text:
    Tuggle v. Tribble.
    Opinion delivered March 28, 1927.
    1. Appeal and error — question not decided below. — Where the circuit court refúsed to entertain jurisdiction on appeal from the county court and therefore did not determine the question whether the county court had jurisdiction to enter judgment changing; the location of a road, such question is not before the Supreme Court.
    2. Courts — appeal from county court — affidavit.—Under Crawford & Moses’ Dig., § 2287, it is error for the county court to make an order granting an appeal to the circuit court until the party appealing shall have filed an affidavit with the court as prescribed therein, but such filing may be waived in the circuit court, and is waived where there is no motion to dismiss the appeal.
    3. Courts — filing affidavit with circuit clerk. — Where a petition for appeal and affidavit were filed with the clerk of the circuit court within apt time and a transcript of proceedings in the county court, it was error to dismiss the appeal, since filing of the transcript with the circuit clerk was tantamount to an order for appeal by the clerk.
    Appeal from Garland Circuit Court; Earl Witt, Judge;
    reversed.

      G. T. Gothmn, for appellant.

      Murphy S Wood, for appellee.
   Wood, J.

Act No. 611. of the Acts of 1923, amending' § 7328 of Kirby’s Digest (now § 5249 of Crawford & Moses’ Digest) provides for the opening of new roads and changing old roads, the same to be located on section lines as near as may be, taking into consideration the convenience of public travel, contour of the country, etc. The procedure to he followed is prescribed in the act.

This action was begun by A. H. Tribble and other property owners of Garland County, under the above statute, by filing petitions in the county court asking for certain changes to be made in the location of part of what is designated in the petitions as the “Harlan Boulevard”. The petitioners described the changes desired and prayed 1lnvt the road be changed and relocated as described.

D. M. Tuggle and 59 other property owners appeared in the county court, asked to be made parties, and filed a remonstrance against granting the prayer of the petitions." They also filed a demurrer and motion to dismiss the petitions upon various grounds, which are set forth in the demurrer and motion to dismiss. On the 26th day of October, 1925, the county court entered an order overruling the demurrer and motion to dismiss, to which ruling the remonstrants duly excepted. On the same day the petition was heard, and the court entered a judgment granting.the same and reciting the changes as prayed in the petition. This judgment- concluded with the following recital: “To which order of the court the remonstrants, D. M. Tuggle et al., at-the time excepted and filed their motion and affidavit for appeal to the circuit court of Garland County, which motion is granted.”

On the 1st day of June, 1926, the same being an adjourned day of the regular April, 1926, term of the Garland County Court, that court, by nunc pro tnnc entry, changed the above recital to read as follows: “To which order of the court the remonstrants, D. M. Tuggle et al, at the time excepted, and prayed an appeal to the circuit court, which appeal by the court was granted, conditioned upon the remonstrants filing the affidavit for an appeal as bylaw required.”

On the 14th day of April, 1926, D. M. Tuggle, for himself and others, filed in the Garland County Court the following:

“Comes D. M. Tuggle, for himself and for all others in like situation, and states that he is a citizen and taxpayer of Garland County, Arkansas, and that he was a party to the proceedings herein in this court in the above entitled canse, and moves the court for an appeal from the judgment or order of the Garland County Court to the circuit court of Garland County, Arkansas.

“D. M. Tuggle, for himself and for all others in like situation, states that he is a citizen and taxpayer of Garland County, Arkansas, and that he was a party to the proceedings below, and that the appeal' taken by him from the judgment of this court rendered in the above-entitled cause to the Garland County Circuit Court, is taken because the appellant verily'believes that he is aggrieved, and is not taken for vexation or delay, hut that justice may be done him. (Signed) D. M. Tuggle.

“Subscribed and sworn to before me this the 14th day of April, 1926. (Signed) Trager Freeman, Clerk. Ursery S. Owen, D. C.”

On April 21, 1926, the transcript of the proceedings in the county court was filed with the clerk of the Garland County Circuit Court. On May 25,1926, A. H. Tribble filed his motion to dismiss the appeal on the ground that the county court did not enter an order granting the appeal after the filing of the affidavit and prayer for appeal in that court, and that the circuit clerk had not entered an order granting the appeal, and therefore the circuit court had no jurisdiction of the action. The trial court, upon the above facts, granted the motion and entered a judgment dismissing the appeal from the county court to the circuit court, from which judgment is this appeal.

The trial court refused to entertain jurisdiction of the action as an appeal from the county court, and therefore did not determine the .question as to whether or not the county court had .jurisdiction to enter a judgment changing the location of the road. That question therefore is not before this court. The only question for our consideration and decision is whether or not the trial court erred in dismissing the appellants’ alleged appeal from the judgment of the county court.

Section 2287, 0. & M. Digest, provides as follows: “Appeals shall be granted as a matter of right to the circuit court from all final orders and judgments of the county court, at any time within six months after the rendition of the same, either by the court rendering the order or judgment or by the clerk of the circuit court, * * * as in other cases at law, by the party aggrieved filing an affidavit and prayer for an appeal with the clerk of the court in which the appeal'is taken; and, upon the filing of such affidavit and prayer, the court rendering the judgment or order appealed from, or the clerk of the circuit court, shall forthwith order an appeal to the circuit court at any time within six months after the rendition of the judgment or order appealed from, and not thereafter. The party aggrieved, his agent or attorney, shall swear in said affidavit that the appeal is taken because the appellant verily believes that he is aggrieved, and is not taken for vexation or delay, but that justice may he done him.”

The order of the county court granting the appeal, as evidenced by its mmc pro tunc judgment, is as follows: “To which order of the court the remonstrants, D. M. Tuggle et al., at the time excepted and prayed an appeal to the circuit court, which appeal was granted, conditioned upon the remonstrants filing an affidavit for an appeal as by law required.”

Under the above statute, and our decisions, it is essential to the jurisdiction of the circuit court that an appeal be granted by the county court or by the clerk of the circuit court, and it is error for the county court to make an order granting the appeal until the party aggrieved shall have filed with the clerk of the county court an affidavit as prescribed in the statute. The statute contemplates that the affidavit and prayer for appeal shall be filed in advance of any order made by the court or the clerk, as the case may be, in order that the court or clerk, before ordering the appeal, may have an opportunity to ascertain whether or not the affidavit complies with the statute. The filing of an affidavit under the statute above is not jurisdictional, because it may be waived in the circuit court, and is waived, where the party against whom the appeal is sought does not, in the circuit court in limine, move to dismiss the appeal before taking any substantive or affirmative steps in the cause.

In Drainage District No. 7 v. Stuart, 104 Ark. 113-118, 147 S. W. 460, speaking of the general statute above, we said: “Under the gener'al statute the filing of an affidavit for appeal is not jurisdictional, and therefore may be waived by failure to have the trial court rule on a motion to dismiss, embodying in the motion such objection.’’ And in Wulf v. Davis, 108 Ark. 292, 157 S. W. 384, we said: ‘ ‘ The filing of an affidavit was a prerequisite but was waived by appellants appearing and taking sub-stantative steps without moving to dismiss the appeal on that ground. ’ ’

Here, however, the appellee did move in the circuit court to dismiss the appeal of the county court before taking any substantive steps, and there was therefore no error in the ruling of the trial court in refusing to entertain jurisdiction on the ground that the affidavit for appeal had not been filed with the clerk of the county court in advance of the order of the court for the appeal. The above statute, however, further provides that “upon the filing of such affidavit and prayer for appeal * * * -the clerk of the circuit court shall forthwith order an appeal to the circuit court at any time within six months after rendition of the judgment or order appealed from, etc.” Now, it will be observed that, within six months, the motion for appeal and the affidavit were filed with the clerk of the county court in which the appeal was taken, and the transcript of all the proceedings had in the cause, including the affidavit and prayer for appeal, was filed also with the clerk of the circuit court within the six months. The filing of the transcript from the county court by the clerk of the circuit court, such transcript containing the affidavit and prayer for appeal, was tantamount to an order for appeal by the circuit clerk. If the circuit clerk did not intend,, by his act in filing the transcript of the proceedings before the county court, to order an appeal from that court, he should have refused to file the transcript, for his act in filing same was clearly indicative of tlie fact tliat lie intended to order an appeal We are convinced that to hold otherwise would he “sticking in the hark,” and magnifying' form above substance. We must assume that the circuit clerk performed his duty and that he was cognizant of the statute supra, proscribing his duty. Therefore we should presume that the circuit clerk examined the transcript of the record of the proceedings in the county court when it was presented to him for filing before he filed the same, and that he discovered that the affidavit and prayer for appeal had been filed in the county court within six months after the rendition of the judgment in such court; and by filing the transcript, instead of rejecting the same, he treated it as an application for an order of appeal, and his act in filing it was equivalent to an order for appeal.

In Hempstead County v. Howard County, 51 Ark. 344, 11 S. W. 478, there was a motion to dismiss the appeal from the judgment of the county court because there was no formal prayer addressed to the circuit -clerk for an appeal and because the county clerk, who was ex-officio circuit, clerk, had affixed the seal of the latter court to his certificate of the proceedings in the county court. Chief .Justice Cockrill, speaking for the court, said: “The repeated decisions of this court discountenancing irregularities of procedure which do not affect the rights of parties upon the merits, and recognizing in the circuit court the power of amending its process and records as well as pleadings,. to any extent short of impairing the substantial rights of the parties, leave no room for argument against the action of the court in this instance. The prayer for an appeal contemplated by the statute is addressed to the clerk for the purpose of apprising him that an appeal is desired. If the statutory affidavit for an appeal is presented to him without a formal prayer, and he acts upon it and causes the appeal to be perfected, ihe requirements of the statute have obviously been fulfilled, for the only end the prayer could effect has been attained.”

