text:
    Taylor v. Cassell.
    4-2947
    Opinion delivered April 3, 1933.

      W. F. Reeves, for appellant.

      A. J. Parks and N. J. Henley, for appellee.
   Johnson, C. J.,

(after stating the facts). This appeal is prosecuted from a decree of the chancery court of Searcy County wherein the claim of Cordelia Cassell, guardian, against Walter E. Taylor, State Bank Commissioner, was allowed, classified and preferred as against common creditors of said insolvent bank.

The decree of the Searcy County Chancery Court was rendered on July 6, 1932, which was sometime prior to the rendition of this court’s opinión in the case of Taylor v. Bankers’ Trust Company, 186 Ark. 1109, 57 S. W. (2d) 1059, decided by this court on October 31, 1932.

Learned counsel for appellee states the issues in this case in brief as follows:

“There is only one distinction to be made between the case at bar and the one decided by this court October 31, 1932, wherein Walter E. Taylor, Bank Commissioner, was appellant and the Bankers’ Trust Company, guardian, was appellee. In the case just cited the guardian was associated with a trust officer, who was required by the guardian’s bond to also sign the checks drawn against the funds deposited. Whereas in the present case there was no trust officer associated with the guardian, and the guardian alone could draw against the funds held by her for the benefit of her wards.”

This court has reached the conclusion that the case of Taylor v. Bankers’ Trust Company, cited supra, decided all the issues presented on this appeal. The mere fact that there was a trust officer to countersign, checks executed by the guardian could not possibly make any difference. This court decided in the case cited that, where the United States Government paid over money to a guardian, it thereby lost control and dominion over such fund and was not thereafter interested in its deposit. The trust officer acting in the Bankers’ Trust Company case was not acting in behalf of the United States Government, but, on the contrary, was acting in behalf of the surety company which had "become the surety for the guardian.

In the case at bar, as in the Bankers’ Trust Company case, cited supra, the United States Government, upon surrender of checks to the guardian, lost all dominion and control over the proceeds of said checks, and therefore was not thereafter interested in its deposit. The guardian was at liberty to make deposit of funds at her discretion; therefore § 3466 of the Revised Statutes of the United States has no application.

Since the rendition of the opinion of this court in Taylor v. Bankers’ Trust Company, supra, the Supreme Court of the United States on March 13, 1933, passed upon the exact question here presented and held: “War risk insurance and disability compensation paid by Government to guardian of war veteran and deposited in bank was not entitled to priority upon bank’s insolvency as “debt due United States,” within Revised Statute 3466 (31 USCA, § 191), because the guardian, appointed by the State court was not an agent or instrumentality of the United States, and payment to the guardian vested title in the ward, and operated to discharge the obligation of the United States in respect of such installments.” Spicer v. Smith, 53 S. Ct. Rep. 415.

For the reasons aforesaid, the decree of the Searcy County Chancery Court will be reversed, and the cause remanded with directions that the claim be allowed only as a common claim against the assets of said insolvent bank.


source: Caselaw Access Project

author: Smith, J.

license: Public Domain

text:
    Maples v. Maples.
    4-2907
    Opinion delivered April 3, 1933.

      J. W. Atkinson, for appellant.

      M. V. Moody, for appellee.
   Smith, J.

This appeal is from a decree of the Pulaski Chancery Court rendered on May 14, 1932, in which the court refused to vacate and set aside a prior decree rendered on July 31, 1931, which last-mentioned decree had declared void a decree rendered on December 20, 1917, in the Pulaski Chancery Court in which B. F. Maples had been granted a divorce from his wife, Emma Lou Maples. The decree of July 31, 1931, appears to have been rendered in an ex parte proceeding, whereas the decree from which this appeal comes was an adversary proceeding in which the two women hereinafter referred to appeared and were heard.

The testimony developed the following facts: B. P. Maples filed suit for divorce in the Pulaski Chancery Court in 1917 against Emma Lou Maples, his wife, upon the ground of desertion, and upon service by the publication of a warning order a decree of divorce was rendered in proper form on December 20, 1917. Testimony was offered at the trial, from which this appeal comes, to the effect that the allegation of the complaint in that case that the plaintiff, B. P. Maples, was a resident of the State of Arkansas was false, he being at the time a resident of the State of Alabama, and to the further effect that the allegation that his wife, the defendant, had deserted him was also false.

After the rendition of the decree of divorce on December 20, 1917, B. P. Maples married Bertha D. ten days later in Lincoln County, Tennessee, and on December 26,1918, a child was born, who was given his father’s full name. After this second marriage Maples returned to the community in Alabama, where he had resided with the wife from whom he obtained the divorce in this State, and continued to reside in that community. He was, however, drafted into the Army of .the United States, and, while serving in that capacity at a training camp in the State of Mississippi, his death occurred on August 24. 1918. On July 24, 1924, a death compensation benefit was awarded Bertha D. and her son, B. F., Jr., by the United States Veterans’ Burean in the sum of $65 per month, which they have since continuously drawn from the Government.

B. F. Maples lived with his second wife in the same county in Alabama and not many miles from the home of his first wife, who, when asked, “When did you first learn that B. F. Maples had married Bertha D. Maples?” answered, “Soon after the marriage.” And she testified also that she learned that a child had been born “some three or four months after my husband’s death.” When asked, “Wdien did you first learn that Bertha D. Maples was drawing monthly death compensation benefits as the widow of B. F. Maples from the Government?” answered, “Something like a year ago.”

It may be said that the testimony establishes the fact that the original decree of divorce was procured in this State through a fraud practiced upon the court, in that B. F. Maples was not a resident of the State of Arkansas as he had alleged in his complaint. Whether he could have furnished any explanation of the apparent fraud if he were alive is a matter of speculation.

It may also be said that Mrs. Emma Lou Maples proceeded with reasonable expedition after discovering that a death benefit had been awarded to the widow of B. F. Maples; but this is not the date to be considered in determining whether she has been guilty of laches.

Without questioning the good faith of either of these unfortunate women, it may be said that neither is now the wife of B. F. Maples, who is dead. They are both single women. The case is like that of Moyer v. Koontz, 103 Wis. 22, 74 Am. St. Rep. 837, in which the Supreme Court of Wisconsin said: “The object of such a suit as this, when the husband is alive, is to adjudicate that whereas by the existing fraudulent decree the plaintiff is made single, she shall, by the demanded judgment, be adjudicated to still be married. It is the converse of the divorce suit, where the relief sought is that, whereas the plaintiff is now married, she may be adjudged to be single. But, in a ease like this, where, by the irrevocable act of death, her status as to her deceased husband has become fixed as that of a celibate, no such question can exist to be acted on. No decree that the courts of Wisconsin can render can change that status. It then becomes a mere adjudication as to a record, for the purpose of satisfying a sentiment or affecting property rights. As is well said in 2 Nelson on Divorce and Separation, § 1054: ‘The proceeding will be a mere contest for property, for, if the decree is vacated, the survivor cannot be restored to marital rights’ (or status).”

The case of Graham v. Graham, 54 Wash. 70, 102 Pac. 891, was one in which a decree of divorce was attacked upon the ground that it had been procured through fraud practiced upon the court, and is very extensively annotated in L. R. A. 1917B, the annotation extending from page 409 to page 512. The annotator says in his note that: “Whoever would have a judgment set aside on the ground that it was obtained by fraud, duress, accident, mistake, or surprise must act diligently in seeking relief, and the rule requiring diligence and prompt action attacking judgments upon such grounds is the same respecting decrees of divorce as other judgments and decrees. ’ ’

Among the numerous cases cited in support of this statement of the law is our own case of Corney v. Corney, 97 Ark. 117, 133 S. W. 813, in which a headnote reads as follows: “Where the defendant in a decree of divorce waited two years before taking steps to vacate the decree upon the ground of the fraud of her attorneys and until the plaintiff had married another woman, her application should be denied on account of laches. ’ ’

We there quoted from Bishop on Marriage and Divorce (vol. 2, § 1533) as follows: “ ‘There are excellent reasons why judgments in matrimonial causes, whether of nullity, dissolution or separation, should be more stable, certainly not less, than in others, and so our courts hold. The matrimonial status of the parties draws with it and after it so many collateral rights and interests of third persons that uncertainty and fluctuation in it would be greatly detrimental to tbe public. And, particularly to an innocent person wbo bas contracted a marriage on faitb of the decree of the court, the calamity of having it reversed and the marriage made void is past estimation. These considerations have great weight with the courts, added whereto there are statutes in some of the States according a special inviolability to such judgments.’ ”

Here, the first wife, having been advised that her husband had married another woman in 1917, waited until after her husband was dead and until 1931 before proceeding to have the divorce decree vacated. We feel constrained to hold that shé waited too long, and is barred by her laches.

The decree of the court below, from which this appeal comes, which vacated and set aside the decree of divorce, will therefore be reversed, and the cause will be dismissed.


text:
    Consolidated Indemnity and Insurance Company v. Fischer Lime & Cement Company.
    4-2948
    Opinion delivered April 3, 1933.

      M. Danaher and Palmer Danaher, for appellant.

      Owens & Ehrman and Rose, Hemingway, Cantrell & Loughborough, for appellee.
   Smith, J.

