author: •Smith, J. Hart, C. J.

text:
    Standard Life Insurance Company v. Robbs.
    Opinion delivered May 14, 1928.

      U. A. Gentry and Carmichael & Hendricks, for appellant.

      R. E. Wiley and McMillan & McMillmi, for appellee.
   •Smith, J.

This, is a suit on an insurance policy in the sum of $5,000, instituted July 17, 1926. The policy sued on was made an exhibit to the complaint, which alleged that, under the terms of the policy, the beneficiary had the option to demand payment in successive monthly installments of $100 each until the sum of $5,000, plus the accumulations named in the policy, had been paid, and that this option of payment had 'been exercised. It was further alleged that, under this option, seventeen payments of $100 each had matured and were payable, and judgment therefor was prayed.

A petition for removal to the Federal District Court was filed, in which diversity of citizenship was alleged. It was also alleged that the amount in controversy exceeded $3,000, and there was a denial of any. liability on the policy. The prayer of the petition was denied. An answer was then filed, in which the right to remove was reserved. The answer admitted the execution of the policy and the death of the insured on February 28,1905, but alleged that the insured had committed suicide within one year from the date of the policy, which contained the following provision:

“ Suicide. Self-destruction, sane or insane, within one year from the date of this policy, is a risk not assumed by the' company under this policy. In such event the company will return the premiums actually received.”

The policy contained an incontestable clause reading as follows:

“This policy shall be incontestable after one year from its date for the amount due, except for nonpayment of premiums, and except for death while in military or naval service in time of war, which is a risk not assumed by the company under this policy; and except as to provisions and conditions relating to benefits in the event of total and permanent disability and those granting additional insurance specifically against death by accident, which provisions may be attached hereto by rider.”

The answer — which was filed more than a year after the issuance of the policy — alleged that the incontestable clause in no way affected the liability of the company, because the risk of death by suicide was not covered by the policy. In an amendment to the answer it was alleged that no proof of death was made within a year from the date of the policy, and that no guardian was appointed for the beneficiary, who was a minor, until the 19th day of May, 1925, which was more than a year after the date of the policy, and that, immediately upon receipt of the proof of death, liability was denied upon the ground that suicide within a year of the date of the policy was not a risk assumed under it.

A demurrer which was interposed to this answer was sustained, and, defendants declining to plead further and announcing that they stood on the answer and amendments thereto, the court found that plaintiff was entitled to a judgment for the amount sued for, with the statutory penalty and attorney’s fees, and judgment was accordingly rendered, from which is this, appeal.

The first’question presented is whether the cause was removable to the Federal District Court, and upon the authority of the case of. Mutual Life Insurance Company of New York v. Wright, decided by the Supreme Court of the United States on March 12, 1928, we hold that it was not. 276 U. S. 602, 48 S. Ct. 323. In this opinion the Supreme Court of the United States affirmed the decision of the Circuit Court of Appeals for the Fifth Circuit, which had reversed the ruling of the Federal District Court refusing to remand the cause to the State court in which the case originated and from which it had been removed to the Federal District Court.

The facts in that case were as follows: A citizen of Alabama brought a common-law action in a State court to recover $420 upon seven monthly installments then due upon a policy of insurance exceeding $3,000 in value, but which was payable in monthly installments of $30 each, upon proof of the death of the insured, but which was of twice that amount if the proof of death showed the death of the insured had been caused by accidental means. The Court of Appeals held that the value of the “matter in controversy” was not the face of the policy, but the amount for which judgment was prayed in the action, and that, as that amount did not exceed $420, regardless of the cause of the insured’s death, the amount in controversy was less than is. required to confer jurisdiction on a Federal District Court, although, a judgment for the amount sued for would work an estoppel against the insurance company- to deny liability for future installments in an aggregate amount exceeding $3,000. It was stated that the effect of the judgment would he to fix the ultimate liability of the insurance company at an amount exceeding $3,000, but that the collateral effect of a judgment was not the test of jurisdiction, and that the amount in controversy is determined by the amount involved in the particular case, and “not by any contingent loss either one of the parties may sustain by the probative effect of the judgment, however certain it may be that such loss will occur.”

In affirming the opinion of the Circuit Court of Appeals, the Supreme Court of the United States, in the per curiam, opinion, supra, merely said: “Affirmed, for the'reason that the amount involved is not sufficient to sustain Federal jurisdiction, on the authority of * * * (Cases cited).”

The next question presented is whether the answer stated a valid defense, and it is the opinion of the majority, upon the anithority of the case of Missouri State Life Ins. Co. v. Cranford, 161 Ark. 602, 257 S. W. 66, 31 A. L. R. 93, that it did not.

It appears from the recitals of the answer that the defendant insurance company took no action to cancel the policy or to deny liability thereunder until more than one year after the date of the issuance of the policy, as more than one year had expired after the date of the policy before the answer was filed in which liability was denied.

As appears from facts already stated, it was recited in the suicide clause that “self-destruction, sane or insane, within one year from the date of this, policy, is a risk not assumed by the company under this policy. In such event the company will return the premiums actually received.” And it also appears, from the recitals of a separate clause of the policy on the subject of incontestability, that the policy was made incontestable after one year except for certain excepted causes, and that death by suicide was not mentioned as one of the exceptions.

In the case of Missouri State Life Ins. Co. v. Cranford, supra, the court cited and approved the case of Mareck v. Mutual Reserve Fund Life Assn., 62 Minn. 89, 64 N. W. 68, 54 Am. St. Reps. 613. In that case the policy sued on contained a clause which provided that: “Death óf the member by his own hand, whether voluntary or involuntary, sane or insane at the time, is not a risk assumed by the association in this contract, but in every such case there shall be payable, subject to all the conditions of this contract, a sum equal to the amount of the assessments paid by said member, with six per cent, interest ; but the board of directors or the executive committee of the association at its option may, in writing, waive this condition. ’ ’

The policy also contained an incontestable clause reading as follows: “After five years from the date of this certificate it is incontestable for any cause, except nonpayment of dues or mortuary assessments at the times and place, and in the manner herein provided — the age of the member being correctly stated in the application for this certificate. ”

The insured in that case died by his own hand, but after the expiration of the five-year period. It was contended, notwithstanding that fact, that, the insured having committed suicide in violation of that clause, his beneficiary was precluded from recovering under the policy, for the reason that death by suicide was not a risk insured against. It was held, however (to quote the syllabus in that case) that: “A life insurance association issuing a policy providing that it does not assume the risk of the death of the insured if caused ’by his own hand, but that such condition may be waived in writing, and then providing that, after five years from the .date of the policy, it shall be ‘incontestable from any cause’ except nonpayment of dues-or mortuary assessments, if the aere of the applicant is correctly .stated, is liable for the ‘full amount of the policy, if the insured commits suicide or dies by bis own hand more than five years after the policy is issued, provided the insured has stated his age correctly, and all dues and mortuary assessments have been paid up to the time of his death.”

In approving that case it was held in the Cranford case, supra, that: “The modern rule is that a life insurance policy containing a provision that it shall be incontestable after a specified time cannot be contested by the insurer on any ground not excepted in that provision. It is said that the practical'and intended effect of such a stipulation is to create a short statute of limitations. By the stipulation the insurance company agreed that it would take a year to investigate and determine whether it would contest the policies of insurance, and that, if it failed within that time to discover any grounds for contesting the same, it would make no further investigation and would not thereafter contest the validity of the policies. ’ ’

It follows therefore that, inasmuch as the policy here sued on did not specify suicide as one of the defenses in the incontestable clause which might be asserted as a defense against a claim of liability, it cannot be asserted after the year when the policy became incontestable, except as against the matters excepted in the incontestable clause.

The 'Cranford case, supra,, is authority for holding that the suicide clause is not available here, for the reason that it was not interposed until more than a year after the date of the policy, when it had become incontestable for that cause. In the Cranford case the incontestable clause reads as follows: “Unrestricted, and after one year incontestable as follows: This policy is free from conditions as to residence, occupation, travel or place of death, in times of peace, and shall be incontestable after one year if the premiums are duly paid, except for violation of the provisions relating to military or naval service in time of war.”

It was there alleged that the issuance of the policy had been procured by fraud practiced upon the company; 'but it was held that, as that defense was not named in the incontestable clause, and was not asserted until the year had expired, it was not available to1 the insurance company. The insured in that case had died before the expiration of the year after the date of the policy, but the insurance company did not raise the defense of fraud until it filed its answer to the suit brought to recover on the policies, and the answer was not filed until after the expiration of the year.

In holding that the defense had not been raised in apt time, the court quoted from the case of Mutual Life Ins. Co. v. Hurni Packing Co., 263 U. S. 173, 43 S. Ct. 90, (erroneously cited as 260 U. S. 712), as follows:

“In order to give the clause the meaning' which the petitioner ascribes to it, it would be necessary to supply words which it does not at present contain. The provision plainly is that the policy shall be incontestable upon the simple condition that two years shall have elapsed from its date of issue; not that it shall be incontestable after two years if the insured shall live, but incontestable without qualification and in any event” (Citing authorities).

