the competency of this testimony, we are of the opinion that it does not excuse the guardians from personal responsibility for loss of said funds. The records of the probate court fail to show any application of either guardian for authority to deposit said funds on time deposits or otherwise in said bank, or to make any other investment of said funds, and no order of court was ever made touching same. The statutes of this State are very plain regarding the duties of guardians to make investments of the surplus funds of their wards and the kind or character of security to be taken. Section 5059, Crawford & Moses’ Digest, provides that “such guardian shall, under the direction of the court, loan the same to such person as will give good security therefor, and such money shall be loaned on such time as the court shall direct.” Section 5061 provides that the loan shall he “at the highest rate of interest prevailing in the community that can be obtained on unincumbered real estate security,” not to exceed one-half the value. Section 5067 provides: “No guardian shall be personally responsible for any money belonging to his ward and loaned out by him, under the direction of the court, and no security, which may have been approved by the court, in case of the inability of the person to whom such money may have been loaned or his security to pay the same.”

Under the latter section of the statute, this court held in Parker v. Wilson, 98 Ark. 553, 136 Ark. 981: “that where a guardian loans the ward’s money without first obtaining an order of court authorizing him to make the loan, he assumes the responsibility, and no subsequent order of the probate court confirming his action will relieve him from liability if loss occurs.” 7th syllabus. In the case cited the guardian testified that, sometime before making the loan he presented a petition to the judge for authority to make the loan, and that the judge indorsed thereon: “Examined and allowed,” which was placed among the guardianship papers, but not delivered to the clerk, and no order was entered. This court held that a finding of the chancellor that no order was obtained would not be disturbed. In holding these provisions of the statute mandatory, including those above mentioned and others related thereto, the court in this case said: “While the language of the provisions under consideration is not as strong and positive as that in the section last referred to, we think that it should be construed to be mandatory. The money belongs to the ward, but he is not consulted, and has no voice in regard to the loaning out of his own money. The statute contemplates that it shall be done under the direction and orders of the probate court. It is true the guardian may assume the responsibility and loan it out without an order of the court, but in such case he acts at his own peril. If he imprudently loans the ward’s money upon inadequate security, without having first procured an order of the court to loan it, he must suffer the loss occasioned thereby, even though he may have acted honestly in the matter.”

The deposits made in this case appear to be time deposits at 4 per cent, interest. "Whether a certificate of deposit was issued in either case is not shown, but apparently they were made for a definite time, and not subject to withdrawal, except upon some notice, but, whether so or not, they were time deposits and had been there for perhaps three years or more. They cannot be regarded other than as investments made by the guardians without security and without an order of the probate court, for which they are personally liable in case of loss. 28 C. J. 1145, § 244.

Nor does the decision of this court in Harper v. Betts, 177 Ark. 977, 8 S. W. (2d) 464, militate against this holding. There the executor had deposited the money in a bank only 18 days before it closed, and the holding in that case was bottomed on the shortness of time in which the money had been on deposit and the reputation of the bank.

Section 5065, Crawford & Moses’ Digest, makes it the duty of the probate court to require guardians to make reports at every annual settlement of the disposition made by him of his ward’s money, and § 5066 reads as follows: “It shall be the duty of said court to carefully examine into such report as soon as made, and, if in its opinion the security is insufficient, it shall be the duty of the court to require additional security to be given to protect the. interest of said ward, and, if such additional security be not given within such time as the court shall order, not exceeding ten days, it shall be the duty of the guardian or curator to institute suit forthwith on such security to recover the amount due thereon; and he and Ms security shall be liable on the bond for any omission so to do; and, if such money has not been loaned out, the court shall order the money to be forthwith- invested in United States bonds, for the use and benefit of such ward, and wMch shall remain so invested until said court shall order otherwise; and a report of the action of such guardian or curator shall be made of his proceedings. ’ ’

If the guardian fails to lend his ward’s money after being ordered by the court to do so, he is liable not only for the money but the interest thereon at the legal rate. Merritt v. Wallace, 76 Ark. 217, 88 S. W. 876. In Lee v. Beauchamp, 175 Ark. 716, 300 S. W. 401, the guardian deposited the money in bank at 4 per cent. It was sought to charge him, not with the deposit, but a higher rate of interest than 4 per cent. This court declined to do so because the rate received was as high or higher than that on Government bonds.

Here, however, these guardians did not invest in real estate securities and did not purchase Government bonds. We think the evidence sufficiently establishes the fact that they could have done either with safety, at least with the protection of an order of the probate court. They permitted these funds to remain on deposit over the strenuous objections of appellant for about three years, at least from June, 1928, until the bank closed. This they had the right to do by making themselves and their bondsmen liable for the loss sustained, just as they could by making any other investment without the approving order of the probate court.

The judgment will be reversed, and the cause rer manded with directions to enter a judgment against appellees for whatever loss has been sustained by reason of the failure of said First National Bank, with interest at 6 per cent, from the date of failure, and to certify same to the probate court for its guidance in the premises. Costs will be awarded against appellees.

Smith and Humphreys, JJ., dissent.


source: Caselaw Access Project

author: Butler, J.

license: Public Domain

text:
    Leavitt v. Marathon Oil Company.
    4-2899
    Opinion delivered March 6, 1933.

      W. L. Curtis, for appellant.

      Henry E. Spitzberg, for appellee.
   Butler, J.

This is a suit by the appellee for judgment for debt evidenced by promissory notes and for foreclosure of a mortgage on personal property, being certain filling stations and equipment executed by the makers, appellants.

The defense relied upon is alleged in paragraphs 12, 13 and 14 of the answer. A general demurrer was filed to the answer and a specific demurrer to paragraphs 12 and 13, and the court, treating the general demurrer as a specific demurrer to paragraph 14, sustained the demurrers as to each of these paragraphs, the defense of the alteration of the mortgage set forth in the first section of paragraph 12 of the answer being waived. The defendant saved proper exceptions to this action of the court, and, refusing to plead further, judgment was rendered against them for the debt and accrued interest and for foreclosure of the mortgages, and from that the defendants (appellants) have appealed.

The nature of the transaction whereby the debt was incurred sufficiently appears in the following paragraph of the answer: '

“11. Further answering, these defendants state that on or about the 5th day of January, 1931, the defendant, W. Q. Leavitt, was the owner of a certain filling station, bulk sales station and the equipment incident to and necessary for the operation of said station, located and being in the city of Booneville, and county of Logan and State of Arkansas; that said equipment was, at the time, of the reasonable value of $7,500.

“12. That on said date the said defendant, W. Q. Leavitt, being in need of funds, negotiated a loan on said plants and equipment for the sum of $3,500, which was evidenced by five promissory notes of $700 each with 6 per cent, interest thereon, said notes to become due and payable in one, two, three, four and five years from date, and that, to secure the payment of said loan, and as a part and parcel of same transaction, made out and executed and delivered to said plaintiff a chattel mortgage on said retail and wholesale oil and gas stations and the equipment connected therewith, and that said chattel mortgage, together with the notes referred to above, are null and void, first, for the reason that said chattel mortgage was materially changed after its execution and delivery to plaintiff by the insertion therein of the paragraph thereof which reads:

“Party of the second part may at its option purchase fire, tornado and theft insurance upon the property herein mortgaged, charging same to the account of the party of the first part, to be secured by the mortgage as an advancement; that said notes and mortgage are further void, for the reason that at the time of making said loan and the execution of the notes and mortgage referred to, and as a part of the same transaction, the said defendant made out and executed a lease agreement with the plaintiff upon the property described in said lease and in said chattel mortgage, which said lease, among other things, provides for an annual rental for said property of $1 per month or $12 per year, with a further provision that said property was to he maintained and kept in good operating condition by this defendant, lessor, at his own necessary expense for five years, and it is this part of the entire contract which the paintiff is seeking to have enforced in this suit, since it is and constitutes, as hereinabove alleged, a part and parcel of the entire transaction with the exceptions hereinafter stated.

“13. That said lease contract, together with the notes and mortgage referred to herein are fraudulent and void,

“ (a) Because they are unconscionable and are not such contracts as will he enforced by a court of equity.

“(h) Because the same, when construed together with the entire transaction, discloses that the value of said lease or rental upon said property, when added to the interest provided for in the notes and mortgage, produces a rate of interest for the life of the contract, or for any one year embraced therein, of a charge in favor of the plaintiff far in excess of ten per cent, on the amount of money loaned by plaintiff to the defendant, and therefore and for that reason is attainted with usury, and that by reason of said usury said note and mortgage as well as said lease contract are absolutely void.

