author: Hart, J.,

text:
    American Insurance Union v. Wilson.
    Opinion delivered February 7, 1927.
    1. Accord and satisfaction — check marked “payment in full.”— —Where a debtor sends a check to his creditor to apply upon a ' disputed claim, bearing upon its -face a statement that it is a payment in full, the reception and collection of the check by the creditor renders it an accord and satisfaction of the debt.
    2. Accord and satisfaction — acceptance of conditional check.— Where an insurer tendered the beneficiary in a policy a check stating that it is in full payment of the amount due under the benefit certificate, which amount was in dispute, and the beneficiary accepted and cashed the check with full knowledge of the condition attached, an accord and satisfaction was completed, though the beneficiary wrote to the insurer that the cheek was not accepted in full payment, but only in part payment.
    3. Accord and satisfaction — liquidated claim. — The term, “liquidated,” when used in connection with the subject of accord and satisfaction, has reference to claims which the debtor does not dispute.
    Appeal from Calhoun Circuit Court; W. A. Spear, Judge;
    reversed.
    STATEMENT OF FACTS.
    C. C. Wilson sued the American Insurance Union to recover the sum of $636.65, alleged to be due him upon a life insurance policy. The suit was defended upon the ground that the defendant only owed the plaintiff the sum of $363.35 under the terms of the policy; that the defendant had paid the plaintiff this sum of money, and that the latter had accepted it as payment in full of his claim against the former.
    The record shows that W. A. Wilson obtained a benefit certificate of life insurance from the Mutual Relief Union of Fort Smith, Arkansas, on October 10, 1916. On April 1, 1918, said company merged with the Home Protective Association of Springdale, Arkansas, while W. A. Wilson was still a member. By the terms of the merger the Home Protective Association assumed liability .under the certificates of the Mutual Relief Union. On November 1, 1918, the Home Protective Association was merged into the American Insurance Union. A contract was entered into by these two companies which provided, among other things, that the American Insurance Union should not be liable to the holders of benefit certificates in the Home Protective Association in excess of the net amount realized from one assessment on the members of the roll of which he was a member in the Home Protective Association, after deducting his proportionate share of the expense of operation.
    According to the evidence of the defendant, a copy of this agreement fixing the liability of-the American Insurance Union to the owners of benefit certificates of the Home Protective Association was mailed to the owners of certificates in the Home Protective Association. The American Insurance Union sent a copy of said contract to W. A. Wilson for the purpose of attaching the same to his benefit certificate and becoming* a part thereof.
    According to the testimony of C. C. Wilson, W. A. Wilson was his father, and lived with him at the time the defendant claims to have sent said contract to be attached to his benefit certificate. The plaintiff opened all his father’s mail, and knows that he did not receive said contract.
    After W. A. Wilson died, proof of his death was made to the American Insurance Union by C. C. Wilson, the beneficiary named in the policy. On February 21,1923, the American Insurance Union mailed a check from its home office at Columbus, Ohio, to O. C. Wilson of Tinsman, Arkansas, the body of which is as follows: “Pay to the order of C. C. Wilson, son, $363.35, the sum of 363 and 35 cents. For amount due C. C. Wilson, beneficiary of W. Á. Wilson, certificate No. 10 H. P. 185, chapter No. 2200, Springdale, Arkansas, said amount being in full and satisfactory settlement of all claims accrued or to accrue.”
    This check was inclosed with a letter of the same date which is as follows: “In-re: Payment of benefits due under certificate held by W. A, Wilson..

      “Inclosed herewith you will find our voucher No. 6605 for $363.35, payment in full for benefits due under certificate No. 10 H. P. 185 held by W. A. Wilson.
    “The Home Protective Association of Springdale, Arkansas, was taken over by the American Insurance Union in January, 1919. The rider-contract attached to the certificate of W. A. Wilson, in which you are named as beneficiary, provides in paragraph 3 of said rider that the American Insurance Union is not to be liable under the attached certificate in excess of the amount realized from one assessment on the members of the roll in which he was a member in the Home Protective Association, after deducting his proportionate share of the expense of operation.
    “A copy of the rider-contract is herewith inclosed, and your special attention is called to the marked portion thereof. Said member died on the 16th day of December, 1922. The total amount of the assessment received from the members of roll No. 10 for the said month of December, 1922, the month in which the member died, amounts to $436.02, less the reduction of one-sixth allowed under said merger contract for expenses, leaves the balance of $363.35, the amount due you as beneficiary under said certificate.
    “Please sign the inclosed receipt and return same to us in the inclosed self-addressed envelope. ’ ’
    C. C. Wilson received the check and the letter accompanying it, and wrote to the American Insurance Union that he could not accept the check in full payment of the amount due him under the benefit certificate, but that he would accept it as part payment due on his policy of $1,000, and on the same day cashed the check and converted the proceeds to his own use. This letter was written about five days after he had received the check from the defendant. When the plaintiff first received the check, he wrote the defendant that he had received it, but that he could not accept the amount of it as the total payment under the policy, and that he was not going to cash it until he heard from them.
    The jury returned a verdict for the plaintiff in the sum of $636.65, the amount sued for. From the judgment rendered the defendant has duly prosecuted an appeal to this court.

      T. E. Helm, for appellant.

      J. 8. McKnigM, for appellee.
   Hart, J.,

(after stating the facts). Regardless of whether the American' Insurance Union owed O. G. Wilson $1,000, the face of his benefit certificate in the Home Protective Association, or whether it only owed him $363.35, as claimed by the defendant under the rule announced in Knight v. American Insurance Union, ante, p. 303, the judgment in the case at bar was wrong, because the defendant tendered the plaintiff the sum of $363.35 in full payment of the amount due under the benefit certificate and the plaintiff accepted the cheek and cashed it with full knowledge of the condition attached to it. The law is well settled in this State that, where a debtor sends a check to his creditor to apply upon a disputed claim, bearing on its face a statement that it is a payment in full, the reception and collection of the check, by the creditor renders it an accord and satisfaction of the debt. Barham v. Bank of Delight, 94 Ark. 158, 126 S. W. 394, 27 L. R. A. N. S. 439, and Cunningham Co. v. Rauch-Darragh Grain Co., 98 Ark. 269, 135 S. W. 831.

In these cases, as in the case at bar, it was urged by counsel for the plaintiffs that, inasmuch as the plaintiffs immediately wrote to the defendant that the check was accepted only in part payment of the debt, this was conclusive evidence that the. plaintiffs did not agree to the accord and satisfaction of the demand.

In the first case cited, in answer to this contention, the court said: “But, if the offer of payment was made upon condition and the plaintiffs so understood it, there was but one of two course open to them, either to decline the offer and return the check, or to accept it with the condition attached. The moment the plaintiffs indorsed the check and collected it, knowing that it was offered only-up on a condition, they thereby agreed to the condition, and were estopped from denying such agreement. It was then that the minds of the parties met, and the contract of accord and satisfaction was complete in law.”

Again, in the second case cited, it was held that, where a'debtor sends a check to his creditor, bearing upon its face a statement that it is a payment in full, the reception and collection of the check by the creditor renders it an accord and satisfaction of the debt; and it is immaterial that the creditor wrote the debtor stating that the check was not accepted as a settlement, where no offer was made to return the check if desired by the debtor.

The reason is that the plaintiff could only accept the money upon the terms offered, which was in full settlement of his demand. He could not accept the benefit and refuse the condition. If the plaintiff was not satisfied with the sum paid him, good faith required him to refuse to accept the money, to return it to the defendant, and to bring suit for the amount he claimed to be due him. By accepting the smaller sum, which was tendered upon condition that he receive it in full payment of his demand, the plaintiff is estopped from denying the agreement.

The plaintiff in the case at bar was fully informed in the letter which accompanied the check of the condition imposed upon him and the grounds upon which the defendant imposed it. This is not a case of a liquidated claim which cannot be discharged by payment of less than it face value. The term ‘ ‘ liquidated, ” when used in connection with the subject of accord and satisfaction, has reference to a claim which a debtor does not dispute. Schnell v. Perlman, 238 N. Y. 362, 144 N. E. 641, 34 A. L. R. 1023; and Chicago, Milwaukee, etc. Rd. Co. v. Clark, 178 U. S. 353, 20 S. Ct. 924.

Later cases from this court recognizing the rule are Pekin Cooperage Co. v. Gibbs, 114 Ark. 558, 170 S. W. 574, and Collier Commission Co. v. Wright, 165 Ark. 338, 264 S. W. 942, and cases cited.

The plaintiff, having accepted the check and cashed it, must be deemed also to have accepted the condition attached to it, which was that it was in full settlement of the amount due by the defendant to the plaintiff under the benefit certificate. The undisputed evidence shows that there was a tona fide dispute as to the amount due under the benefit certificate, and the payment of a smaller sum in satisfaction of the entire claim was a sufficient consideration for the release of the balance of the amount claimed.

The result of our views is that the judgment must be reversed, and, inasmuch as the plaintiff has cashed the check and used the proceeds, his cause of action will be dismissed here. It is so ordered.


source: Caselaw Access Project

author: Smith, J.

license: Public Domain

text:
    Potts v. State.
    Opinion delivered February 7, 1927.
    1. Larceny — sufficiency of evidence. — Evidence in a prosecution for grand larceny held sufficient to sustain a conviction.
    2. Criminal law — exclusion of evidence — prejudice.—Where it was a question whether defendant had a certain conversation with the prosecuting witness in defendant’s office, it was error to exclude the testimony of a witness which tended to identify the prosecuting witness as the person who had the alleged conversation with defendant.
    Appeal from Union Circuit Court, First Division; L. S. Britt, Judge;
    reversed.

