author: Butler, J. Hart, C. J.

text:
    Howell v. Kincannon.
    Opinion delivered February 17, 1930.

      Harney M. McGehee, for appellant.

      Dave Partain and R. 8. Wilson, for appellee.
   Butler, J.

W. H. Howell was convicted in the Crawford 'Circuit 'Court at its March term, 1929, of murder in the first degree, sentenced to be executed, and confined at the penitentiary walls awaiting the date of his execution which has been set for the 28th day of February, 1930. On February 4, 1930, the Honorable J. 0. Kin-cannon, judge of the 15th Judicial Circuit, in which Crawford County is situated, issued a writ directed to S. L. Todhunter, warden of the State penitentiary, commanding him to produce Howell in the Crawford C'ir-cuit 'Court on the 14th day of February, 1930', to the end that his present sanity or insanity be inquired into and determined. The said Howell, by his attorney, Harney M. MoG-ehee, filed in this court his petition, alleging that the said J. 0. Kincannon, as judge, and the Crawford Circuit Court were without authority to issue the aforesaid writ and without jurisdiction to hear and determine the same, and prayed that the said judge be prohibited from proceeding further in this regard.

The question presented to this court for determination is whether or not, after sentence has been pronounced, court adjourned, and the condemned individual transported to and confined in the penitentiary awaiting execution, has the court at which the trial was held, and which rendered judgment, authority to inquire into the question of the sanity or insanity of the condemned arising after judgment, or to make any orders in regard thereto? The authority sought to be prohibited is one which the courts have attempted to exercise but rarely, and this is the first time the question has come directly before this court. Our investigation of the textwriters and adjudicated cases discloses a singular paucity ¡of authority on this question.

In Smoot on the Law of Insanity, § 455, it is said: “Where the defendant in a criminal trial is found to be insane subsequent to trial, verdict and sentence, the insanity has the effect of suspending further procedure. If it occurs subsequent to the trial and verdict, and before sentence, no sentence can be pronounced against the defendant while he is in such condition, not only because it cannot be carried out, but because he would not be able to understand the nature and import of the proceedings, and would not be able to intelligently answer whether there was any reason, as there might be, why judgment should not be pronounced.”

Mr. Bishop, in the second edition of his work on Criminal Procedure, § 1369, in discussing the writ of error coram nobis, says: ‘'‘With us, the cases to the question are few, yet sufficient; as, if unknown the defendant was insane at the trial, or if being- in danger and trepidation from a mob- he pleaded guilty, and wa.s sentenced to prison to save his life, or if being under eighteen he was sentenced to a punishment permissible only against an older person, this writ of error coram nobis is maintainable.”

Mr. Blackstone says: “If a man in his sound memory commits a capital offence, and before his arraignment he became mad, he ought not to be arraigned for it; because he cannot advisedly plead to it with that advice and caution that he ought.. And if, after he has pleaded, the prisoner becomes mad, he shall not be tried; for how can he make his defence? If, after lie be tried and found guilty, he loses his senses before judgment, judgment shall not be pronounced, and if, after judgment, he becomes of nonsane memory, his execution shall be stayed; for peradventure, says the humanity of the English law, had the prisoner been of sound memory, he might have alleged something in stay of judgment or execution.” 4 Blackstone, Commentaries. Cooley’s Ed., page 24.

From the above authorities, it will be seen that the law for the sake of humanity early recognized the propriety of staying- the execution of one condemned to death where it might be shown, after trial and judgment, that the defendant was either insane at the time ,of the trial or had become insane thereafter; and as no method was pointed out to make this beneficial rule effective, the courts, because of the duty arising in such instances making it incumbent on rational beings out of the dictates of humanity to find a remedy, of necessity assumed the power to inquire into the sanity of a condemned person, and, where it appeared upon investigation that the condemned was insane, revoked the judgment or stayed the execution. The power thus assumed was recognized to inhere in the courts to be exercised so long as the law-making power should fail to point out a method by which these questions might be heard and determined; but, whenever that voice should speak and declare a mode and method different or place the authority to determine these questions elsewhere, the power of the courts would necessarily cease.

In the case of Adler v. State, 35 Ark. 517, 37 Am. Rep. 48, this court has held that a circuit judge has power, after the expiration of a term, to issue the writ of error coram nobis to reverse a judgment of conviction in a criminal case where it is shown that the defendant was insane at the time of the trial, and that fact was not made known. This rule has been subsequently upheld by this court in a number of decisions, but we have failed to find any case where the writ was issued or its issuance approved by the court in a case where the defendant became insane after the trial, judgment, and lapse of the term, except where the language was obiter. We may assume, however,' that such right inhered in the court unless the Legislature had pointed out another and different remedy. It is insisted by the respondent-that such power is now inherent in the circuit court, and he cites as authority to that position the cases of Johnson v. State, 97 Ark. 131, 133 S. W. 596, and Ferguson v. Martineau, 115 Ark. 317, 171 S. W. 472, Ann. Cas. 1916E, 421. Upon a cursory examination, those cases appear to support that view. Li Johnson v. State, supra, the court, quoting from the statute providing that, when a defendant appears for judgment, he may, for cause against the judgment, show that he is insane, and that the court, on reasonable grounds for believing that such is the case, may impanel a jury to determine the question, uses the following language: “If the insanity of the defendant be not brought to the attention of the court., and inquired into before the judgment is pronounced, the circuit judge may, after the expiration of the term, issue the writ of error coram nobis to set aside the judgment of conviction and suspend sentence in accordance with the statute above quoted.” And in the case of Ferguson v. Martineau, supra, at page 326, the court said: “It cannot be doubted, therefore, that, even in the absence of any statute upon the subject, the circuit court or judge thereof, in vacation, would have the inherent power to say that the execution of the judgment of that court was not in force upon a person who was insane at the time set for his execution. A writ upon proper application could be issued by the court or the judge thereof, returnable to the court to inquire into the alleged insanity of the prisoner at the time set for the execution to the end that the sentence of the law might not be carried out if it were determined by a jury empaneled for the purpose that the defendant were insane. ’ ’ Upon further investigation of these cases, however, it will be seen., that this question was not before the court. In Johnson v. State, the only question before the court was an alleged error in the selection of the jury, and the only defense made at the trial was that of insanity. The court there said: “After a careful examination of the record, we are of the opinion that there is no error and the judgment should be affirmed,” but, on the suggestion that since the judgment and verdict was rendered the defendant had been pronounced insane, and removed from the jail to the county hospital, the court further said: “That, however, does not affect the adjudication of this court affirming- the judgment of the trial court where no error is found in the record of the trial. Appellant pleaded insanity as a defense to the crime, but no plea of present insanity was interposed at the trial, nor was there any suggestion of present insanity as a reason why judgment should not be pronounced on the verdict of the jury. There is no provision in the statute for suspending proceedings in this court on account of appellant’s insanity, though ample protection is provided in that respect in the lower court. The circuit judge has the power to issue the writ of error coram nobis to set aside a judgment of conviction when it appears that the defendant was insane at the time of the trial, and the fact was not "'made known at the trial. ’ ’

The question before the court in the instant case was not remotely connected or involved in the case of Johnson v. State, supra, so that the language there used by the learned chief justice as above quoted is clearly referable to the question of procedure where insanity exists before the judgment is pronounced. In the case of Ferguson v. Martineau, supra, the only question before the court was the jurisdiction of a court of equity to restrain by injunction the execution of a criminal under judgment to enable the probate court to inquire into the sanity of the condemned, and it was held that such court was without jurisdiction, and that a writ of prohibition was the proper remedy to prevent the usurpation of jurisdiction. Therefore, the language above quoted was obiter dictum, and, while not carefully chosen, it is fairly inferable from the cases cited (Adler v. State, supra, and State v. Helm, 69 Ark. 167-71, 61 S. W. 915) as authority for the language used, that the power of the circuit court referred to was the power to suspend sentence before judgment was rendered. All the decisions of this court called to our attention, to-wit, Adler v. State, supra, Linton v. State, 72 Ark. 532, 84 S. W. 608, and State v. Helm, supra, are cases where the question 'of insanity was raised or referred to before judgment was rendered.

The Legislature of this State, at an early date, provided, (chapter 44, § 14, of the Bevised Statutes of 1838) that “if, after judgment and before execution of the sentence, such convict becomes insane or lunatic, if the punishment be capital or corporal, the execution thereof shall be stayed until the recovery of such convict from such insanity' or lunacy ’ ’; and, by chapter 45, 187, 188 and 189 provided the method by which insanity might be determined and the procedure for such determination as follows:

“¡Section 187. If, after any convict be sentenced to be punished by death, the sheriff shall have cause to believe that such convict has ¡become insane, he may summon a jury of twelve competent jurors to inquire into such insanity, giving reasonable notice thereof to the attorney for the State.”
“Section 18t8. The attorney for the ¡State shall attend such inquiry, and may produce witnesses before the jury, and may cause subpoenas to be issued by a justice of the peace for that purpose; and disobedience thereto may be punished by the circuit court, as in other like cases.”
“¡Section 189. The inquisition of the jury shall be signed by them and by the sheriff; and if it be found that such convict is insane, the sheriff shall suspend the execution of the sentence until he receive a warrant from the Governor or the circuit court, as hereinafter authorized, directing the execution of such convict.”
“¡Section 190. The sheriff shall immediately transmit such inquisition to the Governor, who may, as soon as he shall be convinced of the sanity of such convict, issue a warrant appointing a time for the execution of such convict, pursuant to sentence.”