After stating that a contest, in law, implies an adversary proceeding in which matters in controversy may be settled by the courts upon the issues joined, this court, in the Cranford case, supra, after thus defining the word “incontestable,” proceeded to say:

“In the application of the rule just announced, we think the natural and most reasonable view is to hold that the insurer has not contested the policy until it has acted in the premises. The contract provides that the policy shall be incontestable after one year, and no action on the part of the insured or of the 'beneficiary can relieve the company of its duty to act. In order to contest the policy it was required to file an answer to the suit brought by the beneficiary within one year, or to have instituted an action of its own in equity to cancel the policy on the ground of fraud. In short, we are of the opinion that, construing tlie clause in the light most favorable to the insured, no contest was made in the case at bar until the insurance company filed an answer, in which it averred that the contract should be set aside on the ground of the fraud of the insured in procuring it. Having waited until a year had elapsed before it elected to contest on this ground, the company is barred of relief under its own contract. ’ ’

It is therefore the opinion of the majority — in which view the writer does not concur — that, inasmuch as the insurance company did not, within the year in which it reserved the right, cancel the policy or take action directed to that purpose, it cannot now question the policy, except upon some ground reserved in the incontestable clause, and, as suicide is not one of these grounds, the answer did not state a valid defense, and the demurrer thereto was. properly sustained.

The judgment of the court below must therefore be affirmed, and it is so ordered.

OPINION ON REHEARING.

Hart, C. J.

In a case-note to Mutual Life Insurance Co. v. Hurni Packing Co., 263 U. S. 167, 44 S. Ct. 90, as reported in 31 A. L. R. 102, at page 109, it is said that, where a life insurance policy provides that, after a certain definite time, it shall be incontestable, except for certain defenses, a majority of the courts hold that the death of the insured within this time does not put an end to the incontestable clause or prevent its subsequently becoming operative for the benefit of the beneficiary. The case of Missouri State Life Insurance Co. v. Cranford, 161 Ark. 602, 257 S. W. 66, 31 A. L. R. 93, is among the cases cited.

But counsel for appellants claim that the doctrine announced in the Cranford case should not apply here, because the policy sued on contained a suicide clause in which it was provided that self-destruction, while sane or insane, within one year from the date of the policy, was not a risk assumed by the company. We do not think this makes any difference. The policy contained an incontestable clause after one year, and death by suicide was not mentioned as one of the exceptions in that clause.

This view was adopted by the Supreme Court of Alabama in Mutual Life Insurance Co. v. Lovejoy, 201 Ala. 337, 78 So. 299, L. R. A. 1918D, p. 860. In the rehearing on that case it was held that the defense of suicide is within the provision of a life insuranec policy making it incontestable after two years. In .the opinion the court called attention to the fact that incontestable clauses .are material and valuable provisions in a contract of life insurance. In discussing- the subject the court said:

“'Construing this contract as a whole, it seems that, if the insured dies within two years of its date, the insurance company may contest the cause of the death, or may set up fraud or misrepresentation in the procuring of the insurance, or any other matter that would be a defense to the action on the policy; but, if he does not die within two years from issuance of policy, and he pays all the premiums agreed to be paid, then the insurance company will not contest, or refuse, the payment of fhe amount agreed to be paid, on any ground whatever. It was not an agreement to pay him, his estate, or the beneficiary, that amount if he committed suicide, or was executed by virtue of the criminal law, or in any other manner contributed to his own death. The company merely agreed and bound itself that it would not litigate any of these questions, though, without the incontestable clause, they would-be a defense. To say that the clause applies to all other defenses except suicide while sane, or- death by wrongful, criminal act of the insured, is to read into the policy terms which are not there, and which the very language of the policy excludes:”

In Northwestern Mutual Life Insurance Co. v. Johnson, 254 U. S. 96, 41 S. Ct. 47, 65 law. ed. 155, it was held that suicide of the insured, sane or insane, after the specified time, is no defense to suits on policies of life insurance which contain, respectively, a provision that' if, within two years from the date of the policy, the insured, while sane or insane, shall die by his own hand, the policy shall be void, and a provision that the policy shall be incontestable after one year from the date of issne, provided the premiums are duly paid. In discussing- the subject, Mr. Justice Holmes, speaking for the court, said:

“When a clause makes a policy indisputable after one or two years, the mere evocation of a possible motive for self-slaughter is at least not more objectionable than the creation of a possible motive for murder. The object of the clause is plain and laudable — to create an absolute assurance of the benefit, as free as may be from any dispute of fact except the ‘fact of death, and as soon as it can reasonably be done. It is said that the insurance companies now generally issue policies, with such a clause. The State decisions, so far as we know, have upheld it. Unless it appears that the -State concerned adopts a different attitude, we should uphold it here. * * * We are of the opinion that the provision in the first-mentioned document, avoiding the policy if the insured should die by his own hand within two years from the date, is an inverted expression of the same general intent as that of the clause in the second, making the policy incontestable after one year, and that both equally mean that suicide of the insured, insane or sane,, after the specified time, shall not be a defense. It seems to us that that would be the natural interpretation of the words by the people to whom they are addressed, and that the language of each policy makes the company issuing it liable in the event that happened.”

In Supreme Lodge of Knights of Pythias v. Overton, 203 Ala. 193, 82 So. 443, 16 A. L. R. 649, the Supreme Court of Alabama said that the defendant, for a consideration, having agreed in advance not to contest its liability on any other ground than those specified in the contract, it would not be heard to set up a defense and contest' payments on grounds by which it had induced the contract and which it had agreed not to contest, In discussing the question the court said;

The decision is not that suicide, while sane or intentional, or death fay public execution, or while fleeing felon, is not a defense to an action on an insurance policy; hut the decision is that, fay a valid contract, the insurer has estopped himself from setting up these as well as any other defenses, except those mentioned in the contract. The court will not presume that .such defenses exist, and the party has estopped himself from alleging or proving it.”

In Sun Life Insurance Co. v. Taylor, 108 Ky. 405, 56 S. W. 668, 94 A. S. R. 383, the court said:

“By the incontestable feature of the policy the company, in effect, said it would not refuse to pay the amount of the policy, although the insured might, while sane or insane, take his own life, or if he should lose it by his own criminal action. It was not .an agreement that it would pay him the amount of the policy if he committed suicide or lost his life fay his own criminal action, but it was an agreement that no defense should he made on that ground if he lived and continued to pay premiums for three years.”

To the same effect see Royal Circle v. Achterrath, 204 Ill. 549, 68 Mo. 492, 63 L. R. A. 452, and cases cited; and Goodwin v. Provident Savings Life Assurance Society, 97 Iowa 226, 66 N. W. 167, 32 L. R. A. 473, 59 A. S. R. 411.

The fact of suicide or not could only he established fay proof, and this would faring on a contest, which is the very thing the insurance company has agreed not to do after a certain time. As Mr. Justice Holmes so aptly expressed it, after the period of time expressed in the incontestable clause has expired, there can be no dispute of fact except the fact of death, unless other conditions are imposed in the incontestable clause itself. The cause of death has, fay the agreement of the parties, ceased to he an issue of fact. In short, after the period of time prescribed in the incontestable clause has expired, the insurance company cannot contest the fact of suicide.

While there are authorities to the contrary, we think the better reasoning is in accordance with the decisions of the courts above cited. The incontestable clause constitutes, as the courts generally put it, not an assurance against the results of crime, but an assurance against the hazards of litigation; and we are of the opinion that the insurance company could not contest the policy before or after the death of the insured, after the period of time prescribed in the incontestable clause had expired, except for the conditions set out in the incontestable clause itself.

Therefore the motion for rehearing will be denied.


source: Caselaw Access Project

author: Hart, C. J.

license: Public Domain

text:
    Sherrill v. State.
    Opinion delivered May 21, 1928.

      I. S. Simmons, for appellant.

      H. W. Applegate, Attorney General, for appellee.
   Hart, C. J.

Andrew Sherrill prosecutes this appeal to reverse a judgment of conviction against him for stealing cattle.

The first assignment of error is that there is a variance between the cattle as described in the indictment and the evidence in the case. The indictment charges the defendant with stealing cattle which are specifically described as to color, earmarks and brands. The testimony for the State identified the cattle charged to have been stolen by color and brand, bnt the earmarks, as testified to by the owner of the cattle, differed in some respects from the earmarks as described in the indictment. We think the description of the cattle by color, marks and brands, in the testimony of the prosecuting witness, which fully correspond with the color, marks and brands described in the indictment, was a substantial compliance with the rule of this court that the descriptive allegations of the identity of stolen property as laid in the indictment must be established !by proof. Fletcher v. State, 97 Ark. 1, 132 S. W. 918; and Ridgell v. State, 110 Ark. 606, 162 S. W. 773.

