author: Wood, J.

text:
    Reid v. New York Life Insurance Company.
    Opinion delivered April 5, 1926.
    1. Bankruptcy—cash surrender value of life insurance.—Under § 70A of the Bankruptcy Act of 1898, .at the time of the filing of a bankruptcy petition the cash surrender value of a policy o'f life insurance available to the insured passes to the trustee in bankruptcy.
    2. Insurance—cash surrender value of life policy.—Where a life insurance policy provided that “if the policy be not surrendered for cash or for paid-up insurance within three months after default in payment of the premium, its cash surrender value at date of default, less the amount of any indebtedness, shall automatically purchase continued insurance,” etc., held that, before the cash surrender value of a policy could be realized or paid to a trustee, under § 70A of the Bankruptcy Act, the policy must have been surrendered to the insurance company within three months after default in payment of the premiums; otherwise the cash surrender value would have been converted into continued insurance.
    Appeal from Craighead Circuit Court, Jonesboro District; G. E. Keck, Judge;
    affirmed.

      Cooley, Adams & Fuhr, for appellant.

      Roy Penisc and Rose, Hemingway, Cantrell & Lough-borough, for appellee.
   Wood, J.

This is an action instituted by M. B. Reid, trustee in bankruptcy of the estate of J. F. Meurrier, against the New York' Life Insurance Company to recover the surrender value of a life insurance policy. The defense was that the plaintiff did not, within three months after the third day of December, 1923, surrender the jiolicy and demand a cash surrender value, as it was required to do under the terms of the policy in order to entitle the insured to a cash surrender value. The facts, as shown by an agreed statement, are as follows: On December 3, 1919, the defendant issued to Joseph Meurrier a policy of life insurance in the sum of $10,000 payable to his estate. The third annual premium on the policy was not paid. The policy contained a provision to the effect that, after three full-year premiums have been paid, the insured may, at the end of any insurance year, or within three months after any default in payment of premium, but not later, surrender the policy and receive its cash surrender value (which is designated). The cash surrender value here sought to be recovered amounted to $591.85.

The policy contained this further provision: ‘ ‘ (3) If the .policy be not surrendered for cash or for paid-up insurance within three months after default in payment of premium, its cash surrender value’ at date of default, less the amount of any indebtedness, shall automatically purchase continued insurance from the date of default for the face of the policy plus any dividend additions, and less any indebtedness to the company. The continued insurance shall be without future participation and without the right to loans or cash surrender values.”

On January 1, 1924, the plaintiff wrote the defendant notifying it of the filing of the petition in bankruptcy and of the adjudication thereof and the appointment of plaintiff as trustee. The plaintiff, in this letter," notified the defendant that the plaintiff had been directed by the" court to ascertain the cash surrender value of the bankrupt’s "policies of life insurance and to determine what steps were necessary for surrendering and obtaining their cash surrender value.

The defendant, on January 11, 1924, answered the above letter, and stated that only-one of the policies about which inquiry was made had a surrender value, which amounted to $591.85. On May '21, 1924, the plaintiff again wrote the defendant acknowledging receipt of defendant’s letter of January 11, 1924, and stating that the plaintiff desired to surrender the policy 'which the defendant had stated in its letter of January 11, 1924, had a surrender value of $591.85. In this letter plaintiff requested the defendant to let plaintiff know “the necessary steps to take to effect a surrender,” and to send plaintiff any forms if defendant desired the plaintiff to execute such forms. On January 24, 1925, the defendant wrote the plaintiff acknowledging receipt of plaintiff’s letter of May 21, 1924, and informing plaintiff that “the time within which this policy may he surrendered has expired. It has no present cash surrender value.”

T.he plaintiff, upon the above facts, prayed the court to declare the law to be, in effect, that the plaintiff was entitled to recover the sum of $591.85 with interest at the rate of six per cent, per annum from May 21,1924, to date, less the cost of carrying the policy from December 3, 1923, until May 21, 1924, amounting to $72.40, and prayed the court to render judgment in its favor in the sum of $519.35 with interest at six per cent, per annum from May 21,1924. The court rejected these prayers, to which the plaintiff duly objected and excepted. The court thereupon rendered a judgment in favor of the defendant, that the plaintiff take nothing, and that the defendant recover its cost. From that .judgment the plaintiff duly prosecutes this appeal.

The appellant predicates his right to recover on § 70, subdiv. A (5) of the Bankruptcy Act of 1898 as .amended, which provides, in substance, that the trustee in bankruptcy shall be vested with title to the bankrupt’s property as of the date he was adjudged a bankrupt (except certain exemptions it is not necessary here to mention), and provided “that when any bankrupt shall have any insurance policy which has a cash surrender value payable to himself, his estate, or personal representatives, he may, within thirty days after the cash surrender value has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trustee the sum so ascertained and stated, and continue to hold and own and carry such policy free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings; otherwise the policies shall pass to the trustee as assets.”

The appellant contends that, at the time of the filing of the bankruptcy petition, the cash surrender value of the policy of insurance available to Joseph F. Meurrier passed to the appellant, the trustee in bankruptcy. This may be conceded, and it is so decided in Bulingham v. Crouse, 228 U. S. 459, where it is said: “We think it was the purpose of Congress to pass to the trustee that sum which was available to the bankrupt at the time of bankruptcy as a cash asset; otherwise to leave to the insured the benefit of his life insurance.” See also Everett v. Judson, 228 U. S. 474; Andrews v. Partridge, 228 U. S. 479. The question then recurs, what sum, if any, was available to the appellant, the trustee in bankruptcy, on October 20, 1923, the day when Meurrier was adjudged a bankrupt and the appellant was appointed the trustee in bankruptcy of his estate ? On that day the agreed statement of facts shows that one of the bankrupt’s policies of insurance had a cash surrender value of $591.85, the amount in controversy, and that on that day this policy was surrendered to the appellant, the trustee, as a part of the assets of the bankrupt’s estate. The issue then, in its final analysis, .is whether or not the above sum, under the terms of the policy, was available to the bankrupt on that day. This issue must be determined by the provisions of the third subdivision of the contract of insurance set out above, to-wit: “If the policy be not surrendered for cash or for paid-up insurance within three months after default in payment of premium, its cash surrender value at date of default, less the amount of any indebtedness, shall automatically purchase continued insurance from the date of default for the face of policy plus any dividend additions and less any indebtedness to the company. The continued insurance shall be without future participation and without the right to loans or cash surrender values.”

Now, the trustee in bankruptcy, upon his appointment and qualification, acquired no other or greater right of title in the cash surrender value of the policy under the provisions of § 70A (15) of the Bankruptcy Act of 1898 than was possessed by the bankrupt himself at the time he was adjudged a bankrupt. As is said in New York Mfg. Co. v. Cas swell, 201 U. S. 344: “Under the provisions of the bankrupt act the trustee in bankruptcy is vested with no better right or title to the bankrupt’s property than belonged to the bankrupt at the time when the trustee’s title accrued. The seizure by the court of bankruptcy did not operate as an attachment nor as a lien upon the property. The trustee under such circumstances stands simply in the shoes of the bankrupt, and, as between them, he has no greater right than the bankrupt. In other words, where no rights of creditors have attached, under the local law the trustee in bankruptcy takes no higher title than the bankrupt had.” See also In re Wade, 185 Fed. 664. The adjudication in bankruptcy did not ipso facto render available the cash surrender value of the policy to the bankrupt nor to the trustee. To make that sum available, either the insured, the bankrupt, or the trustee, who stood in his shoes, had to comply with the provisions of the contract of insurance which were conditions precedent to the availability or then payment of the cash surrender value. Under the express provisions of the policy, before the cash surrender value thereof could be realized or paid to the bankrupt or to the trustee in bankruptcy, the policy had to be surrendered to the insurance company within three months after the default in the payment of the premiums. This was not done by the bankrupt himself nor by the trustee in bankruptcy. Not having been done, again the rights of the parties, in such eventuality, were clearly fixed by the terms of the contract between them, to-wit: Upon a failure to surrender the policy at the expiration of three months after default in payment of premiums, the cash surrender value at that date automatically was converted into continued insurance as therein specified, and the surrender value was thus absorbed, and, under the terms of the policy, thereafter there was no surrender value.