Separate suits were brought by the Fischer Lime & Cement Company and the Big Rock Stone & Material Company against the Merrill Engineering Company and the Consolidated Indemnity & Insurance Company as the surety of its codefendent, which suits were consolidated and tried together, and a decree was rendered in favor of both plaintiffs against both defendants.

The Merrill Engineering Company entered into a contract with the State Highway Commission to construct a part of a State highway, and gave bond, as required by law, for the due performance of the contract, with the Consolidated Indemnity & Insurance Company as its surety. Each plaintiff furnished the contractor with certain material used in the performance of the construction contract, upon which partial payments were made. The value of the material and the balance due thereon is not disputed, and only the surety company has appealed from the decree adjudging liability against both defendants.

The surety company defends upon two grounds, (1) that no statement of the account was filed with the secretary of the Highway Commission within thirty days after the completion of the work as required by § 53 of act 65 of the Acts of 1929 (vol. 1, Acts 1929, page 326); and (2) because no action was brought on the bond until more than six months after the date of the final estimate of the construction work given the contractor by the State Highway Commission as required by § 3 of act 368 of the Acts of 1929 (vol. 2, Acts 1929, page 1487).

As to the defense that the claim was not filed with the secretary of the Highway Commission within thirty days after the completion of the work, it may he said that it is first insisted by appellees that there was a substantial compliance with the statute in this respect. It is also insisted that this requirement appearing in act 65 was repealed by implication by act 368, and, as we have concluded that appellees are correct on this last proposition, we do not decide whether they are also correct on the first.

It is quite obvious, in fact it does not appear to be questioned, that the bond sued on was executed pursuant to the requirements of act 368. There had, prior to the enactment of this statute, been numerous suits, which finally came before this court on appeal, in which questions were raised as to the extent of the liability of the surety on contractors ’ bonds, and act 368 was made broad enough in its terms to include all items which had been previously questioned or would likely be used or employed subsequently in the performance of the construction contracts there enumerated.

Section 53 of act 65 requires a bond in an amount at least equal to the amount of the contract. Act 368 does not specify the amount of the bond. Section 53 of act 65 enumerates the items' for which, and the persons to whom, the surety shall be liable, and there follows in the same paragraph the provision that claims for the material, etc., there above-mentioned,‘‘ shall be filed with the secretary of the Highway Commission within thirty days after the completion of the work.” Act 368 includes all the items embraced in act 65, and adds materially to the liability of the surety, without imposing the condition that claims against the bond be filed with the Highway Commission, as does act 65.

Act 65 provides that the contractor’s bond shall be conditioned “as the Commission (Highway) may remfire.” whereas § 3 of act 368 provides that the bond shall specifically include liability “for the things enumerated in § 1 hereof,” and further provides that “the failure or refusal of said officer or persons to include said provisions in said bonds shall not prevent the holders or owners of claims, as provided in § 1 of this act, from collecting said claims or bringing suits and enforeing such claims against said bonds.” Immediately following is a provision regulating such suits, which does not contain the requirement that the claims be exhibited to and filed with the Highway Commission, but it is provided only “that all suits to enforce claims on bonds as provided herein shall be commenced within six months from the date of final estimate to the contractor. ’ ’

Section 53 of act 65 contains no limitation as to the time within which suits may be brought, provided the claim is filed with the secretary of the Highway Commission within thirty days after the completion of the work, or within six months from the time the work was abandoned by the contractor, if such were the case, unless the Commission should enter an order extending the time for filing such claims. Act 368 does contain a limitation upon the time within which suits shall be brought, which period of limitation runs, not from the time of filing the claim with the Highway Commission, for no such requirement is imposed, but “from the date of final estimate to the contractor.” The only condition upon the right to sue under act 368 is that the suit shall be commenced within six months from the date of final estimate to the contractor.

As a general rule, repeals by implication are not favored, and courts are reluctant to hold that there has been an implied repeal of a statute where that purpose was not expressed. This subject was thoroughly and recently considered in the case of Louisiana Oil Refining Company v. Rainwater, 183 Ark. 482, 37 S. W. (2d) 96. In the application of the rule stated, we there first held that a statute under review had not repealed a prior statute by implication, but, upon further consideration under a petition for .rehearing, we concluded that there had been an implied repeal, and, in so holding, it was said: “As stated by Mr. Justice Field in United States v. Tynen, 11 Wall. (U. S.), p. 88, and quoted with approval on rehearing in Mays v. Phillips County, 168 Ark. 829-833, 279 S. W. 366: ‘When there are two acts on the same subject, the rule is to give effect to both if possible; but if the two are repugnant in any of their'provisions, the later act, without any repealing clause, operates, to the extent of the repugnancy, as a repeal of the first, and, even where two acts are not in express terms repugnant, yet if the later act covers the whole subject of the first, and embraces new provisions, plainly showing that it was intended as a substitute for the first act, it will operate as a repeal of that act.’ And this is true, even though the old act contains ‘provisions not embraced in the new.’ Wilson v. Massie, 70 Ark. 25, 65 S. W. 942; Chicago, R. I. & P. Ry. Co. v. McElroy, 92 Ark. 600, 123 S. W. 771; Eubanks v. Futrell, 112 Ark. 437, 166 S. W. 172; Babb v. El Dorado, 170 Ark. 10, 278 S. W. 649; State v. White, 170 Ark. 880, 281 S. W. 678. The difficulty is not in stating the rule, as it appears to be one of universal application, but in applying it to a given case.”

We therefore announce our conclusion that, as act 368 is a later act and impliedly repeals the requirement as to filing claims contained in the earlier act, filing the claim with the State Highway Commission is not made a condition essential to bringing suit under the later act.

The question remains whether the suit was commenced within six months from the date of final estimate to the contractor, and upon this question of fact the testimony was to the following effect: The actual construction work was completed on August 25,1931, and the procedure in regard to obtaining final estimates in this and other similar contracts was as follows: The engineer having supervision of the work inspected it and checked it, making such measurements as were required to ascertain the amount due the contractor. The report thereon would be sent to the district engineer having charge of the work in the district where the work had been done for inspection, and any revision thought necessary. The district engineer then made report to the State Highway Commission in Little Bock, where Mr. Zass, in charge of this department, reehecked the work. In the instant case this was done by Mr. Zass on September 25,1931, on which date the estimate was mailed to the contractor at its office in Jackson, Mississippi, with the request that the usual release be executed by the contractor, in which the latter, if he executed the release, agreed on the total payment to be made. This was done pursuant to article 9 of the general specifications, under which this and similar contracts were let, reading as follows: ‘ ‘ The Commission, upon the receipt of the engineer’s certification of completion and final estimate, and upon receipt of satisfactory evidence from the contractor that all persons furnishing labor or materials have been paid in full, and all persons claiming damages to property or person because of the carrying on of this work have been settled with, or their claims dismissed, or the issues joined, shall certify the estimate for final payment, after previous payments have been deducted, and shall notify the contractor and his surety of the acceptance of the road. On delivery of the final payment, the contractor shall sign a written acceptance of the final estimate as payment in full for the work done. All prior partial estimates and payments shall be subject to correction in the final estimate and payment. ’ ’ When the requirement in this particular had been met, all the papers in the case were then referred to the auditorial department of the Commission for action by it, subject to the final review of the chief engineer of the Highway Department. On October 7 Zass wrote the contractor as follows: ‘ ‘ Glentlemen: The final estimate on this project has been passed to the auditor and is now ready for payment with the exception of the settlement of a claim filed by R. M. Leatherman, of Lonoke, Arkansas, in the amount of $673.70, which includes a labor bill of Craig Harper, in the amount of $153.50. Please furnish this office with evidence that the above claim has been satisfied and the voucher will be released.”

Zass testified that the estimate sent the contractor on September 25 was not supposed to be a final and conclusive statement as to the amount due, but was an intermediate step taken in order that the contractor might examine it and make claim for any additional amount to which he considered himself entitled, and that in the instant case the contractor was not satisfied with the estimate, which was for $7,280.60, but claimed an additional credit of $750. Upon this subject the vice president of the Merrill Engineering Company having the settlement in charge testified as follows: “After talking with Mr. Zass, and Mr. Zass went with me to some other department — I forget the gentleman’s name that we talked to about that' — and they agreed to allow the $750, and I just added it in pencil, and we never received another typewritten copy.” The witness fixed the date of this revised and final estimate as of October 1, 1931, and we think it was from that date that the six months ’ period of limitation should be computed, as the statute does not run from the date of a preliminary estimate, hut from the date of the final estimate, which we construe to mean the conclusion and determination of the person having final authority to make that finding.

In the case of Southern Surety Co. v. Western Pipe & Steel Co., 16 Fed. (2d) 456, the headnote reads as follows : ‘ ‘Under a contract for public work, providing that final payment should be made within 30 days after the final estimate had been approved by the chief engineer, the date of ‘final settlement of the contract,’ within the meaning of act August 13, 1894, as amended by act February 24, 1905 (Comp. St., § 6923), was not when the final estimate was made by the district engineer, hut the date of its approval by the chief engineer. ’ ’

As both suits were brought within less than six months after October 1, 1931, they were brought within the time limited by law. The judgments must therefore be affirmed, and it is so ordered.


author: Humphreys, J.

text:
    Smith v. Mergenthaler Linotype Company.
    4-2936
    Opinion delivered April 3, 1933.