It is next insisted that the court erred in instructing the jury on the question of alibi. We do not deem it necessary to ¡set out the instruction. It is substantially in the same form as the instruction given in Ware v. State, 59 Ark. 379, 27 S. W. 485. As said in that case, when the instruction is carefully considered, it does not intimate any opinion of the court upon the weight of the evidence, nor does it tend in any manner to disparage the testimony introduced by the defendant to prove an alibi. Moreover, the court fully and fairly instructed the jury upon the doctrine of reasonable doubt, and the instructions given fully and fairly presented the respective theories of the State and of the defendant to the jury. Smith v. State, 162 Ark. 458, 258 S. W. 49; and Meadors v. State, 171 Ark. 705, 285 S. W. 380.

It is also insisted that the court erred in refusing to instruct the jury that Dewey and T. D. McEntire were not one and the same person. The indictment charges the defendant with stealing cattle which were the property of “Dewey (T. D.) McEntire.” The testimony of Algy Bennett shows that T. D. and Dewey McEntire were one and the same person. There is no question but what some one stole the cattle of T. D., or Dewey, McEntire. The defendant, as above stated, interposed the defense of an alibi, and that was the principal issue of fact to be determined by the jury. Hence we hold that the court did not err in refusing to give the instruction asked for.

We have carefully examined the record, and find no prejudicial error in it. The evidence adduced by the State, if believed by the jury, warranted a verdict of guilty. It follows that the judgment must be affirmed.


author: Hart, C. J.,

text:
    Albersen v. Klanke.
    Opinion delivered May 21, 1928.

      J. E. Ray, for appellant.

      Charles Q. Kelley and Taylor & Taylor, for appellee.
   Hart, C. J.,

(after stating the facts). The first ground relied upon for a reversal of the decree is that there is no prayer in the cross-complaint for damages against Charles Albersen. This was not necessary. This court is thoroughly committed to the rule that, in a complaint or cross-complaint, the statement of facts and not the prayer for relief constitutes the cause of action, and the court may grant any relief that the facts pleaded and proved may warrant. Mason v. Gates, 90 Ark. 241, 119 S. W. 70; and Baldwin v. Brown, 166 Ark. 1, 265 S. W. 976.

It is true that, in the case last cited, it was'held that, where a vendor, suing to cancel a deed to his vendee for fraud, joined third persons alleged to have participated in the fraud, but asked only that her deed be canceled and for general relief, she was not entitled to a personal judgment against such third persons. The reason was that, under the issues presented in that case, the defendants against whom the personal judgment was asked were not apprised in any manner that any personal judgment would be asked against them, and that to grant such relief was inconsistent with the relief asked in the hill.

In the case at bar the facts are essentially different. Klanke filed a cross-complaint against Alhersen, and alleged specific facts which entitled him to the relief asked against Alhersen. Alhersen denied that he was guilty of the false representation alleged against him, and the parties specifically directed their proof to that issue. In fact, this was the only issue in the case, and the parties themselves were the principal witnesses. Hence it cannot be said that the defendant was taken by surprise, and that the relief granted by the court could not be obtained under the prayer of the cross-complaint for general relief.

Of the merits of the case but little need be said. As we have already seen, the parties to the action were the principal witnesses. Their testimony is in direct and irreconcilable conflict. According to the testimony of Fritz Klanke, Charles Albersen borrowed $2,500 from him upon representing that he would give him a first mortgage on. the 160 acres of land described in the complaint. Some time after he had received the money from Klanke, Albersen gave him a quitclaim deed to the land, and Klanke accepted it, believing that he was getting a clear title to the land for the money advanced by him, instead of a first mortgage on it. • It turned out that Albersen had not procured the land to be released from the mortgage to Franzen, as he had promised Klanke to do. There was a mortgage upon the land to Franzen for an amount greater than the value of the land itself. The testimony of Klanke is corroborated by that of his son, who was present when Albersen procured the money from his father. On the other hand, Albersen states in positive language that he conveyed the land to Klanke for the consideration of $2,500, which he admits he received, and the further consideration that Klanke was to assume the mortgage on the land to Franzen.

No useful purpose could 'be served by any further comment on the facts. The chancellor found- the issue of fact in favor of Klanke, and it cannot be said in any sense that his finding is against the preponderance of the evidence. Therefore, under the settled rules of this court, the decree of the chancery court must be affirmed.


author: Humphreys, J.

text:
    Earle v. Shackleford.
    Opinion delivered May 21, 1928.

      J. R. Pugh and Scott ■& Cooper, for appellant.

      S. V. Neely, for appellee.
   Humphreys, J.

Appellee made changes and improvements in a wooden building located in the fire limits of the town of Earle, which was condemned by the city council and ordered removed within ten days, on account of being made in violation of ordinance 77 of said city, which provides that “no walls, structure, building or part thereof shall hereafter be built, enlarged or altered.”

Appellee immediately brought suit to enjoin the city from removing the improvements on the alleged grounds; First, that the work done on the old building did not amount to- a new .construction or addition to an old building, but, on the contrary, was only an alteration of the old building; and second, that the ordinance was void because it prohibited alteration being made in or on an old building. Appellee filed an answer, denying the material allegations in the complaint, and on the trial of the issues and testimony adduced responsive thereto, the court permanently enjoined appellant from removing the improvements, from which is this- appeal.

The original building was constructed in 1909, and prior in time to the enactment of the fire ordinance. It was built for a blacksmith shop, out of one-inch box-ins,’, with batting on the north and west sides, and without any floor or ceiling, its dimensions being 45x60 feet. At the time the new improvements were made it was in a dilapidated condition. The new improvements were made for the purpose of converting the building into a drive-in filling station and garage. The improvements consisted in constructing a new wall out of good material the entire length of the building, some fifteen feet west of the east wall. Two doors and a large number of windows were built in the new wall. The old east wall was then torn down, leaving a sufficient number of 2x4 supports standing to support the roof until brick columns could be erected to support same. The brick columns had not been erected at the time the new improvements were condemned and ordered removed, but their construction was contemplated. The old north and south walls were also torn down back west to the new wall. By tearing these old walls down the-new wall containing the doors and windows became the front or east wall of the house, leaving an open driveway between the new wall and the east row of columns to be constructed to support the roof over the driveway. Three rooms were then constructed in the west part of the building by constructing partition walls therein. The original building consisted of one room without floor or ceiling. • As reconstructed it consisted of three rooms, with windows and doors, and a covered driveway of considerable width the entire length of the building. Our conclusion from the pictures, plats and testimony is that the old building, formerly used for a blacksmith shop, has been converted into practically a new building to be used for a drive-in filling station, and, to all intents, and purposes, is a new and different building from the first or old one.

Under authority granted to municipal corporations by the Legislature, they have power to pass fire protection ordinances by preventing the erection of any building or addition to any building in fire zone districts, unless the outer walls thereof be made of brick or mortar * * *, and to provide for the removal of any building or addition to any building erected contrary to such prohibition. Section 7544, Crawford & Moses’ Digest. In construing said section of the Digest this court ruled that it contained no authority to prevent the repairing of houses constructed prior to the passage of the ordinance, but that it did confer authority upon municipalities to prevent the building of wooden houses and additions to such houses. Incorporated Town of Paris v. Hall, 131 Ark. 104, 198 S. W. 705. The ordinance in question, passed under the authority conferred by the act, not only provided ag’ainst the construction of wooden buildings but against the enlargement and alteration of old buildings within the fire limits.

Appellant attacks the validity of the ordinance on the ground it inhibits the alteration of old buildings. We think the word “alteration” used in the ordinance was used in the sense that an old building should not be changed in such a way as to convert it into a new and different structure. When used in this sense, it is within the power conferred, and is not a void ordinance. The evidence in the instant case reflects that this old building was altered in such a way as to convert it into practically a new and different structure from the original one, The trial court found otherwise, but we think the finding was contrary to the weight of the evidence.

On account of the error indicated the decree is reversed, and the cause is remanded with direction to dismiss appellee’s complaint for the want of equity.


text:
    Sharp v. Booneville.
    Opinion delivered May 21, 1928.

      Evans & Evans, for appellant.'

      B. 8. Dunn, for appellee.
   Humphreys, J.

Appellant was convicted in the may- or’s court of Booneville, Arkansas, and again on appeal in the circuit court of Logan County, Southern District, of having in his possession or transporting alcohol or intoxicating liquors, in Booneville, contrary to ordinance No. 150 of said city, and, as a punishment therefor, was adjudged to pay a fine of $100, from which is this appeal.

Two assignments of error are relied upon and urged by appellant for a reversal of the judgment, viz: (1) That the court erred in reading to the jury an ordinance of the city of Booneville, which he now contends was not introduced in evidence. (2) That the court erred in holding that the ordinance of the city of Booneville which the court read to the jury, under which the defendant was convicted, is inconsistent with' the State law.

