text:
    General Talking Pictures Corporation v. Shea.
    Opinion delivered May 9, 1932.

      George D. Hester, DeWitt Poe and Rose, Hemingway, Cantrell A Loughborough, for appellant.

      J. G. Williamson, Lamar Williamson and Adrian Williamson, for appellee.
   Humphreys, J.

This suit was brought by appellant agáinst appellee in the circuit court of Desha County to recover possession of two Phonofilm sound reproduction boxes, two preliminary amplifiers and fader control, one “B” amplifier and power supply unit, one set of loudspeakers, and. tubes necessary to install same in the theatre owned by appellee in MoGehee. The things named and sought to be recovered constituted the equipment of a DeForest Phonofilm, or talking-picture machine. It was alleged that appellant was a nonresident corporation, and that the equipment was of the value of $5,000; that appellant was entitled to the immediate possession thereof, and that appellee was unlawfully detaining same, to Appellant's damage in the sum of $1,000. It was further alleged that on the 4th day of February, 1929, appellant leased and delivered to appellee the said property, as an exhibitor, giving appellee a personal, nonexclusive; indivisible license to . use said equipment in his theatre in the city of McGehee, for which he agreed to pay the sum of $3,180, evidenced by twelve promissory notes in the sum of $265 each, the first note to become due on April 20, 1929, and one note each month thereafter until the .twelve notes were fully paid; that appellee has paid the first two notes, but has failed and refused to pay the notes maturing up to and including March 20; 1930; that •appellant has complied with all the terms of the license agreement, and that, by reason of said failure or breach of the contract, it was entitled to recover $2,650; together with the right to the immediate possession of the equipment aforesaid, and damages in the sum of $1,000. The written contract sued upon and notes evidencing the unpaid rentals were attached to the complaint as exhibits.

Appellee filed a special demurrer questioning’ appellant’s legal capacity to sue, and also an answer and Cross-complaint in which he admitted that appellant was a nonresident corporation, and alleged'that this suit is an action to enforce a contract covering intrastate business •done and to be done by appellant in the State of Arkansas, and is a contract the execution of which by appellant constitutes doing business in the State of Arkansas, and that appellant had not complied with the laws of the State of Arkansas authorizing it to do business in this State, and therefore could not maintain this action. In his cross-complaint, he alleged that there was an implied warranty by appellant that the machine.was fit for the purposes for which it was leased, and that this warranty had been broken; that appellant had contracted,to service the equipment and to send its agent, expert in the maintenance and repair thereof, to make all necessary repairs and replacements on same, which contract appellant had violated; and prayed judgment for $20,508.73 as actual damages sustained by appellee on account of the failure of the DeForest Phonofilm to function and the failure of appellant to service the equipment and to make necessary repairs and replacements on same.

Thereupon appellant amended its complaint by alleging that its place of business is in the city and 'State of New York; that a few days prior to February 4,1929', its representative called on appellee and interested him in obtaining from appellant, under its license agreement, the properties described in the original complaint, and that its representative forwarded to appellant, at its place of business in New York, appellee’s order for said equipment; that appellee prepared in New York the license agreement referred to in the original complaint, and forwarded it by United States mail to appellee at Mc-Gehee, Arkansas; that the same was duly acknowledged by appellee and by him forwarded by United States mail to the State of New York, where the contract was approved and acknowledged by appellant on the 13th day of February, 1929; that, pursuant to said agreement, the property described in the original complaint was shipped to appellee at McGeliee, f. o. b.., from New York, which transaction constituted interstate commerce, so that the statute of Arkansas relied upon by appellee can have no application; and that the transaction involved was not doing business in the State of Arkansas, but was an interstate commerce transaction.

Appellant filed an answer to the cross-complaint, denying the material allegations therein.

The trial court heard and sustained the demurrer to appellant’s complaint, and dismissed same over its objection-and exception, and proceeded with the trial of appellee’s cross-complaint and appellant’s answer thereto, over appellant’s objection and exception, which trial resulted in a verdict and consequent judgment in favor of appellee in the sum of $12,500, from which is this appeal.

Appellant contends that the court erred in sustaining the special demurrer to, and dismissing, its complaint, on the ground that it had not qualified to do business in' Arkansas. The effect of the court’s ruling was to invalidate the contract as being made in violation of § 1832 of Crawford & Moses’ Digest, which provides that a non-qualifying corporation cannot make any contract in this State which can be enforced by it in law or equity. Under the allegations of the complaint as amended, the transaction was interstate and not intrastate. The lease of the talking-picture machine in question was entered into between the parties in the State of New York on a rental basis covering a term of ten years with an undertaking on the part of appellant to ship and install same in appellee’s theatre in McGehee, Arkansas, and, after making a test of the proper operation thereof, to supply worn or broken parts and keep the machine in repair for proper functioning. The character of the transaction as to whether interstate or intrastate .is necessarily determined by the essence of the contract. The essence of the instant contract was the renting or leasing of a picture machine in New York for shipment to McGehee, Arkansas. The agreement was entered into in New York. It was clearly an agreement for an interstate shipment, and must be classed as interstate commerce, unless that portion of the contract providing for installation, inspection and repairs renders the transaction intrastate. The decided weight of authority is to the effect that an agreement to install machinery or other apparatus at the point of destination will not divest the sale of its character of interstate commerce. The authorities treat installation of the apparatus as a mere incident to the sale or transaction. Puffer Mfg. Co. v. Kelly, 198 Ala. 131, 73 So. 403; Milan Milling & Mfg. Co. v. Gorten, 93 Tenn. 590, 27 S. W. 971, 26 L. R. A. 135; S. F. Bowser & Co. v. Schwartz, 152 Wis. 408, 140 N. W. 51; Flint & Walling Mfg. Co. v. McDonald, 21 S. D. 526, 114 N. W. 684; DeWitt v. Berger Mfg. Co., (Tex. Civ. App.) 81 S. W. 334; Wolf Co. v. Kutch, 147 Wis. 209, 132 N. W. 981; A. Leschen & Sons Rope Co. v. Moser, (Tex. Civ. App.) 159 S. W. 1018; Vulcan Steam Shovel Co. v. Flanders, 105 Fed. 102; York Mfg. Co. v. Colley, 247 U. S. 21, 38 S. Ct. 430. In principle, we cannot see why an agreement for inspection and repairs of the machinery after being installed would take the contract of sale or lease out of the protection of the interstate commerce clause of the Federal Constitution.

We are also unable to draw any distinction between a lease and a sale rendering the first an intrastate and the second' an interstate transaction. This court held, in the case of Linton v. Erie Ozark Mining Company, 147 Ark. 331, 227 S. W. 411, that a foreign corporation owning a mine in the 'State was not doing business in the State in violation of said section of the statute where it had leased the mine.

Appellee argues, however, that, if the court erred in dismissing the complaint of appellant, it was not prejudicial error. The contention of appellee that the only issues in the case were covered by the cross-complaint and the answers thereto is not sound. The issue tendered by appellant’s complaint that appellee had breached the contract, and that by reason thereof it was entitled to the balance of the rentals and to $1,000 damages, was not included in the cross-complaint and answer thereto. Had appellant’s contract been treated as valid, it might have proved that same was breached by appellee, and recovered the balance of the rents and any damages on account of the breach, and have set off them against any damages appellee might have recovered.

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


source: Caselaw Access Project

author: McHaney, J.

license: Public Domain

text:
    Taylor v. O’Kane.
    Opinion delivered May 9, 1932.

      Rhyne & Shaw, for appellant.

      J. D. Benson, for appellee.
   McHaney, J.

Appellant, as State Bank Commissioner in .charge of the American Bank & Trust Company, insolvent, brought suit against appellee on two promissory notes, and recovered judgment on appellee’s confession in open court that he was justly so indebted. The judgment as entered recited “that execution herein be, and hereby is, stayed until January 1, 1932, when execution may issue for one-half of said judgment and execution stayed on the other half of said judgment until January 1, 1933.” Thereafter, on June 26, 1931, appellant caused execution to issue on said judgment, but on August 13,1931, the court ordered same returned as having been improvidently issued. On August 21, 1931, appellant filed motion to set aside that part of said judgment staying execution until January 1, 1932, and 1933, on the ground that same was and is void as being beyond the power of the court, and contrary to law. Appellee demurred to said motion, which the court sustained, and denied the motion to set aside that portion of said judgment, and this appeal followed.

It does not appear that appellant consented that execution be stayed as per the court’s order, although he was represented by counsel at tbe time judgment was taken, and he made no objection to it on tbis or any other account. But we think this makes no difference if that portion of tbe judgment is void. By § 4258, Crawford & Moses’ Digest: “No execution shall issue on any judgment or decree, unless ordered by tbe court, until after tbe expiration of ten days from the rendition thereof.” It is therefore in tbe discretion of the court to order execution to issue within ten days from tbe rendition of tbe judgment, but it does not follow that be has any discretion to stay execution after tbe lapse of ten days. Tbe statute stays execution for ten days, but tbe court is given power to order same sooner — not to stay it at all. Another statute, § 427G, provides that “No execution shall be a lien on tbe property in any goods or chattels, or the rights or shares in any stock, or on any real estate, to which tbe lien of tbe judgment, order or decree does not extend or has been determined, but from tbe time such writ shall be delivered to the officer in tbe proper county to be executed.” But by still another section, § 6,299, a judgment of tbe Supreme, chancery or circuit courts of this State, or tbe district court of tbe United States in tbis State, becomes a lien on real estate owned by tbe defendant in tbe county where rendered from the date of the judgment. If tbe court could stay or postpone execution, as, for example, .in tbis case, the judgment debtor could make way with all chattels owned by him and any real estate outside the county, free from tbe judgment lien, because no execution could be issued and come to tbe officer’s bands until tbe period of tbe stay bad elapsed. Courts have not been given such power. One of their functions is to aid in tbe collections of just debts by orderly process of law, and not to delay same.

