text:
    Franklin Fire Insurance Company v. Holmes.
    4-3406
    Opinion delivered March 12, 1934.

      Verne McMillen, for appellant.

      Emmet Vaughan and George W. Craig, for appellee.
   Butler, J.

On November 9, 1930, Mrs. Frank L. Goodwin, as owner, secured a policy of fire insurance in the sum of $800 oil a dwelling house situated on lots 7 and 8, block 28, Watkins’ Survey to the town of Des Arc, loss, if any, payable to Henry Nichols, mortgagee. The policy provided that it should be void if the interest of the insured be other than unconditional and sole ownership, or if the subject of the insurance be a building on ground not owned by the insured in fee simple; also, that in the event of the destruction of the property by fire, as a condition precedent to recovery, proof of loss should be made within 60 days.

Mrs. Goodwin died in December, 1930, and on January 19, 1931, J. J. Holmes was appointed administrator of her estate. On April 2, 1931, the property was destroyed by fire, and the insurance company was so notified. Henry Nichols, acting for himself as mortgagee, made the proof of loss necessary to effect a settlement between him and the company, which paid him the amount of his debt secured by the mortgage in the sum of $401, and, under a stipulation in the policy, the company took an assignment of the mortgage from Nichols on June 20, 1931. During this time an investigation was made concerning the title to the property, and it was found that on July 8,1926, Mrs. Goodwin had conveyed the property by warranty deed to Mrs. Frank Hall Murphy, a niece, who lived with her, and, on April 11, 1927, following, Mrs. Goodwin had executed another deed to Mrs. Murphy to correct the descriptions contained in the deed executed in 1926. Mrs. Frank Hall Murphy, claiming to be the owner of the property and entitled to the insurance thereon, employed E. F. West and J. P. Kerby, of Little Rock, attorneys, to represent her in an attempt to effect a settlement, and, on October 1, 1931, signed a letter addressed to the insurance company advising it that she had authorized West and Kerby, as her agents and attorneys, to settle for the insurance loss “on what is known as the Goodwin or Murphy property, consideration that I get an assignment of the Henry Nichols mortgage, which is the mortgage that was transferred and assigned to your company, the same being of record in record book “Y,” at page 625, records of Prairie County, Arkansas, and you are requested to assign this mortgage and deliver same to my said attorneys, making a full settlement with them for all consideration, etc. ’ ’ This was witnessed by Mrs. Ruth'Johnson, a sister of Mrs. Murphy, and by a Miss Mary Hall. Mrs. Murphy claimed there was some writing in the letter not there when she signed it, but there was no claim that West and Kerby did not have authority to settle for her with the company. The insurance company settled with the said attorneys by assigning to them the Nichols mortgage and paying the sum of $100 in cash. After this settlement was effected, on May 3, 1932, Mark Bell filed a complaint in the Prairie Chancery Court against Mrs. Frank Hall Murphy, on which no summons was issued, but which Mrs. Murphy answered, and there appeared on the judge’s docket the following notation: “5-7-32, decree setting aside deed. No summons.”

On August 23, 1932, J. J. Holmes, as administrator of the estate of Mrs. Goodwin, brought the action from whence this appeal comes, to recover on the policy of insurance.

On issue joined, testimony was adduced, the case was submitted to a jury, which returned a verdict in favor of the plaintiff for the sum demanded. The court thereupon rendered judgment for that sum with interest, 12 .per cent, penalty, and attorney’s fee. On appeal it is insisted that the court erred in giving certain instructions for the plaintiff and in refusing others requested by the defendant, which we need not notice for the reason that it is our opinion that the court erred in refusing to direct the jury, at the request of the defendant, to return a verdict in its favor.

The testimony established beyond question the facts heretofore stated. During the trial the plaintiff, in response to the contention that his intestate was not the owner of the property, offered in evidence the chancellor ’s notation which we have quoted supra, and a decree was entered purporting to be based upon the notation aforesaid, in which the court found as the basis for its decree cancelling the deed from Mrs. Goodwin to Mrs. Murphy of April 12, 1927, was that the same “was executed while the said Frank L. Goodwin (Mrs. Goodwin) was mentally incompetent to execute the same.” Without determining how this decree would affect the right of the defendant company, no notice having been given it of the pendency of that action, in so far as the deed of .April 12, 1927, is concerned, it was not sufficient to divest the title of Mrs. Murphy, for that title rests not on the deed of April 12, 1927, but on the deed executed July 8, 1926, the latter deed being executed merely to correct a description in the former. There was no finding by the court that Mrs. Goodwin was mentally incompetent to execute a deed on the first-mentioned date, and, in the absence of a finding to that effect, the presumption is that she was legally competent to make the conveyance. It follows that Mrs. Goodwin, at the time of the execution of the contract of insurance and at all times thereafter, was not the owner in fee simple of the property on which the building insured was located.

During the progress of the trial a letter, dated September 12, 1931, from Mrs. Frank Hall Murphy to her attorney, John P. Kerby, was introduced. This letter was in response to a letter she had received from him a few days preceding and in which she stated that Holmes was appointed administrator for Mr. Nichols, and, if it was necessary, she would prefer to have one appointed of her own choice, but that she had been informed that Mr. Nichols and Mr. Holmes were willing to do all they could to assist her in collecting the insurance.

The case was heard on the testimony of witnesses present before the court, and not by deposition, and neither Nichols nor Holmes denied the implication contained in Mrs. Murphy’s letter to her attorney. From this the inference follows that Holmes, the administrator, was apprised of Mrs. Murphy’s claim and of the effort she was making to effect a settlement with the insurance company. Holmes, in testifying, did not claim that he had made proof of loss or claim for the estate, but stated in effect that he merely accepted the appointment as administrator and did nothing regarding the claim for insurance. Mr. Nichols, the mortgagee, testified that he made no proof for the estate, but simply did what was necessary to protect his own interest.

The settlement of the mortgagee’s claim and that made with Mrs. Murphy were beyond sixty days from the fire, and the company’s action in making these settlements conld not be deemed to be a waiver of any defense it might have against the estate of Mrs. Goodwin, or to constitute an estoppel to assert the same, for there was nothing in its action which could be said to have misled the administrator or to have prejudiced the rights of the estate. On the contrary, it appears that an estoppel works to preclude the claim of the administrator, for it is clear that he stood by while the company was negotiating with Nichols and Mrs. Murphy without intimating that the estate was claiming any interest in the insurance. By his silence, he permitted the insurance company to conclude its negotiations which clearly it would not have done had he, with any reasonable diligence, asserted a claim for the estate of the proceeds of the policy. Manifestly, there was no act of the insurance company which placed the administrator in a position to suffer loss, whereas his conduct was such as to reasonably mislead the company. The loss occurred on April 2, 1931, and we gather it was at least a year before the administrator gave any indication of an intention to claim the insurance. Certainly, far beyond the time for making the proof of loss had elapsed, and there was none such ever made. The stipulation in the policy that the insured must be the sole and unconditional owner of the property, or the owner of the fee-simple title to the ground on which the building is located, is a valid provision, and, where the ownership is otherwise, the policy of insurance is void. Phoenix Ins. Co. v. Public Parks Amusement Ass’n, 63 Ark. 187, 37 S. W. 959; Planters Mut. Ins. Co. v. Loyd, 67 Ark. 584, 56 S. W. 44; Western Assurance Co. v. White, 171 Ark. 733, 286 S. W. 804.

It is equally well settled that the provision for making proof of loss within sixty days after the fire is a reasonable and valid provision and that failure to make such proof within the time prescribed forfeits the rights of the insured. Teutonia Ins. Co. v. Johnson, 72 Ark. 484, 82 S. W. 840; Home Fire Ins. Co. v. Driver, 87 Ark. 171, 112 S. W. 200; Commercial Fire Ins. Co. v. Waldron, 88 Ark. 120, 114 S. W. 210; Queen of Arkansas Ins. Co. v. Faster, 108 Ark. 261, 156 S. W. 848; Ill. Bankers Life Ins. Co. v. Byassee, 169 Ark. 230, 275 S. W. 519.

As suggested by counsel for tlie appellant, if the administrator had made his claim and proof of loss within the time provided by the policy, the company then would have had an opportunity to determine who actually owned the property at the time of the loss, and, the claim not having been made, it had a right to rely upon the record title, and the administrator is now estopped from making any such claim. It follows that the judgment of the trial court is reversed, and the case is dismissed.


source: Caselaw Access Project

author: Butler, J.

license: Public Domain

text:
    Freeman v. State.
    Criminal 3873.
    Opinion delivered March 12, 1934.

      Coleman & Gantt, for petitioners.

      Hal L. Norwood, Attorney General, and John H. Caldwell, Assistant, for respondent.
   Butler, J.