(1). According to the record, the ordinance in question was introduced on request of the city attorney, by handing the book containing same to the court and calling attention to the substance thereof, in the presence of appellant and his attorney, without objection and exception on their part. By failing to object and except to the manner in which the ordinance was introduced in evidence, appellant waived the formal introduction thereof in the manner provided by § 7197 of Crawford & Moses’ Digest. Even though the ordinance had not been introduced at all, the judgment could not be reversed on that ground by this court, as the mayor had jurisdiction as a justice of the peace, and the circuit court jurisdiction on appeal from the mayor’s court to convict appellant for possessing- or transporting alcohol, under the State law. Fly v. Fort Smith, 165 Ark. 392, 264 S. W. 840.

(2). It is unnecessary to consider or discuss the assignment of error to the effect that the ordinance is in conflict with the State law against possessing or transporting alcohol or intoxicating liquors by failing to exempt ministers, doctors, druggists and scientists under certain conditions from the provisions of the ordinance, as this court ruled in the case of Marianna v. Vincent, 68 Ark. 244, 58 S. W. 251, which was cited and affirmed in the .case of Fly v. Fort Smith, supra, that, even though an ordinance were void under which an accused was tried, the conviction must stand if the crime charged was covered by a valid State law, upon the ground that the mayor had the same jurisdiction as a justice of the peace.

No error appearing, the judgment is affirmed.


text:
    Tuggle v. Tribble.
    Opinion delivered May 21, 1928.

      G. T. Gotham and George P. Whittington, for appellant.

      Murphy & Wood, for appellee.
   Hart, C. J.,

(after stating the facts). No motion for a new trial was filed in the circuit court, and, under our rules of practice, we can only consider errors appearing on the face of the record. Burns v. Harrington, 162 Ark. 162, 257 S. W. 720; and Miller v. Tatum, 170 Ark. 152, 279 S. W. 1002. Counsel for appellants recognize this rule, but rely for reversal of the judgment on certain errors which they claim appear on the face of the record.

The method of procedure adopted by A. H. Tribble and other property owners in petitioning for the alteration of the public road was in accordance with the provisions of act 611 of the Acts of 1923. This act amends a;et 422 of Acts of 1911, relative to the power of the county court in making changes in public roads. Acts of 1923, page 490. The act of 1911 just referred to is § 5249 of Crawford & Muses’ Digest. There is no substantial difference between the act of 1923 and the act of 1911 above referred to, relative to the proceedings- in changing and altering public roads. The act of 1923, under which the present proceeding was had, is more comprehensive, and provides for additional procedure in the matter, but is substantially the same as the provisions of § 5249 of Crawford & Moses’ Digest. Hence our decisions construing that section are equally applicable to the provisions of the act of 1923.

It is earnestly insisted by counsel for appellants that the court erred in not following the provisions of § 5247 of Crawford & Moses’ Digest relative to the vacation of public roads, instead of the provisions of the statute relative to altering or changing public roads. Section 5247 of Crawford & Moses’ Digest is part of the act of March 23, 1871, and relates solely to the method of procedure to be followed where a county road or any part thereof is to be vacated because considered useless. We have held that the two acts operate in different fields and were enacted to serve wholly different purposes. Hill v. Mclintock, 175 Ark. 1059, 1 S. W. (new series) 564. In that case we quoted with approval the distinction made by the Court of Appeals of Kentucky between the alteration and the discontinuance of a public highway. In the case where the road is vacated it is abolished altogether, and in the case of its alteration the road is kept up, and leads in the same general direction, although there may be some change in the route. In the case last cited we held that the alteration of a public road was accomplished by a distinct exercise of discretion from that of vacating an existing road or a part thereof. In the very nature of things an application for an alteration of a public road requires a change in a part of the road, but the matter should be presented to the court as one application. The road is the same, and does not open up a new route of travel or abandon an existing one. Every alteration may involve to some extent the discontinuance of a part of the old highways and the laying out of some part of a new highway, but such laying out and discontinuance are the incidents of an alteration, and are not independent matters. People v. Jones, 63 N. Y. 306; Green v. Loudenslager, 54 N. J. L. 478, 24 Atl. 367; and 29 C. J., § 198, on page 503, and § 224, on page 516. Hence we are of the opinion that the court properly followed the act relative to changing or altering public roads, instead of the act providing for the vacating of a public road or a part thereof when it shall be considered useless.

It is next insisted that the court erred in following the provisions of - act 611 of the Acts of 1923, above referred to. It is pointed out that the act under consideration is a special act, and it is claimed that the notice required by the Constitution of the intention to apply for the passage thereof was not given. The act was passed at the General Session of 1923, and was approved on March 23, 1923. Hence, under the settled rules of this court, it will be conclusively presumed by the court that the notice required by the Constitution was given. Davis v. Gaines, 48 Ark. 370, 3 S. W. 184; St. Louis Southwestern Ry. Co. v. State, 97 Ark. 473, 134 S. W. 970; and Booe v. Road Improvemmt District, 141 Ark. 140, 216 S. W. 500.

It is next insisted that the act was unconstitutional because it was in violation of article 5, § 24, of the Constitution, which provides, among other thing’s, that the General Assembly shall not pass any local or special law vacating roads, streets or alleys. We do not consider that this provision of the Constitution was violated, because it was evidently designed to prevent the Legislature from passing' an act whose direct purpose and effect was to vacate a road, street or alley. The act in question was simply enacted for the purpose of prescribing the method of procedure to be followed by the county courts in certain counties in changing or altering public roads. In fact, the act states that it was simply designed to provide for additional procedure in the matter of changing or altering public roads. The adoption of a method of procedure to be followed by the county court in changing public roads in certain counties does not in any sense offend the provision of the Constitution just referred to.

It is next contended that the county court had no right to vacate a suburban highway which had been dedicated to the pulblic, and that D. M. Tuggle and other abutting landowners had a vested interest in the matter, because they had bought property relying upon the fact that the road in front of their property would always be a public road. If this were true, there could never be any change in an existing highway, because doubtless all abutting property owners would claim that they had bought their property relying upon the fact that it was abutting upon a public easement, and that the road could never be discontinued or changed.

Of course the county court 'should not change or alter a public highway unless the public convenience or necessity requires such change. But we cannot review the discretion of the county court in this respect, because no motion for a new trial was filed in the circuit court,, and this bars any inquiry on appeal into the question of fact whether or not the county court acted under the testimony as the public convenience or necessity would require.

In this connection it may be said that there can be no change of an existing highway that does not cause some private inconvenience, and, in that sense, injury to the abutting property owners, who have adapted themselves to the existing order of things and have purchased property on a highway which they believed would never be changed. There is no question presented in the record that appellants have been entirely cut off from any public highway by the proposed change in the public road in question.

We pretermit any decision on the question whether or not a property owner would be entitled to damages if the highway should be changed so as to entirely cut him off from access to any public road. In this connection it may be said that no provision is made in the statute for damages in such a case, ¡but we do not pass upon the question whether an action for damages would lie where a property owner is injured by being entirely cut off from a public road so that it might 'be said that his property was taken or damaged for public use, within the meaning of our Constitution, without providing adequate compensation therefor. The authorities on this question are conflicting, and we do not consider the question at all presented by the face of the record in the present case.

Finally, it is insisted that the judgment of the circuit court is at material variance with that of the county court. The case was appealed and tried de novo in the circuit court. Of course, the circuit court could not try an entirely different issue or a substantially different one from that tried in the county court. We do not think, however, that this was done in the circuit court. The matter presented and tried by it was in all essential respects the same as that determined by the county court; and, while the .judgment of the circuit court differed in some respects from that of the county court, it did not try an issue which was not raised by the petition and remonstrance filed in the county court.

The result of our views is that the circuit court was correct in its judgment, and it will therefore be affirmed.


author: Wood, J.

text:
    Nakdimen v. First National Bank.
    Opinion delivered May 21, 1928.

      J ames B. McDonough, Jr., and James B. McDonough, for appellant.

      Daily & Woods, for appellee.
   Wood, J.

This is an action instituted in the circuit court of Sebastian County by the First National Bank and the Merchants ’ National Bank of Fort Smith, Arkansas, against I. H. Nakdimen. The plaintiffs alleged, in substance, that they are national banks ;• that Nakdimen is the president of the City National Bank of the city of Fort Smith; that, on or about December 21, 19'27, the officers of the Arkansas Valley iBank, another bank at Fort Smith, reported to the plaintiffs and to the City National Bank that the Arkansas Valley Bank would close its doors unless some arrangements could be made to pay its depositors in full, and offered to the plaintiffs and to the City National Bank all of the assets of the Arkansas Valley Bank and, in addition, the sum of $70,000, provided the three banks mentioned would pay the depositors and the valid debts of the Arkansas Valley Bank; that the City National Bank declined to enter into such an agreement, but I. H. Nakdimen agreed that he would personally pay the plaintiffs the sum of $5,000 if plaintiffs would accept the offer of the Arkansas Valley Bank; that the plaintiffs accepted the offer of Nakdimen, and, in consideration of his promise, agreed to pay all the depositors of the Arkansas Valley Bank in full and to assume and pay all other valid debts, if any, of the Arkansas Valley Bank; that the Arkansas Valley Bank had conveyed to the plaintiffs all its assets, and the directors of the Arkansas Valley Bank had paid to the plaintiffs the sum of $70,000; that the plaintiffs had performed each and every one of the covenants of their contract with Nakdimen, and that he had wholly f ailed to pay the plaintiffs the sum of $5,000. The plaintiffs prayed judgment for such sum, with interest due thereon at the date of the judgment.