By § 290 of chapter 10 of the 'Criminal Code, approved July 22, 1868, it was provided that, “the only officers who shall have the power of suspending the execution of a judgment of death are the Governor, and, i.n cases of insanity or pregnancy of the defendant, the sheriff, as provided in the next section; and, in cases of appeals, the clerk of the Supreme Court, as prescribed in title 9, chapter 1, article 1. ’ ’

¡Section 291 of the Code is as follows: “When the sheriff is satisfied that there are reasonable grounds for believing that the defendant is insane or pregnant, he may summon a jury of twelve persons on the jury list, drawn by the clerk, who shall be sworn by the sheriff, well and truly to inquire into the insanity or pregnancy of the defendant, and a true inquisition return; and they shall examine the defendant, and hear any evidence that may be presented, and by a written inquisition, signed by each of them, find as to insanity or pregnancy. And, unless the inquisition find the defendant insane or pregnant, the sheriff shall not suspend the execution; but if the inquisition find the defendant insane or pregnant, he shall suspend the execution, and immediately transmit the inquisition to the Governor.”

■Section 292 of the Code is as follows: “Whenever a judgment of death has not been executed on the day appointed therefor by the court, from any cause whatever, the Governor, by a warrant, under his hand and the seal of the State, shall fix the day of execution, which warrant shall be obeyed by the sheriff, ánd no one but the governor can then suspend its execution.”

It will be seen that as early as 1838 the Legislature, by specific enactment, placed with the sheriff, who had custody of the condemned, the duty, Avhen occasion arose, to have inquiry made as to his sanity, and to report the finding, if found to be insane, to the Governor, and by the express language of § 290, Criminal Code, xupra, no one but the Governor, the sheriff, and the clerk of the Supreme Court could in any manner, or for any cause, suspend the execution of a judgment of death. As a result, whatever inherent poAver existed in the circuit court until that time Avas diAmsted, and the duty to determine the question of insanity of the defendant devolved upon the sheriff. The provisions of our Criminal Code are almost identical Avith those of the Criminal Code of the State of Kentucky in force at the time of the adoption of our Code, which was followed by the commissioners in drafting the Code approved and adopted by our Legislature. By the Kentucky Code, as by our oavu, the sheriff was clothed Avith authority fo make .inquiry into the insanity of a defendant in his custody under sentence of death, and in Kentucky it has been held, since the enactment of its Criminal Code, that “up to the time of final sentence that discretion (to suspend sentence in case of insanity) is vested in the trial judg-e; after sentence, the policy of our law seems to be to vest it in the executioner.” In view of the sections of our Criminal Code above quoted, and especially of § 290 supra, we can come to no other conclusion than that in cases of insanity after sentence, circuit courts have no longer authority to deal with that question.

Act No. 55 of the Acts of the General Assembly of 1913 changes the mode of execution of the death penalty from hanging to electrocution, the custody of the prisoner after judgment and before execution from the sheriff of the county to the superintendent of the State penitentiary, and the place of execution from the county where the crime was committed to the death chamber within the confines of the 'State penitentiary. As we have seen, from an examination of the Acts of the Gen-' eral Assembly from 1838 it has been the policy of the law for the person charged with its administration to exercise discretion as to holding insanity inquisitions in capital cases. The sections of our Code above quoted are now §§ 3250 and 3251 of Crawford & Moses ’ Digest, and, as it “gives an insane condemned person who has no further recourse in law a remedy where none other existed by statute before,” it is remedial in its nature, and should therefore be liberally construed so that the remedy be made effective if it can be done. At the time this statute was passed the sheriff was the executioner, and had the custody of the pei'son of the defexxdant froxn the date of judgmexxt to that of execution, axxd he was therefore the only one who could have full axxd free access to the presence of the defendaxxt, and observe him during the time of his confinement before execution; and, since by the exxactmexxt of act No. 55, supra, all these duties and opportunities for observation have passed from the sheriff to the keeper of the penitentiary, the only way by which those sections of our Code, supra, can be given any practical effect is by substituting the keeper of the penitentiary for the sheriff.

A number of authorities have been called to our attention on this point in the able brief of the Attorney General which we deem it unnecessary to review herein since our court has always recognized that statutes remedial in their nature should be liberally construed so as to afford all the relief within the power of the court which the language of the statute indicates the Legislature intended to grant. Bv the terms of the statute, the Governor, and, in cases of insanity, the sheriff, and on appeals to this court, the clerk of this court, were the only authority by which sentence of one condemned might be stayed after judgment; and, as the purpose of the section following was to clothe the officer charged with the execution of the death sentence, having in his custody the person of the condemned, with the duty of causing inquiry to be made as to the sanity of the defendant, when he had reasonable grounds to believe the defendant insane, then to give any other effect to the statute, since the enactment of act No. 55, supra, would render the remedy abortive, and in effect destroy the law.

In the case of Barrett v. Commonwealth, Court of Appeals of Kentucky, December 21, 1923, reported in 202 Ky. 153, 259 S. W. 25, in dealing with an identical situation to that in the instant case, where the law at first clothed the sheriff with authority to institute and conduct insanity inquisitions when he was executioner, and where the mode of execution was afterwards changed from hansing to electrocution, and the executioner from the sheriff to the keeper of the penitentiary, as in this State, the court said: “We can see no reason why, after the removal of the convict to the penitentiary, such an inquest may not be held by the warden of the penitentiary, if he is satisfied there are reasonable grounds to believe the condemned insane or pregnant. In this respect he simply takes the place of the sheriff, and performs the same duties except as to the place and manner of execution. He has custody of the condemned, and is informed as to his mental condition. Being charged with the solemn execution of the death penalty, such an affliction upon the part of the condemned person appeals to his mind and conscience, as he is the natural one to intrust with the responsibility of determining -whether or not there are sufficient grounds for holding an inquest. ’ ’

We therefore think that, in order to give effect to the statute providing for the stay of the execution of a condemned insane person, it is necessary that the warden be clothed with all the powers which were entrusted to the sheriff before the passage of act No. 55, supra, and that it is now the duty of the superintendent of the penitentiary to conduct the insanity inquisition.

We have not overlooked the cases cited by respondent in support of his construction of the holding of the court in the cases of Johnson v. State, and Ferguson v. Martineau, supra, but we have examined these cases and do not find them in conflict with the views herein expressed. The case of In re Smith, 25 N. M. 48, 176 Pac. 819, 3 A. L. R. 83, cited by respondent, we find, turns on the construction of the statute under which the proceeding’s in a criminal case in which an insanity inquest was held, and such statute -was held by the court to be not applicable to criminal proceedings, but was a statute for the protection of civil and property rights. In the case of State v. Superior Court, 139 Wash. 125, 245 Pac. 929, 49 A. L. R. 801, cited by respondent, the question before us in the case at bar was not there before the court. The question was whether in insanity inquests the change of venue statute of that State applied. The other cases cited by respondent merely recognized and approved the inherent power of courts at common law in proper cases to have control of their judgments, and, of necessity, the protection of insane persons where the law is silent, and did not consider statutes such as ours, which has taken from the courts such inherent power.

The prayer of the writ of prohibition must be ' granted, and it is so ordered.

Mr. Chief Justice Hart agrees with this opinion except as to that part of the opinion which holds that the effect of our statutes is to abolish the power of the court, and he is of the opinion that the circuit court still has power in cases of present insanity after judgment to determine that question by proper proceeding.

Hart, C. J.

I agree that the question under consideration is a matter subject to legislative regulation, hut I do not agree that the connection of courts with proceedings of this sort has been taken away by the statutes construed in the majority opinion. To so hold, according to my notion, is impliedly at least to overrule the holding in Sease v. State 157 Ark. 217, 247 S. W. 1036, to the effect that after verdict and sentence, the court may inquire by inspection and by witnesses whether the prisoner has become insane since his sentence. I quote from that opinion the following:

“The petition now before us is sufficiently -broad, however, to constitute an allegation of insanity at the present time and to invoke relief by suspension of the sentence as long as the condition of insanity of the accused exists.”
“In our former decisions we have recognized the power of the court to grant relief in capital cases, where the convict is insane when the time comes for executing the judgment. This remedy however, as shown in the Kelley case supra (156 Ark. 188, 246 S. W. 4) must be exercised with caution, and the court determines as a preliminary question, whether there is sufficient ground for entering- upon an investigation of the question of the insanity of the convict. As we have already said, the testimony now adduced is merely cumulative of that which was adduced at the trial and tends only to show general insanity, which began long before the commission of the homicide. It is true there were introduced the affidavits of physicians, who testified as experts, but that testimony is merely cumulative. There was no showing of a substantial change in the prisoner’s condition since the original trial.”