      II. W. Applegate, Attorney General, and Darden Moose, Assistant, for appellee.
   Smith, J.

Appellant was convicted under an indictment charging’ him with the crime of grand larceny, alleged to have been committed by stealing a sewing-machine, the property of Eose Tucker. For the reversal of the judgment appellant insists that the verdict of the jury was contrary to the law and the evidence, and that the court erred in excluding certain testimony offered in his 'behalf.

We think the testimony is sufficient to sustain the verdict, and no error was assigned in giving and in refusing to give instructions. • • .

A brief summary of the testimony follows: Nate Tucker, a colored man, was confined in jail on a charge of possessing and transporting intoxicating liquor. .He testified that appellant, who is a practicing attorney, came to the jail to see a client, and, while thefe, solicited witness’ case, and procured from witness a noté for $100 as an attorney’s fee. Appellant ascertained where Tucker lived, and went out to Tucker’s home, where he met Rose Tucker, the wife of the prisoner. Appellant discussed with Rose Tucker the question of his fee, and brought her to his office, where the discussion was continued. A few days later appellant went to the home of Rose Tucker, and, finding her absent, took from her house a talking machine and a sewing machine. This was done without the knowledge or consent of either Rose Tucker or her husband. The property was shown to be of a greater value than $10, and appellant was found guilty of grand larceny and sentenced to a term in the penitentiary.

Appellant admitted taking the sewing machine and talking machine in the absence of Rose Tucker, but he testified that he did so pursuant to an agreement with her that he should take them and allow a credit therefor of $50 on the fee.

J. E. Bradley was called as a witness for appellant, and was interrogated concerning a conversation between appellant and Rose Tucker in appellant’s office. Rose Tucker was called in for identification by the witness, and, when she appeared, he was examined as follows:

“Q. Is that she! A. I think so. She is not dressed the same. Q. T)o you state that she is the same woman? A. To the best of my knowledge, yes sir. Q. You may state whether or not she came in the room and made this statement, or this in substance, to Mr. Potts: ‘We can’t get the money; you go out and get those machines and I will pay the balance of the money today, this evening or tomorrow evening,’ and if Mr. Potts, in reply to what she said, stated, ‘Well, I have not got time to go out there now, but I will look after it just as soon as I can’?’'’ (The State objects, .as the time is not sufficiently placed, and the party whom he alleges to have made the statement is not identified). By the court: “Q. Do you say this was the woman who made the statement in the office? A. To the best of my knowledge. Q. Will you say this is the woman who made the statement? A. I would not say for sure. (Objection sustained. Exception saved). Q. At the time you were in Mr. Potts’ office was there a negro woman in there? A. Not twhen I went in there. Q. During the time you was there did a negro woman come in? A. Yes sir. Q. State whether or not you heard a conversation between her and Mr. Potts? A. I heard part of the conversation. Q. Do you know what they were talking about? (State objects. Objection sustained. Exception saved). By the court: I will rule that the time is sufficiently placed, but the identification is insufficient. ’ ’

It is then recited that the above testimony of Bradley was withdrawn by agreement of both parties.

Appellant was then called as a -witness, and testified that, in a conference which he had with Rose Tucker in his office, she agreed that he might go to her house and get the machines and credit them as a $50 payment on the fee, and that Bradley was present in his office at the time.

Taylor Potts, a brother of annellant, testified that he was present in his brother’s office and heard this conversation between appellant and Rose Tucker, and that Bradley was also present.

Thereafter Bradley was recalled as a witness and was examined as follows: “Q. You have been on the stand before in this case? A. Yes sir. Q. Do you know about what day of the month it was that you were in the office of Hugh D. Potts — had you ever been there before that day? A. No sir. Q. What time of day were you there? A. Somewhere about 12 o’clock. Q. You have not been talked to since you left the witness stand? A. No sir. Q. When this negro woman came into the office and talked to Mr. Potts, I will ask you if she stated, in substance, this: ‘Mr. Potts, I can’t get the money; you go on out ■ and get the machines, and I will get you the rest of the money today or tomorrow or the next day;’ and if Mr. Potts did not reply, ‘I am busy now, and I don’t know whether I can go out there today or not, but I will go as soon as I can’? (State objects). By the court: Q. If you can testify that Rosie Tucker made such a statement as that, you may answer the question? A. I don’t know her name. Q. Can you say she was the woman who made the statement? A. To the best of my knowledge. Q. Answer my question? A. No sir. Objection sustained. Defendant excepts.” Counsel for the defendant then stated: “We put Mr. Potts (appellant) on the stand and he said this was the woman who was in his office when Mr. Bradley was there, and if we identified her as being the woman, this man can testify. By the court: Mr. Potts cannot testify for this witness. (Objection overruled. Exceptions saved).”

We think this ruling was erroneous and necessarily prejudicial. The defense was that Rose Tucker, the owner of the property, had consented that appellant might have it as a credit on the fee he had agreed to charge her husband. It was the theory of the State that no such conversation had occurred. Appellant and his brother testified that there was such a conversation and that Bradley was present when it occurred. Bradley stated that he did not know Rose Tucker, and he was not positive in his identification of her, although he did state, as appears from the testimony of Bradley, set out above, that he thought the woman presented to him for identification at the trial in the courtroom was the woman he had seen in appellant’s office. Moreover, appellant and his brother, who knew Rose Tucker, had testified that it was she who was in appellant’s office at the time Bradley was in there, and, if this were true, it would have been competent for Bradley to have testified what that woman said, although he had been uncertain in his own identification of her or had been unable to identify her at all. But we think that his own identification of her was sufficient to make the proffered testimony admissible. Its value would have depended upon the jury’s- opinion of the witness’ credibility. They might have regarded his testimony as untrue, just as they did the testimony of appellant and his brother. The jury might also have thought that Bradley’s identification of the witness was not sufficiently certain to make the testimony very important. But these were all questions for the jury. But, in view of Bradley’s testimony that he thought the woman who appeared in court was the woman he had seen in appellant’s office, and the additional testimony of appellant and his brother that the woman present in appellant’s office when Bradley was there was Bose Tucker, we think it was clearly erroneous for the court to refuse to permit Bradley to testify concerning the conversation between appellant and the woman who was in appellant ’s office.

The judgment of the court below must therefore be reversed, for the error indicated, and the case will be remanded for a new trial.


text:
    Johnson v. Belmont.
    Opinion delivered February 7, 1927.
    1. Mines and minerals — contract to purchase oil lease. — A written contract for the purchase of an oil lease was not void as having been executed under a mutual mistake of fact because the sale of the property by a receiver to one of the parties, without their knowledge, had been set aside by order of court, where the other parties proceeded under the written contract by purchasing at a subsequent receiver’s sale.
    2. Trusts — when arises. — Where, as a result of plaintiff’s information relative to an oil lease, defendants were put in touch with such property, and a written agreement was entered into whereby plaintiff was to have a one-fifth interest, a lease acquired by defendants in their own name will be helé subject to a trust in favor of plaintiff for such interest.
    3. Frauds, statute of — oral amendment of written contract.— An oral agreement amending a written contract for an interest in an oil lease is not within the statute of frauds where it went to the manner of acquiring the lease and did not change the relative interests of the parties.
    4. Mines and minerals — failure to contribute to development of lease — laches.—Where plaintiff furnished information to the purchasers of an oil lease under a contract for an interest therein, his failure to contribute money to the development was not laches where the lease was at all times worth more than it cost, and money borrowed for development was obtained on the security of the lease, and suit was brought for plaintiff’s interest as soon as he was informed that his interest had been forfeited.
    Appeal from Ouachita Chancery Court, First Division; J. Y. Stevens, Chancellor;
    affirmed.

      Gaughan £ Sifford, E. E. Godimn and T. B. Crawford, for appellant.

      Coulter £ Coulter, Joiner £ Stevens and W. R. McHaney, for appellee.

      J. N. Saye, amicus curiae for appellee.
   Smith, J.

Appellee, H. B. Bellmont, who is a geologist and petroleum engineer, made a survey and investigation of the southwest quarter of the southeast quarter section 34, township 15 south, range 15 west, • Ouachita County, Arkansas, which convinced him that the land was promising territory for oil exploration. He made inquiry about the land, and ascertained that it was involved in litigation and was in charge of a receiver, who had possession of the property under the directions of the court. The land was owned by J. M. Farris, who had give an oil léase to E. L. Miller as trustee, who had become involved in litigation, and there were debts and liens against the property amounting to about $20,000. Appellee entered into an agreement with Haines, the receiver, to pay the creditors and the court costs and thereby terminate the receivership, and, at the same time, entered into a contract with Miller whereby Miller was to convey or release to appellee his residuary interest in the property.

To carry out this arrangement it was necessary for appellee to interest some one able to command the necessary money, and, with this purpose in view, appellee went to Rock Island, Illinois, where he got in touch with appellants, with whom he had several conferences in regard to going into the adventure. Appellants had never been to this oil field, and knew nothing about the proposition except what they were told by appellee, and they asked time to investigate the proposition.

When this was done, it was decided not to attempt to acquire the lease by private sale, but to permit a sale by the receiver, which had been ordered by the court to be made, and the property was sold by the receiver on October 18,1924. J. D. Anderson, as attorney for appellee, became the purchaser at this sale for $22,000, it being agreed between Anderson and the receiver that appellee should have a reasonable time to execute the bond required by the order of sale.

On October 27 appellee, accompanied by appellants, Johnson and Flannigan, arrived in El Dorado, and they immediately went out to inspect the property. The pros pects were sufficiently alluring to enlist the interest of Johnson and Flannigan, and they discussed with appellee what the respective interests of the parties should be if they went into the adventure. Johnson and Flannigan represented not only themselves but Quinlan and Hawley, all of whom were to share equally in the adventure if they went into it at all.