‘ ‘ 14. That, as an inducement to secure the execution of said notes and mortgage and said lease at the time and in the manner hereinabove stated, the said plaintiff, through its agents and representatives who negotiated said contracts with the defendant, W. Q. Leavitt, M. R. Springer falsely and fraudulently represented to the said W. Q. Leavitt that the $12 rental specified in said lease and the difference between 6 per cent, interest on the loan and of possibly 10 per cent, thereon to the plaintiff was not a sufficient sum to constitute a valid rental on the use of the property which plaintiff was securing under the terms of said lease, but that in addition thereto the plaintiff would allow the defendant the sum of one-fourth, of a cent per gallon on all gasoline handled or sold during the life of the lease by either the bulk sale or retail station covered by said lease, but for certain trade reasons he did not want to include said provision in said contract, but would subsequently have the plaintiff confirm said arrangement by letter, and that the defendant relying upon said representations of said plaintiff and its agents, was thereby fraudulently induced to sign said notes and said mortgage and said lease contract, and that, notwithstanding said understanding and agreement and inducement, thereafter said plaintiff wholly repudiated same and refused to confirm the same or to recognize the same in any way, thereby rendered all of said transaction null and void and of no force and effect.”

The first question to be determined is whether the allegations of paragraph 12 are sufficient to constitute the defense of usury. It is alleged that the lease contract set out was a part and parcel of the same transaction by which the loan was secured. This appellant contends is a sufficient plea upon which to found the defense of usury when there are other averments that the rentals on the property demised, when added to the six per cent, interest the notes carried, made a sum in excess of 10 per cent, per annum on the debt for the entire period before the due date of loan or any one year thereof. Cammack v. Runyan Creamery Co., 175 Ark. 601, 299 S. W. 1023, is cited as supporting this contention. We do not so view that case, which was a suit on an alleged contract of employment, and which was successfully defended on the ground that no employment of the plaintiff was contemplated or any service rendered, but that the arrangement was merely a device to cover a usurious rate of interest on a loan of money made by the. plaintiff, either as the principal lender or as his agent. In upholding the finding of the chancellor as not against the weight of the evidence, the court recited.the settled principle that, to constitute usury, “there must be an agreement between the parties by which the borrower promises to pay and the lender knowingly receives a higher rate of interest than the statute allows for the loan or forbearance of money, or such greater rate of interest must be knowingly reserved, taken or secured for such loan or forbearance. And the wrongful act of usury will not be presumed or imputed to the parties, and it wall not be inferred where the opposite conclusion can be reasonably and fairly reached.”

In the answer in the instant case there was no allegation from which the reasonable intendment could be drawn that a corrupt agreement existed between the parties that would bring its averments within the principle recognized in Cammack v. Runyan, supra, and which was necessary to a plea of usury. Citizens’ Bank v. Murphy, 83 Ark. 31, 102 S. W. 697; Berner v. Wade, 170 Ark. 1020, 282 S. W. 359.

It is the general rule, approved by this court, that an agreement for a loan is not usurious, even though the lender refused to make it unless the borrower would enter into another contract from which the lender might-gain advantage, if the collateral agreement was fair and legal (Simpson v. Smith Savings Society, 178 Ark. 921, 12 S. W. (2d) 890), the reason for which is stated in the recent case of Hogan v. Thompson, emte p. 497, as follows : ‘ ‘ This is based on the- principle that, since the law forfeits the entire loan and interest thereon for an exaction of usurious interest, however small, the intent to exact a usurious! interest must be clearly shown and will not be inferred where, from the circumstances, the opposite conclusion can be reasonably and fairly reached.”

Therefore, the allegation that the lease contract was a part of the transaction of the borrowing of the money does not constitute a defense, in the absence of an allegation that the contract of lease was a device or cloak for usury which the lender intended to exact and the borrower to pay.

2. In determining the correctness of the .court’s ruling on the demurrer to paragraphs 13 and 14, the contention of the appellant raised in the second and third part of counsel’s brief may be considered under one bead. The first is that the “lease contract as a matter of equity was either without consideration or was for such a gross inadequacy as to render the same void/’ and, next, that the lease contract was secured by the false representation that appellant would be paid one-fourth of a cent per gallon on all the gasoline sold on and through the demised premises. The answer to these contentions is that the suit of appellees does not involve the lease, but a recovery on notes evidencing money it loaned appellant and foreclosure of a mortgage given to secure the same. The fact that a lease was fraudulently procured would be no defense to a suit to recover appellee’s debt or for foreclosure on the security, and, as pointed out by counsel for appellee, appellant did not allege any damage for the alleged failure to pay them one-fourth of a cent per gallon on gasoline handled through the filling stations leased or seek to offset the debt or any. portion thereof on account of any damage sustained.

We are of the opinion that no defense was stated in the answer, and the chancellor correctly sustained the demurrer.

The decree is therefore affirmed.


text:
    Faulkner v. Faulkner.
    4-2910
    Opinion delivered March 6, 1933.

      T. H. Humphreys, Jr., Fred A. Isgrig and Harry Robinson, for appellant.

      Tom W. Campbell, for appellee.
   Butler, J.

Nelson Faulkner, a locomotive engineer in the employ of the Missouri Pacific Railway Company, suffered an injury while in the discharge of his duties, from which injury he died.

He left surviving him Lillian Faulkner, his widow, aged 38 years, and two children, a son born to him and his wife, Lillian Faulkner, who was at the time of his father’s death 20 yearSj 3 months and 24 days old. The other child was an adopted son, William August Faulk-per, pged 22 months ydien the father died,

The deceased Fad made a will, whieli was filed for and admitted to probate, in which the said Lillian Faulkner was named executrix. Thereafter she, as such executrix, filed suit against the Missouri Pacific Railway for the benefit of the estate and for herself as widow and the next of kin. On December 24, 1929, judgment was rendered in the sum of $1,000 for the benefit of the estate and $4,000 for benefit of the widow and next of kin.

In January, 1932, Nelson Edward Faulkner brought suit alleging the death of his father, the recovery of the aforesaid judgment, and that at the time of his father’s death he was a minor residing* with, and dependent upon the earnings of, his said father for support. He further alleged that the defendant, Lillian Faulkner, had collected the sums adjudged; that he was entitled to one-third of the sum recovered for benefit of the widow and next of kin, but which had been kept or appropriated by the defendant for her own use. Judgment was prayed for $1,333.33 with interest at -6 per cent, from December 24, 1929, the date the defendant was alleged to have received the money on the judgment. To this complaint the defendant made answer denying that the plaintiff had been supported by or was dependent upon the earnings of his father or that he was entitled to share in the said recovery, and, by way of cross-complaint, alleged that the plaintiff was indebted to her in the sum of $1,306.25, for which she prayed judgment.

On these issues the case proceeded to trial, at which testimony was introduced tending to sustain the allegation that plaintiff lived with and was supported by, and was dependent upon, the earnings of his father, and to refute the allegation of the cross-complaint. The test i mony on the part of the defendant sharply controverted that of the plaintiff and tended to sustain the allegation of her answer and the averments of her crossrcomplaint. On that state of testimony the court instructed the jury to find for the plaintiff the sum sued for, less whatever, if any, the .jury might find to be due defendant on her cross-complaint, and refused the request of the defendant to instruct the jury as follows:

1. “You are instructed that, if you find from the evidence in this case that Nelson Edward Faulkner was not dependent upon his father, the deceased, for support, and that he sustained no pecuniary injury by the negligent killing of his father, then Nelson Edward Faulkner would not be entitled to recover, and your verdict will be for the defendant on his cause of action.”

2. “If you find from the evidence in this case that Nelson Edward Faulkner was dependent upon his father for support, then his proportionate part of the recovery would be for the remaining time of his minority as compared with the expectancy of his mother, the defendant, and William August Faulkner, his foster brother.”

There was a verdict and judgment for the plaintiff in the sum of $500 from which defendant has appealed and argues error of the trial court in its instruction given for the plaintiff and in its refusal to instruct the jury as requested by her.