      John C. Ashley and Shields M. Goodwin, for appellant.

      Fred A. Isgrig, for appellee.
   Humphreys, J.

Suit to recover a judgment for $894.44 and to foreclose a chattel mortgage was instituted in the chancery court by appellee, a foreign corporation engaged in manufacturing and selling linotype machines, against appellant, who had purchased a secondhand linotype machine from it. At the time of the institution of the suit, a balance of $894.44 was due on the machine, which appellant refused to pay. The notes evidencing the balance and the chattel mortgage given on the machine to secure them were made the basis of the suit.

The defense interposed to the suit by appellant was that the contract was void and nonenforceable because made in the State ¡by a foreign corporation without first complying with the laws of the State authorizing it to do business here.

The cause was submitted to the court upon the pleadings and testimony, resulting in a finding that the transaction was interstate and a judgment for the amount sued for and a decree of foreclosure, from which is this appeal.

The record reflects that appellee, a foreign corporation, had its main office and factory in New York with an office at New Orleans as headquarters for its traveling salesmen; that it manufactured and sold linotype machines through its traveling salesmen on written orders which had to be approved and accepted, before effective, by its executive officers in the State- of New York; that it sold to The Herald, a newspaper published at Bison, a new linotype machine, taking as part payment a second-hand linotype machine, in the latter part of 1926, which it stored or left in place in said newspaper office until it disposed of same in February, 1927, to appellant; that the sale was made by appellee’s traveling salesman to appellant on appellant’s written proposal to pay $50 cash and notes in $20 denominations, which proposition was accepted by the executive officers of appellee in New York; that, pursuant to the agreement, appellant executed a series of fifty-seven notes for a total amount of $1,596.50, the purchase price of the machine, and a chattel mortgage on the machine to secure same dated February 14, 1927, and payable at Bison, which were mailed to appellee in New York on the 21st day of February, 1927; that the mortgage was recorded in Izard County on the l'2th day of March, 1927; that, upon receipt of the notes and mortgage, the machine was shipped directly from Bison to Melbourne.

The sole question presented to this court on trial de novo upon the pleadings and testimony is whether the transaction was interstate or intrastate. The sale of the new linotype machine to The Herald was clearly an interstate transaction. The acceptance of the old lino-type machine in part payment therefor was allowable as a part of the interstate transaction, as much so as if the whole consideration had been paid in cash. The right to convert the property thus received in payment of the new linotype machine into cash and negotiable paper was a necessary incident to the interstate transaction and a continuation thereof. Otherwise, it would have been necessary to incur the expense of shipping the secondhand linotype machine out of the State in order to convert it into money or its equivalent. The statutes of this State requiring foreign corporations to comply with certain conditions before doing intrastate business were not intended to place such a burden upon the enforcement of good faith interstate transactions. The facts in the instant case bring it within the rule announced by this court in the case of L. B. Powell Company v. Roundtree, 157 Ark. 121, 247 S. W. 389, and approved in the later case of Linograph Company v. Logan, 175 Ark. 194, 299 S. W. 609.

No error appearing, the decree is affirmed.


author: Humphreys, J. Butler, J.,

text:
    Independence County v. Independence County Bridge District No. 1.
    4-2943
    Opinion delivered April 3, 1933.

      Coleman & Reeder, W. K. Ruddell and S. C. Knight, for appellant.

      I. J. Matheny, for appellee.
   Humphreys, J.

By act No. 338 of the General Assembly of 1925 a bridge district was created for the purpose of building a bridge across one of the principal rivers of the State in Independence County, and along the route was one of the State’s principal highways. In order to ascertain and report to the bridge commissioners the resources that might be obtained to aid in building the bridge, a committee was appointed to secure the promise of aid from the State and from the county.

The county court of Independence Count}'- made and entered the following order:

• ‘On this day was presented to the court the petition of I. J. Matheny, secretary of Independence County Bridge District, stating to the court that said bridge district commissioners have met and organized and are preparing to circulate petitions to the landowners of said district with a view of ascertaining whether a majority favor the construction of said bridge. Petitioner further states that, should said bridge be constructed, the lands of the district would be bonded to pay for said construction. The petitioner further alleges that said bridge if constructed would be of material benefit to the whole county of Independence, and praying the court that a perpetual order be made paying out of the special road fund of the county yearly, five thousand dollars upon said bonds.
‘ ‘ And the court, being fully advised in the premises, is of the opinion that said bridge, if built, will be of ma-. terial benefit to said county, and that said county should pay a part of the expense of said bridge, and further that said payment should be made from the special road fund of the county.
“It is therefore considered, ordered and adjudged by the court that said appropriation of five thousand dollars be and the same is hereby made perpetual to be paid yearly upon said bonds should same be issued.”

By order of the bridge commissioners, a statement was printed and circulated to the taxpayers, informing them that the State of Arkansas had agreed to bear one-half of the expense of constructing the bridge, and that Independence County would donate from turnback money the sum of $5,000 per annum to aid in the payment of the bonds, and upon this statement the taxpayers signed the petition circulated in majority, both as to number and value, to tax themselves in order to build the bridge. Bonds were issued and sold and the bridge was constructed at an approximate cost of $600,000.

The record is silent as to the date when the bridge was completed and as to the number of bonds that had matured and the interest due thereon.

In August, 1932, the bridge district filed a claim in the usual form against the county for $5,000 on the “donation or appropriation of special road funds for Independence County by order of the county court made and entered of record June 1, 1925.” The claim was disallowed by the court in an order which also rescinded and set aside the order of the court made June 1, 1925. On appeal to the circuit court, the proceedings in the county court in 1925 were offered in evidence and also the testimony of the present county judge and clerk regarding the status of the turnback funds, the number of miles of county roads and the condition of the roads, from which it appeared that, if the $5,000 per annum .were paid from the turnback fund, there would not be sufficient funds from that and other sources to maintain the county roads in a usable condition. The county judge testified from the facts within his own knowledge and the information he had received that he had concluded that it was not for the best interest of the county and the various road districts thereof that payment be made under the order of June 1,1925.

On the pleadings, exhibits and evidence adduced, the ‘case was submitted to the circuit court, which held that the order of the county court of June 1, 1925, constituted a binding contract upon the county, that it could not be abrogated by the present county judge, and adjudged that the claim should be allowed directing its .judgment to be certified to the county clerk of Independence County, and that the order and judgment of the county court last made be set aside and held forever naught.

On appeal to this court, it is contended by the county: First, that the order or judgment of the county court made June 1, 1925, was not a final judgment in that it was indefinite and conditional; and, second, that the court had no authority to make the order because it was an attempted diversion of the turnback money from the uses authorized by the act of the General Assembly which granted said funds to the county.

(1) The argument is made that the order or contract is indefinite and uncertain because no definite number of payments was agreed upon or incorporated into the order. It is true that the order or contract does not specify the number of payments to be made, but it is clear that such annual payments are to continue during the life of the bonds and no longer. The final payment of the county is necessarily restricted to the final payment of the bonds. It is not to be supposed, as suggested, that the' bridge commissioners would unduly extend the payment of the bonds in order to continue indefinitely the county’s contribution to the enterprise. It is common business knowledge that, in order to float a large bond issue, the payment thereof must be within a reasonable time.

(2) The order or contract, on its face, provides "that the annual appropriation for a contribution to the enterprise shall be paid out of the special road fund, or what both appellant and appellee treat as the gasoline turn-back fund, by the State to the county. It is argued that, at the time the order or contract was made, the gasoline turnback fund could not be used in building bridges. The special acts of the Legislature relating to the use to be. made of the turnback fund provided that it may be used “for constructing and maintaining roads” — “for use on county roads” — and “for aid of county highway fund.” See act No. 5, § 21, Special Acts of 1923; act No. 147 of Acts 1925; acts Nos. 11 and 18 of Acts of 1927. The provisions quoted above from the special acts referred to are broad enough to include building and maintaining bridges, which are necessary integral parts of highways. The mere fact that building and maintaining bridges is specially mentioned in act No. 63 of the Acts of 1931, relative to the use of turnback fund, does not mean, as argued, that a different Legislature in passing the prior acts intended to prevent the use of the turnback fund in building and maintaining bridges. Had all the acts been enacted at the same session of the Legislature, there would be some force in appellant’s argument that special reference made to the use of the fund for building and ■maintaining bridges in the last act and not in the prior acts evidenced an. intention that such use thereof was not intended by the Legislature in the prior acts. Not so when the several acts were enacted at different times by different Legislatures. Under these circumstances, the intention of each act would and must depend largely on the breadth and scope of the language used.

Lastly, it is argued that the contract or order was void because contrary to public policy. The record does not reflect that any injury resulted from the contract. The petition filed in the county court to obtain the donation to the enterprise alleged that the construction of the bridge would be of material benefit to the whole county of Independence, and the order and contract recited that the construction of the bridge would be of material benefit to the county.

The judgment is affirmed.

Smith and Butler, JJ., dissent.

Butler, J.,

(dissenting). In my opinion, the judgment is void on every ground stated by counsel for appellant, and I respectfully dissent.

