text:
    Bailey v. Perkins Oil Company.
    Opinion delivered October 23, 1922.
    1. Contracts — evidence.—The chancellor’s finding that defendant received money from a third person under agreement to pay plaintiffs held not contrary to a clear preponderance of the evidence.
    2. Frauds, statute of — agreement to pay another’s debt. — Where defendant received money from a third person under agreement to pay plaintiff’s claim against such third person, the agreement is an original undertaking, and not within the statute of frauds.
    Appeal from Cross Chancery Court; A. L. Hutchins, Chancellor;
    affirmed.

      Jas. R. McDowell, for appellant.
    If Bailey promised to pay the debt owing by the St. Francis Q-in Company it was within the statute of frauds and void. C. & M. Dig., sec. 4862; Shannon’s Code of Tenn., sec. 3142.
    Persons holding themselves out as partners are liable only to those who have ¡been misled by such representations. . 20 R. C. L. 1068.
    A partnership is the relation existing between two or more persons who have agreed to carry on a business and share the profits as joint owners. 22 A. & E. Ency. Law, (2nd ed.) 2.
    An incoming partner of an existing business does not assume liability for previous debts, unless he does so by express agreement. 5 S. W. 787.
    Conveyances which are made in good faith to bona fide purchasers are not subject to attack by creditors. 8 Fletcher’s Cyclopedia of Corporations, sec. 5047.

      8. W. Ogan, for appellee.
    Corporate funds are trust funds for the discharge of the corporate indebtedness. Taylor on Private Corporations, sec. 656, p. 657.
    The assets of an incorporated company are trust funds for the payment of its debts. 107 Ark. 424; 107 Ark. 125; 124 Ark. 90; 38 Ark. 17.

      The debts of a corporation existing at the time of dissolution may be collected' out of the assets of the defunet corporation in the hands of shareholders, except innocent purchasers. 124 Ark. 90.
    "Where one deals with an agent without knowledge of the agency, after discovering the agency he may hold it responsible. 87 Ark. 374; 119' Ark. 558; 45 Ark. 367; 50 Ark. 433; 87 Ark. 434.
   Humphreys, J.

This is an appeal by appellant from a decree of the Cross County Chancery Court holding him personally liable for an indebtedness to appellee incurred by J. W. Mullinix f or the St. Francis River Gin Company, a corporation. The indebtedness represents borrowed money advanced to J.' W. Mullinix to buy cotton seed in the conduct of the gin business which was, in fact, owned by said St. Francis River Gin Company, although ostensibly owned by Mullinix and managed by him. Millinix owned 97 per cent, of the stock and his wife and son the other three per cent. Appellee charged the money advanced to the private account of J. W. Mullinix, not knowing that the ginning business was incorporated. The corporate property, including customers’ cotton in storage with it, was insured for $28,000. R. W. Bailey, Sr., and J. W. Mullinix were associated together in the farming and mercantile business 'and had an agreement to become partners in the ginning business as soon as the charter of the St. Francis River Gin Company could be 'dissolved. Mullinix was indebted to Bailey in a large sum for money advanced to him to pay commercial debts at the time they became partners in the mercantile business. Before the charter was surrendered the gin burned, and Mullinix collected the insurance money of $28,000. At least $12,000 of this money was turned over to Bailey, and perhaps more. It is sought to hold Bailey personally responsible x for the amount of $4,488.37 advanced by appellee to buy seed for the corporation on the ground, among others, that he received the insurance money aforesaid under an agreement with Mullinix to pay appellee said amount out of it. The St. Francis River Gin Company was not made a party when the original bill was filed, because appellee did not know of its existence, but when it was discovered that the corporation was the principal debtor, and that a part of the insurance money had been turned over to Bailey, it was made a party and served with summons. Its appearance was thereupon entered, and the cause proceeded to trial.

■ The testimony sharply- conflicted upon the issue of whether Bailey received the insurance money under an agreement to pay appellee’s claim. J. W. Mullinix, who absconded just after turning the money over to Bailey, returned before the. trial, and testified that it was the intention of Bailey and himself to become partners in the ginning business, and that Bailey insisted upon the debt to appellee being paid; that he then turned the money over to Bailey, and Bailey received it under an agreement to pay appellee out of it; that it was agreed between them that he (Mullinix) should draw a draft upon the deposit in favor of appellee for the amount; that he immediately left the country and failed to do so. We think this testimony, properly interpreted, means that Bailey made an unconditional promise to pay the debt out of the insurance money, and that the drawing of the draft related merely to the method of payment. If his testimony was true, the agreement by ’Bailey to pay appellee’s debt was an original undertaking on his part and not an oral promise to pay the debt of another. The agreement, therefore, was not within the statute of frauds, as contended by appellant.

R. W. Bailey, Sr., testified that he had no knowledge of the indebtedness, and that he did not agree to pay any part of the money received by him upon appellee’s claim; that he agreed to pay certain claims of customers, whose cotton was burned; out of the amount, ¡and that it was agreed and understood that the balance should be applied upon Mullinix’s debt to him, which was done.

The trial court determined the issue in favor of appellee, and we are unable to say that the finding of the chancellor was contrary to a clear preponderance of the evidence. The decree is affirmed.


source: Caselaw Access Project

author: McCulloch, C. J.

license: Public Domain

text:
    National Life & Accident Insurance Company of Nashville, Tenn., v. Sherod.
    Opinion delivered October 30, 1922.
    1. Insurance — proof of denial of liability! — Contention that there was no proof that the insurer denied liability is met by proof that the insured went to former’s general office and was informed by some one in apparent authority that he had been paid all that was due him under the policy and would not receive anything more.
    2. Appeal and error — instruction harmless .when. — In an action on an insurance policy, any error in an instruction “if you find that the defendant did not deny liability under the policy you may find for plaintiff if you find for him gnly such sum for which proof was made, as provided by the terms of the policy,” is harmless, if erroneous, where the jury by their verdict disregarded the instruction by finding that defendant denied liability.
    3. Insurance — limitation.—Where an accident policy limited insured’s action to two years from accrual of right, insurer could not avail itself of such limitation if it failed to plead it; and it is therefore unnecessary to determine whether Crawford & Moses’ Dig., § 6153, abrogates such stipulations in policies of this character.
    4. Insurance — attorney’s fees. — Recovery of attorney’s fees was not procluded on the ground that insured asked for more than he was entitled to, where the verdict was for less than the amount asked by crediting insurer with an amount previously paid,
    Appeal from Crittenden Circuit Court, Second Division ; J. M. Futrell, Judge;
    affirmed.

      A. B. Shafer, for appellant.
    In tbe absence of evidence showing that the appellant had knowledge of the acts or conduct of any agent denying liability under the policy, the court should have directed a verdict for the defendant. 97 Ark. 378; 10 Ala. App. 395. 212 Mass. 318; 98 N. E. 1086; 156 Pac. 327.
    Appellant was entitled to its requested instruction No. 3 to the effect that appellee was not entitled to recover benefits unless accrued within two years of the filing of the complaint. The court declined to give the instruction upon the authority of C. & M. Dig., sec. 6153, but this section is limited to actions upon policies for life and property insurance. See 185 Pac. 656.
    A penalty should not have been assessed, as the recovery was for a less amount than that sued for. 92 Ark. 378; 205 S. W. (Ark.) 118.

      Berry & Wheeler, for appellee.
    Appellant did not plead that the appellee’s action was barred either by statute or contract. This is a matter which must be specially pleaded. 1 C. J. 494, par. 270; 51 Ark. 351.
    The words “on property or life” used in C. & M. Digest, sec. 6153, are not words of limitation, but are general and cover all kinds of policies. See 151 N. W. 593, L. R. A. 1916 A, p. 475; 141 Mo. 115; 47 S. W. 948.
    Penalty and attorney’s fees were properly allowed under the rule laid down in 102 Ark. 675 and 103 Ark. 1.
   McCulloch, C. J.

Appellant is -a foreign insurance company issuing life policies with clauses affording indemnity against sickness and accident. Appellant issued to appellee a policy dated August 28, 1916, for payment' of the sum of $99.75 in the case of death, with sick and accident benefits in the sum of seven dollars per week. The policy contained the following clause with respect to the payment of weekly benefits:

“Weekly benefits for accident will only be paid for eadh period of seven (7) consecutive days that the insured is, by reason of accidental injury, disabled from work of any nature, and there must be external evidence of such injury for the time paid. The number of weekly benefits payable under this policy in any twelve (12) consecutive months is limited to twenty (20).”

Appellee sustained physical injury by the accidental explosion of dynamite, on account of which he lost the sight of both eyes, lost his left arm below the elbow, and his right hand was crippled so that he could not pursue his ordinary vocation. He made claim in apt time for the twenty payments during the first.year of his disability, which were paid, and the present action was instituted November 4, 1921, to recover twenty weekly payments for each of the four years subsequent to the first payment and prior to the institution of the action. The suit, in other words, was for twenty weekly benefits for four years, making a total sum of $560' sought to be recovered.

It was alleged in the complaint that appellant was totally disabled for life and was entitled to benefits from year to year as long as he kept his policy in force, which he had done. It was also alleged that proper proofs had been offered to appellant, but that liability had been denied by appellant.