What was said In re Chandler, 290 Fed. 988, upon the facts of that case, is equally applicable here: “While, the filing of the petition is a caveat to all the world, and, in effect, an attachment and injunction, and while, on adjudication, title to the bankrupt’s property becomes vested in the trustee in actual or constructive possession, and is placed in the custody of the bankruptcy court, and therefore, upon adjudication, the insurance company held for the trustee the full surrender value of the policies, which became payable to the latter, unless the bankrupt elected to pay it as* of the date of filing of the petition, nevertheless the trustee, except in cases of fraud, concealment, or unlawful preference, stands in the shoes of the bankrupt, and the property which comes into his hands as assets is subject to all the equities impressed upon it in the hands of the bankrupt. The policies were continuing contracts, in which performance by both parties was essential. The trustee therefore took them cum onere. As between the trustee and the insurance company therefore, the trustee cannot take the benefits under the policies and avoid the obligations impressed by their terms.” See also Frederick v. Fidelity Mutual Life Ins. Co., 256 U. S. 395.

It follows that the appellant, having failed to comply with the provisions of the contract of insurance in order to make available the cash surrender value thereof at the time same had a cash surrender value, and having-delayed to comply with the terms of the policy until the cash surrender value was absorbed and passed into other values and rights of the parties to the contract of insurance, there is no liability against the appellee for such cash surrender value, because, at the institution of the action, there was none. The trial court ruled correctly in so holding, and its judgment is therefore affirmed.


source: Caselaw Access Project

author: "Wood, J.

license: Public Domain

text:
    Moore v. Tillman.
    Opinion delivered April 5, 1926.
    1. Homestead—mortgage no alienation.—A mortgage of land, entered for homestead purposes, by the entryman prior to obtaining his patent or making final proof entitling him to a patent, is not an alienation of the land, within the prohibition of Rev. Stat. U. S. § 2291.
    2. Homestead—construction by land department.'—In controversies between individuals involving the construction of the Federal homestead law, the State courts, unless some insuperable obstacle of reason or policy intervenes, should harmonize their decisions with the interpretation of that }aw by the Land Department.
    3. Homestead—validity op mortgage.—The provision in the Rev. Stat., § 2296, to the effect that no homestead “shall in any event become liable to the satisfaction of any debt contracted prior to the issuing of the patent therefor,” does not invalidate a mortgage voluntarily given on an unperfected entry.
    Appeal from Faulkner 'Chancery Court; W. E. Atkinson, Chancellor;
    reversed.

      J. C. & Wm. J. Clark, for appellant.

      R. W. Robins, for appellee.
    On January 4, 1918, A. M. Ledbetter sold the southeast quarter of section 27, in township 5 north, range 13 west, to J. E. Tillman, taking- notes for $600 secured by mortgage on the land. Within a short time thereafter Tillman learned that the title to the southwest quarter of the southeast quarter was in the United States, and on January 25, 1918, he entered the above land under the homestead law and procured a patent in February, 1924. Mrs'. A. E. Moore acquired the purchase money notes before maturity and without notice of any defects.- On January 4, 1921, Tillman, being unable to pay the notes, executed four notes payable to Mrs. Moore for the sum of $165 each, secured by mortgage on the southwest quarter above mentioned, signed by his wife, Ida H. Tillman, and by A. W. Winston, due in one, two, three and four years. The notes being unpaid, Mrs. Moore brought suit on November 21, 1923, asking judgment upon the notes and foreclosure of the mortgage. Defendants answered, alleging that the mortgage was void as to the southwest quarter of the southeast quarter, for the reason that Tillman had not received a patent therefor or made final proof at the time he executed the mortgage. The chancellor gave .judgment upon the notes, but sustained the defense as to the mortgage being invalid as to the southwest quarter of the southeast quarter. The plaintiff has appealed.
   "Wood, J.

The question presented by this appeal is whether or not one who has entered lands under the United States Homestead Act may execute a valid mortgage thereon prior to the issuance of a patent,.or prior to making final proof entitling the entryman to a patent therefor. The applicable provisions of the homestead laws are contained in the Revised Statutes of the United States, as amended by acts March 3, 1891, c. 561, § 5, and June 6, 1912, c. 153, and are as follows:

“Section 2289. Every person who is the head of a family, or who has arrived at the age of twenty-one years, and is a citizen of the United States, or who has filed his declaration of intention to become such, as required by the naturalization laws, sháll be entitled to enter one-quarter section, or less quantity, of unappropriated public lands, to be located in a body in conformity to‘the legal subdivisions of the public lands; but no person who is the proprietor of .more than one hundred and sixty acres of land in any State or Territory shall acquire any right under the homestead law. And every person owning and residing on land may, under the provisions of this section, enter other land lying contiguous to his land, which shall not, with the land so already owned and occupied, exceed in the aggregate one hundred and sixty acres.
“Section 2290. Any person applying to enter land under the preceding section shall first make and subscribe before the proper officer and file in the proper .land office an affidavit that he or she is the head of a family, or is over twenty-one years of age, and that such application is honestly and in good faith made for the purpose of actual settlement and cultivation and not for the benefit of any other person, persons or corporation, and that he or she will faithfully and honestly endeavor to comply with all the requirements of law as to settlement, residence and cultivation necessary to acquire title to the land applied for; that he or she is not acting as agent of any person, corporation, or syndicate in making such entry, nor in collusion with any person, corporation or syndicate to give them the benefit of the land entered, or any part thereof, or the timber thereon; that he or she does not apply to enter the same for the purpose of speculation, but in good faith to obtain a home for himself, or herself, and that he or she has not directly or indirectly made, and will not make, any agreement or contract, in any way or manner, with any person or persons, corporation or syndicate whatsoever, by which the title which he or she might acquire from the Government of the United States should inure, in whole or in part, to the benefit of any person, except himself, or herself * * * .
“Section 2291. No certificate, however, shall be given, or patent issued therefor, until the expiration of five years from the date of such entry; and if, at the expiration of such time, or at any time within two years thereafter, the person making such entry; or, if he be dead, his widow; or, in case of her death, his heirs or devisee; or, in case of a widow in making such entry, her heirs or devisee, in case of her death, proves by two credible witnesses that he, she, or they have resided upon or cultivated the same for the term of five years immediately succeeding the time of filing the affidavit, and makes affidavit that no part of such land has been alienated, except as provided in section twenty-two hundred and eighty-eight, and that he, she, or they will bear true allegiance to the Government of the United States; then, in such case, he, she or they, if at that time citizens of the United 'States, shall be entitled to a patent, as in other-cases provided by law.
“Section 2296. No lands acquired under the provisions of this chapter shall in any event become liable to the satisfaction of any debt contracted prior to the issuing of the patent therefor.”

Learned counsel for the appellees contend that a mortgage of the lands, entered for homestead purposes, by the entryman prior to obtaining his patent, or making final proof entitling him to a patent, is an alienation of the lands in the sense of the provisions of the homestead laws above, and is therefore forbidden by those laws.