The court evidently adopted the theory which ap-pellee here maintained, viz., that the suit of Mrs. Lillian Faulkner was instituted under § 1074 of Crawford & Moses ’ Digest, and that the sum recovered should be distributed as provided by § 1075 of the Digest which provides that the amount recovered for the benefit of the widow and next of kin be distributed to such widow and kin in the proportion provided by law in relation to the distribution of personal property left by persons dying intestate; and 'by § 3535, Id., which provides for an allotment of one-third of the personal estate to the widow as her dower; and by § 3471, Id., which provides for the distribution of the estate of a deceased person.

The act of the General Assembly, approved March 6, Í883, of which §§ 1074 and 1075, Id., is a part, embodied certain provisions of an English statute known as Lord Campbell’s Act, and applies in cases where a recovery may be had for an actionable injury resulting in death, regardless of the agency by which the injury was inflicted and gives the right of action to the personal representative of any person whose death has been caused by the wrongful act of any other. Davis v. Railway, 53 Ark. 117, 13 S. W. 801.

The act did not limit a recovery for the death of one of a certain class by another of a certain other class, but applied equally to all persons alike, both as to those for whose death a recovery was sought and to those through whose fault the death was occasioned. Under its provisions suit might be brought for the death of a railway employee against the railway company responsible therefor and thus remained the law until the General Assembly, by an act passed at its 1911 session, now § 7138 et seq. of Crawford & Moses’ Digest, provided for liability of common carriers by railroad for damages for the death of its employees resulting from its negligence. It is the contention of the appellant that this suit was authorized and prosecuted under the latter act, and that it is to be, and is, determined by the allegations of the complaint.

The Federal Employers’ Liability Act of April 22, 1908, applies only to railroad carriers and to those suffering injury resulting from the negligence of such carrier while in their employ and engaged in the prosecution of their work. The act of March 6, 1911 (§ 7138 et seq.) was modeled upon the Federal statute and was construed in the case of K. C. & M. Ry. Co. v. Huff, 116 Ark. 461, 173 S. W. 419, as not applicable to the case of every servant of a railroad company injured when he was performing his duty as such, and'in St. L., I. M. & S. R. Co. v. Ingram, 118 Ark. 377, 176 S. W. 692, following the decisions of other states construing similar acts, it was held that our statute was designed for the exclusive benefit of those who, in the course of their employment, are exposed to dangers peculiar and incident to the use and operation of engines and trains and to injuries occasioned by these instrumentalities.

In St. L., I. M. & S. R. Co. v. Wiseman, 119 Ark. 477, 177 S. W. 1139, following and approving the doctrine announced in the two cases above mentioned, the dangers enumerated therein were designated as “railroad hazards” which the court said “are those peculiar dangers to which, employees are exposed while they are engaged in work connected with, and necessary to, the operation and running of trains.” The facts in that ease, in the opinion of the trial court, brought it within the statute (§ 7138 et seg). In overruling the trial court, this court said: “It would be a difficult task to determine in advance and to define specifically what cases may fall within the purview of the statute. Each case will depend upon its own peculiar facts as developed. But the undisputed facts of the present record show that Wiseman at the time of his injury was engaged in the work of repairing a car in the shops at McGehee. This work in no manner exposed him to those peculiar hazards which are incident to, and connected with, the physical use and operation of a line of railroad, and the work in which he was engaged did not bring him within the protection of act No. 88 of the Acts of 1911, as construed by us in Ry. Co. v. Ingram, supra.”

The doctrine of those cases was applied by the court in the case of Murphy v. Province, 153 Ark. 240, 240 S. W. 421, relied upon by appellant. In that case a recovery was obtained on a suit by the executrix against the railroad company for the death of her testator, one of its employees, by reason of the negligence of the railroad company. A married daughter brought suit against the executrix to recover a share of the amount recovered on the ground that the “recovery of the funds in controversy was secured in an action under the statute of this State which is generally referred to as having been patterned after Lord Campbell’s Act (Crawford & Moses’ Digest, §§ 1074, 1075), which provides that the recovery secured thereunder ‘shall be for the exclusive benefit of the widow and next of kin of such deceased person, and shall be distributed to such widow and next of kin in the proportion provided by law in relation to the distribution of personal property left by persons dying intestate’.”

That suit was resisted by the executrix, her contention being that the judgment for the death of her testator was had either under the Federal Employers’ Liability Act or under the statute, § 7138 et seq., supra, which act she claimed provided a different method of distribution from that contended for by the plaintiff. This is precisely the issue presented in the instant case.

The court, in that case, found it unnecessary to determine whether the original recovery should be treated as one under the Federal statute or under § 7138 et seq., of the Digest, holding that it might be under either according to the fact whether or not the employee was engaged in interstate commerce and noted that the complaint in the original action was silent on that subject. The court held against the contention of the plaintiff (appellee) and that, under the allegations of the complaint in the original case as “denoting the character of the accident, ’ ’ the case stated was not based on §§ 1074 and 1075, supra, as claimed by the plaintiff, but on the latter statute, § 7138 et seq., as contended for by the executrix. In that connection the court said: “It was alleged in the original complaint that Murphy, at the time of his injury, was in the employ of the defendant, ‘not operating any engine, but on said date was assisting engineer Schultz to disconnect engine 2395 at Cotter, and, on account of defects in said engine, the radiator rod was blown out of said engine, striking said Murphy in the back of the head, breaking his skull,’ etc. This allegation brings the cause of action within the last statute referred to as interpreted by the cases cited above. It is clear therefore that the other statute of this State (the one patterned after Lord Campbell’s Act) has no application, and we need not determine what the distribution would be under that statute.’’

The court, continuing, observes that our statute with unimportant variations is the same as the Federal statute, and that it is clear that it was intended to cover the same subjects included in that, so far as it affects causes of actions of the kind described other than those while the employee was engaged in interstate commerce. The court notes the construction placed by Federal courts on the Federal statute and says: “Our statute is, of course, subject to tbe same interpretation. That statute {% 7138 et seq.) does uot contain any express provision or direction witb reference to tbe distribution of tbe fund, as is tbe case witb respect to our statute patterned after Lord Campbell’s Act. But it does clearly appear from tbe statute that tbe recovery is for tbe benefit of tbe person or class of persons wbo suffer injury on account of tbe, death caused by tbe wrongful act, and, in tbe absence of an express provision to tbe contrary in tbe statute itself, tbe only reasonable interpretation is that the. participation in tbe distribution of tbe fund must be limited to those wbo are to be compensated for the injury.”

We have seen that tbe contention of the appellant and tbe appellee in tbe instant case as to tbe statute under which tbe original suit was brought are tbe same as those of tbe parties in Murphy v. Province, supra.

In this case tbe complaint alleged that “tbe deceased was in tbe employ of tbe defendant as a locomotive engineer, and on said date, while be was in tbe exercise of due care for bis own safety, be was attempting to alight from bis engine at Hoxie, Arkansas, and, on account of tbe negligent and careless handling of tbe engine by tbe fireman wbo was running tbe engine at tbe time, and on account of tbe defective condition of tbe steps and handholds on tbe cab of said engine, said deceased was caused to fall to tbe ground, suffering severe injuries * * '* and finally died.”

A comparison of tbe complaint last quoted witb that in tbe case of Murphy v. Province, supra, discloses that in each tbe person for whose death suit was brought was an employee of a railroad company engaged at tbe time of bis injury in work for bis employer “directly connected with, and incident to, tbe operation of a railroad, ’ ’ and neither complaint contains any allegation indicating whether or not tbe employees were engaged in interstate commerce. This comparison shows beyond question that tbe complaints are identical in legal effect, and that tbe conclusion reached in Murphy v. Province, supra, controls in this case.

We do not overlook the argument of learned counsel for the appellee (1) that when § 1075 is considered as a whole there is no conflict between that section and § 7138, as that section has been construed by this court, or (2) that by the express provision of that statute § 1075 has not been repealed; nor (3). do we disregard the contention that, as § 1075 contains the only directions for distribution of the amount recovered for wrongful death, therefore “when, in any case for wrongful death in this State, it has been determined which of the children are entitled to share in the damages recovered for the wrongful death, the provisions of said § 1075 furnish the only legal guide for the division of such damages among the widow and those of the children who are entitled to any share in such damages”; or (4) that this contention is sustained by the recent case of Adams v. Shell, 182 Ark. 959, 33 S. W. (2d) 1107, in which it was decided that the amount of recovery should be distributed, after the widow’s interest was deducted, among the next of kin, share and stare alike, as provided for in § 1075, supra.