Our statutes provide a method by which tbe court may stay, quash or vacate tbe writ of execution, §§ 4291-4295, Crawford & Moses’ Digest, or tbe clerk may issue tbe stay if no writ is in the bands of tbe officer, § 4294. Tbe method provided in both instances involves the giving of a bond with good security by tbe judgment debtor, and therefore preserves the rights of the judgment creditor. This method of staying executions on judgments appears to be exclusive. Having so provided, all other ways are excluded, including the fiat of the court. In Federal Land Bank v. Blackshear, 183 Ark. 648, 38 S. W. (2d) 30, we held that a court of chancery had no power to postpone sale of property under decree of foreclosure beyond a reasonable time — four to six months at the outside.

Appellee seeks to sustain the judgment on the ground that appellant should have appealed from the original judgment, instead of from the refusal of the court to modify same on motion. We do not think so. That part of the judgment staying execution beyond the time fixed by statute is void, because the . court had no power or authority to make it. Being void, it could be attacked collaterally by motion or otherwise, and the court, under its continuing power to- amend its records to speak the truth, may, after the lapse of the term, vacate a void judgment, or vacate a void portion of a judgment otherwise valid. State v. West, 160 Ark. 413, 254 S. W. 828.

The judgment is accordingly reversed, and remanded for further proceedings in accordance with this opinion.


text:
    Hudson v. Allen.
    Opinion delivered May 9, 1932.

      Brewer <& Gracraft, for appellant.

      W. G. Dinning, for appellee.
   McHaney, J.

Appellant and appellee became partners in the general insurance business at Helena, Arkansas, under the name of the E. M. Allen Company, in May, 1919, and continued as such until July, 1927, when appellant purchased appellee’s interest. On July 12,1927, they entered into a preliminary sale and purchase agreement in which it was stipulated that it was to be replaced with a formal contract of sale signed by both partners. Appellant owned a 45 per cent, interest in the partnership, and appellee, 55 per cent. The purchase price of appellee’s interest was $13,500, of which $6,000 was paid in cash and $7,750 was evidenced by a promissory note due October 1, 1928, with 6 per cent, interest. The purchase price was fully paid, in accordance to the terms of the contract, and on October 17, 1928, 17 days after the payment of the $7,750 note representing the balance of the purchase price, appellee filed this suit against appellant to recover 55 per cent, of renewal commissions on premiums of life insurance which he alleged appellant had collected during the period of the partnership, and for which he had not accounted, which amount was alleged to be $4,800’. Prior to the formation of the partnership appellant represented the Mutual Life Insurance Company of New York as its agent, and under his contract with it he was entitled to receive certain commissions on renewal premiums on policies written by his agency. On the formation of the partnership in 1919, it was agreed that all commissions on life insurance business, whether renewal or original commissions on policies thereafter to be written, should accrue to the partnership, but renewals on policies previously written Avere not to become an asset of the partnership. Appellant defended on two grounds: (1), that he had accounted to the partnership for all life insurance commissions on premiums, both original and renewals, collected from life insurance written during the life of the partnership; and (2), that, under his contract with appellee by which he purchased appellee’s interest, he had acquired all the assets of the partnership of every kind and description, except the accounts and notes receivable that were due on or before July 1, 1927, and that the purchase price was not based on inventory, but was a lump sum offer including any differences that had arisen between them regarding life insurance commissions, and that both parties fully understood that the purchase price paid was a full and final settlement covering all disputes between them.

The coürt found that appellant had failed to account for certain commissions and entered a judgment against appellant fdr $2,289.11, being 55 per cent, of the amount for which tíre court found appellant had not accounted. Wherefore this appeal.

We do hot discuss the issue as to whether appellant had accounted to the partnership for the commissions on life insurance premiums, as, in view of the decision we make on the other defense of appellant, it becomes unnecessary to do so. The formal contract of sale between them was dated October 26, 1927. This was the agreement contemplated by the preliminary agreement of July 12, 1927. In the formal contract it is provided: “It is specifically hnderstood and agreed that Allen is selling all of his interest in the assets of the E. M. Allen Company of every Hnd and character, except the accounts and notes receivable that were due on or before July 1, 1927, and also his good will for a period of five years from the date of the signing of this instrument, and also agrees not to enter into the insurance business in Phillips County, Arkansas, indirectly or directly, for a period of five years.”

The undisputed evidence shows that no inventory of the assets was made,.and that the purchase of appellee’s interest by appellant was made on a lump sum basis. The undisputed evidence further shows that, at the time of the execution of said formal contract, and for some time prior thereto, he was contending that appellant had not properly accounted for renewal commissions on life insurance business. Several letters passed between them prior to the execution of the contract of October 26,1927, and in one of them, dated September 25, 1927, written by appellee from Chicago, Illinois, to appellant’s attorney in Helena, he used this language: “Furthermore, if we are to become technical, then I must insist upon adding to the agreement my proportion of the renewal commissions on life insurance business for the years 1919 to 1926, inclusive, which commissions have never been credited, although I frequently called the matter to Mr. Hudson’s attention. I am not willing to believe that he intended to defraud me in connection with these commissions, but certain it is they have not been credited to my account, although statements sent me indicate that settlements were made regularly during that time. Reference to your copy of partnership agreement will convince you regarding these commissions.”

We are therefore of the opinion that the final contract of sale of October '26, 1927, was a full and final settlement between the parties, including the claim now In question, and that appellee is in no position now to maintain such action. He signed the contract which specifically stated that he was selling “all of his interest in the assets of the E. M. Allen Company of every kind and character, except the accounts and notes receivable, ’ ’ etc. The commissions on life insurance business became an asset of the partnership, whether accounted for or not. He sold said assets, believing at the time that appellant had not accounted for same, and must be held to have included this asset in the purchase price received by him. Betts v. Brundidge, 182 Ark. 830, 32 S. W. (2d) 818; People’s Savings Bank v. Howson, 171 Ark. 680, 286 S. W. 865. In this respect this case is unlike that of Wright v. Lake, 178 Ark. 1184, 13 S. W. (2d) 826, where one partner sued for profits fraudulently concealed and after-wards discovered. Other courts have had occasion to construe this same contract between the same parties. See Allen v. Hudson, 35 Fed. (2d) 330. This claim being an asset of the partnership, one which appellee thought he knew, at the time of signing the contract, had been concealed, if he desired to take action thereon, he should have reserved it in the contract, as he did the accounts and notes receivable. This not having been done, it must be held to have been included in the broad language of the contract and passed to appellant as the purchaser.

The decree of the chancery court is therefore reversed, and the cause dismissed.


author: . Butler, J.

text:
    Bank of Maynard v. Carroll.
    Opinion delivered May 9, 1932.

      George M. Booth, for appellant.

      Walter L. Pope and W. J. Schoonover, for appellee.
   . Butler, J.

Suit was brought by the appellant bank against the appellees, John L. Carroll, Ben Johnson and A. J. Lewis, to recover on a promissory note executed by them March 19, 1927, and due on November 19 of that year. The appellees, Ben Johnson and A. J. Lewis, defended on the ground that they were sureties, and their liability on the note sued on was discharged because of the acceptance by the appellant of a new note executed on December -6,1928, signed by John L. Carroll and M. L. Carroll, which was secured by a mortgage executed to the bank by the said Carrolls, and that this note was accepted by the bank in full and complete satisfaction of the note upon which they were the signers.

The testimony taken was directed to this issue, and, upon a hearing, the court found that the plaintiff, Bank of Maynard, had accepted in renewal of the obligation evidenced by the note of March 19, 1927, a note for a similar amount signed by John L. Carroll and M. L. Carroll with knowledge on the part of the bank that the said defendants, Lewis and Johnson, would not sign a renewal, and that, in order to secure the payment of the said note, the bank accepted a real estate mortgage executed by them, and declared that “it is the further finding of the court that the taking and accepting of the said renewal note and mortgage was an alteration of the original contract and obligation, and, further, that the transaction amounted to an accord and satisfaction, and that the note for $800, dated March 19, 1927, should be canceled and surrendered to the defendant, Lewis and Johnson.” The court thereupon rendered a decree to that effect, from which the plaintiff bank has prosecuted this appeal.

It was in testimony that, after the note of March 19 became due, Johnson and Lewis refused to sign a renewal note and notified the bank of the refusal of their signatures. Ben Johnson testified that he notified the bank to proceed to collect the note or to take additional security; • that he thought the note had been settled, because, as he stated, “I thought I had properly and legally notified the bank to either collect the money or renew the note in some other form.”

It is not contended, however, by counsel for the appellees that this notification complied with the require- • ments of the statute (§ 8287, Crawford & Moses’ Digest), or that it effected a discharge of Lewis and Johnson from liability, as indeed it did not. Their contention now is the same as that made in the answer, i. e., that the testimony supports the chancellor in his finding that the taking and acceptance of the renewal- note and mortgage effected the discharge of appellees from their obligation on the note sued on, and it is their contention here that the decree and finding of the court must be affirmed as not against the preponderance of the testimony. Counsel agree that the applicable law is stated in 21 R. C. L. 1053, and in this we think they are correct. That statement is as follows: “It is well settled that the acceptance of a security of a higher nature in lieu of, or satisfaction of, one of an inferior nature operates as an extinguishment of the latter; but, where such security is accepted merely as additional or collateral security of a pre-existing- debt, it is clear that the doctrine of extinguishment or merger does not apply. Therefore, taking a collateral, security of a higher nature, whether from the principal or a stranger, does not preclude the creditor from suing on the first contract, and consequently does not discharge the sureties on it. A mortgage is not a satisfaction but a security for the payment of a debt. It does not merge or extinguish the original debt, but is merely collateral security. Hence the giving of a mortgage or deed of trust of property to secure a pre-existing debt will not of itself, in the absence of an agreement to that effect, extend the time or discharge the sureties of the debtors.”