The word-“alienated” in § 2291, supra, is used in the narrow and'restricted sense that the entryman has not executed a deed or absolute conveyance to the land or any part thereof upon which he made his homestead entry. A mortgage, or incumbrance, in itself does not operate in equity to convey an absolute title, and therefore by such instrument the entryman has not “alienated” his property in the sense of*the above Federal statute. This is the interpretation put upon the word ‘ ‘ alienated” by the Land Department of the United States, and bv the Supreme Court of the United States, and is practically the consensus of modern opinion in State jurisdictions where the above provisions of the statute have been under consideration. While the exact question here before the court was not decided by the Supreme Court of the United States in the case of Hafemann v. Gross, 199 U. S. 342, 50 Law ed. p. 220, nevertheless the similarity of the questions, and what was there said by the Supreme Court of the United States, show definitely the interpretation which that court has put upon the statutes under review. After referring to the provisions of the homestead law, Mr. Justice Brewer, speaking for a majority of the court, says: “With respect to a mortgage or deed of trust executed under like circumstances, the decisions of the Land Department have been all to the effect that such mortgage or deed, of trust is not an alienation within the scope of the homestead statute or forbidden by the preemption law. * * * Obviously, the trend of authorities is strongly in favor of the proposition that a mortgage or deed of trust by one seeking an entry under the preemption or homestead laws of the United States, made prior to the perfection of his equitable right, is valid.” In this opinion Judge Brewer cites many decisions of State courts as a basis for the statement above quoted. While the interpretation of the above provisions of the Revised Statutes of the United States by the Land Department is not controlling oh the courts, it is at least highly persuasive; and where it is in harmony with the decision of the United States Supreme Court in the construction of these statutes, it occurs to us that such interpretation should and must govern.

Mr. Finney, First Assistant Secretary of the Interior, ,in 48 Land Decisions, at page 583, says: “All the decisions of the department since the incumbency of Secretary Teller have been to the effect that such mortgage or deed of trust is not an alienation within the scope of the homestead statute, or forbidden by the spirit of the law. * * * The spirit and intent of the' preemption and homestead laws in this respect are the same.” This interpretation is in precise conformity with what is said by the Supreme Court of the United States, through Mr. Justice Brewer, in Hafemann v. Gross, supra.

Learned counsel for the appellees, to sustain their contention that the mortgage of the lands entered for a homestead is an alienation thereof, and therefore prohibited by the Revised Statutes of the United States cite the line of our cases holding that a mortgage carries the legal title. Whittington v. Flint, 43 Ark. 504; Terry v. Rosell, 32 Ark. 478; Reynolds v. Canal Co., 30 Ark. 520; Kannady v. McCarron, 18 Ark. 166; Gilchrist v. Patterson, 18 Ark. 575.

But an analysis of these very cases will discover that a mortgage of lands is not a conveyance thereof carrying the absolute and unrestricted title thereto. On the contrary, while a mortgage at law does carry the legal title, it is not, either at law or in equity, an absolute, unconditional and indefeasible title. It becomes such only after the mortgagor has breached the condition of the mortgage and his equity of redemption has been foreclosed. In other words, while the legal title under the law does vest in the mortgagee, still this is only for the purpose of enabling him to obtain security for the satisfaction of the debt or obligation due him by the mortgagor; and, when that satisfaction is obtained, the legal title vests and remains in the mortgagor without the necessity of a reconveyance - from the mortgagee. Thus, after all is said and done, a mortgage, in common parlance as well as legal acceptation, is an instrument evidencing a security for debt—the conveyance or instrument to be void upon the discharge of the debt or obligation. As is well said in 19 B. C. L., page 242, § 2, “harmony and consistency have been achieved only by the complete adoption, by judicial decision or statute, of the original equitable conception that a mortgage is in fact a security—nothing more, nothing less.” See also Hil-' lard on Mortgages, § 2, p. 1; 4 Kent’s Commentaries, *pgs. 154 to 162, inclusive. Our own court, through Chief Justice Cockrill, in Stewart v. Scott, 54 Ark. 187-191, gives a clear definition of the essentials and characteristics of a mortgage. Among other things he says: “A power to sell is not necessarily a power to mortgage, nor is a power to mortgage a power to sell, and it is held that giving a mortgage upon land by one who has already conveyed his title by deed is not disposing of the land, within the meaning of a statute which made it a felony to make a fraudulent second sale. Payment of the debt at its maturity destroys the estate, without a reconveyance or release by the mortgagee. Equity always regards the mortgagor as the owner of the land, and the mortgagéé as holding a security only for his debt; and a court of law, in a controversy between the mortgagor and a stranger to the mortgage, does ndt regard the mortgage as a conveyance. For example, in a suit by the mortgagor for possession, it is no answer for a stranger to say that the title is in another by virtue of the mortgage. ‘It is an affront to common sense,’ said Lord Mansfield in Rex v. St. Michaels, 2 Doug. 632, ‘to say the mortgagor is not the real owner.’ ” And as early as Kannady v. McCarron, supra, Mr. Chief Justice English, speaking for the court, said: “In equity, a mortgage is regarded as a security for the debt, etc., and the mortgagor is considered the owner' of the property until he is debarred by his own default, or by judicial decree; but, at law, the legal title passes to the mortgagee, subject to be defeated by the performance of the conditions of the mortgage.” • See also Hannah v. Carrington, 18 Ark. 85-105; Burr v. Robinson, 25 Ark. 275-281; Ringo v. Woodruff, 43 Ark. 469-488.

In Cox v. Donnelly, 34 Ark. 762,.we held that an agreement by a homestead entryman before the completion of his entry for the sale and conveyance of a part of the land entered as a homestead, is in violation of the above statute. But, as we have seen, an agreement for a sale or absolute conveyance of the land is an alienation; a mortgage is not. In Shorman v. Eakin, 47 Ark. 352, one Fleming Burke was in possession of a tract of land which he sold to Eakin on a credit. Eakin executed his note to Burke for the purchase money, and Burke executed a bond for title to Eakin agreeing to convey to him the land when the note was paid, and Eakin went into possession under this agreement. Eakin, finding that the land was subject to homestead entry, entered as such and remained in possession. Burke sold Eakin’s note to one Shorman, and Eakin, having refused to pay the note, Shorman instituted an action against him on the note and to foreclose a vendor’s lien on the land. This court held that Shorman had no lien on the land, and that the note was without consideration, and that Shorman’s cause of action failed. Judge Battle, in the opinion, cites Cox v. Donnelly, supra, in which we held that an agreement by a homestead entrant for the sale of land entered is void, and also Sorrels v. Self, 43 Ark. 451, in which we held that lands entered as a homestead are not subject to be taken for debts contracted by the entrant while the title to'the same is in the government. After citing these two cases, Judge Battle stated as follows: “As a logical sequence to these decisions, it necessarily follows, no lien on the land entered under the homestead to secure a debt contracted before the patent therefor is issued can in any manner be acquired.” And «further: “(No title therefore, acquired by Eakin under the homestead act, inured to the benefit of Burke or Shorman,. as that would defeat the spirit, and intent of the act, and be contrary to public policy; and for the same reason they, or either of them, did not acquire any lien on account of Eakin’s purchase from Burke. ’ ’ And further: “Since Burke never had any title to the land sold to Eakin, and the title acquired by Eakin did not inure to him, the note sued on was without consideration. ’ ’

It is clear that it was unnecessary to the conclusion reached by the court in the decision of the above case to hold that “no lien on the land entered under the homestead to secure a debt contracted before the patent therefor is issued, can in manner be acquired.” True, the language was' germane to the discussion, but was not necessary to the decision, and the facts are entirely different from the case at bar, and therefore we do not feel bound by the decision to hold, in the instant case, that a mortgage executed by the homestead claimant prior to the time of receiving his patent or making his final proof is null and void. In the case of Shorman v. Eakin, supra, Burke, although in possession of the land at the time he sold to Eiakin, was not claiming the land under a homestead entry but under a swamp land grant. Furthermore, Burke, even if he could be considered as the homestead claimant, was not proposing to mortgage the land but to make a straightout unconditional sale of the same. There was no mortgage executed by Eakin, the homestead claimant, to Burke. So, from any viewpoint, there was a total failure of consideration for the note on which Shorman predicated his action. The case, for all purposes of the decision, could and should have ended there.