The above language is exceedingly apposite here. The true spirit and purpose of the statute has been attained when the affidavit and prayer for appeal has been filed with the clerk of the county court, within the time allowed, and when either the county court or the clerk of the circuit court, after the filing of such affidavit, orders an appeal. In Brown v. Kirkland, 156 Ark. 542-548, 246 S. W. 851, passing upon a question similar in principle, we said: “The entering of an order upon the affidavit for appeal by the clerk of course would have been the best evidence that the appeal had been granted by him, but his act in complying with all the essential requirements of the statute regulating appeals in such cases was. sufficient to show that he had granted the appeal and to invest the circuit court with jurisdiction.” It follows that the trial court erred in dismissing the appeal. The judgment is therefore reversed, and the cause is remanded for further proceedings according to law.


source: Caselaw Access Project

author: Smith,' J.

license: Public Domain

text:
    Chicago, Rock Island & Pacific Railway Company v. Russell.
    Opinion delivered March 28, 1927.
    1. Master and servant — nonpayment- op wages — construction of statute. — Crawford & Moses’ Dig-., § 7125, providing that, on nonpayment by a railway company of the wages of a servant or employee, upon his discharge his wages shall continue from the date of his discharge or refusal to further employ him until paid, is a penal statute, and must be strictly construed.
    2. Master and servant — employment during emergency. — Where plaintiff was employed to watch a railway engine only for the period of an emergency, there was neither discharge nor refusal to further employ him at expiration of the emergency, and he could not recover the penalty for nonpayment of wages provided by Crawford & Moses’ Dig., § 7125.
    Appeal from Union Circuit Court, Second Division,*' W. A. Speer, Judge;
    modified."

      Thos. S. Buebee, Geo. B. Pugh and A. 8. Busbee, for appellant.

      E. W. McGotigh, for appellee.
   Smith,' J.

"This suit was instituted by appellee to recover from appellant certain wages due him and a penalty for their nonpayment. .

The cause was heard ,in the court below upon an agreed statement of facts, wherein it was recited: “That, on August 17, 1921, plaintiff, who was not a regular employee of defendant, was employed by one of defendant’s engineers only to watch an engine belonging to defendant at Calion, Arkansas, said engine and the train to which it was attached being Hied up’ at Calion on account of congestion of traffic in defendant’s yards at El Dorado, Arkansas; that plaintiff was hired to watch said engine until orders were received for said engine to proceed to El Dorado.” It was further recited in the agreed statement of facts that the engineer agreed that plaintiff should receive for the first eight hours 64 cents per hour and for every hour thereafter he was to have time and a half, or 96 cents per hour, and that plaintiff watched the engine from 10 a. m. to 10 p. m., making a total of 12 hours, and was entitled to receive the sum of $8.96.”

The agreed statement of facts further recited that ‘ at the expiration of said service plaintiff demanded said sum, hut it was not paid him. Pie thereupon requested that his money,- or a valid check therefor, be sent to defendant’s office at El Dorado, Arkansas, where defendant kept an agent. Plaintiff was given a statement of his time, which was signed by defendant’s agent ’at Calion, Arkansas, and was told that his money or a valid check therefor would be sent to El Dorado, Arkansas, in seven days.”

At the expiration of the seven- days plaintiff called at the office of the defendant in El Dorado and demanded of the ag*ent in charge his wages, or a valid check therefor. The demand was not complied with, although repeated from time to time, and plaintiff was told by the agent, -upon each demand, that he had no check for plaintiff.

After the institution of this suit an offer was .made by the defendant railway company to confess judgment for the amount of wages due plaintiff. Upon the trial below before the court, by consent, judgment was rendered in plaintiff’s favor for $8.96 wages and $307.20 as penally, and the defendant has appealed.

This suit was brought under § 7125,'C. & M. Digest, and so much of it as is necessary to be considered here, reads as follows: “Whenever any railroad company ® * * shall discharge, with or without cause, or refuse to further employ, any servant or employee thereof, the uupaid wages of any such sei’vant or employee then earned at the contract rate, without abatement or deduction, shall be and become due and payable on the day of such discharge or refusal to longer employ; any such servant or employee may request of his foreman or the keeper of his time to have the money due him, or a valid check therefor, sent to any station where a regular agent is kept, and if the money aforesaid, or a valid check therefor, does not reach such station within seven days from the date it is so requested, then, as a penalty for such non.payment, the -wages of such servant or employee shall continue from the date of the discharge or refusal to further employ at the same rate until paid.”

In construing this statute it has been said that it was penal in its nature, and must therefore be strictly construed, and that no one can recover thereunder unless he comes strictly within its provisions. Caldwell v. Missouri Pacific Ry. Co., 137 Ark. 439. In the case of St. L. I. M. & S. Ry. Co. v. Bryant, 92 Ark. 425, which Avas a suit to recover a penalty under the statute quoted, it Avas said: “We think that the object and purpose of the statute was to secure to the employee the prompt payment of his Avayes, or a continuance of his emploAmient, so that he avouIc! have a livelihood and a means of main-tenauce. To secure that object, it would be necessary to give him that employment in which he was competent to perform the duties thereof and at a place where he could reasonably be in order to perform those duties of such employment. The employee, by earning his wages under the contract of employment, shows that he was competent and able to perform the duties of the employment in which the wages were earned; and therefore we are of the opinion that the ‘further employment’ meant by the statute is employment of the same class and kind and in the same locality in which Iris wages were earned under the contract of employment.”

Construing this statute strictly, - as we must do because of its penal character, it must he said that there was neither a discharge of plaintiff nor' a refusal to longer employ him. Plaintiff was employed in an emergency, and he was not -discharged. It -was not contemplated that Ms employment would extend beyond' the expiration of the emergency. When the train could be moved, plaintiff’s service would no longer be required. He could not therefore have been longer employed after the engine had been moved.

The employment arose out of an emergency, and the payment of the wages earned was therefore not a matter of routine to be reported by a foreman or keeper of time, and the language of the statute does not appear to be broad enough to cover the facts of the case.

The court below should therefore have rendered a judgment in plaintiff’s favor only for the wages due him, with costs and interest to the date of the offer to confess judgment. The judgment will therefore be modified by striking out the allowance of the penalty, and, as thus modified, will be affirmed.


author: Smith, J.

text:
    Laney v. Faulkner County Hospital.
    Opinion delivered March 28, 1927.
    1. CORPORATIONS — agrbement to purchase bonds. — A written contract to purchase $1,000 of the bonds of a corporation is not so ambiguous as to be unenforceable, in view of oral testimony as to an agreement to buy at par such bonds bearing 4 per cent, interest.
    2. Pleading — allegations of complaint. — Allegations of a complaint which were not denied will be taken as true.
    3. Evidence — oral evidence explaining writing. — Where a written instrument does not express the entire agreement or understanding of parties, oral testimony may be admitted to show such agreement' or understanding.
    4. Corporations — contract to buy bonds. — A contract to purchase $1,000 of bonds of a corporation held not void for want of mutuality as not showing obligation to sell the bonds, nor for want of the seller’s signature; delivery of part of the bonds and ténder of the remainder constituting binding acceptance of the contract on the seller’s part.
    Appeal from Faulkner Circuit Court; George W. Clark, Judge;
    affirmed.

      Wm. J. Clark, for appellant. .

      C. A. Holland and R. W. Robins, for-appellee.
   Smith, J.

• Appellee, a corporation organized under the laws of this State for the purpose of building a hospital in the city of Conway, filed an amended complaint, in which it alleged that, on November 12, 1923,-the appellant, B. T. Laney, Jr., contracted and agreed in writing to purchase bonds issued by appellee to the amount of $1,000, at par, and bearing interest at 4 per qent., as shown by a copy of the agreement made an exhibit to the complaint.

The hospital was erected at a cost of about $40,000, and funds for its erection were furnished upon defendant’s subscription and similar subscriptions by various citizens of Faulkner County and'a subsequent#issue of bonds secured by a mortgage loan on the hospital building.

The complaint further alleged that, conformably to the agreement, defendant has paid $500 and received therefor five bonds of $100 each. That a tender of five bonds for $100 each has been made to defendant, who refused to accépt and pay for them, and that all the bonds were to be of like interest and kind as the $500 actually delivered. A tender of the bonds accompanied the complaint, and there was a prayer for judgment for the contract price of the bonds. The agreement, to purchase the bonds reads as follows:

“Faulkner County Hospital,

“Conway, Arkansas, Nov. 12, 1923.

“For the purpose of erecting a modern hospital in Conway, for the benefit of the people of Faulkner County, I herdby agree to purchase bond(s) of the Faulkner County Hospital, aggregating one thousand dollars ($1000). Qne-half on or before January 1, 1924, the remainder June 1, ’24.

“B. T. Laney, Jr.”