We are of the opinion, however, that the evidence fails to establish that the acceptance of the note of December 6, 1928, and the mortgage securing it, was in lieu of or in satisfaction of the note signed by the appellee. Buel Loftis was the cashier of the bank at the time of - the giving of his testimony, and had been working in the bank since before March 19, 1927. On that date 'Ben Choate was the cashier and remained such.,until-February, 1930. Both of these testified that- they were familiar with the transactions out of which this litigation arose, and stated that at no time did the bank enter into an agreement with Johnson, Lems or Carroll, that the note of December 6, 1928, and the mortgage were to be accepted in lieu of the note of March 19, 1927; that, when that note fell due, negotiations for its renewal were begun, and the bank was informed that Johnson and Lewis would not sign a renewal note, and, when this was ascertained, the renewal note which Carroll and his wife had signed and the mortgage they had given were pinned to the original note, and the payments of interest subsequently made credited on that note, and the mortgage was not regarded as having any value; it was a second mortgage, and the lands already mortgaged to the New England Securities Company for their value; that the mortgage was not foreclosed because the bank realized that nothing could be made out of it; that no notice had been given the bank by Johnson and Lewis to sue on the note of March 19, 1927, but indulgence was given Carroll because he was a good man, and they were not advised that Johnson and Lewis did not acquiesce in this indulgence.

The appellees, Johnson and Lewis and John L. Carroll, all testified in the case, and all stated that it was their “understanding” that the renewal note was given to, and accepted by, the bank in satisfaction of the note of March 19, 1927, but, when their testimony is analyzed, it does not dispute the testimony of Loftis and Choate to the effect that there was no agreement made by the bank that this note should be so accepted. John L. Carroll was the individual who gave Johnson the information in December, 1928, that the note which he and Lewis were on had been settled. 'Carroll stated that it was his understanding that the old note was to he canceled; that the mortgage he gave was his voluntary act without request having been made by the bank that he execute it, and he would not have given the mortgage if he had not thought the note first given was to be satisfied and canceled. In answer to the question, however, as to whether or not the bank understood at the time the mortgage was executed that it would be security for the' old debt, additional to the names of Johnson and Lewis, he stated: “I don’t know what they thought about it, but it was my understanding that the old note would be released when I executed the mortgage.” He did not testify as to how he reached this understanding, but did not dispute the testimony of Loftis and Choate to the effect that the bank had not agreed to the cancellation of the note. • ■

Johnson testified that he refused to sign the renewal note, and claimed that after December, 1928, he did not know that the bank was still looking to him for payment of the old note until June 12, 1930, and that he thought the note had been settled “because I thought I had properly and legally notified the bank to either collect the money or to renew the note in some other form, and I had not heard of the note for so long that I thought it was all settled. ’ ’ When asked if he knew whether the note of December 6, 1928, and the mortgage given to secure the same were taken by the bank in satisfaction of the old note, he said: “Well, I thought it was because it was made a matter of record over a year before I received this notice in June from the bank that the note was not paid”; and in answer to a question as to whether or not any one ever told him that the new note and mortgage were taken in complete satisfaction of the old note, he stated: “Yes, John L. Carroll told me it was.” When the .specific question, if the bank ever told him that it was taking the note of December, 1928, and mortgage from Carroll in satisfaction of the note signed by him and Lewis, he answered that he construed a letter received from the bank dated March 23, 1928 (which he said was evidently misdated and should have been March 23,1929), which he exhibited, as to mean ‘ ‘.they were not holding me any longer.” He also exhibited another letter from the bank of April 27, 1928. Neither of these letters was answered, and he stated that these were the last communications from the bank until the receipt of a letter from it in June, 1930, advising that the bank still held the note signed by him and Lewis and could not carry it any longer, and asking if he would like to take up the note or if suit should be filed. He further testified that on receiving this letter he and Lewis went to the bank and found the note he and Lewis had signed, together with the new note given by the Carrolls and the original mortgage they had given dated February 14, 19291, and showing that it had been filed for record March 22 of that year; that they demanded the original note, which was refused.

The interpretation which Johnson testified he gave to the letter of March 23, 1928, does not appear to us to be justified. That letter and the one written April 27, 1928, which merely called attention to the letter of March '23, preceding, and asked for an answer, were all the letters Johnson stated he received. The letter of March 23, 1928, is as follows:

“Dear (Sir: Sometime during the first part of December I turned over to John L. Carroll a new note in the amount of $800' for execution, and he stated to me at that time that you said you had rather not sign any new paper. I then told him that the board of directors insisted on my getting the paper renewed up so it would not be necessary for the bank to carry it as past-due paper.

“I spoke to Herbert about it the other day, and asked him whether John had gotten the paper, fixed up, and left it with him to deliver to the bank, and he told me that you still had refused to sign the new note. I will appreciate it if you will write me the exact status of the matter so I may talk with our board about it as they are very insistent in the matter of my getting the paper renewed, as the banking department, or rather the examiner, criticize us severely for allowing paper to run past due in this manner. I shall appreciate a line from you about it. ’ ’

We can see nothing in this letter to indicate any. intention on the part of the bank to accept the new note in lieu of the old, or that the signers of the original note should be released. On the other hand, to our minds it indicates a contrary intention. A. J. Lewis appears to have had but little personal knowledge of the transactions leading up to this litigation prior to his visit to the bank in company with Johnson in July, 1930. The effect of his testimony is that he had been informed by Carroll that the note of March 19, 1927, had been settled, and he was at the time of his testimony denying liability because the Bank of Maynard had taken the mortgage from Carroll, and because of the length of time that had elapsed before he was notified by the bank that the note had not been paid. The inference to be gathered from the testimony of Jolmsofi' and Lewis is that, when they learned-that a mortgage had been- given to secure the indebtedness, they assumed that this was a discharge of their liability. In order to escape liability, it was necessary for Johnson and Lewis to show by a preponderance of the evidence that the note and mortgage given to secure it were in lieu of the first note and accepted as such by the bank. This, we think, they have failed to do. The decree of the chancellor is- against the preponderance of the testimony, and it is therefore reversed, and the cause remanded for further proceedings, in conformity with this opinion, and not inconsistent with the principles of equity.


author: Butler, J.

text:
    Bennett v. Taylor.
    Opinion delivered May 9, 1932.
    . George M. Bennett and Evans & Evans, for appellant.

      Rhyne é Shaw and Sam Rorex, for appellee.
   Butler, J.

The American Bank & Trust Company, a banking corporation doing business in the town of Palis, entered into a written lease contract by which it leased a certain building in said town for a term of ten years, the lessor to make certain improvements and the lessee to pay a yearly rental of $1,620 at $135 per month. The improvements were made according to the agreement, and the bank entered on the property and occupied the same, paying the rental as stipulated for about five years,' when it became insolvent and was taken over by the State Bank Commissioner for liquidation. For about a year the deputy bank commissioner in charge of the liquidation occupied the premises and paid the rent at the rate of $135 per month, until the first day of May, 1931, at which time, acting under instructions from the banking department, he notified the appellant, the executrix of the lessor (then deceased) of his intention to abandon the premises unless she would accept a rental of $35 per month. Upon her refusal to do this, he notified her of his intention to vacate, and advertised for sale the bank fixtures which had been installed in the building by the bank. The appellant thereupon brought this suit, denying the right of the Bank Commissioner to cancel the lease, and prayed for an order restraining the sale of the fixtures until the full rental for the ten-year period had been paid, and claimed a vault door as a fixture to the freehold.

A temporary restraining order was granted until the cause could be heard, and upon a hearing thereof the court found (1) that the appellant had no lien upon the fixtures; (2) that the appellee, if he found the lease burdensome to the bankrupt estate, had the right, within a reasonable time, to terminate the same; (3) that the appellant had not been damaged by appellee in vacating the premises; (4) that she was entitled to the rent at the contract price for the month of May, 1931; (5) that the appellant was entitled to a reasonable rent since June 1, 1931, upon which proof might be taken; and (6) that the vault door affixed by the appellee is personalty like other bank fixtures, and may be removed.

This appeal is from a decree setting aside and vacating the temporary restraining order and dismissing the petition.

The appellant states that “the only real question in the case is whether or not, under the allegation of the petition and under the proof, the petitioner has a lien for rent upon the property described. * * * It is our contention that Dr. Bennett, in his lifetime, had a lien upon these fixtures on the demised premises for the accruing rent on the premises, and that his executrix, the petitioner herein, has a lien upon the fixtures for the rent as it accrues, and that she is entitled to have these bank fixtures condemned and sold to pay the unpaid rent upon the premises, the rent that has accrued and the rent as it yet accrues, but certainly for the rent that has accrued. ’ ’ To sustain this contention, learned counsel calls attention to the provision in § 719 of Crawford & Moses’ Digest, to the effect that the- title of the State Bank Commissioner to, and his right of, possession of insolvent bank assets shall be subject to any and all equities in favor of third persons which have arisen or have been obtained as against said property or assets prior to the taking charge thereof by the said commissioner, and to the holding in the case of Funk v. Young, 138 Ark. 38, 210 S. W. 143, 5 A. L. R. 79, that the Bank Commissioner is not an innocent purchaser in taking possession of the assets of an insolvent bank, but takes them subject to the equities against the bank. He also relies on the landlord’s prerogative of distraint by which at common law the landlord may seize all chattels found on the demised premises for rent in arrears. It is insisted that this common-law rule is in force in this State by reason of the provisions of §1432 of Crawford & Moses’ Digest, by which the common law, so far as the same is applicable and of a general nature, shall be the rule of decision in this State unless repealed by the General Assembly and not inconsistent with the Constitution of this State or of the United States.