On or about the 26th day of October, 1933, the circuit .judge of the 11th judicial circuit, having been informed that certain gambling devices, commonly called slot machines, were being operated in Jefferson County, under the mandatory provisions of § 2630-37 of Crawford & Moses’ Digest, caused to be issued a warrant to the sheriff directing him to make search for such devices and to seize the same, if found, for such further action as the court might find proper. Acting on this warrant, the sheriff and his deputies, on the 27th of October, 1933, seized some twenty-one slot machines of various kinds. "While the question of the disposition of the alleged gambling devices was- still pending, on October 31, 1933, the Pine Bluff Commercial carried the following editorial:

“WHAT DO YOU THINK
“By Walter Sorrells, Jr.
“This paper does not advocate the violation of any law.
“Unfortunately, there are many laws that should never have been passed and should be repealed.
“However, spasmodic enforcement of any law will accomplish nothing. I do not blame the officers for taking up the marble machines.
“Regardless of how they might feel personally about it, they are officers of the court and cannot do otherwise.
“Lack of continuity of effort or inconsistency in the enforcement of the law does much to encourage violation, however.
*****
“For instance, the State of Arkansas comes along and levies a tax on marble machines. In other words the State gives the operator a license to do business. Bluntly speaking, the State licenses the violation of this specific law.
“The City of Pine Bluff, not to be outdone, levies an additional tax on the machines, and the circuit court comes along and has them confiscated.
“This is not a criticism of Judge Parham’s action. But somewhere down the line, law enforcement agencies should get together.
*****
“It is unfair, and unjust, to charge the operators a State and city license, then fine them for operating them, and confiscate the machines.
“It is true that a warning was issued. But it is not true that the warning was issued before the State and city licenses were paid. And that is where inconsistency in the enforcement of the law works a hardship. If it had been the practice to take up marble machines before, few operators would have paid a State and city license.
“There has never been any concerted drive to rid the county of such machines before, hence they were led to believe that inaction on the part of the law enforcement agencies justified them in paying a State and city license tax.
“The fair thing to do would be to state plainly that hereafter and henceforth, the operation of all such machines will be prohibited, and the machines, together with the money contained in them returned to the operators. Before the operators lose, and few if any can afford to lose, the law enforcement agencies should establish a fixed policy in regard to such machines and stick to it.
“I think that the same thing should apply to the carnival, brought here by the baseball team. In the first place, I don’t believe that a carnival should be permitted to stop in Pine Bluff. But those interested in baseball in Pine Bluff should have been given sufficient warning before they contracted with the carnival.
“They claim no warning was issued.
“Few people in Pine Bluff would object to the indiscriminate enforcement of all laws. But they should know that they are subject to arrest and fine when they do violate them. They should not be led to believe by inaction on the part of the enforcement agencies that they are safe'in paying a State and city license, then lose the amount of the tax as well as the privilege of making a little money, by a sudden impulse on the part of the enforcement agencies.
-15, Ji. TP TS' w tP
“I have observed closely Judge Parham’s official actions since he has been on the bench, and I am satisfied that the people in the district that he serves have found him fair and impartial, but he must see how unfair it is to force these operators to pay a State and city license, then confiscate their money as well as machines, since they were not warned before the license was paid that a law that seemingly has been ignored by laymen as well as officers would suddenly be enforced.
“If the marble machine law, whatever it might be, is going to be enforced rigidly against all alike in every town in the district, well and good. I’m for such action because by strictly enforcing such laws, some acts conceded to be merely nuisances might be repealed. But if that is to be the policy of the law enforcement agencies, then let’s give the merchants who are having a pretty hard struggle a fair warning. I’m sure if it is made cleár that such will be the policy of the officers hereafter, there will be no marble machines in Pine Bluff.
“What do you think?”* * *

Immediately following the publication of the foregoing editorial, the prosecuting attorney filed a petition in the circuit court setting- out the article and praying that the owner of the Pine Bluff Commercial, E. W. Freeman, Sr., and its editor, Walter Sorrells, Jr., be cited to appear and show cause why they should not be punished for contempt of court for the publication of said article. On the day named in the citation, the appellants appeared and filed their disclaimer of intention to reflect upon the court or any officer thereof, or to publish anything tending to embarrass the court or to influence its action with reference to any issue pending before it, and affirming that the publication was not intended to be contemptuous, disrespectful, or an effort to dictate the judicial determination of any issue before the court, but that it was published under the belief that it was an honest and proper opinion regarding a matter of public interest. Continuing, the respondents stated that, at the time the article was published, they believed, and still believe, that the judge of the court is a man of honor and integrity, fair and impartial in his judicial decisions and not to be influenced by newspaper articles or other considerations except the law and the evidence in each case; that the article was not intended to be partisan, or to comment upon evidence, or to dictate what the court’s opinion should be. They alleged that they did not believe at the time the article was published, and do not now believe, that the publication could, or would, have had any effect on the court, and that, if any statements in the article were untrue or not founded upon the law, it was unknown to them.

The response also contained a demurrer to the petition for citation on the ground “that the said newspaper article is not disrespectful or derogatory to the court or any of its officers, is not defamatory or threatening, does not tend to intimidate the court, and is not calculated to embarrass the court in the decision of any pending cause or to interfere with the administration of justice; that the said response filed by the petitioners purged any possible contempt which might háve existed by reason of the publication- of the said newspaper article.” The demurrer was overruled, and testimony heard which established the facts before narrated, and, in addition, that the Pine Bluff Commercial is a newspaper which covers the city of Pine Bluff and approximately fifty miles of surrounding territory in southeast Arkansas; that appellants were the owner and editor, respectively, of the paper which had a circulation at that time of 6,588 subscribers.

The court thereupon found that the appellants were in contempt of court in that the editorial published was of a character “having a tendency to influence the action of the tribunal before which the case is pending,” and “where a newspaper takes sides, comments on the evidence, and expresses an opinion as to the merits or proclaims an accused’s innocence * * * may be an unlawful interference with the proceedings of the court * * * and its publication in the place where the court is sitting may be punished as a misbehavior in the presence of the court.”

On the. law of contempts the court quoted from 4 C. J. 34, 6 R. C. L. 509, the cases of Globe Newspaper Co. v. Commonwealth, 188 Mass. 449, 74 N. E. 682, 3 Ann. Cas. 761, and Bee Publishing Co. v. State, 107 Neb. 74, 185 N. W. 339, and held that the editorial offended against the rules announced in those cases. The law of contempts is well settled in ’this State, and the rules announced by our decisions do not differ from those laid down in the authorities cited by the learned trial judge. Early in the history of this court, it had occasion to discuss at length and determine the powers of the court with relation to the punishment for contempt, to distinguish between true liberty of the press and license, and to make inquiry into and determine the nature and effect of those acts- and declarations deemed to be contempts and the reason therefor. To determine what the law of contempt is, and the power of the courts with respect thereto, we need therefore to look only to our own decisions, and from these Ave derive the following rules: (1) That the.power of punishment for contempt is independent of statutory authority, being inherent in and an immemorial.incident of .judicial power, its conclusions to be reached and judgments found without the intervention of a jury; (2) that, because of this extraordinary and inherent power, the administration of which is entrusted to the conscience of the court alone, the power should never be exercised except in those cases where the necessity is plain and unavoidable if the authority of the courts is to continue; (3) that courts entertain proceedings for contempt for two purposes, one to preserve the power and dignity of the court and to punish for disobedience of orders, and the other to preserve and enforce the rights of private parties to suits and to compel obedience to orders and decrees made to enforce the rights and administer the remedies to which the court has found the parties to be entitled.

It is the first class with which the court has to deal in the instant case. In order to preserve the dignity and efficiency of courts, it is essential, among other things, that no conduct be permitted which is either a direct or a consequential contempt — a direct contempt which openly insults the court or infringes on its power committed in the presence of the presiding judges, or consequential, which, without open insult or direct opposition, plainly tends to create an universal disregard of their authority. In the latter class are included any speaking or writing contemptuously of the court or judges acting in their judicial capacity; or by printing false accounts of causes then pending before the court; or printing articles with respect thereto which would be calculated to influence, intimidate, impede, embarrass or obstruct the courts in the due administration of justice. Neel v. State, 9 Ark. 259; Cossart v. State, 14 Ark. 541; State v. Morrill, 16 Ark. 384; Ex parte Winn, 105 Ark. 190, 150 S. W. 399; Bryan v. State, 99 Ark. 163, 137 S. W. 561; Turk v. State, 123 Ark. 341, 185 S. W. 472; Weldon v. State, 150 Ark. 407, 234 S. W. 466.

It was the opinion of the circuit court that the article questioned came within the law of contempts for the reason that the paragraph reading, “I do not blame the officers for taking up the marble machines. Eegardless of how they might feel personally about it, they are officers of the court and cannot do otherwise,” carried with it the implication that the court was alone to blame, whereas the court was but obeying the plain mandate of the law.

The construction further placed upon the article by the trial court was that it was a contempt to obstruct the free judgment of the court by exciting in the readers of the paper a prejudice against the proceedings before the court, and that this was “unfair and unjust.” The court further reasoned that the article tended to embarrass it because if it should finally order the machines destroyed the article would tend to give rise to a public opinion that the judgment of the court was arbitrary and unfair, whereas, if the facts and circumstances should convince the court that the machines should be returned to their owners as not being gambling devices within the meaning of the law, the court might be subject to the criticism that it was merely following the “Commercial’s” bidding.

The language is susceptible of the interpretation placed upon it by the trial court, but we think it also comports with the idea that it was not the action of the court, either past or prospective, which the writer had in mind and intended to make the subject of his animadversion, but rather the law itself and the action of the revenue officers of the State and city as tending to lull the owners of slot machines into a sense of false security. In other words, we think the language of the article is susceptible of more than one construction; indeed, it is difficult, because of the inherent infirmity of our language, to state anything in writing" with such clarity and precision that a single meaning may be conveyed. Such being our view of the doubtful meaning of the article, and where it might have been given an innocent construction, the contempt was purged by the disavowal of the appellants, made under oath, of any intent to influence or embarrass the court or to cast any aspersion upon its integrity and fidelity to duty. It is undoubtedly the tradition of the press of this country that it has uniformly upheld and maintained respect for the judiciary, and it is generally held that a denial under oath of want of intent will purge a contempt arising from language used in publishing articles which are susceptible of two interpretations. 6 R. C. L. 534, § 47; Percival v. State, 45 Neb. 741, 50 A. S. R. 568; Ex parte Earman, 85 Fla. 297, 95 So. 755, 31 A. L. R. 1226; Ib. note 1243; In re Robinson, 117 N. C. 533, 23 S. E. 453, 53 A. S. R. 596.