On the day following the inspection of the property, Johnson and Flannigan went with appellee to the office of appellee’s attorney. This attorney was among the numerous witnesses in the case, and he testified that he drew up a contract which outlined the agreement appellee had made with Johnson and Flannigan. This agreement reads as follows:

‘ ‘ Memorandum Agreement
“It is hereby mutually agreed by and between H. B. Bellmont, party of the first part, and D. N. Johnson, W. H. Flannigan, Wm. J. Quinlan and J. H. Hawley, parties of the second part hereto, that the party of the first part did, on the 18th day of October, 1924, purchase all the property making up the estate in the case of E. L. Miller et al. against Geo. Barbare et al., pending in the Ouachita Chancery Court, Second Division, and that the parties of the second part have advanced the sum of five thousand and no/100 ($5,000) dollars on the purchase money, and have undertaken to pay the balance, making a total of twenty-two thousand and no/100 ($22,000) dollars.
* “That if, and when, the parties hereto shall have paid the entire purchase money of said property and the receiver thereof executed deed, the property .will be conveyed by the party of the first part hereto to the parties of the second part, to the extent of the four-fifths, one-fifth to be conveyed to each of the parties of the second part hereto.
“It is further contemplated that the parties hereto are now organizing themselves, together with others, into a corporation to be known as Smackover Petroleum Corporation, and, in the event the said company shall have been fully incorporated at or before the date of the execution of the deed or assignment from the receiver to the parties hereto, the said property shall be conveyed to the corporation. And that the party of the first part shall receive in payment of his one-fifth interest in said property, the capital stock of said corporation to the amount of twelve thousand and no/100 ($12,000) dollars, and that he, the said Bellmont, will make, execute and deliver unto the said parties of the second part, or to the corporation aforesaid, good and sufficient conveyance in and to said property.
“Witness our hands and seals on this the 28th day of October, 1924.
“H. B. Bellmont,
“Party of the first part.
“D. N. Johnson,
“W. H. Flannigan,
“Wm. J. Quinlan,
“ J. H. Hawley,
“Parties of the second part.”

At the time this contract was signed, none of the parties knew that the court had, on the 20th of October, set aside the receiver’s sale. When that fact was discovered, an attorney was employed to sustain the sale and to secure the confirmation thereof, if this could be done. The court’s order was not set aside, and there is some conflict in the testimony as to why this was not done. Appellants testified that the term of court had lapsed 'before the attorney was prepared to present their case to the court. Appellee testified that it was agreed to proceed under the written contract set out above and to buy the property at the second sale which had been ordered by the court.

After the conference between appellee and appellants at the attorney’s office, the receiver executed to appellee a certificate of purchase, and an escrow agreement was entered into between appellee and the receiver, setting forth the terms and conditions of the sale. By this escrow agreement, appellee deposited to the receiver’s credit with the Bank of' Commerce of El Dorado the sum of $5,000, and a note for the balance was executed to the receiver’s order, which was also placed in escrow. This note was signed at the time by appellee and Johnson and Flannigan, and it was agreed that Johnson and Flannigan should take a duplicate of the note to Illinois and have it executed by Quinlan and Hawley, and that the note so signed should be signed by all parties and substituted for the one placed in escrow.

When it was discovered that the first sale by the receiver had been set aside, the parties agreed that they would proceed under their original agreement to acquire the lease, and that, when acquired, it should be owned by all five of the contracting parties, 'each owning a one-fifth interest. This is the big question of fact in the case, but the court found the fact to be as stated, and we think the testimony supports that finding. The proposition of appealing from the order of the court setting aside the sale was discussed, but it was agreed that the matter could he closed more expeditiously by permitting a second sale to be made and by buying at that sale. Appellee had filed a motion to vacate the order setting aside the first sale, but, by agreement, the hearing of this motion was continued to November 29, 1924, the day upon which the second sale was to be made.

A second sale was ordered and was later made by the receiver on November 29,1924. Desiring to purchase the lease as cheaply as possible, it was agreed that the property should be bid in by Farris, and this was done, the purchase price being $23,000.

It was also agreed that appellee Bellmont should not attend the sale. He went to El Dorado to release the escrow agreement, in order that the $5,000 on deposit in escrow might be available to perfect the bid made by Farris. Johnson advanced $6,000 additional to indemnify the surety on the bond which the purchasers were required to execute pursuant to the order of sale, and, when this was done, Farris transferred his certificate of purchase to Johnson.

Up to this time the testimony is overwhelming that all parties interested regarded the second sale as having been made for the benefit of all of them ;but it is the insistence of appellants that appellee passed out of the transacti.on by reason of his failure to “kick-in,” as they expressed it, with his part of the money to pay for the lease and its development.

After the second sale, Johnson and his associates attempted to buy the interest of appellee, and offered him $3,000, which appellee declined. This discussion and offer took place in Rock Island, Illinois, on February 4,1925. When this offer was declined, Johnson stated to appellee that he (appellee) had no interest in the lease, whereupon appellee returned to El Dorado, and, on February 9, 1925, instituted this suit to recover and to have declared his interest in the property.

Money to pay for the lease and to develop it was obtained from George W. James, and, to secure him in his advances, the certificate of sale was assigned to him, and later a deed was made directly to him by the commissioner. At the time of the first sale to appellee a small well had been brought in. Appellants drilled two other wells, which were also small producers. .A fourth well was drilled to a greater depth, and the well thus brought in was of the capacity of 15,000 barrels of oil per day. •

James was repaid'his advances, and, on May 28, 1925, he reconveyed to appellants, who conveyed to the Smackover Petroleum Corporation. A conveyance was then executed by appellants and the Smackover Petroleum Corporation to the Phillips Petroleum Company for the consideration of $375,000, the vendors reserving all the oil which had been produced prior to the date of the conveyance.

Appellee’s right to recover is resisted upon several grounds: (a) That the contract of October'28, 1924, set out above, was executed under a mutual mistake of fact, in that appellee was not the owner of the property with reference to which the contract was made; (b) that there was no trust in favor of appellee; (c) that the parol agreement in regard to the second sale was within the statute of frauds, and was void because it was not in writing; and (d) that appellee was barred by laches.

. The court found in favor of appellee upon all these issues, and declared that all the persons' through whose hands the lease passed, as stated, took title thereto subject to an existing- trust in appellee’s favor, except the last purchaser and present owner, the Phillips Petroleum. Company. Upon this finding’, the court appointed a master to state an account of the profits and proceeds of the lease, and from the final decree confirming the master’s report is this appeal.

We think the written contract of October 28 was not void as having’ been executed under a mutual mistake of fact. It is true that, when its terms were agreed upon, the parties were under the misapprehension that Bellmont had the title to the lease, which could and would be perfected when the terms of the sale had been complied with; but it appears that, after it was known the sale had been set aside, the parties proceeded under the written contract as amended, the essence of which,, so far as appellee was concerned, was that he should have a fifth interest in the lease.

In support of the contention that there was no trust in appellee’s favor, it is insisted that appellee had nothing to convey, and that the lease was n-ot acquired under the agreement of October 28, and that the alleged subsequent agreement under which appellee says a trust in his favor arose was void because it was not in writing.

In reply to this contention, and to the contention that the parol agreement was within the statute of frauds, it is answered — and we think correctly so — that appellee made a very valuable contribution to the enterprise. It was through his investigation and survey -and the information obtained as a result thereof that appellants were put in touch with this very valuable property, which has proved so enormously profitable to them, and the agreement of October 28 evidences that fact. It is true, as pointed out by counsel for appellants, that this agreement was amended, but this amendment went to the manner of acquiring the lease and did not change the relative interests of the parties. It may be that this amended agreement cannot be enforced as an express trust because it was not evidenced by a writing, but this dhange in the written agreement was not intended to eliminate appellee as a party in interest or to diminish his interest, and Ms right to recover is not to be defeated because of the absence of a- writing evidencing the supplemental agreement and which prevents the finding that there was an express trust.

The contention that appellee is barred by laches is based upon the fact that he made' no contribution of money, while appellants used their credit to the extent of $56,000 in developing the lease, including the sum paid for it, and that, in addition, they gave the enterprise much of their time and attention, whereas appellee devoted neither time nor attention to the development of the lease. It is also insisted that, by Ms non-participation, appellee speculated, at the expense of appellants, on the outcome of the adventure.

In reply to this contention it is answered that the lease was at all times worth more than it cost, and before its development appellants were offered $60,000 for it. The development of the adjacent lands and the discovery of oil thereon proved the value of the lease and added to its value. Appellee testified that he had devoted several-months of his time to the discovery of this property, and had spent about $2,500, including the expenses of his various trips to Illinois, in his effort to enlist appellants, in the adventure. Appellants did develop the lease by drilling wells, but all the wells drilled were producers, and the money borrowed for this purpose was obtained on the security of the lease itself. The services rendered by appellants consisted in clearing the ground for the location of the wells and in arranging for the money to drill them. It does not appear that appellee was called upon to participate in this service or' that he declined to render any aid for which he was asked.

The master, in stating the account between the parties, made a finding on the credits to which appellants are entitled, and it is not insisted that the account was not correctly stated if appellee is entitled to recover the interest claimed by him. Nothing was allowed appellee for his own time or for the expenses which he said he had incurred. Appellee brought this suit immediately after being advised by appellants that he had forfeited his interest in the original agreement. We conclude therefore that the defense of laches is not sustained.

Respective counsel have filed briefs reviewing the decisions of this and other courts on trusts of various kinds. We do not review these decisions — not even those of our own court — as they are quite recent, and no useful purpose would be served by going into a subject which has 'been so thoroughly considered.

There is a contrariety of opinion among the members of the court, under the facts stated, as to the kind of trust created, but a majority are of the opinion that a constructive trust arose and that the decree of the lower, court should be affirmed on that theory.