Learned counsel for the appellant concede this rule has never been invoked or applied in this State, but that, not having been changed by statute, it still exists, for the reason that it is not at all incompatible with our institution. We cannot assent to this conclusion for the very reason that, throughout nearly a hundred years of the history of this State, no court or Legislature has ever recognized the harsh and oppressive remedies of the landlord’s common-law right of- distraint, and, in the absence of a statutory direction, we are unwilling now to revive and apply that doctrine. It is a matter of common knowledge that the tenant class of this State are among the poorest and most helpless of our citizens, and, in the absence of a statute or contract authorizing it, we decline to say that a landlord may seize and dispose of the poor belongings of his tenant for rent in arrears, which, in many cases, are all they have. Indeed, we are of the opinion that the only common-law lien that has been recognized by the statutes or courts of this State is that which was recognized at common law as artisans’ lien, by which a chattel which had been improved or repaired was impressed with a lien in favor of the workman so long as it remained in his possession. Gardner v. First National Bank, 122 Ark. 469, 184 S. W. 51.

Li the early case of Barnett v. Mason, 7 Ark. 253, this court declared that even that lien would be lost where the chattel was once surrendered and could not be revived by any subsequently acquired possession. In the case of Alexander v. Pardue, 30 Ark. 359, where a landlord sought to have a lien declared on the corn and cotton raised by his tenant on the demised promises for food and other supplies advanced by the landlord to enable the tenant to make the crop, the court denied the landlord’s right to the remedy invoked and defined a lien at common law to be “a right in one man to retain that which is in his possession belonging to another until certain demands of him (the person in possession) are satisfied.” Continuing, the court said: “It does not appear that the plaintiff was in possession of the cotton and corn. No presumption of such possession can arise from the fact that the cotton and corn were raised on land belonging to him, for the defendant can be regarded in no other light than as a tenant, and his possession is exclusive of the plaintiff’s.”

To the same effect are the decisions of the court in Hamlett v. Tallman, 30 Ark. 509; Roberts v. Jacks, 31 Ark. 361; Burrow v. Fowler, 68 Ark. 178, 56 S. W. 1061.

Most of the cases in which the question of a landlord’s lien has arisen are those dealing with the right of the landlord to a lien on the products of the soil. But we can see no difference in principle between such chattels and the cook-stove and sewing machine of the housewife or the furniture in a bank. The court, in a number of cases, has indicated that landlord’s liens in this State arise only by operation of statute, and thus inferentially deny the common-law lien to be fixed by distraint.

In the case of Smith v. Meyer, 25 Ark. 609, it was held that the landlord’s lien in this State is a statutory lien; and in Rogers v. Cooper, 33 Ark. 406, 409, and Walters v. Meyer, 39 Ark. 560-567, it was held that the landlord’s lien is a creation of statute. Where a rent contract provides for a lien on certain chattels in default of the payment of the rent, it has been construed by this court in effect to be a chattel mortgage.

In the case of Hill v. Morris, 124 Ark. 132, 186 S. W. 609, the court, in denying the right of the landlord to a lien on the property of the tenant which he had put into the leased building, and which he held as assignee of the original lessee, held that, although the original contract of lease contained a stipulation which might be treated as an equitable mortgage binding the property of the lessees in the building for the payment of the rent, this could not bind the property of the assignee with the lien for the payment of the rent to the lessor as none was “allowed him by statute or under common law.” (Referring to §§ 4 and 5, page 136.) See also Grayson v. Mixon, 176 Ark. 1123, 5 S. W. (2d) 312, where it was held that a landlord had no lien for rent due on the furniture of a tenant in a hotel.

The trend of all the cases above cited justifies the conclusion we have reached that the landlord has no lien either by statute or under the common law, as recognized and applied in this State, on furniture or other property of the tenant in the demised premises for arrears of rent.

The vault door was installed hy the bank, and was necessary for the conduct of its business, and could be removed without damage to the building. There is no showing made that it was the intention that the vault door should remain in the building and become the property of the landlord at the expiration of the lease, and the modern trend of decisions is in favor of the removal of articles affixed to the free-hold by the tenant unless, from their very nature, it appears that the fixtures were intended to be permanent, or that such was the intention of the parties. Choate v. Kimball, 56 Ark. 55, 19 S. W. 108; Ark. Cold Storage Co. v. Fulbright, 171 Ark. 552, 285 S. W. 12; Barnes v. Jeffers, 173 Ark. 100, 291 S. W. 990; Rogers v. Vanderbilt, 175 Ark. 977, 1 S. W. (2d) 71; Bank of Mulberry v. Hawkins, 178 Ark. 504, 10 S. W. (2d) 898; Alwes v. Richheimer, ante p. 535. These authorities sustain the chancellor in his finding that the vault door was a trade fixture and removable.

Since we have disposed of the question as to what, by her, is regarded as the only real issue in the case, and adverse to her contention, it will be unnecessary to discuss the other questions raised by counsel for the appellant.

Affirmed.


author: Hart, C. J.,

text:
    Carle v. Avery Power Machinery Company.
    No. 4-2465.
    Opinion delivered May 16, 1932.

      Leach & Elms, for appellant.

      John W. Moncrief and A. O. Meehan, for appellee.
   Hart, C. J.,

(after stating the facts). The warranty clause relied upon by the defendant is in writing and is set out in our statement of facts. It provides that, if within six days from the first starting of the machine, the purchaser is not satisfied that the machine can be made to operate and do work as well as any other machine of the same size, the purchaser shall notify the company by registered mail or telegram addressed to the Avery Power Manufacturing 'Company of Peoria, Illinois, clearly specifying his complaint, and the purchaser shall forthwith discontinue the use thereof pending the remedying of such claimed defect.

Thus, it will be seen that the warranty was conditioned upon giving the notice of the defect within a specified length of time. The agreement of warranty, being in writing, is controlled by the language used. It has been held by this court that contracts of this sort are lawful and must be enforced as they have been made by the parties, and the test must be made within the time specified, and the notice given according* to the terms of the agreement. The condition that notice of defects must be given within a specified time is imperative; and if the buyer does not show a compliance therewith, he cannot enforce it against the seller. Where a purchaser of machinery has agreed that, if it proves defective, he will give notice thereof to the seller within a specified time, he will not be entitled to resist payment of the purchase money on account of imperfections of it if he did not give notice. Southern Engine & Boiler Works v. Globe Cooperage & Lumber Company, 98 Ark. 482, 136 S. W. 928; Heer Engine Company v. Papan, 142 Ark. 171, 218 S. W. 202; and Thomas v. Schaad, 170 Ark. 797, 281 S. W. 10.

It is claimed by the ■ defendant, however, that the agreement to give them, notice was waived by the seller. Of course, it was within the power of the seller, under a contract containing* warranties and conditions, to waive any or all the conditions, including* a requirement that the purchaser give notice of defects within a stipulated time. We do not think, however, that this principle of law has any application under the facts of • this case. The only thing to base it upon is the testimony of the defendant to the effect that Hunt, the salesman, came ‘out to his place where the machinery was being* operated day after day in an effort to adjust the machine and see that it would work properly. Hunt finally told him that he did not know what to do, and it then became the duty of the defendant to give the notice required by the contract of warranty. He knew that Hunt was only endeavoring to see that the machine was installed properly, and there is nothing in the conduct of the parties to show that Hunt was endeavoring to. remedy any defect in the machine or to do anything* else hut to properly install it. The defendant continued to use the machine during the remainder of the fall of 1929 and never even made any demand upon the dealer at Stuttgart through whom he purchased it to remedy the defect. He did not attempt to give notice at the factory as required by the contract of warranty. He continued to use the machine during the season of 1930. Under these circumstances, we do not think that there was any waiver of notice on the part of the seller, and the contract between the parties must be enforced according to its terms.

The parties were competent to contract and must be bound by the language used by them. There is nothing to show that the seller had any knowledge that Hunt was trying to remedy any defect in the machinery or that lie was attempting to waive any of the conditions of the contract. It only appears that he was trying to properly install the machinery and get it ready to operate. It then became the duty of the defendant to give the notice as required by the contract, or he must be deemed to have accepted the machine.

Therefore we a.re of the opinion that the decree of the chancery court was correct, and it will be affirmed.


author: Kirby, J.

text:
    Ogletree v. Welker.
    Opinion delivered May 23, 1932.

      William Gibson, George M. Chapline and Joseph Morrison, for appellant.

      George C. Lewis, for appellee.
   Kirby, J.

(on rehearing). This suit was brought by appellant in the Arkansas Circuit Court for the possession of certain property. There was a judgment for the appellees, and an appeal was prosecuted to this court. This court, on April 18, 1932, reversed the cause and remanded with directions.

Our attention is now called to the fact that we overlooked the failure of the appellant to file a bill of exceptions within the time allowed. Judgment was rendered in the circuit court on August 4, 1931, and on the 5th day of August, 1931, motion for new trial was filed. The court on September 1, 1931, overruled the motion for a new trial, and granted an appeal to the Supreme Court, hut did not give any time for .filing hill of exceptions.

The clerk’s certificate shows the hill of exceptions was filed in the clerk’s office November 24, 1931. Since the record does not show that any time was given in which to file a bill of exceptions, and it was not filed until November 24, 1931, court having adjourned on November 16, 1931, the bill of exceptions was not filed during the term of court, and cannot he considered. Petroleum Products Ass’n v. First Nat. Bank, 165 Ark. 267, 263 S. W. 965; Engles v. Oklahoma Gas & Oil Co., 163 Ark. 270, 259 S. W. 749.