The rule announced in the authorities last cited was approved in the early case of State v. Morrill, supra. In that case an order was made reciting the publication of an article and the summoning of .the publisher to appear before the court to show cause why he should not be adjudged guilty as for criminal contempt. A demurrer was first filed to the order and citation on several grounds, one of which was that by no construction could the article be deemed to be libelous or in contempt of court. In overruling the demurrer on this ground, the court held that the language of the article was not an attack upon the trial, character or conduct of the members of the court as men, but appeared to be an imputation against the purity of their motives while acting officially as a court in a specified case. Whereupon a response was filed in which the statement was made under oath that there was no intention to reflect upon the integrity of the court or to intimate that it was corruptly influenced in reaching its decision, but that, justly interpreted, the language referred to other persons, and that he positively denied all intention to commit a contempt by the publication of the article. In that case the court said: “The response being upon oath, we shall treat it as true, and the rule will be discharged. ’ ’

Following the general rule and the action of the court in the case of State v. Morrill, supra, it is our opinion that when the.petitioners filed their sworn disclaimer the court should have exonerated them, save for the costs which had been incurred. The judgment of the trial court is therefore quashed.


author: Johnson, C. J.

text:
    Turley v. Owen.
    4-3413
    Opinion delivered March 19, 1934.

      C. W. Norton, for appellant.

      Mann & Mann, for appellee.
   Johnson, C. J.

This proceeding was instituted, by A. B. Owen, the Central Life Insurance Company of Cincinnati, Ohio, and A. B. Oliver against appellant, Linn Turley, seeking cancellation of a certain commissioner’s deed executed by J. F. McDougal, commissioner in chancery, to appellant, Linn Turley, conveying the northeast quarter of southeast quarter, section 13, township 5 north, rang’e 6 east. Concisely stated, the facts are as follows:

St. Francis Road Improvement District No. 12 was created by special act No. 620 of 1923. The district was duly organized, assessment of benefits effected, bonds sold, and the improvement contemplated under the act regularly completed. Section 28 of said act, among other things, provides, in effect, that, upon completion of the improvement provided for in the act, the district shall not be dissolved, but shall continue in effect for the purpose of maintaining the highways of the district; that the commissioners shall annually estimate and report to the county court the amount of money required for maintenance of said highways for the ensuing twelve months. Said section further provides that the estimate of the cost of the contemplated maintenance shall be filed in the office of the county clerk not later than September 1 of each year, and upon the filing of such estimate that the commissioner shall cause a notice to be published for one week in a newspaper in St. Francis County setting forth that such estimate has been filed, and will be presented to the county court on a day of its next regular term. Said section further provides that the county court shall hear all complaints filed against the estimate, and shall determine and adjudge the amount reasonably required for the upkeep of said roads, and shall levy the sum as a maintenance tax upon lands within the district in the same proportion as the lands and other items of real estate were originally assessed, and that such additional assessment shall be added to the other tax, and extended upon, the tax books for the ensuing year, and collected in the same manner, and at the same time as other assessments are collected.

Act 112 of 1927 amends act 620 of 1923 by limiting the amount which may be assessed against the lands in the improvement district not to exceed 1 per cent, on the assessed benefits in the district.

In the pursuance of the authority conferred under § 28 of said act 620 of 1923, and the amendatory act of 1927, the commissioners of said road district in September, 1929, filed with the county clerk of St. Francis County an estimate of and for the maintenance of roads in said district for the year 1930. Said estimate determined a maintenance charge of 1 per cent, upon the original assessment of benefits.

On October 28,1929, the county court of St. Francis County made and entered an order, based upon the petition of the commissioners, levying a tax of 1 per cent, in value upon all the lands in the district based upon the original assessment of benefits.

This judgment of the county court does not reflect upon its face that notice was given or published prior to the determination thereof.

The maintenance tax, thus levied by the county court, was not paid by the owner or any one for him during the time allowed by law for payment. Thereafter, Road Improvement District No. 12 instituted foreclosure proceedings in the St. Francis Chancery Court against the lands here in controversy; notice of the pendency of the suit was published in compliance with the statute, and thereafter, on October 27, 1930, said tract of land was condemned and ordered sold for nonpayment of the delinquent taxes aforesaid. On December 26, 1930, in pursuance of the decree therefore entered, this tract of land was sold to one J. T. Campbell, and thereafter the report of sale was in all things approved by the chancery court. At the expiration of the period of redemption, a deed was executed to the holder of the certificate of purchase, which seems to have been the present appellant, Firm Turley, which deed was, in all things, approved by the chancery court.

Thereafter, on April 17,1933, this suit was instituted for the purpose aforesaid, and thereafter a decree was entered canceling appellant’s deed, and this appeal is prosecuted to reverse this decree. The decree appealed from, which was rendered on November 9, 1933, contains the following finding of law and fact:

“That this cause is a direct attack on a decree of this court heretofore rendered in cause No. 5434, wherein St. Francis County Road Improvement District No. 12 was plaintiff, and George C. Brown & Company et al. were defendants. The court finds further that the process and proceedings, had in said cause No. 5434, were regular, and that the decree rendered therein was good as to form, but that the same should be vacated for the reason the proceeding’s had in St. Francis County Court, October 28, 1929, attempting to levy a maintenance tax for the year 1930, upon Avhich the decree in cause No. 5434 in this court was based, were void, and hence rendered the process of this court inoperative.”

It appears from the chancellor’s findings of law that it was his opinion that this suit was a direct attack upon the prior decree of the St. Francis Chancery Court condemning the lands in this controversy for sale. The chancellor was in error in this conclusion of law.

It is true that appellees filed an amendment to their complaint in which it was alleged that “a fraud was practiced on the court in obtaining the judgment establishing a lien on said lands, and ordering a sale thereof,” but there is no testimony establishing or tending to establish this allegation.

Conceding, without deciding, that the county court judgment, assessing the maintenance benefits and levying the tax, was a void order, nevertheless, and for the reasons hereinafter stated, this would not be decisive of this case.

The mere fact, if it be a fact, that the decree of the St. Francis Chancery Court in foreclosure Avas based upon a void or voidable order, and judgment of the county court is entirely insufficient to show that the foreclosure decree Avas procured by fraud.

In Cassady v. Norris, 118 Ark. 449, 177 S. W. 10, quoting from the seventh headnote, we held:

“Fraud as the basis of an action to impeach a judgment, must be a fraud extrinsic of the matter tried in the cause; it must not consist of any false or fraudulent act or testimony, the truth of which was or might have been in issue in the proceeding before the court which resulted in the judgment that is assailed; it must be a fraud practiced upon the court in the procurement of the judgment.”

In 15 R. C. L., page 762, the rule is stated thus:

“The acts for which a court of equity, may, on account of fraud, set aside or annul a judgment at law between the same parties have relationship only to fraud which is extrinsic or collateral to the matter tried by the first court, and not to fraud in the matter on which the judgment was rendered.”

In the ease of United States v. Throckmorton, 98 U. S. 61, the Supreme Court of the United States had under consideration a petition which sought to set aside and vacate a previous order and judgment, because based upon an instrument in writing which was falsely and fraudulently executed. The court stated the rule as follows:

“That the mischief of retrying every case in which the judgment or decree rendered on false testimony given by perjured witnesses, or on contracts or documents whose genuineness or validity was in issue, and which are afterwards ascertained to be forged or fraudulent, would be greater, by reason of the endless nature of the strife, than any compensation arising from doing justice in individual cases.”

Thus it appears that practically all the authorities agree that judgments will not be set aside and vacated merely because they were superinduced by false testimony or based upon false, fraudulent or forged instruments.

Since we have determined that the foreclosure decree was not procured through fraud, it remains only to determine whether or not this proceeding is a direct or a collateral attack on the judgment in foreclosure in the chancery court.

For the reasons .just stated this proceeding does not come within the purview of § 6290, Crawford & Moses’ Digest, and for this reason is not a direct attack on the judgment sought to be vacated because of said section. Independently of the statute just quoted, is this a direct or collateral attack on the chancery court decree in foreclosure?

In Hooper v. Wist, 138 Ark. 289, 211 S. W. 143, we held:

“This brings us to a consideration of whether the present case is a direct or collateral attack on the former chancery decree. A direct attack on a judgment is usually defined as an attempt to reform or vacate it in a suit brought in the same action and in the same court for that purpose. On the other hand, a collateral attack upon a judgment has been defined to mean any proceeding in which the integrity of a judgment is challenged, except those made in the action wherein the judgment is rendered, or by appeal, and except suits brought to obtain decrees declaring judgments to be void ab initio. 15 R. C. L. 838, par. 311. This is the effect of our decisions in the cases above cited as well as numerous other decisions of the court.”

In Cassady v. Norris, supra, we held an action attacking a decree of the chancery court condemning for sale certain lands for the nonpayment of taxes to be collateral.

In the case of Pattison v. Smith, 94 Ark. 588, 127 S. W. 983, we held: “That the findings and recital of a decree in foreclosure of a tax lien were binding and conclusive upon a collateral proceeding,” and cited as supporting the rule: McLain v. Duncan, 57 Ark. 49, 20 S. W. 597; McConnell v. Day, 61 Ark. 464, 33 S. W. 731; Porter v. Dooley, 66 Ark. 1, 49 S. W. 1083; Porter v. Tallman, 68 Ark. 211, 56 S. W. 1071; Palmer v. Ozark Land Co., 74 Ark. 253, 85 S. W. 408.

In the instant case, it may be said that the validity or invalidity of the county court judgment levying the maintenance tax and assessment for 1930 was an issue of fact in the foreclosure proceedings of October, 1930, and the adjudication of the question in favor of the district and levy was and is conclusive and binding upon all parties thereto, which includes not only the landowner, but his privies in estate. Moreover, the rigor of the rule thus stated is not modified or impaired, because the proceeding’ Avas one in rem and not in personam.

In Pattison v. Smith, supra, we held that, by the filing of a suit in foreclosure and the publication of the notice required by statute, the court acquired jurisdiction over the land involved in the action, and that the question as to whether or not the taxes on the land were delinquent was but an issue of fact to be passed upon by the court. It was further determined in that opinion that the jurisdiction thus acquired was as complete and effective as if personal service of process had been had upon the owner of the land.