It has been suggested that the court decided that case without having its attention called to the statute now under consideration. Reference to the briefs filed for Sease show that the case first cited is 115 Ark. 317, 171 S. W. 472, which is Ferguson v. Martineau, where the court discussed the effect of the statutes upon each other, and concluded by saying: “It cannot be doubted, therefore, that, even in the absence of any statute on the subject, the circuit court, or judge thereof, in vacation would have the inherent power to say that the execution of the judgment of that court was not in force upon a person who was insane at the time set for his execution. A writ upon proper application could be issued by the court or the judge thereof returnable to the court to inquire into the alleged insanity of the prisoner at the time set for the execution to the end that the sentence of the law might not be carried out if it were determined that the defendant was insane. ’ ’

In both oases, the court doubtless considered that the Legislature intended that the officer named in § 3251 of C. & M. Digest might suspend the execution of the death sentence until he could transmit the inquisition to the Governor for his information in the exercise of the power to grant reprieves, commutations of sentence and pardons after conviction conferred upon him by article 6, § 18, of the Constitution; and that it was not intended by the Legislature to take away the jurisdiction of the courts in the matter in the manner outlined above. Neither was it intended that § 3250 of the Digest conferring upon certain officers under certain eircum-stances tlie power of suspending the execution of a judgment of death should take away the jurisdiction already possessed by the courts.

If, as now declared, the sections of the statutes are controlling, and the jurisdiction of the trial court in a proceeding" like this is at an end, the court should have so held in the Sease ease to the end that his attorneys might have availed themselves of the only legal remedy in his behalf after sentence of death, and thus have pointed out and secured to him the constitutional guaranty of our bill of rights and the 14th Amendment of the Constitution of the United States that no person shall be deprived' of his life without due process of law.


source: Caselaw Access Project

author: Hart, O. J.,

license: Public Domain

text:
    Humphrey v. Tinsley.
    Opinion delivered February 24, 1930.

      Feasel <& Steel, for appellant.
   Hart, O. J.,

(after stating the facts). The Legislature of 1915 passed an act for the purpose of bringing about cattle tick eradication, and establishing a Board of Control for enforcing the law relating- thereto with full power to promulgate the necessary rules looking to that end. The act was sustained as a valid exercise of the police powers of the State for the protection of the health of cattle, and that this class of legislation emanates from the same source as that dealing with the public health. The court said that, while the Legislature could not delegate its power to make laws, it might delegate to a board or other governmental agency the power to make and enforce rules and regulations for the execution of a statute according to its terms; and that, when these boards adopt rules or regulations by virtue of legislative authority, they may be said to be in force by authority of the statute. Davis v. State, 126 Ark. 260, 190 S. W. 436; Cazort v. State, 130 Ark. 453, 198 S. W. 103; Palmer v. State, 137 Ark. 160, 208 S. W. 436; and Boyer v. State, 141 Ark. 84, 216 S. W. 17.

In the application of the principle in State v. McCarty, 5 Ala. App. 212, 59 So. 543, the Court of Appeals of Alabama held that the State, under its police powers, may prescribe stock quarantine regulations, and punishment for their violation, and may require its citizens, at their own expense, to disinfect their stock.

In United States v. Grimaud, 220 U. S. 506, 31 S. Ct. 480, it was held that Congress could not delegate legislative power, but that the authority to make administrative, rules was not a delegation of legislative power, and that such rules do not become legislation, because violations thereof are punished as public offenses. In that case the court recognized that it is sometimes difficult to define the line which separates legislative power to make laws from administrative authority to make regulations. It is a matter of scientific knowledge, that wherever the cattle tick is found, there Texas fever exists; and, as has been judicially declared, Texas fever and cattle ticks go - hand in hand. Because Texas fever is communicable and is a dangerous cattle disease, which may be carried on cattle from one locality to another, quarantine regulations, including the spraying or dipping of cattle, have generally been held valid under the police powers of the State. In order to effectuate the purpose for which they are intended, some leeway must be given administrative officers in the execution of the laws. While the law must be complete in all its parts and govern every step taken in its execution, much discretion must be left to the administrative officers in putting it in operation, and in executing it. To this no valid objection can be made. Of course, the administrative officers may be dealt with for any arbitrary, discriminating or willful disregard of their official duties. We .are of the opinion that the Board of Control may mould and fashion its rules to'suit changing conditions.

.As said in Sutherland, Statutory Construction, vol. 1, § 68, 2d ed., p. 148: “The true distinction is between the delegation of power to make the law, which involves a discretion as to what the law shall be, and conferring an authority or discretion as to its execution to be exercised under and in pursuance of the law. ’ ’

The issue raised by the appeal in the case at bar involves the construction of paragraph '2, § 4 of the rules promulgated by the Board of Control, which reads as follows:

“Paragraph 2. In counties or portions of counties where systematic tick eradication is being conducted under the regulation of this board, it shall be the duty of all persons owning* or having* charge of any cattle to dip, or otherwise disinfect by means that may be. designated, all their cattle every fourteen days under' the supervision of a duly authorized inspector of this board, unless they receive written notice that they are not required to dip their cattle. ’ ’

The Legislature of 1919 made it the duty of any peace officer, when notified by a duly authorized inspector, to dip; cattle at a time and place designated by said inspector, when the owner fails, refuses, or neglects to dip-his cattle under supervision on regular dipping dates. A fee for the payment of the officer is provided for in the same section, and, upon the owner failing to pay the same, the peace officer may sell the cattle, and take his statutory fee and the expenses of the sale out of the proceeds of the sale. General Acts of 1919, p. 216.

The evidence adduced in favor of appellants tends to show that appellee refused to dip his cow under the supervision of the inspector as required by the rules of the board. The appellee admits this, and also testified that he carried his cow home without doing so. He seeks, however, to maintain his action of replevin for the cow by showing that he sprayed his. cow in the presence of the inspector just as other cows were being sprayed, which he testified were in similar condition to his cow. This was not a compliance with the rules. It would take away from the inspector his discretion or supervision in the matter and place it in the owner of the cattle. iSuch a course would soon result in a practical nullification of the rules, and tick eradication could not be accomplished except by the unanimous voluntary action of the owners of cattle within the district.

In this view of the matter, the law had just as well never have been passed. If compulsory dipping or spraying is to be enforced, it must be done under the supervision of an officer appointed for that purpose, and not left to the judgment of each cattle owner. No uniformity in enforcing the rules of the board can be accomplished ex-eept under the supervision of an officer whose duty it is to act, and he must be left to act on his own judgment in the matter, always subject to removal or punishment for an arbitrary discharge of his duties or willful disregard of them.

Here the undisputed evidence shows that the appel-lee refused to allow the inspector to dip the cow, but claimed the right to spray her himself, and then carried her home. This fact was reported by the inspector in charge of the dipping vats to appellants, who were the proper officers to enforce the rules of the board. Appellants then took the cow, dipped her, and held her for payment of the fees and expenses allowed them by statute for so doing. It is true that appellee testified that his cow was sprayed with the same material used by the inspector, but he admits that the inspector told him that this cow would have to be dipped and that he refused to allow this to be done and took his cow home after spraying her according to his own notion. Thus, according to his own evidence, the supervision or discretion of the inspector was taken away, and that of the owner of the cattle was substituted. This act was in violation of the rules; and when the inspector notified appellant of the refusal of appellee to allow his cow to be dipped under his supervision, it became their duty, as officers charged with the enforcement of the rules of the board, to take charge of appellee’s cow for the purpose of dipping her, and they had the legal right to keep the cow until appellee paid them the statutory fee; and in default of payment thereof, appellant might sell the cow for the dipping fee and expenses of sale as provided by statute.

Therefore, the court erred in not directing a verdict for appellants; and for that error the judgment must be reversed, and the cause will be remanded for a new trial.


author: Hart, C. J.

text:
    Commercial Investment Trust v. Miles.
    Opinion delivered February 24, 1930.

      Herbert V. Betts, for appellant.

      Bert B. Larey, for appellee.
   Hart, C. J.

This is an appeal from the order of the circuit court quashing an execution, and making perpetual a temporary injunction which had theretofore been issued.

The facts decisive of the issue raised by the appeal may be briefly stated as follows: On May 28, 1926, Commercial Investment Trust instituted an action of replevin in the circuit court, against G-odfrey B. Miles to recover the possession of an automobile. The action was based upon the right of the plaintiff to recover the possession of the car under a conditional sales contract which provided that the automobile should remain the property of the seller until it was paid for. The complaint alleged default in the payment of the installment notes, and that there was due and unpaid on them the sum of $593.32. The prayer of the complaint was for judgment for the recovery of the automobile or its value in the sum of $593.32, and for $100 damages for the detention of the same.

Miles retained possession of the automobile under-a bond given for that purpose on the 8th day of June, 1926, signed by himself and P. G. Sample and H. C. Bull as sureties. The body of the bond is as follows:

“We undertake and are bound to the plaintiff, Commercial Investment Trust, in the sum of six hundred and ninety-three 32/100 dollars, that the defendant, Godfrey B. Miles, shall perform the judgment of the court in the above entitled cause.”

On the 9th day of November, 1926, there was a judgment by default in favor of the plaintiff against the defendant Miles and his sureties, P. .G. Sample and H. C. Bull, for the sum of $593.32, with interest at six per cent, per annum. The judgment recites that the defendant has been duly served with summons, but makes default, and that the cause is submitted to the court upon the complaint, the original nbte and contract, and the bond of the defendant to retain the property, which is set forth in full together with a recitation, that it was executed by the defendant and his sureties, P. G. Sample and H. C. Bull. No appeal was taken from this judgment.