On the trial of the cause it was shown that in August prior to the institution of the action demand had been made for the payment of the accrued benefits, and the jury returned a verdict in favor of the appellee for $553 and for twelve per centum damages. The court rendered judgment accordingly, and also rendered judgment for attorney’s fees.

There was proof introduced by appellee to the effect that, after the payment of twenty benefits during the first year, appellee applied to appellant’s office in Memphis, and there was a denial of liability.

The first contention of counsel for appellant, as grounds for reversal, is that the claims asserted were premature, and that the refusal to pay was therefore justified and that there was no ground for recovery on these claims without new proof. The testimony was against appellant on this issue, however, and the verdict of the jury has settled the issue against it.

It is' also contended that the evidence is not sufficient to show that liability was denied by. appellant or any of its authorized agents. Counsel is mistaken in asserting that there is no testimony on that issue, for appellee himself testified that he went to the office of appellant, to which' he was directed, and had a conversation with one in apparent authority, who ordered him out of the office and told him that he had already been paid all that was -due him under the policy and would not receive anything more. There was evidence warranting the inference that the place visited by appellee was really appellant’s general office and that-the denial .of liability was made by some one there in authority.

It is next contended that the court erred in giving the following instruction:

“If you should find that the defendant did not deny liability under the policy under instructions given you, you may find for plaintiff, if you find for him only such sum for which proof was made, as provided by the terms of the policy.”

The contention is that there was no evidence to support a finding that proof was duly made of ¡any amounts in addition to what was paid. It appears that appellant, in its answer, admitted that it had, through error, declined to pay two weekly benefits upon proper notice. This was sufficient to justify the instruction given by the court and warrant a finding, of the jury for at least a sum covering two weekly benefits. However, the jury disregarded this instruction, for they found for the fuil amount of the subsequent benefits, and necessarily found that there had been denial of liability, otherwise they would not have found for the amount that they did find. There is no claim that proofs were made for the benefits in each - of the years. The instruction therefore was harmless, even if it was erroneous.

It is contended that the court erred in refusing to give an instruction concerning the limitation in the contract as to time for the commencement of the action on the policy. The policy contained a clause to the effect that no action should be maintained in any of the courts to recover unless instituted within two years from the accrual of the right of action. It is sufficient to say in reply to this contention that the answer contained no plea presenting the issue as to limitation. Appellant did not plead this clause of the contract, and it was therefore not available as a defense, and it is unnecessary for us to determine whether or not the statutes of this State (Crawford & Moses’ Digest, sec. 6153) abrogate such stipulations in policies of insurance of this character.

Finally, it is contended that the court erred in rendering judgment for penalty and attorney’s fees, for the reason that the recovery was seven dollars less than the amount .asked for in the complaint. It appears that the jury credited the amount of a previous payment of seven dollars and thus reduced the recovery to that extent. Appellant was entitled to plead this payment, and the jury allowed the same as a credit; therefore it is not a case where less was recovered than the amount demanded. Queen of Ark. Ins. Co. v. Bramlett, 103 Ark. 1.

Judgment affirmed.


text:
    Munsell v. Yerger.
    Opinion delivered October 30, 1922.
    1. Appeal and error — limiting cross-examination — prejudice.— Where the court of its own motion stated that further cross-examination of a witness concerning certain matters would not be allowed, no question is presented for review where appellant’s counsel made no offer to cross-examine the witness further or to show what could he proved by him.
    2. Appeal and error — conclusiveness op verdict. — A verdict on sharply conflicting evidence is conclusive.
    3. Attorney and client — negligence in drawing complaint.— Where a complaint seeking cancellation of a land contract alleged false and fraudulent representations concerning the land, the mere fact that the allegations as to misrepresentations would not alone constitute grounds for canceling the contract did not show' such negligence of attorneys in preparing the complaint as would defeat their right to compensation, such allegations not being inappropriate in connection with the other allegations.
    Appeal from Chicot Circuit Court; Turner Butler, Judge;
    affirmed.

      H. II. Hays, for appellants.

      Jas. B. Yerger and B. F. Merritt, for appellees.
   McCulloch, C. J.

Appellees are attorneys at law and they instituted this action against appellants to recover compensation for services alleged to have been performed in an action instituted by them for appellants against a corporation named Jackson-Vreeland Land Corporation for the breach of a contract for the sale of certain lands.

Appellees alleged in their complaint that they charged and were paid a retainer fee of five hundred dollars for prosecuting the afore-mentioned action for appellants, and that there was to be a further agreement between the parties with respect to the amount of additional compensation to be paid. They further alleged that they performed the services in said litigation by the institution and prosecution of the same until it was compromised and settled between the parties, and that a fair and reasonable value of the services so rendered was the sum of two thousand dollars in addition to the amount paid as retainer.

There was a demurrer to the complaint, which the court overruled, and then appellants filed a motion to make the complaint more definite and certain, to which appellees responded by an amendment to the complaint. Appellants then filed their answer, admitting that appellees had instituted the action against Jackson-Vreeland Land Corporation, that said litigation was settled before trial, but denied that there was any agreement for the payment of any fee in addition to the five hundred dollars -paid at the institution of the action. They alleged, on the contrary, that there was an agreement that no additional fee should be charged, and they also alleged that the services of appellees were of no value for the reason that the litigation afforded no relief to appellants, and that appellees were negligent in preparing the complaint in the cause and in refusing to amend the same after having had their attention called to its imperfections.

There was a trial of the cause before a jury, and the verdict returned was in appellees’ favor, fixing the amount of the recovery at the sum -of eight hundred dollars.

It appears from the testimony in the cause that appellants had entered into a contract with Jackson-Yreeland Land Corporation for the purchase of a large body of farm and timber,lands in Chicot County at the -price of fifty dollars per acre, the aggregate price being $157,590, and a controversy arose between the parties concerning the performance of the contract. Appellants claimed that there had been representations made to them, as an inducement to the purchase of the land, to the effect that the value of the land was fifty dollars per acre and could be sold for more than that; that the land would produce a -bale of cotton per acre, and was above overflow from the Mississippi River, or any other waters, by reason of drainage canals; that the Boueff River had been opened and cleaned, all of which representations were, according to the claim of appellants and the allegations of their complaint against Jackson-Yreeland Land Corporation, false.

When the controversy arose between the parties, negotiations were opened up between them looking to a settlement of the controversy, and there was an oral agreement to the effect that the Jackson-Yreeland Land Corporation would convey certain other lands to appellants in settlement of the controversy. Upon the refusal of the Jackson-Yreeland Land Corporation to comply with the oral contract, appellants consulted appellees concerning the merits of the controversy and employed them to institute -an action against the Jackson-Yreeland Land Corporation upon the contract. The complaint was prepared by appellees and filed in accordance with the request of appellants, setting forth the contract of purchase with the Jackson-Vreeland Land Corporation, the aforesaid misrepresentations concerning the value and condition of the land and its surroundings, and the prayer of the complaint was that the contract be canceled and that the appellants recover the amount they had paid thereunder and damages, or that the Jackson-Vreeland Land Corporation be compelled to specifically perform their oral agreement to convey other lands.

During the pendency of the action appellants, by negotiation with their adversaries in the litigation, obtained a settlement whereby the Jackson-Vreeland Land Corporation performed their oral contract with respect to the conveyance of other lands, and appellants accepted this in settlement of the controversy.

The pleadings in the former litigation were introduced in evidence, and each of the appellees testified in regard to their employment and the services which they performed. They both testified that they were paid a retainer fee of five hundred dollars, and that there was an express agreement that the question of the amount of the fee in the litigation should remain in abeyance until the litigation was concluded. Each of them testified in detail as to services performed, and they stated that their services were of the value of two thousand dollars in addition to what had already been paid. Other «attorneys testified in the case to the effect that the fee claimed by appellees was a reasonable one for the services performed.

Mr. E. Gr. Mims ell, one of the appellants, who employed «appellees «and who conferred with them with reference to the litigation with the Jackson-Vreeland Land Corporation, testified in the case and stated that he had an explicit agreement with appellees, that, the fee of five hundred dollars paid should be all that would be «charged if the case was settled out of court before being tried in the chancery court.

In the course of the cross-examination of Mr. Yerger, counsel for appellants interrogated him concerning certain allegations of the complaint prepared by appellees in the Jackson-Vreeland Land Corporation litigation. The purpose of the inquiry was to show that some of the allegations of the complaint with respect to misrepresentations in the sale of the land to appellants were immaterial and did not constitute grounds for the cancellation of the contract. The questions propounded to Mr. Yerger were intended to elicit a statement from him as to his opinion whether or not, as a matter of law, the representations concerning the value, location and productiveness of the land were sufficient, if false, to afford grounds for canceling the contract. The declared purpose of counsel was to Show in this manner that appellees were negligent in the preparation of the complaint and did not state therein facts sufficient to constitute a cause of action.

After numerous questions of this sort had been propounded, the court, of its own motion, stated that no further cross-examination would be allowed concerning those matters for the reason that the demurrer to the complaint had been overruled. Exceptions were saved to this ruling of the court, and the ruling is now assigned as error.