Since the hill of exceptions cannot he considered and no error appears on the face of the record, it follows that, the judgment of April 18, 1932 is erroneous. The petition for rehearing is granted, the judgment heretofore entered in the case is set aside, and the judgment of the Arkansas Circuit Court is affirmed.


author: Mehaeey, J.

text:
    State v. Hurlock.
    Opinion delivered May 9, 1932.

      Sal L. Norwood, Attorney General, and Robert F. Smith, Assistant, for appellant.

      A. L. Smith, for appellee.
   Mehaeey, J.

Jeff Duty, deputy prosecuting attorney for Benton County, Arkansas, on May 22, 1931, filed ‘with the justice of the peace, F. P. Galbraith, the following information, charging Butler Hurlock, M. C. Morris and John Elrod with misdemeanor: “The said Butler Hurlock, M. C. Morris and John Elrod, in the said county of Benton, in the State of Arkansas, on or about the 26th day of April, 1931, did unlawfully and wilfully fail and refuse to secure a regular valid license issued by the Arkansas Real Estate Commission authorizing the above-named parties to act as a real estate broker or brokers or real estate salesman or salesmen in the State of Arkansas, and the above-named parties assumed, advertised and did act as such real estate brokers or salesmen without having secured such valid license from the Arkansas Real Estate Commission.”

On July 10 the case ag'ainst appellees was tried, and the justice of the peace held the law invalid and unconstitutional and discharged the defendants. The deputy prosecuting attorney prayed an appeal to the circuit court, and the appellee, Butler Hurlock, filed a motion in the circuit court to dismiss the action, on the ground that act 148 of the Acts of 1929, as amended by act 142 of the Acts of 1931, is unconstitutional and void for the following reasons:

“(1) Because the acts with which defendant is charged with committing do not constitute a public offense, and

“(2) Because said act is against public policy and void, and

“(3) Because by said act it is attempted to confer the power upon the State of Arkansas, or upon any member of the Real Estate Commission, its secretary, or any citizen of the county holding a license, as authorized by said act, in the name of the State of Arkansas, to appeal from an adverse decision in a justice court. ’ ’

The circuit court dismissed the cause on the ground that the act under which appellees were prosecuted was unconstitutional and void, because said act conferred the right of individuals to appeal in behalf of the State.

Appellee’s motion was sustained, and the cause dismissed because the law is unconstitutional and void, and the State prayed an appeal, which was by the court granted.

Act 148 of the Acts of 1929 and act 142 of 1931 are found in Castle’s Supplement, 1931, §§ 838a to 8381.

Appellee first contends that the acts with which defendant is charged with committing do not constitute a public offense. “A public offense is any act or omission for which the law has prescribed a punishment. ’ ’ Crawford & Moses’ Digest, § 2294.

The act provides that a person violating it shall, upon conviction, be deemed guilty of a misdemeanor, and shall be punished by a fine of not less than $25 and not more than $500, or by imprisonment for a term not to exceed six months, or by both such fine and imprisonment in the discretion of the court.

The statute, after defining felony, provides all other public offenses are misdemeanors. Crawford & Moses’ Digest, § 2297.

It therefore clearly appears that the acts charged constitute a public offense, as defined by the statute.

The presumption is that an act passed by the Legislature is constitutional, and it must be so held by the courts unless it appears to be in conflict with some constitutional provision.

A statute will not be held to be invalid unless it is either expressly or impliedly forbidden by the Constitution. Bush v. Martineau, 174 Ark. 314, 295 S. W. 9; Ark. Rd. Commission v. Casteter, 180 Ark. 770, 22 S. W. (2d) 993; Dabbs v. State, 39 Ark. 353; Moore v. Alexander, 85 Ark. 171, 107 S. W. 395; Webb v. State, 176 Ark. 722, 3 S. W. (2d) 1000; Hargraves v. Solomon, 178 Ark. 11, 9 S. W. (2d) 797.

In discussing the police power of the State and the right of the Legislature to enact laws thereunder, this court said: “In the exercise of this "power, the States have always regulated certain kinds of business, and absolutely prohibited others. The power to prohibit any business which is dangerous to public safety, health, or morals, has never been denied, and the power to regulate any business in which the public is interested is also sustained.” Williams v. State, 85 Ark. 464, 108 S. W. 838, 26 L. R. A. (N. S.) 482, 122 Am. St. Rep. 47; Little Rock v. Barton, 33 Ark. 436.

It is true that the police power can only be exercised to suppress, restrain, or regulate the liberty of individual action, when such action is injurious to the public welfare.

If an act of the Legislature is neither expressly nor impliedly prohibited by some provision of the 'Constitution, a court cannot declare it invalid. An act cannot be held void because, in the opinion of the court, it might violate the best public policy. As to whether a law is good or bad law, wise or unwise, is a question for the Legislature, and not for the courts. Lewis’ 'Sutherland Stat. Const., vol. 1, p. 136.

The act expressly provides for an appeal from an adverse decision from a justice of the peace. It is contended, however, that, under § 3381 of Crawford & Moses’ Digest, the State cannot appeal from judgments of the justice court.

If this act did not provide for an appeal, and there was no other statute enacted subsequent to the enactment of § 3381, appellant’s contention would be correct, but there is nothing in the Constitution prohibiting the Legislature from authorizing the State to appeal from a judgment of the justice court, and the statute under consideration expressly authorizes an appeal.

The Constitution provides that appeals may- be taken from the final judgments of the justice of the peace to the circuit court under such regulations as are now, or may be provided by law. Section 42, art. 7, Constitution of Arkansas. This section gives the Legislature the right to regulate the manner of taking appeals from the judgments of justices of the peace, and the Legislature can provide any manner of taking such appeals that to it may seem proper.

Section 12 of act 148 provides that, if any section, sentence, clause, phrase, or requirement of this act is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions thereof.

This court has frequently held that, when a statute is unconstitutional in part, the valid portion of an act will be sustained if complete in itself, and capable of being executed in accordance with the apparent legislative intent. Alexander v. Stuckey, 159 Ark. 692, 253 S. W. 9; Davies v. Hot Springs, 141 Ark. 521, 217 S. W. 769.

There are many other cases that might be cited to the same effect. In the act here under consideration, the act is capable of being executed in accordance with the legislative intent without the section conferring upon individuals the right of appeal. Although the Constitution authorizes the Legislature to provide for appeals from the justice court, it is not necessary to decide whether they might give an individual the right to appeal in this case, because the appeal was actually taken by the prosecuting attorney.

Many authorities are cited by counsel, but most of these authorities have been referred to and reviewed in the cases above cited, and it would serve no useful purpose to review those cases again.

Our conclusion is that the act under which this prosecution was begun is a valid act, and the judgment of the circuit court is reversed, and the cause remanded for a new trial.


text:
    Shoptaw v. Sewell.
    4-2539
    Opinion delivered May 16, 1932.

      G. G. Wait, for appellant.

      Hays '■& Smallwood and Robert Bailey, for appellee.
   Hart, C. J.,

Appellant prosecutes this appeal to reverse a decree sustaining a demurrer to his complaint asking that the defendant Sewell he declared a trustee for the lands described in the complaint and that the deeds from the defendant Sewell to the defendant Bailey be canceled as a cloud upon his title.

The material allegations of the complaint may be stated as follows: Sometime prior to 1918, a partnership composed of R. K. Sewell and three others was organized in the city of Russellville, Arkansas, to deal in general merchandise under the firm name of Sewell-Thompson & Company. In April, 1919, appellant, J. J. Shoptaw, became by purchase a one-fourth owner of said mercantile company. In March, 1920, the partnership purchased the interest of one of the partners, leaving the firm composed of R. K. Sewell, Fred Thompson and J. J. Shoptaw, who continued the business under the firm name of Sewell-Thompson & Company, each owning a one-third interest therein. In April, 1925, Thompson sold his interest to W. A. West, and the business was conducted under the name of .Sewell-West & Company. In March, 1928, West sold his one-third interest to T. M. Overman, and the firm became Sewell-Overman Company. In February, 1931, this firm was dissolved by mutual consent, and Sewell and Overman withdrew from it and sold their interest to appellant, Shoptaw.

In April, 1923, Sewell-Thompson & Company recovered judgment in the circuit court against J. M. Hendrix in the sum of $755.57. In September, 1926, execu-. ti'on was issued on the judgment and levied upon certain lands of said Hendrix. In October, 1926, Sewell-West & Company became the purchasers at the execution sale for the amount of the judgment indebtedness. Prior to the date of the aforesaid judgment, Hendrix had mortgaged said lands to Ray Moses. On the 23rd day of October, 1928, Ray Moses, by his attorney, Robert Bailey, brought suit to foreclose said mortgage, and on November 7, 1928, a decree of foreclosure was granted. Before said decree was rendered, Moses transferred his mortgage to Sewell-Overman Company, and judgment was rendered in favor of that firm both for the indebtedness due Ray Moses and for the judgment held by SewellThompson Company. The lands embraced in the mortgage were sold to satisfy the judgment.

We copy from the complaint the following:

“That said lands were duly advertised for sale according to said decree and at the sale' thereof, E. K. Sewell (presumed to be bidding for Sewell-Overman Company), bid and offered for said lands the sum of nine hundred seventy-five andno/100 ($975) dollars, and, he being the highest and best bidder, the lands were struck off and sold to him for that sum, and a commissioner’s deed was made to the said E. K. Sewell, said report of sale and approval of deed appearing of record in chancery record “K” at page 296. Date Feb. 25,1929.

“That the cost of said proceeding in chancery was paid out of funds belonging to Sewell-Overman Company, and the value of the property carried upon the books of the firm as part of the assets of the firm.”