The answer filed contained a denial that defendant had entered into an agreement for the purchase of any bonds of the hospital, or that he was indebted in any sum upon the alleged agreement. The answer admitted that defendant had signed the document, a copy of which was attached to the complaint, but denied that there was any agreement beyond that set out in said document. It denied that the same was intended to be a binding contract, and alleg’es its insufficiency as such. It further alleged that, if said writing signed by defendant be held sufficient to constitute a binding contract, he has complied therewith and discharged the obligations thereof “by purchasing from plaintiff bonds of the Faulkner County Hospital aggregating more than one thousand dollars, $500 of which were 4 per cent, bonds similar to the one attached to the complaint and $3,000 of which were 8 per cent, mortgage bonds.”

The 4 per cent, bonds were unsecured, and the 8 per cent, bonds were secured by a mortgage on the hospital building.

■ Upon the issues thus joined, only one witness testified, this witness being P. F. Cleaver, the president of the hospital. This witness testified that he was familiar with all the transactions of the institution since its organization. He offered in evidence the original subscription card signed by defendant. Witness had asked defendant . to redeem his subscription by taking the $500 4 per cent, bonds which had not been delivered and paid for, but defendant declined to do so, and gave, as the reason for his refusal, the fact that he had already done more than his share towards building the hospital. Defendant had taken and paid for $500 of the 4 per cent, debenture bonds, and did not question that the bonds accepted accorded with the pledge or contract. A tender of the $500 4 per cent, bonds was made and refused. Defendant did not admit to witness that he had accepted the $500 in 4 per cent, bonds, but did admit that he had paid for these bonds.

An attempt was made, upon the cross-examination of the witness, to prove that witness had agreed with defendant to release defendant from the unperformed part of the contract upon the condition that defendant would buy and pay for $3,000 of the 8 per cent, bonds. The witness did not make this admission, and he categorically denied that he had any such authority. Witness testified that defendant did buy and pay for $3,000 of the 8 per cent, bonds. There was no contradiction of the testimony of Mr. Cleaver, as he was the only witness called.

Under the direction of the court a verdict was returned in favor of the plaintiff for $500, and judgment was rendered accordingly, from which is this appeal.

For the reversal of the judgment it is insisted that the complaint, as amended, did not state a cause of action, and that the testimony offered did not support the verdict.

Numerous authorities are cited to the effect that, if aii agreement is so uncertain or ambiguous that the court is unable to collect from it what the parties intended, the court cannot enforce it, and there is therefore ño valid contract, and it is alleged that the contract here sought to be enforced is of that character. It is also insisted that the contract is void for the want of mutuality, as it was not shown that the plaintiff was hound by the agreemem to sell any bonds to defendant, and that the so-called contract amounted to nothing more than an unaccepted offer on the part of defendant to purchase. We do not agree with counsel in either contention.

The subscription card, which the answer admits was signed by defendant, did not purport to express the entire contract between the parties, but the oral testimony makes the provisions of the agreement clear. These were that appellant" had agreed to buy $1,000 of .4 per cent, bonds at par, but had only bought and paid for $500 of the bonds, and had declined to pay for the remainder, not because the bonds tendered did not conform to the contract, but because defendant thought he had done enough for the hospital. The allegation of the complaint, “that all the bonds purchased were to be of like interest and kind as the $500 actually delivered,” was not denied in the answer, and for this reason must be taken as true. Section 1231, C. & M. Digest. No testimony was offered to support the allegation that Cleaver had agreed, or had authority to agree, to treat the purchase of $3,000 of 8 per cent, bonds as a performance or discharge of the obligation of the contract to purchase and pay for $500 additional 4 per cent, bonds.

The doctrine of the case of Breckenridge v. Brashears v. Hearne Timber Co., 135 Ark. 31, 204 S. W. 981, applies here. It was there said: “The writing did not specify how long the same was to continue in force. The oral testimony offered made it clear that it was contemplated by the parties that the contract should be in operation for the period of one year. This testimony was within the rule that, where a written instrument does not express the entire agreement or understanding of the parties, oral testimony may be admitted to show such agreement or understanding. In such cases the instrument on its face shows that it is not complete, and the admission of oral testimony therefore does not tend to vary or contradict the written contract. The contract being silent as to the period of duration, parol evidence was admissible to show it.

If it be said that the subscription card does not show an obligation on the part of the plaintiff to sell bonds in any amount and was not signed by the plaintiff, it may be answered that the delivery of a part of the bonds and the tender of the remainder constituted a binding acceptance of the contract on the part of plaintiff.

The court was correct therefore in directing a verdict in plaintiff’s favor, as no valid defense to the suit was shown, and the judgment will therefore be affirmed.


author: Humphreys, J.

text:
    Faulkner County Bank & Trust Company v. Vail.
    Opinion delivered March 28, 1927.
    Mortgages — priority.—Where a husband and wife executed a note and mortgage to a loan company for money to purchase land, but the loan company failed to advance the money as agreed, but transferred the note and mortgage to a third person, and subsequently a bank advanced the money to buy the land to the husband and wife and simultaneously took a mortgage, the lien of such mortgage was prior to that of the mortgage to the loan company.
    Appeal from Faulkner Chancery Court; John E. Martineau, Chancellor on exchange of circuits;
    reversed.

      J. C. <& Wm: G. Clark, for appellant..

      R. W. Robins, for appellee.
   Humphreys, J.

This suit was instituted in the chancery court of Faulkner County by appellee against George I. "Wharton, Annie May "Wharton, his wife, and appellant to recover judgment against the "Whartons on a promissory note for $1,500 and interest, dated October 2Ó, 1920, and to foreclose a mortgage executed by them on said date to secure same on the northwest quarter of the' southwest quarter of section 17, township 5 north, range 11 west, in said county. It was alleged that the note and mortgage were executed to the Conservative Loan Company; that it placed the mortgage of record on the 22d day of December, 1922, and duly assigned the note and mortgage to appellee on January 5, 1923, for a valuable consideration before maturity.

Appellant filed an 'answer, interposing the defense that it acquired a lien for $995 upon said real estate paramount to appellee’s lien by virtue of having furnished that amount of money to the Whartons to buy the land with the understanding that he and his wife would execute a mortgage back to it on said land to secure the purchase money thus advanced. Appellant also filed a cross-bill against the Whartons asking judgment upon the purchase money note, with interest, and for a decree of foreclosure and order of sale to satisfy said indebtedness.

The cause was submitted to the court upon the pleadings and testimony adduced by the respective parties, which resulted in a judgment against the Whartons in favor of appellee for the $1,500 -note and interest, and in favor of appellant for $1,032.75' on the purchase money note, declaring a paramount lien upon the land in favor of appellee, and decreeing a foreclosure of the land and sale thereof to satisfy said judgments in the order of priority thus declared.

Appellant has duly prosecuted an appeal to this court from that part of the decree declaring its lien inferior to the lien of appellee.

The facts are undisputed. On October 20, 19'22, GeorgeT. Wharton and his wife, Annie May "Wharton, in contemplation of the purchase of said land, executed a note and mortgage on same to the Conservative Loan Company; for $1,500 with which to pay for it. The Conservative Loan Company recorded the mortgage on December 22, 1922, and assigned the note and mortgage to appellee oh January 5, 1923, before maturity, for a valuable consideration. The Conservative Loan Company failed to advance any sum to the Whartons on the $1,500 note and mortgage,, so they were unable to purchase the land. Later in the year they renewed their effort to purchase the land, and contracted to buy same from tlie owners for $1,000, paying $10 down to bind tlie trade. They then arranged with appellant to advance the balance of the purchase money, amounting to $995, $5 being included to pay the expenses to be incurred in the preparation of the papers, under agreement that they would execute a mortgage back to appellant on the land to secure it for the purchase money advanced. Pursuant to the agreement, the Whartons executed the note for $995 and a mortgage to secure same upon said land, but, through mistake, described it as being in section 7 instead of section 17. The mortgage was dated December 28, 1922, acknowledged December '29, and immediate^ sent from Wharton’s home, about twenty miles distant, to the bank. Upon receipt of the mortgage the bank placed $995 to the credit of George I. Wharton with which to pay for the land. He then notified the owners of the land that lie" had obtained the money from the bank to pay them, whereupon they executed a deed, correctly describing the land, to him, dated December 30, 1922. Upon the receipt of the deed he gave them a check, drawn upon the bank, for $990 and sent the deed to it. The owners of the land came to town, and cashed the check. The transaction was closed on December 30, 1922. On that date the deed was delivered to the bank, the purchase money paid on the check, mortgage recorded, and Wharton took possession of the land. Subsequently the misdescription in the mortgage ivas discovered and the bank retained the deed, not placing the same on record, until it could get a new mortgage from the Whartons correcting the description. On June 21, 1923, it procured a new mortgage properly describing the land, and then placed it ¡and the deed on record.

In 19 R. C. L., page 416, article 196, the rule applicable to the facts recited above is as follows:

“It is a general rule, to which there is little dissent, that, a mortgage on land executed by the purchaser of the land contemporaneously with the acquirement of the legal title thereto, or afterwards, but as a part of the same transaction, is a purchase money mortgage, and entitled to preference as' such over all other claims or liens arising through the mortgagor, though they are prior in point of time; and this is true without reference to whether the mortgage was executed to the vendor or to a third person. The reason for the rule most frequently.given is that the execution of the deed, and mortgage being simultaneous acts, the title to the land does not for a single moment rest in the purchaser, but merely passes through his hands, and, without stopping, vests in the mortgagee, and during such instantaneous passage no lien of any character can attach to the title. The deed and mortgage need not be executed at the same moment, nor even on the same day, to make them contemporaneous, provided they were parts of one continuous transaction, and so intended to be, so that the two instruments should be given contemporaneous operation in order to promote the intent of the parties.”