'The defendant, in his answer, admitted the organization and business status of plaintiffs, as .set up in the complaint, and admitted that he was the president of the City National Bank at Fort Smith, Arkansas. He denied specifically all the other material allegations of the complaint, and further denied that there was any consideration passing from the plaintiffs to the defendant, or to. any one else, whereby the defendant obligated himself to pay the plaintiffs, or any one else, any sum of money. The defendant further denied that any covenant was made by the plaintiffs to the defendant in any contract, and denied that any contract was made in writing, or otherwise, whereby the defendant undertook to become liable for the debts, default, or other obligation, of either of the plaintiff's, or to the Arkansas Valley Bank or its officers or directors, and denied that there was any consideration whatever for the alleged agreement between the plaintiffs and the defendant.

The issues of fact were- submitted to a jury, and the testimony was substantially as follows :

W. J. Echols testified that he bad lived in Fort Smith forty-six years, and had been president of the Merchants ’ National Bank about twenty years. He was called by Hugh Branson, president of the Arkansas Valley Bank, on December 21, 1927, to attend a meeting of the directors of. that hank. There were present at that meeting the directors of that bank and John C. Gardner, A. M. Sioard, I. H. Nakdimen, and the witness. The president of the Arkansas Valley Bank announced that, on account of the recent defalcation of one of its officers in the sum of about $25,000, and whose bond was $15,000, and on top of another misfortune that the Valley Bank had had, they had decided to close the Valley Bank, unless -some arrangement could be made for taking it over. The directors of the Valley Bank offered $70,000. Mr. Nakdimen said that he would gladly take over the bank if he had room, but that his bank was so small that he could not do it, and suggested that one or the other of the plaintiffs take it over. The feasibility of the three banks taking it over and paying the depositors and the debts in proportion to their respective resources, was discussed. Mr. Nakdimen stated -that he would not do that. Witness asked Mr. Sicard if he would take it over for $10,000. He stated that he would not, hut would give witness $10,000 to take it over. Nakdimen said he would give $5,000 if witness would take it over, and if witness’ loss was more than that he would give $1,000 more, and give his personal cheek for it. Witness asked Nakdimen if he would hold his' proposition open in case he took the bank over, and Nakdimen stated that he would. Beveral of the officers of the plaintiffs went over the paper of the Valley Bank, and the losses were apparently so great — so much paper that they did not know anything about — they could not form a very definite conclusion as to what the losses might be; they might he $50,000 or over $50,000 — they could not tell.

A meeting of the citizens was called that night in the room of the Arkansas Valley Trust Company. Mr. Nakdimen was present at that meeting. Witness further testified as follows: “I stated that the Arkansas Valley Bank would close the next morning, unless arrangements were made to take it over and pay the depositors and other just debts. I stated that they would turn over to the Merchants’ National Bank all their assets; that the directors would pay personally $70,000; that Mr. Nakdi-men had agreed to donate $5,000; that the First National and the Merchants’ National Banks had agreed to lose $25,000, including the $5,000 that Mr. Nakdimen would give, before the citizens would be called upon to give anything; that if the citizens, subject to these payments, would undérwrite a bond for $40,000, guaranteeing us against loss to that extent in excess of the assets of the bank and the $70,000 paid by the directors and the $25,000 the banks would lose, we would take it over and pay the depositors of the hank. It was a splendid meeting, and saved a very serious situation. I made the statement twice, because there were about 25 or 30 that came in. at first and probably 15 l'ater. Mr. Nakdimen was present when I made the statement both times, and when the bond was being written up I turned to him and said, ‘You agreed to give $5,000, and in addition to that you agreed to pay another $1,000 if the losses were greater than we expected,’ and he subsequently signed for $1,000. Witness further testified that Nakdiman did not deny that he had agreed to pay $5,000 to the plaintiffs under the conditions as above stated. The bond for $40,000 was signed by some that night and (by others the next day.

The Arkansas Valley Bank turned over to the First National and Merchants’ National Banks all the assets of the Arkansas Valley Bank under the following agreement :

“This agreement this day entered into by and between Arkansas Valley Bank of Fort Smith, party of the first part, and Merchants’ National Bank of Fort Smith and First National Bank of Fort Smith, parties of the second part:

“Arkansas Valley Bank, for valuable consideration, receipt of which is hereby acknowledged, hereby sells, assigns, transfers, sets over and delivers unto the First National Bank of Fort Smith and the Merchants’ National Bank of Fort Smith all of its assets, both real and personal, and wheresoever located, and it hereby agrees to execute such other and formal deeds, transfers, assignments and indorsements as may be necessary. In consideration of said sale >and transfer, and in consideration of other valuable considerations and agreements moving to them from individuals, said Merchants’ National Bank of Fort Smith and First National Bank of Fort Smith hereby agree with the said Arkansas Valley Bank to pay all valid debts of said Arkansas Valley Bank.

“In testimony whereof Arkansas Valley Bank has, by order of its board of directors, caused these presents to be executed by its president, attested by its cashier, and corporate seal; and First National Bank of Fort Smith has, by order of its board of directors, caused these presents to be executed by its president; and Merchants’ National Bank of Fort Smith has, by order of its board of directors, caused these presents to he executed Iby its president, all in triplicate, this 22d day of December, 1926.

(Signed) “Arkansas Valley Bank,

“By Hugh Branson, its president.

“Attest: G. H. Sexton, cashier.

“First National Bank,

“By A. N. Sicard, its president.

“Merchants’ National Bank,

“By W. J. Echols, its president.”

('Seal of Arkansas Valley Bank).

There was also executed the following instrument:

“Whereas the Arkansas Valley iBank has, concurrently with the execution of this agreement, transferred all of its assets of every kind, shape, form, manner and description, to the First National Bank and Merchants’ National Bank of Fort Smith, and has placed John C. Gardner as liquidating agent for said First National Bank and said Merchants’ National Bank in possession of said assets; and whereas, concurrently with the execution of this agreement, the directors of said Arkansas Valley Bank have paid to said First National Bank and said Merchants’ National Bank the sum of $70,000; and whereas the First National Bank and the Merchants’ National Bank, in consideration of said transfer of said assets, said payment of $70,000, and the execution by us and the delivery to them of this agreement, have agreed to pay in full all the valid debts of said Arkansas Valley Bank (including deposits).

“'Now therefore each of us severally, but not one for the other, agree that, in case the net proceeds received and collected by said two hanks from the assets so transferred, plus said $70,000, plus an additional $25,000, the risk of which said two banks assume, fails to pay said valid debts (including depositors) of the Arkansas Valley Bank, then that we will severally, hut not one for the other, pay the said First National Bank and Merchants’ National Bank that proportion of the amount set opposite our respective signatures that said sum so •set opposite our respective signatures bears to the total amount paid out by said two banks on debts of said Arkansas Valley Bank, in excess of the following: the net proceeds received and collected by said two banks from the assets so transferred, plus $70,000, plus $25,000; provided, that in no event shall any one of us be liable for any amount in excess of the amount by us severally set opposite our respective signatures.

“Dated this 22d day of December, 1926.”

Then follow the signatures and the amounts 'set opposite their respective names. The last name signed is that of I. H. Nakdimen, and set opposite his name is the notation, “$1,000, and no more.”

The bond was in two parts, both being worded precisely the same, the amount of obligation in the first part being $42,500 and in the second part $9,500. Concurrent with the execution of the bond, the Merchants’ National Bank and the First National Bank signed the following statement:

“We agree that the signers of the obligation, copy of which is hereto attached, will not be required to pay to us in the aggregate in excess of $40,000. ’ ’

The witness continued his testimony, saying that the additional signatures over $40,000 were obtained to minimize the loss of any one who signed the bond. The next day witness called Mr. Nakdimen over the ’phone and asked him to pay the $5,000, which he declined to do. • Hence this action against him.

Witness was asked the following: “Q. Did Mr. Nakdimen make a statement in the first meeting that he would pay in the event of a loss 1 A. He said he would pay $5,000, whether we lost or gained, and he said that he would pay $1,000 more if we lost more than we expected. Q. How did he say he would pay the $5,000, in cash, or how? A. He said that he would give us his personal check.”