Neither is the rule .just announced in conflict with the previous holding of this court in Taylor v. Bay St. Francis Drainage District, 171 Ark. 285, 284 S. W. 770. In the case just referred to, a petition was filed in the circuit court seeking certiorari to bring up and quash certain proceedings of the county court. The judgment and order of the county court sought to be quashed was made and entered at a time when the original proceeding’s in suit were pending in the Supreme Court. Thus it appears that the Taylor case was a direct attack authorized by § 2237, Crawford & Moses’ Digest, upon a judgment of a court of inferior jurisdiction, and is therefore no authority against the position here taken.

Neither can we agree that our present holding is in conflict with Grayling Lumber Co. v. Tillar, 162 Ark. 221, 258 S. W. 132. In this case the facts were, that on November 7, 1901, a decree confirming title was entered in favor of Red Fork Levee District. Frank Tillar was not made a party to the confirmation proceedings. Many years thereafter Tillar instituted conformation proceedings against the Grayling Lumber Company, which had succeeded to the rights and title of the Reel Fork Levee District. The lumber company pleaded the former adjudication in bar. The trial court found, as a fact, that Tillar paid the taxes on the land in controversy for the years 1895 to 1901, inclusive. The decisive issue in that case was thus determined.

“The confirmation proceedings were had pursuant to our statute regulating the procedure in confirming and quieting title to lands. Sections 8362-8373, inclusive. Section 8369, among other things, provides that the decree in the cause shall not bar or affect the rights of any person, who, within seven years preceding, had paid the taxes on the lands, unless such person shall have been made a defendant in the petition, and duly summoned to answer the same.”

Thus it appears that Tillar fell within the statutory exception; he had paid the taxes, was not served with summons, and was not bound by tbe decree under tbe plain mandate of the statute.

The result of our previous opinions is that any proceeding provided for by law which has the purpose of avoiding or correcting a judgment or decree is a direct attack which will be successful upon showing error; while an attempt to do the same thing in any other proceeding is a collateral attack which will be successful only upon showing a want of power.

The chancery court of St. Francis County had jurisdiction of the subject-matter and parties in the foreclosure suit of October, 1930, and therefore had full power and authority to determine all the issues here presented, and appellees’ fáilure or refusal to appear in said foreclosure proceedings and contest the same has foreclosed and barred their rights to now be heard.

We agree with appellees that act 112 of 1927 does not repeal act 620 of 1923, and that notice to the landowner of the assessment of benefits for the purpose of maintenance was a prerequisite to the validity of the county court judgment. But, even so, this does not militate. against the rule that a judgment rendered by a court of competent jurisdiction which acquires jurisdiction of the subject-matter and the parties is conclusive and binding between parties and their privies.

The interest of the Union Central Life Ins. Co. rises no higher than that of A. B. Owen. The life insurance company’s title was derived from Owen subsequent to the foreclosure decree and sale.

It follows from what we have said that the foreclosure decree of the St. Francis Chancery Court, of date October, 1930, is conclusive and binding upon all parties to this record, and the title of appellant acquired by purchase from the foreclosure sale is superior and paramount to appellees’ title.

For the reasons aforesaid, the case will be reversed and remanded with directions to the St. Francis Chancery Couri to enter a decree in conformity to this opinion.


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    Sinclair Refining Company v. Jones.
    4-3407
    Opinion delivered March 12, 1934.

      J. Loyd Shouse, for appellant.

      Shinn & Henley, for appellee.
   Johnson, C. J.

This suit was instituted -by appellees against appellant, Sinclair Refining Company, to recover damages alleged to have accrued by reason of false, malicious and fraudulent claims and assertions by appellant of a valid and effectual leasehold contract upon and against a certain leasehold interest owned and possessed by appellees in and to a certain gasoline service station located in the city of Harrison, Arkansas.

The case was tried to a jury, and they were warranted in finding the- following facts from the evidence:

That on and prior to February 9, 1933, appellees owned a certain leasehold interest in and to a gasoline service station in Harrison, Arkansas, and on said date signed and acknowledged a certain lease contract in favor of appellant. The lease, as thus executed, was submitted to the home office of appellant for approval or rejection, but up to March 17, 1933', the submitted form of lea,se had neither been accepted nor rejected by appellant. On the last mentioned date, appellees directed to appellant’s home office the following telegram:

“You are hereby notified that proposed lease on lot 416 at North Vine, Harrison, Ark., recently signed by N. W. Jones and M. O. Jones will not be accepted and is hereby canceled.
(Signed) “M. O. Jones,
“N. W. Jones.”

On April 11, 1933, appellant responded to appellees telegram of March 17, 1933, as follows:

“We agree to cancellation of lease as per your telegram dated March 17.
(Signed) ‘ ‘ Sinclair Refining Company. ’ ’

That after the last mentioned telegram was received by appellees, appellant, through its agents, servants and employees, knowingly, maliciously and wantonly continued to assert and claim ownership of and to a valid lease contract against said service station property to a number of other oil and gas distributing companies; that said false and fraudulent assertions, were communicated by appellant to Magnolia. Petroleum Company, the Standard Oil Company, the Marathon Oil Company, etc., and that said false and fraudulent assertions of ownership were continued to be asserted 'by appellants to the companies aforesaid up to the last days of June, 1933, that the result of said false and fraudulent claims of ownership were to and did cause the companies aforesaid to refuse to furnish or sell to appellees gas and oil products for resale.

From the facts thus established, the jury returned a verdict in favor of appellees and assessed damages in the sum of $400. A judgment was entered in conformity to the verdict of the jury, and this appeal is prosecuted therefrom.

Appellant asserts, and appellees deny, that the lease contract of date February 9, 1933, was a valid lease against the property in controversy, but we find it unnecessary to decide this question. The uncontradieted evidence shows that the parties on April 11, 1933, voluntarily agreed to a cancellation and renunciation of the lease contract, and any asserted claims of ownership by appellant of a valid leasehold contract after that date was without, foundation in fact or right in law.

The law in reference to slander of title is stated thus in 17 R. C. L., page 456:

“In an action for slander of title, or for disparagement of goods or property, it is essential that the plaintiff prove that the defendant acted maliciously in uttering the words in question. It has been held that, while malice is not necessarily presumed from, the falsity of the statement of the defendant, it may in certain cases be inferred therefrom. A bona fide claim of title on the part of the defendant is generally sufficient to rebut any implication of malice in making the utterance in question, and one who has reasonable ground to suppose himself possessed of the legal title to lands, or of an equity therein which would enable him to maintain an action for a conveyance, is not liable in damages in an action for slander of title. In the case of disparagement of goods, the fact that the defendant sought to protect his own goods, rather than to attack the plaintiff’s, has been held to deprive the plaintiff of his right to recover, on the ground that malice is negatived in such .a case, but the authorities on this point are in conflict. ’ ’

It is true, of course, that malice is not necessarily presumed from the falsity of assertions made, but, where the assertions are known to be false by the one making them, malice may be inferred by the triers of fact. Moreover, the evidence in the instant case warranted the jury in finding actual malice. Appellant was engaged in the wholesale distribution of gas and oils in the vicinity of Harrison, where this controversy arose, and at the same time appellant had as competitors in this territory the Standard Oil Company, the Magnolia and Marathon Oil Companies. The jury was fully warranted' in finding that these false assertions of ownership were communicated to the companies aforesaid by appellant for the specific purpose of injuring appellee’s business, and that such was the result. This was a question of fact for the jury to determine, and its findings in favor of appellee conclude the question.

The court’s instructions to the jury, submitting the questions of fact for their consideration, were in conformity to the views here expressed, and, since it is not contended that the verdict is excessive, the judgment will be affirmed.


author: Humphreys, J.

text:
    United States Fidelity & Guaranty Company v. Lyons & Carnahan.
    4-3403
    Opinion delivered March 12, 1934.

      Barber & Henry, for appellant.

      J. W. House, Jr., and Philip McNemer, for appellee.
   Humphreys, J.

This is an appeal from a judgment rendered by the circuit court of Pulaski County, Third Division, against appellant in favor of appellee for $3,276.15 on an indemnity bond executed by appellant to appellee for the faithful performance of Parlette Bros., Inc., the principal in the bond, of a contract entered into between Parlette Bros., Inc., and appellee, relative to the sale and exchange of text books for use in the public schools of Arkansas and an accounting of proceeds derived therefrom. The bond was to cover a period of time beginning July 5, 1929, and ending July 5, 1930.

Appellant admits that the court rendered a judgment for the correct amount if it is liable for any amount under the bond, but denies liability thereon and contends for a reversal of the judgment on the ground that Parlette Bros., Inc., the principal in the bond, defaulted in payment of the books under paragraph 6 of the contract between it and appellee, and, after appellee’s knowledge of such default, they failed to notify., appellant thereof within the time provided by § 3 of said bond, thereby discharging appellant from the obligations under same.

Paragraph 6 of the contract is as follows:

“The first party agrees to render to the second party a statement of all sales and exchanges, four times each year, at the following dates: October 1st, December 30th, April 1st, July 1st, and to remit to second party the proceeds of such sales and exchanges within sixty days from the date of such statement. (Except that final payment of the proceeds of sales reported April 1st may be delayed until July 31st.) In addition to such reports, first party shall also make, each month during the continuance of this contract, a remittance, which shall cover in a general way the receipts to the dates of such remittances, this monthly remittance, however, to be considered as a remittance on account previous to the complete report to be made four times annually as above specified.”

Paragraph 3 of the bond is as follows:

“'In the event of any default on the part of the principal in the performance of any of the terms, covenants or conditions of the said contract, the obligee shall promptly, and in any event not later than thirty days after knowledge of such default, deliver to the surety at its office in the city of Baltimore, written notice thereof with a statement of the principal facts showing such default and the date thereof.”