In the first place, the judgment was not final but was contingent upon an event which might never happen. That it has happened does not render the judgment valid, for that must be determined from the language of the judgment itself. It is for no definite amount but for a yearly fixed sum for an indefinite and uncertain period: “It is therefore ordered, etc., * * * that said appropriation be, and the same is hereby, made perpetual.”

Judgments must be certain. Their validity and binding force must rest upon facts existing at the time of their rendition. They take their validity from the action' of the courts, and not from what persons may or may not do after the court has rendered such judgments. Consolidated, etc., Co. v. Huff, 62 Kan. 405; Puette v. Mull, 175 N. C. 535; Johnson v. Carver, 175 Pa. 200.

The following statement is made in the majority opinion: “It is true that the order or contract does not specify the number of payments to be made, but it is clear that such annual payments are to continue during the life of the bonds and no longer. The final payment of the county is necessarily restricted to the final payment of the bonds.” In order to find warrant for this statement, the court must go .beyond the language of the judgment and indulge in surmise and speculation. This, I submit, is an improper way to interpret the language of a judgment or to test its validity. Continuing, the court says: “It is not to be supposed, as suggested, that the bridge commissioners would unduly extend the payment of the bonds in order to continue indefinitely the county’s contribution to the enterprise. It is common business knowledge that in order to float a large bond issue the payment thereof must be within a reasonable time. ’ ’ It is, perhaps, true that the bridge commissioners would not intentionally extend the payment of the bonds, and that the maturities of the bonds will fall due within a reasonable time, but it does not follow by any means that the payment will not be unduly extended beyond the maturity, and may be for a long time thereafter, from causes arising which could not have been reasonably foreseen or prevented. It is also “common business knowledge,” which has been sharpened and made alert by recent events, that bonds which were expected to be paid at a certain time may, unhappily, never be paid or their payment extended to a far distant day. Therefore, if the judgment means what it says, it is entirely possible that the $5,000 per annum payment may be indeed perpetual. I repeat that the order appears to me to violate the first requisite of a valid judgment; that it must be certain in the amount which must be paid.

The special road fund named in the judgment was a gift from the State to the county, and the former had the right to, and did, prescribe and limit its use. That prescription and limitation is clear and explicit. The controlling law at the time the county court rendered its judgment is to be found in § 21 of act No. 5 of the Extraordinary Session of 1923, and thus speaks: “The funds thus paid into the county highway improvement fund shall be by the county court expended upon the public highways of said county, and it shall be the duty of the county court to fairly and equitably apportion the funds so paid into the county highway improvement fund at the option of the court among the various road districts and road improvement districts or road districts only -in said county for the purpose of constructing and maintaining the road, whether hard surface or earth road, and such apportionment shall be made by the county court after taking in consideration the relative importance of the roads of the county.”

In the cases of Stanfield v. Kincannon, 185 Ark. 120, 46 S. W. (2d) 22, and Anderson v. American Bank & Trust Co., 178 Ark. 652, 11 S. W. (2d) 444, we held that the fund received from the State by the county, called the “turnback fund,” is not county revenue, but State revenue; and in Hastings v. Pheifer, 184 Ark. 952, 43 S. W. (2d) 1073, we held that it is immaterial by what name the fund is called where it is shown that it was received, from the State to be applied to a specific purpose. In all of the acts dealing with State aid to the counties for the improvement of highways, prior to act 63 of the Acts of 1931, State aid was limited to the improvement of county roads. In the last-named act, which is not retroactive and therefore cannot affect previous orders made with respect to the turnback fund, the power is given county courts to expend a part of the fund for the payment of bridges built by bridge districts, the amount to be paid the bridge districts to be determined by the county court or judge thereof. That act, however, as we have seen, relates only to the disposition of the turnback fund from and after the passage of that act.

We have held that county bridges were a necessary and integral part of the road which crossed them and expenses therefor were to be considered as expenses incurred on county roads; but it is a far cry from a county bridge to a bridge such as the one involved in the instant case. This is a bridge one and a half miles long erected at a cost of $600,000 across one of the principal rivers of the State and as a part of one of its main highways, and to say, as does the court, that “the provisions above (referring to the acts of the Legislature) are broad enough to include building and maintaining bridges which are necessary parts of the highways” is to totally ignore the character of the bridge under consideration which, in no sense, is a county bridge and the expenditure from the turnback fund thereon was wholly unauthorized.

The court says: “Lastly, it is argued that the contract or order was void because contrary to public polic}'-. The record does not reflect that any injuries resulted from the contract.” On this point the facts are undisputed that the county has 900 miles of unsurfaced roads to maintain, and that there would be left from the turn-back fund after the $5,000 appropriation demanded is paid a little in excess of $6,000 which, with the-three-mill county road tax, will be totally inadequate to maintain the roads of the county. It seems to me that much injury will result. It is to be presumed that the vast majority of the county’s population resides on or near the county roads, and, if these become impassable, -as it is the opinion of the county officers they will, but little good will result to the people from the magnificent-bridge and the State’s highway and the enforcement of the order of the county court will, in the end, prove disastrous to the county.

It is my opinion that the judgment of the circuit court should be reversed, and the order of the county court declared void.

Mr. Justice Smith concurs in the view here expressed.


author: Kirby, J.,

text:
    Gage v. Inman.
    4-2892
    Opinion delivered April 3, 1933.

      Lee G. King, for appellant.

      G. C. Carter and J. P. Clayton, for appellee.
   Kirby, J.,

(after stating the facts). It is insisted that the court erred in denying the appellants’ prayer for reformation of the mortgage, and also in rendering personal judgment against appellant, Mrs. Florence Gage, there being no testimony showing execution of the note secured by the mortgage by her, and she having denied its execution and any indebtedness whatever to appellees.

Mrs. Gage testified that she had made no agreement with any one to mortgage her South Ozark property, and had no intention of mortgaging same, and did not know at the time she signed the mortgage that her property was included therein. That, if she had known it, she would not have signed same, and that her purpose and intention in signing the mortgage was to relinquish, subject to the conditions of the mortgage, her right of homestead and dower in and to her husband’s Webb City real estate. That she did not sign the note made by her husband and Mr. Inman and Mr. Harris to Mr. Volentine.

The scrivener, who prepared the mortgage upon the request of one of Mr. Inman’s boys and wrote into the mortgage the description of the town lots as furnished him by appellee’s son, stated that he presented the mortgage to each of appellants, and each appeared to understand what the purpose was, and that each signed it apparently without reading it.

Harris, one of the appellees, stated that it was his understanding that the agreement was that the appellees were to have a mortgage on Ed Gage’s Webb City property and nothing more.

Gage testified that his agreement with appellees was that he was to mortgage his Webb City real estate, and nothing else. That, when he signed the mortgage that was presented to him by Mr. Law, he did not know that other property than his Webb City property was described therein; that he signed the mortgage without reading it, and did not furnish the numbers of his property or its description to Mr. Law at all.

The testimony was clear, unequivocal and decisive that there was no agreement between the appellees and the appellants that Mrs. Gage’s separate property should be mortgaged, and no intention on their part to execute a mortgage thereon. It likewise showed that Mrs. Gage had not executed the note for securing the payment of which the mortgage was given. The court erred in holding otherwise and in not reforming the mortgage and excluding from its provisions lots 7, 8, 9, 18, 19 in block 1, South Ozark, in the reformation thereof.

In addition to the testimony of witnesses already set out, the mortgage itself does not purport to have been executed by Mrs. Gage with any intention to bind herself except in releasing dower and homestead to her husband’s property conveyed therein. The granting-clause of the mortgage, which was exhibited with the complaint, reads:

“KNOW ALL MEN BY THESE PRESENTS:
“That Ed Gage, for and in consideration of the sum of one dollars ($1) to us in hand paid, and the premises hereinafter set forth, do hereby grant, bargain, and sell unto John T. Harris & John Inman, and unto their heirs and assigns forever, the following property, situated in Franklin County, Arkansas:
“Lots (2, 3, 6) 7, 8, 9, 18, 19, block one in South Ozark, and lots 4 & 24, west side or west half (%), lot 5 in block one. Also lots 7, 8, 9, 10, 11, 12, 13, in block one in Webb City, Ark.”

The warranty clause reads:

“I hereby covenant with the said John T. Harris & John Inman that I will forever warrant and defend the title to the said property against all lawful claims.”

The relinquishment of dower and homestead clause reads:

“And I, Florence Gage, wife of the said Ed'Gage, for the consideration aforesaid do hereby release unto the said John T. Harris & John Inman all my right of dower and homestead in and to the said lands.”

The sale was on condition that said Ed Gage was indebted to the said Inman and Harris, etc., and the clause reads in part:

“Now, if I shall pay said moneys at the times and in the manner aforesaid, then the above conveyance shall be null and void.” After authorizing the sale of the property, etc., the mortgage concludes:
“And the proceeds of said sale shall be applied, first, to the payment of all costs and expenses attending said sale; second, to the payment of said debt and interest, and the remainder, if any shall be paid to the said grantor. ’ ’

In the last clause it was said: “We hereby waive any and all rights of appraisement or redemption, etc.,” and the instrument was signed by O. E. Gage and Florence Gage. The' acknowledgment shows only Ed Gage as grantor in the first section thereof; and the voluntary appearance of Florence Gage, his wife, who certified that she, in the absence of her husband and of her own free will, “executed the foregoing deed and signed and sealed the relinquishment of dower and homestead therein expressed, for the consideration and purposes therein contained and set forth, without compulsion or undue influence of her said husband.”