In the case of Haskell v. Patterson, 165 Ark. 65, 262 S. W. 1002, rve quoted from 3 Pomeroy’s Equity Jurisprudence, § 1044, the following statement of the law: “Constructive trusts include all those instances in which a trust is raised by the doctrines of equity for the purpose of working out justice in the most efficient manner, where there is no intention of the parties to create such a relation, and, in most cases, contrary to the intention of the one holding the legal title, and where there is no express or implied, written or verbal declaration of the trust. They arise when the legal title to property is obtained by a person in violation, express or implied, of some duty owed to the one who is equitably entitled, and when the property t.lms obtained is held in hostility to his beneficial rights of ownership. As the trusts of this class are imposed by equity, contrary to the trustee’s intention and will, upon property in his hands, they are often termed trusts in invitum, and this phrase furnished a criterion, generally accurate and sufficient, for determining what trusts are truly ‘constructive.’ An exhaustive analysis would show, I think, that all instances of constructive trusts, properly so-called, may be referred to what equity denominates fraud, either actual or constructive, as an essential element, and as their final source. Even in that single class where equity proceeds upon the maxim that an intention to fulfill an obligation should be imputed, and assumes that the purchaser intended to act in pursuance of his fiduciary duty, the notion 'of fraud is not invoked, simply because it is not absolutely necessary under the circumstances; the existence of the trust in all cases of this class might be referred to constructive fraud. This notion of fraud enters into the conception in all its possible degrees. Certain species of the constructive trusts arise from actual fraud; many others spring from the violation of some positive fiduciary obligation; in all the remaining instances there is, latent perhaps, but none the less real, the necessary element of that unconscientious conduct which equity calls constructive fraud. Courts of equity, by thus extending the fundamental principle of trust — -that is, the principle of a division between the legal estate in one and the equitable estate in another — to all cases of actual or constructive fraud and breaches of good faith, are enabled to wield a remedial power of tremendous efficacy in protecting the rights of property; they can follow the real owner’s specific property, and preserve his .real ownership, although he has lost, or even never had, the legal title, and can thus give remedies far more complete than the compensatory damages obtainable in courts of law. The principle is one of universal application; it extends alike to real and to personal property, to things in action, and funds of money.” See also Bray v. Timms, 162 Ark. 247.

In the case of Strasner v. Carroll, 125 Ark. 34, 187 S. W. 1057, it was said: ‘It is true the general rule is that a mere verbal agreement by which one of the parties thereto promises to buy in, at a judicial sale, lands of the other and hold same for his benefit, does not create a resulting or implied trust, the agreement itself being within the statute of frauds. There are, however, several well recognized exceptions to the rule, and one of them is that, where the purchaser of lands in which the other is interested becomes such under such a. state of facts as would make it a fraud to permit him to hold on to his bargain. Trapnall v. Brown, 19 Ark. 39; McNeil v. Gates, 41 Ark. 264; LaCotts v. LaCotts, 109 Ark. 335. In the first two mentioned cases the principle is announced that it would be a fraud in a purchaser, who obtained property at a price greatly below its value by means of a verbal agreement, to keep the property in violation of the agreement. ’ ’

Appellee had an equity in the property when he made the agreement of October 28. He might have prosecuted his contract with the receiver and the residuary owner and have thus acquired the property. He might, by prosecuting an appeal from the order of October 20, have had that order set aside and the sale confirmed. But, whether 'this could have been done or not, he abandoned the pursuit of either course, pursuant to the amended agreement with appellants to let the property go to sale and buy it a second time. He refrained from bidding at the sale or from attempting to enlist any other person to do so.

Upon this point he testified .that he had arranged with one Landau of Chicago to furnish the money to acquire this lease. But he did not close the contract with Landau because Carl Sundeen, who had put him in touch with appellants, advised that appellants were ready to proceed, and he closed with appellants rather than Landau, because he thought Sundeen had earned and was entitled to the commission promised him. Sundeen corroborates appellee in this statement. Appellants were permitted to bid at the second sale in reliance. upon appellee’s investigation and discovery, and they did bid, and bought the property under an agreement which contemplated that the purchase should inure to the joint and equal benefit of all the parties.

We conclude therefore that a trust existed in appellee’s favor, and that the court below was correct in so holding.

Appellee has prosecuted a cross-appeal wherein he 'insists that his interest in the lease itself should be declared and accorded Mm. He testified that the lease was sold for a grossly inadequate price, although, the sale price was $375,000, and the proceeds of the sale of the oil before the sale of the lease brought the gross income of the property to $393,978.46, and there is testimony corroborating Mm in Ms estimate of the value of the lease.

The court found, however, that the lease sold for a fair price, and that the sale thereof should be confirmed, and we think this finding should be affirmed.

Appellee expressly states that he raises no question about his being charged with his part of the expenses of developing the lease, and the finding of the court below that he should be so charged is affirmed.

The report of the master found that the net value of appellee’s one-fifth interest was $67,386.94, and judgment was rendered in his favor for that amount.

The correctness of that finding is not questioned, if it be conceded that appellee is entitled to receive a fifth of the net profits. The court below found that he was so entitled, and, as we concur in that finding, the decree of the court below is affirmed.

McCulloch, C. J., and Hart, J., dissent.


author: Humphreys, J. Hart, J.

text:
    Black v. Goldweber.
    Opinion delivered February 7, 1927.
    1. 'Automobiles — duty to self-invited guest. — In an action by a self-invited guest in an automobile against the owner and driver of the car, it was error to direct a verdict on the theory that the only duty owed to a self-invited guest by the owner of the car was to refrain from willful or wanton injury.
    2. Automobiles — care as to self-invited guest. — The owner and driver of an automobile owes to a self-invited guest the duty of using reasonable care not to cause him injury.
    Appeal from Jefferson Circuit Court; T. G. Parham, Judge;
    reversed.

      Sam M. Levine, for appellant.

      Wooldridge S Wooldridge, for appellee.
   Humphreys, J.

Appellant instituted this suit in the circuit court of Jefferson County against appellee to recover damages in the sum of $5,000 for injuries received while riding in appellee’s automobile from Pine Bluff to Little Bock, through the alleged negligence of appellee in driving same in a reckless and dangerous manner, and at a reckless and dangerous rate of speed, and in disregard of the trafile laws and the regulations of the highway. Appellee filed an answer, denying the material allegations of the complaint.

The cause was submitted to the court upon the pleadings and testimony adduced by the respective parties, which resulted in a peremptory instruction to the jury to return a verdict in favor of appellee and a consequent judgment dismissing her complaint, from which is this appeal.

Appellant was and had been employed by appellee for a number of years in his store at Pine Bluff. She is a widow, and her children live in Little Bock. Appellee and his little girl were going to Little Bock in an automobile, on or about April 12, 1925. Appellant expressed a desire to the little girl to accompany them to Little Bock, so that she might see her children. The little girl spoke to her father on behalf of appellant, and obtained his permission for her to accompany them. The testimony introduced by appellant tended to show that the automobile in which they made the trip was turned over on account of fast driving by appellee, which resulted in injury to appellant.

The trial court instructed a verdict for appellee upon the theory that the only duty he owed appellant, while riding in his automobile as a self-invited guest, was to refrain from injuring her willfully or wantonly. The testimony failed to reveal any evidences of a willful or wanton attempt on the part of appellee to injure appellant.

The only question presented for determination on this appeal is whether the trial court was correct in assuming, as a matter of law, that the only duty the owner and driver of an automobile owes a self-invited guest riding in his car is not to injure him willfully or wantonly. The doctrine announced by the trial court finds support in the case of Lutvin v. Doplms, decided by the Supreme Court of New Jersey in 1920, reported in 108 Atl. 862, and two or three other courts which have adopted the rule announced by the New Jersey court. The general rule or duty to bare licensees is applied by these courts to owners and drivers of automobiles and other vehicles. The distinction between the duty to invitees and bare licensees has been preserved by these courts and applied in vehicle cases.

The trend of modern authority is to disregard this distinction and apply the rule of duty imposed on owners and drivers of vehicles to invitees, to self-invitees or licensees also. The prevailing rule, approved by recent cases, requires drivers of automobiles to exercise ordinary care in the operation thereof to transport their passengers safely, whether guests by sufferance, self-invited guests, or invited guests. In the recent case of Munson v. Rupker (Ind.) 148 N. E. 169, the court disapproved the doctrine announced in Lutvin v. Dopkus, supra, and adopted the prevailing rule, for the following reasons:

“It seems to us that the only sensible and humane rule is that an owner and driver of an automobile owes a guest at sufferance the duty of using reasonable care so as not to injure him. The rule as to trespassers and licensees upon real estate, with all its niceties and distinctions, is not to be applied to one riding in an automobile at the invitation of, or with the knowledge and tacit consent of, the owner and operator of the automobile. A trespasser and licensee going* upon a tract of land — an inert, immovable body — takes it as he finds it, with knowledge that the owner cannot and will not by any act of his start it in motion, and hurl it through space in a manner that may mean death to him who enters therein. He who enters an automobile to take a ride with the owner also takes the automobile and driver as he finds them. But, when the owner of the automobile starts it in motion, he, as it were, takes the life of his guest into his keeping, and, in the operation of such car, he must use reasonable care not to injure any one riding therein with his knowledge and consent. It will not do to say that the operator of an automobile owes no more duty to a person riding with him as a guest at sufferance, or as a self-invited guest, than a gratuitous bailee owes to a block of wood. The law exacts of one who puts a force in motion that he shall control it with skill and care in proportion to the danger created. This rule applies to a guest at sufferance as well as a guest by invitation. ’ ’

The Indiana court cited the following cases in support of the prevailing doctrine: Pigeon v. Lane, 80 Conn. 237, 67 A. 886; Dickinson v. Connecticut Co., 98 Conn. 87, 118 A. 518; Grabau v. Pudwill, 45 N. D. 423, 178 N. W. 124; Christie v. Mitchell, 93 W. Va. 200, 116 S. E. 715; Rappaport v. Stockdale 160 Minn. 78, 199 N. W. 513; Mazey v. Loveland, 133 Minn. 210, 158 N. W. 44.