The first three propositions advanced are answered by the court in Murphy v. Province, supra, where it is held that there are inconsistencies in the two statutes, and, where there are such, the later statute repeals the former, and that, while there is not any express direction for the distribution of the fund as in the statute patterned after Lord Campbell’s Act, that act has no application in cases such as this. This last statement is made by the court in a paragraph quoted supra. With reference to the proposition that the statutes are inconsistent in certain particulars and when inconsistent the former is to that extent repealed by the latter, the court said:

“The act of 1911, supra, contains a provision in the last section to the effect that the act shall not be held to limit the duty of common carriers by railroad, or impair the rights of their employees in the existing laws of the State.’ This, provision may be conceded to show an intention on the part of the Legislature not to repeal any statute then in existence except those repugnant to the terms of the later statute, hut that statute necessarily operated as a repeal of any other statute conferring a right of action under the facts set forth in this statute. The two statutes are inconsistent to that extent, and the last one repeals the first to that extent. This is necessarily so, for the remedies of the two statutes are entirely different and for the benefit of different persons.”

The last point raised by the appellee noted above (4) that their position is sustained by the opinion in Adams v. Shell, supra, because of the claim that the applicable law in that case was § 7144, a statute which, with the exception of the word ‘corporation’ being substituted for the words ‘common carriers by railroad’ found in § 7138, is the same, and in that case (as it is claimed) this court held that a fund derived from a judgment for wrongful death should be distributed, one-third to the widow and one-third each to the two children, and that therefore in the case at bar a similar order should be made and that the trial court correctly so held.

An examination of Adams v. Shell, supra, will disclose that the propositions advanced find no support in that case. In the first place, that was not a suit against a common carrier by railroad for the wrongful death of one of its employees, but an action for damages against the International Paper 'Company, and, in discussing the question of the distribution of the fund arising from moneys obtained in satisfaction of the judgment, the court assumed, whether correctly or not, that the suit for the wrongful death was under §§ 1074 and 1075, and not under § 7144, as counsel suggests. This is apparent because in the reference in the opinion to the manner of the distribution of the fund the court said: “Under § 1075 of the Digest, the personal representative of a deceased person may bring an action for the wrongful death of said decedent, and the amount recovered shall be for the exclusive benefit of the widow and next of kin of such deceased person and shall be distributed to such widow and next of kin in the proportion provided by law in relation to the distribution of personal property left by persons dying intestate. Tiras, it will be seen that it is the duty of the administrator to bring the suit as provided by the statute, and, in the event of a recovery, to distribute the amount recovered according to the provisions of the statute which covers the distribution of personal property. The damages are recovered in the name of the personal representative of the deceased, but do not become assets of the estate. The relation of the administrator to the' fund when recovered is not that of the representative of the deceased, but of a trustee for the benefit of the widow and next of kin; and the suit is wholly for their benefit.”

Further than holding that the distribution of the fund obtained by a cause of action, prescribed by § 7138, was not to be distributed as prescribed by § 1075, the court, in Murphy v. Province, supra, did not indicate how distribution should be made, as that was unnecessary because the plaintiff, having sustained ho pecuniary injury, was not entitled to any part of the fund.

The statute as interpreted makes the pecuniary injury the b.asis of damage and of the participation in any judgment recovery therefor. The dependence of the plaintiff and whether or not the deceased had contributed to his support are merely evidentiary facts from which, with the other circumstances in the case, the question of the pecuniary injury and its extent is to be ascertained. The distribution not having been prescribed by the governing statute (§ 7138) and the mode named in § 1075 not being applicable, it becomes the duty of the court to formulate a rule of distribution consonant with reason and the principles of sound justice.

It is not difficult to perceive how the rule provided for in § 1075 or how any other fixed and arbitrary rule might be the occasion of an unfair division by which one in no sense in need and in every sense unworthy and who had received and had no right to expect any contribution would share equally with those entirely dependent and most worthy and who had, in the lifetime of the deceased, been the principal beneficiaries of his bounty and had the right to expect that this would continue. Many cases might be imagined illustrative of how that rule might work, but the mere statement of the rule suggests to the mind circumstances which might, and frequently do, arise where an equal distribution among the next of kin would be most unreasonable and unjust. Therefore the rule to be adopted should be flexible to fit the circumstances of each case, which should determine who should participate in the distribution and to what extent.

The statute itself, as construed by this court, indicates the proper method to be adopted. It is clear that simply because one is among the number of next of kin does not entitle him to recover damages or to share with the others, but it must appear that some pecuniary injury to him must have been suffered. If then the injury suffered is the basis of the recovery, the extent of that injury as compared with others of the next of kin ought to be the measure by which his proportionate share in the damages recovered should be ascertained. In many cases that could not be determined by any single fact but only from a consideration of all the attendant circumstances.

The rule evoked by appellant’s requested instruction No. 2 is unsound because it leaves out of consideration the pecuniary injury suffered and makes the ages of the respective parties the only measure of the extent of the injury. It might be, and it sometimes is, the case that an adult child may be more dependent than a minor and have received and may have reason to expect much greater contribution than the minor child. The fairest rule, it appears to us, is that it should be for the jury to say from a consideration of all the facts and circumstances whether the plaintiff in a given case had suffered pecuniary injury, and, if so, what was its extent as compared with the others entitled to share in the fund — that, also, to be determined from a consideration of all the circumstances in the case, and from this his proportionate share will be fixed.

In the instant case counsel for the appellee call attention to the allegation in the complaint of the executrix filed in the' original suit, to-wit: “That at the time of his death the said Nelson Faulkner was in good health, aged about forty-seven, and earning large sums of money, practically all of which he was contributing to the support of his, your executrix, and two children, Nelson Edward, aged twenty-one, and William August, aged three, the latter named being his survivors.”

'Counsel for appellee then calls attention to the judgment based upon this allegation, which was “for the benefit of the widow and next of kin of said deceased. ’ ’ We are inclined to the view of counsel that this allegation precludes the appellant in the instant case from denying the right of appellee to share in the fund and that the cases cited by him support his contention. Less v. Less, 158 Ark. 255, 249 S. W. 588; 15 R. C. L., p. 1012, § 485; Westfield Gas Co. v. Noblesville Gravel Road Co., 41 N. E. 955; Parkhurst v. Berdell, 18 N. E. 123. Therefore the only question which would be before the court would be the proportionate part of the fund due the appellee to be ascertained in the manner we have pointed out, that to be diminished by whatever it might appear was due appellant on her cross-complaint.

The judgment of the court below is therefore reversed, and the cause is remanded for a new trial.


author: Smith, J.

text:
    Hot Springs Street Railway Company v. Henry.
    4-2924
    Opinion delivered February 13, 1933.

      C. T. Gotham and Sidney S. Taylor, for petitioner.

      J. B. Wilson, for respondent.
   Smith, J.

The Hot Springs Street Railway Company prays a writ of prohibition to restrain the presiding judge of the judicial circuit, of which Cleveland County is a part, from proceeding with the trial of certain causes now pending in Cleveland County, in each of which it was made a party defendant.

A motion was filed in the court below to quash the summonses which had been issued and served in these cases, upon which motion testimony was heard. The undisputed testimony appears to he as follows: Louis Cone, a resident of Pulaski County, while driving an automobile in the city of Hot Springs, had a collision with a street ear in that city, and he and two young ladies, who were riding with him, were injured. The young ladies, as well as Cone himself, resided in Pulaski County. Complaints were prepared to be filed in the Cleveland Circuit Court by the attorney for each of these young ladies against both Cone and the street car company, and during the day upon which they were filed service was had upon Cone under the following circumstances: The complaints were filed with the clerk of the Cleveland Circuit Court in the morning, and the plaintiffs’ attorney advised a deputy sheriff that the defendant, Cone, would be at the court house that afternoon. The defendant, Cone, drove up to the courthouse gate that afternoon, accompanied by another man whom the officers thought was Cone’s brother. This man came to a deputy sheriff, and told the officer that the defendant, Cone, was in his car. The officer did not know either party, but the man in the car was introduced to him as Louis Cone, and he served the summonses on him as he had been directed by the plaintiffs’ attorney in the morning. The complaints upon which these summonses had issued alleged that the young lady plaintiffs had been injured through the concurring negligence of the street car company and Cone, and prayed judgment against each of them.