In March, 1923, Eobert Thomas became indebted to the firm of Sewell-Thompson & Company and executed a mortgage on certain town lots in the city of Eussellville to secure his indebtedness. In August, 1927, Sew-ell-West & Company, successors to Sewell-Thompson & Company, by their attorney, Eobert Bailey, brought suit to foreclose said mortgage and obtained a decree of foreclosure on the 27th day of September, 1927. We copy from the record the following:

“That said lands were duly advertised for sale according to the decree in said cause and at the sale thereof, E. K. Sewell (supposed to be bidding for the firm of Sewell-West & Company) bid and offered for said lands the sum of eight hundred twenty three and 09/100 ($823.09) dollars, and he being the highest and best bidder, said lands were struck off and sold to him for that sum, and a commissioner’s deed was issued to the said E. K. Sewell, said report of sale and approval of deed now appearing of record in Chancery Eecord “K” at page 112. Date of deed Dec. 5, 1927.

“That the cost of this proceeding in chancery was paid out of funds belonging to the firm of Sewell-West & Company, and the value of the property carried on the books of the firm as assets of the firm.”

In the spring of 1930, Sewell borrowed from the bank $600, giving his promissory note therefor with Robert Bailey and H. B. Sewell as security. Said note became due and unpaid, and, to secure said Bailey against loss, R. fL Sewell conveyed to him the two tracts of real estate described in the complaint, the title to which had been taken in his own name as above stated. The deed to the Thomas property was dated May 15, 1930, and recited a consideration of $500, but no consideration passed between the parties. The deed to the Hendrix land was dated December 3, 1930, and recited a consideration of $100, but no consideration passed between the parties. The taking of title to said property in the name of R. K. -Sewell and his subsequent sale to Robert Bailey was entirely unknown to appellant until after said deeds from Sewell to Bailey were recorded in December, 1930. The taking of title to said property in the name of R. K. Sewell and his subsequent conveyance to Robert Bailey was a fraud upon the right of appellant as the last successor to the rights and assets of said firm. The prayer of the complaint is that R. K. Sewell be adjudged to have acquired title to said tracts of lands as trustee for said firm, and that his deed to Robert Bailey be declared void and canceled as a cloud upon the title of appellant.

Our Code drew a marked line of distinction between an entire failure to state any cause of action or defense on one side which is to be taken advantage of by demurrer and the statement of a cause of action or defense in an insufficient, uncertain or imperfect manner, which is to be corrected by a motion to render the pleading more definite and certain by amendment. The court has uniformly held that, if the substantial facts which constitute a cause of action are stated in the complaint, or can be inferred by reasonable intendment by the matters which are set forth, although the allegations of these facts are imperfect or indefinite, such insufficiency should be met by a motion to make the averments more certain and can not be corrected by demurrer. In short, if the facts stated, together with every reasonable inference therefrom, constitute a cause of action, then the demurrer should be overruled. Ball v. Fulton County, 31 Ark. 379; Wright v. Lake, 178 Ark. 1184, 13 S. W. (2d) 826; Kansas City Southern Railway Company v. Fort Smith Suburban Railway Company, 180 Ark. 492, 22 S. W. (2d) 21; and Holcomb v. American Surety Company, 184 Ark. 449, 42 S. W. (2d) 765. This practice has been uniformly sustained by numerous other decisions of this court.

Applying the principle to the case at bar, we think the learned chancellor erred in sustaining a demurrer to the complaint. It is the duty of partners to observe the utmost good faith towards each other in the partnership business. They stand in a fiduciary relation to each other, and the same rules are to be applied to the conduct of partners towards each other as are ordinarily applicable to that of trustees and agents. All property bought by funds belonging to a firm is prima fade the property of the partnership, although the title to it is taken in the name of one of the partners. The reason is that partners are bound to conduct themselves with good faith towards each other, and the partnership property cannot be used for the private gain of one of the partners to the exclusion of the others. Drummond v. Batson, 162 Ark. 407, 258 S. W. 616; and Cain v. Mitchell, 179 Ark. 556, 17 S. W. (2d) 282.

"While stated in a somewhat imperfect and indefinite manner, it is fairly inferable, when the complaint and the surrounding circumstances are considered together, that it was intended to allege that R. K. Sewell became the purchaser at the commissioner’s sale for the benefit of the partnership. It would have been more in accord with good pleading to have alleged directly that he became the purchaser for the partnership. This is infer-able, however, from the allegations that the cost of the proceeding in chancery in each case was paid out of the partnership funds, and the value' of the property carried on the books of the firm as a part of the assets. If the land had been purchased by Sewell for his own benefit, the cost of the proceeding should have been deducted from the proceeds of the sale, and the balance would have been carried on the books of the partnership as the money derived from the proceeds of the sale.

It is pointed out that the sale in each case was made prior to the dissolution of the firm, and that several years elapsed before the present suit was instituted. The complaint, however, contains a distinct allegation that these facts were entirely unknown to appellant, and that it did not become known to him until sometime in December, 1930, when the deeds from Sewell to Bailey were filed for record.

It is also insisted that the defendant, Bailey, is an innocent purchaser, and that the deed to him should not be set aside. Here again the cause of action must be tested by the allegations of the complaint and not by what might or might not be proved upon a trial of the case upon the merits. It is alleged that the defendant, Bailey, was the attorney for the partnership in the foreclosure proceedings, and as such must have known all the facts connected therewith. Our court has uniformly held that whatever puts a party on inquiry amounts to notice where the inquiry becomes a duty and would lead to knowledge of the requisite facts by the exercise of due diligence. Waller v. Danby, 145 Ark. 306, 224 S. W. 615; Walker-Lucas-Hudson Oil Co. v. Hudson, 168 Ark. 1098, 272 S. W. 836; Jordan v. Bank of Morrilton, 168 Ark. 117, 269 S. W. 53; and Richards v. Billingslea, 170 Ark. 1100, 282 S. W. 985.

Besides this, the plaintiff alleges that no money was paid by the defendant 'Bailey in consideration of the deeds that were executed to him. The complaint alleges that he became a surety for Sewell, and that the deeds were executed to him by Sewell to secure him from loss by reason thereof. Notice at any time before payment was sufficient to defeat the defense of innocent purchaser by Bailey. Massie v. Enyart, 32 Ark. 251.

The result of our views is that the court erred in sustaining a demurrer to the complaint, and for that error the decree will be reversed, and the cause will be remanded with directions to overrule the demurrer and for further proceedings in accordance with the principles of equity and not inconsistent with this opinion.


author: Smith, J.

text:
    Ayres & Graves v. Ellis.
    Series 4, No. 2550.
    Opinion delivered May 16, 1932.

      Reed ■& Beard, for appellant.

      Chas. A. Walls, for appellee.
   Smith, J.

On the 30th day of April, 1930, Boss & Dalton entered into a contract with the .State Highway Commission for the construction of thirteen and one-half miles of State highway, and they sublet to Ayres & Graves a portion of the work. Ayres & Graves, in turn, sublet to A. O. Freeman the concrete structural work on a portion of the highway, and Freeman entered into a contract with W. C. Ellis doing business as the W. C. Ellis Lumber Company to furnish money and material to carry out the sub-contract. When the original contract was let to Ross & Dalton they executed a bond with the New Amsterdam Casualty Company as surety, conditioned as required by act 368 of the Acts of 1929, page 1487. This was an act entitled “An act to protect those who furnish labor, material, * * * and all other supplies or things entering into the construction of public buildings or works or necessary or incident to the construction of the same.” Section 1 of this act reads as follows: ‘‘ That all bonds required by any commission or commissioners or board, or the agent or agents thereof, county courts or judges thereof, or any other public officer or officers for the construction of any public buildings, levee, sewer, drain, road, street, highway, bridge or other public buildings or works aforesaid, shall be liable for all claims for labor, material, camp equipment, fuel including oil and gasoline, food for men and feed for animals, labor and material expended in making repairs on machinery or equipment used in connection with the construction of said public buildings or works aforesaid, lumber and material used in making forms and supports and all other supplies or things entering into the construction, or necessary or incident thereto or used in the course of construction of said public buildings or public works; said bonds shall also be liable for rentals on machinery equipment, mules and horses used in the construction of said public buildings or public works aforesaid, and all persons holding such claims shall have a right of action on said bonds.”

Upon the completion of Freeman’s sub-contract, a balance was due from him to Ellis, who brought this suit against Freeman and all other parties above named to recover the balance due him.

A general denial of all the allegations of the complaint filed by Ellis was contained in the answer filed in the name of all the defendants, and liability to Ellis was denied upon the following grounds: (1) That the contract between Freeman and Ellis was usurious, and void for that reason; (2) That all demands have been paid for which any of the defendants are liable; and (3) That the bond sued on was not offered in evidence.

At the conclusion of the testimony the case was, by consent, withdrawn from the jury and submitted to the court, and from a judgment against all the defendants is this appeal.

The defense of usury was not pleaded in the answer but was raised in the court below upon the testimony developed in the case, and is based upon the charge that the contract between Freeman and Ellis involved and required the payment of interest on money advanced at the rate of 8 per cent, per month.

We think the court below was warranted by the testimony in finding that the contract between Freeman and Ellis was not void as usurious. It appears that Ellis undertook to finance Freeman’s contract, and to order and deliver all material required, to keep a record of the pay rolls, and to render monthly statements, to which there should be added 8 per cent. These statements included, among other items, cash advanced, and upon these cash advances, as well as all other items, a charge of 8 per cent, was added. Usury can only attach to a loan of money or to the forbearance of a debt. Cheairs v. McDermott Motor Co., 175 Ark. 1126, 2 S. W. (2d) 1111. This compensation, by way of an 8 per cent, addition to the monthly statements, appears to have been made, not merely for the money advanced, but for services rendered in connection with ordering and delivering the' material and in keeping the payrolls. In other words, the 8 per cent, charge was not exclusively for the money advanced, and the contract was not, therefore, usurious. Coleman v. Hawkins, ante p. 283. There was no testimony that any kind of partnership arrangement existed between Freeman and Ellis, and the extent of Ellis’ connection with Freeman’s sub-contract appears to have been to order and deliver material and to keep records of the pay rolls.