In the case of Gilkerson-Sloss Co. v. Forbes, 54 Ark. 148, Forbes entered the land as a homestead and had made final proof necessary to entitle him to a patent. Before he obtained his patent, he and his wife executed a mortgage on the land entered. Under those facts we held that one who has become entitled to a patent under the homestead act of Congress may mortgage the land before the patent is issued. Judge Battle, speaking for the court, said: “Our coiiclusion is that a creditor cannot, in any manner, acquire an .involuntary lien on land acquired by his debtor under the homestead laws of the United States, to secure a debt contracted before the issuance of the patent, but that the owner of the land can mortgage it, after he becomes entitled to a patent, to secure such debts.” It will be observed that in neither of the above cases was the precise question now before us involved or decided, for the facts did not call for such decision. Therefore, any language .in Shorman v. Eakin and in Gilkerson-Sloss Co. v. Forbes, supra, which may be construed by implication as holding that a homestead entryman cannot mortgage the lands entered prior to making his final proof or obtaining his patent therefor, is necessarily obiter dictum. If the question had been before the court in those cases that is now before us, we frankly concede that the learned judge, who voiced the opinions of the court, used some language which clearly indicates that the court, at the time these decisions were handed down, was of the opinion that a mortgage could not be executed by the homestead claimant prior to the time of making his final proof or obtaining his patent. It was doubtless the opinion of the great .judges who then constituted the court that a mortgage was at least a conditional alienation of the lands, and it may be that the weight of authority, State and Federal, at that time, sustained that view. Such was the doctrine in Minnesota, Webster v. Bowman, 25 Fed. 889; McHugh v. Smith, 9 Minn. 259—the case cited by Judge Battle in Shorman v. Eakin, supra—to sustain the obiter. Such was the doctrine in Kansas. Brewster v. Madden, 15 Kan. 249; Mellison v. Allen, 30 Kan. 382. But McHugh v. Smith, supra, was overruled by the same court in Jones v. Tainter, 15 Minn. 512; Lang v. Morey, 40 Minn. 396; and Brewster v. Madden, supra, was overruled in Stark v. Morgan—(Kan.) 6 L. R. A. (N. S.) 934; and some other State cases which adopted the earlier rule that a mortgage was an alienation were later repudiated by the same court. These cases are referred to by Judge Brewer in Hafemann v. Gross, supra, and numerous cases of State courts are cited adopting the view that a mortgage is not an alienation in the sense of the homestead law, supra, which doubtless led the United States Supreme Court to make the statement above quoted that the trend of authorities is strongly in favor of the doctrine that a mortgage, prior to the final proof or obtaining the patent, is valid.

Nevertheless, our court has never decided the precise question here involved, and therefore no rule of property has been established by this court by any decision upon the subject. We are called upon now to .decide it, and must decide it, in the light of the weight of authority that now obtains throughout the American Union, and what we believe to be the better reason.

One of the best cases we have found upon the subject is that of Stark v. Morgan, supra, 85 Pac. (Kan.) 567, 6 L. R. A. (N. S.) 934. After an exhaustive review of the authorities, the Supreme Court of Kansas says: “However, the courts as well as the Interior Department have recognized no distinction between mortgages executed upon land held under the preemption law, when that law was in force, and those held under the homestead law. The purpose of the requirements in both is held to be to prevent speculative entries, and the right of the claimant to execute a valid mortgage upon the land for any legitimate purpose is no longer doubted. There is much force in the suggestion that, in cases of this kind, the court should hold in harmony with the policy and will of the government as announced in the rulings of the Land Department.” See also ease note.

Another illuminating case is that of Lohman State Bank v. Grim, 222 Pac. 1052, where the Supreme Court of Montana says: “The act of the entryman in giving a mortgage in good faith to secure a legitimate debt is not deemed an alienation within the meaning of, and is not forbidden by, the spirit of the Federal statute which provides that land acquired under the homestead laws shall not, in any event, become liable to the satisfaction of any debt contracted prior to the issuing of patent therefor. This view is .sustained by the nearly unanimous voice of the courts.”' After citing numerous cases, the court continues: “Yet, while the entryman may incumber the land voluntarily to the extent of his rights therein, within the limitations above mentioned, the statute prevents a creditor from in any manner acquiring m involuntary lien upon the land to secure satisfaction of a debt contracted by the homesteader before patent issues. ”

Counsel for the respective parties, in their most excellent briefs, have greatly lightened our task by an exhaustive survey of all the authorities of importance to be found on the subject. After a critical analysis of these, we are convinced that a homestead entryman may mortgage the land entered either before or after making final proof entitling him to a patent therefor. The rationale of the doctrine of the cases is: First, that these homestead provisions of the Revised Statutes were intended by Congress for the benefit of actual bona fide citizens of the United States who wish to acquire homesteads. Alienation is prohibited because it would mean abandonment and would lead to speculation and fraud upon the government and be destructive of the very purpose which Congress had in mind in enacting the homestead laws. Therefore, the homesteader is forbidden to alienate the entered land, and-the same can not be taken from him by process created, not by contract, but by operation of law. See Ruddy v. Rosser, 248 U. S. 104. But, while laying over the settler this protecting shield, Congress did not intend it should be used as a destruction of his right to voluntarily pledge the land as a security for his debts or obligation, because such restrictions placed on the settler might hinder rather than help him in the acquisition of Ms homestead, and thus defeat the main purpose of the law. See Klemp v. Northrop, 137 Cal. 414, 70 Pac. 284; Fuller & Co. v. Hunt, 48 Iowa 163, and other cases cited in note to Stark v. Morgan, 9 A. & E. Cases, 930-935.

Second: Since the homestead entrant, by mortgaging the land entered as security for his debts or obligations, does not contravene the policy of the government, as between him and the mortgagee, he would be estopped from disputing the validity of a lien created by him. Kirkaldie v. Larrabee, 31 Cal. 455; Stark v. Duvall, 7 Okla. 213; Weaver v. Laidler, 26 Wash. 144; Klemp v. Northrop, supra.

Third: In controversies between individuals involving the construction of the homestead laws to determine their rights, for the sake of uniformity and harmony in the practical administration and execution of the government’s home-building program, State courts, unless some insuperable obstacle of reason or policy intervenes, should endeavor to harmonize their decisions with the interpretation of the homestead laws by the Land Department, which is intrusted with the enforcement of these laws. Most assuredly should this be the case so long as the interpretation by the Land Department is not contrary to the decisions of the Supreme Court of the United States. This rule is observed with practical unanimity as shown by numerous decisions of State courts cited in appellant’s brief.

Fourth: The Land Department, in an exhaustive opinion by First Assistant Secretary Finney, 48 Land Dec. 582, to which we have already referred, distinctly holds that ‘ ‘ a homestead entryman is not precluded from mortgaging his entry prior to the perfection of his equitable title; and the provision contained in the Revised Statutes to the effect that no homestead shall in any event become liable to the satisfaction of any debt contracted prior to the issuance of patent, does not invalidate a mortgage voluntarily given'on an unperfected entry.”