Cone filed an answer, in which he denied that he had been guilty of any negligence which had caused or contributed to the injury. In connection with this answer, he filed a cross-complaint against the street car company, in i^hich he alleged that he had been injured himself through the negligence of the company, and he prayed judgment against the company for $10,000 to compensate the injury. .

The court declined to quash the summonses in the cases of the two young ladies, hut did dismiss the cross-complaint of Cone against the street car company.

Thereupon, pleadings were filed in this court to prohibit the circuit court of Cleveland County from proceeding with the trial of the two original suits.

It was and is insisted that, as the street railway company is located only in the city of Hot Springs, in Garland County, and does not run through or into Cleveland County, any suit against it was local under § 1172, Crawford & Moses ’ Digest, and can he maintained only in Garland County, although the street car company was sued in conjunction with a defendant who was served with process in Cleveland County. We do not decide this question, as the writ of .prohibition will he awarded upon another ground.

The respondents defend the action of the court in refusing to quash the service and seek to sustain the right of the circuit court to proceed with the trial of the causes under the authority of § 1178, Crawford & Moses’ Digest, which reads as follows: “Where any action embraced in § 1176 is against several defendants, the plaintiff shall not be entitled to judgment against any of them on the service of summons in any other county than that in which the action is brought, where no one of the defendants is summoned in that county or resided therein at the commencement of the action, or where, if any of them resided or were summoned in that county, the action is discontinued or dismissed as to them, or judgment therein is rendered in their favor, unless the defendant summoned in another county, having appeared in the action, failed to object before the .judgment to its proceeding against him.”

It is insisted that, as Cone was found in Cleveland County and served with summonses there, the plaintiffs have the right to compel his codefendant, the street car company, to answer in the same county, inasmuch as the plaintiffs alleged their injuries were occasioned by the concurring negligence of Cone and that of the street car company.

We do not concur in the view that § 1178, Crawford & Moses’ Digest, above quoted, conferred jurisdiction upon the Cleveland County Circuit Court under the circumstances stated. This section does permit a defendant to be sued, not only in the county of his residence, but in another county in which he is found and is served with process. But this means, of course, where one is found and served with process in the usual and ordinary course of circumstances, and not where service was had col-lusively, as was done in the instant case.

The law of the subject was declared in the ease of Wernimont v. State, 101 Ark. 210, 142 S. W. 194. The opinion in that case discussed the manner of obtaining service by summons, and, after referring to § 6074, Kirby’s Digest, which is identical with § 1178, Crawford & Moses’ Digest, above quoted, says: “If the transaction is colorable and collusive, and the resident person not a defendant in fact and in good faith, then service of process of summons upon him would be incapable of laying the foundation for jurisdiction of the court over nonresident defendants served with summons in other counties. Upon such facts being made known to the court, it would be its duty to quash the service of summons upon such nonresident defendants. Such defendants cannot be dragged from the forum of their residence by any sham or contrivance to evade suit against them in a court in the county where they reside. Such a perversion of the court’s process is a fraud practiced upon the court, which should receive its condemnation upon being made aware of it.”

We think the conclusion is inescapable; in fact, it does not appear to be seriously denied that Cone was “found” and summoned in Cleveland County in accordance with a prior arrangement, to which he was a party, to that effect. It was the intention of all parties concerned to confer jurisdiction upon the Cleveland Circuit Court, although no person connected with the lawsuit in any capacity resided there, and -to confer jurisdiction, not only of the suits of the young ladies plaintiff against the street car company, hut to confer jurisdiction also of Cone’s own suit. It is true the court dismissed Cone’s cross-complaint, but it is true also that the filing of this cross-complaint shows the collusive character of the proceeding. The courts should not lend their aid to such practices, and no statute requires them to do so.

The writ of prohibition will therefore be granted as prayed, restraining the Cleveland Circuit Court from proceeding further in the causes.


text:
    Crawford v. Hopper.
    4-2874
    Opinion delivered February 20, 1933.

      M. A. Hathcoat, for appellant.

      Shinn & Henley, for appellee.
   Butler, J.

In 1921 Mrs. Grant Crawford died, leaving surviving her husband, the appellant, and three children, a son about four years old, a little girl just younger and a baby boy about seven weeks old. Immediately after Mrs. Crawford’s death, Mr. and Mrs. Hopper, at the request of the appellant, moved into his home with the understanding that Mrs. Hopper was to take care of his small children, and she and her husband were to have a home. They lived together under this arrangement for a short time when Mrs. Hopper took the baby and went to Missouri. The appellant had Mr. Hopper arrested charged with kidnapping the baby, but after a time he was released upon the promise that he would secure the return of the child. Hopper then also went to Missouri, but did not bring the child back. The appellant attempted to locate the Hoppers without success until August, 1929, when they returned to Boone County, Arkansas.

Appellant filed a proceeding in the chancery court to obtain the custody of the child, who was then about eight years old. After hearing the evidence, the chancellor made certain findings of fact, in which he recited the testimony tending to show that the mother had before her death given her baby to her sister to be kept by her and reared as her own. He recited other facts which the evidence tended to establish, and concluded that the attempted gift of the child was void, but that under the circumstances the father was not entitled to the exclusive custody of the child. He divided the custody of the child between the Hoppers and the appellant, awarding the care and custody of the child during the time he attended school, — i. e., from September 1st to June 1st, to Mr. and Mrs. Hopper, and for that period from June 1st to September 1st to the father and requiring the expenses of transportation from the home of the Hoppers to that of the appellant to he borne equally by the appellant and the Hoppers; that Mr. and Mrs. Hopper should execute a bond in the sum of $2,000 obligating themselves to return the infant to the jurisdiction of the court and to perform the judgment of the court at that time or which might thereafter be made.

The order of the court made at its proceedings in August, 1929, was acquiesced in by both parties. The child remained with Mr. and Mrs. Hopper at their home in Muncie, Indiana, where he attended school from September to June, and was then sent each year to his fathei; for the summer vacation. This arrangement continued until some time in August, 1932, when the appellant filed a petition in the Boone Chancery Court asking that the order made in 1929, be modified, and that he be given the exclusive and permanent care and custody of his child. At the hearing, a letter was introduced written by the child to his foster parents in which letter he expressed apprehension that his father was planning not to allow him to return to them in Indiana. The child also stated to the chancellor that he preferred to live with his foster parents. It was shown that Mr. Crawford was a good man, and that there was a good school in his vicinity; that he had remarried, and that he was able to properly care for the child. It was also shown that Mr. and Mrs.' Hopper were good people, and that they were not only willing and able to care for the child, but that they had done so all his life and had sent him regularly to a good school, and that at the time of the examination he had advanced to the 6th grade in school; that during all this time, according to the testimony of Mrs. Hopper, which was not disputed, the father had contributed nothing to the support or education of the child.

The conditions had not materially changed since the order of the court in August, 1929, and the chancellor refused to modify that order. On appeal it is insisted that, as a father at common law is the natural guardian of his minor child, he is entitled to its sole care and custody unless it is shown that he is incompetent or unfit for such duties. A number of our oases are cited in support of this contention, but this rule is not absolute and may be interpreted and inforced by the court placing the interest of the minor as of paramount importance. It is argued by the appellee that, in consideration of all the facts before the court in the habeas corpus proceeding first instituted and on the hearing from which comes this appeal, the father had practically abandoned the child and forfeited his right to its custody. We deem it unnecessary to review the facts in detail, for the reason that the chancellor had all the parties and witnesses bef ore him in the two proceedings, which occurred in the county of his residence, and we are not disposed to differ from the conclusions he has reached unless it appears that this action w#s arbitrary and against- the preponderance of the testimony. This we do not find to be the case, and, as he still has jurisdiction in the future to make such orders as equity in the case warrants, his order will be upheld and affirmed.


author: MoHaNey, J.

text:
    Missouri Pacific Railroad Company v. Martin.
    4-2883
    Opinion delivered February 27, 1933.

      Thos. B. Pryor and Harvey G. Combs, for appellant.

      Brid & C of felt, for appellee.
   MoHaNey, J.