The reasoning of the Indiana court seems to us to be sound, and, since it is supported by the weight of authority, we adopt it as the rule applicable to vehicle cases.

On account of the error indicated the judgment is reversed, and the cause is remanded for a new trial.

Mr. Justices Hart and Kirby concurring.

Chief Justice McCulloch dissenting.

CONCURRING OPINION.

Hart, J.

Judge Kirby and I hold to the view that, in a gratuitous carriage for the sole benefit of the guest, the law requires only slight diligence and makes the owner of the automobile liable for only gross neglect. Cody v. Venzir, 263 Penn. 541, 107 A. 383; West v. Poor, 196 Mass. 183, 11 L. R. A. (N. S.) 936, 124 Am. St. Rep. 541, 81 N. E. 960; and Massaletti v. Fitzroy, 228 Mass. 487, 118 N. E. 168, L. R. 1918C, 264, Ann. Cas. 1918B, p. 1088.


author: Humphreys, J.

text:
    State v. Johnson.
    Opinion delivered February 7, 1927.
    1. Fish — game—constitutionality of license fee. — Crawford & Moses’ Dig., § 4773, in s.o far as it fixes a hunting and fishing-license fee for residents of the State and one for nonresidents, held a proper classification.
    2. Fish — game—regulation.—Fish and game belong to the State in trust for the public, and the Legislature may regulate the taking of same, so long as it does not discriminate against any class of its citizens.
    3. Fish — game—discriminatory regulation. — Crawford & Moses’ Dig., § 4773, in so far as it limits the right to resident game licenses to residents possessing the qualifications of legal voters, is an unauthorized discrimination against residents who do not possess such qualifications.
    Appeal from Jackson Circuit Court; Dene E. Coleman, Judge;
    affirmed.

      E. W. Applegate, Attorney G-eneral, and John L. Carter, Assistant; E. U. Williamson and Guy Amsler, of counsel, for appellant.

      Fred M. Pickens and J. Vernon Ridley, for appellee.
   Humphreys, J.

The only question involved on this appeal is the constitutionality of the latter part of § 4773 of Crawford & Moses’ Digest, which is as follows: -“Any person wishing to avail himself of the privilege of hunting in this State, upon an application to the commission and furnishing the commission with his personal description, as provided in the form of license hereinafter provided, and payment to the State Treasurer or to the circuit clerk of the county in which application is made (of) a license fee, as follows: For a resident to hunt deer, bear dr turkey, $1.10; to fish with artificial bait, $1.10; for nonresident of the State to hunt, $15; to fish, $5; shall receive a license to- hunt or fish in any county in this State; all licenses to expire December 31 of the year issued. Provided, the commission may, on application, issue to a nonresident a trip license to -fish not to exceed fifteen days for $1.10; but such holder of said license shall not take nor ship any fish so caught out of the State; and provided, further, that only one trip license may be issued to one person during any one year; provided, further, that only those persons shall be classed as residents who possess the qualifications of a legal voter under the laws of Arkansas.” .

The case was tried below on an agreed statement of facts, which resulted in a finding by the court that the latter part of said section was contrary to § 18, article 2, of the Constitution of Arkansas which provides:.

“The General Assembly shall not grant any citizen or class of citizens privileges or immunities which upon the same terms shall not equally belong to all citizens.”

Based upon this finding and declaration of law, the trial court acquitted appellee of the charge against him for fishing without obtaining a nonresident license in accordance with said section. The agreed statement of facts is as follows:

‘‘Comes H. IT. Williamson, prosecuting attorney for the State of Arkansas, and Fred M. Pickens, attorney for the defendant herein, and respectfully submit by agreement the following statement of facts upon which this case is to be tried: This cause is here on appeal from the justice court of Union Township, Jackson County, Arkansas, defendant being charged with a violation of the fish and game laws of the State of Arkansas by fishing in the waters of this State without first procuring a nonresident license to do so, and, the defendant waiving a jury, this cause is submitted to the court sitting as a jury for the trial hereof, and the facts are as follows: W. E. Johnson, the defendant in this case, has lived in this State for the past three years, two of which he lived in Blytheville, Arkansas, which is in Mississippi County. He owned a house and lot in Blytheville, and he and his family, composed of wife and children, lived in same for two years; he then sold said property and moved to Newport, in Jackson County, Arkansas, July 25,1926, and took charge of the office of Anderson-Clayton Cotton Company, cotton buyers, and moved to Newport with the intention of making it his permanent home, ■bringing Ms family with him and renting a home in Newport. He has bought three resident'licenses to fish for the three years which he has been in this State, the last resident license being for the year 1926, the fees for said license being .$1.10, and he had same with him at the time of his arrest and while fishing. He has never paid a poll tax in this State since he has been in same, but has paid property tax on his property at Blytheville. He does not claim citizenship in any other State, and has not paid a poll tax in any other State, but claims Arkansas as his home and expects to permanently reside therein. He admits fishing in the waters of this State without the payment of poll tax during the year 1926 for which he was arrested. Admits that he had no nonresident license, but has, and has had for three years, annual resident license. ’ ’

Section 4773 of Crawford & Moses’ Digest, down to the last proviso or last clause, extends to every resident of Arkansas the right to fish with artificial bait upon the payment of a license fee of $3.10. This is a proper classification, because it embraces every bona fide resident in the State, excluding from the right to pay a resident license and fish all who are temporarily residing- in the State. This classification is in keeping- with the well-recognized doctrine that the fish and game of the State belong to the State in trust for the public, and that the Legislature may regulate the taking of same so long as it does not discriminate against any qne class of its citizens. Lewis v. State, 110 Ark. 204, 161 S. W. 154.

The last clause of said section attempts to make a classification within the first classification by limiting- the right to fish in the waters of the State to those residents only who possess the qualifications of a legal voter under the laws of Arkansas. The proviso clearly means that, before a bona fide resident of the State can pay a resident license to take fish out of the waters of the State with artificial bait, he or she must have attained to his or her majority, paid a poll tax, and have resided in the State a year, in the county six months, and his voting precinct thirty days. The attempted classification in the last proviso is in conflict with the first classification, wholly foreign to the subject in hand, that of a right to fish, and is an unjust, unreasonable classification. There is no rhyme, reason or justice in saying that a bona fide resident boy or girl of the State cannot pay a resident license and take fish from the waters of the State until they attain their majority, pay a toll tax, reside in the State a year, the county six months, and their voting precinct thirty days. It would be just as reasonable to say that one could not pay a resident license to fish after he attained to the age of 25 or 30 years, as to deprive him of the privilege until he has reached his majority. Classifications of the citizenship to whom privileges and immunities are granted must be reasonable and just, else there is necessarily an arbitrary discrimination between the citizens embraced in the class, or between the class and all other citizens of the State. Section 18, article 2, of the Constitution of Arkansas prohibits the General Assembly from granting to any citizens or class of citizens privileges or immunities which, upon the same terms, shall not equally belong to all citizens. The proviso or last clause of § 4773 of Crawford & Moses’ Digest is therefore void because repugnant to the valid part of said section as well as to § 18, article 2, of the Constitution of Arkansas.

The judgment of the trial court is affirmed.

Chief Justice McCulloch dissents.


text:
    Bell v. Koontz.
    Opinion delivered February 7, 1927.
    1. Mechanics’ liens — right to lien. — The fact that a material-man held the title to lots as security for the purchase money did not defeat his right, to a lien for materials furnished to build a a house thereon, since the purchaser had an equitable estate in the lots.
    2. Mechanics’ liens — conveyances in general. — Persons acquiring an interest in lots subject to a mater ialman’si lien, after the materials were furnished and within the time allowed by Crawford & Moses’ Dig., § 6911, to bring suit to enforce such lien, were not innocent purchasers, but purchased subject thereto.
    3. Mechanics’ lien — estoppel to assert lien. — A materialman is not estopped to assert his lien for materials by erasing his own name and inserting that of the purchaser as grantee in the deed of the lots to him executed as security for the- purchase money, where his successors in title were not thereby induced to purchase or lend money on the property and did not know of the change when they became interested in the property.
    4. Estoppel — acts done and change of position.- — Estoppel in pais is worked by conduct intended and calculated to induce and in fact inducing one to alter his condition, so that it would be a fraud on him t<? allow the other to take an inconsistent attitude to his detriment.
    5. Mechanics’ lien- — right to lien. — A materialman is not entitled to a lien on lots for money paid by him to a laborer whose claim was not assigned to him, but is entitled to a personal judgment against the owner for the amount so paid at his request.
    Appeal from Sebastian Chancery Court, Fort Smith District; J. V. Rowland, Chancellor;
    reversed.

      John D. ArbucJde and George W. Dodd, for appellant.

      J. H. Glendening, Jr., and A. A. McDonald, Geo. F. Youmans and Roy Gean, for appellee.
   Humphreys, J.

This suit was instituted in the chancery court of Sebastian County, Fort Smith District, by appellant against appellees, on the 2d day of April, 1925, to enforce a lien for material and labor in the total sum of $1,216.13 against lots 21 and 22, in block 9, in G-eneral Benjamin Bonneville Addition No. 2 to the city of Fort Smith, Arkansas, It was alleged, in substance, that the materials and labor were furnished by appellant to H. A. Koontz, the owner of the lots, between the dates of October 16,1924, and January 8,1925, the last item being-furnished on the 7th day of January, 1925.