It follows that the trial court erred in refusing to foreclose appellant’s mortgage on the southwest quarter of the southeast quarter of section 27, township 5 north, range 13 west, Faulkner County, Arkansas, said lands being embraced in a mortgage executed by appellee, J. E. Tillman, to the appellant to secure the debt of appellee to appellant. The decree is therefore reversed, and the cause will be remanded for further proceedings according to law and not inconsistent with this opinion.


author: Hart, J.,

text:
    Moore v. Exelby.
    Opinion delivered April 5, 1926.
    1. Frauds, statute of—sufficiency of letters as memorandum.— A complete contract for the sale of lands, binding under the statute of frauds, may be gathered from letters between the parties relating to the subject-matter and so connected with each other that they may be fairly said to constitute one paper relating to the contract; but, to be sufficient, they must be signed by the party sought to be charged, and set out the parties, the subject-matter, the price, the description and terms, leaving nothing to rest in parol.
    2. Statute of frauds—parol evidence to aid description of land. —Oral evidence may be resorted to for the purpose of identifying the description contained in letters or other writings, but not for the purpose of locating the land and supplying the description which the parties have.omitted from such writings.
    3. Pleading-^sufficiency of complaint on demurrer.—In determining the sufficiency of a complaint as against a demurrer on the ground that the facts are insufficient to constitute a cause of action, the allegations must be taken as true.
    4. Pleading—exhibits.—In equity, exhibits to the complaint control its averments and the nature of the cause of action, and may be looked to for the purpose of testing the sufficiency of the allegations of the complaint.
    5. Evidence—judicial notice of geographical facts.—The court will take judicial notice of the location of towns.
    6. Vendor and purchaser—sufficiency of description.—A description of land offered for sale as a tract of 80 acres belonging to the vendor and as being all of the land owned by her near a certain town held sufficient to let in parol evidence identifying it.
    7. Vendor and purchaser—oral employment of agent to sell.—A contract employing an agent to find a purchaser of land is not within the statute of frauds.
    Appeal from White Chancery Court; John E. Martineau, Chancellor;
    reversed.
    STATEMENT BY^ THE COURT.
    R. P. Moore brought this suit in equity against Jennie Exelby and John Exelby to enforce the specific performance of a contract for the sale of eighty acres of land in White County, Ark.

      Under the allegations of the complaint, Jennie Exelby, through her duly authorized agent, John Exelby, submitted to R. P. Moore a written offer to sell eighty acres of land in White County, Ark., which are specifically described according to the United States Government surveys.
    It is alleged that the-offer was in the form of letters and that the plaintiff agreed to give the defendant $1,225 in cash for the land and to pay all State and county taxes for the year 1924. That the plaintiff’s offer was accepted by the defendants by letter on December 17, 1924, and that copies of the various letters on the subject are exhibited with the complaint.
    It appears from the letters that John Exelby and Jennie Exelby lived at Ranger, Texas, and R. P. Moore lived at Bald Knob, Ark. On the 21st day of September, 1924, John Exelby wrote a letter to R. P. Moore, and the body of it reads as follows: “Our Friend: Jennie wants me to drop a few lines to you about the 80-acre tract of timber land that she still owns. You no doubt are well acquainted with it and its location. She offers it at $1,500. That 80 would make a good farm. Most of it is high enough to be dry, and, according to what the boys told me some time ag’o, all of it will grow lespedeza to a finish, and that they claim has become quite a factor in farming operations about Beebe. I am not offering this information as any special inducement. Just calling your attention to it. Please let me hear from you at your earliest convenience, as we are trying to dispose of it.
    “Yours respectfully.”
    On September 25, 1924, R. P. Moore wrote to John Exelby the following:
    “Dear Sir and Friend: • Your letter of September 21st received, and I make you an offer of $1,250 for the land and timber near Beebe belonging to your wife. Hoping to hear from you soon, I beg to remain,
    “Very respectfully yours.”
    On September 30, John, Exelby replied to this letter with the following:

      “Dear Sir and Friend: Jennie wants me to say that she thinks the 80-acre tract is worth $20 per acre. That is, according to the way the land is selling there. And that $1,500 would be a really fair price for it. I think so too, and, as I know every foot of it, can conscientiously say that I think it would make a right good farm for one if handled properly. I of course don’t know what timber is on it, and in that respect you are much better qualified to judge of its value than I. I of course know that the timber is the main consideration with you, still the land is really of some value, located as it is so near town. Please reconsider the matter and drop us a line at your earliest convenience. With best wishes for yourself and family, I remain, “Very respectfully your friend.”
    On October 21, 1924, John Exelby wrote to R. P. Moore the following:
    “Friend Moore: Jennie’s brother advised her to accept your offer of $1,250 for the 80-acre tract of timber and will you consider assuming the taxes on same. We first thought that we might move back there, and, in that case, we would use the tract ourselves, but, as we have about decided to stay, here, it makes a difference. Abstract complete. Tour friend.”
    On December 12, 1924, R. P. Moore wrote to John Exelby as follows: •
    “Dear Sir and Friend: Tours of the 21st note what you say in regard to taking my offer on the 80 acres if I will pay the taxes for this year. I would have been glad to, if I could have gotten that tract this summer, but it will be next summer before can get the timber out now. I will say this, I will give you $1,225 and pay this year’s taxes if you will accept $225 cash and note for $1,000 at 6 per cent, interest, due on or before October 1, 1925.
    “Now, if you will, close this at once, so I will know how to make my arrangements.
    “Very Resp. R. P. Moore.
    “P. S. If this is O. K., make deed and send to Bald Knob State Bank.”

      On December 17, 1924, John Exelby replied to this with the following:
    “Dear Friend: I am writing to say that Jennie accepts yonr offer and will make over papers soon as convenient. This is to let you know what to expect. Now, as it is about Christmas, every one is busy, but we will fix it up as soon as may be.
    “Thank you for your favors and wish you a Merry Christmas, health and happiness.
    “Very truly yours.”
    On December 29, 1924, John Exelby wrote to E. P. Moore that he was unable to find the abstract for the south half of the 80-acre tract. He states that Charley Westbrook owned the north half of the 80 and Jennie the south half, and that she later acquired both tracts. He closes the letter as follows:
    “I am taking it for granted that you are in receipt of my last letter accepting your offer to purchase the land. Hoping that you will advise at once, so that I can go on with getting up the necessary papers, I remain,
    “Tour friend.”
    On Jan. 12, 192-5, E. P. Moore replied to the last letter with the following:
    “Dear -Sir and Friend: Your letter and abstract received the same time. You spoke of my receiving your letter. I received it, and I understand your letter accepting my offer which I will state again, which was for me to pay you $225 cash and tax and give you note for $1,000 bearing 6 per cent, interest on or before whatever date you may wish, we might say November first, ’25. I am inclosing your abstract which I think would be better for you to have papers and abstract brought up to date on both forties and send to the Bald Knob State Bank. I should have sent this sooner, but have been away. Now, if you understand the trade, write-me and I will send you check for $225, and then I can move my mill down. I speak of this so there will be no delay as to my going ahead as tho I had proper papers. Let me hear from you by return mail.
    “Very Eespt.”

      On January 15, 1925, R. T. Westbrook wrote to R. P. Moore stating that he would no doubt be surprised to hear that he had bought the 80 acres of timber from his sister. Mrs. Jennie Exelby was the sister referred to.
    The defendant filed a demurrer to the complaint. The chancery court sustained the demurrer, and the plaintiff refused to plead further and elected to stand upon his complaint and the exhibits thereto. Whereupon it was decreed that the plaintiff’s complaint be dismissed for want of equity, and to reverse that decree the plaintiff has duly prosecuted this appeal.