The bond does not expressly provide that the surety (appellant) shall be discharged from the obligation thereof for failure to comply with the conditions therein, and the language used does not necessarily imply a discharge in case of default in payment by Parlette Bros., Inc. The provision relative, to notice was not made a condition precedent or of the essence of the contract expressly or by implication, so we cannot construe the contract and bond,- as suggested by appellant, to mean that a failure by appellee to give notice to appellant of defaults of Parlette Bros., Inc., to remit within sixty days from the date of quarterly statement or to make monthly remittances to appellee on current quarterly liabilities, automatically and in any event, released appellant from the obligations of the bond. This court is committed to the rule of construction that “a failure to give notice within a certain time of liability under an insurance policy does not operate as a forfeiture of the right to recover unless the policy in express terms or by necessary implication so provides.” Hope Spoke Co. v. Maryland Casualty Co., 102 Ark. 1, 143 S. W. 85; Home Life & Accident Co. v. Beckner, 168 Ark. 283, 270 S. W. 529; Sovereign Gamp, W. O. W. v. Meek, 185 Ark. 419, 47 S. W. (2d) 567; Home Indemnity Co. v. Banfield Bros., Inc., amte p. 683.

The entire account between appellee and Parlette Bros., Inc., as reflected by the ledger sheets beginning on January 11, 1928, and ending on July 31, 1930, was introduced in evidence, and an analysis thereof shows that the only defaults, if any, consisted in a failure to remit balances which were subsequently wiped out or off-set by books shipped to appellee by Parlette Bros., Inc., in accordance with the provisions of their contract for the return or exchange of text books, until May 9, 1930, at which time, appellee notified appellant that they understood from reliable sources that Parlette Bros., Inc., was insolvent. The shipment or return of books on exchange and the checking and prices to be allowed for them necessarily resulted in some delay in Parlette Bros., Inc., getting a credit for them, but the delays were reasonable in point of time and could not be characterized as defaults on the part of Parlette Bros., Inc., in the performance of its contract with appellee. According to the manner of doing business, the books showed no defaults in making remittances to meet current liabilities which would not be wiped out by the amounts to be credited for books returned or to be returned. It was not shown by the testimony that Parlette Bros., Inc., made any collections on accounts for books sold by it to retail dealers which were not remitted to appellee. It was not contemplated by the parties to the contract that Parlette Bros., Inc., should remit to appellee sums or amounts not collected from the retailers.

There is ample evidence in the record to sustain the finding of the court that there was no substantial default in the performance, of the contract by Parlette Bros., Inc., before appellee gave notice to appellant that Parlette Bros., Inc., was insolvent. This notice was given to appellant on May 9, 1930, and Parlette Bros., Inc., was not adjudged a bankrupt until July 25, 1930. Even at the. time the notice was given, appellant had no knowledge that Paulette Bros., Inc., had defaulted or would default in the performance of the contract.

No error appearing*, the judgment is affirmed.


author: McHaney, J.

text:
    Guthrie v. State.
    Criminal 3876
    Opinion delivered March 12, 1934.

      John C. Sheffield, L. L. Harris and Brickell & Douglas, for appellant.

      Hal L. Norwood, Attorney General, and Robert F. Smith, Assistant, for appellee.
   McHaney, J.

Appellant was convicted of murder in the second degree, and sentenced to twelve years in the penitentiary for the killing of Bryant Graves on October 1, 1933.

The only assignment of error relied upon for a reversal of the judgment is that a material witness for the State, "Willie Heriod, a negro boy 15 years of age, was disqualified by reason of his inability to appreciate the sanctity of an oath. After the witness had testified to facts very damaging to appellant, on cross-examination he testified that he didn’t know what it was to tell the truth, didn’t know what an oath was, nor what would happen to him if he testified falsely. The court overruled a motion to exclude his testimony from the jury. After a short recess of court, and after talking with the State’s attorney, the witness was again, examined, and stated that he did understand the nature of an oath.

We think the matter of his qualification as a witness rested in the sound discretion of the court. Payne v. State, 177 Ark. 413, 6 S. W. (2d) 832; Yother v. State, 167 Ark. 492, 268 S. W. 861; Sanders v. State, 175 Ark. 61, 296 S. W. 70; Durham v. State, 179 Ark. 508, 16 S. W. (2d) 991.

Affirmed.


author: Smith, J.

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    State ex rel. Arkansas Construction Commission v. Toler.
    4-3454
    Opinion delivered March 19, 1934.

      Hal L. Norwood, Attorney General, and Pat Mehaffy, Assistant, for appellant.

      J. B. Milham, for appellee.
   Smith, J.

Petitioner prays the issuance of a writ prohibiting the circuit court of Saline County from hearing and adjudging a suit wherein the Arkansas Construction Commission was garnished by a plaintiff who sought to enforce a demand against his debtor who had been employed by the Construction Commission in the discharge of the duties conferred upon it by act 180 of the Acts of 1929, page 884. By this act a commission was created for the purpose of constructing and equipping a State Hospital for Nervous Diseases and a Tuberculosis Sanitarium.

The case of Bull v. Ziegler, 186 Ark. 477, 54 S. W. (2d) 283, is decisive of the question that such agencies of the State are not subject to garnishment. See also Watson v. Dodge, 187 Ark. 1055, 63 S. W. (2d) 993.

The writ will be awarded as prayed prohibiting further proceedings in that suit.


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    Smith v. Housley Mining Company.
    4-3367
    Opinion delivered March 19, 1934.

      Houston Emory and C. T. Cotham, for appellant.

      Martin, Wootton & Martin, for appellee..
   Smith, J.

A complaint was filed in this cause which contained the following allegations: The plaintiff, Housley Mining Company, a corporation under the laws of this State, owned a tract of land, there described, which it leased to H. H. Smith and W. J. Hemphill, who assigned it to the Amity Development Company, a nonresident corporation, whose stock was chiefly owned by the original lessees. The lease was dated the.........day of October, 1929. The consideration therefor was a royalty, payable weekly, of five per cent, of the market value of all ore mined and sold during the preceding week.

The lease contemplated that the lessees should “prospect and mine for lead, zinc and other valuable mineral substances,” and that operations should begin at Slice. The complaint alleged that the lessees had failed to perform this requirement from the.........day of August, 1931, until the date of the filing of the complaint, which date was December 1, 1932. It was alleged that because of this failure the lessor had, at a meeting-of its stockholders held on the.........day of August, 1932, declared said lease forfeited, of which action the lessees had been duly notified, but, notwithstanding this action, the lessees remained in possession of the leased premises and refused to surrender it. It was prayed that the lease be canceled.

A demurrer to the complaint was overruled, and it is insisted that this action was erroneous for the reasons (1) that the plaintiff had an adequate remedy at law, and (2) the lease, not relating to oil and gas, and containing no express covenant providing for a forfeiture, was not subject to cancellation under the allegations of the complaint.

An answer was filed when the demurrer was overruled, in which it was denied that there had been any such nonoperation of the lease as entitled the lessor to cancel it. It was alleged that, if there had been any breach of .the conditions of the lease, the same had been waived, and that there had been no abandonment of the lease. It was answered also that the lessor had acquiesced in the nonoperation of the lease, and that it would be inequitable to cancel it without compensating the lessees for the cost of the improvements which they had placed upon the land, and also that the lessor was barred by laches from maintaining the suit.

The court found the facts to be that the lessees had failed to comply with the implied covenant of the lease to continuously explore and develop the lease, as alleged, and, as a consequence thereof, that the lease should be canceled.

Inactivity during this period is conceded, but the lessees insist that this inactivity was acquiesced in by the lessor as evidenced by a letter written and signed by M. A. Eisele, who was the secretary of the lessor corporation, addressed to one of the original lessees. This letter, dated December 12, 1931, reads as follows:

“Beplying to your letter of December 6, 1931, we have no one in view at present that will take on tbe Point Cedar mines. My own opinion is that you are wise in closing down on account of price of ores and the financial market conditions. I am cheered up somewhat from what I hear, and see that a gradual betterment is approaching, but a mining proposition generally requires property to be floated successfully. I hear the new cinnabar (quicksilver) development at Pike County will probably be a success, with headquarters at Amity. If it is, it won’t hurt our properties and may bring additional capital in the section for development. No matter what propositions are made to us as to this property in the future, we will surely be fair with you. Have no fears on that score. The Housley boys feel as I do about this and will, I am sure, be guided by me. Yours truly, (Signed) M. A. Eisele.”

It will be observed that this letter was not signed by Eisele in his capacity of secretary, and that it was expressing, as the letter recites, only his own opinion, and that even the writer did not intend, and had not authorized, the entire suspension of operations of the lessees of which they were later guilty.

It was decreed that the lessees might remove their improvements, but that they should not have any other compensation for their expenditures, which, according to the testimony on the part of the lessees, totaled about $18,000.

The testimony on the part of the lessees was to the effect that they never intended at any time to abandon the lease or to cease work in its development, and that work was suspended only because of the general depression and the lack of a profitable market for the output of the mines which had been developed. It was shown also that the lessees had endeavored during this time to secure the financial assistance necessary to continue operations, and also that an effort had been made to sell the lease to some one having the necessary capital to operate it. For a considerable portion of the time during which operations were suspended the lessees employed a watchman, who remained in charge of the plants which had been previously operated.

It is very earnestly insisted that the demurrer to the complaint should have been sustained, and, in support of that argument, attention is called to the fact that the lease did not contemplate exploration for oil and gas, but related to mining for mineral ores, and it is insisted that such a lease should not be canceled in the absence of a provision in the lease authorizing that action except for an abandonment of the lease.

The finding of fact made by the court, set out above, does not appear to be contrary to the preponderance of the evidence, and the law applicable to the facts as found by the court was declared in the case of Mansfield Gas Co. v. Alexander, 97 Ark. 167, 133 S. W. 837. The case cited has become the leading one in this State, and has since been frequently cited and followed in the numerous cases cited in the briefs.

The lease there considered was “for the purpose of mining, boring and operating for lead, zinc, coal, gas, oil and other minerals,” for which the lessee agreed to pay to the lessor a certain per cent, of the value of such minerals, with the right in the lessee to remove all buildings and machinery placed upon the land in the event of a failure to obtain any minerals by reason of the operation of the lease. There was no express provision for a forfeiture for lack of diligence in operating the lease, but the court found that there had been a lack of such diligence, and upon this finding declared the law to be that: “Equity may enforce a forfeiture of a contract of lease giving the exclusive right to explore for minerals upon a tract of land where it would be inequitable to permit the lessee longer to assert such right by reason of his continued default. ’ ’ The reasons for this rule were there stated, and numerous cases which supported it were there cited, and need not be again reviewed, especially as the case has since been frequently cited and followed by this court. It was there stated that the purpose of a mineral lease was not to make a grant of the.land or to transfer any estate therein, but that such would be its effect if the lessee were not required to perform the conditions of the lease which constituted the consideration for its execution.