After the lapse of the term at which said default judgment was rendered, H. C. Bull and P. G. Sample presented to the court a petition to correct said default judgment so as to make it speak the truth, and this petition was heard in the circuit court on the 24th day of November, 1927, and the default judgment- rendered on November 9, 1926, was corrected, so as to read as follows.:

“It is ordered and adjudged by this court that the Commercial Investment Trust shall have judgment against the defendant, Godfrey B. Miles, for the prop-crty in controversy of the value of $593.32 inclusive of 6 per cent, interest from October 21, 1926. Damages waived. ’ ’

Subsequently, the plaintiff caused an execution to issue on its judgment, and defendant moved to quash the execution. Plaintiff showed by competent evidence that the defendant. Miles, had held the possession of the car under the retaining- bond, and that by continual use since the institution of the replevin suit the car had greatly deteriorated in value, and was now practically worthless.

Under this state of facts, we are of the opinion that the court erred in quashing the execution. Conceding that the docket entry correctly shows the judgment rendered by the court in the first instance, it simply means that the court rendered judgment for the plaintiff for the automobile or its value when sued for in the sum of $593.32. The word “of” is clearly a misprision and was intended for “or.” That “of” was used in the sense of “or” is evident from the record proper considered together. The prayer of the complaint was for judgment for the automobile or its value. There was a default judgment which recited that the cause was submitted upon the complaint, the original note and contract, and the bond to retain the property. Prom the original note and contract, the court found that there was due and unpaid the sum of $593.32 on the purchase price at the date of the institution of the replevin suit. The rule is that in actions to recover personal property or its value, sold under a conditonal bill of sale, the proper measure of its value to the plaintiff is the balance due on the contract price in the absence of proof to the contrary. Winton Motor Carriage Co. v. Blomberg, 84 Wash. 451, 147 Pac. 21.

If the court merely meant to render judgment for the car, there would have been no use in finding its value. The view we have adopted and the conclusions. reached by us bring the case squarely within the principles announced in Commercial Investment Trust v. Forman, 178 Ark. 695, 10 S. W. (2d) 397, where it. was held that in cases like this, the seller or holder of the installment notes in a conditional sales contract was entitled to judgment against the sureties on the retaining bond as well as against the buyer for the balance due on the sales contract, against which the present' value of the car should be credited. In that case it was held that where the buyer, in an action of replevin to recover an automobile sold with reservation of title, gave bond and retained possession of the car until it was worn out and then returned it to plaintiff, the latter was entitled to judgment against defendant and the sureties on his bond for the balance due under the sales contract, against which the present value of the car should be credited.

But for the retaining bond, the car would have been returned to the seller when the suit was brought, at which time value as found by the court was equal to the balance due on it. By virtue of the execution of the retaining bond, the buyer was enabled to keep the car until it was worn out, and he cannot now satisfy the judgment by returning a worthless car. The court in its judgment in the replevin suit fixed the value of the car as it was at the time the plaintiff was entitled to recover possession of it, which was at the commencement of the suit; and the defendant could not keep and use the oar until it had become worthless, and then return it in satisfaction of the judgment.

This principle was also recognized in Love v. Hoff, 179 Ark. 381, 16 S. W. (2d) 12, and applied in a case Avhere the plaintiff in the replevin suit had kept possession of an automobile and had used it until it had become worn out. The court said the plaintiff in execution Avas entitled to have restored an automobile of undepreciated value, and that the plaintiff in the replevin suit could not satisfy a judgment against himself by returning a depreciated car in satisfaction of the judgment.

Therefore, the judgment of the circuit court will be reversed, and the cause remanded with directions to order the clerk to issue an execution for the sum of $593.32 with the accrued interest, and for further proceeding's according to law.


author: Smith, J.

text:
    Butt v. Saxon.
    Opinion delivered February 24, 1930.

      W. P. Feasel, Sam E. Leslie and Walter M. Purvis, for appellant.

      Barber <& Henry and Frauenthal, Sherrill S Johnson, for appellee.
   Smith, J.

Prior to the 17th day of March, 1924, a receiver was appointed by the Pulaski Chancery Court to take possession of the assets of the Climber Motor Company, an insolvent corporation, and in the progress of the litigation the receiver was ordered to sell the assets of the company at public sale, upon a credit of three months. The order of sale required the receiver, acting as a special commissioner, to require bond of the purchase!’, with security to be approved by him, for the performance of the offer to buy.

Notice was given pursuant to the order of sale, and a sale of all the assets was made on March 17, 1924. A report of the sale was made, which recited that J. W. Dickinson had purchased the property for $90,000, and that he had executed bond with B. L. Saxon as surety. This report was duly approved and confirmed on the 21st day of March, 1924, which was a day of the October, 1923, term of the court. The April term of the court began on the first Monday of April following.

On June '2, 1924, J. S. Butt, who had previously recovered a judgment against Dickinson in the Howard County Chancery Court, filed a duly certified copy thereof in the office of the clerk of the circuit court of Pulaski County, and the lien thereof has been kept in force by revivor proceedings, and it is now' a subsisting lien on any land in Pulaski County in which Dickinson has an interest. Certain valuable lands in Pulaski County were embraced in the-assets of the corporation which were sold by the receiver.

On the 8th day of August, 1924, a petition was filed in the Pulaski Chancery Court, signed by attorneys for Dickinson and Saxon, in which it was alleged that Saxon —and not Dickinson — was the purchaser at the receiver’s sale; that Saxon had already paid the sum of $28,000 to the receiver, and was ready to pay the balance, with the interest thereon, when an order was made correcting the decree 'confirming the sale so as to show that Saxon • — and not Dickinson — was the purchaser of the property. After hearing testimony, the court found the fact to be that an error had been made in the report of the receiver, in that it recited that Dickinson was the purchaser, and Saxon was the surety, whereas the truth was that Saxon was the purchaser, and Dickinson was the surety, and the order of confirmation was set aside, and an order entered confirming’ the sale as having been-made to Saxon and not to' Dickinson, and upon the entry of this order Saxon paid the balance then due upon the purchase price, and a deed, duly approved, was delivered to him. It appears that to obtain the money to complete the payment Saxon obtained a loan from the Bankers’ Trust Company, of Little Bock, upon the security of the real estate sold at the receiver’s sale.

Three suits were filed in the Pulaski Chancery Court, which were consolidated for the purpose of trial and heard as a single case, and it is from the decree therein rendered that this appeal comes.

J. S. Butt was the plaintiff in one of these cases, and for his cause of action he alleged' that his judgment against Dickinson herein referred to was a lien on the land herein involved, and he prayed the court to make an order setting aside the previous order, above referred to, correcting the confirmation of the sale, and to set aside the deed executed pursuant thereto, and that he have his judgment against Dickinson declared a lien on the land. Saxon and the Bankers’ Trust Company were made defendants in this suit. Answers and cross-complaints were filed which elaborated the facts herein summarized.

When the notes of Saxon to the Bankers’ Trust Company matured and were not paid, suit was brought to foreclose the deed of trust securing them, and all persons in interest were made parties and the same issues were raised.

The third suit was broug’ht to enforce a mechanic’s lien against Saxon, which was conceded to be subject to the lien of the deed of trust to the Bankers’ Trust Company.

A decree was rendered, from which only Butt has appealed, and we need therefore consider only the issue which he raised oil this his appeal, and that is, that the court was in error in holding that his judgment against Dickinson was not a lien upon the land.

For the reversal of this decree it is insisted that the court erred in setting aside, at the April term of the court, the order confirming the sale, made at the previous October term.

The undisputed testimony shows that Dickinson did not attend the sale and did not bid thereat. On the other hand, it is undisputed that Saxon was the last and highest bidder, and the undisputed testimony further shows that he personally paid the entire purchase price, and that Dickinson paid nothing. After the sale it became necessary to execute a bond to comply with the order of sale, and it was not certainly known who the surety would be, so that, when the report of the receiver was prepared, this part of the report was left blank, and when the report was completed and filed it recited that Dickinson was the purchaser, and Saxon the surety, and the report was confirmed with this recital in it.

The simplest principles of equity and justice require the correction of this error, and § 6290, C. & M. Digest, affords full authority for doing so, as this was a misprision of the clerk within the meaning of that statute. It is true the report of sale was not prepared by the clerk, nor was the precedent for the order confirming it, but it was his duty to prepare this order. Section 1374, C. & M. Digest, provides that “He (the clerk) shall seasonably record the judgments, rules, orders and other proceedings of the court of which he is the clerk, * * *, ” and it is his duty to record them correctly. The court was the vendor in this case, acting through its receiver, and the order of the court should have correctly named the purchaser. It was a misprision not to do so, and the error was properly corrected at the subsequent term. Section 6290, C. & M. Digest. Moreover, the court had not lost its jurisdiction over the case at the expiration of the October term. It was necessary for the court, at its ensuing April term, to determine whether the purchaser had become entitled to his deed by complying with his bid, and the court then determined that he had and that Saxon was the purchaser. It was therefore within the jurisdiction of the court to correct the erroneous recital in the order of confirmation, and to order the deed delivered to the actual purchaser, and this order was properly entered.