Appellees filed an answer, denying the material allegations in the complaint and pleading an estoppel in pais agaipst appellant; and Ben Fant, a subsequent purchaser, and Samuel Baron, a subsequent mortgagee, pleaded, by way of. further defense, that they were innocent purchasers of the property for value.

The cause was submitted to the court upon the pleadings and testimony, resulting in a dismissal of appellant’s complaint for the want of equity, from which is this appeal.

After a careful reading of the testimony, we are convinced that the weight thereof reflects that the items for material contained in appellant’s account were delivered upon the premises and used in the construction of the house thereon, and that the items of labor on the house embraced in the account were paid for by appellant; also that the last item for material was furnished within ninety days before the institution of this suit. We deem it unnecessary to set out, in substance or detail, the testimony responsive to these issues.

The only three questions of consequence presented for determination on this appeal are:

First. Whether appellant can claim a lien for. material furnished while. holding the legal title to the lots as security for the payment as- a part of the purchase price thereof.

Second. Whether appellant was estopped from asserting a lien upon the property because he had changed the deed from W. E. Lowery and wife by erasing his own name and inserting the name of H. A. Koontz therein as grantee; and,

Third. Whether he can claim a lien for the amount paid by him for labor in the construction of the house. The facts necessary to a determination of these questions are undisputed, and are as follows:

H. A- Koontz desired to purchase the lots described above from W. E. Lowery .and build a house upon them. Lowery asked $115 for the lots, and Koontz had only $50. He applied to appellant for a loan of $65 to pay the balance of the purchase money, and requested him to furnish'material and pay for labor to construct the house. The application and request were granted. Pursuant to agreement, H. A. Koontz paid W. E. Lowery $50 and M. T. Bell paid him $65 for the lots. Koontz executed a note to Bell for $65, and W. E. Lowery and wife executed a deed for the lots to M. T. Bell, to be held as security by him until Koontz paid the note, at which time the deed was to be turned over to Koontz. Koontz took possession of the property and proceeded to build the house, and worked on it one day himself. J. C. Harry did most of the work, and was paid partly by Koontz and partly by Bell. Bell paid him $100 on his labor account. Bell furnished all of the material for the house, the last item being furnished on January 7, 1925. On January 14, 1925, Koontz paid Bell the $65 note, evidencing’ the balance of the purchase money for the lots, and Bell scratched out his name in the deed as grantee and inserted the name of H. A. Koontz, and delivered the deed to him. The deed was dated September 30, 1924, and recorded February 25, 1925. On February 16, 1925, H. A. Koontz and wife conveyed the lots by warranty deed to J. 0. Harry, which was recorded March 14,1925. J. O. Harry had received the materials and used them in building the house, with full knowledge that they had not been paid for by Koontz. On March 16, 1925, J. C. Harry and wife conveyed the lots by warranty deed, for $1 and a loan to J. B. Fant, which was recorded on the day of its execution and delivery. On the same date, March 16, 1925, J. B. Fant executed a note and mortgage on the property to secure same, for $600. The note récited that it was executed for purchase money, whereas the mortgage recited that it was given to secure the loan.

(1). The fact that Bell held the title as security merely for the balance of the purchase money due on the lots did not defeat his statutory lien for materials furnished to build the house. Koontz was the equitable owner and in possession of the lots. The instrument of conveyance was in fact a mortgage, although a deed in form. Bell’s lien for material attached to the estate owned by Koontz in the lots. White v. Chaffin, 32 Ark. 59. Bell’s lien for material could not merge in the legal title held by him to the lots as security merely, when the equitable title to the lots belonged to another.

The appellees, who traced their title back to Koontz, who was not himself an innocent purchaser as against Bell’s lien, could not be innocent purchasers as against the lien, because they acquired their deeds and mortgage after the materials were furnished and within the period Bell was given by the materialman’s lien statute to bring suit to enforce his lien. They bought subject to Bell’s lien for material, because the statute required them to take notice of the existence thereof during the ninety-day period given him after furnishing the last item to file his lien or to bring suit to enforce it. Section 6911 Crawford & Moses’ Digest; Eddy v. Loyd,, 90 Ark. 340, 119 S. W. 264.

(2). None of the appellees tracing their title back to H. A. Koontz were induced to purchase or lend money upon the property on account of Bell scratching out his name as grantee in the deed from "W. E. Lowery and inserting’ H. A. Koontz’s name. None of them had any knowledge that the change had been made when they respectively acquired, sold and incumbered the property. Having no knowledge of the change, they could not have been misled by it to their damage. The rule of an estoppel in pais is as follows: Estoppel in pais is worked by conduct intended and calculated to induce, and in fact inducing, another person to alter his condition so that it would be a fraud on him to allow the other person to .take an inconsistent attitude to his detriment.” Thompson v. Willard, 66 Ark. 347, 50 S. W. 870; Johnson v. Taylor, 140 Ark. 100, 215 S. W. 862; Ferrjuson v. Guydon, 148 Ark. 295, 230 S. W, 260,

(3). Appellees are correct in their contention that Bell is not entitled to a lien for money paid to J. C. Harry on account of labor. J. C. Harry’s lien was not assigned to him. The labor for which Bell paid cannot be treated as the cost of material in place, as was done in the case of constructural iron used in a building in the case of Terry v. Klein, 133 Ark. 366, 201 S. W. 801. Appellant, however, is entitled to a personal judgment against H. A. Koontz for the amount he paid for labor to J. C. Harry at his request.

On account of the errors indicated the decree is reversed, and the cause is remanded with instructions to give appellant a judgment against H. A. Koontz for the entire amount of his claim, with interest, and to enforce the lien against the said property in appellant’s favor for the amount of the claim, after deducting the items of labor therefrom.


author: Kirby, J.

text:
    Blytheville v. Webb.
    Opinion delivered February 7, 1927.
    Licenses — dealer, in oils and gasoline. — Under a city ordinance imposing a license tax on dealers engaged in selling oils and gasoline within the city, a wholesale dealer in oils- and gasoline who maintains his office and storage tanks without the city but drives his trucks into the city and then sells -and delivers oils and gasoline, is liable for the tax.
    Appeal from Mississippi Circuit Court, Chickasawba District; W. W. Bandy, Judge;

    reversed.

      Ivy W. Crawford, for appellant.
   Kirby, J.

This appeal is prosecuted by the city of Blytheville on judgment of the circuit court reversing the judgment of the police court of that city, convicting appellee for a violation of an ordinance prohibiting the' engaging in the oil and gas business without a city license. The case was submitted to the circuit court on agreed statement of facts, the .jury béing waived, and the court found the appellee not guilty.

The appellee is an oil and gas dealer, a wholesale distributor thereof, with office and storage tanks just outside the corporate limits of the city of Blytheville. Pursuant to an ordinance of the city prohibiting stationary surface containers or tanks for gasoline and other petroleum products in greater quantities than fifty gallons to be erected or maintained within the fire limits or 150 feet of any dwelling, the appellee moved his tanks and office outside the corporate limits. Before the passing of this ordinance his office and storage tanks were within the city limits, and he paid the city license fee of $100 assessed by ordinance No. 243 for engaging in the oil and gas business.

“The facts are that appellee Webb sells and delivers oil and gas, in wholesale, to retail filling stations in the city of Blytheville, in the same manner as prior to the removal of his office and storage tanks from within the city; that he had been regularly engaged in the sale and delivery of oil and gas to retail filling stations in the city of Blytheville during the first half of the year 1926; that the method of making the sale and delivery of oil and gas is for the appellee to fill his tank trucks at his storage tanks, located less than a mile outside the city limits, and drive into the city of Blytheville, and from one retail filling station to another,'asking the owners thereof the quantity of oil and gas desired, and then and there delivering the quantity of oil and gas desired; the retail dealers usually paying cash therefor.”

The retail filling stations or customers pay a privilege tax, and are not connected with the business of appellee. He collects the State tax fixed on the oil and gas, remits to the proper authorities, and pays no occupation or privilege tax to any State, county or municipality, and paid no license tax for selling oil and gas for the year 1926 or any part thereof. Ordinance No. 243 provides:

“Section 1. It, shall be unlawful for any person, firm or corporation in the city of Blytheville to engage in, exercise or pursue any of the following lines of business without first having obtained and paid for a city license therefor from the city collector, the amount of which licenses are hereby fixed in this ordinance.
“Section 3. The licenses as provided in this ordinance are hereby fixed, defined and established under the several items as follows, to-wit:
“Item 80. Oils, lubricating, gasoline, fuel, illuminating, naphtha and grease, $100 per annum.
“Section 6. All licenses provided for under this ordinance shall be issued by the city collector for a six-months period, such licenses shall be paid in full in advance, and shall be due and payable on January 1 and July 1 of each year, respectively.
“Section 7. Any person, firm or corporation violating any provision of this ordinance shall be deemed guilty of a misdemeanor, and, upon conviction in the police court, shall be fined in any sum not less than five dollars nor more than fifty dollars, and each day said violation shall continue shall be a separate offense.”

Appellant contends that appellee was doing business in the city of Blytheville without having paid the license for that privilege, in violation of said ordinance. There can be no question but that the method of selling, by his filling tank trucks, at his storage tanks a .mile outside the city limits, and driving them into the city of Blythe-ville, and from‘one retail filling station to another, and there making the sale and delivery of the quantity of oil or gas desired by the purchaser, and usually collecting the price thereof, constituted engaging in or doing business within the city of Blytheville. Clark v. Watkins Medical Co., 115 Ark. 166; Miellmier v. Toledo Scales Co., 128 Ark. 211; Wagner v. City of Covington, 251 U. S. 95, 64 L. ed. 157.