The case of Miller v. Mauney, 150 Ark. 161, 234 S. W. 498, involved a lease for the purpose of exploring and mining for diamonds, and it was there held (to quote the third headnote of that ease) that: “Where a lessee in a mining lease, the consideration of which is a royalty to he paid, has, after a reasonable time, failed to begin and to continue the work of development and exploration provided in the contract, the lessor has three remedies, vis: (1) he may sue in equity to cancel the contract and recover incidental damages; (2) he may sue at law for damages for breach of the contract; or (3) he may treat the contract as rescinded and sue at law to recover possession of the property leased.”

The late case of Ezzell v. Oil Associates, Inc., 180 Ark. 802, 22 S. (2d) 1015, again reviews the law of the subject, and states, as one of the reasons why relief by cancellation will be awarded the lessor in a proper case, that it would be difficult for the lessor to prove his damages.

It is insisted that it is inequitable to cancel the lease without compensating the lessees for the expenditures made in its development. But the lease contains no such provision, nor is any such to be implied. All the cases recognize the hazardous nature of mining* leases. They usually prove to be entirely worthless or very profitable, and in no case has the lessor been held to be a guarantor of the success of the enterprise unless he expressly assumed that obligation.

It is argued also that the lessor is barred by laches from prosecuting this suit. This contention does not appear to be consistent with the other contentions made. Had the lessor acted more promptly in suing to cancel the lease, the contention would, no doubt, have been made, even more earnestly, that the suspension of operations had not continued long enough to support a finding that there had been a forfeiture through lack of operation.

It was held, in the case of Rozell v. Chicago Mill & Lumber Co., 76 Ark. 525, 89 S. W. 469, that a complaint seeking to cancel a deed to wild and unoccupied lands is not open to demurrer merely on account of delay in bringing the action, if it did not appear that the rights of the defendants were prejudiced thereby, and numerous cases have declared that ‘ ‘ laches, in legal signification, is not mere delay, but delay that works disadvantage to another.” Casey v. Trout, 114 Ark. 359, 170 S. W. 75; Nobles v. Poe, 121 Ark. 613, 182 S. W. 270.

The decree appears to be correct, and it is therefore affirmed.


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    Morrow v. Scroggins.
    4-3402
    Opinion delivered March 19, 1934.

      Williams & Williams, for appellant.

      Daniel B. Byrd and Robert Bailey, for appellee.
   Humphreys, J.

This is an appeal from a judgment rendered by the circuit court of Johnson County, sitting as a jury by agreement, finding and adjudging that appellee was entitled to recover $970.25 from W. J. Morrow, Jr., administrator in succession, and his bondsmen, J. S. Kolb and W. J. Morrow, Sr., who are appellants herein. The judgment recites on its face that it was rendered on June 17, 1933, and filed July 15, 1933. The judgment also recites that the cause was duly submitted to the court at a regular term thereof and was heard on June 17,1933, 'both appellants and appellee being present by their respective, attorneys. The record reflects that the regular term of court at which the cause was submitted was adjourned on May 8, 1933, to June 19, 1933, and was not in session between said dates; hence that the cause was heard and determined in vacation. The subsequent proceedings show that the judgment rendered in vacation was filed during the adjourned term, which convened on June 19,1933, or, to be more definite, was filed on July 15, 1933.

Appellant contends for a reversal of the judgment because there is no constitutional or statutory law vesting the circuit court with authority to take a case under submission at a regular term of court, and to hear and determine it in vacation. This is true, but in the instant case the .judgment rendered in vacation was not filed or entered until the court reconvened. The filing or entry of the judgment in term time amounted to a confirmation of the findings of fact and law in vacation and to a rendition of the judgment in open court.

Appellants also contend for a reversal of the judgment because the. court rendered a judgment in favor of appellee for $970.25. Appellee brought suit against appellants to recover the balance due her for her dower interest in her husband’s estate. The appellant, J. W. Morrow, Jr., brought a suit against George H. Scroggins and appellee to recover amounts alleged to have been unaccounted for in his final settlement as administrator. The two cases were consolidated and submitted to the court, sitting as a jury, upon the pleadings and evidence adduced, which resulted in a finding that W. J. Morrow, Jr., administrator in succession of the estate of William Scroggins, was not entitled to go behind the final settlement of George H. Scroggins, which was approved by the probate court on February 23, 1931, and that appellee was entitled to recover from appellants the balance due on her dower interest, less $1,003.74, for which George H. Scroggins wrongfully took credit as adjudged in a former case. The issues involved in these consolidated cases were involved in the trial of Scroggins v. Osborn Company, 181 Ark. 424, 26 S. W. (2d) 95, and were decided adversely to the contention of appellants herein upon practically the same record iioav before us. The findings of the court herein are supported by substantial evidence in the record.

The judgement is therefore affirmed.


author: Kirby, J.,

text:
    Dominion Textile Company, Ltd. v. Beck.
    4-3409
    Opinion delivered March 19, 1934.

      Williams, Williams & Shaver and Partain & Agee, for appellant.

      James D. Head and Jones & Jones, for appellee.
   Kirby, J.,

(after stating the facts). It is contended by appellant that the court erred in refusing to direct a verdict in its favor at the conclusion of the testimony, as well as in the eivinsr and refusal of certain instructions and in the admission of certain testimony objected to by it.

It appears from the testimony that appellee only’in fact owned 28 of the 330 bales sold, the rest of the cotton belonging to other individuals with whom the deal was made; and the great preponderance of the testimony shows that the sale was made, that it was made on call, and that the appellant’s agent ag’reed that the purchaser would hold the cotton subject to the seller’s call, and, if the price advanced over the 17 cents per pound paid when the cotton was delivered, the seller had the right to call the contract and realize the difference, between the price paid and the price to which the cotton had advanced when it was called; while, if• the price went down, the seller could not lose more than the $5, or one cent per pound retained upon the sale, no agreement having been made to pay any greater difference should the market price go below said price advanced. The court therefore did not err in refusing to instruct a verdict for the appellant, the testimony being ample to show the contract and to support the verdict as found by the jury.

Neither was error committed in allowing the introduction of the statement by appellee of what certain witnesses, who were the other parties to the sale, told him about the deal having been closed and the cotton delivered in accordance with the agreement made before he left for the Rio Grande Valley. He knew what the negotiations were before leaving, and had authorized the others to close the deal in his absence, which was done, and the testimony was but a report to him of the closing of the contract from which he could testify that the contract had been imade and dosed and the cotton delivered and paid for in accordance with its terms. The draft paid for the cotton was made payable to him and put in the bank until his return, when the money was distributed by him in accordance with the amount of cotton owned by the different persons interested in the sale.

There was testimony tending to show that a different contract was made after the first one, after the sale of the cotton in fact, and that under this contract the appellee was liable to the payment of the difference between the price for which the cotton was sold and the price to which it had declined before it was called by appellant; and it is complained that two of the instructions refused would have properly submitted this question to the jury, but the pleadings did not allege any new contract, but only the issue as already stated, and, while the court could have refused to allow the introduction of any such testimony showing a changed contract, which was not alleged, it could have as effectively refused to instruct the jury upon such issue, which' it did, and no error was committed in so doing. It was within the discretion of the court to allow an amendment stating a different cause of action after the trial was begun, and there was no abuse of discretion shown in refusing the instructions on such an issue which had not been raised, and such action amounted to a refusal to allow the amendment. Cole v. Branch, 171 Ark. 611, 285 S. W. 353; Temple Cotton Oil Co. v. Davis, 167 Ark. 449, 268 S. W. 38; Butler v. Butler, 176 Ark. 626, 2 S. W. (2d) 63.

Moreover, there was no testimony showing any consideration passing for the making of the alleged new contract, or amendment of the terms of the contract of sale, which could not therefore have been valid anyway. Cook v. Cave, 163 Ark. 407, 260 S. W. 49; Feldman v. Fox, 112 Ark. 223, 164 S. W. 766.

We do not find it necessary to discuss the objections raised to the other instructions, but conclude that upon the whole case the jury was properly instructed upon the issue alleged and submitted, and that the testimony was amply sufficient to support the verdict. The judgment is affirmed.


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    Sovereign Camp Woodmen of the World v. Johnson.
    4-3405
    Opinion delivered March 19, 1934.

      Rainey T. Wells and Lee Miles, for appellant.

      Madison K. Moran, for appellee.
   Kirby, J.,

(after stating the facts). The testimony showed, as the court found, that the insured was insane when the March assessment became due, and continued so until his death. The appellant insists that there was no provision in its constitution and bylaws, when the forfeiture for nonpayment of the March dues was claimed, exempting insured’s failure to pay his assessment or relieving against the forfeiture for failure to pay such dues, and such appears to be the case.

The insured, however, upon the dissolution of the local camp at Cabot elected to become a member of Loyal Camp No. 555 of Omaha, Neb., and was charged and paid camp dues not fixed by the bylaws of said camp, together with all other assessments by check directly to the treasurer of the Sovereign Camp. He was charged and paid 25 cents monthly for such unauthorized camp dues, and because thereof was entitled to credit for the payments made therefor and had on hand to his credit when the March assessment was required to be paid an amount more than sufficient to pay the said March assessment; and said amount should have been applied to the payment thereof, it being the money of the insured, which would have prevented the forfeiture relied on by appellants. The insured was entitled to have any of his money in the hands of the association credited against the charge of the assessment for March before, a forfeiture could be effective under the terms of the certificate and the bylaws of the association. Mutual Aid Union v. Perdue, 162 Ark. 551, 258 S. W. 375; Gallegly v. American Ins. Union, 180 Ark. 4, 20 S. W. (2d) 642.