The decree of the court is correct, and must therefore he affirmed, and it is so ordered.


text:
    Mushrush v. Downing.
    Opinion delivered February 24, 1930.

      Maddox <& Greer, for appellants.

      Horace Sloan, for appellees.
   Smith, J.

Á. H. Vieth recovered a judgment against the Mushrush Lumber Company, a corporation organized under the laws of the State of Illinois, in this court on February 16, 1925 (167 Ark. 669, 269 S. W. 44), which was duly assigned on March 31, 1927, to W. P. Downing, and a certified copy of the judgment, with the assignment thereof, was later filed in the office of the clerk of the circuit court of Poinsett County, in which county the corporation owned certain real estate. Downing later assigned a half interest in the judgment to Jess Brown.

The corporation was organized under the laws of Illinois on January 6, 1913, and on March 14, 1914, was authorized to do business in this State by filing a certified copy of its articles of incorporation and designating an agent upon whom process might be served. For the nonpayment of its franchise tax to the State of Illinois the Secretary of State certified the corporation to the Attorney General of that State for dissolution, but no action was taken by the Attorney General to forfeit the charter of the corporation. On April 25, 1923, the Governor of this State, acting under act 158 of the Acts of 1923, page 132, declared the corporation to have forfeited its authority to transact further business in this State on account of the nonpayment of the Arkansas franchise tax. The principal, but not the only, stockholders of the corporation were Mark Mushrush, who died intestate June 19, 1926, survived by his widow and several children, and W. M. Pepple, who died testate April 11, 1926, and whose estate was devised to his widow.

On February 3, 1927, Asa Mushrush filed suit in the chancery court of Poinsett County against the widow and heirs of Mark Mushrush, in which he alleged that Mark Mushrush had become indebted to him in a sum evidenced by two notes, to secure the payment of which a mortgage was given on certain lots in the town of Weiner, in Poin-sett County, and it was prayed that this mortgage be foreclosed, as the notes had not been paid. These are the lots to which the corporation had the record title.

Cn April 26, 1927, another suit was filed in the chancery court of Poinsett County by W. P. Downing* and A. H. Vieth, for the use of W. P. Downing, against the Mushrush Lumber Company, the widow and heirs of Mark Mushrush, the widow of W. M. Pepple, Jesse S. Baker, a stockholder in the corporation, and Asa Mush-rnsh, which contained the following, among other, allegations : The facts herein stated were alleged, and it was further alleged that the lots in the town of Weiner, mortgaged to Asa Mushrush by Mark Mushrush, were not the property of Mark Mushrush, but were the property of the Mushrush Lumber Company, and were subject primarily to the payment of its corporate debts. It was prayed that the real estate in the county be declared to be subject to the lien of the plaintiff’s judgment, and that the mortgage from Mark Mushrush to Asa Mushrush be canceled. Brown was later made a party to this proceeding.

These cases were consolidated and tried together, and the decree of the court below, from which this appeal comes, canceled the mortgage from Mark Mushrush to Asa Mushrush, and the correctness of this action is the question in the case.

Testimony was offered on behalf of Asa Mushrush to the effect that the assets of the corporation were divided between Mark Mushrush and Pepple, who were the principal stockholders, and that Mark Mushrush took the Arkansas assets of the corporation, while those in Illinois were given to Pepple. No deed was produced from the corporation to Mark Mushrush, and no competent or sufficient testimony was offered to prove that one had ever been made; in fact, the testimony to the effect that such a deed had been executed consisted principally in the proof of declarations of Mark Mushrush, that he owned all the Arkansas property which had once belonged to the corporation, and that he acquired this title by the division of the corporate assets between himself and Pepple, who, together, had acquired and owned all the stock of the corporation.

It is the insistence of Asa Mushrush, who was never at any time a stockholder in the corporation,' that his mortgage from Mark Mushrush is valid and superior to the judgment lien, and, further, that Brown could not and did not acquire any interest in the judgment lien, for the reason that, at the time when he claimed to have done so, he was in possession of the Weiner property as the tenant of Mark Mushrush, and, as a tenant, he could not purchase a lien on the demised premises and claim thereunder before a surrender of the possession to his landlord, which he had not done.

It appears that Brown took possession under a written lease executed in the name of the corporation, but Asa Mushrush testified that Brown told him that he took the lease from Mark Mushrush, but had it changed in the name of the corporation, because the record title to the property was in the corporation.

A number of interesting questions are raised in the briefs of opposing counsel, but we find it unnecessary to consider many of them to dispose of this appeal.

Under the laws of Illinois, the cancellation of a corporate charter by the Secretary of State does not dissolve the corporation, but it is a mere declaration of that fact as a preliminaiy administrative act upon which a dissolution suit'can be based. People v. Rose, 207 Ill. 352, 69 N. E. 762; 8 Fletcher, Cyclopedia Corporations, § 5445, p. 9060; 4 Harker’s Illinois Statutes Annotated (1919), §§ 118-123, p. 4542 and 4543. But it also appears that under the laws of that State the corporate existence is continued, even after dissolution, for the purpose of enforcing corporate liability. 4 Harker’s Illinois Statutes Annotated (1919), § 79, p. 4534.

The judgment here sought to be enforced is based on notes dated July 1, 1920, (167 Ark. 670, 269 S. W. 44) which was prior to the date of the certificate of the Secretary of State of Illinois showing the delinquency in the payment of the franchise tax in that State; and it is clear that the certificate of the Governor of this State, above referred to, was not an attempt to dissolve this Illinois corporation. Indeed, he could not have done so. Section 741 of chapter “corporations” in 7 R. C. L., p. 733. The only effect of this certificate was to withdraw from the foreign corporation authority to transact business in this State, and being1 sued was not “doing business” in violation of our statutes regulating foreign corporations operating in this State. Linton v. Erie Ozark Mining Co., 147 Ark. 331, 227 S. W. 411: Buffalo Zinc & Copper Co. v. Crump, 70 Ark. 525, 69 S. W. 572, 91 Am. St. Rep. 87.

We think the decree of the court below was correct. It is undisputed that the corporation, the judgment defendant in the original Veith case (167 Ark. 669, 269 S. W. 44), owned the town property, and, as we have said, there was no sufficient showing that it had ever been conveyed by the corporation to Mark Mushrush. Proof of the self-serving, declarations of Mark Mushrush, to the effect that he had acquired this title (and there was no attempt to prove that a deed had been executed to him from the corporation) is ineffective to show that fact. Arkmo Lbr. Co. v. Cantrell, 159 Ark. 445, 252 S. W. 901; Davis v. Falls, 172 Ark. 314, 288 S. W. 723; McCurry v. Griffin, 170 Ark. 421, 279 S. W. 995; Strickland v. Strickland, 103 Ark. 183, 146 S. W. 501 ; Waldroop v. Ruddell, 96 Ark. 171, 131 S. W. 670.

The mortgage does not purport to be the act and deed of the corporation, and Mark Mushrush had no power to mortgage the corporate property as an individual, whatever his interest in the corporation may have been. Section 2449 of chapter on Corporations in 14A C. J., p. 532; Red Bud Realty Co. v. South, 96 Ark. 281, 131 S. W. 340.

There is nothing in the contention that Jess Brown could not acquire an interest in the judgment, by reason of his tenancy. In the first place, the relation of landlord and tenant was not shown between Brown and Mushrush individually.

In the case of Connolly v. Rosen, 144 Ark. 442, 222 S. W. 716, it was held (to quote a headnote) that “The rule which forbids a tenant to dispute his landlord’s title and right to possession without delivering possession has no application where defendant in possession denies that a tenancy ever existed. ’ ’

But, even though the existence of a tenancy were conceded or established by the testimony, we perceive no reason why Brown, as a tenant, might not buy an interest in the judgment, or buy the entire judgment.

At § 143, chapter on Landlord and Tenant, in 16 B-. C. L., p. 656, it is said:

■ “There is authority for the position that there is such a confidential relation between a tenant and his landlord as will preclude the tenant from purchasing an adverse title, without notice to his landlord, and that where he does so it will be presumed that his purchase was made for the benefit of and to protect the landlord’s possession. On the other hand, according to the better view, the relation does not itself preclude a tenant from purchasing a title adverse to that of his landlord; while there are fiduciary relations where one may not purchase and hold for himself an adverse interest, but the purchase will inure to the benefit of the person toward whom he holds the confidential relation, the relation of landlord and tenant does not as a general rule fall within this class. And, a fortiori, if a lessee under a defective title is disturbed by a party having" a paramount title, he is not restrained by his lease from purchasing the paramount title, without the consent of his lessor, although he had not been evicted or ousted.”

In the note to the text, quoted, the case of Lausman v. Drahos, 10 Neb. 172, 4 N. W. 956, is cited as the authority for the position that there is a confidential relation between a tenant and his landlord which precludes the tenant from purchasing- an adverse title, without notice to his landlord, and that, when he does so, it will be presumed that his purchase was made for the benefit of and to protect his landlord’s possession. But this court expressly declined to follow that case in the case of Pickett v. Ferguson, 45 Ark. 195, and referred to it as a case standing alone as supporting that doctrine. See also Dennis v. Tomlinson, 49 Ark. 577, 6 S. W. 11; Swift v. Ivery, 147 Ark. 141, 227 S. W. 600.