On cross-examination the witness stated, among other things, that, about sixty days before the Valley Bank was taken over (by the plaintiff's, witness’ bank had been requested by the president of the Yalley Bank to take, over the assets of that bank and liquidate them. Witness made an examination of that bank’s assets. Its deposits at that time were approximately three-fourths of a million. After examining a list of the notes and other assets, which he had under 'consideration for probably a week, witness notified the president of the Yalley Bank that he did not care to liquidate that bank. It was a private matter, and witness did not discuss it with any one. Just after the meeting on December 22, 1926, there appeared on December 23, 1926, in the Southwest American, a daily newspaper published in Fort Smith, a statement which reads in part as follows:

“W. J. Echols, president of the Merchants’ National Bank, in a statement in which A. N. Sicard, head of the First National Bank, concurred, declared Wednesday night: ‘There has been another serious defalcation in the Arkansas Yalley Bank, in the clerical department. This, coming on the heels of the previous defalcation, caused the directors to realize that they could not hope to continue the bank with the full confidence of the public. Realizing that a run would be made on the Arkansas Yalley Bank, its directors called the bankers of Fort Smith into consultation with them as to the means of having the depositors paid in full, if possible. In the event this could- not be done, it was felt that it would be necessary to close the bank at once, in order that no preference might be shown depositors who might call first for their money. After several days of consultation with the First and Merchants’ National Banks it was arranged to pay the depositors in full. John C. Gardner was chosen to represent the First and Merchants’ National Banks and take charge of the Arkansas Yalley Bank and pay the depositors as promptly as their accounts could be balanced. The City National Bank contributed a fund of $5,000 in order to minimize to this extent any possible loss that the First and Merchants’ National Banks might sustain in taking over the assets of the Arkansas Valley Bank and in paying its depositors. The directors of the Arkansas Valley Bank contributed a liberal fund in cash to make it possible for the First and Merchants’ Banks’ to liquidate its affairs. The leading business men of Fort Smith have also agreed to hold the First and Merchants ’ Banks harmless to the extent of $40,000 in the event they sustain any loss in excess of $25,000.’ ”

Witness stated that the statement was erroneous in that it stated that the City National Bank had contributed $5,000; that it had not contributed $5,000; that Mr. Nak-dimen agreed to. The statement in the newspaper was not written out and signed by witness. Witness was just talking to a reporter. .After the controversy arose, witness wrote out a corrected statement and had it published.

Mr. A. N. Sicard testified for the plaintiffs. We will not set out his testimony in detail, as it corroborates substantially the testimony of the witness Echols. In regard to what Nakdimen said on the night that he and Echols and witness were consulting about the liquidation of the Valley Bank, witness testified as follows: “Nakdi-men stated that if we would take the Arkansas Valley Bank over and pay the depositors, he would pay $5,000,’ and would give his personal check. He stated that he wanted his liability fixed. The amount was not fixed. Of course, the $5,000 was supposed to cover any loss that might be sustained. ’ ’

Witness was asked the following question: “If you sustained any loss, he would give it — -that is right? A. Yes sir.’ ’

Speaking of the meeting of witness, Echols, and the .citizens held in the Arkansas Valley Trust Company’s building on December 21, 1926, witness further testified as follows: “We felt that we would be willing to stands loss of $25,000, including the $5,000 we expected to get from Mr. Nakdimen, if the citizens would raise a bond of $40,000 to protect us in that amount, guaranteeing us against any further loss, and at that meeting that ¡bond was signed up, and Mr. Gardner was selected as liquidating agent and placed in charge of the hank the next morning, and there was placed to his credit ¡by the First and Merchants’ National Banks the sum of $750,000 to pay off the depositors of the Arkansas Valley Bank.”

On cross-examination the witness stated that the Arkansas Valley Bank at that time had about $750,000 in deposits. The liquidating agent balanced the accounts of the depositors and gave them a check on witness’ bank or the Merchants’ Bank for the money, which they deposited wherever they pleased.

During the examination of this witness he identified a letter dated December 28, 1926, addressed to the First National and the Merchants’ National Banks, which the-plaintiffs offered in evidence. The attorney, for the defendant objected to its introduction, whereupon one of the attorneys for the plaintiffs stated: “The purpose of it is to show that the two banks, were not to profit by the conveyance made to them, but- were assuming a loss, if there were any, and not to profit by the arrangement made, and to show how it is to fee held.” The court would not permit the letter to be introduced in evidence, but allowed the witness, over the objection of appellant, to testify that the agreement between the Valley Bank and the First and Merchants’ National Banks, with reference to the conveyance of the assets of the Valley Bank, was as follows: “After the debts of the bank were paid, any remaining assets were to be turned back to the directors, first, who had advanced $70,000, and, should there be any left over, it was to go to the stockholders of the Arkansas Valley Bank.”

■Six other witnesses testified for the plaintiffs. Their testimony corroborates substantially the testimony of Echols concerning the statement made by Echols at the meeting of the citizens held at the building of the Arkansas Valley Trust ’Company, to the effect that he stated 'openly at that meeting to the persons there assembled, at which meeting I. H. Nakdimen was present, that, to prevent the closing of the Arkansas Valley Bank the next morning, the Merchants’ and First National Banks had agreed that they would lose $25,000, including the $5,000 that Nakdimen would give, before the citizens would be called upon to give anything; that the arrangement was that the Merchants’ and First National Banks were to give $10,000 each and Mr. Nakdimen would give $5,000 to have the Merchants’ and First National Banks take over the assets and pay the depositors and all valid delbts of the Valley Bank; that E'chols, in making a statement, turned to Nakdimen and asked him to join with them in taking over the Valley Bank, and that he declined to do so, stating that he wanted to know what his actual loss would 'be. One of the witnesses, who went the next morning to obtain the signature of Nakdimen to the bond, testified that he told Nakdimen that Echols had told him that Nakdimen would give $5,000, win or lose; that in reply Nakdimen said, “I did, and would have, but when they called the public in to take care of their losses, I didn’t feel obligated to do so.” Witness then said to Nakdimen, “You should have spoken up,” whereupon Nakdimen replied, “I did not say anything — they did all the talking. It was not my place to talk — it was their meeting.”

Another witness testified that Echols stated that the two banks were to lose $10,000' each before the bond was called on for anything. Echols stated that Nakdimen proposed to pay $5,000 to the other banks to save the failure and for taking the Valley Bank over; that the two other banks were to stand a loss of $10,000 each if there was that much, before the bond would come in, but that Echols did not say that they gave anything. Witness did not hear all that was said at the meeting.

Another witness stated that Elchols said at the meeting that any loss, after the bond had been exhausted, would be borne by the Merchants’ and First National Banks. Another one of the witnesses stated that Echols stated that Nakdimen had agreed to pay $5,000 if the First National Bank would take over the assets of the bank, and he further stated that the First National and Merchants’ National Banks were willing to lose $10,000 each, and not over that, because, in his opinion, the loss would be more. This witness further stated that, shortly after the albove transaction, he had a conversation with Nakdimen, in a Pullman coming from St. Louis, in which conversation Nakdimen stated that he had not agreed to pay the $5,000 unless there was a real loss in the transaction. Witness asked Nakdimen why he did not correct Echols at the meeting, and Nakdi-men replied that he didn’t wish to break up the meeting.

Another witness testified that Echols stated at the meeting that the City National Bank did not want to join with the other two hanks in the liquidation of the Arkansas Valley Bank. This witness was asked whether Echols said anything about what Nakdimen personally had agreed to do, and the witness answered, “Well, as I remember it, the First National and the Merchants’ National Banks were to pay $10,000 each and Mr. Nakdi-men $5,000.” Witness did not know whether this proposition was conditioned on loss or not.

Fagan Bourland testified as a witness for the defendant. He was present at the meeting of the citizens at the building of the Arkansas Valley Trust Company. He did not remember who made the statement, but was of the opinion that it was Mr. Echols, who stated that the stockholders were to put up $70,000 and the three banks were to put up $25,000. The two larger banks, the First National and the Merchants’ National, were to put up $10,000 each and the City National $5,000. That this $25,000 from the 'banks was to be used to indemnify the depositors after the $70,000 subscribed by the stockholders was exhausted. Witness was under the impression at the meeting that the three banks together were to take over the assets and pay the depositors of the Arkansas Valley Bank, and stand a loss.

I. H. Nakdimen, the defendant, testified that he was president of the City National Bank; that he was called by Branson, president of the Arkansas Valley Bank, to a. meeting at which the affairs of the Arkansas Valley Bank were discussed. He was shown a piece of paper purporting to 'be a confession of the bookkeeper. After reading it, he remarked that $30,000 would not break the bank. He was told that the bookkeeper had a bond of $25,000 and had $4,000 in the bank, and witness stated that that was enought to pay the $30,000. Witness said to Echols, “Why don’t you buy it?” and Echols said to him, “Why don’t you (buy it?” Witness finally said to Echols that he would give $3,000 towards the loss. When Echols asked witness if witness would -buy it, he replied, “No.” Then Sicard asked Echols, “Why don’t you buy it?” Echols asked Sicard, “Would you give $20,000?” Sicard replied, “No, I will give $10,000,” whereupon witness said, “I will give $5,000.” iSicard asked Echols if he would be included in the $25,000, and Echols said, “No.” Witness offered to give $20,000 for the deposits, but his offer was ignored. Witness declined to take any of the notes or paper. Finally, after further discussion and conversation, witness said, “I will give $5,000,” meaning that much toward the loss. Witness’ offer was rejected. Witness further testified that he was present at the later meeting, Wednesday night, at which Echols made a statement. Witness did not like the statement, but did not contradict Echols, because witness was afraid that he would get in a row and that the Arkansas Valley Bank would be closed. The statement was made that the City National Bank would give $5,000, and witness stated that the bank would give $5,000 and that he would give personally an additional $1,000. Witness did not refuse to pay the $5,000 only until they showed witness a loss. At the meeting Echols and Sicard were representing their respective banks and witness was representing the City National Bank. Witness stated at the meeting that he was willing to give $5,000, not for himself, but for the bank. He denied that he had told Echols that he ■would pay $5,000 personally, whether there was a loss or not.