The rule thus announced is supported by the following authorities: 27 Cyc. 1180-1182; 2 Pomeroy’s Equity Jurisprudence, art. 725 (3d ed.); l Jones on Mortgages (7th ed.), 703-713. Our own court states in the case of Western Tie & Timber Co. v. Campbell, 113 Ark. 570, 169 S. W. 253, Ann. Cas. 1916C, 943, that:

“A mortgage given at the time of the purchase of real .estate to secure the purchase money, whether given to the vendor or to a third person, who, as a part of the same transaction, advances the purchase money, has preference over all judgments and * * * liens against the mortgagor.”

Appellee contends that § 1498 of Crawford- & Moses’ Digest, providing that an after-acquired title by a grantor shall immediately pass t*o his grantee, rendered the mortgage lien of appellee prior and paramount to that of appellant because prior in date and recorded first. We do not think so, for the Whartons only acquired by reason of the simultaneous transaction an equity in the land subject to the payment of the purchase money to the bank, and appellee could not acquire more under that statute than his grantors, the -Whartons, acquired. Appellee had nothing under his mortgage prior to the time the bank advanced the purchase money to buy the land. Wharton had no title to it at all at the time the note and mortgage which he purchased were executed. If the bank had not advanced the money with which to-buy the land under an agreement that it was to have a mortgage to secure the purchase money thus advanced, appellee would never have acquired any lien upon same, for Wharton could not have purchased same unless the bank had advanced him the money to do so. It would indeed be inequitable, under these circumstances, to allow appellee’s lien to take precedence over that of appellant.

On account of the error indicated the decree is reversed, -and the cause is remanded, with directions to declare appellant’s lien'paramount to that of appellee.


text:
    Burkholder v. Smith.
    Opinion delivered March 28, 1927.
    Improvement district — sale op bonds — breach op contract. — A contract for the sale of bonds by an improvement district was not breached by the commissioners of the district where they refused to accept as part payment the buyer’s certified check, which had become the subject of garnishment proceedings, and was in litigation between the buyer and another.
    Appeal from Pulaski Circuit Court, Second Division; Richard M. Mann, Judge;
    affirmed.
    Action iby G. E. Burkholder, trading as Burkholder Bond Company, against A. P. Smith, W. D. Braddock and W. M. Rankin, commissioners of Street Improvement District No. 376.

      Melbourne M. Martin, for appellant.-

      Downie é Schoggen, for appellee.
   Humphreys, J.

This suit was brought by appellant against appellees in the circuit court of Pulaski County, Second Division, to recover $4,400 as damages on account of an alleged breach of contract in the sale and purchase of $53,500 of the district’s bonds. The alleged breach consisted in the refusal of the district, through its qualified and acting officers, to deliver said bonds to appellant upon payment to them of $48,963.11, in addition to his certified check for $1,000 which he had deposited with them as purchase money when the contract was signed.

Appellees filed an answer, denying a breach, of the contract on the part of the district in refusing to deliver the bonds upon payment of $48,963.11, alleging that the $1,000 check had been garnished in an action in the circuit court of Pulaski County wherein M. W. Elkins was plaintiff and appellant was defendant. The cause was submitted on the pleadings and testimony, which resulted in a judgment upon an instructed verdict in favor of appellees, from which is this appeal.

The contract alleged to have been breached is as follows:

‘ ‘ CONTRACT OR PURCHASE.

“September 29, 1924.

“To Commissioners of Street Improvement District No. 376, Little Bock, Arkansas.

“For the approximately $54,000 bonds of Street Improvement District No. 376, to be in denominations of $500 or $1,000, at our option, to be dated August 1, 1924, and to mature serially 1926 to 1945, said maturities to be approved by the attorney of the district and our attorney, and to draw interest at the rate of six per cent. (6%) per annum, payable semi-annually on February 1 and August 1 of each year, both principal and interest to be payable at St. Louis Union Trust Company, St. Louis, Mo., we will pay you ninety-seven and 50/100 dollars for each one hundred dollars of the par value or face value of the bonds delivered to us in St. Louis, Mo., subject to the following conditions:

“1. Prior to the delivery of the bonds to us we are to be furnished a complete certified transcript of the proceedings authorizing the -issuance of the bonds, which shall evidence to the satisfaction of a firm of recognized bond attorneys, Rose, Hemingway, Cantrell & Lough-borough,'selected by us, that the bonds are a legal and binding obligation of Street Imp. Hist. No. 376. The fee of said attorneys to be paid by the district.

‘ ‘ 2. The bonds are to be prepared and printed under our direction and the cost of same to be paid by the district.

“3. The foe for certifying these bonds to be borne by the district, and it is understood that we are to have no expense whatsoever.

“4. The bonds are to be delivered in accordance with the conditions of this proposal, to us in St. Louis, Mo., on or before November 1, 1924, otherwise thereafter at our option.

“5. It is hereby agreed that we are to have the right, at our option, of converting the interest rate on the bonds to 5% per cent., all other features of this proposal to remain unchanged, except that the purchase price above stipulated for 6 per cent, bonds will be changed to conform to the same-income basis price for 5H> per cent, bonds based upon standard tables of bond values.

“6. As evidence of our good faith, we attach hereto cashier’s check No. 31030 of the Nat’l City Bank, St. Louis, in the amount of $1,000, indorsed to your order, which check is to be held uncashed as earnest money and eventually utilized as part payment for said bonds, when delivered to us in accordance with the terms of this proposal; or returned to us in case the aforesaid attorneys are unable to approve the legality of the bonds; or forfeited as liquidated damages in full settlement of our liability in the event that we fail to comply with the above terms of this proposal.

“This proposal is made for immediate acceptance or rejection, and, if rejected, the cashier’s check attached hereto is to be returned.

“Burkholder Bond Co.

“By Gr. E. Burkholder.

'[The above and foregoing proposal is hereby accepted, and a copy thereof is ordered spread upon the minutes of tlie proceedings of this meeting held at Little Rock, Arkansas, this twenty-ninth dav of September, 1924. ' ' -

“Street Imp. District No. 376,

“ Little Rock, Árk.

“By W. D. Braddock, Secy.

“A. V. Smith, 'Chrn’n.

“W. M. Rankin, Corn’s’r.”

The facts material to a determination of the controlling questions on this appeal are undisputed. On November 17 W. M. Rankin, one of the commissioners of the district, and "W. W. Shepherd, one of its attorneys, presented the bonds to appellant at his place of business in St. Louis for acceptance and payment in cash of the full consideration, amounting, by agreement, to $49,963.11. Appellant agreed to accept the bonds if the district would allow him a credit of $1,000 on the cash payment for the certified check he had given them when the contract was executed. The credit ivas refused on the ground that a writ of garnishment had been served on the district on the 3rd day of October, 1924, impounding the check in a suit in the circuit court of Pulaski County, wherein AI. W. Elkins was plaintiff and appellant was defendant, which suit had been transferred to the chancery court and was undecided at the time the bonds were presented. It appears that on October 14, 1924, the district filed its answer to the garnishment, setting out the contract between appellant and defendant, praying for its dismissal. On October 28, 1924, the appellant filed a motion to quash the writ of garnishment. On October 31, 1924, the motion was overruled,' and the suit in which the garnishment was issued was transferred to the chancery court. -

We do not think the district breached the contract b,v refusing to accent the $1.000 check as part payment for the bonds. Under the terms of the contract the click became the nroperty of appellant after November 1, 1924, for it was optional with him, after that time. whether he would buy the' bonds. The district could not have appropriated the check after November 1, either as part payment for the bonds or as liquidated damages for ¡appellant’s refusal to take the bonds. In other words, the district had no interest in the check after November 1,1924, and it, being the individual property of appellant, was subject to garnishment. The refusal of the court to quash the writ and transfer the action carrying the garnishment proceedings therein to the chancery court justified the commissioners of the district in refusing to accept the check, thus impounded, as part payment for the bonds. The validity of the writ of garnishment wlas a question for the court, and not the commissioners of the district, to determine. The burden did not rest upon the district after November 1,1924, to make further defense to the suit of M. "VY. Elkins seeking to recover the proceeds of the check to apply on appellant’s indebtedness to him, as it no longer had any interest in the check. It would indeed be a harsh and unjust rule to require commissioners of an improvement district, acting in the capacity of trustees for public funds, to accept in part payment of the district’s bonds, checks of a purchaser which had become the subject-matter of litigation. Appellant, having refused to exercise his option by paying full consideration therefor, was not entitled to recover, damages for the alleged breach of the contract by the district.