Counsel did not make any further offer of proof along the lines of the cross-examination which had been pursued. There was an acceptance, in other words, to the ruling of the court, without offering to cross-examine Mr. Yerger any further or to show what could be proved by him. Tlje incident therefore presents a case where there is not enough shown to make it apparent that prejudice resulted from the ruling of the court.

The case went to the jury up&n instructions which submitted only the issues as to what the agreement was between the parties with respect to fee, and the value of the services performed. There was a sharp conflict in the testimony as to whether or not any additional fee was to be paid, but as both of the appellees testified concerning this agreement and stated that there was an additional fee to be paid, that issue must be treated as settled by the verdict of the jury. There was also testimony sufficient to sustain the verdict as to the amount of compensation awarded.

Appellants requested the court to give an instruction which submitted to the jury the question of negligence of appellees in drawing the complaint and in failing to properly advise appellants of their rights and remedies in the controversy with the Jacks on-Yreeland Land Corporation, but the court modified this instruction by striking out the statement in regard to negligence. We are of the opinion that the court was correct, for there was no proof in the case to justify submission of that issue to the jury. It is not shown that the allegations of the complaint were not in accordance with the facts communicated by appellants to the attorneys, nor that these allegations were, ás a whole, insufficient' to constitute a cause of action against the Jackson-Vreeland Land Corporation.

The complaint alleged false and fraudulent misrepresentations concerning the value of the land, its productiveness and its condition with respect to drainage, and it was alleged that these representations were relied upon and constituted an inducement to the purchase. Conceding that the allegations in the complaint with respect to false representations concerning the value of the land would not, alone, constitute grounds for cancellation of the contract, it was not an inappropriate 'allegation in connection with the other allegations of the complaint and did not in any wise lessen the effectiveness of the complaint as a statement cf a cause of action. The incorporation of this allegation does not show either negligence or lack of skill which would justify a denial of compensation to the attorneys pursuant to agreement.

Upon the whole, we are of the opinion that the record is free from error and that there was evidence sufficient to sustain the verdict.

Judgment affirmed.


text:
    Vanderford v. Monroe County Road Improvement District No. 4.
    Opinion delivered October 30, 1922.
    1. Highways — alteration of petition. — Where the county judge and others intereste'd jn the organization of a road improvement district under Crawford' & Moses’ Dig., § 5399 et seq., altered the petitions prepared fiy-.the State Highway Engineer, so as to eliminate certain lands not benefited before circulating them, the validity of the proceedings was not affected, since the preservation intact of the petitions as prepared is not jurisdictional; the essential thing being that the petitions as presented indicated the boundaries, and that there be on file plans and estimates prepared by the Highway Engineer.
    2. Highways — boundaries of road improvement district. — The State Highway Department has nothing to do with fixing the boundaries of road improvement districts except to describe the same in the petitions prepared at the indication of the promoters; such boundaries being primarily established by the property owners in the petition which they sign, though power is conferred' on the county court under Crawford & Moses’ Dig., § 6401, on hearing to eliminate from the district any lands not benefited.
    3. Highways — improvement district — conclusiveness of county court’s finding. — The finding of a county court in its order creating a road improvement district under Crawford & Moses’ Dig., § 5399 et seq., that certain changes in the petition therefor were made before it was signed, is conclusive on collateral attack; the jurisdiction of the county court being dependent only on the filing of the plans and estimates of the highway engineer and the signing of the petition by the property owners.
    4. Highways — improvement district — presumption.—Where the county court granted a petition establishing a road improvement district under Crawford & Moses’ Dig., § 5399 et seq., it will be conclusively presumed that the court found, upon proper evidence, that erasures in the petition filed were made before the same was signed and presented.
    Appeal from Monroe Chancery Court; John M. Elliott, Chancellor;
    affirmed.

      Joe P. Melton, for appellant.
    Under section 5400, C. & M. Digest, the county judge had no authority to change either the petitions or plats prepared for circulation among the landowners. That section must be strictly complied with. 127 Ark. 310; 123 Ark. 205; 123 Ark. 298; 126 Ark. 318.

      Bogle & Sharp, for appellees.
    The county court had the power to eliminate lands from the petition before they were signed. 142 Ark. 509.
   McCulloch, C. J.

This 'case involves an attack upon the validity of the organization of a road improvement district in Monroe County created by an order of the county court, made pursuant to the general statutes of the State authorizing the creation of such districts. Acts of 1915, p. 1400, Crawford & Moses’ Digest, § 5399 et seq.

It is alleged, as the basis of the attack upon the validity of the proceeding, that the petitions prepared by the State Highway Engineer for circulation among the owners of property were altered by the county judge •by the erasure of the description of some of the lands described in the petitions, and that the said petitions, as filed, were different in some respects from each, other, and also differed from the petitions prepared and filed in the county court by the State Highway Engineer.

This action was instituted and tried in the chancery court of Monroe County, and it is alleged in the complaint that the county judge of Monroe County applied to the State Highway Department for the preparation of preliminary plans, surveys, specifications, and estimates of the cost of the road proposed to be built, and that such plans, specifications and estimates were prepared and filed; that thereafter the State Highway Engineer prepared, upon request of the county judge, petitions to be circulated among the landowners of the proposed district, and attached to each of the petitions a plat on which the boundaries of the proposed district were plainly indicated; that the petitions contained a description of the lands to be embraced within the district, and “that the petition of the property owners, as filed in the county court, differed with respect to the boundaries of the district and the description of the lands therein contained from the petitions presented to the highway department, and also from the petitions prepared' by the highway department for circulations among the property owners.”

It is also alleged that “the lands described in the petition filed by the property owners in the county court also differed from the lands as shown upon the plat, as being within the boundaries of the district; and it is therefore impossible to tell whether the property owners, in signing the petition for the formation of the district, wished the district to be formed in accordance with the boundaries as shown upon the plat, or in accordance with the boundaries as decribed in the petitions.”

There was an answer filed, in which it was denied that there was any difference between the petitions actually filed, but it was admitted that, after the State Highway Engineer had prepared the petitions in which the lands to be embraced in the district were described, it was determined by the county judge and others who were interested in the creation of the district, that certain sections of land described in the petitions would not receive benefit from the proposed improvement and should not be embraced in the petitions, 'and that the county judge, before the circulation of the petitions, erased those sections from the petitions; that thereafter the petitions were circulated and signed by the property owners, and that the district was formed by order of the county court establishing the boundaries of the district in accordance with the petitions as altered before circulation.

There was oral testimony presented to the court which clearly established the .fact that the only change made in the petition was the erasure of the description on about seven sections of land from the petitions prepared by the State Highway Engineer, and that these erasures were made before the petitions were circulated among the property owners and before any of the petitions were signed.

The chancery court, upon a hearing, dismissed the complaint for want of equity, and the only point raised by this appeal is that the changes made by the erasures on the petitions eliminating certain lands, before the circulation of the petitions, were unauthorized and rendered the whole proceeding invalid.

The lengthy section (1) of the statute authorizing those proceedings is copied in the opinion of the court in Lamberson v. Collins, 123 Ark. 205, and it is unnecessary to set it out again in full. The procedure required by the statute, as interpreted by this court in Lamberson v. Collins, supra, and in subsequent decisions following that case, is as follows: Upon the application of either the county judge or ten or more owners of land within a proposed road improvement district, the State Highway Commission is required to prepare the preliminary surveys, plans and specifications, and estimates of the road which is proposed to be constructed or improved, and these plans, estimates, etc., are filed with the county court. Then, upon the further application of the county judge or ten owners of property, the State Highway Enr gineer is required to prepare a form for the petitions for presentation to the owners of the property in the district to sign, praying for the organization of the district, and these petitions must either describe the boundaries of the district so as to indicate what real estate is to be embraced therein, or must make some references which will indicate the boundaries of the district and the lands to be embraced therein. The statute provides that a pl'at shall be filed showing the boundaries of the district. Upon the filing of the petition with the county court by a majority “in land value, acreage or number of landowners” within the proposed district, the county court causes public notice to be given, and upon a hearing of the petition in accordance with the notice, the district is either created or the petitions rejected, in accordance with the findings of the court on the question of a majority.

We held in Lamberson v. Collins, supra, that the filing of the plans and estimates prepared by the State Highway Engineer prior to the circulation of the petitions is jurisdictional and is essential to the validity of an order creating the district. There have been numerous decisions of this court following the case cited above, most of the cases being where there was a direct appeal from the order of the county court. In Griffin v. Boswell, 124 Ark. 234, we held that the same rule was applicable in a collateral attack upon the validity of the proceedings, and that such an order creating a district is void unless all essential jurisdictional facts appear upon the record. We decided, however, that it is unimportant how the plans and estimates of the State Highway Engineer concerning the proposed improvement get upon the files of the county court, and that the provision of the statute that it should be done upon the application either of the county judge or the property owners is merely directory. Jones v. Road Imp. Dist. No. 1 of Sevier County, 126 Ark. 318.