      John E. Miller and Gulbert L. Pearce, for appellant.

      Brundidge $ Neelly, for appellee.
   Hart, J.,

(after stating the facts). At the outset it may be said that it is well settled that a complete contract for the sale of lands binding under the statute of frauds may be gathered from letters between the parties relating to the subject-matter of the contract and so connected with each other that they may be fairly said to constitute one paper relating to the contract. In order to be sufficient, the letters relied upon must by reference to each other disclose every material part of a valid contract and must be signed by the party sought to be charged. Jn other words, the letters must set out the parties, the subject-matter, the price, the description, and terms, and leave nothing to rest in parol.

Oral evidence may only be resorted to for the purpose of identifying the description contained in the writings, but not for the purpose of locating the land and supplying the description which the parties have omitted from the writings. Ashcraft v. Tucker, 136 Ark. 447; Stanford v. Sager, 141 Ark. 458, and cases cited; and Ryan v. United States, 136 U. S. 68.

The plaintiff, who was the purchaser of the land, sought to have the contract specifically performed, and the chancery court sustained a demurrer to his complaint.

In determining the sufficiency of a complaint as against a demurrer on the ground that the facts are insufficient to constitute a cause of action, the allegations must be taken as true. Moore v. North College Avenue Imp. Dist. No. 1, 161 Ark. 322.

Under the practice in equity, exhibits to the complaint will control its averments and the nature of the cause of action, and may be looked to for the purpose of testing the sufficiency of the allegations of the complaint. The reason is that the instruments exhibited become for all purposes of pleading a part of the complaint, and consequently on demurrer may be used in aid of the defective statement in the complaint itself. This rule has been followed and applied by this court in various ways, according to the allegations of the 'complaint or the proof made in each particular case.

In the Ashcraft and Stanford cases cited above it was held that the written contract relied upon for specific performance furnished no'data whatever which could be aided by extrinsic evidence to identify the land.

In Dollar v. Knight, 145 Ark. 522, it was held that the written contract itself furnished the key by which the property might be identified with the aid of parol evidence.

Again, in Kirby v. Malone, 145 Ark. 608, it was held that it is enough for specific performance that the written contract describes the farms sold by names; for these are capable of being made definite by extrinsic evidence.

In Richardson v. Stuberfield, 168 Ark. 713, there was nothing in the contract to point out or locate the land.

In the case at bar, if we take every part of the description in the letters, including the acreage and location, and give every part its due weight, we have a fixed and definite tract of land that must have been contemplated by the parties. The letters show that John Exelby and wife, Jennie Exelby, lived at Ranger, Texas, and R. P. Moore at Bald Knob, Ark. The letters indicate that from the beginning both parties definitely understood the tract of land which was the subject of their negotiations.

In the letter of September 24, 1924, to R. P. Moore, John Exelby refers to it as the 80-acre tract of timber land that Jennie (his wife) still owned. In the next sentence he refers to the fact that no doubt Moore is well acquainted with it and its location. It is offered at a price of $1,500. He then said, “that 80 would make a good farm.” This showed he referred to a definite 80' acres of land. Again in the same letter he says that the growing of lespedeza has become quite a factor in the farming operations about Beebe.

The court will take judicial notice that Beebe is located in White County, Ark., and this and other letters indicate that the land is situated near Beebe. The letter was so understood by R. P. Moore, who answered it on the 25th day of September, 1924. He made a counter offer “of $1,250 for the land and timber near Beebe belonging to your wife. ”

On the 30th day of September, 1924, Exelby wrote another letter to Moore, holding out for $1,500 and stating that, while he knew that the timber was the main consideration with Moore, the land was really of some value because of its near location to the land of Moore.

On the 21st day of October, 1924, Exelby again wrote Moore that his wife’s brother had advised her to accept his offer of $1,250 for the 80-acre tract of timber land, and asked if he would consider assuming the taxes on it.

On the 12th day of December, 1924, Moore wrote Exelby that he had noted what he had said in his last letter with reference to his offer for the 80 acres if he would pay the taxes. Moore then offered to give him $1,225 and pay the taxes for the current year. The terms were $225 in cash and a note for $1,000 due on or before October 1, 1925. On December 17, 1924, Exelby wrote to Moore that his wife accepted his offer.

These letters contained a definite contract to sell the land, and we think the chancery court should have held it enforceable. It is manifest that it is sufficiently definite with reference to the price and terms of payment.

.It is manifest from the letters that Moore knew exactly what 80 acres of land he was buying and Jennie Exelby knew what she was selling through her husband, John Exelby. The land was described so that the court could, with the aid of extrinsic evidence, apply the description to the exact property intended to be sold. Looking at the letters, it must be assumed that both parties were dealing as to a particular 80-acre tract of land near Beebe owned by Jennie Exelby. The letters which constitute the contract identify and furnish the means of finding the land. The letters refer to a particular 80-acre tract of timber land still owned by Jennie Exelby near Beebe. It is inferable from the letters that this was the only tract of land in that vicinity which she still owned. Hence an ambiguity could not exist unless she could show that she had more than one tract of land in the vicinity of Beebe.

It is not like a case where 80 acres of land are described. In such case it would be necessary for the plaintiff to show that the defendant had only one tract of land, and this would be supplying and adding to a description insufficient on its face. Where a party agrees to sell a particular 80 acres of land which is described as all the land owned by him situated near a certain town, extrinsic evidence may be used for the purpose of identifying the land and applying the description to the particular eighty.

The defendants having described the land as an 80 acre tract of timber land that Jennie Exelby still owned and as being near Beebe, we think the description is as sufficiently definite as if it had been described as the farm on which she then lived, which has been held to be good.

As above stated, it is clear from the letters themselves that a particular 80 acres of land which is described in the complaint according to the United States Government surveys, was the subject of the negotiations between the parties, and that the letters themselves furnish the means of finding the land. Carson v. Ray (N. C.), 78 Am. Dec. 267; Waring v. Ayers, 40 N. Y. 357; Lente v. Clark (Fla.), 1 So. 149; Hollis v. Burgess (Kan.), 15 Pac. 536; Lick v. O’Donnell, 3 Cal. 59, 58 Am. Dec. 383.

In addition to the cases above cited, this principle has been applied by the court in Martin v. Urguhart, 72 Ark. 496, and Oliver v. Howie, ante p. 758.

It is also insisted that the letter of R. P. Moore of the date of January 12, 1925, copied in our statement of facts, shows that the minds of the parties had never met, and that in that letter he was making a different offer which was never accepted by the defendants.

We do not agree to this contention. That letter shows on its face that it was merely a recapitulation of the terms of a contract which had already been completed by a definite offer and acceptance. It is true that the date of the deferred payment is made on November 1, 1925, instead of October 1, 1925, as in, the original contract, but this was due, no doubt, to the fact that Moore had not kept a copy of the original letters or that he did not have them before him-when he wrote the letter restating the terms of the contract. Besides, if the contract had become a valid and binding one by a definite offer and acceptance by both contracting- parties, it could not be abrogated by one of the parties mistaking i'ts terms or proposing new ones.

In passing it may also be stated that the complaint alleges that John Exelby was the agent of his wife to make a sale of the land in question for her, and the demurrer admits this allegation to be true. It was not necessary that authority to sell and make a binding contract for the sale of land to be in writing; for a-contract employing an agent to find a purchaser is not within the Statute of Frauds. McCurry v. Hawkins, 83 Ark. 202; Forrester Duncan Land Co. v. Evatt, 90 Ark. 301; and Davis v. Spann, 92 Ark. 213.