No error appearing, the judgment is affirmed.


text:
    Lemon v. Tanner.
    Opinion delivered March 28, 1927.
    1. Deeds — description.—A descrintion of land in a deed is sufficient if the descriptive words furnish a key for identifying the land.
    2. Easement — reservation of road — uncertainty. — A reservation in a deed of land of a road, described as beginning at the northeast corner of the land, “thence west along line through small field, thence southwest around the foot of steep hill on right-of-way now cut out for wagon road, 30 feet wide,” was void for uncertainty, where there was no road cut through the land 30 feet wide or approaching that width.
    3. Eminent domain — compensation for land taken. — Property of an individual cannot be taken for public use as a road without compensation.
    Appeal from Washington Chancery Court; Sam Williams, Chancellor;
    reversed.
    Appellants pro se.

      J. Wythe Walker, for appellee.
   Humphreys, J.

This is a suit to enjoin John Tanner and his successor as road overseer of Lee’s Creek Township, Washington County, Arkansas, from maintaining a public road through the southeast quarter of the southwest quarter of section 7, in township 13 north, range 30 west, in said county, for the use of the public.

The road was ordered opened and improvéd by the county court on the theory that the public was entitled to the particular route adopted under and by virtue of reservations contained in deeds to the land from John M. Tucker to F. B. Scott and from F. B. Scott to appellants. The reservation following the description of the land in each deed is as follows: “Except wagon road described as beginning at the northeast corner of above described forty-acre tract, thence west along line through small field, thence southwest around the foot of steep hill on right-of-way now cut out for wagon road thirty feet -wide for public use through above described forty-acre tract.”

Several issues were joined in the pleadings, but, at the inception of the trial of the cause, an agreement was entered into between the parties in open court limiting the controversy to the single issue of whether the road was laid out and improved along the route described in the reservations in said deeds. The agreement is as follows:

“It is further agreed by the parties'in open court that the order of the county court mentioned in the' pleadings in this case undertaking to establish a county road through the land described in the deeds heretofore intro-cluced was intended to establish such county road along the line as described in the reservation in said deed. And plaintiffs (appellants) concede that, if said road was established on said line, they should fail in this action, and it is conceded by the defendants (appellees) that they have no right to a county road over any other .part of said lands than what is mentioned in said reservation.’-

The undisputed testimony in the case reflects that the right-of-way referred to in each reservation had not been cut out at the time the reservations were made, and was never attempted to be cut out until the overseer and his assistants cut a strip of timber 30 feet wide along the trail running- from the field referred to, southwest through the 40-acre tract. This was done after the appellants piu--chased and moved on the land. In other words, the road was not laid out, after leaving the field and turning southwest, along the line of a right-of-wa}*- which had been cut out 30 feet wide, or any other width. The line along which the road was built, after turning- southwest, was a trail through the woods. There was a road, after leaving the field, running almost west through the 40-acre tract which had been used by the public for forty or fifty years, known as the Jahagan road, but that road had never been cut out 30 feet wide, and was referred to by some of the witnesses as a trail through the woods also. There was no road which had been cut out 30 feet wide, or approaching that width, on the 40-acre tract at all when the reservations were made. The testimony does not reflect which side of the steep hill the road reserved ran upon, or how long the hill was.

The rule is that a description of land is sufficient if the land can be located by evidence aliunde from the description itself. If the descriptive words themselves furnish a key for identifying the land conveyed, nothing-more is required. Tolle v. Curley, 159 Ark. 175, 251 S. W. 337. Applying this rule to the descriptive words contained in the reservation it will be observed that the only key or guide by which the land embraced therein might he located by even aliunde evidence is the reference to a cutout right-of-way 30 feet wide. No right-of-way appears to have been upon the land when the reservations were •made. The reservations therefore, after leaving the field, were and are void for uncertainty in description. Burns v. Harrington, 162 Ark. 162, 257 S. W. 729. Being void by reason of indefiniteness in description, the road was not, and could not, be laid out over them. Under the agreement, appellees were not entitled to a road over any part of said land other than such portion thereof as could be definitely located by the descriptive words in the reservation. Appellants’ property could not be taken for public use without compensation.

The decree is therefore reversed, and the cause is remanded with directions to the chancery court to enjoin the road overseer of said township 'from maintaining the road for public use across appellants’ land, unless and until the county court shall lay off the road as a public road and provide for damages and compensation to appellants.


author: Kirbv, J.,

text:
    Barnes v. Balz.
    Opinion delivered March 28, 1927.
    1. Venue — waiver of objection. — Under Crawford & Moses’ Dig., § 1176, 1178, providing that certain causes of action may he instituted in the county where the defendant or one of several defendants resides or is summoned, a defendant summoned in a county not of his residence, who appears and makes no objection to the suit proceeding against him before judgment, is deemed to have waived his right to do so.
    2. Judgment — authority to enter default after sustaining demurrer. — Where the court sustained a demurrer to a complaint, it could not subsequently, without amendment of the complaint and without setting aside the order sustaining the demurrer, enter a default judgment against the defendants.
    3. Pleading — proof TO' sustain complaint. — Where the allegations of a complaint are specifically denied by ans.wer, it was error to enter judgment for plaintiff by default; the action not being founded on a verified account, and in the absence of an affidavit that no good and valid defense existed.

      4. Venue — objection to venue availabt.e when. — Under Crawford & Moses’ Dig., § 1776, defendants, not residents of the county-in which the action is brought, after dismissal of the action as to defendant, whose joinder authorizes suit in that county, have a right to object, to any judgment being rendered against them.
    Appeal from Randolph Circuit Court; John C. Ashley, Judge;
    reversed.
    STATEMENT BY THIS COURT.
    Appellee commenced this suit in the Randolph Circuit Court on-a $4,000 policy issued by "the South Arkansas Mutual Fire Insurance Association, and alleged that he became a member of said association by application made by his agent, George William Balz, on November 14, 1924, for fire insurance on the Balz Hotel, paying for the membership and premium for insurance $80 required; that, under the agreement, the insurance was to be effective from the date of the application; that, subsequent to the execution of the application for insurance'and payment of premium, the property insured, the hotel building, burned on November 22, 1924, and was a total loss; that, subsequent to the fire, a policy from the South Arkansas Mutual Insurance Company was delivered to him, which stipulated the divisions in which plaintiff was to have insurance, designated as Division Nos. N-298, amount of insurance $1,000; R-187, amount of insurance $1,000; S-182, amount of insurance $1,000; T-182, amount of insurance $1,000.
    It was further alleged that, without the knowledge of plaintiff, $1,800 in insurance had been taken out on the building by a creditor, upon which had been realized the sum of $1,240, the proportionate part due from this company, and that the proportion due under the said $4,000 policy is $2,760; that the said South Arkansas Mutual Fire Insurance Association, subsequent to the fire, was taken over by the Modern Mutual Insurance Company, defendant, “under an arrangement to the effect that the said Modern Mutual Insurance Company should be liable for its obligations.”

      Plaintiff states tliat the said South Arkansas Fire Insurance Association was a mutual assessment association, and that the said Modern Mutual Fire Insurance Company is a mutual assessment association; alleged further that the insurance was in divisions containing a certain number of members; that the members in these respective divisions “have already been assessed by the defendant’s officers on the basis of a $4,000 liability,” and that, in view of the fact that the membership in said divisions was charged the levy and assessment of $5 on each member, which would yield the sum of $1,500, one-third of which was to go toward the payment of expense of management of defendant company, two-thirds of which amount was to be paid to the beneficiary; “that the membership in each of the aforesaid divisions is now far below the number sufficient to yield the said amount of $1,500 on assessment, and that the assessments, if collected in full on each of the divisions in which plaintiff has $1,000 insurance, will amount to not more than $2,760;” alleged the proof of loss was made to the defendant and the aforesaid South Arkansas Mutual Fire Insurance Association, and that assessments were made on the membership within which defendant’s insurance was placed on a basis of a $4,000 liability, and that the said assessments have been collected by the defendant, two-thirds of which sum amounts to more than the sum of $2,7(50.
    A .judgment was prayed against the defendant in the sum of $2,760. A copy of the certificate from the South Arkansas Mutual Fire Association was filed as an exhibit, and summons was issued directly to the sheriff of Pulaski County on the 17th day of June, 1925.
    Plaintiff next moved to make X. O. Pindall a narty, who was receiver of the defendant, Modern Mutual Insurance Company, which had gone into his hands as receiver since the service of summons on it. The summons was issued to Pulaski County, and served on the receiver on the 29th day of June.

      Plaintiff then filed an amendment to the complaint and a motion to make the bondsmen parties, alleging that the predecessor of the Modem Mutual Insurance Company, defendant, was the South Arkansas Mutual Fire Insurance Association, which was taken over and became the Modern Mutual Insurance Company about the first day of March, 1925; that it had executed a bond on the 10th day of December, 1923, as required by law, and approved by the Insurance Commissioner, with appellants sureties thereon, and that the bond had been breached by the South Arkansas Mutual Fire Insurance Association, to plaintiff’s injury in the sum of $2,760; that the defendant took over the assets of the South Arkansas Mutual Fire Association on such terms that it became responsible for all the liabilities of its said predecessor, executed its bonds by its president, Joe Bailey, and ¥m. B. "Womack, its secretary, and with Joe Bailey, L. W. Watson, W. B. Womack, John A. Cobb and Z. A. Copeland as sureties, conditioned as required by law; that this bond was approved by the Insurance Commissioner on February 11, 1925; that each of said bonds is. in the sum of $20,000 and, “plaintiff states that the defendant, Modern Mutual Insurance Company, took over the assessments collected for the plaintiff by the South Arkansas Mutual Fire Insurance Association, and plaintiff alleges that the -bond of both the South Arkansas Mutual Fire Insurance Association and the said'bond of Modern Mutual Insurance Company and the sureties thereon are each jointly and severally liable to this plaintiff for the amounts sued for.” Prayed judgment that all such sureties, naming them, be made -parties defendant, and „that his original complaint with the amendment be-considered his complaint against all the defendants and prayed judgment accordingly.
    This motion and amendment to the complaint was verified bv plaintiff’s‘guardian and next friend on January 21, 1926, and process issued to Union 'and Pulaski counties -on the 30th of June, 1925.