Under the terms of the statute, the boundaries of the district are primarily fixed by the property owners in the petitions which they sign and present to the county court, though power is conferred upon the county court at the hearing of the matter to eliminate from the district any lands found not to be benefited by the improvement. Acts of 1915, see.'2, p. 1400, Crawford & Moses’ Digest, sec. 5401.

The State Highway Department has nothing to do with the fixing of the boundaries of the district except to describe the same in the petitions prepared, and this, of course, is done by indication from the county judge or the promoters of the district so as to have the boundaries properly described in the'petitions to be circulated among the property owners.- ■. . ■

The essential thing to be done by the State Highway Department is to furnish plans and estimates of cost of the proposed improvement (Maples v. Road Imp. Dist. No. 2, 137 Ark. 177), and, as we have held in the case cited, this is necessary in order that the property owners may know the scope and extent and cost of the improvement before they are called on to sign a petition asking for the improvement. In the present instance the State Highway Engineer, upon the request of the county judge, prepared the petitions and described the boundaries and the lands included, presumably in accordance with the directions of the county judge, but after the petitions were received by the county judge it was determined by him ’and certain landowners who were interested in promoting the improvement that certain sections of land included in the petitions would not be benefited, and the county judge erased those sections from the petitions.

The validity of the proceedings was not affected by the fact that the change was made in the description of the boundaries and the lands embraced in the district at that time*, for the preservation intact of the petitions as prepared by the State Highway 'Commission was in no sense jurisdictional. They were still within the control of those who were promoting the district, and the only essential thing was that the petitions presented to the property owners should in some way indicate the boundaries of the district and the lands to be embraced therein, and that there should be on file the plans and estimates prepared by the State Highway Engineer.

It is alleged in the complaint that these changes in the petitions were not made in a way to indicate clearly what property was eliminated and what was left within the boundaries of the district, but the testimony in the present case is undisputed that the changes were made by erasure, striking out the sections of land to be eliminated, and the chancellor has found from this testimony that the changes were made before the petitions were circulated. We are concluded by that finding of the chancellor, which is based upon the evidence. Besides, the finding of the county court in its order creating the district is, on collateral attack, conclusive, the jurisdiction of the court being dependent only on the filing of the plans and estimates of the State Highway Engineer and. the petitions signed by the owners of the property.

It is conclusively presumed that the county court found, upon proper evidence, that the erasures in the petitions were made before the same were signed and presented to the court.

It is clear, therefore, that appellant has wholly failed in sustaining his contention that the district is invalid by reason of unauthorized changes in the petitions.

The decree is affirmed.


author: Wood, J.

text:
    Hatch v. Camp.
    Opinion delivered October 30, 1922.
    Alteration of instruments — ratification or waiver.' — Where a party charged by an instrument recognized his liability thereon by making payments with knowledge of a previous alteration, he waives or ratifies the alteration.
    Appeal from Hempstead Circuit Court; George R. Haynie, Judge;
    affirmed.

      King, Whatley & Ilamiter, for appellant.
    The court erred in directing a verdict in favor of the plaintiff.
    Any alterations which affect the rights of parties is material. 57 Ark. 277; 21 S. W. 468; 9 Ark. 122; 27 Ark. 108.
    Any material alteration of a written contract after delivery avoids the contract. 9 Ark. 122; 35 L. E. A. 469.
    A note is rendered void by the alteration of its date by the holder and without the consent of the maker. 32 Ark. 166.
    The admission of the altered note in evidence without explanation, did not place the burden of proof on the defendant to prove that he was liable. 69 Ark. 140; 61 Ark. 752; 39 L. E. A. (N. S.) 109; 50 Ark. 358; 35 Ark. 146.

      Where the alteration does not affect the rights of any of the parties, it is immaterial. 131 Ark. 178.
    P. T. Staggs, for appellee.
    The alteration was not written into the body of the note and was not material. 68 Ark. 391.
    Where one makes payments on a note with knowledge that the note has been altered, he thereby ratifies the alteration. Ann. Cas. 1917-D, 342 note.
    Where a negotiable instrument is materially altered without the assent of all partiés liable, it is avoided except as against a party who assented to the alteration. C. & M. Dig., sec. 7890.
    Silence with knowledge of change is implied ratification. Ann. Cas. 1917-D, 346.
    Defendant having made payments on the note is es-topped from pleading non est factum. 30 Ark. 285.
    It was a question of law for the -court, and not one of fact for the jury to determine whether or not there was a material .alteration. 35 Ark. 146.
   Wood, J.

This .action was begun by the appellee in the justice 'court against the appellant to recover the alleged balance due appellee on two promissory notes. The notes were dated July 22, 1919, and one was payable November 1, 1919, the other one November 1, 1920. The first note was a plain promissory note for the sum of $200, bearing interest from maturity at the rate of eight per cent.' per annum until paid. The second note was for the sum of $250 and was similar in form to the first note, except that the note for $250 contained the following recital: “This note is given to secure balance -of unpaid purchase money on one grist mill, one crusher, one sorghum mill and one No. 8 horse power gasoline engine.” Both notes were signed by the appellant, and after his signature in the left-hand corner of each note was the following: “No. - Due - Ownership lien being retained until paid.” The note for $200 had the following credits indorsed thereon: “Received on within note $85 this the 13th day of October, 1919. August 25th A. J. Camp received on the within note 2000 shingles $57. November the 12, 1920, received on the within note $21. ’ ’

The appellant entered a plea of non est factumand contended in the court below and contends here that the notes were materially altered by the appellee after they were executed, which rendered the notes void. The appellant admitted in his testimony at the trial he signed the notes, but testified that after the notes were signed they had been changed; that.the alteration consisted in placing the words, “Ownership lien being retained until paid” on the left-hand corner of the notes at the bottom following the appellant’s signature; that these words were not on either of the notes at the time appellant signed the same, and that appellant did not know anything about the alteration until a month or two afterwards.

The appellant, on cross-examination, stated that on one occasion, a month or two after the notes were signed, he met the appellee and appellee told appellant that the notes had been revised and a lien placed in the notes as indicated. Appellee was speaking to the appellant about the machinery and appellant remarked, “You got them notes all right,” and appellee replied, “Yes, but I didn’t know whether they were right or not. Carried them down to Uncle Bill Fomby and had them fixed right.” Appellee then showed the appellant the words as above indicated and stated, “Here’s what I had put on it.” Appellant further testified that when the apoellee told him that he had put the words mentioned on the note, he said to appellee, “I suppose it must be right.” The appellant was questioned in regard to the payments credited on the note, and if lie did not make these after his attention was called to the fact that the notes had been changed, and he did not answer. After testifying that he didn’t give the appellee any authority to change the notes, he further stated that when the appellee called his attention to the words mentioned he (appellant) did not object to it; that is, he didn’t make any answer to it at all. Appellant further testified that he had. not made any payments • on the notes before he found out that the change was made; that at the time the appellant made the payments he knew that the words now objected to were written in the notes. The notes were introduced in evidence.

At the conclusion of the appellant’s testimony the court directed the jury to return a verdict in favor of the appellee. The jury thereupon returned a verdict in appellee’s favor in the sum of $259.99. From a judgment in that sum in favor -of the appellee is this appeal.

The alteration complained of here was not in the body of the notes, -but we find it unnecessary to decide, and do not decide, whether such alteration was material. For if it be conceded that such alteration was material, the undisputed facts show that the appellant did not object to the alteration, but, on the contrary, made several payments on the first note after he was advised of the alleged alteration.

In 1917-D Ann. Cas., case note to Smith v. Barnes, at page 342, the following statement is made correctly declaring the law: “Where a party charged by an instrument yields his assent to it, or recognizes his liability thereon, with knowledge of a previous alteration, he will be held to have waived or ratified the alteration.” See also Supplement R. C. L. vol. 1, p. 312, sec. 68, paragraph 1-B; Divide Canal & Reservoir Co. v. Tenny, 57 Colo. 14, 139 Pac. 1110, Ann. Cas. 1917 D, page 346; sec. 7890, C. & M. Digest.

Let the judgment be affirmed.


text:
    Johnson v. State.
    Opinion delivered October 30, 1922.
    Criminal law — harmless error. — Evidence tending to show that a State’s witness whose testimony was relied upon for conviction was prejudiced against accused, admitted as hearing upon the weight to he given such witness’ testimony, was favorable to defendant and is not ground for reversal on defendant’s appeal.

      Appeal from Garland Circuit Court; Scott Wood, Judge,
    affirmed.

      Randolph & Cobb, for appellant.

      J. 8. Utley, Attorney General, Elbert Godivin and Wm. T. Hammock, Assistant®, for appellee.
   Wood, J.

The appellant was convicted of the crime of keeping a gambling-house under section 2632, Crawford & Moses’ Digest. A judgment was entered sentencing bim to two years’ imprisonment in the State Penitentiary, from which he appeals.