The mortgage itself does not purport to be and was not a conveyance by Florence Gage of her property or any other property, except the relinquishment of dower and homestead, etc., by her in accordance with its terms. Her name was not included in the granting clause, nor an3r other clause of the instrument that would show any intention to mortgage the property, except for security of the payment of the debt of O. E' Gage, none of which she owed or had agreed to pay according to the terms of the note, which was not executed by her. In the construction of deeds, the first clause thereof controls and under our numerous decisions, the wife not having joined in tlie granting clause thereof, it is held that her relinquishment of dower and homestead would not have effect to convey the fee. Jones v. Hill, 70 Ark. 34, 66 S. W. 194.

-She could, of course, have mortgaged her separate property to secure her husband’s debt, but she did not do so in the execution of this instrument, the only effect of which was to relinquish her right to dower and homestead in his lands according to the recitals and provisions of the mortgage.

The court also erred in rendering a personal judgment against the wife. She denied in her answer that she had executed the note, denied any indebtedness whatever to appellees, and there was no proof contradicting her statements or tending to show that she had executed the note or was in any way obligated to its payment; and the court’s finding otherwise was certainly contrary to the great preponderance, if not all, of the testimony.

The decree must therefore be reversed, and the cause remanded with directions to reform the mortgage by excluding therefrom the separate property of the wife; and judgment of foreclosure should be rendered only against the husband’s property as shown therein for payment of the judgment against him for liability upon the note upon which appellees were indorsers and for security of which the mortgage was executed. No personal judgment should have been rendered against the wife, she being entitled to a reformation of the mortgage to exclude her property therefrom, and she should have judgment for her costs herein expended. It is so ordered.


text:
    National Life & Accident Insurance Company v. Davison.
    4-2848
    Opinion delivered April 3, 1933.

      Roy Penix, for appellant.

      Giles Dearing, for appellee.
   Kirby, J.,

(after stating the facts). It is undisputed that Sadie Davison was in no way related to the insured, nor did she have an insurable interest in her life as the court told the jury. It is likewise undisputed that the insured, Lucy Mitchell, was suffering from heart disease and dropsy and not in sound health on the day of the application, nor on the date of the-issuance of the policy, and that the policy was never delivered to Lucy Mitchell.

It is insisted that, because of the provision in the application that “no obligation shall exist against the company unless the policy of insurance issued in pursuance thereof shall be delivered to the insured,” the policy was void for want of delivery. An insurance' company may limit its liability to recovery of premiums paid if an insured was not in sound health on the date of the policy, and a condition that the policy shall not take effect unless delivered during the lifetime and good health of the insured is a valid condition precedent to the liability of the company. 37 C. J. 405; American National Ins. Co. v. Lacey, 182 Ark. 1158, 34 S. W. (2d) 757; Jenkins v. International Life Ins. Co., 149 Ark. 265, 232 S. W. 3; Pyramid Life Ins. Co. v. Belmont, 177 Ark. 576, 7 S. W. (2d) 32; 37 C. J. 400.

Although a provision in the policy that there should be no liability of the insurance company unless the insured was in sound health at the time the delivery was made can be waived, this policy limited the liability of the company to the return of the premiums paid, the company having the right to declare the policy void at any time within the contestable period if it discovered that the insured suffered with certain kinds of diseases, heart disease, etc., and was a provision that could not be waived merely by a soliciting agent having no authority to issue policies or pass upon applications; and under the terms of the policy it was stipulated that there could be no waiver thereof except “by being specifically recited in the ‘Space for Indorsements’,” which was not done in this case. Souza v. Metropolitan Life Ins. Co., 270 Mass. 189, 170 N. E. 62.

The undisputed testimony here shows that the insured was afflicted with both heart disease and dropsy when the application for the policy was made, wherein it was stated that she had had neither disease, and that she died of said diseases within two weeks from the date of the application, and on the afternoon of the day the policy of insurance was delivered, not to the insured but to the beneficiary who had no insurable interest in the life of the insured. Under these circumstances the clause in the policy limiting the liability to the return of the premiums, etc., and giving the company the right to declare the policy void would be binding, and was such a condition as could not be waived by the agent delivering the policy. National Life Ins. Co. v. Jackson, 161 Ark. 297, 256 S. W. 378.

The soliciting agent and the superintendent of the company, respectively, had no authority to waive any provisions of the policy or to pass on the application for the insurance, it being necessary for it to be submitted to the home office. Sadler v. Fireman’s Fund, 185 Ark. 480, 47 S. W. (2d) 1086; American Ins. Co. v. Hampton, 54 Ark. 75, 14 S. W. 1092; Inter-Southern Life Ins. Co. v. Holzhauer, 177 Ark. 927, 9 S. W. (2d) 26.

The contention that there was a waiver of the provision of the policy relative to Bright’s disease and diseases of the heart, kidneys and liver, etc., by the statement, conceding it to be true, of appellee that she notified the agent delivering the policy on the day of its delivery that the insured was sick and he should go to see her, is not warranted, since it could not have given knowledge to the company that the insured was suffering from heart disease and dropsy, both of which diseases she stated she had never had at the time of her application for the policy two weeks before. In other words, it would not be notice that the sickness of the insured resulted from any of the diseases mentioned in the said warranty or representation in the application. 14 R. C. L. 1172-73.

As said in Planters’ Mutual Ins. Co. v. Loyd, 67 Ark. 585, 56 S. W. 44: “Nor will an act which impliedly waives one ground of forfeiture affect another forfeiture of which the company and its agent were ignorant. ’ ’

The undisputed testimony shows that appellee had no insurable interest in the life of the insured, and the jury could have found that the suggestion was made by her that she would furnish the money to pay the premium if the insured would make the policy payable to her. The court should have instructed the verdict on the ground that the policy had not been delivered to the insured during her lifetime.

The judgment is reversed, and the cause dismissed


author: Mehaffy, J.

text:
    Smith v. Walker.
    4-2955
    Opinion delivered April 3, 1933.

      Jordan Sellers, for appellant.

      Coulter & Coulter, for appellee.
   Mehaffy, J.

This suit was begun in the Union Chancery Court by Bellé Walker and her husband, G. P. Walker, against the appellant, J. M. Smith.

Appellee, at one time owned an interest in certain real estate in Gregg County, Texas. This land became valuable oil producing property. The appellee, prior to December, 1931, had executed conveyances to all of her interests in these lands. In an effort to recover some interest in the property, she gave a power of attorney to J. R. Cheek.

The appellant learned that the appellee had some interest in oil lands in Texas, and he went to see her about representing her in recovering her interest in the lands. He was told at the time he visited her that she had entered into contracts with other parties, but he finally entered into a contract with the Walkers to represent them for one-half of what he recovered, and appellees say that he was to “knock out these other parties.”

The Walkers, at this time, lived at Texarkana, and the appellant brought them to El Dorado and secured an order of the probate court of Union County declaring appellee insane, and appointing appellant as her guardian. Appellant filed a bond as guardian in the sum of $200, with G. F. Walker, husband of Belle Walker, and Walter L. Brown, attorney, as his sureties. After appellant was appointed guardian, he entered into a contract with Walter L. Brown, attorney, to represent him in recovering his ward’s interest in the property in Texas, and agreed to pay Brown one-half of any amount recovered. Brown then employed the appellant to investigate the facts.

Suit was thereafter instituted in the district court of Gregg County, Texas, by Walter L. Brown as next friend of Belle Walker, an insane person. Appellant was a party to this suit, both in his individual capacity and as guardian.

On December 5, 1931, the court heard evidence and adjudged Belle Walker sane, and the Sinclair Oil & Gas Company was ordered to pay $15,000 to clear the property of the Walker claim; $7,500 to Cheek, who held power of attorney from appellee, and $7,500 to Belle Walker. The Sinclair Oil & Gas Company gave Cheek and Belle Walker each a. draft for $7,500. Walter L. Brown, after appellee had indorsed her draft and delivered it to him, gave her his check for $3,750. Brown indorsed the Sinclair draft and delivered it to appellant with instructions to deposit $3,750 to Brown’s account to cover the Walker check. Appellant paid Brown $600 and a lawyer in Texas, where the case was tried, $300, and of the $3,750, the appellant received $2,850 in addition to what he paid the attorneys.

On January 11,1932, after the decree of the court in Texas finding Belle Walker to be sane, the probate court of Union County, Arkansas, declared her sane. In June, 1932, after appellee ha'd been declared sane by the Union County probate court, this action was begun against appellant to recover $2,850.

Appellant filed a demurrer to the complaint alleging that the court had no jurisdiction, and filed answer alleging that as a matter of fact Belle Walker never was insane, and that she was adjudged sane by the district court of Gregg County, Texas; denied that he collected any money for her as guardian or otherwise; denied that he had converted $3,750 to his own use, and denied his insolvency. The chancery court found in favor of appellee in the sum of $2,882.22, and the case is here on appeal.