We therefore adhere to what the text quoted designates as the better view, that the relation of landlord and tenant does not itself preclude a tenant from purchasing a title adverse to that of his landlord, and therefore that Brown had the right to purchase an interest in the judgment ag'ainst the corporation.

We are of the opinion that the decree of the court below is correct, and it is therefore affirmed.


author: Humphreys, J.

text:
    State use Calhoun County v. Maryman.
    Opinion delivered February 24, 1930.

      Joe Joiner and Compere & Compere, for appellant.

      Powell, Smead & Knox, for appellee.
   Humphreys, J.

This suit was brought in the circuit court of Calhoun County, by appellant against appellee, to recover $2,500 which was paid to him out of the county funds on a post-dated check drawn in his favor by H. B. Easterling, county treasurer, to settle an individual debt which Easterling owed appellee, for borrowed money. It was alleged, in substance, that the county owed appel-lee nothing at the time the check for $2,500 was accepted and cashed by him; that the payment of said amount to him by Easterling out of the county’s public moneys was without authority, fraudulent and unlawful; and that he knew the payment out of said funds was an unlawful and wrongful conversion of the public funds of said county, its subdivisions and agencies.

Appellee filed an answer denying the material allegations of the complaint.

The cause was submitted to the court, without the intervention of a jury, upon the pleadings and testimony, which resulted in a finding of the issues for appellee and a consequent judgment that appellant take nothing in the suit, from which is this appeal.

The facts are undisputed. In the month of September, 1928, H. B. Easterling, county treasurer of said county, had wrongfully and fraudulently converted more than $2,500' of the county's money to his own use. In order to cover up his shortage in his settlement with the county court, Easterling applied to appellee, a friend with whom he had had considerable business dealings,-for a personal loan for a few days of $2,500. .Appellee did not know of Easterling’s shortage, nor the purpose for which he was borrowing the money. Appellee agreed to lend him the amount requested, and it -was arranged between them that Easterling would make a draft on appel-lee for the amount which appellee would honor, and, in repayment of same, Easterling, as treasurer of the county, gave appellee a post-dated check for $2,500, which check was to be held by him and cashed on a date agreed on for payment. Pursuant to this arrangement, Easter-ling made a draft on appellee for the amount, and deposited the draft in the Citizens’ Bank of Thornton, Arkansas, to his credit, as c.ountv treasurer. This deposit was made on September 18, 1928. The post-dated check which Easterling gave appellee was drawn on the Hampton- State Bank, and was signed “H. B. Easterling, County Treasurer,” and was paid by the bank upon which it was drawn some time in September, 1928. Pour months subsequent to that time Easterling’s term of office expired, and shortly thereafter it was discovered that his shortage to the county amounted to over $23,000.

It is argued, in support of the judgment of the trial court, that appellee was an innocent purchaser for value of the post-dated check; and that, in addition, the county received the money which he loaned to H. B. Easterling. According to the undisputed facts appellee loaned the money to H. B. Easterling and not to the county. At the time Easterling deposited the money, which he had individually borrowed from appellee, in his account as treasurer, it was his money and not the money of appel-lee. Easterling paid the $2,500 to the county upon his shortage at that time, and it must be regarded as a payment by him, and not by appellee. Appellee could not have followed the money into the treasurer’s fund and recovered same from the county. He had no right of action whatever against the county for the $2,500 which he loaned to Easterling as an individual. Appellee accepted payment of this individual loan to H. B. Easter-ling out of the public funds belonging* to the county, although he had no claim whatever against the county at the time. The post-dated check was not issued for any indebtedness the county owed to appellee or any other person. It was issued directly to him in payment of Easterling’s individual debt. The transaction was and is inhibited by § 2833 of Crawford & Moses ’ Digest, which is as follows:

“It shall be unlawful for any person or persons whomsoever to borrow or receive any public funds from any such officer, deputy, clerk or employee, knowing the same to be public funds, and for the purpose of converting or applying the same to his or their own use or benefit, or for the use or benefit of any other person or persons, or of any corporation.”

The statute was passed to protect the public funds, and to interpret the statute as meaning that one in due course might accept a check thereon in payment of an individual debt against the custodian of the fund would render the statute nugatory.

The judgment of the trial court is therefore reversed, and, as the facts are fully developed, a judgment is directed to he entered here in favor of appellant against appellee for $2,500, and interest thereon from September, 1928, at the rate of six per cent, per annum.


author: Kirby, J.

text:
    Binganan v. State.
    Opinion delivered February 24, 1930.

      John E. Tatum, for appellant.

      Hal L. Norwood, Attorney General, and Pat Mehaffy, Assistant, for appellee.
   Kirby, J.

This appeal is prosecuted from a judgment of conviction for obtaining- money on a check under false pretenses. The appellant was first indicted-for forging and uttering a forged instrument in giving the check, and upon appeal to this court, upon a confession of error by the Attorney General, the cause wras reversed. Binganan v. State, 180 Ark. 266. Pending the appeal, the grand jury, without any further directions from the court, indicted appellant for obtaining money under false pretenses by the issuance of the check. He moved to dismiss the indictment as having been returned without authority and pleaded former acquittal.

Appellant contends that the court erred in not quashing the indictment herein, insisting that it was found without authority by the grand jury, since the matter had not been resubmitted to the grand jury by direction of the court after the first indictment was returned. The finding of the indictment for forgery, etc., however, the first indictment, cannot be considered a dismissal of the cause by the grand jury within the meaning of the statute, § 2997-98, C. & M. Digest, (2212-2214, Kirby’s Digest), and, if such were the case, the court held in Marshall v. State, 84 Ark. 90, in construing the statute, that it has no reference to the independent action of the grand jury over such causes, saying-: “It contains no limitation upon the duty of that body, after it had been impaneled and sworn, to make its inquiries and presentments as broad as the oath it takes. * * * It is the function of the grand jury, therefore, to investigate and re-investigate concerning matters within their jurisdiction as often as they ‘have knowledge or may receive information,’ and the statute under consideration is not intended to limit or restrain that function.”

Nor was the plea of former acquittal available to appellant. It is true that he was convicted of the offense for the same act, that of issuing the check upon a bank in which he had never had an account and cashing it, upon which he was convicted forging- and uttering the same check as a forged instrument, but he was not put in jeopardy a second time by this trial for the same offense, but for an altogether different one. “The test is not whether the defendant has already been tried for the same act, but whether he has been put in jeopardy for the same offense. ’’ 16 C. J. 295, § 443; Turner v. State, 130 Ark. 48, 196 S. W. 477; Woodson v. Fort Smith, 165 Ark. 443, 264 S. W. 934; Young v. State, 176 Ark. 170, 2 S. W. (2d) 14.

Neither was error committed in allowing the introduction of testimony showing the drawing and issuance of another check, an altogether different one, to another party .upon the same bank upon the same day. The court limited the jury’s consideration of this testimony with a proper instruction, and told them specifically that they could not convict the defendant of the offense with which he was charged upon that testimony.

The appellant admitted drawing the check, but stated that he did not tell the person .to whom it was delivered that he had funds in the bank on which it was drawn, but only that his wife would put the money in the bank to meet the payment. The testimony, however, was sufficient to support the verdict, and, finding no error in the record, the judgment must be affirmed. It is so ordered.’


author: Mehafpy, J.

text:
    Mente & Company, Inc., v. Westbrook.
    Opinion delivered February 24, 1930.

      Coleman & Gantt, for appellant.

      Roivell $ Alexander, for appellee.
   Mehafpy, J.

The appellant is a manufacturer of burlap bags in New Orleans. The appellee, Howell L. West-brook, was formerly engaged in the grain and milling business in Pine Bluff, under the name of Westbrook Grain & Milling Company. The appellee, Helen F. West-brook, is his wife.

In August, 1920, Howell L. Westbrook entered into a written contract with Mente & Company, Inc., for the purchase of 75,000 yards of burlap to be manufactured into bags as ordered by him. As the bags were ordered, they were manufactured and shipped and were to be paid for within ten days. Orders were given and shipments were made from time to time, but Westbrook was slow in making his payments. After November 8,1921, he failed to give any further orders or to answer letters, and the contract w¡as by appellant treated as having been breached by him after he had placed orders for something like one-half of the burlap provided for in the contract.

Appellant brought suit against Westbrook on June 16, 1923, in the circuit court of Jefferson County, for damages for breach of the contract, and recovered a judgment of $2,162.84 with interest. The judgment was affirmed by this court on May 3, 1926. On May 20, 1927, an execution was issued and levied on H. L. Westbrook's interest in a lot in Pine Bluff. This lot was formerly the homestead of W. H. Westbrook, the father of Howell L. Westbrook, and under the will II. L. Westbrook claimed a one-half interest in the lot. After the levy of the execution Westbrook produced a deed which had not been recorded, purporting to have been executed by him to his wife on the 24th day of December, 1923. Westbrook had the deed recorded after the execution was levied. The sheriff proceeded to sell his interest in the lot, and the appellant subsequently received a deed from the sheriff.

On July 28,1927, appellant filed this suit in the chancery court, alleging that the conveyance from Westbrook to his wife was made at a time when he was larg-ely indebted and insolvent for the purpose of defrauding and delaying his creditors, and praying that the deed be canceled as a cloud on the title of appellant acquired at the execution sale.