Jeff Jones, a witness on behalf of the State, testified to facts which fully justified the jury in returning a verdict of guilty. The appellant does not contend that the evidence is not sufficient to sustain the verdict, but complains because the witness, Jones, was permitted, over the objection of appellant, to testify that one time the appellant cursed him and threatened his life because he (Jones) requested that the appellant return a dollar to him which Jones claimed he had given to 'appellant for the purpose of inducing the appellant to sign an appearance bond for Jones. The specific testimony of Jones to which the appellant objected was as-follows: “I went to Dave and I asked Dave to give me my dollar and Dave said, ‘I ain’t going to’give you a damn thing— I will blow your G — • damn brains out if you don’t get out of here.’ I said, ‘Well, that is all you can do is to blow my brains out.’ He said, ‘G— damn you, if I thought you had a pocket-knife I would blow you down right here,’ and my wife and another girl was together with me.”

The court permitted this evidence on the ground that it tended to show the interest and feeling of the witness and might be considered by the jury in weighing the witness ’ testimony. It was certainly not prejudicial to appellant to permit testimony tending to prove that the witness, upon whose testimony the State relied for conviction, was strongly prejudiced against the appellant. Such, testimony was favorable to the appellant, and be is in no attitude to complain of the ruling of the court. Fort v. State, 52 Ark. 180; National Produce Co. v. Garrett, 121 Ark. 570.

Since the ruling of the court was not prejudicial to appellant, the judgment is correct and it is affirmed.


text:
    McCord v. Little River County.
    Opinion delivered October 30, 1922.
    1. Highways — road commissioner not authorized to purchase automobile. — Crawford & Moses’ Dig., § 5278, authorizes county road commissioners to buy “such tools, plows, scrapers, wagons, graders and other implements as may be necessary for use on roads and bridges on the different road districts.” Acts 1921, No. 494, § 11, provides for expenditure upon the highways of money paid into the highway fund. Held that a county road commissioner was not authorized to purchase, subject to the approval of the county court, an automobile for inspecting work upon road districts.
    2. Highways — unauthorized purchase of automobile — ratification. — The county court could not allow a claim for the unauthorized purchase of an automobile by the county road commissioner, and thereby ratify his contract in purchasing same, though it was purchased and used in good faith.
    Appeal from Little River Circuit Court; James S. Steel, Judge;
    affirmed.

      A. D. DuLaney and John J. DuLaney, for appellant.
    The county court was authorized to purchase the automobile the same as it could have purchased any other machinery necessary in constructing and maintaining the roads, and authority therefor is found in sec. 11 of act 494 of the Acts of 1921; sec. 5278, C. & M. Digest; and the decisions in 135 Ark. 110 and 165 S. W. (Ark.) 631.
    The county ratified the purchase by paying for same out of the highway improvement fund, mentioned in sec. 11, act 494, Acts of 1921. The county court may ratify an unauthorized contract made in behalf of the county, if the contract is one the county could have made in the first instance. 122 Ark. 114.

      George R. Steel, June R. Morrell and Reynolds & Steel, for appellee.
    A passenger automobile is neither necessary material, nor a necessary road, tool or other implement for the construction of a public road, as defined in sec. 5278, C. & M. Digest. Authority for its purchase can not be found in the other 'sections of the Digest which treat of expenses for bridges and roads. See secs. 5490-5496, C. & M. Digest. This clearly being an unauthorized claim, the circuit court was correct in denying it. 118 Ark. 531. No authority is found in act 494 of Acts of 1921 for this purchase. The cases cited by appellant support the contention of appellee that the claim was unauthorized and that an illegal claim could not be ratified.
   Wood, J.

P. M. McCord (hereafter called appellant), who was the county judge and road commissioner of Little River County, purchased a Buick automobile to be used by him as road commissioner in the supervision and construction of roads and bridges in Little River County. He was to pay the sum of $1,075 for the automobile, and he presented four separate claims in the aggregate for that sum to the county court, which claims were allowed, the appellant sitting as judge. The court directed the payment -be made out of the highway improvement fund. Warrants were issued, and the amounts thereof paid to the appellant out of such fund.

The appellees, who were taxpayers of Little River County, protested against the allowance and appealed to the circuit court from the judgment of the county court making such allowance.

The appellant testified substantially as follows: That he was the county judge and road commissioner of Little River County, and as such it was very necessary that he get out among the road overseers and supervise the work on the roads and bridges. There are fifteen districts in the county. Some of them are large districts and he had. four or five men working at a time. Seventy-five to ninety per cent, of his time was spent in looking after the road work. If he hadn’t purchased the car, it would have been necessary for him to hire one, which would have been more expensive to the county. It would cost from twelve to fifteen dollars per day to hire a car to get to remote portions of the county. The work on the roads was not being done by contract, but under appellant’s personal supervision.

At the conclusion of the testimony, the court rendered a judgment disallowing the appellant’s claims, from which is this appeal.

The appointment of commissioner of public roads is provided for and his duties prescribed under sections 5276-6278, Crawford & Moses’ Digest. Section 4269 makes it the duty of the commissioner of public roads “to diligently prosecute the work of construction and repairs on roads, bridges, and other public works of the county, under direction of the county judge, and to organize, equip, take charge of, manage and control the property and labor of such force of men, teams and tools as the county court, or judge, may from time to time direct. ’ ’

Other sections make it his duty “to examine all the first and second-class roads and bridges of the county, giving estimates of the work to be done, repairs, or changes to be made, and the cost of same,” and to make written sworn reports at the October term of the county court of the work done. Sec. 5276. It is also made his duty “to superintend the work of construction of all bridges of the county, and the work on the roads and highways of any road district of the county, whenever the county court, or the county judge in vacation, shall so order,” and to report to the county clerk all road overseers who failed to perform any of their duties as prescribed by law. Secs. 5276-77.

Sec. 5278 provides as follows: “The road commissioner shall, under the direction of the county court, buy such tools, plows, scrapers, wagons, graders and other implements as may be necessary for the use on roads and bridges on the different road districts in the county, and distribute 'the same among the overseers of each county, and the cost of same shall be paid for out of the county treasury on warrants properly drawn and allowed by the county court, out of any money in the treasury to the credit of the road district in which said tools and implements are purchased and used; provided, that, if the county court so order, the road commissioner may purchase wagons and road graders to be used in any road district in the county, and the cost of the same shall be paid pro rata, according to the amount of taxes levied and collected in said district, out of any moneys in the county treasury to the credit of said districts; provided, that no money shall be used for working or repairing roads or bridges in any other district than that in which said money was raised or voted. ’ ’

Section 11 of act 494 of the General Acts of Arkansas 1921, page 500, provides in part as follows: “The fund so paid into the county highway improvement fund shall be by the county court expended upon the public highways of said county, and it shall be the duty of the county court to fairly and equitably apportion the funds so collected among the various road districts and the road improvement districts in said county for the purpose of constructing and maintaining the roads, whether hard surfaced or dirt roads.”

Appellant contends that the authority for the allowance of his claims can be found in section 11, act 494, supra, authorizing the county court to expend the money paid into the county highway improvement fund upon the highways of the county for the purpose of constructing and maintaining the roads. But not so. An automobile cannot be used “for the purpose of constructing and maintaining roads.” The money expended for the purchase.of an automobile is not “expended upon the public highways.” The road commissioner, under the statute, and by direction of the county court, shall buy “tools, plows, scrapers, graders and other implements as may be necessary for use on the different roads and bridges in the county.” But the words, “other implements,” under the rule of ejusdem generis, must be implements of the same nature of those previously mentioned, referring to tools, etc., that may be used in the actual construction of roads and bridges. Jones v. State, Í04 Ark. 261, and cases there cited. An automobile is not in that category.

After a most careful scrutiny of the various statutes describing the functions, the duties and powers of the road commissioner, the county judge and county court, we fail to discover any statutory authority for the purchase of an automobile by the road commissioner, or the county judge, subject to the approval of the county court. No such authority exists, and the act of the road commissioner in making such purchase at the expense of the county was ultra vires and void. It was beyond the power of the county court to allow the claims for the purchase of this automobile and by so doing ratify the contract of the commissioner in making the purchase. Since such contract was illegal and void, the court could not authorize it in the first place, nor ratify it in the second place, after it had been entered into by the commissioner. Leatham v. Jackson County, 122 Ark. 114; see also Monroe County v. Brown, 118 Ark. 531.

It may be said, in passing, that the testimony shows that the automobile purchased was used in good faith and for a good purpose by the appellant in the performance of his duties as road commissioner, but considerations of economy and expediency in the allowance of claims of this kind must be addressed to the Legislature and not to the courts. Authority for. the allowance of all such claims must be found in ita lex scripta est (“so the law is written”). ... ' .