The decree sustaining the demurrer is reversed, and the cause will be remanded with leave to the defendants to answer if so advised, and for further proceedings in accordance with the principles of equity, and not inconsistent with this opinion.


author: Smith, J.

text:
    State v. Lokey.
    Opinion delivered April 5, 1926.
    Game—killing op doe.—Under Crawford & Moses’ Dig., § 4790, it is unlawful for any person at any time “to shoot, kill, maim or wound any doe.”
    Appeal from Searcy Circuit Court; J. M. Shinn, Judge;
    reversed.

      H. W. Applegate, Attorney General, and John L. Garter, Assistant, for appellant.

      W. F. Reeves, for appellee.
   Smith, J.

This appeal involves the construction of § 4790, C. & M. Digest, which reads as follows: “It shall be unlawful for any person to shoot, kill, maim or wound any doe. It shall be unlawful to kill, shoot or take any wild turkey hen. It shall also be unlawful to kill, shoot or take any wild pheasant, grouse, prairie chicken or robin redbreast in this State until after the first day of January, 1922.”

Appellee was charged with having violated this statute by killing a “doe deer” on or about the 11th day of November, 1925. He filed a demurrer in the circuit court to the information which had been lodged against him in the court of a justice of the peace, where the prosecution was commenced. The circuit court sustained the demurrer, holding that “there .is no law against the killing of a female deer, commonly called doe,” and the State has appealed.

. The General Assembly at its 1917 session passed act 133 (Acts 1917, page 695), entitled, “An act to'provide for a State Game and Fish Commission and to protect the game and fish and fur-bearing animals of this State, and to regulate the killing and taking of same.” Section 35 of this act reads as follows:

“It shall be unlawful for any person to kill, shoot, maim, wound any deer with antlers less than five inches long, or to kill, shoot or take any wild turkey hen, wild pheasant, grouse, prairie chicken, woodcock, turtle dove or robin redbreast in this State until after tbe 1st day of January, 1922.”

At tbe 1919 session of tbe General Assembly tbe act of 1917 was amended in many particulars (General Acts of 1919, page 204) by act 276. Among the numerous other sections of the act of 1917 amended by the act of 1919 was § 35, which was amended by the act of 1919 to read as it now appears as § 4790, C. & M. Digest, set out above.

It is contended by appellee that the inhibitions of this section expired by limitation on the 1st day of January, 1922, and the court below so held, and the correctness of this contention and holding is the question for decision.

• We do not concur in the view of the court below. It will be observed that this section of the act is composed of three separate and complete sentences. By the first sentence it is made unlawful for any person to shoot, kill, maim or wound any doe. By the second sentence it is made unlawful for any person to kill, shoot or take any wild turkey hen. By the third and last sentence an additional inhibition is imposed, and it is made unlawful for any person to kill, shoot or take any wild pheasant, grouse, prairie chicken or robin redbreast until after the first day o'f January, 1922.

As we interpret this section of the act, it was made unlawful to shoot, kill, maim or wound a doe, or to kill, shoot or take a wild turkey hen at any time, and it was also made unlawful to kill, shoot or take any of the other game mentioned until after the first day of January, 1922. It may be said, in passing, that the closed season on certain game mentioned in the third sentence of this section has been extended by act 500 of the General Acts of 1*923 (Acts 1923, page 407).

It is the insistence of appellee, and was the view of the court below, that the word “also” appearing in the third sentence should be read as a conjunction, connecting the three sentences, and thereby reading into each of the first two sentences the limitation on the inhibition contained in the third sentence, making the inhibitions contained in the first two sentences expire on January 1, 1922. As we have said, we do not concur in this view. The first two sentences impose inhibitions without limitation as to time, and, in addition, in the third sentence it is inhibited to lrill, shoot or take certain other game until after January 1,1922.

The court below was therefore in error in holding that no offense had been charged against appellee, for it is unlawful to kill a doe at any season of the year. The judgment of the court below will therefore.be reversed, and the cause remanded.


author: Humphreys, J.

text:
    Drake v. McDonald.
    Opinion delivered April 5, 1926.
    1. Judgment—discretion to set aside default.—Where a default judgment was entered on account of the absence of defendant, the granting of a new trial is within the sound discretion of the trial court.
    2. Judgment—default judgment—discretion as to setting aside. ■—Refusal to set aside a default judgment will not be reversed where the defendant was fifteen minutes late in appearing in court and waited two days before asking to have the judgment set aside, and in his motion set uip a different defense from that pleaded in his answer.
    Appeal from Columbia Circuit Court; L. S. Britt, Judge;
    affirmed.

      Kitchens é Upton, for appellant.

      Henry Stevens, for appellee.
   Humphreys, J.

On the 14th day of July, 1924, appellee instituted this suit in the circuit court of Columbia County against appellant to recover a balance of $907.75, including interest, upon au open account. On the 26th day of August following he filed an amendment to his complaint, to which was attached an itemized statement of the account beginning in the month of July, 1923, and extending through November of that year.

On the 28th day of August, 1924, appellant filed an answer denying each and every allegation in the complaint, and the cause was set down for trial on the 10th day of February, 1925. On the day set the cause was tried in the absence of appellant, and at 1:45 o’clock p. m. a judgment was rendered in favor of appellee against appellant in the sum of $932.50.

On the 12th day of. February, 1925, appellant filed a verified motion for a new trial, setting up as grounds therefor that he resided 22 miles from Magnolia, the county seat, and left home in an automobile at 7 o’clock a. m. and would have been present at the trial had it not been for a breakdown of his car; that he arrived in the courtroom fifteen minutes after the judgment had been rendered against him; that he had a good defense against the claim of appellee to the extent of more than $500; that appellee failed to credit him with checks to the amount of more than $400, which he had paid on his account..

The motion was overruled by the court on the 19th day of February, 1925, before the term expired, over the objection of appellant, from which ruling an appeal has been duly prosecuted to this court.

It is insisted that the trial court committed reversible error in denying appellant a new trial. The granting of a new trial on account of the absence of a party to the suit is within the sound discretion of the trial court, and this court will not interfere on appeal unless the trial court abused its discretion. Meadow v. Hudson, 90 Ark. 294. In the instant case appellant failed to present any excuse for the absence of his attorneys or, if present, their failure to ask for a postponement of the cause to a later hour on the day the case was set or to some other day in the term, or why he waited two days thereafter to account for his absence and request a new trial. In addition to this, the alleged meritorious defense set up in his motion for a new trial was different from that contained in his answer to the complaint. In the original answer he denied purchasing the goods at all. In the motion for a new trial lie admitted the purchase of the goods and alleged part payment. Much latitude is allowed a trial judge in the exercise of his discretion. Applying this rule, we cannot say that the facts and circumstances of this case reveal any abuse of the trial court’s discretion.