      On the 22d day of July, 1925, the bondsmen filed a general demurrer and sepárate answer to the motion to make them parties and amendment to the complaint, and, without waiving their rights under the demurrer, denied the execution of the bond of December 5, 1923, or any other date; denied the execution on February 11, 1925, or any other date, of bond for the Modern Mutual Insurance Company; denied that said company took over any assessments collected for the plaintiff by the South Arkansas Mutual Fire Insurance Association, and that the bond of said fire insurance association or the sureties is liable to the plaintiff in any way, for any amount sued for, or any other amount; denied that the sureties on the bond of the Modern Insurance Company were in any way liable to the plaintiff for the amount sued for, or any amount; that any assessments were collected for the plaintiff, either by the Modern Mutual Insurance Company or the South Arkansas Mutual Fire Insurance Association.
    The demurrer was confessed and sustained, and the plaintiff given thirty days leave to amend its complaint, and the defendants were given thirty days to answer, and the cause continued until the 5th day'of the next term of court.
    On January 18,1926, the attorney for the defendants, upon leave of the court, withdrew from the case, and, on the 22d, the fifth day of the regular January term, plaintiff took a nonsuit and dismissed his case as to the defendants, Modern Mutual Insurance Company, the receiver, and each and all of'the sureties on its bond.
    The judgment recites it appeared that appellants liad been duly served in Union County, Arkansas, on July 3,1925, and that said defendants did, on the '22d day of July, 1925, file an answer herein, which answer was unverified, denying the allegations of the complaint of the plaintiff, and that the attorney for the defendants had withdrawn from the case by leave of the court; that they were no longer represented, and failed to appear; recited that the complaint was verified; that the South Arkansas Mutual Fire Association had ceased to exist as a corporation, and that, prior to then, it had collected $2,760 of the policy holders of the company on the policy of insurance issued to the plaintiff, which it had failed to pay over, and that the said bondsmen were liable to the plaintiff for that sum, less a small balance, and rendered judgment therefor, with interest, from which an appeal was granted by the clerk of the Supreme Court.

      Allyn Smith, for appellant.
   Kirbv, J.,

(after stating the facts). Appellants insist that none of them was ever served with process in Randolph County, where the fire loss occurred and the suit was brought, and that suit.was not brought against the insurance company of which they were sureties on the bond, and no service was ever had upon it, and that judgment could not be rendered against them there.

The statute does provide that certain causes of action may be brought in the county in which the defendant or one of several defendants resides or is summoned, and also that, where the action embraced in said section of the statute (1176 Crawford & Moses’ Digest) is against several defendants, plaintiff shall not be entitled to judgment against any of them on the service of summons in any other county than that in-which the action is brought, where no one of the defendants is summoned in that county , or resided therein at the commencement of the action, unless judgment is recovered against the defendant upon whom service was had in the county. Tf the defendant summoned in another county appears, Iioav-ever, and makes no objection to the proceeding against him before judgment rendered, he is deemed to have waived his right to do so.

The statutes also provide that actions against insurance companies of the kind herein may be brought in any county in the State Avhere the loss occurs, and that the sureties on the bond given by the company may be joined in such action. This suit was not brought in the first instauce against either the sureties on the bond of the South Arkansas Mutual Fire, Association nor against it. The Soutli Arkansas Mutual Fire Association was never made, or attempted to he made, a party to this suit, and a motion to make additional parties as an amendment to the complaint was filed, and these appellants, residents of Union County, sureties on the hond of said company, and also the sureties on the bond of the Modern Mutual Fire Insurance Company, were made parties defendants, and brought into court.

They filed a general demurrer to the complaint and amendment, and, without Avaiving any rights thereunder, filed an answer, denying the execution of the insurance bond or any liability to the plaintiff on any account Avhat • ever. The demurrer Avas thereupon confessed and sustained, and the plaintiff giA-en thirty days to amend and defendants thirty days in Avhich to ansAver the amended pleading. No amendment to the pleadings Avas filed, Iioav-ever, the'attorney for defendants Avas alloAved to Avith-draiv from the case, the suit Avas dismissed as to the Modern Mutual Insurance Company, the original defendant and all its bondsmen, and on the same a .judgment rendered by default, and Avithout any exfidence introduced against these appellants, sureties on the bond of the old South Arkansas Fire Insurance Association.

The court having determined by order, on confession of the demurrer, that the complaint di’d not state a cause of action 'against defendants, and granted leave to amend, could not thereafter, Avithout overruling and setting aside such order, proceed to trial on the original complaint adjudged insufficient. No amendment having been made or proposed under permission granted therefor, the complaint should have been dismissed. Certainly the court could render no judgment by default thereon Avithout -proof against these parties to the suit, Avhose answer was properly filed, denying all the material allegations of the complaint. Hurst v. Davis, 291 S. W. 799.

The verification of the complaint in the instant ease, the action not being- founded upon an account, nor the affidavit in form such as is required to prove an account (<§. 4200, CraAA-ford & Moses’ Digest), and it not beina' in form an affidavit on the merits that no good and valid defense existed to the action, made no other or greater proof necessary on the side of the adverse party, the defendants. (§ 1214, C. & M. Digest).

Since appellants, the sureties on the South Arkansas Mutual Fire Association bond, could not be made parties to a suit over their objection in any county but that of their residence, except upon their being, joined in the suit against their principal and maybe its successor in liability, they would have had this right to object after the non-suit or dismissal of the action as against the defendant, Modern Mutual Insurance Company, and the sureties on its bond, to any judgment being rendered against them at all. ■ : ;•••'•*!

For the errors committed in rendering' judgment by default against them on a complaint already adjudged insufficient as not stating a cause of action, and without the introduction of testimony to support the claim over the allegations of the answer denying specifically and generally the allegations of the complaint and any liability thereunder, the judgment must be reversed, and the cause remanded for a new trial. It is so ordered.


author: Kirby, J.,

text:
    Old American Insurance Company v. Jackson.
    Opinion delivered March 28, 1927.
    1. Appeal and error — conclusiveness op verdict. — Though the verdict of a- jury is against the weight of conflicting evidence, it will not he disturbed on appeal.
    2. Insurance — right to introduce by-laws. — Where the answer in' an action on a life insurance policy alleged that the insurer’s by-laws were part of the contract, and generally denied the ■ allegations of the complaint, held that insurer could introduce the by-laws to show that the liability was less than the amount claimed, though it would have been better pleading to allege specifically a limited liability provided in such by-laws.
    3. Pleading — indefiniteness—remedy. — Where plaintiff deems defendant’s answer indefinite and uncertain, his remedy is a motion to make it more definite and certain.

      4 Insurance — limitation op liability — evidence.—Where an insurer alleged that its by-laws were part of its contract, and offered to prove by its by-laws a limitation of liability, refusal to admit such proof was error.
    5. Evidence — parol proof op corporate by-laws. — In an action under a life insurance policy which made the by-laws of insurer a part of the contract, it was competent to prove such by-laws by the president of the company.
    Appeal from Little Biver Circuit Court; B. E. Isbell, Judge;
    reversed.
    STATEMENT BY THE COURT.
    This suit was brought on a policy of the Old American Insurance Company issued by said company on the life of Buck Jackson to Jener Jackson, beneficiary.
    It was alleged that the premium had been paid in accordance with the terms of the contract providing for payment of $1,000 to the beneficiary'on the death of the insured; that the insured had died while the policy was in full force, and that proofs of death had been duly made, and the company had refused to pay the policy and denied liability thereunder.
    The answer denies each and every material allegation in the complaint, except those specifically admitted; admits the issuance of the policy; alleged that the policy, application and by-laws of the company constituted the contract 'between it and Buck Jackson, insured; that both provide the insured, at the time of obtaining the policy, must be in good health, and all answers made in the application for insurance are warranties; that the insured had denied therein ever having had tuberculosis, lung trouble of any kind or influenza, and that he answered “No” to a question that he had been treated by a physician in the past two years; that the answers to these questions were false, and were warranties, but for which policy would not have been issued; and alleged further that Buck Jackson was not an insurable person at the time he obtained the policy, that he was suffering from chronic ailments, and receiving medical treatment therefor from the time policy was issued, and died on the 20th day of May, 1925; that, if all his condition had been disclosed, and it would have been if true answers had been given to the questions asked, the policy would never have been issued.
    The testimony shows that deceased died with tuberculosis, or consumption, as some of the witnesses called it. Some of the proof was positive to the effect, judging from the result and certainty of diagnosis of the disease, that it had existed and insured was suffering from it for some time at the time of, and long beiore, the application was made and policy issued. The evidence was in conflict, however, on this point.
    Other witnesses testified that there was no such indication, at the time of the issuance of the policy, that deceased was afflicted with this disease, of which he after-wards died, and that he was in apparently good health.
    The insurance company offered to prove by its president, who had a copy of the by-laws, -which were made .part of the policy by its terms, that they were the by-laws and provided for the payment in full satisfaction of the policy, the amount collected by assessment on members for payment of the loss for the death -of the last decedent in the month preceding the death of the insured; that the by-laws provided, as the limit of the liability, the amount paid under such assessment, to be determined by the certificate- from the secretary and treasurer. The court refused to permit the introduction of this testimony, over defendant’s objection, and also refused' to give its requested instruction No. D as follows:
    “The court instructs the jury that, if you find from a preponderance of the evidence in favor of plaintiff, that your verdict cannot exceed the amount of $575.70, that being'the gross yield or amount paid in by the policyholders in assessments or premiums for the month of June, 1925, in the twenty thousand series, in which Buck Jackson was classified.”
    The jury returned a verdict against appellant for $1,000, the maximum amount of the policy, and, from the judgment thereon- for said amount, with penalty and attorney’s fees, this appeal has been prosecuted.