The judgment of the court is therefore correct, and it is affirmed.


author: Hart, J.

text:
    United Order of Good Samaritans v. Meekins.
    Opinion delivered October 30, 1922.
    1. Insurance — fraternal society — age limit. — Under Crawford & Moses’ Dig., § 6075, providing that fraternal benefit societies may admit to membership any person not less than 16 nor more than 60 years of age, a benefit certificate issued to a member over the age of 60 when admitted is void, and the society will not be liable thereon, though it solicited his membership and thereafter accepted his dues.
    2. Corporations — prohibited contracts — ratification.—If a statute prohibits a corporation from making a contract of a certain kind, the contract is void, and incapable of ratification.
    3. Corporations — prohibited contracts — ultra vires doctrine.— The doctrine that a corporation may not plead ultra vires to a contract of which it has received the benefit has no application to a contract which is expressly or impliedly forbidden by statute, or to contracts whose enforcement would be against public policy.
    4. Evidence — judicial notice. — The powers delegated by statute to corporations are matters of public law of which no one can plead ignorance.
    5. Insurance — fraternal benefit society. — Where the beneficiary belonged to a subordinate lodge, which held secret ritualistic ceremonies, and sent part of its dues to a supreme governing body, which issued benefit certificates to members, the organization was a “fraternal benefit society,” within the meaning of Crawford & Moses’ Dig., §§ 6068-9.
    Appeal from Clark Circuit Court; George R. Haynie, Judge;
    reversed.
    STATEMENT OK KAOTS.
    Lillian Meekins sued the United Order of Good Samaritans to recover $300 alleged to be due ber upon a benefit certificate issued by it upon the life of Luke Jefferson.
    It appears from the record that A. A. McElroy was present on the 16th day of August, 1920, when the local lodge of the United Order of Good Samaritans was organized at Arkadelphia, Ark. Since that time, McElroy has been what he calls president or colonial chancellor of said lodge. The lodge holds regular meetings, and is a secret order. It lias a book containing its by-laws and the rules of the Supreme Colony of the United Order of Good Samaritans. The by-laws and rules of the order were introduced in evidence, and provide that no person shall be received as a member of the order above the age of sixty years.
    Grant Reed was present at the time the local order at Arkadelphia was organized by W. R. Cox, a deputy of the grand lodge. Reed has been treasurer of the local lodge since it was organized. Cox solicited people to join who were over sixty years of age and told them that this did not make any difference as long as their health was good. Luke Jefferson was initiated on the night the lodge was organized, and was told by Cox that it did not make any difference that he was over sixty years of age. The members pay a certain stipulated sum as dues each month, and a certain per cent, of the amount so collected is sent to the grand lodge. Luke Jefferson paid his dues regularly until his death, which occurred on the 17th day of March, 1921. The benefit certificate issued upon his life was for the sum of $300, and was payable to Lillian Meekins, a daughter of Luke Jefferson.
    Evidence was introduced on the part of the defendant to show that Luke Jefferson was over sixty years of age at the time he was initiated in the lodge; and on the other hand evidence was introduced by the plaintiff to show that Luke Jefferson was under sixty years of age at the time he joined the lodge.
    Evidence was also introduced by the defendant to show that it paid the plaintiff the sum of $75, as a payment in full of any amount which might be due on the beneficiary certificate sued on.
    The plaintiff admitted receiving this sum, but stated that it was a voluntary gift on the part of the defendant.
    The jury returned a verdict in favor of the plaintiff, and the defendant has appealed.

      Callaway é Calla%vay, for appellant.
    Appellant is a fraternal benefit society, and under sec. 6071, C. & M. Digest, is exempt from the general insurance laws. Sec. 6075 provides for the qualifications of members, and is mandatory, and any act of a deputy attempting to waive it was ultra vires, and not binding on’ the order. 98 Ark. 505. See also 30 Ark. 609.
    A provision of the statute under which the appellant order was organized, and which gives it the right to do business, cannot be waived. 114 111. App. 194; 215 111. 190; 74 N. E. 121; 106 Am. St. Rep. 160.
    Where the contract of insurance is beyond the powers conferred by law, neither the society nor any other party can, by acting on it, or assenting to it, be estopped to show that it was prohibited by law. 182 111. App. 319; 193 Mo. App. 619; 187 S. W. 134; 168 N. W. 189.

      McMillan & McMillan, for appellee.
    It was appellant’s duty to prove that it was a fraternal benefit society under sec. 2068. See 143 Ark. 184.
    Since the man Cox, who was sent by appellant to organize the lodge, told deceased that his age didn’t matter, a by-law of the kind relied on would not be a defense in this case. 130 Ark. 12.
    The benefit certificate does. not comply with sec. 6076, C. & M. Digest. If a fraternal benefit society issues a policy not authorized by the statute under which it is incoporated, still the contract is enforceable against it. 223 S. W. 70 (Mo.); 193 Mo. App. 619.
    Where an agent having express or apparent authority to take applications, makes false representations which induce the member to join the society, the society will be estopped from controverting the truth of such representations. W. O. W. v. Richardson> 151 Ark. 231. The defense of ultra vires is not available to appellant. 74 Ark. 377; 74 Ark. 191; 77 Ark. 109; 96 Ark. 595; 137 N. Y. 417; 151 N. Y. 24.
   Hart, J.

(after stating the facts). Counsel for defendant assign as error the refusal of the court to instruct the jury that, if Luke Jefferson was over sixty years of age at the time he was initiated in the local lodge of the defendant, the plaintiff was not entitled to recover.

We think the court erred in refusing to give the instruction. The rules of the order provide that no person shall be received as a member of the order above the age of sixty years, and that failure to comply with this rule renders the contract null and void.

Our statute prescribing the qualifications for membership in fraternal benefit societies provides that any such society may admit to membership any person not less than sixteen and not more than sixty years of age. Crawford & Moses’ Digest, § 6075. It will be observed that the by-laws follow the statute in fixing the age limit for membership in the order.

It is the contention of the plaintiff that the receipt and retention by the defendant of the dues of the deceased with knowledge that he was ©ver sixty years of age at the time he was initiated in the lodge at Arkadelphia, operates as a waiver of the right to forfeit the benefit certificate. Counsel contend that a corporation cannot avail itself of the defense of ultra vires when the contract has been performed in good faith by the other party and the corporation has had the full benefit of such performance. In support of this claim various decisions heretofore rendered by this court are referred to and relied upon. We need not review these decisions; for they are not applicable in cases where contracts are prohibited by statute. If the prohibition contained in the rules of the order was all that was in the case, the principles might be availing to the plaintiff. The statute, however, restricts the age limit of members to those not over sixty years of age. It provides that only persons not less than sixteen and not more than sixty years of age may be admitted to membership in fraternal benefit societies. This amounts to a prohibition against admitting members over sixty years of age.

The general rule is that if a statute prohibits a corporation from making a contract of a certain kind, the contract is void, even though not expressly declared to be so in the statute, and it is incapable of ratification. The doctrine of ultra vires has no application in the case of contracts by a private corporation, the making of which is prohibited by statute, or where their enforcement would be against public policy on account of being immoral. The reason given is that the powers delegated by the State to corporations are matters of public law of which no one can plead ignorance. Steele v. Fraternal Tribunes, 215 Ill. 190, 106 Am. St. Rep. 160.

In Haner v. Grand Lodge A. O. U. W. of Nebraska, 168 N. W. 189, the Supreme Court of Nebraska said that the general rule seems to be that a fraternal society may waive its own rules and by-laws, but it cannot waive the provisions of a statute made for its government. See, also, Tuite v. Supreme Forest Woodmen Circle, 130 Mo. App. 619, 187 S. W. 137.

The principle is also recognized in White v. Commercial & Farmers’ Bank, 66 S. C. 491, 97 Am. St. Rep. 803, where it was held that contracts ultra vires cannot be made the foundation for the liability of a corporation, nor can a corporation be made liable on a contract which the law prohibits it from entering into. It was said that in such cases the court will not lend its aid in the enforcement of rights growing out of a contract expressly forbidden by statute, but will leave the parties to the unlawful contract where it finds them.

So, too, In re Assignment Mutual Guaranty Fire Insurance Company, 107 Iowa 143, 70 Am. St. Rep. 149, the Supreme Court of Iowa held that where a mutual insurance company issues a policy which it is prohibited by law to issue, the policy is illegal and void, and the fact that premiums have been paid thereon and used by the company will not estop it from pleading ultra vires to a suit on the policy. Fraternal benefit societies do not have a capital stock, and are organized and carried on solely for the mutual benefit of their members. Our statute regulating such societies was manifestly enacted to protect the members, who are incapable of protecting themselves. It is well known that in such societies the officers make the rules and by-laws, and that the members have practically no voice in the management of the affairs of the. order. The Legislature having thus intended to restrict the age limit of the members of such societies for the purpose of protecting the members, the courts are bound to carry out the statute and to see that it is not violated. Otherwise the officers of such societies, by a course of conduct, could abrogate a statute and thus do indirectly what the statute prohibits them from doing directly.

But it is insisted that the defendant has failed to show that it was a fraternal benefit society within the meaning of the statute. We cannot agree with counsel in this contention. Sec. 6068 of Crawford & Moses’ Digest contains a definition of fraternal benefit societies. It provides that any corporation, society, etc., without capital stock, organized and carried on solely for the mutual benefit of its members and their beneficiaries, and having a lodge system with ritualistic form of work ¡and representative form of government, etc., is declaréd to be a fraternal benefit society.

Sec. 6069 provides that any society having a supreme governing body and subordinate lodges into which members shall be initiated and admitted, in accordance with its constitution, laws and prescribed ritualistic ceremonies, which subordinate lodges shall be required to hold regular meetings at least once in each month, shall be deemed to be operating under the lodge system.