Although it is true that appellee did not keep his office and storage tanks in the city of Blytheville, he did engage in, exercise or pursue one of the lines of business prohibited being pursued by said ordinance, without payment of the city license. The purpose of the ordinance, and a fair construction of its terms, shows it was the intention to prohibit the engaging in, pursuing or exercising the line of business within the city limits without payment of license, rather than that only firms or corporations who live or reside within the city should be required to procure license. He was “in the city of Blytheville, ” too, within the meaning of that clause of said ordinance, if it could he held to have a meaning other or different from the construction already expressed, when he brought his products and merchandise in supply tanks to the door of the retail stations, made his contracts of sale, and delivered his products there, as much so as though his supply tanks had been loaded from storage tanks within the city and driven to the place of sale.

It follows that the judgment of the circuit court was erroneous, and the .same is reversed, and the cause is remanded for a new trial.


author: Mehaffy, J.

text:
    Tennyson v. Keef.
    Opinion delivered February 7, 1927.
    1. Appeal and error — conclusiveness of verdict. — The verdict of a jury will not he disturbed by the Supreme Court if there is any substantial evidence to support it.
    2. Trial — ambiguous instruction — -specific objection. — Where an instruction is ambiguous, a specific objection should be made or the error will be waived.
    3. Trial — general objection to instruction. — When a portion only of an instruction is correct, and a general objection only is made to it, the giving of such instruction is not error.
    4. Trial — ambiguous instruction- — ween cured by other instructions. — An instruction on the joint liability of a person constructing an electric light system and of the person supervising the construction of the wires, although ambiguous, held not reversible error, in view of other instructions properly submitting the issue that defendant was liable only if he placed or caused to be placed the wire in such manner as to injure plaintiff.
    Appeal from Boone Circuit Court; J. M. Slnimi, Judge;
    affirmed.

      Woods & Greenhaw, for appellant.

      V. D. Willis and Shouse & Rowland, for appellee.
   Mehaffy, J.

The plaintiff commenced this suit in the Boone Circuit Court, for personal injuries alleged to have been caused by the appellant and others. It is alleged that the. defendant stretched, or caused to be carried and' stretched, directly across the public highway, the principal street through the town, a strand of insulated wire, well knowing that said highway was a public thoroughfare, and not regarding their duty in that behalf, 'and without due and proper care towards the public and the plaintiff; that they stretched or caused to be stretched the wire at a low and dangerous and unlawful place. That plaintiff came along said highway, across which said -wire was stretched, and, without knowledge or warning from the defendant or any one, came violently in contact with the wire, through no fault of his own, but by reason of defendant’s negligence and carelessness; that plaintiff was in an automobile, and that the wire was hanging at a low and dangerous height from the ground, and, extending directly across the highway, caught plaintiff in the mouth, whereby he was violently thrown from said car to the ground, and received severe injuries. The defendants filed separate answers, denying the material allegations in the complaint. It is unnecessary to set out the testimony at length. It is sufficient to say that there was testimony to the effect that appellant was superintending the work of putting up the wires, was supervising the work. The testimony is conflicting, but we think there was sufficient evidence to submit the question of the appellant’s negligence to the jury. There is no testimony that the appellant put up the wire where the appellee was injured, and the only theory on which the appellant could be held liable is that he caused it to be done, or that he was supervising the construction of the wire. This was a question of fact for the jury, and the verdict of the jury will not be disturbed by this court if there is any substantial evidence to. support it. The appellant contends that instruction No. 2, given at the request of the appellee, was erroneous, and, for that reason, the case should he reversed. Instruction No. 2 is ambiguous, and should not have been given. It reads as follows:

‘ ‘ Even though you believe from the evidence that the defendant, Tobe Tennyson, and the parties purchasing the electric light system, were constructing the lines in question jointly, that is, if you believe that the defendant, Tennyson, and the purchasers of the electric system, were each and all together constructing the system, and the plaintiff was injured through the negligence of any one of the said parties or any one workingunder the supervision and direction of the defendant, Tobe Tennyson, then in that event every one interested in supervising and constructing said work would be responsible for such damages as were sustained by their negligence. And the plaintiff has the right to sue either or all of said parties, or either or any one of them. Therefore, even though you may believe from evidence that the defendant, Tobe Tennyson, was only acting jointly with the purchasers of the system in the supervising and directing and constructing of said wire, if you further believe that the plaintiff was injured through the negligent construction thereof, then, and in that event, the defendant, Tobe Tennyson, would be responsible for such damages as were sustained, and you must find accordingly. ’ ’

It is difficult to tell just what the first paragraph of the instruction means. It tells the jury that if Tennyson and other parties were constructing the lines jointly, were each and all together constructing the system, and the plaintiff was injured through negligence of any one of said parties, or any one working under the supervision and direction of Tobe Tennyson, then, in that event, each and every one interested in supervising and constructing said work would be responsible for such damages as were sustained by their negligence.

It will be observed that, while the first part of the instruction mentions constructing the system together, and of plaintiff being injured through the negligence of any one of, etc., the latter part of the instruction confines it to any one working under the supervision and direction of the defendant. It only tells them that the defendant would be responsible for such damages as were sustained by their negligence. The latter part of the instruction then correctly tells the jury that, if the appellant was supervising and directing and constructing the wires, and plaintiff was injured through the negligent construction thereof, the defendant would be responsible. The appellant did not make specific objection to this instruction, but his objection was general. It has been often held by this court that, where an instruction was ambiguous, specific objection should be made or the error would 'be waived. It is also true that, when a portion of an instruction is correct and a general objection only is made to it, the giving of said instruction is not reversible error.

Moreover, we do not think the instruction, as given, would make Tennyson liable for the acts of any of the owners of the system if done without his knowledge or against his consent or instruction, as argued by the appellant. If the appellant was superintending the putting up of the wires, if he was having wires stretched, then if they were negligently stretched, and, because of this negligence, the appellee was injured while he was in the exercise of ordinary care, the appellant would be liable to him for his injury. The appellant himself requested and the court gave the following instruction:

“Before you can find for plaintiff in any sum against the defendant, you must find, by a preponderance of evidence, that the defendant negligently placed, or caused to be placed, the wire in question in such manner as to injure the plaintiff, or cause 'the same to be done under his supervision and direction, and if you fail to find such facts, you will find for the defendant.”

This instruction submitted the issue squarely to the jury. It was made plain to them that, unless the appellant negligently placed or caused to be placed the wire in such manner as to injure the plaintiff, or unless he caused the same to be done under his supervision and direction, there was no liability. Other instructions were given confining liability to acts done by appellant himself or caused to be done by him. There was therefore no reversible error in giving instruction No. 2, and the evidence is sufficient to support the verdict, and the judgment will be affirmed.


author: Iíabt, C. J.

text:
    H. Rouw Company v. St. Louis-San Francisco Railway Company.
    Opinion delivered February 14, 1927.
    1. Carriers — burden op proof of negligence. — In a suit against a carrier for damage negligently caused to a shipment of strawberries, the shipper has the burden of proving the carrier’s negligence, but a prima facie case is established by evidence that the strawberries were delivered to the carrier in good condition and were delivered by the latter to the consignee in bad condition.
    2. Carriers — negligence in shipment — instruction.—In an action by a shipper against a railroad for damages to a shipment in transportation, an instruction which placed on the shipper the burden of proving the railroad’s failure to exercise ordinary care in keeping a car properly refrigerated, instead of requiring merely proof c? delivery to- the railroad in good condition and to the consignee in bad condition, held prejudicial error.
    3. Carriers — notice op damage to shipment — waiver.—In an action by a shipper against a carrier for damages to a shipment, where plaintiff’s attorney at the trial asked if the railroad raised “any question about us making demand for payment of this claim,” and defendant’s attorney answered in the negative, the defendant will be held to have waived compliance with a provision of the contract of shipment making notice of damages a condition precedent to recovery.
    Appeal from Crawford Circuit Court; James Cochran, Judge;
    reversed.
    STATEMENT OE FACTS.
    The H. Bouw Company brought this suit against the St. Louis-San Francisco Bailway Company to recover damages in the sum of $420 for damage to an interstate shipment of strawberries.

      According to the evidence for the plaintiff, on May 21,1924, it shipped a car of strawberries over the defendant’s line of railroad from. Lowell, Arkansas, to Minneapolis, Minnesota. On the bill of lading appears the following notation: “From the EL Rouw Company, the property described below in apparent good order, except as noted.” The berries were bought by the plaintiff, from growers in the neighborhood, for shipment. They were inspected before they were loaded in the car, and were good, firm berries, graded as No. 1. They were ripe, smooth and clean. The car of berries was received by the consignee at St. Paul, Minnesota, on May 26,1924. The car contained 420 crates, and there was considerable decay in them. Other evidence for the plaintiff tended to show that the berries, if properly iced and refrigerated, should have arrived in sound condition. It was also shown that the berries were damaged in the amount sued for.
    According to the evidence for the defendant, the car in which the berries were shipped was properly iced when the berries were loaded in the car, and the car was kept properly refrigerated until it reached its destination and was delivered to the consignee.
    There was a verdict and judgment for the defendant, and the plaintiff has duly prosecuted an appeal to this court.