We deem it unnecessary to set out the evidence in full, but the evidence, in substance, showed that H. L. Westbrook was engaged in the wholesaling of grain and manufacture of milling products in Pine Bluff from 1912 until some time in 1925. His business consisted almost altogether of buying grain in carload lots, and either selling it in its original state or after being manufactured into feed products. Practically his only creditor for a long while was the local bank from whom he borrowed money upon which to operate. In June, 1914, he executed a deed of trust upon all of his real estate except the lot in question to the Cotton Belt Savings & Trust Company for $20,000, and also covering all indebtedness which he might owe this bank. His indebtedness to this bank, secured by a deed of trust, was from $20,000 up as high as $80,000. At the time he executed the deed to his wife he was indebted to the Cotton Belt Savings & Trust Company something like $39,000.

The statement introduced in evidence showing the condition of Westbrook’s business on December 31, 1923, showed that his net worth above his indebtedness was in excess of $100,000. The undisputed proof shows that the property cost to construct approximately $125,000. It was not encumbered in any way except the deed of trust to the bank. The undisputed proof also shows that at the time that Westbrook executed the deed to his wife, and at the time the iudament was secured in the Jefferson Circuit Court, he had ample personal property which could have been sold under the execution, and that it would have sold for enough to satisfy appellant’s judgment. There was no effort on the part of Westbrook and nothing done by him to prevent the execution and sale of this property. After the judgment he prosecuted an appeal to the Supreme 'Court, but did not give any super-sedeas bond, and there was nothing to prevent appellants from having the execution levied on the personal property. Appellant not only did not do this, but no execution was levied after the affirmance of the case in the Supreme Court for about a year. The lot sold at execution sale for $570.40, plus the expenses of the suit, and this amount had been credited on the judgment of the Mente Company against Westbrook.

The bank foreclosed its mortgage or deed of trust, and at the foreclosure sale the property was purchased for $35,000. The bank afterwards sold it for $30,000. The sale of the property was not sufficient to pay the bank’s claim, there being a balance of approximately $1,500. After the bank sold the property the purchaser expended approximately $20,000 on it. The property thereafter burned, and the owner collected $55,000 insurance. The undisputed proof shows that the insurance company deducted quite a sum because of the building not being entirely destroyed, and, in addition to this building, there was a warehouse that was not destroyed by the fire. The undisputed proof also shows that the amount of insurance paid was considerably less than the value of the property destroyed by fire.

The chancellor found that the execution sale should be set aside, and the deed executed by the sheriff to Mente & Company should be canceled, and that the credit of $570.40 upon the judgment in favor of Mente & Company against Westbrook should be set aside.

It is contended by appellant that the deed from Westbrook to his wife was made to defraud creditors. The bank intended at one time to include the lot in controversy in its mortgage or deed of trust, and prepared a deed of trust including this property, but it was never executed. The evidence shows that Westbrook took it to have it executed, but he did not do so, and he did not tell the bank at the time that the property belonged to his wife.

Appellant first cites and relies on the case of Rudy v. Austin, 56 Ark. 73, 19 S. W. 111, 35 Am. St. Rep. 85, in which it was stated: “If he be insolvent, unable to pay his debts, the presumption that it is fraudulent as to antecedent creditors is conclusive.”

And they also rely on the case of Driggs v. Norwood, 50 Ark. 42, 6 S. W. 323, 7 Am. St. Rep. 78, in which the court stated: “Every voluntary alienation of his property by an embarrassed debtor is presumptively fraudulent against existing creditors. Indebtedness raises a presumption of fraud, which becomes conclusive upon insolvency.”

The declarations of law above set out have been many times approved by this court and there can be no controversy about the statements being- correct, as many times declared by this court. But it is a question of fact in this case as to whether Westbrook was at the time of the conveyance to his wife insolvent. One is not prohibited from conveying his property to his wife or any other person simply because he is in debt. If that were true, most of the voluntary conveyances made would be void because most people are in debt. But if a man was really worth $100,000 above his indebtedness, it would certainly not be a fraud to convey property of approximately $1,000 value, although it might turn out thereafter that under a forced sale his property would not bring enough to satisfy his creditors. There is some evidence in the case tending to show that the wife of West-brook declined to sfign the deed of trust to all the other property which included the Westbrook home until Westbrook conveyed his interest in this lot. It is contended that the deed was not made on the 24th of December, 1923, as alleged by appellee, but we think the evidence is practically conclusive that it was made on the date mentioned. The fact that it was a voluntary conveyance, that it was made when Westbrook was indebted to the bank, and that it was not recorded, are all properly admitted in evidence for the purpose of showing whether the conveyance was fraudulent.

In the first place, courts should carefully scrutinize all cases of alleged fraud against creditors wherein members of the family of the debtor make claim to important or valuable interests as creditors, or conveyances to husband and wife, when attacked as fraudulent should be very carefully scrutinized. And a gift of property to Ms wife by one indebted at the time is presumptively fraudulent as to existing creditors. When it is shown that a gift of property was made by the husband to the wife, that the husband was largely indebted at the time, the burden of proof is on the husband and wife to show that the debtor’s intentions were innocent, and that he had at the time abundant means to pay all his debts. But, on the other hand, if the evidence shows that one had ample means to pay all his debts, the conveyance to his wife of property of small \alue as compared with his whole property, together with other facts tending to show good faith, would be sufficient to justify the conclusion that the transfer was not fraudulent.

There os no controversy about the principles of law in this case. The relationship of the parties, the fact that the conveyance was voluntary, and the fact of the indebtedness of the grantor at the time, are all to be considered in determining whether or not the conveyance was in fact fraudulent. But it is also well settled, that, if the evidence shows that the grantor had abundant means other than this property to satisfy all his creditors, the conveyance will not be declared fraudulent. It is also well settled that, to entitle a creditor to set aside a conveyance as fraudulent, it is necessary not only that there be fraud on the part of the vendor participated in by the vendee, but also that there be an injury to the person complaining. The creditor who seeks to set aside a conveyance as fraudulent must show that his debtor has disposed of property that might otherwise have been subjected to the satisfaction of his debt. And, not only that, but he must show that the debtor did not have other property sufficient to pay the creditor. And this is especially true where there is no evidence of fraud except the relationship and the conveyance, and the fact that the debtor was largely in debt.

The undisputed proof in this case shows that the creditor could have made bis money by the sale of personal property owned by the debtor at the time of the judgment in the Jefferson 'Circuit Court. If he had done this, the conveyance, even if fraudulent, could not have injured him, and fraud without injury or injury without fraud will not support an action to set aside a conveyance as fraudulent. 12 R. C. L. 491.

“Whatever may have been the early doctrine on the subject, at the present time there is no doubt that a husband may not only convey directly to his wife for a valuable consideration, but he may also convey to her as a gift when not prejudicial to his creditors. All gifts from a husband to his wife are good inter se, and against all persons claiming under them. The mere existence of the relation of husband and wife between the grantor and grantee does not create an implication as to fraud against creditors, especially where one fails to show that he was a creditor at the time of the conveyance, or that the husband was insolvent. To render a conveyance from husband to wife fraudulent and void as to creditors, there should exist an intent on the part of, the husband to defraud, or at least to hinder and delay, his creditors. And if a conveyance is made with actual fraudulent intent, participated in by the wife, the conveyance will be void without question. It is unnecessary, however, that an actual fraudulent intent, should exist on the part of the husband. Such intent may be, and generally is, inferred from the circumstances surrounding the conveyance, and the existence of the relation of husband and wife is an important fact to be taken into consideration in weighing the evidence relating to the good faith of a conveyance, and this because husband and wife have unusual facilities for the perpetration of fraud on creditors. A conveyance from husband to wife requires less proof to show fraud, and, when a prima facie case is made, stronger proof tó show fair dealing than would be required if the transaction were between strangers.” 12 R. C. L. 513-14.

“Evidence of indebtedness at the time a conveyance is made is important, however, on the question whether such conveyance was fraudulent, but mere indebtedness at the time the conveyance was made, though evidence of fraud, does not necessarily make it void. So a conveyance to one’s wife is not in fraud of the rights of creditors, where the grantor retains ample property for the satisfaction of all his debts, and there is no intent to defraud, nor is it fraudulent where the settlement itself provides for the payment of all existing- debts, and such debts are actually paid in pursuance of the settlement. But a husband cannot give to his wife that which the law regards as belonging to his creditors.” 12 R. C. L. 516.

In the instant case, as we have already said, the undisputed proof shows that when the appellant obtained judgment for 'breach of contract in the Jefferson Circuit Court an appeal was prosecuted by Westbrook without giving a supersedeas bond. And at that time the debtor had ample personal property which could have been sold and the judgment satisfied. No effort on the part of Westbrook was made to prevent this, and no effort on the part of the creditor was made to collect his debt. The undisputed proof is that he waited for more than a year after the case was affirmed in the Supreme Court before undertaking to collect his judgment.