It is fairly inferable from the benefit certificate sued on and from the testimony of the treasurer and the head officer of the local lodge that the defendant is a fraternal benefit society within the meaning of the statute. The benefit certificate recites that it was issued by the supreme lodge, and that Luke Jefferson was a member of the subordinate lodge at Arkadelphia. It also recites that his daughter is the beneficiary, and that the insured agrees to be governed by the constitution and by-laws of the supreme colony and to pay the local colony the requisite amounts to maintain membership in the society.

It is fairly inferable from the testimony of the officers of the local lodge that it had a ritualistic form of ' work. They testify that it was a secret order, and that it had regular meetings. It is also shown that the dues were paid monthly, and that part of the dues was kept by the local lodge and that a part of them was sent to the supreme governing body.

Therefore it is inferable from the evidence that the defendant is a fraternal benefit society within the meaning of the statute.

It follows from the views we have expressed that the court erred in not instructing the jury that, if it should find from the evidence that Luke Jefferson was over sixty years of age at the time he became a member of the order, it should find for the defendant.

Therefore the judgment will be reversed, and the cause remanded for a new trial.


text:
    Mitchell v. State.
    Opinion delivered October 30, 1922.
    I Indictment and information — statutory offense. — An indictment under a statute ought to charge with certainty that the defendant committed the acts under the circumstances and with the intent mentioned in the statute.
    2. Prostitution — indictment.—An indictment under the “pandering statute” (Crawford & Moses’ Dig., § 2632), for procuring a female to leave the State for purposes of prostitution, held bad in leaving out the qualifying words of the statute “by promises, threats,” etc., before the words “inveigle, entice,” etc.
    3. Criminal law — instruction.—It was error to instruct the jury, on trial of a woman, that uuder Crawford & Moses’ Dig., § 9316. females over 18 years old convicted of felony are sent to the State farm for Women, and that courts and juries are prohibited from fixing any punishment, etc., as such statement may have influenced the jury to return a verdict of guilty.
    4. Prostitution — sufficiency of evidence. — Evidence held to sustain a conviction of pandering.
    Appeal from Benton Circuit Court; W. A. Dickson, Judge;
    reversed.

      Sullins é Ivie, for appellant.

      J. S. TJtley, Attorney General, Elbert Godwin and W. T. Hammock, Assistants, for appellee.
   Hart, J.

Pearl Mitchell' prosecutes this appeal to reverse a judgment of -conviction against her for a violation of the provisions of § 2703 of Crawford & Moses’ Digest, known as the “pandering statute.”

The first assignment of error is that the court erred in not -sustaining -a -demurrer -to- the indictment. The charging part of the indictment is -as follows: “The said Pearl Mitchell, in the said county of Benton, and State of Arkansas, on the 4th day of May, 1922, feloniously did inveigle, entice, encourage, and procure one Bertha Potts, a female person, to leave the State of Arkansas and go into the -State of Missouri for the purpose of prostitution, against the peace and dignity of the State of Arkansas.”

We have uniformly held that an indictment under a statute ought to -charge with -certainty that the defendant committed the acts under the -circumstances and with the intent mentioned in the statute.

In construing that clause -of the statute under which the indictment was found in Holland v. State, 111 Ark. 214, the court said: “Under a proper interpretation of the statute, the clause -making it an offense to ‘inveigle, entice, persuade, encourage or procure any female person to come into this State or to leave this State,’ for the purpose of prostitution, or for the purpose of sexual intercourse, where the marriage relation does not subsist, is limited by the preceding phrase, ‘any person who by promises, threats, violence, by any- device or scheme, by fraud or artifice, or by duress of person or goods, or by use of any position of confidence or authority, or having legal charge.’ ”

In that case the indictment used the qualifying words, “by promises, threats” etc, before the words, “inveigle, entice,” etc. Hence the indictment was held to be valid.

The indictment in the instqnt case has omitted the qualifying words, and for that reason is fatally defective, as will be seen from the quotation above. If the words,' “inveigle, entice,” etc., are limited or qualified by the preceding phrase, “any person who by promises, threats,” etc., it is evident that these latter words are descriptive of the offense and must be set out in the charging part of the indictment, although the particular words constituting the promises, threats, etc., need not be set out.

By leaving out the qualifying words in the indictment, an essential element of the crime as defined by the statute was omitted, according to the holding in the case cited above, and it follows that the indictment is not valid. Hence the 'circuit court should have sustained the demurrer to it.

It is next insisted that the court erred in telling the jury “that all females over eighteen years convicted of felonies shall be sent to the State Farm for Women, and all courts and juries are prohibited under this section from fixing any punishment,” etc. The section referred to is 9316 of Crawford & Moses’ Digest, which provides that:

“Women over eighteen years of age belonging to any of the following classes may be committed by any court of criminal jurisdiction to said institution: first, persons convicted of or who plead guilty to the commission of felonies,” etc.

In construing a similar provision of the statute with regard to committing to the reform school boys convicted of felonies, the court held that it was erroneous to tell the jury that the defendant would be sent to the reform school and not to the penitentiary. The reason given was that a statement to that effect by the court might have influenced the jury in returning a verdict of guilty. Pittman v. State, 84 Ark. 292, and Bird v. State, 154 Ark. 297. The Attorney General has confessed error with respect to the giving of this instruction, and it is well taken.

Finally, it is insisted that the evidence is not sufficient to support the verdict. In view of another trial we will not set out and discuss the evidence in detail, but deem it sufficient to say that the evidence for the State is sufficient to support a verdict of guilty. It is true that the prosecuting witness was an unwilling one, but her testimony, taken in connection with a letter written by the defendant while in jail to one of her friends, which is in the nature of a confession, was sufficient to warrant the verdict.

For the errors indicated, the judgment will he reversed and the cause remanded for a new trial.


text:
    Jonesboro Trust Company v. Harbough.
    Opinion delivered October 30, 1922.
    1. Landlord and tenant- — holding over under lease por years.— Wher.e a tenant under a lease for a term of years held over after the -end of the term without any new agreement, and paid rent according to the terms of the lease, which was accepted by the landlord, a tenancy from year to year is created.
    2. Landlord and tenant — tenancy from year to year — termination. — A tenancy from year to year cannot be terminated by either party except on six months’ notice.
    Appeal from Craighead Circuit Court, Jonesboro District; W. W. Bundy, Judge;
    affirmed.

      STATEMENT OE EACTS.
    This is an action of unlawful detainer brought by the Jonesboro Trust Company, as trustee for certain designated parties, against C. M. Harbough and others, to recover certain town lots in the city of Jonesboro in Craighead County, Ark.
    According to the allegations of the complaint, C. M. Harbough entered into the possession of the property on January 25, 1917, under a written lease between himself and A. P. Carville for the St. Roman's Congregation of Jonesboro, Ark. The lease was for a term of three years from the 25th day of January, 1917, for a consideration of $900, payable at the rate of $25 per month in advance for each and every month until the end of the lease. C. M. Harbough continued to hold over after the expiration of his lease, and paid rent according to the terms of the lease up to and on the 25th day of October, 1921. On the last mentioned date, the plaintiffs became the owners of said property by purchase. C. M. Harbough was advised of the change in ownership, and paid to the plaintiffs the sum of $50 in payment of the rent due up to January 25, 1922. On December 14, 1921, the plaintiffs gave notice to the lessee that they did not desire to lease the property to him after January 25, 1922, and notified him to vacate the property on that date. C. M. Harbough refused to vacate the property, and continued to hold it after the 25th day of January, 1922. Hence this lawsuit.
    The defendants filed a demurrer to the complaint, which was sustained by the court. The plaintiffs declined to plead further, and their 'complaint was dismissed by the court. The plaintiffs have duly prosecuted an appeal to this court.

      Eugene Sloam, for appellants.
    We have here a contract for the rental of city residence property for a period commencing January 25, 1917, and ending January 25, 1920; a holding over by the tenant without objection or other agreement and payment of rent by the month until January 25, 1921, and again without objection or other agreement the tenant held over and paid rent from that date monthly until December 14, 1921, when he was notified by the new owners, who had acquired title about three months previously, that they would' not rent the property to him after the expiration of the yearly period then running, which would end January 25, 1922.
    Under this state of facts the holding over ought not to be held as creating a common law tenancy from year to year, entitling the appellee to six months’ notice to vacate prior to the end of the yenj 16 R. C. L. p. 1167; 24 Cyc. 1382, and cases cited n note 58; 1 Underhill on Landlord and Tenant, 157; 25 L. R. A. (N. S.) 849; 60 Ohio St., 427; 53 Hun (N. Y.) 260; 28 N. E. 25.

      Driver & Simpson, for appellees.
    Under the facts in this case the tenancy became one from year to year, subject to the terms of the original lease. 61 Ark. 377; 25 L. R. A. (N. S.) 857; 147 Ark. 282, 289; 148 Id. 79.
   Hart, J.

(after stating the facts). The decision of the circuit court proceeded upon the theory that, under the facts alleged in the complaint, a tenancy from year to year was created, and the plaintiffs were not entitled to recover because they had not given the notice to quit required under such a tenancy.