The appellee, when she brought suit, caused writs of garnishment to be issued against the banks, and two of the banks answered showing the money appellant had on deposit, and the court also ordered that the contents of the safety deposit box in the First National Bank of El Dorado be impounded, etc.

The appellant who, as guardian, made the contract with Brown, the attorney, was not a lawyer, but a physician practicing at Smackover, Arkansas. Appellant claims that he spent about five or six weeks in Texas investigating the matter, and spent considerable money.. He does not, however, testify as to what he spent money for, nor does he claim to have kept any account of the amounts expended. Mr. Brown made a trip out to Texas when the suit was tried in Gregg County, but he spent very little, and is not claiming anything in this suit.

It is earnestly contended by appellant that the probate court alone had jurisdiction, and he relies on the Constitution and laws of Arkansas. The constitutional provision relied on reads as follows: “The judge of the county court shall be the judge of the court of probate, and have such exclusive original jurisdiction in matters relative to the probate of wills, the estates of deceased persons, executors, administrators, guardians and persons of unsound mind and their estates as is now vested in the circuit court, or may be hereafter prescribed by law.” Constitution, article 7, § 34.

The statute quoted and relied on is § 2256, and reads as follows: “The court of probate shall have original jurisdiction in the following cases:

“First. In all matters relating to the probate of last wills and testaments, the estate of deceased persons, executors, administrators, guardians, and persons of unsound mind and their estates.
“Second. In the settlement and allowance of the accounts of executors, administrators and guardians.”

This suit did not involve the estate of a person of unsound mind, because both the Texas court and the probate court of Union County had declared the appellee sane, and the appellant himself testified that she had never been insane. Therefore this suit did not involve a person of unsound mind, or the estate of a person of unsound mind. It did not involve any settlement or allowance of the accounts of executors, administrators or guardians, and therefore the authorities relied on by appellant have no application.

It was not claimed by the appellant in this suit that the appellee was insane. There is no doubt from the record that the guardian was appointed for Belle Walker for no other purpose than to assist in getting the conveyances theretofore made by Belle Walker set aside, so that she might recover her interests in the Texas lands. There was nothing for the probate court to do, and this suit does not involve any matters that are within the jurisdiction of the probate court.

“The courts of chancery have no power to take such cases out of the probate courts, for the purpose of proceeding with the administration. But their power and functions to relieve against fraud, accident, mistake or impending irremediable mischief, is universal; extending over suitors in all courts, and over the decrees of those courts, obtained by fraud, .or rendered under circumstances which render it inequitable that they should be inforced. Hence any frauds in the settlements of administrators or executors may be corrected. When that is done, if there be still a necessity for continued proceedings in the course of administration, such proceeding should go on in the probate court, upon the basis of the reformed settlement. The object of chancery intervention having been accomplished, the jurisdiction in equity should cease with the necessity. Otherwise the courts of chancery might make themselves courts of probate, in violation of the spirit and intention of the Constitution. If however there be no continuing necessity for a further course of administration; if the assets be collected in, and the debts be all ascertained, and nothing remains but to fix the liabilities of administrators, executors, and their sureties, and the rights of creditors, legatees and distributees, and to make adjustment on equitable principles, all that business comes within the more facile and effective operation of the remedial processes peculiar to equity practice. ’ ’ Reinhardt v. Gartrell, 33 Ark. 727. The doctrine announced in the Reinhardt case has been constantly adhered to by this court.

The undisputed proof in this case shows that there is no continuing necessity for a further course of administration. There are no assets to be collected, and, so far as the record shows, there are no debts, and nothing remains to be done by the probate court. The record however in this case shows that the Texas court and the probate court of Union County had both declared Belle Walker sane. The judgment of the probate court in Union County declaring her sane was in January, 1931. This suit was begun about five months after she was adjudged sane by the Union County Probate Court.

Section 5835 of Crawford & Moses’ Digest is as follows: “If it be found that such person has been reformed or restored to his right mind, he shall be discharged from care and custody, and the guardian shall immediately settle his accounts, and restore to such person all things remaining in his hands belonging or appertaining to him.”

The Supreme Court of Montana, construing statutes very similar to ours, said: “The language of § 2973, above, is susceptible of but one construction, namely, that the judicial determination that the ward is of sound mind, and capable of taking care of himself and his property, and the adjudication of his restoration, do, ipso facto, terminate the guardianship.” Scheuer v. Kinman, 31 Mont. 606, 79 Pac. 244; 22 Cyc. 1146. In support of the above declaration the court cites: Woerner’s American Law of Guardianship, § 150; Probate Judge v. Stevenson, 55 Mich. 320, 21 N. W. 348; and Ex parte Latham, 41 N. C. 406.

The court in the Montana case further said: “If the contention of the respondent could be maintainéd, then the guardianship continues, and a person sui juris, against his own-will, is subject to the control and government of a guardian, which in itself involves a contradiction of terms and a legal impossibility. ’ ’ The court in the same case also said: “Likewise, the authority of the probate court, after the order of restoration is made, is limited to requiring the guardian to make such final report, and to discharge such guardian from his trust.”

If, after the order of the Union Probate Court declaring Belle Walker sane, appellant could still act as her guardian, then a person sui juris, against her own will, would be subject to the control and government of a guardian.

It was not necessary for the probate court to make an order discharging the guardian, although it was proper that it should have done so, but he -could not serve as guardian for a person sui juris. No person can serve as guardian for another who is of full age and sui juris.

The probate court might never enter an order discharging the guardian, but whether it did or not would not affect her right to maintain suits and manage her own affairs.

The probate court would have had no jurisdiction in this case. “Probate courts have no common-law jurisdiction. The nature, extent and exercise of the jurisdiction of probate courts depend on the terms of the constitutional and statutory provision, and they cannot exercise any powers other than those which have been expressly conferred upon them, or which are necessarily implied from those conferred.” Moss v. Moose, 184 Ark. 798, 44 S. W. (2d) 825.

The court in the above case further said, speaking of probate courts: “Taking into account the magnitude of the property interests which thev have in charge, these courts should be required to proceed in exact con-fortuity to law, instead of being panoplied by tbe presumptions which attend the exercise of superior jurisdictions by other courts.”

After the order declaring Belle Walker sane, the only thing the probate court could have done was to order the guardian to make settlement, but in this case there was no settlement of any kind to make, and there was no property in the hands of the guardian as such. He had received this money which belonged to the appellee, and the chancery court had jurisdiction, because it was sought not only to recover the money, but to impound the money, of appellant in certain banks. He ivas not sued as guardian, and he does not claim that he held this money as guardian. The suit might havé been brought in circuit court, but, even if the circuit court was the proper court in which to bring suit, appellant would have been required to file a motion to transfer to circuit court, which he did not do.

The appellant, as guardian, claims that he made a contract with the attorney, Walter L. Brown, and that Mr. Brown then employed appellant to go to Texas to make investigations. The guardian had no authority to employ counsel to prosecute a suit on behalf of the estate in another State.

“The court there expressly recognized the rule to be that every grant of administration is strictly confined in its authority and operation to the limits of the State which granted it, and does not extend to other States. Hence we are of the opinion that the probate court could not confer upon the administratrix any authority to employ counsel and to prosecute suits on behalf of the estate of the decedent in the State of Texas. Ancillary administration would have been necessary in the .State of Texas to have accomplished that purpose." Miller v. Oil City Iron Works, 184 Ark. 900, 45 S. W. (2d) 36.

The record in this case shows that some sort of an agreement was made with the Sinclair Oil Company, and this agreement seems to have been that appellee’s interest in the lands was $15,000. Appellee was therefore entitled to $7,500 according to the agreement testified to by appellant. Tbe court below gave her judgment for $2,800 instead of $2,850, and appellee prosecutes a cross-appeal to reverse the finding of the lower court in not allowing her the $50. Under the decisions of this court, there is no authority for employing counsel, or other agencies, in another State. Appellee was therefore entitled to $2,850 instead of $2,800.

The judgment of the chancery court is therefore affirmed on appeal and reversed on cross-appeal, and judgment given here for the additional $50 with interest.


author: McHaney, J.

text:
    Rose v. Spear.
    4-2952
    Opinion delivered April 3, 1933.

      James D. Head, for appellant.

      Shaver, Shaver & Williams, for appellee.
   McHaney, J.

This is an interpleader’s suit brought by appellee, Sanderson, against appellant and appellee, Spear, for the purpose of having a judicial determination of the title to certain bearer bonds of the Hotel Grim Company which had belonged to appellant. Spear, who will hereafter be referred to as appellee, filed his inter-plea and eross.-oomplaint against appellant, claiming to be the owner of said bonds, and that he delivered them to Sanderson to be held pending determination of the title thereto as between him and appellant, and alleged that he had acquired same “in due course,” for value, and without notice of any adverse claim thereto, and that he was therefore entitled to the possession thereof. Appellant filed his answer and claim to the bonds, alleging that he was the owner and entitled to the possession thereof, and that he had parted with the possession of said bonds by connivance, fraud and theft.