Appellee was employed by appellant to work in its yards connected with its North Little Rock shops. At the time of his injury, hereinafter mentioned, he was engaged in stenciling coal cars. It was usual and customary to do this work out in the yards in the open in good weather, but on the morning of October 23, 1930, the date of the injury complained of, it was raining to such extent that such work could not proceed in the open, and about 1 p. m. of said date, the rain continuing, the foreman caused ten coal cars to be moved under the sheds, and directed appellee to stencil the cars. There were a number of tracks under the sheds about eight or ten feet apart. There had been stacked a°pile of grain strips between the track on which the coal cars were placed and another, same being about two feet wide and one and one-half or two feet high and held together by stakes driven in the ground. These grain strips were three-cornered pieces of wood of about two-inch faces, about thirty feet long, and were used in coal cars to prevent wastage of bulk grain when shipped therein. Some three or four of these strips had fallen off the pile. In moving from one place to another in doing his work, and while carrying his ladder, appellee stepped on said grain strips, which gave way and caused him to fall, injuring his back.

A suit by appellee against appellant resulted in a verdict and judgment against appellant.

The only error urged for a reversal of the judgment by appellant is that the court erred in refusing to direct a verdict in its favor on its request, on the ground that the undisputed evidence shows appellee assumed the risk. We must agree with appellant in this contention.

While it is true that appellee was performing his work under the sheds, a place in which he was not accustomed to work, and that he was in a hurry because he was directed to get the ten cars out, a whole day’s work in half a day, still this pile of strips was perfectly open and obvious, and whatever danger there was in stepping on them was likewise open and obvious; as much so to appel-lee as to appellant. He testified himself that he saw the strips, knew some three or four of them had fallen off the pile, and that the pile was higher than the stakes that held them. It is not clear whether he stepped on the pile and slipped, or whether on one of those that had fallen off, but in either event he must have known that to do so might cause him to fall. If was not incumbent therefore upon appellant to warn him of such danger, as whatever danger there might be was apparent. As said by this court in Crawfordsville Trust Co., v. Nichols, 121 Ark. 556, 181 S. W. 904: “Where the elements of danger are obvious to a person of average intelligence, using due care, an employer is not required to warn his employees to avoid the danger, which ordinary prudence would make him avoid without warning. * * * Something may properly be left to the instinct of self-preservation and to the exercise of the ordinary faculties which every man should use when his safety is known to be involved."

In the recent case of Missouri Pacific Rd. Co. v. Lane, ante p. 807, we said: “He was unloading this car in broad open daylight, and the only excuse he gives for not seeing the oil and thereby avoiding it is that he did not look. Had he looked he would have seen the oil, as it was plainly visible on the top of the car. The law, under such circumstances, is well settled. In the recent case of Mississippi Valley Power Co. v. Hubbard, 181 Ark. 487, 26 S. W. (2d) 118, we said: ‘It is true employees do not ordinarily assume risks created by the negligent act of the master, and that he has a right to require of the master to provide suitable appliances and a safe place in which to do his work, and to do such is the clear duty of the master. St. L., I. M. & S. R. Co. v. Touhey, 67 Ark. 209, 54 S. W. 577, 77 Am. St. Rep. 109; Pettus & Buford v. Kerr, 87 Ark. 396, 112 S. W. 886; St. L., I. M. & S. R. Co. v. Holmes, 88 Ark. 181, 114 S. W. 221. But it is equally true that, where the danger arising from the negligent conduct of the master is so apparent and obvious in its nature as to be at once discoverable to one of ordinary intelligence, an employee, by voluntarily undertaking to perform bis work in such a situation, assumes tbe hazards which exempts the employer from liability on account of injury to the employee. Wisconsin & Ark. Lbr. Co. v. McCloud, 168 Ark. 352, 270 S. W. 599; C. R. I. & P. Ry. Co. v. Allison, 171 Ark. 983, 287 S. W. 197; Ward Furniture Co. v. Weigand, 173 Ark. 762, 293 S. W. 1002.’ Other recent cases on the subject are: Howell v. Harvill, 185 Ark. 977, 50 S. W. (2d) 597, and Koss Construction Co. v. Vanderberg, 185 Ark. 316, 47 S. W. (2d) 41.”

So here, appellee was working in a place which was open and light. He not only could see, 'but actually saw the strips, and deliberately or otherwise stepped upon them. It would be placing too high a duty upon the master to require him to keep the employee’s place of work clear of every object upon which an employee might step and slip or fall. They are not insurers, but are only held to the exercise of ordinary care to furnish a safe place to work. .

For the error in refusing to direct a verdict for appellant, the judgment will be reversed, and, as the case appears to have been fully developed, it will be dismissed.


author: Humpheeys, J.

text:
    J. H. Hamlen & Son v. Allen.
    4-2909
    Opinion delivered March 13, 1933.

      Rose, Hemingway, Cantrell & Loughborough, for petitioner.

      8am T. Poe and Tom Poe, for respondents.
   Humpheeys, J.

This is a petition filed in this court for a writ of prohibition against respondents to prevent them from proceeding in the trial of a suit in the circuit court of Grant County wherein respondent, T. H. Allen, is plaintiff, and petitioner is defendant, on the allegation that the warning order and summons issued in said cause were invalid and for that reason the writ of attachment issued on the complaint had nothing to support it.

The record tendered and undisputed is, in substance, as follows:

Respondent, T. H. Allen, brought suit against petitioner, J. H. Hamlen & Son, for $3,000 based upon contract in the circuit court of Grant County on July 15, 1932, by filing his complaint and an affidavit for attachment, alleging that petitioner was a,foreign corporation and a nonresident and also an affidavit for a warning order containing the same allegation, but failed to allege that it had designated an agent in the State upon whom process could be served. At the same time, respondent caused the summons to be issued and delivered to his attorney. A writ of attachment was issued and levied upon the real estate belonging to said petitioner in said county. A warning order was issued and published as required by law. On August 15, 1932, the first day said court was in session after the complaint was filed, petitioner appeared specially and filed and presented its motion to quash the warning order on the ground that it did not contain an allegation that petitioner had not designated an agent in this State for service of process upon it. During the argument of the motion, petitioner was advised that a summons had been issued upon the complaint, and was in the hands of the attorney for respondent, T. H. Allen. The summons had not then been served upon the agent appointed to receive service. At the conclusion of the argument, the presiding judge, T. E. Toler, who is the regular judge and who is the other respondent herein, passed the matter until October 16, 1932, for disposition. On August 16, 1932, the summons was served by the sheriff of Pulaski County within the confines of said county upon the duly appointed agent to receive service. Petitioner appeared specially and filed its motion to quash the summons because it was served after the return day thereof. The motion was presented to the court on October 10, 1932, whereupon the court made an order quashing the warning order, to which respondent T. H. Allen excepted, but overruled the motion to quash the service of the summons, to which petitioner saved its exception and requested a stay of thirty days in the proceeding in order that it might apply to this court for a writ of prohibition, which it has done.

The trial court correctly ruled that the. attempted constructive service was void because the affidavit failed to state that petitioner had no agent in this- State upon whom process might be served, when, as a matter of fact, it had appointed an agent in this State for that purpose. Section 1159 of Crawford & Moses’ Digest makes such a requirement when an agent has been appointed as provided in § 1151 of Crawford & Moses’ Digest. After the appointment of an agent in accordance with said § 1151, a foreign corporation can be proceeded against only by personal service upon the agent and not by constructive service upon it.

The trial court, however, was in error in ruling that the attempted personal service was valid, as the summons was not served before the return day thereof. It is true, as suggested by respondent, that according to the language of the summons, same was not returnable for 20 days after service, but § 1140 of Crawford & Moses’ Digest requires that the summons shall be returnable to the first day that the court shall he in session after twenty days after the date of the issuance thereof. The law, and not the language of the summons, must control. The first day the court was in session after the summons was issued was August 15, 1932, and the summons was not delivered to the officer and served until August 16, 1932, or one day after the summons was functus officio. The return of the officer shows that it was served August 15, 1932, hut this was necessarily a clerical error, as the officer filed an affidavit that it was not received until August 16, 1932. Under § 4199 of Crawford & Moses’ Digest, proof of the service of a summons may he made by affidavit.

Respondents also argue that, hy requesting and obtaining time in which to apply to this court for a writ of prohibition, petitioner thereby entered a general appearance in the suit the same as if it had been properly served in the beginning. We think not. It could not appeal without entering its general appearance; hence a request for it to apply to this court for a writ of prohibition was its only remedy by which to test the jurisdiction of the trial court over its person. It was forced to request the time, else the suit would have proceeded, and, being forced to do this, it cannot be said that by doing so it entered its general appearance in the cause.

On account of the error indicated, a writ of prohibition is granted.


author: McIIaNey, J.

text:
    Motion Picture Advertising Service Company v. Cannon.
    4-2914
    Opinion delivered March 13, 1933.