As to whether the conveyance in the instant case was fraudulent and as to whether the debtor at the time had ample property out of which the appellant could have made its money are questions of fact, and the chancellor’s decisions or findings on questions of fact are conclusive here unless contrary to the clear preponderance of the testimony. Pattison Orchard Co. v. Southwest Ark. Utilities Corp., 179 Ark. 1029, 18 S. W. (2d) 1028; Sternberg v. Lane, 179 Ark. 448, 17 S. W. (2d) 286; Cain v. Mitchell, 179 Ark. 556, 17 S. W. (2d) 282.

Our conclusion is, that the finding- of the chancellor is not ag-ainst the weig-ht of the evidence, and the decree is affirmed.


author: Mehaeey, J.

text:
    National Surety Company v. Southern Lumber & Supply Company.
    Opinion delivered February 24, 1930.

      Barter do Henry, for appellant.

      L. P. Biggs, for appellee.
   Mehaeey, J.

Crutchfield & Jeffus, contractors, had a separate contract with each of three school districts to erect school building’s. There was a contract with the Gregory district, another with the Hilleman and another with the Howell-Wiville. The contractors entered into a bond for the faithful performance of their contracts as provided by statute. There was one bond in each case. The appellant, however, was surety in each of the bonds. The buildings were erected and the contractors gave checks for the amount due to all the creditors. The bank declined to pay any of the checks because funds of the contractors in the bank were insufficient to pay all the checks. The contractors had given three checks to the appellee, one for the full amount on each of the contracts. It was afterwards ascertained that the funds of the contractors in the bank amounted to 95 per cent, of the aggregate indebtedness on the three contracts. The creditors then entered into an agreement whereby all of the money would be paid out by the contractors by paying each creditor 95 per cent, of the amount due said creditor. The amount on deposit in the bank to the credit of the contractors was $9,752.72, and the amount of the indebtedness was $10,137.53. 95 per cent, of the amount due appellee on the three contracts was $7,397.47.

After the creditors had entered into the agreement the contractors sent a cheek to appellee for $7,397.47. This was 95 per cent, of the amount due appellee on the three contracts. Nothing was said by the debtor about how it should be applied, and the creditor, appellee, applied the sum thus received so as to pay in full the amount due on the Gregory job, and also the amount in full on the Hilleman job, leaving a balance due on the Howell-Wiville job of $388.79.

The appellee brought suit against the surety company and contractors to recover this amount. There was a judgment in favor of appellee for the amount sued for, and this appeal is prosecuted to reverse said judgment.

One provision in the contract entered into by the creditors whereby each received 95 per cent, of the amount due was as follows:

“It is further agreed, however, that this instrument shall not be taken as a release of any liability on the part of Crutchfield & Jeffus or the National Surety Company, and it is understood and agreed that the Farmers ’ National Bank, and the various creditors entering' into this agreement do not undertake to release Crutchfield & Jeffus or the National Surety Company, but that any cause of action against the said Crutchfield & Jeffus or the National 'Surety Company shall be preserved.”

As stated by appellant in its brief, the appellee’s cause of action is based upon the appellant’s liability under the terms of the bond executed by it on the Howell-Wiville contract for an alleged balance • due for material furnished by appellee for construction of the Howell-Wiville school. The appellant admits a balance due the appellee on the Howell-Wiville job of $157.71, and ten-' dered this amount in court, appellant’s theory being’ that, since the creditors were paid 95 per cent, of their claims this should have been applied on the separate contracts, paying 95 per cent, of each, and that that would leave a balance due on the contract sued on of $157.71. Of course if this application of payments had been made, there would have been an indebtedness or balance due on each of the other contracts and the three amounts would total the amount sued for in this action, and it calls especial attention to the following paragraph in the agreement entered into by the creditors:

“Each of the said creditors is to be paid out of the total amount in the hands of the said bank a proportionate sum represented by the proportionate part that the check of each creditor bears to the total amount due all the creditors.”

In other words, pay to each creditor 95 per cent. This was done in the instant case. The appellee was paid 95 per cent., but there was no application made by the debtor, and no suggestion as to how the payments should be applied.

It is contended on the part of the appellant that', since appellee received a proportionate amount upon its total account, it necessarily received its proportionate payment on the Howell-Wiville job. We do- not agree with the appellant in this contention. The contractors were indebted to appellee on three separate accounts paid $7,397.47, and the creditor applied the payment as above shown.

Appellant contends, and correctly, that an application of payments once made, either by the debtor or the creditor, discharges the guarantor pro tanto, and cannot be affected by change of application by the creditor and the principal debtor. It is true that an application, once made, cannot .be changed, but in the instant case there had never been an application. The three- checks that were given first, if they had been honored, would have been a -payment in full on the three contracts. So, there was not even a suggestion of an application of payments in that. Then, when the last check was sent, the debtor made no request as to how-it should be applied, and it was applied as above set forth.

“The right to apply payments is one strictly existing between the -original parties, and no third person has any authority to insist on an appropriation of the money in his own favor, where neither the debtor nor the creditor has made or required senj such appropriation. * * * "While the authorities are not entirely in accord, third persons, such as guarantors, sureties, in-dorsers, and the like, secondarily liable on one of several debts, cannot control the application which either the debtor or the creditor makes of a payment, and neither the debtor nor the creditor need apply the payments in the manner most beneficial to such persons. This rule applies as well to a corporation engaged in the business of writing surety bonds for a compensation, as to an ordinary accommodation surety. Accordingly, it has been held that where a creditor has several demands against the same debtor, one -of which is secured by an indorsement, and he has procured attachments to be issued and levied on all the demands, he has the right to apply the proceeds of the attachment to the satisfaction of the demands not secured by the indorsement, and then seek satisfaction, if necessary, from the indorser.” 21 B„ C. L. 107-8.

“The exercise of the right of appropriation of payments belongs exclusively to the debtor and. creditor, and no third person can control or be heard for the purpose of compelling a different appropriation from that agreed upon by them. But an appropriation by either party cannot afterward be changed so as to injuriously affect the rights of third persons. * * * Third persons, such as guarantors, sureties, indorsers, and the like, secondarily liable on one of the debts, cannot control the application of a payment b3r either the debtor or the creditor, and neither the debtor nor the creditor need apply the payment in the manner most beneficial to such persons.” 30 Cyc. 1250-51.

“In a case in Michigan where a bond was given by a contractor to insure the payment of labor and material furnished on the contract, it was held that the sureties were not relieved by reason of the payment of an antecedent debt from the contract price of the improvement. It was said: ‘This bond did not, in terms, provide that the contractor should apply his earnings to pay the laborers or materialmen, and the statute does not provide for such a bond. It undertook that the contractor should perform his personal obligations in his own way. It contemplated that he would receive and disburse his money as should suit his convenience. * * * The law does not have the same solicitude for corporations engaged in giving indemnity bonds for profit as it does for the individual surety who voluntarily undertakes to answer for the obligations of another. Although calling themselves sureties, such corporations are in fact insurers, and in determining their rights and liabilities, the rules peculiar to suretyship do not apply.’ ” Chicago Lbr. Co. v. Douglas, 89 Kan. 308, 131 Pac. 563, 44 L. R. A. (N. S.) 843; Valve Mfg. Co. v. Fidelity & Casualty Co. of New York, 114 Kan. 151, 217 Pac. 282; Salt Lake City v. O’Connor, 68 Utah 233, 249 Pac. 810; Puget Sound State Bank v. Gallucci, 82 Wash. 445, 144 Pac. 698, 39 Am. & Eng. Ann. Cas., 767; Wyandotte Paving & Const. Co. v. Wyandotte Coal & Lime Co., 97 Kan. 203, 154 Pac. 1012, Ann. Cases 19170, 580.

Where there are different sureties on different contracts, still the debtor and creditor have the right to appropriate the payments.' If this surety company had been surety on the bond sued on in this case, and other surety companies were sureties on the other bond, still either the debtor or creditor would have had the right to appropriate the payiiients to the other two, and the surety company could not complain. In the instant case, however, the appellant was surety on each bond, and, according to its own contention, if the payments had been applied like it says they should have been applied, it would have owed the same amounts, but would have owed it on three separate contracts. If the payments had been applied as suggested by the appellant, the funds would have been insufficient to pay the amounts due on each of the contracts, and the balance due on the three contracts, for which the surety company would have been liable, would have been the amount sued for in this case. In other words, if the course suggested by appellant had been pursued, the appellant would have been liable for the same amount, but on three contracts instead of one.

There is no controversy about the amount that was due at the time the $7,397.47 was paid. The appellant does not claim that it paid the debts, but admits that it left a balance of $388.79 for which it would have been liable if the payments had been made on each of the .claims as suggested by appellant. Therefore, there could have been no injustice in this case in the application of the payments by the creditor. The surety company is not called upon to pay any more than it admits it would have been liable for, if the payments had been applied as suggested by it. But, even if that were not true, as we have already said, the debtor and creditor are the persons who have the right to make the application, and the third person or surety company has no right to be heard, and no right to direct how the payments shall be applied. The rule as announced by this court is that the debtor at the time of making a payment has the right to direct the application. If he fails to make such application, the creditor has the right to make it. Briggs v. Steele, 91 Ark. 458, 121 S. W. 754.

But, whether the creditor or the debtor had a right to make it and did it, the appellant has sustained no injury, because it has not been called on to pay any more than the evidence conclusively shows it was liable for.

We find no error, and the judgment of the circuit court is affirmed.