Trial resulted in a finding by the court that about April 1, 1932, appellee, for value and before maturity obtained said bonds as collateral for a loan of $1,000, was an innocent purchaser and entitled to hold same to the extent of $1,000 with interest from April 1,1932, at 6 per cent. Decree was accordingly entered, declaring a lien for such sum in appellee’s favor with costs, and ordering the bonds sold to satisfy same if appellant failed to pay same in 60 days. This appeal comes from that decree.

Two grounds are urged for a reversal: (1) That appellee is not an innocent holder for value “in due course,” without notice; and, (2) that appellee obtained said bonds through, or by reason of, a gambling transaction.

The facts, briefly stated, are as follows: Appellant owned, prior to April, 1932, $4,500 of bearer bonds of the Hotel (Trim Company. None of the bonds were past due. The latter part of January, 1932, he was approached by a man named Wallace, who stated that he desired to purchase a mine in Nevada and would pay appellant, a real estate operator, a commission of 5 per cent, if he would handle the purchase thereof for him. The stranger, Wallace, bore a forged letter of introduction to appellant from a friend. He represented that the- owner of the mine, one Roy F. Fellows, would be at the Hotel LaFayette, in Little Rock, and induced appellant to go up there with him' to consummate the deal, which failed to go through because Fellows demanded $5,000 cash. They returned to Texarkana where Wallace pretended to try to borrow money from his partner and was unsuccessful, but he placed a certain amount of cash in appellant’s hands, raised his commission to 10 per cent., and induced appellant to put up with Fellows said bonds to secure the balance of the cash payment of $4,000, which would be held by Fellows for one year until final payment was made by Wallace to Fellows, and the latter executed and delivered to appellant the following receipt: “Received of Andrew Rose $4,500 in bonds, Hotel (Trim, Texarkana, Texas, as collatei’al for $4,000 to be paid in one year from this date. Dated this 27th day of January, 1932. Nos. 81-136-174-212-289-441-442-443-444. Subject to title of land. (Signed) R. F. Fellows.” This receipt was written by appellant, who also gave Fellows a check for $500, which was later cashed. Fellows executed and delivered a deéd to certain property in Nevada, but it was found to have forfeited for taxes. Shortly thereafter, or within a few days, appellant became suspicious of the deal and of Wallace and Fellows and finally determined that he had been victimized.

Appellee acquired the bonds in a gambling house in Hot Springs about March 1, 1932, at night, from two men he did not know, but whom he had seen playing the games in the place for some nights, by lending them $1,000 on the bonds. He knew nothing about- how they were acquired, or from whom, but did know Mr. Conway, of Texarkana, who was connected with the Hotel Grim. Thereafter, about April 16 he went to Texarkana to sell the bonds, but the people he wished to see were out of the city. He went back again and saw Mr. Sanderson about selling them to him. Sanderson, thinking they were the bonds appellant had owned, notified him and they all met at Sanderson’s office. Appellant claimed them, and appellee left them with Sanderson, as above stated, until their title could be judicially determined.

Under this state of facts, we cannot say that the finding of the trial court is against the preponderance of the evidence. We must try the case on the record made in this case and not upon the record in another or different case that might reflect upon the credibility of either party. Under the Negotiable Instruments Law, § 7818, Crawford & Moses’ Digest, a holder in due course is defined as follows: “A holder in due course is a holder who has taken the instrument under the following conditions: (1) That it is complete and regular upon its face; (2) that he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact; (3) that he took it in good faith and for value; (4) that at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.” Section 7822 provides what is necessary to constitute notice of defect in title as follows: “To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith.”

This was the state of the law prior to the passage of the Negotiable Instruments Law. Bothell v. Fletcher, 94 Ark. 100, 125 S. W. 645; Holland Banking Co. v. Booth, 121 Ark. 171, 180 S. W. 978; Broadway Bank v. Mason, 176 Ark. 812, 4 S. W. (2d) 5. A careful examination of the testimony fails to convince that actual knowledge of any infirmity in the instruments, or defect in the title of the bearer, was brought home to appellee, or that it shows “knowledge of such facts that his action in taking the instrument amounted to bad faith.” As said by this court in Beam v. Copeland, 54 Ark. 70, 14 S. W. 1094: “The right of such a holder is not defeated by circumstances calculated to excite suspicion or prompt inquiry, unless of such a character as proves that he acted in bad faith.” Here the most that can be said from the record is that the- bonds were taken at an unusual hour and at an unusual place for such transactions to occur, but we feel that these circumstances were not of such a character as to prove bad faith.

Nor can we agree with appellant that the bonds were acquired in a gambling transaction. They were not won or lost at gambling. A loan was made upon them in a gambling house. Whether the money so loaned was later lost in gambling, the proof does not show. Nor was this an issue in the court below.

Affirmed.

Johnson, C. J., disqualified and not participating.


text:
    Foster v. Taylor.
    4-2928
    Opinion delivered April 3, 1933.

      U. A. Gentry and Carrigan & Monroe, for appellant.

      Geo. R. Steel and W. P. Feazel, for appellee.
   McHaney, J.

On January 21, 1930, A. M. O’Quinn and wife executed and delivered to one Peppers their notes for $15,000 secured hy deed of trust on 115.6 acres of land, which was to become due and payable October 15, 1930. The land described in the deed of trust was erroneous as to one 40 acres, it being described as the northeast quarter of the northwest quarter of section 34, whereas it should have been described as the northeast quarter of the -northeast quarter, and it is undisputed that O ’Quinn and wife intended to correctly describe the land known as the O ’Quinn peach orchard, and that they did not own the northeast quarter of the northwest quarter, and that the description was inserted by inadvertence, oversight or honest mistake in drawing the mortgage. Said notes and mortgage were transferred on January 21, 1930, for value and before maturity to the Planters’ Bank & Trust Company. Thereafter, O’Quinn defaulted in the payment of said indebtedness, the Planters’ Bank & Trust Company became insolvent, and was taken over by the Bank Commissioner for liquidation, and on August 4. 1931, suit was brought by the Bank Commissioner against O’Quinn and wife and Peppers to foreclose said deed of trust, and a decree was granted in accordance with the prayer on September 10, 1931. Appellant was not made a party to this action, although on January 21, 1931, 0’Quinn and wife executed and delivered a second mortgage to the Hope Fertilizer Company to secure their note to it in the sum of $2,381.91, given for a pre-existing debt, due October 1, 1931, with interest at 8 per cent, to maturity and 10 per cent, thereafter. The mortgage covered the O’Quinn peach orchard, the same 115.6 acres, but correctly described the 40 acres of land in controversy as the northeast quarter of the northeast quarter of section 34. This mortgage to the Hope Fertilizer Company, after correctly describing the land, contained this clause : “It is understood that this is a second mortgage on the above-described land.” This mortgage was before maturity and for value assigned to appellant, who is the wife of the president of the Hope Fertilizer Company.

Pursuant to the decree of the court in favor of the Bank Commissioner of September 10, 1931, all the land described in the mortgage to the Planters ’ Bank & Trust Company was sold, and the Bank Commissioner became the purchaser, which sale was approved by the court and deed executed to the Bank Commissioner. After the sale the Commissioner received information of the error in the description of said 40 acres and obtained a quitclaim deed from O’Quinn and wife to the northeast quarter of the northeast quarter and executed and delivered to the owner of the northeast quarter of the northwest quarter his quitclaim deed thereto to clear up his title. Thereafter, on March 13, 1932, appellant, as assignee of the Hope Fertilizer Company, brought this action to foreclose the second mortgage, making the Planters’ Bank & Trust Company, the Bank Commissioner and the liquidating ag’ent defendants in this action. Appellant there claimed, and is now claiming, that her second mortgage became a first mortgage on the 40 acres of land misdescribed in the Peppers’ deed of trust. The chancery court found that the mortgage given to Peppers, as corrected by the quitclaim deed executed by O’Quinn and wife to the Bank Commissioner since the foreclosure of the mortgage, constituted a superior and paramount lien to the lien of appellant under the mortgage executed to the Hope Fertilizer Company. A decree was accordingly entered, but, inasmuch as neither appellant nor the Hope Fertilizer Company was made a party to the first foreclosure suit, that appellant was entitled to the privilege of redeeming the lands from the Bank Commissioner by paying the full amount of his debt within 90 days.

As above stated, appellant’s mortgage contained the condition that: “It is understood that this is a second mortgage on the above-described lands.” This clause was inserted pursuant to agreement between O’Quinn and the Hope Fertilizer Company. 0’Quinn’s indebtedness to it was past due, and it was trying to collect its debt or obtain security for it. In response to a letter from it, O’Quinn wrote the company as follows: “Your letter to hand relative to giving* further security on the fertilizer note due you from me. I told your Mr. Helms after his questioning me that the only further security that I could give on the note would be a second mortgage on the real estate. Personally, do not see that you will be any further secured, but, if it will assist you in your financing, I am entirely willing to give such a mortgage. I am giving you a description of this orchard property, and you can have a second mortgage form filled out and mail this to me for my signature, and, if you wish, I will have the same recorded at the courthouse in Howard County and mail it to you.”