      John L. Ciarle, for appellant.

      Otis Gilleylen, for appellee.
   Kirby, J.,

(after stating tlie facts). It is contended that the judgment is not supported by the evidence, which shows that the answers to the questions relative to insured’s health made in his application were warranties and false; that he was suffering, at the time of application made for insurance, with, and had been treated for, tuberculosis, of which disease he later died.

The Aveight of the evidence is in favor of the falsity of these warranties, it is true, hut the testimony is not undisputed, and the jury, upon conflicting testimony, have found against the appellant, and its verdict will not be disturbed.

It is next contended that the court erred in refusing to admit the proof of the by-laws of the association by its president, Mr. Judd, and in excluding his testimony regarding the amount of the assessment recoverable thereunder and also in refusing to give its requested instruction D, limiting the amount of the recovery to $575.70. Appellee insists that, it not being specially pleaded in the ansAver, the by-laAvs relating to limiting the amount of the recovery to the one assessment producing less than the amount expressed in the policy, could not he considered.

Section 3, article 5, of the by-laws offered to be proved by the president of the company, provides:

“All policies shall he placed in series in numbers as the hoard of directors or the president shall designate, and no policy-holder shall he entitled to a greater benefit or a greater policy value than the yield Avhich one single assessment on the series in Avhich he was classified Avill produce in the month succeeding the approval of the claim of the policy-holder or beneficiary. This shall be the maximum limit of liability of the company. The SAVorn statement of the secretary or assistant secretary as to the yields shall be the basis of settlement under this clause. This clause shall apply to all policies issued by this company or association.”

The president, Mr.-Judd, also stated in his deposition which was excluded that' the amount of $575.70 was yielded by the assessment of the twenty thousand series in which Buck Jackson was classified in the month succeeding his death, and exhibited the sworn statement of the assistant secretary of the company showing that sum.

The answer expressly denied every material allegation of the complaint except such as are specifically admitted, one of which is that the company would insure the life of the said Buck Jackson in the sum of $1,000 to be paid in the case of his death to Jener Jackson upon proof of death, no admission of which is made in the answer. It also alleged that the policy, application and by-laws of the said defendant constituted the contract between the company and the insured, and, although this allegation is in a clause relating to the warranties made in answer to questions in the application as to the insured’s good health, it was nevertheless such an allegation as entitled the company to introduce in support of it the provisions of the by-laws relating thereto, which the policy also provides shall constitute a part of the contract of insurance.

It had been better pleading to deny specifically the liability for the payment of the maximum amount expressed in the policy and to set up or allege liability only to the payment of the amount of the one assessment as provided in the by-laws. But, if the answer was regarded indefinite and uncertain, the defect could have been remedied by a motion to make it more definite and certain.

The court erred in refusing to admit the proof of the by-laws of the association and also in excluding the president’s statement that the yield of the assessment for which the company was liable to payment under the policy, upon the death of the insured, was $575.70.

This court has often held that, although a certified copy of the charter under which a corporation is organized is the best evidence of its existence, it may be established by other and parol testimony. Kelley v. Stern Pub. & Nov. Co., 147 Ark. 383, 227 S. W. 609; Stur- divant v. Ka-Dene Medicine Co., 169 Ark. 535, 275 S. W. 921; Amer. Trnst. Co. v. Netherlands-Amer. Mtg. Bk., 169 Ark. 869, 276 S. W. 1010.

Under the same principle as well as the authority of the ruling in Knight v. American Insurance Union, 172 Ark. 303, 228 S. W. 395, it 'was competent to prove the by-laws of the corporation by its president, who also could testify to the amount of the yield of the assessment for which the company was liable to payment under the terms of the policy, and this without regard to whether his testimony exhibiting the affidavit and. certificate of the 'assistant secretary showing the amount of the assessment was admissible or not. If this testimony erroneously excluded had been admitted, appellant was entitled to have its requested instruction D given also. For the errors designated the judgment is reversed, and the'cause remanded for new trial.


author: Mehafuy, J.

text:
    Garrett v. Lion Oil & Refining Company.
    Opinion delivered March 28, 1927.
    1. Deeds — effect of surrender of unrecorded deed. — Where the grantee in an unrecorded deed returned the deed to the grantor without executing a reconveyance, and the grantor executed to the grantee a new deed to one-half of the land, the title to the other half was not revested in the vendor.
    2. Mines and minerals — notice of prior conveyance. — Where a lessee in an oil and gas lease had notice that the lessor had conveyed one acre of the leased tract to another, part of which was under fence, and such acre was specifically excepted from the lease, there was no fraud practiced on the lessee in excepting the acre.
    3. Mines and minerals — notice of prior conveyance. — Lessees under an oil and gas lease, excepting one acre previously eon- - veyed by the lessor, were not innocent purchasers of a lease of the entire tract, but took with knowledge of the rights of the purchaser of the one acre, regardless of whether the lessor subsequently reacquired the acre or not.

      Appeal from Union Chancery Court, Second Division; George M. LeCroy, Chancellor;
    reversed.

      Kitchen £ Harris, Marsh, McKay £ Marlin and Potu-ell, Smead £ Knox, for appellant.

      Mahony, Yocum £ Saye, for appellee.
   Mehafuy, J.

In 1908, and for some time prior thereto, Jesse T. Murphy was the owner of a 65-acre tract of land in Union County, Arkansas, described as all of the NE14 of the NE44 of section 8, except 5 acres in a square in the NW corner of said 40-acre tract, and the W% of the SEI4 of the SEÜ of section 8, all in township 16 south, range 15 west, Union County, Ax-kansas, containing 65 acres.

On January 27, J. T. Murphy and his wife, Mattie Mnrphv, conveyed one acre out of the 65-acre tract to Louis Hicks. The one acre conveyed to,Hicks was described in the deed to Hicks as follows: “Begin at NE corner of the SE% of SEÍ4 section 8, Twp. 16 S. range 15 W. run west one hundred and seventy (170) yards, thence run south (22) twenty-two yards to the place of beginning, thence run south 70 yards, thence west 70 yards, thence north 70 yds., thence east 70 yds. to place of‘.beginning, containing one acre.” The deed stated “do hereby grant,, bargain, sell and convey unto the said Louis Hicks and unto his assigns forever.” It did not contain the word heirs. The habendum clause also omitted the word heirs, and stated “mito his assigns forever, for a graveyard.” The acre of land conveyed to Hicks was used by him as a graveyard or burial place, and Hicks cleared about >/t of the acre after it was conveyed to him, but he did not put his deed on record.

The graves of the persons buried were marked, and the remaining 64 acres was still held by Murphy as open and unimproved land until March 17, 1922, on -which date Murphy and his wife executed and delivered to W. G. Sanford an oil and gas lease to the 65 acres, excepting one acre, now used as a cemetery, and describing it as containing 64 acres more or less. The lease provided for an annual rental of $64. Whether the exception of the' one acre was valid or not, Sanford’s lease was upon 64 acres only. And if the lease from Murphy to Sanford had included the one acre used as a burial place, it would have been 65 acres. Sanford thereafter assigned a portion of this lease to Marshall Spoonts, trustee for the Oil Operators’ Trust. This assignment recites the original lease and contains the description as it is in the original lease. Spoonts thereafter resigned as a trustee, and 0. F. Spencer was selected trustee, in succession. Later C. F. Spencer and Dan Lydick were appointed receiver for the Oil Operators’ Trust.

The Lion Oil & Refining Company submitted an offer to the receivers to purchase the property, and, in itemizing the property that they' proposed to buy, they described this tract, and in the description was “less one acre used as a cemetery.” An assignment was afterwards executed by Spencer and Lydick as receivers, and Spencer also acted as trustee, conveying the property to the Lion 0-il & Refining Company.' From the time the deed was made to Hicks, 1908, until some time in 1924, Hicks had kept his deed in his possession, but had never had it recorded. On April 5, 1924, Hicks returned the deed to the one acre and Murphy executed a new deed conveying one-half of the original acre tract. There was no reconveyance by Hicks, but he simply delivered the original deed to Murphy. The one-half acre that contained the graves was under fence. Murphy paid Hicks nothing for the surrender of the deed. In March, 1925, Hicks executed a warranty deed to the one-half acre which was not inclosed, to G. D. Hayes, describing the one-half acre as follows: “Beginning at the northeast corner of the southeast quarter of the southeast quarter of section 8, township 16 south, range 15 west, running west .633 feet, thence south 66 feet for a point of beginning, thence south 210 feet, thence east 1Ó5 feet, thence north 210 fee,t, thence west 105 feet, to point of beginning, being one-half (i/>) acre more or less.”