In the case of Mutual Aid Union v. Perdue, supra, it was held that, where, under the bylaws, assessments are required to be levied 'by the board of directors, the levy of such assessments by the secretary is without authority, and a failure to pay an assessment so levied did not work a forfeiture of the policy. Here the bylaws of the association state that the camp dues shall be fixed under the bylaws of the particular camp of which he is a member, and, Loyal Camp No. 555 having no bylaws, the camp dues were fixed by the president, who was not a member of said camp (neither do any of the other officials belong to said camp) and since the failure to pay dues wrongfully assessed could not cause a forfeiture of the policy, certainly dues wrongfully assessed and paid would still be the property of the insured in the hands of the association applicable to payment of the March assessment to prevent a forfeiture of the policy, and should have been so applied. Gallegly v. American Ins. Union, supra.

We do not find it necessary to determine the other questions raised, having held that the forfeiture claimed for the nonpayment of the March assessment could not be effective because the insured had in the hands of the association available to his credit, more than enough to pay the said March assessment; and it was the duty of the association to apply such available, funds of the insured to the payment of such assessment to avoid a forfeiture of said certificate.

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


author: Mehaffy, J.

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    Modern Woodmen of America v. Seargeant.
    4-3410
    Opinion delivered March 19, 1934.

      Geo. G. Perrin, George H. McDonald and Harrison, Smith & Taylor, for appellant.

      Claude F. Cooper and T. J. Crowder, for appellee.
   Mehaffy, J.

John C. Seargeant, husband of appellee, in January, 1917, made application for membership' in the Modern Woodmen of America, and for a benefit certificate. The benefit certificate was issued on January 17, 1917. On August 19, 1930, John C. Seargeant made application for exchange of his benefit certificate for a term certificate expiring at the age of 65. The certificate was issued, and the assessments were $1.45 per month, and 35 cents per month local camp dues. The dues and assessments were not paid in June, 1932, and on July first he was suspended from membership in the company. The appellee was named beneficiary in the certificate, which was for $1,000.

About November 1, 1932, J. C. Seargeant became ill, was taken to the hospital in Blytheville, Arkansas, on November 7th, and his case was' diagnosed as ruptured appendix, and he ¡died in the hospital op November 15, 1932.

On November 14tli the. appellee, wife of said Seargeant, mailed to the local camp at Paducah, Ky., a money order for $11.30, as payment for all hack dues and assessments. When the clerk of the camp' at Paducah received the money order on November 15,1932, he issued a receipt for the dues, and cashed the money order. The money order sent to the clerk at Paducah paid for the months of June to November, inclusive. No formal application was made for reinstatement, but the clerk of the camp signed the receipt and mailed it back to the insured. The clerk also wrote him at the time that he would have, to make formal application for reinstatement, and that he, the clerk of the camp, would write to the head clerk to mail application blanks direct to Seargeant.

On November 17th the clerk saw in a paper published in Paducah, an account of Seargeant’s death, and the next day the clerk wrote to Mrs. Seargeant a letter, and sent her his check for the amount she had sent him. The money was returned because Seargeant had not been reinstated, and the clerk did not know, and had no way of knowing, of the physical condition of Seargeant, as he was in Blytheville, Arkansas, and the clerk in Paducah, Kentucky. Mrs. Seargeant returned the check, and there was no letter explaining why it was returned.

A letter containing the following paragraph was introduced in evidence without objection: “Under a new ruling a member may go in suspension as long as 12 months and then reinstate without examination and that is the way many are doing. A large number that went in suspension a year ago have reinstated.”

The case was tried before the circuit judge sitting as a jury, and no declarations of either law or fact were made, and the court found in favor of appellee, in the sum of $1,000, with interest from date of judgment until' paid, and all costs. The case is here on appeal.

It is admitted that Seargeant was suspended for nonpayment of dues and assessments for June, 1932, and that no other assessments were paid until the day before his death, when a money order was sent, paying his dues up to and including the month of November.

The only question for our consideration is whether the policy was in effect at the time of Seargeant’s death. There is no dispute about his being suspended; no dispute about his illness; no dispute about the fact that the day before he died the money order was sent to Paducah, Ky., to pay his dues, and no dispute about the clerk of the local camp sending a receipt for the money.

The application, benefit certificate and bylaws were introduced in evidence. It is unnecessary to copy them in this opinion, but we will call attention to those provisions that affect the question here involved.

Section 44 of the bylaws reads as follows: ‘ ‘ Section 44. No Waiver of Any By-Law. — No officer of this society, nor any local Camp, or officer or member thereof, is authorized or permitted to waive any of the provisions of the bylaws of this society which relate to the contract between the member and the society, whether the same be now in force or hereafter enacted. Neither shall any knowledge or information obtained by, nor notice to any local camp officer or member thereof, or by or to any other person, be held or construed to be knowledge of or notice to the head camp, or the officers thereof, until after said information or notice has been presented in writing to the head clerk of the society.”

Section 66 of the bylaws provides that a beneficial member in suspension for more than three months but less than six months on account of nonpayment of assessments, fines or dues, if in sound health, * * * may be reinstated upon furnishing a certificate of sound health from the camp physician, or if beyond the jurisdiction of any local camp, then by some reputable practicing physician, possessing the qualifications provided in § 329 of these bylaws, upon form prescribed by executive council, after medical examination duly approved by the Supreme Medical Directors within six months of the date of suspension, and upon payment of the current assessments and dues and arrearages of every kind, including all assessments, dues, and fines for which the suspended member would have been liable by remaining in good standing.

One paragraph in the application for membership by Seargeant reads as follows: “I understand and hereby agree that if this application is accepted and I become a member of said society and afterwards cease to be a member thereof either by suspension, expulsion, or because of the violation of any provision of the bylaws of the society, or otherwise, I will have no interest whatever in the Benefit, General, or other funds of said society, and I hereby agree that any payments I may have made to any such fund shall be forfeited to said society whenever I shall so cease to be a member.”

The certificate contains the following paragraphs: “This certificate is issued in consideration of the warranties and agreements contained in the application therefor, and in further consideration that the member shall make payments to the society of the sums required by the bylaws of the society, on or before the last day of each calendar month in accordance with said bylaws.

“This certificate is issued and accepted with the express agreement that the provisions and conditions contained on this and the succeeding pages of this benefit certificate, and in any authenticated riders attached hereto, shall form a part of this contract as fully as if recited over the signature hereto affixed.”

The certificate provides “that the contract between the society and said member consists of (1) the Articles of Association of this Society, (2) this Benefit certificate, (3) the application for membership signed by the member and, (4) the bylaws of the society, with all present and subsequent amendments to each thereof.”

. This court recently said: ‘ ‘ The application for membership in appellant order and the certificate issued thereon both expressly refer to the laws, rules, and regulations of appellant, and make the certificate null and void, if the holder thereof fails to comply with such laws, rules, and regulations.

“It is well settled by our own cases, as well as the authorities generally, that the constitution and laws of a mutual benefit fraternal society, such as that of- appellant, form the basis and constitute a part of the contract of insurance. This contract measures the obligations of the members and the liability of the association or governing body.” Sovereign Camp Woodmen of the World v. Clark, 184 Ark. 1035, 44 S. W. (2d) 336.

The application, articles, certificate and bylaws constitute the contract in this case, and it is expressly provided that suspended members may be reinstated after suspension for more than three months and less than six months if in sound health. Seargeant was not only not in sound health, but was critically ill, and in fact died the next day after the money was sent to appellant, and it was received probably a few hours before his death. The undisputed evidence shows that neither appellant nor its agents knew anything about Seargeant’s illness when it received the money and issued the receipt. The undisputed evidence also shows that the clerk of the camp, Avhen he received the money order, wrote to Seargeant that he would have to make formal application for reinstatement, and that the clerk of the local camp did not have the application but would write the head clerk to send the blank applications for reinstatement direct to Seargeant. This was the day before he learned of Seargeant’s death. It is apparent that when Seargeant was at the point of death, the dues were sent to the camp without saying anything about Seargeant’s illness. When the contract provides that a member may be reinstated if in good health, the mere fact of making application for reinstatement without disclosing the illness of the member is itself an implied statement that he is-in good health.

‘ ‘ The parties made their own contract which is free from ambiguity, and necessarily must be enforced according to its terms. The beneficiaries must stand in the shoes of the insured, and will be bound by the terms of the policy issued; and the insured accepted and retained without objection the policy until it was forfeited for nonpayment of premiums upon the date fixed by its terms.” Craig v. Golden Rule Ins. Co., 184 Ark. 48, 41 S. W. (2d) 769; Mutual Life Ins. Co. v. Hynson, 171 Ark. 218, 283 S. W. 357.

“But the mere payment of assessments to the financial secretary or supreme treasurer does not operate to reinstate a member, where those officers have no authority to waive the laws of the society, which require a new medical certificate and a majority vote. * * * And, since no right to reinstatement exists, while insured is mortally ill, acceptance of arrearages without knowledge of such fact does not effect a waiver. Nor is there a reinstatement where, without knowledge ¡by insurer of insured’s illness, it accepts overdue payments, even though insured’s agent, in making said payments, had no knowledge of such illness. And where the policy has lapsed, and payment is accepted without knowledge of an accident to insured during delinquency, there is no liability therefor. ’ ’ Couch on Insurance, vol. 6, § 1376.

The bylaws of appellant expressly provide that the officers are not authorized to waive any of the provisions in the policy.

“It is usually provided that the insured, who has defaulted in his payments, can be reinstated on payment of arrears if he is in good health. Where such is the provision of the contract or bylaws, the good health of the insured is a prerequisite to reinstatement, and a payment of arrears when not in good health will be ineffective.” Cooley’s Brief on Ins., vol. 4, § 3787.