      C. M. Wofford, for appellant.

      E. T. Miller and Warner, Ear din é Warner, for appellee.
   Iíabt, C. J.

It is earnestly insisted by the plaintiff that the court erred in giving instruction No. 7, which is as follows:

. “The court charges you that, before the plaintiff can recover herein, it must show by a preponderance of the testimony that the said berries were in good condition for shipment at the time they were delivered to the defendant, and that said defendant failed to exercise ordinary care to ice said car, while the same was in transit, at regular icing stations along the line of railroad over which said car was transported, and to keep the vents and drain-pipes open, and, further, that defendant negligently failed to furnish a car that would properly refrigerate, and negligently failed to transport said car from Lowell, Arkansas, to its destination within a reasonable time after said car was delivered to the defendant for shipment, and that said alleged negligent acts were the proximate cause of the damage, if any, to said berries; and, if plaintiff fails to establish these facts by a preponderance of the testimony, then it will be your duty to find for the defendant. ’ ’

The burden of establishing the carrier’s negligence was upon the plaintiff. When it introduced evidence to show the delivery of the shipment of berries to the carrier at Lowell, Arkansas, in good condition, and its delivery to the consignee at Minneapolis, Minnesota, in bad condition, such evidence made out a prima facie case of negligence. C. R. I. & P. Ry. Co. v. Walker, 147 Ark. 109, 227 S. W. 12; Mo. Pac. Rd. Co. v. Bell, 163 Ark. 284, 259 S. W. 745; Mo. Pac. Bd. Co. v. Wellborn & Walls, 170 Ark. 469,. 280 S. W. 18; and C. & O. B. Thompson Mfg. Co., 270 U. S. 416, 46 S. C. 318, 70 L. ed. 659. In the application of the principle of law, instruction No. 7 was wrong and necessarily prejudicial to the plaintiff, because it placed upon it the burden of showing that the defendant failed to exercise ordinary care in keeping- the car in which the berries were shipped properly refrigerated during transit.

Counsel for the defendant claim that the instruction was not erroneous because of a clause in the contract of shipment which provided that, if loss or damage to the berries was claimed to have occurred in transit by the negligence of the defendant, a notice to this effect should be required as a condition precedent to recovery, and that the plaintiff did not prove compliance with this provision of the contract. As bearing on this point, we quote from the record the following:

“Mr. Wofford: You don’t raise any question about us making demand for payment of this claim? Mr. Hardin: No sir. We don’t deny that.”

Mr. "Wofford was attorney for the plaintiff and Mr. Hardin for the defendant. This agreement was made at the close of the testimony, and it is fairly inferable that it was intended to cover the point in question. We think the agreement is broad enough to show that the defendant waived compliance with this provision of the contract. Having’ done so, no assignment of error can be based upon the failure to comply with the provision of the contract. It necessarily follows that the instruction as given is contrary to the principles of law decided in the cases above cited. Therefore the judgment must be reversed, for the error of the court in giving instruction No. 7, and the cause will be remanded for a new trial


author: Hart, C. J.,

text:
    United Order of Good Samaritans v. Thompson.
    Opinion delivered February 14, 1927.
    1. Insurance — fraternal insurance — constitution and by-laws. —The constitution and by-laws of a fraternal order become part of the contract insuring its members.
    2. Insurance — death of suspended member. — Under a benefit certificate providing that the insured should be automatically suspended for nonpayment of more than one month’s dues, and that a subsequent payment will not entitle the insured or the beneficiary to any benefits if sickness or death occur before the expiration of 30 days from reinstatement, held that, where 'a member suspended for nonpayment of two months’ dues died within 30 days after paying his back dues, his beneficiary was not entitled to recover on his benefit certificate.
    Appeal from Woodruff Circuit Court, Southern District; E. D. Robertson, Judge;
    reversed.
    STATEMENT OP PACTS.
    Sena Thompson sued the United Order of Good Samaritans to recover the sum of $300, alleged to he due her on a benefit certificate. The suit was defended on the ground that the policy was not in force at the time that the insured died.

      On the first day of January, 1922, the United Order of Good Samaritans, a fraternal insurance company incorporated under the laws of the State of Arkansas, issued to Henry Thompson a benefit certificate. The certificate reads, in part, as follows:
    “This is to certify that Henry Thompson, of Cotton Plant, is a member of Shady Grove Colony No. 226, subordinate to the supreme colony, Arkansas jurisdiction. In consideration of the issuance of this certificate and of an agreement to be governed by the constitution and by-laws of the supreme colony and to pay the local colony the requisite amounts to maintain membership in the society, the supreme colony, upon the satisfactory proof of the death of the above member, promises to pay to Sena Thompson, who bears the relationship of wife, the sum of three hundred dollars, or the sum of its value, in accordance with the general law.”
    The benefit certificate also contains a clause as follows:
    “The constitution, by-laws, medical certificate and all laws that may be hereafter adopted by the supreme colony shall be read together as a part of this contract. ’ ’
    The plaintiff also introduced in evidence by-laws of the subordinate lodge of which the insured was a member. Section 3 reads as follows: “Any brother or sister neglecting to pay all arrears to the funds of the colony for two months shall be automatically suspended, and, during such suspension, he (she) shall forfeit all claims on the order, and should he (she) desire to return, he (_she) shall pay all indebtedness and contributions that may have been assessed on each member in the interval between his (her) suspension and time of return, and shall stand over one month before he (she) shall be entitled to any benefits. ”
    According to the testimony of Ethel Peaden, she was financial secretary of the local lodge at the time the transaction in question took place.' It was the custom of the local lodge to collect dues at the meeting held on the first Tuesday night in each .month. Henry Thompson was not present in September, 1924, and did not pay his dues that night. He was present at the meeting on October 7, 1924, and at that time paid his dues for September and October. The dues were ninety cents per month, and he also paid a tax or penalty of fifty -cents. This made a total payment of $2.30. It was the duty of the local lodge to send the dues to the secretary of the supreme colony by the tenth of each month. The secretary of the local lodge sent them to the secretary of the supreme colony in time for them to have been received by the tenth instant. Henry Thompson died on'October 16,1924.
    The constitution and by-laws of the supreme colony were introduced in evidence by the defendant. Section 6 is as follows: “When the dues exceed one month’s dues,taxes and fines included, the insured shall be automatically suspended, and in case of sickness or death neither supreme, grand nor subordinate colonies shall be liable for any sum under the contract. Should the dues be paid, neither the insured nor the beneficiaries shall be entitled to any benefits if sickness or death occurs before the expiration of thirty (30) days; also, the subsequent payment of such arrears shall not entitle the insured, or 'beneficiary, to any benefits for sickness or death occurring during the period of such suspension. The insured will not be permitted to pay up while sick.”
    According to the secretary of the supreme colony, the dues sent in by the local lodge in payment of the arrears of Henry Thompson had. not been received by the 10th of October, 1924. After the death of Henry Thompson the amount of $2.30, paid by Mm to the secretary of the local lodge on October 7, 1924, was tendered to his widow, and she refused to accept the same.
    From the verdict and judgment against it the defendant has duly prosecuted an appeal to this court.

      Boss Mathis, for appellant.

      W. D. Trice and Ed Trice, for appellee.
   Hart, C. J.,

(after stating the facts). Counsel for the defendant relies for a reversal of the judgment on the ground that, under the by-laws of the supreme colony, the benefit certificate sued on had lapsed at the time of the death of Henry Thompson, and that there was no liability under the terms of the benefit certificate. In this contention we think counsel is correct. On the 9th day of August, 1924, the supreme colony adopted the rules and by-laws of which § 6, copied in our statement of facts, is a part. The benefit certificate sued on was issued by the supreme colony, and had lapsed for the nonpayment of the assessment for the month of September, 1924. It is true that the insured paid the assessment for September on October 7, 1924, and at the same time paid his assessment for the month of October. It will be noted, however, that, under the provisions of § 6, when a member is in .arrears for one month’s dues he is automatically suspended. Under the provisions of that section the member was entitled to pay up his arrears on the 7th day of October, 1924, and the record shows that he did so. The section further provides that, should the dues be paid, neither the insured nor the beneficiaries shall be entitled to any benefits if sickness or death occurs before the expiration of thirty days thereafter; and also the subsequent payment of such arrears shall not entitle the insured, or beneficiary, to any benefits for sickness or death occurring during the period of such suspension. The record shows that the plaintiff died on October 16, 1924, which was within the thirty-day period.

It is a settled rule of this court that the constitution and by-laws of a- fraternal order become a part of the contract insuring its members, and this is especially so where the certificate, as in the case at bar, provides that the constitution and by-laws of the order shall be a part of the contract of insurance. W. O. W. v. Hall, 104 Ark. 538, 148 S. W. 526; Supreme Royal Circle v. Morrison, 105 Ark. 140, 150 S. W. 561; and Mutual Aid Union v. Lovitt, 170 Ark. 745, 281 S. W. 354.

The benefit certificate in the case at bar especially provides that it is to be governed by the constitution and by-laws of the supreme colony. Again, it provides that the constitution and by-laws of the supreme colony shall be read together as a part of the contract. It is plain, when this is done, that the contract of insurance was not in force when the insured died. He had been automatically suspended for nonpayment of dues, and the thirty days during which, under the by-laws, he was not entitled to any benefit for sickness or death, had not expired when he died.

Counsel for the plaintiff, however, seeks to avoid the force of § 6 by invoking the provisions of § 3, which is also copied in our statement of facts. The record shows that § 3 was adopted as a by-law of the local lodge. As such, it could only govern the rules under which persons were entitled to membership in that lodge. The benefit certificate especially provides that the constitution and by-laws of the supreme colony shall be a part of the contract of insurance. As we have already seen, when the contract of insurance of the benefit certifcate and the constitution and by-laws of the supreme colony are read together, the insured was suspended at the time of his death and was not entitled to any benefit for sickness or death at that time. Besides, there is nothing- in the benefit certificate which makes the rules and by-laws of a subordinate lodge part of the contract of insurance. .

The result.of our views is that the circuit court should have directed a verdict for the defendant, and erred in not doing so. Therefore the judgment will be reversed, and, inasmuch as the plaintiff’s case has been fully developed, her cause of action will be dismissed here.