Hayes, on the same day, executed an oil and gas lease on the one-lialf acre to Fred W. Bowen. Bowen assigned one-half interest to M. L. McCorkle, who assigned an interest to Thurman. The owners of the lease on the one-half acre conveyed to him by Hicks drilled an oil well upon the property, which is still producing large quantities of oil. Shortly after the drilling of said well, appellees brought a suit in the chancery ' court to enjoin the appellants from drilling and taking oil from said one-half acre, alleging that they were the owners of said one-half a,cre tract, under, the original. lease from Murphy to Sanford.

After this suit was filed, Murphy was unable to locate the deed which Hicks had returned to him, and parol evidence was ■ introduced, and a decree rendered to the effect that the evidence of the execution of the deed was insufficient. Before the term of court adjourned, Murphy found the deed, the court set • the original decree aside for the purpose of hearing further evidence. The deed was then introduced, and the court again found in favor of appellees, holding that the deed to Hicks conveyed only the surface right for a graveyard, and did not convey a fee sifuple estate, nor any interest in oil .and gas, and again entered a decree in favor of appellees.' This deed from Hicks to Hayes was placed on record in March, 1925. The suit brought not only asked for an injunction, but for a cancellation of the deed, lease, and assignments. There is practically no dispute about the facts, and the appellant states that the case presents only the following propositions of law:

. 1. Did the deed from Murphy to Hicks in 1908 convey the oil and gas to Hicks?

2. Did Sandford, by his lease from Murphy in 1922, acquire any interest in this one-acre tract of land?

3. Did Murphy acquire any title to the Hayes half-acre by reason of the fact- that Hicks, in 1924, surrendered the original deed covering one acre to him and took a new deed to the one-half acre? -

4. If Murphy did acquire title by this transaction, did such title inure to the plaintiffs under the doctrine of after-acquired title?

We think the proof is clear and convincing .that Murphy executed and delivered to Hicks a deed in 1908. This deed was not recorded, and it was afterwards surrendered to Murphy, and Murphy executed and delivered to Hicks a deed to one-half of the acre, and this deed was put on record.

It is earnestly insisted by the appellee that, in cases like this, where the deed was delivered back to the grantor-with the intention of revesting title in him and a new deed wias executed to the grantee, a- court of equity will treat the transaction as vesting the equitable title in the grantor, and in effect that the grantee holds the naked legal title as trustee for the person to whom he surrendered the deed. Appellees admit that the ease of Strawn v. Norris, 21 Ark. 80, has no-particular bearing on this case. And we think also that the case of Neal v. Speigle, 33 Ark. 64, has no particular bearing. The facts in that case are wholly unlike the case at bar, and the court said: “At the time the deed and mortgage were burned, Jones being dead, the legal title to the lands was in his heirs at law by virtue of the mortgage, and the equitable title was in Shaver, and the destruction of the deed did not divest his title and revest it in the heirs of Jones. The legal existence of the deed and mortgage continued, though the papers on' which they were written were burned. * * * A court of equity would not have permitted Shaver to take advantage of the fraudulent registration of the deed, but would have opened the agreement upon which the mortgage, note, and deed were burned. ■ Nor can the appellant in equity and good conscience be allowed to avail himself of a fraud of which he had full knowledge and which he aided Shaver in attempting to perpetrate.” Neal v. Speigle, 33 Ark. 64.

The situation in. the case at bar is wholly different, and this is true, we think, of the other eases relied on by appellees, but they state when Murphy executed the lease to Sanford, which is now owned by the appellees, Murphy, as well as Hicks, and also Sanford, clearly understood that Murphy had title to all the 30 acres of laud except that being used as cemetery. The laud being used as a cemetery was fenced, and its limits therefore unmistakably defined. We do not think the evidence .justifies the statement of the appellees, but we think, on the contrary, that Sanford knew he was getting 64 acres and no more.

A number of cases of other states are referred to, but this question is so thoroughly settled by the decisions of our own court that we think it unnecessary to-discuss them, and our court has stated, in the case quoted from by appellees, that the decided weight of authority is that the surrender of a deed, though not registered, mil not operate to revest the grantor with the title. We therefore hold that the surrender of the deed to the one acre by Hicks to Murphy did not operate to revest the title in Murphy.

Appellees next discuss the mutual mistake in the deed of 1908, and state that it is their belief that the fence was constructed at the very time that the deed was executed, and on a wholly different tract of land from that described in the deed. Admitting this to be true, appellees had notice that Hicks had one acre, and if he did, and had one-lialf of it fenced, as they say he did from the beginning, there was certainly no fraud practiced by anybody against the lessee, because, in the lease itself, granting the right to Sanf-ord, it states specifically, “excepting one acre now used as a cemetery,” and, if he had only one-half of it fenced, they were bound to take notice from the lease itself that he had one acre, and, to make it more certain, the lease further stated, after the description of the part, “containing 64 acres more or less,” there were 65 acres in the tract, the lease expressly exempted one acre, used as a cemetery, and expressly stated that there was conveyed 64 acres more or less. The evidence does not show that Murphy reacquired the title by adverse possession. He was not claiming it adversely, and, as late as,1922, the time he executed the lease to Sanford, the statement in the lease, excepting one acre, we think, shows that he did not claim it by adverse possession, and, whatever may have been the situation between Hicks and Murphy, Murphy- did not intend to convey the one acre formerly granted as a cemetery. He did not intend to convey more than 64 acres, and Sanford knew that one acre was exempt and knew that only 64 acres was being conveyed to him.

Appellees next contend that the deed from Murphy to Hicks did not convey a fee simple.title, and the first case they call attention to is in the 112 Arkansas. In that case the deed contained the following:

“Now therefore, in consideration of the premises above recited and of the sum of $1 to us in hand paid., we, the said Theodore Maxfield and Charles W. Maxfield, do grant, bargain, sell and convey unto the said C. R. Han-ford, W. li. llallett, and J. S. Hanford, partners as C. R. Hanford & Co., their and each of their assigns, the said parcel of land hereinabove last described, being the width of 30 feet, to have and to hold the same to their use and behoof for a public railroad or other public roadway, to be kept open and free to the public.”

The court said: “In construing a deed, the object sought is to ascertain and give effect to the intention of the parties, and this is to be effected by giving to all parts of the deed such consideration, if possible, that they will stand together. • But, if there is repugnancy between the granting and the habendum clauses, the former will control. * * In the application of these cardinal rules of construction it may be said that the strip of land 30 feet in width, in controversy in this action, was granted to appellees in fee simple, and by the habendum clause the restriction was added that the land granted should be used by the public for a public roadway and for a public railroad.” Mt. Olive Stave Co. v. Hanford, 112 Ark. 522, 166 S. W. 532.

They next call attention to the case of Dempsey v. Davis, 98 Ark. 570, 136 S. W. 975, and Whetstone v. Hunt, 78 Ark. 231, 93 S. W. 979. 8 Ann. Cas. 443. Both of these cases, however, hold, like the other cases, that. in the construing a deed,' yon should ascertain the intention of the parties, and, if there is a repugnancy between the granting clause and the habendum clause, the granting clause controls and the repugnant clause is void, unless, as stated in the 78 Ark. $ase, such a construction may be put upon it as that they may be consistent and not conflicting. Appellees argue that the Mt. Olive Stave Co. v. Hanford, 112 Ark. 522, relied on by appellants, is not in point.- They say the court in that case did not discuss and evidently did not consider the omission of the word heirs, and if the court’s attention had been called to that, it might have placed a different construction on that deed. The court’s attention in the briefs of counsel may not have been called to the absence of the word “heirs” specifically, but the briefs, as published, do show that appellees were claiming in fee simple with a condition, and numerous authorities were cited. The contention • was also made that the habendmn may enlarge and extend, but not abridge, the estate limited in the premises. They also contended that a deed should be construed more strongly against the grantor, and cited numerous authorities, among* others, Arkansas eases.

Appellees’ next contention is that they are innocent purchasers. We think a complete answer to this is that they had notice, and it was .stated in" the lease itself, that one acre was excepted as a burial place, and that they purchased with this knowledge, and with the further statement that they were getting 64 acres, and while the $64 for the 64 acres does not specifically state $1 per acre, yet we think that all the facts, taken together, that is, that one acre was excepted and that 64 acres was mentioned in the lease and that $64 was fixed as the rental, show conclusively that Sanford purchased with the knowledge or notice of Hicks’ right.

In conclusion, -we think that, no matter what view may be taken of the transactions between Murphy and Hicks, the • appellees secured the right to 64 acres only, and, as to them, it is wholly immaterial who owns the one acre, whether Murphy or Hicks owns it. We think it certain, from the facts in this case, that appellees had no right to it. The decree of the chancery court must be reversed. It follows, of course, that the appellees were entitled to nothing on their cross-appeal, because their contention as to that is based wholly on their right to the oil from the one-half acre; The decree is therefore reversed, and remanded with directions to dismiss the case.