It is also said in the same volume, § 3788: “Under provisions authorizing reinstatement of persons in good health, a reinstatement obtained by one not in good health, without the association’s knowledge thereof, may be repudiated unless the association has waived the matter or is estopped.”

Appellee relies on a letter written by the clerk of the camp at Paducah, June 21, 1932, which contains the paragraph above set out. This letter was introduced in evidence without objection, and this statement is not contradicted. The rule itself was not introduced in evidence, and there is no statement in the letter indicating what was in the rule except the statement that the member might be reinstated without examination. There is nothing in the letter indicating that there could be a reinstatement if the member was not in good health.

Under the contract in this case, the member could not be reinstated if he were not, at the time, in good health, and, as the evidence conclusively shows that he was mortally ill at the time the dues were sent, he was not in good standing when he died, and there can be no recovery.

The judgment of the circuit court is reversed, and the cause dismissed.


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    Richardson v. Merchants’ & Planters’ Bank & Trust Company.
    4-3412
    Opinion delivered March 19, 1934.

      J. H. Lookadoo, for appellant.

      McMillan & McMillan, for appellee.
   McHaney, J.

Appellee sued appellant and his nephew, Keelie Richardson, on a joint promissory note executed by them to the appellee bank for $2,500, and, on July 12, 1933, obtained a decree against both in the sum of $3,165.41, with interest from that date until paid at 8 per cent, per annum. Keelie Richardson has not appealed.

For a reversal of the judgment, appellant first contends that he was induced to sign the note through the fraud of appellee, in that appellee’s officers promised him that he would not be held liable on the note. In the first place, this defense cannot be availing, for it runs counter to tlie parol evidence rule. As we said in Randle v. Overland Texarkana Co., 182 Ark. 877, 32 S. W. (2d) 1064: “There is no charge of fraud or trickery in obtaining his signature to the note, but the allegation simply means that, although he signed the note, there was a contemporaneous oral agreement that he. should not be bound * * * . Under such circumstances the rule is that parol evidence is not admissible to contradict or vary the written instrument, which appellant Nash sought to do.” See also cases there cited. Moreover, in the second place, the court found there was no fraud practiced on appellant on evidence which is in dispute, and we cannot say this finding is against the preponderance thereof. We think the case of City National Bank v. Riggs, ante p. 420, relied on by appellant, is not in point, here.

It is next contended by appellant that there was no consideration for his signature on the note, because at the time he signed same appellee had already advanced the amount of the loan to Keelie Richardson. But again the evidence on this point is in conflict. The bank officials testify positively that no part of the money was paid to Keelie Richardson until after appellant had signed the note, and again we cannot say that the court’s finding against him in this regard is contrary to the preponderance of the evidence.

The next contention is that appellant is relieved from liability because the bank on March 26, 1931, accepted a new note and mortgage'on future, crops from Keelie Richardson. The evidence shows that a new note and mortgage were executed by Keelie Richardson, and the bank presented the new note to appellant for his signature, but he refused to sign, so the deal fell through. The court found against appellant, and this finding is supported by the evidence that the bank did not accept the new note and mortgage without the. signature of appellant on the new note, or that it did anything showing a release of his liability on the old note.

It is finally contended that' appellant should be relieved of liability because the bank was negligent in collecting certain security deposited with it as collateral to the note. There was no legal duty resting upon the bank in this regard. Thornton v. Bowie, 123 Ark. 463, 185 S. W. 793; Cravens & Boren v. Barr, 123 Ark. 528, 185 S. W. 1084. Moreover, the evidence shows the bank was not negligent in this respect, but acted diligently in the premises.

We find no error. Affirmed.


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    Arnett v. State.
    Crim. 3874
    Opinion delivered March 19, 1934.

      W. M. Thompson, for appellant.

      Hal L. Nonoood, Attorney General, and Robert F. Smith, Assistant, for appellee.
   Butler, J.

From a conviction on the charge of embezzling- the property of F. C. O’Neal, F. E. Arnett prosecutes this appeal on the sole ground that the evidence was not legally sufficient to warrant the submission of the case to the jury. This contention is based on the theory that the evidence fails to show (1) that the property embezzled was that of O’Neal, and (2) that the relation of principal and agent was not established by the evidence. These contentions are not tenable.

The evidence introduced on the part of the State tended to establish the following facts: 0 ’Neal had procured a loan from the United States Government in the sum of $'60, which was secured by a chattel mortgage on the crops of cotton he might raise during the year in which the loan was procured. He produced three bales of cotton which he sold and delivered to Arnett with the understanding that the latter would pay to the Government’s agent the $60, Arnett having paid O’Neal the difference, between said sum and the purchase price. Arnett disposed of the cotton, collected the proceeds, and failed to pay the Government the $60 appropriating it to his own use. Arnett testified that he had not appropriated the money, but had paid it to the. cotton broker who had purchased the cotton from him, for transmission to the Government.

The jury found against the appellant on the disputed question of fact, and, it 'being the exclusive judge of the credibility of the witnesses, its judgment is binding upon us. The appellant cannot escape criminal liability on the ground that O’Neal, having executed a chattel mortgage on the cotton, was not the owner of the same. He had the right of possession with the power to sell the cotton and discharge the mortgage by the payment of the debt it was given to secure.

There is also no merit in the claim that Arnett was not the agent of O’Neal, but of the Government in the transaction. There is no intimation in the testimony that .he secured possession of the cotton and retained the $60 by any authority derived from the Government, but clearly was acting for O’Neal and as his agent.

Embezzlement is the fraudulent appropriation to one’s own use of property of another intrusted to his care. The evidence found to be true by the jury establishes that this is precisely what Arnett did. The evidence is clear that O’Neal sold and delivered the cotton to Arnett at a specified price receiving a part of the proceeds and intrusting the remainder to Arnett to pay to the Government; that Arnett in turn sold the cotton and appropriated the $60 to his own use, and under the rule announced in Gurley v. State, 179 Ark. 1149, 20 S. W. (2d) 886, the jury was warranted in finding the appellant guilty as charged.

Let the judgment he affirmed.


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    Jett Brothers Stores v. McCullough.
    4-3418
    Opinion delivered March 26, 1934.

      Jay M. Rowland and C. Floyd Huff, Jr., for appellant.

      C. T. Cotham, for appellee.
   Johnson, C. J.

Appellee brought this suit in the Garland Chancery Court against appellants, seeking recovery of $273.40, the purchase price of a certain delivery of turkeys effected on November 23, 1931.

Appellants answered the complaint, and admitted the purchase and delivery of the shipment and the aggregate purchase price, but affirmatively alleged payment as follows:

The acceptance of a valid check drawn by appellants against their account in the Community Bank & Trust Company of Hot Springs, Arkansas, which check was negligently withheld from presentment for payment by appellee for an unreasonable time, and that during such negligent delay the bank on which the check was drawn discontinued business. Briefly, the facts presented -in evidence were as follows:

Appellee was engaged in the produce business at Mineral Springs and Nashville, in Howard County, and appellants were engaged in a similar business at Hot Springs, in Garland County. Pursuant to a contract theretofore made, appellee, on November 23, 1931, delivered to appellants ’ place of business in Hot Springs a shipment of turkeys, which was accepted by appellants, and, in payment of the agreed purchase price, appellants delivered to appellee their check for the sum of $273.40, drawn against their account in the Community Bank & Trust Company of Hot Springs. Appellee accepted the check, but, instead of presenting it for payment to the bank on which it was drawn on the date of issuance or the following day for the reason as explained by him, that he did his banking business with a Nashville bank, and that the check was withheld for the purpose of deposit in his home bank. On November 25th the check was deposited for credit and collection in the Nashville bank, and thereafter it took its usual and customary course, which resulted in its arrival at the drawee bank on November 30th, on which date the drawee bank closed its doors for business. The check, not having been honored by the drawee bank, was thereafter returned to appellee. Appellee resides at Mineral Springs, which is some ninety miles distance from Hot Springs.

At the close of the evidence, the trial court directed the jury to return a verdict in favor of appellee for the amount sued for, and this appeal is prosecuted to reverse the judgment entered thereon.

Appellants contend that the evidence presented a question of fact for the jury’s determination as to whether or not appellee negligently withheld the check from presentment for payment for an unreasonable time. The check was deposited by appellee in his home bank at Nashville on Wednesday, November 25,' 1931, for credit and collection, and the evidence is not in dispute but that the check was thereafter handled in the usual and customary manner. The issue of fact is therefore reduced to whether or not it was unreasonable for appellee to withhold the check until his return home and then make deposit in the bank in which he did his business. Only one banking- day intervened between the issuance of the check and its actual deposit for collection. The witness, Mr. Stone, a deputy State Bank Commissioner, testified that appellee’s actions in returning- to his home to make deposit of the check was the usual and customary practice, and that the withholding of the cheek for this purpose was not a negligent delay nor an unreasonable one. This evidence was not contradicted by any other witness.

In Federal Land, Bank v. Goodman, 173 Ark. 489, 292 S. W. 659, we held that a check must be presented for payment within a reasonable time after its receipt, but that what constitutes a reasonable time depends upon the circumstances of the particular case under consideration. The test is, such diligence as a prudent man would exercise in his own affairs. See George H. McFadden Brothers Agency v. Keesee, 179 Ark. 510, 16 S. W. (2d) 994; Parker v. Grau, ante p. 1016.

The only conflict appearing in the testimony is in reference to the failure of appellee to present the check in person to the drawee bank either on the 23d or 24th days of November, 1931. This apparent conflict is of no importance under all the facts and circumstances here presented. Appellee had the legal right to pursue the usual and customaiy custom in effecting collection of the check, and this appears to have been to make deposit for collection in the bank with which he did his banking business. Appellants were charged with knowledge of this custom when they delivered their check to appellee. If appellants desired immediate presentment for payment, they could have effected it by presenting the check for payment themselves and paying to appellee in cash, but, when they elected to pay appellee by check, they thereby agreed that the check might be presented for payment in the nsnal and customary manner.- This seems to have been pursued by appellee, and the trial court was correct in so finding.

The judgment is affirmed.