On cross-examination witness stated that at the first meeting, speaking for the City National Bank, he refused to go in with the First and Merchants’ National Banks to pay off the depositors of the Valley Bank. On redirect examination witness stated that he didn’t know who had prepared the contracts and bond, hut he signed the bond the next day, or several days thereafter.

At the close of the testimony the plaintiffs asked the court to instruct the jury as follows *

“1. In this case you are called upon to decide one single issue, which is, did I. H. Nakdimen agree to pay $5,000 to the Merchants’ National Bank and the First National Bank, in consideration of these two banks agreeing to pay in full the deposits and other valid debts of the Arkansas Valley Bank? If you find from a preponderance of the evidence that I. H. Nakdimen made such an agreement, then your verdict will be for the plaintiff for $5,000, with interest on such amount at six per cent, from the date that demand was made upon him for payment. If you find that I. H. Nakdimen made no such agreement, your verdict will be for the defendant.

“2. The written agreement of the First National Bank and Merchants ’ Bank to pay the valid debts of the Arkansas Valley Bank was sufficient consideration to •support a promise of I. H. Nakdimen to pay $5,000, if you find that I. H. Nakdimen made such promise.”

The defendant objected generally to the giving of each of the above prayers for instructions, and excepted to the ruling of the court granting same. No specific objection or exception was saved.

The court granted the following prayers for instruction at the instance of the defendant:

“1. If the defendant, I. H. Nakdimen, was not representing himself personally in any negotiations relating to the taking over of the Arkansas Valley Bank, and if his negotiation® were made for and on behalf of the City National Bank, the jury will find a verdict for the defendant. ’ ’ ■

“6. If the plaintiffs and the defendant entered into a contract whereby the defendant agreed to pay to the plaintiffs the sum of $5,000, and if the agreement was that said sum was to he paid the plaintiffs only in the event of loss to the plaintiffs 'by taking over the Arkansas Valley Bank, then and in that event the jury will find for the defendant.

“61/2• In order to make a contract binding there must 'be a consideration. To be a consideration, there must be a benefit to the party promising or a loss or detriment to the party to whom the promise is made.”

The court refused to grant the following prayers for instruction presented by the defendant:

“1. The court instructs the jury to find the issues for the defendant.”

“3. If the jury find that the defendant, I. H. Nakdi-men, was not representing the City National Bank in said negotiations, and was representing himself, then and in that event the jury will consider the instructions given below in order to ascertain whether the defendant is liable to the plaintiffs or not.

“4. If the plaintiffs were contemplating the taking over of the Arkansas Valley Bank, and if the representatives of the plaintiffs, having authority so to do, entered into negotiations with I. H. Nakdimen, and if the plaintiffs and the defendant entered into a contract whereby the defendant agreed to pay the plaintiffs the sum of $'5,000, and if said contract was not in writing, the jury will find for the defendant.

“5. In order to make a contract binding, there must be a consideration. To be a consideration, there must be a benefit to the party promising or a loss or detriment to the party to whom the promise is made. Benefit as thus employed means that the promisor has, in return for his promise, acquired some legal right to which he would not otherwise have been entitled, and the word ‘detriment’ means that the promisee has, in return for the promise, forborne some legal right which he otherwise would have been entitled to exercise. Unless there was a consideration existing in this alleged contract as thus defined, the jury will find for the defendant.”

“7. If the plaintiffs and the defendant entered into an agreement such as that set forth in the complaint, and if in that agreement the defendant undertook and agreed with plaintiffs to pay to them the sum of $5,000, whether they suffered a loss or not, and if the consideration for that agreement on the part of the defendant was a benefit, if there was one, resulting to the defendant, the same as to all other citizens in Fort Smith, arising from the taking over of the Arkansas Valley Bank and thus avoiding the failure of that bank, the court instructs the jury that such benefit, even if it existed to the defendant, is not a benefit within the meaning of the law which may support a contract, and in that event the jury will find for the defendant.

“8. A benefit such as will support a contract must be either a benefit to the defendant or a detriment to the plaintiffs. The fact, if it be a fact, that plaintiffs took over the Arkansas Valley Bank, is not alone sufficient to be a detriment within the meaning of the law, and if the plaintiffs forbore no legal right or gave up no legal right, then the said taking over would not be such a detriment as will support a contract.”

The defendant duly excepted to the ruling of the court in refusing to grant each of the above prayers for instructions.

The jury returned a verdict in favor of the plaintiffs in the sum of $5,000, with interest from the date of demand. The court rendered judgment in favor of the plaintiffs against the defendant in the sum of $5,250, from which is this appeal.

1. The appellant contends that the complaint does not state facts sufficient to constitute a cause of action. There was no separate demurrer by the appellant to the allegations of the complaint, hut in his answer the appellant denied that there were ‘ ‘ any covenants of any kind between the plaintiffs herein and this defendant.” Learned counsel- for the appellant contend' that there were no facts alleged in the complaint showing a return promise made by the plaintiffs to the defendant. Therefore they insist that appellant has not waived the objection that the complaint does not state facts sufficient to constitute a cause of action, although there was no separate demurrer and no demurrer embodied in the appellant’s answer to the allegations of the complaint.

We agree with counsel that, if the allegations of the complaint do not state facts sufficient to constitute a cause- of action, the appellant has not waived such objection by failing to file a separate demurrer or by failing to demur to the complaint in his answer. Under § 1189 of C. & M. Digest one of the grounds of demurrer is “that the complaint does not state facts sufficient to constitute a cause of action;” and § 1192, C. & 'M. Digest, provides that “when any of the matters enumerated in § 1189 do not appear upon the face of the complaint, the objection may be taken by answer. If no such objection is taken, either by demurrer or answer, the defendant shall be deemed to have waived same, except only * * * the objection that the complaint does not state facts sufficient to constitute a cause of action.” As we have stated above, the appellant in his answer denied that there were any covenants between the plaintiff herein and this defendant. Therefore, if counsel be correct in their contention that the complaint does not allege any facts sufficient to show a return promise made by the appellees to the appellant in consideration of appellant’s promise to pay them $-5,000,'it-is certain that the appellant has not waived the defense of failure upon the part of the appellees to state facts constituting a cause of action in their complaint. Because lie lias specifically raised that issue in his answer, and, even if he had not so raised it, such issue is not waived under the express provisions of the statute supra.

But, after a careful consideration of the allegations of the complaint, we cannot concur in the view of counsel for the appellant, that the allegations of the complaint do not state facts sufficient to show that the appellees made a return promise to the appellant in consideration of his promise to pay them $5,000. Recurring to the allegations of the complaint, without again setting them out in detail, it will he observed that, after setting forth that the appellant offered and agreed that he would pay the appellees $5,000 if appellees would agree to pay the depositors and other valid debts of the Arkansas Valley Bank, the complaint further sets forth that the First National Bank and the Merchants’ National Bank accepted the offer so made by the said I. H. Nakdimen, m * * and the First National Bank and the Merchants’ National Bank, for and in consideration of the promise and agreement made by the said I. H. Nakdimen, agreed to pay all' of the depositors of said Arkansas Valley Bank in full and agreed to assume and pay all other valid debts, if any, of said Arkansas Valley Bank; that the First National Bank and the Merchants’ National Bank have performed each and every one of the covenants of their contract made with the said I. H. Nakdimen on their part to he performed. ”

It occurs to us that the above allegations not only allege facts sufficient to show a return promise on the part of the appellees to do certain acts in consideration of appellant’s promise, but the allegations are sufficient to show that the appellees had fulfilled the promise made by them to the appellant. Assuming, as they do, that the allegations of the complaint do not state facts sufficient to show a return promise on the part of the appellees for the offer or promise on the part of appellant to pay to them the sum of $5,000 upon certain conditions as a consideration of appellant’s promies or offer, counsel for appellant cite ns to a number of our cases. Under the doctrine of these cases they insist there was no mutuality of obligation and no consideration to support the promise of appellant upon which this action was founded. See Eustis v. Meytrott, 100 Ark. 510, 140 S. W. 590; Elmore v. Snow, 102 Ark. 592, 146 S. W. 476; Feldman v. Fox, 112 Ark. 223, 164 S. W. 766; Baucum v. Waters, 125 Ark. 305, 188 S. W. 802. But, since we have concluded that the complaint does allege facts sufficient to show a return promise on the part of the appellees for the promise made by the appellant and as a consideration for his promise, it follows that the above authorities have no application.