Ellis’ right to recover for the materials furnished Freeman is not questioned, but it is insisted that payments made were sufficient to discharge that demand, and it is denied that Ellis has any right to sue upon the contractor’s bond for the money paid Freeman’s laborers. On the other hand, it is asserted that both the bond and the statute confer that right. The right of the laborers themselves to sue upon the bond is conceded, but the question is whether Ellis has the right to sue for the money paid by him to Freeman’s laborers.

The argument is made that, upon advancing money to pay laborers, Ellis acquired the status of a subcontractor, to the extent of such payments, and is thereby entitled to sue upon the bond. The statute enumerates the claims which may be enforced against the bond, and provides that “All persons holding such claims shall have a right of action on said bond.” Is Ellis the holder of such a claim by reason of having paid the laborers? It is not contended that Ellis is the assignee of any of the laborers or that any attempt was made to assign these claims to him, and we do not, therefore, have the question of the right of an assignee of a claim to enforce it as the holder thereof.

We think the case of Norton v. Maryland Casualty Co., 182 Ark. 609, 32 S. W. (2d) 172, is decisive of the question above stated. It is true that that case arose prior to the passage of the act of 1929, supra, but it is true also that the bond there sued on contained the provision in regard to paying labor which the act of 1929 would have written into it had it been executed subsequent to the passage of that act. The statement of facts in that case recites that: “The contractor executed a bond with the Maryland Casualty Company as surety for the faithful performance of the contract and the payment of all bills for labor and material entering into the construction of said road or used in the course of the performance of the work.”

In a suit upon that bond, which covered both labor and material, (as does the bond here sued on and the statute pursuant to which' it was executed), it was contended in the Norton ease, supra, that one who had advanced money to pay the contractor’s laborers might recover the amount of such advances. The reasoning of that case applies here, and we quote from it as follows: “The main question to be determined is whether appellant, by advancing money to the contractor in the manner he did, thereby became entitled to a lien or claim against the surety company. Of course, no one would claim that the surety company became liable for all of the contractor’s personal debts, but it is claimed that, because appellant advanced or loaned money to the contractor to meet the pay roll of laborers and the money was used to pay for labor and material, the appellant thereby became a subcontractor and is entitled to enforce his claim against the surety company. We do not agree with appellant in this contention. It makes no difference what the purpose was in lending the money, it was a loan from appellant to the contractor. The contractor used the money or most of it to pay for labor and material, but this did not make appellant a sub-contractor, and he did not furnish either labor or material. The surety company was compelled to pay materialmen and laborers, and, as shown by the evidence, lost a large sum of money. It was not a volunteer, but under its bond it became obligated to pay all bills for material and labor used in the work.”

Notwithstanding the liability of the surety company to pay laborers, we there denied the right of one to recover who had advanced money to pay laborers upon the theory that he did not thereby acquire a contractual relation to the bond, but became only a creditor of the contractor. The fact that Ellis personally paid the laborers in the instant case does not alter the legal principles there announced. Such payment was nothing more than an advance to Freeman, and created only the relation of debtor and creditor between Ellis and Freeman, and did not constitute Ellis a subcontractor, as appellee contends, nor did it make Mm a person holding such a claim as the statute requires the surety to pay. Ellis furnished material, and for the contract price thereof he has a right of action. He advanced money to Freeman to pay laborers, and for these advances he has no enforceable demand against any one except Freeman.

It appears that, as the work progressed, Freeman received checks covering the estimates given him on his contract, which were indorsed and delivered to Ellis. As Freeman owed Ellis for both the materials and money advanced to laborers, Ellis had the right to credit such payments to the debt due him, whether for material or for money paid laborers, but, as no application of the payment appears to have been made to any particular item, the items will he credited proportionately. If at the time any check was indorsed to Ellis it sufficed to pay the entire account then due, the whole thereof was paid, as Freeman had the right to use the money for that purpose.

The case was not tried upon this theory, and we do not, therefore, render judgment here, as we are unable to say with certainty what the statement of the account is since the last payment was made. The account will, upon the remand of the cause, be stated in accordance with the principles here announced.

As to the failure to introduce the bond sued on in evidence, but little need be said. A copy of the bond was made an exhibit to the complaint, but the original bond was not introduced until after the cause had been withdrawn from the jury by consent and submitted to the court. The attorney for Ellis’then asked permission to offer the bond in evidence, which request the court refused upon the ground that he did not consider it necessary, to which action plaintiff’s counsel excepted. Thereafter judgment was rendered for the plaintiff. Later, during the same term, the court reconsidered its ruling excluding the introduction of the bond and permitted it to be formally offered in evidence, granting to the defendants the right to object and except to that ruling and to amend the motion for a new trial to include this exception.

It is not contended that the copy of the bond made an exhibit to the complaint differed in any respect from the bond later offered in evidence, and, as the case had been, by consent, submitted to the court, and as the reversal of the ruling as to the admission of the bond was made at the same term of court at which the original judgment was rendered, there was no prejudicial error in the action of the court in permitting the bond to become a part of the record in the case. American Bldg. & Loan Ass’n v. Memphis Furniture Mfg. Co., ante p. 762; Democrat Ptg. & Litho. Co. v. Van Buren County, 184 Ark. 974, 43 S. W. (2d) 1075.

The judgment of the court below will therefore be reversed, and the cause remanded with directions to disallow so much of the account of Ellis for labor as has not already been paid by Freeman.


author: Humphreys, J.

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    St. Louis Southwestern Railway Company v. Missouri Pacific Railroad Company.
    4-2547
    Opinion delivered May 16, 1932.

      Garter, Jones d Turney and Lamb d Adams, for appellant.

      R. E. Wiley, for appellee.
   Humphreys, J.

Appellee, a railroad company doing an interstate and intrastate business, and owning terminal facilities in North Little Bock, Arkansas, filed its application with the Arkansas Bailroad Commission under § 1643 of Crawford & Moses’ Digest, to fix the point and manner of crossing’ with a proposed spur, an industrial track of appellant, for the purpose of serving directly the cotton seed oil plant in North Little Bock, which proposed spur was to extend from its own track a distance of 5,460 feet in a south and southeasterly direction to the plant and property of said National Cotton Seed Products Company. Notice was given to appellant, and the application and appellant’s objections thereto were heard upon testimony adduced by each with the result that appellee’s application was denied, from which an appeal was prosecuted to the circuit court. The circuit court heard the cause, quashed the order of the Commission, and fixed the point of crossing at grade 265 feet east from its switch connection with the main lead switch or old main line of the St. Louis Southwestern Bailway Company, and directed the Commission to proceed in conformity with its order, from which is this appeal.

Appellant contends the circuit court erred in directing the Commission to fix the point and manner of crossing, because, first, under the statute it has no authority to act until appellee acquires the right-of-way by condemnation proceedings, and, second, until it obtains a certificate of convenience and necessity for the crossing from the Interstate Commerce Commission as provided by paragraph 18 of § 1 of the Interstate Commerce Act.

The section of Crawford & Moses’ Digest, referred to and made the basis of appellee’s petition, in so far as applicable here, is as follows:

“Crossings. The commission shall have exclusive power to determine and prescribe the manner, including the particular point of crossing and the terms of installation, operation, maintenance, apportionment of expenses, use and protection of each crossing of one railroad by another railroad, or street railroad by a railroad, so far as applicable.”

It will be observed that there is nothing in the statute relative to a condemnation of the right-of-way before the Commission can proceed to fix the place and manner of a proposed crossing of one railroad by another. The legal right of one railroad to cross another exists by virtue of § 1 of article 17 of our Constitution, which is as follows:

“Every railroad company shall have the right with its road to intersect, cross and connect with any other road.” Therefore, it is unnecessary to acquire a legal right for railroads to cross or intersect each other by a proceeding in court. As stated above, that right exists under our Constitution. Of course, it would be necessary if railroads could not agree as to the compensation or damages to condemn the right-of-way in order to determine the amount of compensation or damage, but it seems to us that the orderly way would be to first fix the place and manner of crossing and then proceed in the proper tribunal to condemn the land needed to effect the crossing at the place fixed or designated. The case of Missouri K. & T. R. Co. v. St. Louis S. W. Ry. Co., (Tex. Civ. App.) 239 S W. 337, cited by appellant in support of its contention that condemnation proceedings must be brought and determined before the Commission can fix the place and manner of crossing, has no application in the instant case because in Texas the right to cross must first be determined by the judgment of a court; whereas in this State the Constitution fixes the right to cross.

Paragraph 18, § 1, of the Interstate Commerce Act referred to by appellant in support of its second contention, in so far as applicable, is as follows:

“ (18) Extension or Abandonment of Lines, Certificates Required. No carrier by railroad subject to this chapter shall undertake the extension of its line of railroad, or the construction of a new line of railroad, or shall acquire or operate any line of railroad, or extension thereof, or shall engage in transportation under this chapter over or by means of such additional or extended line of railroad, unless and until there first shall have been obtained from the Commission a certificate that the present or future public convenience and necessity require or will require the construction, or operation, or construction and operation of such additional or extended line of railroad.”

The above paragraph is limited by paragraph 22 of said section, and is as follows:

(22) Construction, etc., of Spurs, Switches, etc., within State. The authority of the Commission conferred by paragraphs (18) to (21) both inclusive, shall not extend to the construction or abandonment of spurs, industrial, team, switching or sidetracks, located wholly within one State, or of street suburban, or interurban electric railways, which are not operated as a part or parts of a general steam railroad system of transportation.”