It accepted O’Quinn’s proposition, prepared a mortgage which correctly described the lands in the orchard, and embodied the agreement therein that it was a second mortgage on the lands described. Appellant, as assignee of the Hope Fertilizer Company, acquired no better title than it had, which was by agreement a second mortgage only. True, it did not state that it was second or subject to any particular mortgage, but we think that is unimportant, even as against an unrecorded mortgage, for all that appellant’s assignor took was a second mortgage, which made it subject to a valid prior first mortgage, whether recorded or not. We so held in Haney v. Holt, 179 Ark. 403, 16 S. W. (2d) 463, written by the iate Chief Justice Hart. In that case the first mortgage was not filed or recorded, not being* subject thereto for lack of acknowledgment. The second mortgage contained this clause: “This mortgage is second to a previously recorded mortgage.” It was there said, quoting from Young v. Evans-Snider-Bush Com. Co., 158 Mo. 395, 59 S. W. 113: “This agreement of plaintiffs, substantially recited in their mortgage, to take their security subject to the defendant’s prior mortgages, which were an equit- ' able lien upon the cattle, valid between the parties thereto, obviously takes the defendant’s case, upon this issue, out of the principle of the Arkansas case aforesaid, upon which plaintiffs rely, and brings it within the well-settled doctrine recognized and enforced in that State, as well as in the other States of the Union, that ‘one who takes a conveyance, absolute or conditional, which recites that it is second or subordinate to some other lien or incumbrance, can in no proper sense claim that he is a purchaser of the entire thing. He purchases only the surplus or residuum after satisfying the other incumbrance ’; and ‘a mortgage expressly providing that it shall be subject to a prior mortgage is subject to it, independently of the fact that the prior mortgage is not of record; nor will it alter matters to record the subsequent mortgage first.’ Jones, Chat. Mortg., § 494; 5 Am. & Eng. Enc. Law (2d ed.) 1015; 2 Cobbey, Chat. Mortg., § 1039; Clapp v. Halliday, 48 Ark. 258, 2 S. W. 853. The plaintiffs, by accepting 'their subsequent mortgage under the circumstances aforesaid, ceased to be strangers to the defendant’s prior mortgages, and were thereby brought into contractual relations with said mortgages, and they imposed limitations upon the interest acquired by them in the property, to the extent of defendant’s equitable lien under said prior mortgages, subject to which they agreed to take. There is nothing in the statutes of Arkansas, or in the rulings of the Supreme Court of that State thereupon, prohibiting the making or impugning the validity of such a contract.”

See also Wells v. Farmers’ Bank & Trust Co., 181 Ark. 950, 28 S. W. (2d) 1059, and Gunnels v. Farmers’ Bank of Emerson, 384 Ark. 149, 40 S. W. (2d) 989. In the latter case the second mortgage to Gunnels, as here, recited that it was a “second mortgage on” the lands described in the mortgage to the bank. We there held that the case was ruled by Haney v. Holt, and said: “In the instant case, as in the case of Haney v. Holt, supra, the second mortgage was taken while the first mortgage was a subsisting lien, and there’ was a contractual agreement in the second mortgage, which became a condition upon which the conveyance was made, that is, that it was second to a prior mortgage.” So here the mortgage to the fertilizer company was taken on the condition that it was a second mortgage on the land therein correctly described. That was all O’Quinn was willing to give, and but for that condition he would have given no mortgage at all. The fact that 40 acres was misdescribed in the first mortgage did not work any prejudice to its rights, and, because of such condition, neither it nor its assignee is in any position to complain because O’Quinn gave appellee a quitclaim deed thereto. Undoubtedly Peppers, the bank, or the Bank Commissioner after insolvency of the bank, could have had a decree of reformation of the instrument at any time so as to show the correct description, as it is undisputed in this record that 0 ’Quinn intended to give and Peppers to receive a mortgage correctly describing the orchard, and not land belonging to a stranger to the whole transaction, and this would work no injury to appellant or.her assignor, as all they ever had was a second mortgage on said property. .

Since appellant was not made a party defendant in the foreclosure of the first mortgage, she would have the right to redeem in a reasonable time, which the court gave her.

We find no error, and the decree is accordingly affirmed.

Johnson, C. J., disqualified and not participating: Kirby, J., dissents.


author: Butler, J.

text:
    Nesler v. Paragould.
    Crim. 3831
    Opinion delivered April 3, 1933.

      Wm. F. Kirsch, for appellant.

      Jeff Bratton, for appellee.
   Butler, J.

This case was tried before the circuit court, sitting as a jury, on an agreed statement of facts, from which it appeared that the appellant, Nesler, is engaged in the grocery business in the city of Paragould, and, incident thereto, makes exclusive use of a one-half ton inclosed truck making deliveries to customers, for which no extra charge is made over and above the price charged customers who buy at the counter and themselves carry away the merchandise. Appellant had been charged as a license fee $5 under city ordinance No. 416, which was amendatory of city ordinance No. 406, and which provided that all persons, firms or corporations, except persons, etc., paying dray license on automotive vehicles, who owned and used other motor vehicles, should pay a privilege license of $5. In addition to this, there was demanded of appellant an additional $5 on said delivery truck under ordinance No. 417, which he declined to pay, and this action was brought for a violation of that ordinance. The court found the appellant guilty and assessed a fine against him, from which judgment is this appeal.

The question presented involves the validity of § 10 of ordinance No. 417. This ordinance, by its title, purports to be “an ordinance to license and to regulate all persons, firms and corporations engaged in any of the following vocations, callings or businesses within the city limits of the city of Paragould, Arkansas.” Section 1 of the ordinance makes it unlawful for any person, etc., to engage in or pursue any of the vocations, callings or businesses thereinafter named in the ordinance without having first obtained a city license, etc. Then follow thirty-six sections naming various callings and vocations, such as livery stables, patent medicine vendors, and fixing-license fees. It practically covers all of the callings that could be imagined in which one would engage in a city the size of Paragould.

Section 9 of the ordinance fixed the license fee in varying amounts for horse drawn and automotive vehicles used for draying purposes. Section 10 reads as follows:

“For each person, firm or corporation operating delivery wagons or motor vehicles for delivery purposes the licenses shall be as follows :
“For each two-horse wagon $5 per annum.
“For each one-horse wagon $3 per annum.
“For each one-half ton truck $5 per annum.
“For each additional half-ton $5 per annum.”

It is this section which is questioned in the instant case.

The appellee seeks to find authority for the enactment of this section under the provisions of § 7529 of Crawford & Moses’ Digest, which provides in part as follows: “They shall have power * * * to regulate the transportation of articles throughout the streets and to prevent injury to the streets from overloaded vehicles,” and § 7606, Id., which provides that “the city council shall have the care, supervision and control of all the public highway bridges, streets, alleys, public squares and commons within the city; and shall cause the same to be kept open and in repair, and free from nuisance,” and under § 7618, Id., by which cities of the first and second class are authorized to enact ordinances for classified occupation tax or license.

The right to enact ordinances is a power conferred on municipal corporations by legislative grant; and therefore its authority to legislate is limited to the authority found in an express grant of power, or which is necessarily implied in the express grant in order to make effective the attainment of the purpose for which the express authority is given. Argenta v. Keath, 130 Ark. 337, 197 S. W. 686. It follows, therefore, that, unless the authority to enact § 10 of ordinance No. 417 is to be found in the sections noted either expressly conferred or arising from necessary implication, the city council is without power, and § 10 of the ordinance is invalid.

Counsel for appellee insists that the delivery by a retail grocer of the purchases made to his customers in a vehicle constitutes a business and comes within the meaning of § 7618, supra, and that, as he says, the vehicles necessarily occupy the streets to a greater extent than vehicles operated by other persons; that the wear and tear on the streets from their use is a matter of importance which may be considered by the council and the use of delivery trucks adds to the police duties of the city in directing traffic; that for these reasons that part of § 7529, supra, and § 7607, supra, are applicable. We are of the opinion that neither of the sections relied upon by the appellee warrant the contention made. The appellant was engaged in a retail grocery business, and the delivery of the purchases made by his customers was merely an incident to the business itself and could in no just sense be deemed to be a separate business. Section 7618, supra, as before stated, provides for a classified occupation tax or license fee for the privilege of conducting any business within the city. This is not the nature of the ordinance under consideration, but undertakes to impose license fees on certain specific callings permitted by various statutes. We think that part of § 7529, supra, relied upon, has no application, for it manifestly refers to the transportation of articles of an unusual character which, either from their weight or some inherent quality, might work injury to the streets or inconvenience or might endanger the public.

Section 7607, supra, relied on, relates merely to the supervision and control of the public ways, and gives authority to the city to keep them open, in repair and free from nuisance and can have no bearing on the question before us. The city council has authority under § 7532 of Crawford & Moses’ Digest to regulate and license wheel vehicles kept for hire. This section would have no application, for appellant operates no vehicle for hire, but uses his truck in connection with his business as a retail grocer.

By § 7444 of the Digest authority is conferred on the city to- require its residents to pay a tax not to exceed $5 per annum for each motor vehicle operated, and the appellee has exercised that power under ordinance No. 416 amendatory of ordinance No. 406, and appellant has offered to comply with these provisions. It appears that the city’s right to tax motor vehicles not used for hire is limited by § 7444, supra, and the burden sought to be imposed upon the appellant for the use of his truck in addition to the $5 prescribed by ^ 7444 is invalid and cannot be sustained.

The judgment of the trial court is therefore reversed, and the case against the appellant is dismissed.