Counsel urge that the case of Eustis v. Meytrott, supra, is controlling on the question under consideration. That'case was determined on general demurrer by the defendant to the plaintiff’s complaint. The complaint in that case set forth at great length the promise of the defendant upon which the action was instituted and the circumstances under which the promise was made, and the acts performed by the plaintiff, superinduced, as he alleged, fby the promise of the defendant. But it is not alleged in the complaint that the plaintiff accepted the offer of the defendant', nor is it <alleged that the plaintiff, in consideration of the pronúse and agreement of the defenda/nt, agreed in return to do anything in consideration for such promise on the part of the defendant. In the case at bar, the complaint, after setting forth the promise of the defendant, alleged that “the plaintiff accepted the offer so made by the said I. H. Nakdimen, and, * * * in consideration of the promise and agreement made by the said I. H. Nakdimen, agreed to pay all the depositors of the said Arkansas Valley Bank in full, and agreed to assume and pay all other valid debts,” etc.

The case of Baucum v. Waters, supra, was determined on the facts, which showed no mutuality of obligation. Likewise the other cases mentioned above are wholly differentiated from the case at bar on the facts, and we need not review them.

We are dealing now with the sufficiency of the allegations of the complaint to constitute a canse of action. The appellees set ont in their complaint the promise of appellant, stating the facts constituting such promise, and alleged that such promise was made upon the condition or consideration that appellees would perform certain acts, and set forth what those certain acts were, and further alleged that the appellees accepted the promise of appellants and agreed on their part, to perform those acts, and had performed the same. Appel-lees thus stated facts showing a contract between the appellees and the appellant sufficient, if proved,.and if violated by appellant, to constitute a cause of action in favor of appellees. To be sure, the condition set forth in the complaint to be performed by the appellees as the consideration for the promise on the part of appellant, is a condition precedent which must be performed by the appellees before their cause of action against the appellant accrued. In their complaint the appellees set up the condition, and alleged that “they have performed each and every one of the covenants of their contract made with the said I. H. Nakdimen on their part to be performed.” This was sufficient. It was not essential that they set forth the specific acts which constitute a performance of the condition precedent to recovery on their part. These, where performance was controverted, were matters of proof. Section 1227, C. & M. Digest; Kirshman v. Tuffli Bros., 92 Ark. 111, 122 S. W. 239.

2. One of the grounds urged for reversal is “that the agreement of the plaintiff banks to lose $10,000 each was ultra vires, illegal, and absolutely void, and cannot be a consideration to support any promise of I. H. Nakdimen.” Section 5136, ch. 1, p. 993, Revised Statutes' of the U. S., pertaining to the organization and powers of national banks, among other things provides;

“It (a national bank) shall have power: 7. To exercise fey its board of directors, dr duly authorized officers or agents, subject to law, all such incidental powers as shall fee necessary to carry on the business of banking; fey discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; fey 'buying and selling exchange, coin, and 'bullion-; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the provisions of this title.”

It is thoroughly settled that a national bank, under the above statute, has no authority, either in - express terms or fey implication, to lend its credit to a third person solely for his benefit, by becoming a surety, indorser, or guarantor for him. 'Such acts are ultra vires tod void, and no rights grow out of them that will bind such banks by estoppel. Merchants’ Bank of Valdosta v. Baird, 160 Fed. 642; Farmers’ & Miners’ Bank v. Bluefield National Bank, 11 Fed. (2d.) 83; Commercial National Bank v. Pierrie, 82 Fed. 799; Bowen v. Needles National Bank, 87 Fed. 430; Id. 94 Fed. 925; Seligman v. Charlottesville National Bank, 21 Federal Cases, No. 12642, p. 1036. Counsel for appellant cite and rely upon the above doctrine announced in these cases. See also First National Bank of Leslie v. Stokes, 134 Ark. 368, 373, 203 S. W. 1026, and cases there cited. But the facts of this record, as shown by the testimony and as the jury might have found, and did find, them, make the doctrine as above announced wholly inapplicable.

It would unduly extend this opinion to discuss the facts in detail, which have been already sufficiently set forth. To sustain their contention that the contract of the appellees with the Valley Bank, which was the consideration for, and out of which arose, the contract between the appellees and the appellant, was ultra vires, counsel for appellant assume and argue that the uncontradicted testimony shows that the appellees agreed unequivocally to lose the sum of $25,000 in taking over the assets and paying the depositors and valid debts of the Arkansas Valley Bank before Nakdimen would, or could, be called on by them to comply with his promise to pay them $5,000. It is unquestionably true that, when the appel-lees and the appellant responded to.the S. O. S. call of the president of the Valley Bank and met in consultation concerning its affairs, all contemplated that there might be a loss to the bank or banks taking over the assets of the Valley Bank and discharging its obligations in a sum reaching from fifty thousand to one hundred and fifty thousand dollars. But no one knew certainly what the amount of the loss, if any, would be. To prevent the far-reaching, disastrous and embarrassing consequences which the failure of a large banking institution necessarily causes in the financial and business life of any community where the same is located, the appellees and the appellant expressed a willingness, each of them, to incur, a loss, if it involved a loss, to take over the assets of the distressed bank and discharge its obligations. The appellees and the appellant did not know absolutely that there would be a loss, or, if a loss, the amount of such loss, but each was willing to contribute something to the one which might assume the risk by taking over the assets of the Valley Bank and paying its depositors and valid debts. These were the general circumstances which superinduced the contract entered into between the appellant and the appellees and the contract between the appellees and the Valley Bank. The appellees did not agree with the appellant that they would certainly lose $25,000 before they called on him to pay the $5,000 which he offered and promised to pay in the event they took over the Valley Bank and furnished the necessary funds to discharge its obligations. They agreed with the appellant that they would take over the assets of the Valley Bank and pay into such bank the money necessary to discharge its obligations and assume the risk of whatever loss, if any, might be involved in the transaction. The testimony, in its final analysis, justified the jury in finding tliat the appellant, in consideration that the appellees would put up their money and assume such risk, and thus prevent the threatened disaster to the whole business community, promised that he would pay to them the sum of $5,000. In the circumstances the promise of each to the others was a sufficient consideration, when acted upon by any one of them, to bind the others.

The provisions of the written contract between the appellees and-the Yalley Bank and the bond do not reveal any .ultra vires act on the part of the appellees. On the contrary, we are convinced that the provisions of these instruments and the oral testimony adduced on the issues involved show that the contract between the appellees and the Yalley Bank was not in violation of the act of Congress supra, but was one which the appellees were fully authorized to make in the exercise of the ordinary powers of a banking corporation under the Federal statute.

The doctrine applicable to the facts of this record is announced in the case of Schofield v. National Bank, 97 Fed. 282, and expressed in syl. No. 3, as follows:

“A contract by a national bank to assume and pay the liabilities of another bank in consideration of the transfer to it by the other bank of its office furniture and lease and its cash and cash assets, and the further assignment to a trustee for its benefit of bills receivable and securities, is not ultra vires, but is within its powers conferred by statute to conduct a general banking business. ’ ’ See also George v. Wallace, 135 Fed. 286; Wyman v. Wallace, 201 U. S. 230, 26 S. Ct. 496.

3. What we have already stated shows that the jury were justified in finding that there was a consideration for the contract and a performance thereof on the part of the appellees, inasmuch as the testimony showed that the appellees had performed their part of the contract by paying the money to the Yalley Bank necessary to pay its depositors and valid debts, 'The appellees thus discharged their promise to the appellant, which furnished the consideration moving from the appellees to the appellant, and which (bound the appellant to perform his promise to the appellees. See Nothwang v. Harrison, 126 Ark. 552, 191 S. W. 2.

4. We have considered the objections to the rulings of the court in granting and refusing prayers for instructions and in the admission and exclusion of testimony. We do not find any reversible error in these rulings. The issues of fact were submitted under instructions at the instance of the appellees as we'll as the appellant, which were free ’from errors prejudicial to the appellant.

Instruction No. 1, given at the instance of the appel-lees, was erroneous because it directed the jury to return a verdict for the plaintiffs, if they found that the defendant agreed to pay the plaintiffs the sum of $5,000 without reference to whether plaintiffs had performed the contract on their part. But this error was not prejudicial, for the reason that the undisputed evidence proved that plaintiffs, appellees, had performed the contract on their part. The court correctly defined and declared what was necessary to constitute a consideration» and correctly submitted to the jury the issue as to whether the contract contemplated that there should be proved a loss by appellees before they were entitled to recover. The court ruled correctly in refusing appellant’s prayers ■for instructions on his plea of the statute of frauds, because the testimony did not justify the submission of such issue. The undisputed facts proved an original undertaking by appellant to pay appellees $5,000. It was ¡not a collateral agreement on his part to pay the debts of another.

There was testimony to sustain the verdict. On the whole case, we conclude that the issues have been fairly tried and that the judgment is correct. It is therefore affirmed.