To reverse the judgment, counsel for the plaintiffs have cited cases which hold that under a state of facts similar to those alleged in the complaint a tenancy from year to year is not created. We do not deem it necessary to discuss or to review these cases, because this court has held to the contrary. We have held to the common-law rule that a tenant under a lease for a term of years, by holding over after the end of the term without any new agreement, and paying rent according to the terms of the lease, which has been accepted by the landlord, becomes a tenant from year to year, and that this tenancy cannot be terminated by either party except upon notice of six months. Belding v. Texas Produce Co., 61 Ark. 377; Lamew v. Townsend, 147 Ark. 282, and Peel v. Lane, 148 Ark. 79.

According to the allegations of the complaint, the lease was for a period of three years, with a stipulated rental payable monthly in advance. The lease terminated on the 25th day of January, 1920. After that time the tenant continued to hold the premises and pay rent under the terms of the prior lease until December 14,1921. The landlord accepted the rent. Hence by election of the parties a tenancy from year to year was created. The act of the tenant in holding over and of the landlord in accepting rent under the terms of the prior lease created the relation of tenancy from year to year, and it was not within the power of either to throw off that relation, however onerous it might be, without giving the notice of six months required by the common law.

Of course this implication of law might have been rebutted by proof, but such a course was not adopted in the present case. Indeed, the demurrer admitted the allegations of the complaint to be true; and by declining to plead further, the plaintiffs elected to try the issues on the allegations of the complaint.

Therefore the judgment will be affirmed.


author: Smith, J.

text:
    Rowe v. State.
    Opinion delivered October 30, 1922.
    1. Witnesses — impeachment on cross-examination. — Defendant in a prosecution for carnal abuse may impeach the character of the prosecutrix by cross-examining her as to intercourse with other men.
    2. Witnesses — impeachment—cross-examination as to collateral matter. — Where the prosecutrix in a prosecution for carnal abuse was questioned on cross-examination as to having had intercourse with others, ’ her answers, whether true or false, were conclusive.
    3. Rape — carnal abuse — evidence.—¡Where the State, in a prosecution for carnal abuse, attempted to corroborate the prosecutrix by testimony that defendant was the father of the child, he should have been allowed to prove that another might have been the father.
    4. Rape — carnal abuse — evidence.—The State’s evidence in a prosecution for carnal abuse that defendant was the father of a child begotten by the illicit intercourse may be rebutted by evidence of an admission by prosecutrix that he was not its father.
    5. Rape — paternity of child — evidence.—Where the State in a prosecution for carnal abuse sought to fasten the paternity of a child on defendant, the latter, having testified that he was away from prosecutrix until 8 months before the birth, should have been allowed to prove by the attending physician whether the child was fully developed at birth.
    6. Rape — carnal abuse — evidence of intercourse with another, —The intercourse of prosecutrix with another which defendant in a prosecution for carnal abuse may show to rebut evidence of the State tending to prove that defendant was father of her child is limited to the period when conception probably occurred.
    7. Rape — carnal abuse — defense.—It is no defense to a prosecution for carnal abuse that prosecutrix had had intercourse with another.
    Appeal from Miller Circuit Court; George B. Haynie, Judge;
    reversed.

      B. E. Carter and J. M. Carter, for appellant.

      J. S. Utley, Attorney General, Elbert Godwin and Wm. T. Hammock, Assistants, for appellee.
   Smith, J.

Appellant was convicted of carnally knowing Pernie Braswell, a female under the age of sixteen years, and has appealed.

The prosecutrix did not expressly testify that appellant was the father of her child, which she produced in court and which she testified was horn on April 16, 1922, hut, on her direct examination by the prosecuting attorney, a showing was made of act of sexual intercourse with defendant at about the time when conception must have taken place.

The prosecution did attempt, however, to fasten the paternity of the child on appellant through the testimony of a Mrs. Dixon.

This witness testified that appellant told her, before the child was born, that he was its father. On her cross-examination she was asked if the prosecutrix had not stated to her that appellant was not the father of the child; that Joe Holt was its father, but that she would go to hell before she would put it on Joe.

The defendant denied he had ever had sexual intercourse with the prosecutrix; he denied that he had ever gone with her, and the girl admitted that defendant had never visited her, and her. parents, who were witnesses in the case, also admitted that they never knew defendant to pay their daughter any attention. The prosecutrix admitted that defendant had never courted her and that she never loved him, and the defendant attempted, by his cross-examination of her, to show that Joe Holt had been and was her sweetheart, and that she was in love with him; but the court held this testimony incompetent. It was the theory of the defense that the prosecutrix had become pregnant by Joe Holt, and that she sought to protect him by falsely accusing defendant.

The defendant asked the prosecuting witness, on cross-examination, if she had not had sexual intercourse with Joe Holt, and an objection to that question was sustained. The defendant also' offered to prove by certain witnesses that Joe Holt had had sexual intercourse with the prosecutrix, and offered to prove such acts of intercourse about the time the child was begotten; but the court excluded this testimony.

The defendant undertook to show that during the summer of 1921 (this being the time when the prosecutrix testified defendant had intercourse with her) he was in Kansas City, and that he did .not return until eight months before the child was born..

■ Defendant also called the physician who delivered the child and asked him what the ordinary period of gestation was, and whether the child was fully developed at the time of its birth and appeared to be a normal, fully developed child; but the court excluded this testi.-. mony.. , "

It appears, from the above recitals, that the judgment of the court must be reversed. Defendant should have- been allowed to ask the prosecutrix about acts of intercourse with other men for the purpose of impeaching her character as a witness. This was, of course, a collateral matter, and her answers, whether true or false, would have concluded the inquiry so far as impeaching her character as a witness was concerned. King v. State, 106 Ark. 160; Howell v. State, 141 Ark. 487; Jordan v. State, 141 Ark. 504; Davis v. State, 150 Ark. 500.

But this cross-examination was also competent, under the facts of this case, as bearing on the paternity of the child. The State had attempted to show the defendant was the father of the child by his own admissions to that effect, and by the testimony of the prosecutrix that the acts of intercourse occurred about the time conception must have taken place.

We recently had occasion to consider the rule of evidence in the circumstances stated in the case of McDonald v. State, ante p. 142. It was there said: “It is a well established doctrine that in prosecutions for carnal abuse, the prosecutrix being under the age of consent, her illicit relations with other men, showing want of chastity, are immaterial, because in such a prosecution the chastity of the prosecutrix is not in issue and testimony tending to prove specific acts of sexual intercourse with others than the accused is not relevant. Pleasant v. State, 15 Ark. 627; Plunkett v. State, 72 Ark. 409; Renfroe v. State, 84 Ark. 16; Peters v. State, 103 Ark. 119; Davis v. State, 150 Ark. 500. But the doctrine seems to be equally well established, as shown by the above authorities, that where the State undertakes, on direct examination, as was done here, to corroborate the testimony of the prosecutrix by introducing a child which she testified was the result of the sexual intercourse with the accused, then testimony introduced by him in rebuttal, tending to prove that another might have been the father of the child, is competent and relevant. The logical tendency of such testimony would be to break down the credibility of the prosecuting witness on an issue which the State has elected to bring forward as material to the cause. Before such testimony becomes relevant, however, it devolves-upon the appellant to show that the alleged acts tending to prove sexual intercourse with another occurred about the time conception took place. The testimony, in other words, to be competent must tend to contradict and rebut the testimony elicited by the State on the direct examination of the prosecutrix.”

While it is true here that the prosecutrix did not expressly state that defendant was the father of the child, this was a reasonable inference from her testimony. But the State did undertake to corroborate the testimony of the prosecutrix as to the acts of intercourse by having Mrs. Dixon testify to an alleged admission of defendant that he was the father of the child; and, as defendant denied making this admission, he should have been allowed to prove that another might have been the father of the Child.

In this connection it is proper to state that defendant should have been allowed to show by Mrs. Dixon, as he proposed to do, the admission of the prosecutrix that defendant was not the father of the child.

We think error was committed in refusing to permit the- physician to answer the questions set out above, as the answers thereto were relevant and material in determining the child’s paternity, a question which the State had elected to put in issue by the testimony of Mrs. Dixon.

The-court properly refused to permit defendant to prove general acts of intercourse between the prosecutrix and Joe Holt. Such testimony should have been limited to the period of time when conception probably occurred, and was competent for that purpose only because the State had put in issue the paternity of the Child.

To recapitulate: The chastity of the prosecutrix is not in issue in prosecutions under the carnal abuse statute; and while the prosecutrix may be asked, on her cross-examination, about other illicit intercourse, this is only for the purpose of impeaching her as a witness— a circumstance to be considered by the jury in passing upon the credibility of the witness. But, as the matter is collateral to the main issue, her answers, whether true or false, conclude the inquiry. So also the defense may not show acts of sexual intercourse between the prosecuting witness and other persons, as the “et tu” defense does not obtain, as was said in the case of Plunkett v. State, 72 Ark. 409. If, however, the State elects to attempt to corroborate the prosecuting witness by showing that a child was begotten by the illicit intercourse charged in the indictment, then defendant may show acts of sexual intercourse with other persons about the time conception took place for the purpose of rebutting this testimony. The State made that effort here, and the defendant should therefore have been allowed to rebut that testimony by showing that some other person was the father of the child.

For the errors indicated the judgment is reversed, and the cause remanded for a new trial.