      Silas W. Rogers, for appellant.
   McIIaNey, J.

Appellant entered into a written contract with, appellee, dated February 7, 1929, to render to him moving picture advertising service for fifty-two weeks at $18 per week. Tfie contract provided for cancellation thereof by appellee in tbe following language: “This contract subject to cancellation after thirteen weeks’ actual service, at option of advertiser, written notice of such intentions having been given M. P. A. Service Co. on or before 7-30-29.”

Appellee decided to cancel the contract and thought he might do so at any time prior to the expiration of thirteen weeks’ actual service, which he construed to be August 31, 1929. He gave written notice of cancellation August 10, 1929, which appellant refused to accept as a timely notice, performed the service, and brought this action to recover the balance due in the sum of $720. At the close of the testimony appellant requested a directed verdict, which the court refused, and the case was submitted to the jury to determine when the notice of cancellation was required to be given. If they found the contract required notice to be given on or before July 30, 1929, they were to find for appellant. If, however, they found notice could be given up to August 31, 1929, the verdict should be for appellee, except for $36, for which appellee offered to confess .judgment.

The court erred in not directing a verdict for appellant. The clause above quoted relating to cancellation and when notice should be given is not ambiguous. It clearly provides that he shall have the right of cancellation after thirteen weeks’ actual service had been rendered, but that he must give notice of his intention to cancel “on or before July 30, 1929.” The right to cancel depended on the notice required. The parties might have agreed on any other date, but they saw proper to agree that notice should be given on or before July 30. It made no difference whether the thirteen weeks’ actual service was then completed or not.

Since the contract fixed the date on or before which notice should be given in order to have the right to cancel the remainder of the service, notice after that date was ineffectual. The judgment will be reversed, and judgment be rendered here for the amount sued for with interest at 6 per cent, from February 7, 1930.


author: Kirby, J.,

text:
    Taylor v. Bankers’ Trust Company.
    4-2706
    Opinion delivered October 31, 1932.

      Sam Rorex and Nat R. Hughes, for appellant.

      Cleveland Cabler and Frauenthal, Sherrill $ Johnson, for appellee.
   Kirby, J.,

(after stating the facts.) Appellant insists that the United States Government has no lien and is not entitled to priority of payment of the funds paid to the guardian of the incompetent world war veteran by the Government under its laws and by him deposited in the failed bank. No claim was first made for priority of payment under the provisions of § 3466 of the Revised Statutes of the United States (31 U. S. Code, § 191), nor could any valid claim have been made thereunder. The facts are undisputed: the payments were made to the guardian of the veteran under the provisions of the statute, the funds were received for the ward by the guardian and by him deposited as such guardian in the failed bank, and such funds were on deposit in the amount of $2,078.68 on November 15, 1930, when the depository bank became insolvent.

Priority of payment of this fund is claimed under subdivision 3, § 1, act 107 of 1927, which reads:

“A prior creditor shall be: * * * (3) a prior creditor who is such by virtue of an act of Congress applicable to the said bank and as to the extent as provided by said act * *

The Federal statutes granting bonuses and veterans ’ relief (U. S. Code, title 38,, § 450) does not grant priority of payment to any such funds, and § 3466 of the Revised Statutes (31 U. S. Code, § 191) cannot apply in this case, because the American Exchange Trust Company, the failed bank, was not indebted to the United States on account of the deposit of the compensation money paid by the Grovernment to the guardian of the incompetent world war veteran and by him deposited in the failed bank.

Section 3466 of the Revised Statutes reads as follows: “Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied and the priority established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof or in which the estate and effects of an absconding, concealed, or absent debtor are attached by process of law as to cases in which an act of bankruptcy is committed. ’ ’

In Wilson v. Sawyer, 177 Ark. 495, 6 S. W. (2d) 834, this court held that money paid to'a disabled soldier under guardianship by virtue of the World War Veteran’s Act (38 USCA § 421 et seq.) was not subject to garnishment whether in the hands of the soldier or his guardian; § 22 of the act providing that the compensation paid shall not he subject to the claims of creditors. 38 USCA, § 454.

Commenting on the declaration of the law made by the trial court therein, this court said:

“The court was correct in the declaration of law made except that the funds were not subject to seizure, even after they had come into the hands of the ward. ’ ’

It was further held therein that the funds involved were exempt from garnishment by the statute under which they were allowed and paid to the veteran. After stating the terms of the act and citing cases from other jurisdictions construing it, the court said: “The World War Veterans’ Act of 1924 contains substantially the same exemption from seizure as is found in the War Bisk Insurance Act, and the cases cited which construe the latter act are applicable here.” And further: “we think the manifest purpose of the legislation making provision for World War Veterans was to devote the benefactions there provided to the sole use of the beneficiaries, and that the same should not be subject to the .demands of creditors, even after the money came into their hands or was held by another for their benefit.”

These funds were paid over by the agency of the Government and had come into his hands, being delivered to his duly appointed guardian by whom they were held for his benefit. The guardian deposited said funds in the bank, and had drawn against the account along with the trust officer, who was required by the guardian’s bond to also sign the checks, and the title to the fund was in the ward, the guardian’s possession being the possession of the ward. 28 C. J. page 1128, and 12 R. O. L. page 1123.

The government may attach restrictions on its bounty to disabled veterans, has the power to prescribe when, how and to whom such paymexlt shall be made. It can also punish embezzlement or conversion of funds by those in a fiduciary capacity, and it may even withhold or suspend payment thereof, but when it has made payment to the beneficiary or to a duly appointed guardian, or other person authorized to receive same, the funds so paid lose their character as government funds, and the bank in which they are deposited by the guardian does not become indebted to the United States within the meaning of said § 3466 of the Revised Statutes, entitling the United States to priority of payment thereunder, and, neither the government nor the recipient of its bounty being a prior creditor by virtue of any act of Congress applicable to the bank, no priority of payment of such funds is provided under subdivision 3, § 1, of act 307 of 1927.

It follows that the court erred in decreeing otherwise, and the decree is accordingly reversed, and the cause remanded with directions to allow the claim as a common claim


text:
    Provident Life & Accident Company of Chattanooga, Tenn. v. Grabiel.
    4-2826
    Opinion delivered February 13, 1933.

      Busbee, Pugh ■& Harrison, for appellant.

      Louis M. Cohn, for appellee.
   Kirby, J.,

(after stating the facts). Appellant first contends that the testimony is not sufficient to support the verdict, and insufficient to prove that any notice was given of the disability under the policy that would warrant a recovery in the case. It is insisted that the presumption that the letter of July 12,1930, properly mailed to the company, was delivered had been overcome by the rebuttal testimony, and that in any event it was not sufficient notice of loss as required by the terms of the policy.

The testimony showed that the letter was dictated by the insured, written by the stenographer at the hospital on the same day, and thereafter signed by the insured; was addressed accurately to the appellant company at Chattanooga, Tennessee, with the insured’s return address on the corner of the envelope, the ward of the hospital in which he was confined being shown thereon; and the stenographer testified that the envelope was stamped properly, that she carried it to the postoffice station and mailed it herself, although she did not remember whether it was sent by registered or air mail, and that the letter was never returned. The insured also testified that it had never been returned.

The instructions on this point about the presumption of the letter having been delivered to and received by the appellant were correct. Merchants’ Exchange Co. v. Sanders, 74 Ark. 16, 84 S. W. 786, 4 Ann. Cas. 955; Burlington Ins. Co. v. Threlkeld, 60 Ark. 539, 31 S.W. 265; Southern Engine & Boiler Works v. Vaughan, 98 Ark. 388, 135 S. W. 913, Ann. Cas. 1912 D, 1062; Knight v. American Ins. Union, 1772 Ark. 303, 288 S. W. 395; Harper v, Thurlow, 168 Ark. 491, 270 S. W. 607; Bluthenthal v. Atkinson, 93 Ark. 252, 124 S. W. 510; Keffer v. Stuart, 127 Ark. 498, 193 S. W. 83; Click v. Sample, 73 Ark. 194, 83 S. W. 932; Taylor v. Corning Bank & Trust Co., 183 Ark. 757, 38 S. W. (2d) 557; United Assurance Ass’n v. Frederick, 130 Ark. 12, 195 S. W. 691.