After a careful reading and analysis of the evidence adduced in the instant case, the court has concluded that the proposed improvement is a spur within the meaning of paragraph 22, and not an extension of the line of appellee’s railroad within the meaning of § 18. The proposed improvement being a spur only, it was unnecessary to obtain a certificate of convenience and necessity for a crossing from the Interstate Commerce Commission before appellee could file its application before the Bail-road Commission of Arkansas to fix the place and manner of the crossing.

The judgment of the circuit court is therefore affirmed.


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    Ricks v. Sanderson.
    4-2561
    Opinion delivered May 16, 1932.

      Arnold S Arnold, for appellant.

      Will Steel, for appellee.
   McHaney, J.

Appellee sued appellant and K. E. Green to recover damages done to her automobile by reason of a collision between her car driven by her daughter and the car of appellant driven by said Green. The collision occurred on May 28, 1931, at 5th and Walnut streets in the city of Texarkana. A trial resulted in a verdict and judgment for appellee against appellant and Green in the sum of $125. Green has not appealed.

At the conclusion of the testimony appellant requested the court to direct a verdict in his favor on the ground that he had loaned his car to said Green, and that said Green was not in his employ, was attending no business for him, but was on a mission of Ms own, in which appellant was not interested in any way. The court refused such request, and this is assigned as error and urg’ed for a reversal of the case. In view of the decision we make on this point, that is whether Green was the agent of appellant in the operation of his car, we do not discuss the negligence of Green in the operation of the car.

The facts necessary to a decision of this point are that one Webb was the owner of an airplane, which was located in a garage near the airport out of Texarkana, which was undergoing some repairs and that Green had been piloting the airplane and was the mechanic maMng the repairs.' He desired to get some material, cork, from the ice plant and take it out to the garage where the airplane was, to be used on the step or wane, to keep one’s foot from slipping when getting in the airship. Green went to the place of business of Mr. Mimms to borrow his automobile for such purpose, Mimms having formerly been a partner with "Webb in the ownership of the airplane, but at that time no longer interested, having sold out to Webb. Mimms was unable to lend him the car at the time and suggested that he borrow appellant’s car which was standing in front of Mimms’ place of business. Appellant agreed to lend him the car, but desired’ to be taken to a picture show first. Green took appellant to the picture show, went on to the ice plant, secured the cork and had started out to the garage in the borrowed car when the accident occurred with appellee’s car. Mimms agreed to take Webb out to the garage later to get his car. The judgment is sought to be sustained by reason of the testimony of one Harris, a deputy sheriff, who served the summons on appellant when he was sued, and who claimed to have had some conversation with appellant at the time of service. Harris’ recollection of the conversation between him and appellant regarding the loan of. the car to Green was very indistinct and uncertain. According to his recollection of the conversation between him and appellant at the time of the service of the summons upon appellant, he said: “Well, Green drove the car, took-him to the picture show, and drove it the whole route, as I under-. stand it, in taking him to the picture show, and then was going back and coming back after him.” The whole substance of the witness’ testimony relating to the conversation with appellant is that Green borrowed appellant’s car, took him to the picture show, and was then to take something out to the garage near the airport, and later was to come back for appellant. Nowhere does he testify that in g’oing out to the airport or to the garage near the airport Green was on a mission for appellant. The undisputed testimony is that, after Green took appellant to the picture shoAV, he used the car on a mission of Ms own, or that of Ms employer, Webb, a matter in wMch appellant had not the slightest interest, and in performing this service he was not the agent of appellant, even though it be conceded that there is some testimony to the effect that, after delivering the cork to the garage for the repair of the airplane, he was to come back and get appellant at the picture show or deliver the car to him anywhere else. The fact remains that he was on no business of appellant, and the relation of master and servant or principal and agent did not exist. The undisputed testimony is that Green was not in the employ of appellant and had never been. The court should have directed a verdict in appellant’s favor. Healey v. Cockrill, 133 Ark. 327, 202 S. W. 229, L. R. A. 1918D, 115; Hunter v. First State Bank of Morrilton, 181 Ark. 907, 28 S. W. (2d) 712.

The result of our views is that there is no substantial testimony to support the verdict and judgment, and that the court should have granted appellant’s request for a peremptory instruction, and erred in refusing to do so. The judgment will therefore be reversed, and, as the case seems to be fully developed, it will be dismissed.


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    Southwestern Gas & Electric Company v. W. O. Perkins & Son.
    4-2562
    Opinion delivered May 16, 1932.

      Arnold <é Arnold, for appellant.

      John K. Butt, for appellee.
   Butler, J.

In 1925, W. O. Perkins & Son brought suit against Evelyn S. Wilson, who at that time was the owner of a parcel of land, alleging that the defendant was justly indebted to them in the sum of $56.86 for lumber and building material sold and delivered to the defendant and 'used in the repair and improvement of the parcel of land, and that within ninety days from the date of the last item purchased they had filed a lien on the property and prayed for judgment for the amount of the debt, and that the property be ordered sold in satisfaction of the judgment. Answer was fileid by Evelyn S. Wilson, and at the trial of the case the court rendered a decree adjudging the defendant indebted to the plaintiff in the sum sued for, and further that the suit was not filed within the time prescribed by law for the enforcement of liens, and denied that part of the prayer of the complaint asking that the property be sold. The judgment remaining unsatisfied, a writ of garnishment was issued on September 14,1931, and properly served on the Southwestern Gas & Electric Company, but no allegations or interrogatories were filed at that time or thereafter.

The garnishee answered stating that it did not have in its hand or possession on or after service of the writ any moneys, goods, chattels or any other property of any kind, nature or description belonging to the defendant, Evelyn Wilson, and, continuing, it answered that ‘ ‘ said garnishee states, however, that the records of said company show that the said Evelyn S. Wilson owns nine shares of the par value of $100 each preferred stock of said company with no maturity date; that, so far as the records of said company shoAV, said stock is still OAvned by the said defendant.”

No denial to the answer was filed by the garnisher and on the 19th day of January, 1932, in the case of W. O. Perkins & Son v. Evelyn S. Wilson, defendant, and Southwestern Gas & Electric Company, garnishee, the court entered the folloAving- judgment:

' “ On this day this canse came on to be heard upon the interrogatories propounded to garnishee by plaintiff and upon the answer herein filed by garnishee showing that defendant held preferred stock in defendant garnishee company of the par value of $900 and that said stock was issued in her name. The court finds that a writ of garnishment was issued against defendant garnishee at the instance of plaintiff, and that defendant garnishee’s answer is filed in response to said writ.

“Upon the proof adduced, and upon the answer of defendant garnishee herein filed, the court finds that defendant garnishee has in its hands personal property belonging to defendant in the sum of $900, and that by reason thereof plaintiff is entitled to judgment against defendant, and that, upon payment of said judgment to plaintiff by defendant garnishee, defendant garnishee shall be entitled to reimburse itself out of said personal property so held by it.

“Wherefore it is the judgment of this court that plaintiff have judgment against defendant garnishee in the sum of $99.47 with interest thereon at the rate of 6 per cent, from September 14, 1931, until paid; that defendant garnishee have judgment against defendant in the same amount; that, in order to collect its said judgment, defendant garnishee is hereby authorized to deduct the amount of same from the value of the personal property held in its hands belonging to defendant.”

The record in that case has been certified to this court for review, it being insisted by the appellant that the judgment is void for three reasons which appear on the face of the record, as follows:

“1. That the original ‘ judgment upon which the judgment by garnishment against appellant was rendered is void for want of jurisdiction.

‘‘ 2. That the judgment by garnishment against appellant is erroneous because it was rendered without allegations and interrogatories.

“3. That the judgment is void and reversible because on its face it appears that it was rendered solely on the garnishee’s (appellant’s) answer.”

We are of the opinion that the first and second grounds urged for reversal are without merit, but, since we think that the third ground is well taken, it is unnecessary to state our reasons for our conclusion as to the first and second grounds.

It is insisted by the appellee that, because of the recitals in the judgment that the court based its finding <£upon the proof adduced and upon the answer of the defendant garnishee filed herein,” the case must be affirmed, as it is here without a bill of exceptions or a record of the evidence, and therefore the conclusive presumption is that there was evidence to support-the finding and judgment of the court. Appellee argues that this court cannot know what the evidence was, but the judgment shows upon its face that there was some evidence, and that it must be presumed that this evidence showed that the garnishee (appellant) had in its hands and possession personal property belonging to the defendant of the value of at least $99.47, and that by reason thereof the plaintiff was entitled to a judgment against the garnishee, notwithstanding the garnishee answered that it had no such money or property in its possession belonging to the defendant.

Appellee overlooks the fact that they did not file any denial to the answer. If they had deemed the answer untrue or insufficient, they might have denied the same and caused such denial to be entered on the record, § 4912, Crawford & Moses ’ Digest, and, having failed to do this, the garnishee’s answer is conclusive of the truth of its allegations. Beasley v. Haney, 96 Ark. 568, 132 S. W. 646. Hence no proof could have been adduced tending to controvert the answer or to show that appellant had in its hands any goods, chattels, moneys, credits and effects or other property belonging to the defendant. In fact, when the judgment is scrutinized considering all of its parts, the inference is inescapable that the court based its judgment on the information contained in the answer that the records of appellant company showed that Evelyn S. Wilson owned nine shares of the preferred stock of the company of the par value of $100 each, and this must have been the property it found to be in the hands of the appellant belonging to the defendant, Evelyn S. Wilson.

The statute prescribes the manner in which shares of stock belonging to a judgment debtor may be reached by the creditors. This appears to us to be the exclusive remedy, and garnishment will not lie.

If the appellee is so advised, it may proceed against the shares of the stock in the method pointed out by the statute for the collection of its debt. The decree of the trial court is reversed, and the garnishment is dismissed.