The jury found that the presumption was not overcome by appellant, ‘ ‘ and we must draw the strongest inference in favor of that finding that the jury were warranted in deducing from the evidence,” as said in Merchants’ Exchange Co. v. Sanders, supra.

Four or five of the employees of the insurance company testified that, if the mail was received and distributed regularly, they would have received or known of such letter and given it to the claim department of the company; but not all the employees, whose duty it was to distribute the mail, who were working for the company during the month of July, when the letter was claimed to have been written, testified, some of them having been replaced by other employees, and the chief of the claim department did not testify at all. Neither was the letter addressed to any particular department of the company, but to the company generally, and it might have been received by the company without going through the hands of the particular employees whose duties it was to properly distribute the mail received. The testimony left the question as to the receipt of the letter for the determination of the jury under all the testimony adduced at the trial, and the jury found that the presumption as to its delivery was not overcome. Burlington Ins. Co. v. Threlkeld, supra; and Southern Engine & Boiler Co. v. Vaughan, supra.

This letter of July 12, 1930, informed the company that, as a result of the fall of last December, insured sustained certain injuries which necessitated two operations, giving the name and location of the two hospitals wherein they were performed. That he had not recovered and had been sent to the hospital in Denver three months before this letter was written, and his trouble had been diagnosed as tubercular; advised that its agent through whom the policy had been taken ont had been written to without reply received; that insured had been confined to his bed since April 10, and had been unable to work for several months, in fact, from the date of his second operation on February 4. He said he did not know the amount of the policy, but that it was one giving his wife an income of $100 per month in case of his death; and said that the number on the premium note recently paid was 34,310, and the amount of the premium was $508. This letter, if it could be regarded as insufficient proof of the disability under the terms of the policy, certainly furnished the company all the necessary facts for its ascertainment about the condition; and the company could have waived any additional proofs by not notifying insured that such were required. Exact and full proofs were later demanded and supplied by the insured; and there has been no question raised or intimation even that the disability suffered by the insured did not exist or continue as shown in the proofs.

The disability herein began with the injury that caused it and prevented the insured from the prosecution of any kind of work or business until his recovery, and not with the giving of the notice of such disability, and appellant cannot claim that, notwithstanding it was advised of the time of the beginning of the disability and the duration of its continuance, it could escape payment therefor, except for the last month thereof, because it claimed that it had not had proper notice and proof of such disability, and that it was only bound to the payment of one month’s indemnity, notwithstanding the time of its existence, because of failure to give notice and furnish proof thereon. It cannot escape payment therefor under the terms of its policy because of any such claim, and limit payment of the indemnity to one month because of the alleged failure to give the notice about and furnish the proof of such disability under the circumstances of this case.

We find no error in the record, and the judgment is affirmed.


author: Mehafft, J.

text:
    Parrish v. Nelson.
    4-2957
    Opinion delivered February 20, 1933.

      A. B. Gaplinger, I.t M. Greer and June P. Wooten, for appellant.

      Bog Nelson, J. J. Mardis and Harrison, Smith S Taylor, for appellee.
   Mehafft, J.

This is a suit to contest the certificate of nomination for the office of senator of the twenty-ninth district, composed of the counties of Poinsett, Mississippi and Jackson. This is the second appeal.

When the case was here on appeal before, it was reversed because the trial court had held that Nelson was not entitled to amend his complaint because ten days had elapsed. But this court held that it was a contest against the total vote of the entire district composed of three counties, and not against the total vote cast in one county, and that, since it was a contest of the vote in the district, the contestant had twenty days in which to file his complaint from the date of the certification, and that he therefore had twenty days in which to amend, instead of ten.

The opinion on former appeal is on p. 427 ante. The case was reversed and remanded, and on the second trial in the circuit court the appellee, Nelson, was declared the nominee.

It was contended on former appeal, and is contended now, that the complaint should he dismissed because it was not supported by the affidavit of ten reputable citizens. While this question was not discussed in the opinion when the case was here before, this contention must have been overruled, because, if we had not held against this contention, the complaint would have been dismissed.

At the second trial in the circuit court, evidence was taken, and the court, of its own motion, made the following declaration of law:

“Section 3777 of Crawford & Moses’ Digest of the Statutes of Arkansas was complied with in no respect or in the case of no ballot; that the purported official list of qualified electors was not prepared, authenticated and filed in substantial compliance with § 3740, Crawford & Moses’ Digest, of the statutes of the State of Arkansas, and that no legal votes were cast in Poinsett County in the election in question.”

The court was correct in holding that § 3777 of Crawford & Moses’ Digest was not complied with, and also in holding that the official list of qualified electors was not prepared, authenticated and filed in substantial compliance with § 3740 of Crawford & Moses’ Digest. This section provides that the collector - shall file with the county clerk a list of all persons who have paid their poll tax, etc.

The court was in error, however, in declaring as matter of law that no legal votes were cast in Poinsett County in the election. The failure to comply with the law by election officers, whether the result of carelessness, ignorance or negligence, destroys the integrity of the returns, but it does not have the effect of disfranchising the voters of the district, and does not make the election void.

In such case the integrity of the list, and of other acts in connection with the election, which are not in substantial compliance with the law, is destroyed, but the legal votes cast at such election are not void, but may be proved by other evidence.

When it is shown that the law has not been substantially complied with, all confidence in the official acts is destroyed, and persons claiming anything under an election conducted in this manner must prove the votes cast for him by evidence other than the official acts, which, if performed in compliance with the law, would themselves be evidence. McCrary on Elections, 423 et seq.; Paine on Elections, 105 et seq.

It is contended by the appellee, however, that no voter in Poinsett County complied with § 3777 of Crawford & Moses’ Digest.

The judges of election had a list of the voters prepared by the collector, although not prepared in compliance with the above section. The election officers used this list to determine who was entitled to vote. While this list was not prepared as it should have 'been, yet it was a list by the collector of persons who had paid their poll tax, and thereby became entitled to vote at the election. No question was raised at the time about the insufficiency of the list, and the voters themselves did not violate the law. Therefore they are entitled to have their votes counted for the candidate for whom they voted. Having been permitted to vote upon a showing- that their names were on the list of poll taxpayers, they were prima facie entitled to vote. There is no contention: that the ballots had been tampered with.

It was said by this court in a recent case: “The record shows that the collector did not file with the county clerk a list of poll taxpayers duly authenticated by Ms affidavit as required by § 3740 of Crawford & Moses’ Digest, and this fact is conceded by tbe contestant. Tbe record shows that thirty-six votes were cast in the manner provided in § 3777 of the Digest by persons who have attained the age of 21 years since the time of assessing taxes next preceding the election, and that of these votes, 26 were cast for Tucker, and 10 for Meroney. It is the contention of counsel for appellant that these were the only legal votes cast, and that, inasmuch as a majority of them were cast for Tucker, he should have been declared the nominee, and that the certificate of nomination should have been issued to him. We do not agree with contestant in this contention. The official returns of the election are quasi records, and are prima facie correct. The burden is upon the contestant to show by affirmative proof that they do not speak the truth.” Tucker v. Meroney, 182 Ark. 681, 32 S. W. (2d) 631.

Here it is contended that no votes cast in Poinsett County are legal, and here, as in the case last cited, the collector did not file a list as required by law. But the official returns of the election, as said in the case last cited, are quasi records, and prima facie correct.

The proceeding to contest the nomination in a primary election is statutory, and the statutes must be substantially complied with. There is, however, a presumption that the election was conducted according to law, and this presumption cannot be overcome by mere charge of fraud and illegality. Cain v. McGregor, 182 Ark. 633, 32 S. W. (2d) 319.

The contest of the certificate of nomination is intended to determine or ascertain which candidate received a majority of the legal votes cast. The ballots themselves are prima facie correct, and the burden is upon one contesting an election to show that he received a majority of the legal votes.

The votes of a township or a county will not be thrown out, where the legal votes can be separated from the illegal votes, and in the instant case it appears that this can be done.

It is also contended that contestant was not a candidate, and therefore not entitled to contest the election. We do not agree with appellant in this contention. The contestant evidently reached the conclusion that he would not be a candidate, and so announced, hut, after talking to friends, he concluded to continue in the race. He was a candidate, and entitled to contest the election.

The right to contest a primary election is statutory, and it was evidently the intention of the Legislature to provide a method by which it could he determined what candidate had received a majority of the legal votes, and it was also the intention, of the Legislature that the candidate receiving a majority of the legal votes should he entitled to the nomination.

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