No error appearing, the judgment is affirmed.


text:
    Louisiana Northwest Railroad Company v. McMorella.
    Opinion delivered March 8, 1926.
    1. Appeal and error—motion not acted upon.—A motion filed by defendant to require the plaintiff to make the complaint more definite and certain, which was never acted upon by the trial court, presents no question for decision in the appellate court.
    2. Pleading—exhibits.—An account, exhibited with the complaint in an action at law, may be referred to as explanatory of the allegations of the complaint, although the action is not founded upon it.
    3. Receivers—authority to make contracts.—Where a chancery court takes possession of a railroad and operates it through a receiver, it may authorize the receiver to make all contracts necessary to carry on the business, and the court’s ratification of a contract made by the receiver makes it as binding as if the contract had been expressly authorized in the first place.
    Appeal from 'Columbia Circuit Court; L. 8. Britt, Judge;
    affirmed.
    STATEMENT BY THE 'COURT.
    Elizabeth McMorella sued E. E. Bernstein as receiver of the Louisiana & Northwest Eailroad Company, and the Louisiana Northwest Eailroad Company, to recover the sum of $3,000 alleged to he due her for services performed for. said railroad company.
    The plaintiff was a witness for herself. According to her testimony, in January, 1919, she entered into a contract with George W. Hunter, as receiver of the Louisiana & Northwest Eailroad Company, to perform certain services for said railroad company, and continued in its service under the terms of the contract until George W. Hunter ceased to be receiver in October, 1920. Under the contract, as first made, she was to get out ties for the company, and to receive a commission therefor, and a stipulated salary per month. She was also required to look after certain lands which a railroad company was attempting to sell to Bulgarian colonists. In the summer of 1920, it was agreed that the plaintiff should be paid a monthly salary of $250 per month, and a commission of three cents per tie for all ties purchased up to a maximum of .$100,000 annually, which would give her the maximum income of $6,000 yearly. The agreement was in writing, and was to operate retrospectively, so that it would begin the first of July, 1919, and was to continue from that day until the final discharge of the plaintiff, which could only be done by giving’ thirty days’ notice to her. The contract was approved by the judge of the Federal court in which the receivership was pending. G. W. Hunter was discharged as receiver on October 1,1920, and the plaintiff was discharged in a short time thereafter. During the time she was in the service of the railroad company she furnished 128,402 pine ties, 424 gum ties, and 14,867 oák ties. When Hunter resigned, he filed a statement of his account in the Federal court, which was approved by the judge of said court. His final statement included an itemized statement of the account of the plaintiff with the railroad company, and showed a balance due her as of November 1,1920, of $2,467.46. The itemized account of the plaintiff as sued on is as follows:

      “Magnolia, Arkansas,
    September 8, 1922.
    Receiver, Louisiana & Northwest Railroad, Dr.
    To Elizabeth McMorella, Cr.
    Balance as of November 1, 1920.................................... $2,467.46
    Salary for November 1920—23 days at $250 per
    month ........................................................................ 191.59
    Legal expenses: McKay & Smith, attorneys..............$500.00
    Kate McKey, transcript, etc......................................... 100.00
    Court fees ........................................................................ 198.50 798.50
    Care of live, stock:
    Peed .................................................................................... 301.00
    Caretaker .......................................................................... 145.00 446.00
    Sundry expenses:
    Railway fares between Magnolia and Mohawk ........ 90.00
    Subsistence ........................................................................ 540.00
    Automobile hire ............... 200.00
    Travel.................................................................................. 192.36
    Stenographer ................................................ 50.00 1,072.84
    Total ....................................................................................$4,976.39
    Less cash collection of colony applied.......................................... 1,976.39
    “Balance due ......................................................................$3,000.00
    The first item of the account as above stated was the balance due her as shown by the report of George W. Hunter, as receiver, and approved by the court when he was discharged as receiver. The salary item of $191.59 was due her, because, under the terms of the contract, she was entitled to thirty days’ notice, and continued in the service of the company for twenty-three days after she received notice that she had been discharged. The $500 which she paid McKay& Smith, attorneys,was for services performed by them in clearing the title to certain lands owned by the railroad company. For convenience, the legal title to these lands had been placed in the plaintiff, and it was necessary that she should bring suit in order to perfect the title to them. Under her agreement with the receiver she had employed McKay & Smith for that purpose, and had paid them $500, which was a reasonable sum for their services. Pursuant to her agreement with the railroad company, she had conveyed the lands to them after the titles had been settled. The amount paid Kate McKey was for services as stenographer in making out a report of the proceedings and services of the plaintiff with regard to all matters and items embraced in carrying out her contract, and was worth $100. The $198.50 included the court costs which the plaintiff incurred in perfecting the title to said lands.
    She had charge of the live stock belonging to the defendant at the time she was notified of her discharge, and continued to have the live stock fed and cared for until the railroad company relieved her of this responsibility. In this way she paid $301 for feed and $145 for a caretaker for said live stock. It was necessary that the stock should be fed and cared for until she was relieved of all responsibility in the matter. The amount of $90 was spent by her for railway fare in transacting the business of the railroad company, and she was entitled to this amount under her contract. The $540 for subsistence claimed by her was for hotel bills and other traveling expenses. 'She was allowed her traveling expenses under the terms of her contract with the railroad company, and actually spent more than the amount claimed. The $200 for automobile hire was for the purpose of transportation for herself in carrying on the business of the company when she could not secure speedy transportation on the railroad’s trains. The amount of $192.36 was for traveling expenses when she was sent out on the business for the company. The $40 stenographer’s fees was for letters written relative to the business of the company, and extended oyer á period of one year.
    .George W. Hunter corroborated the testimony of the plaintiff as to the terms of her contract of employment, and as to the amount due her, as shown by his report as receiver, which was approved and allowed by the Federal court.
    Evidence was introduced by the defendant which tended to disprove the account of the plaintiff, and to show that the railroad company was not indebted to her in the amount sued for or in any amount whatever.
    The jury returned a verdict in favor of the plaintiff in the sum of $3,000, and from the judgment rendered against the defendant, Louisiana Northwest Railroad Company, an appeal has been duly prosecuted by it to this court.

      Henry Stevens, for appellant.

      McKay & Smith, for appellee.
   Hart, J.,

(after stating the facts). It is first contended by counsel for the defendant that the judgment should be reversed because the court erred in refusing to compel the plaintiff to make her complaint more definite and certain. The record shows that the defendant filed a motion to require the plaintiff to make her complaint more definite and certain, but that the motion was never acted upon by the court. It has been repeatedly held by this court that, unless a party secures a ruling on a demurrer, it will be presumed on appeal that the demurrer was abandoned. Kierman v. Blackwell, Admr., 27 Ark. 235; Hobart-Lee Tire Co. v. Keck, 89 Ark. 122; and Harbottle v. Central Coal & Coke Co., 134 Ark. 254, and cases cited. And, as a rule, a motion which, so far as appears from the record, was never decided below presents no question for decision in the appellate court. Baker v. Martin, 95 Ark. 62, and 3 C. J. p. 890, par. 797. It follows that this assignment of error is not well taken.

It is insisted that the judgment should be reversed because the item of $2,467.46 resulted from a colonization contract which the plaintiff made with George W. Hunter as receiver of the Louisiana & Northwest Railroad Company, which the receiver was not authorized to máke. The record shows that George W. Hunter, as receiver, made a contract with the plaintiff to furnish ties for the railroad company, and to look after certain lands belonging to the railroad company which the railroad had sold to a Bulgarian colony. For her services the plaintiff was to receive a salary and a certain commission on the ties furnished. Her own testimony, and that of George W. Hunter, show that she performed the services, and that the sum of $2,467.45 was due her. While the record does not disclose that the receiver was expressly authorized to make this contract, it does show that the receiver made a -report to the court in which he. explained the contract, and made a detailed statement of what the plaintiff had done under the contract. The court expressly ratified and approved the action of the receiver in the premises. It appears from the record that the services of the plaintiff in the premises were of great benefit to the railroad company, and that they were worth the amount claimed. The action of the court in ratifying the contract of the receiver in allowing the $2,467.46, made the contract as legal and binding as if it had been expressly authorized in the first place.

It is next insisted that the remaining items of the account do not fall within the allegations of the complaint. We can not agree with counsel in this contention. We do not deem it necessary to set out the whole complaint. It is sufficient to say that the whole account copied in our statement of facts was made an exhibit to the complaint. While the action is not founded upon the account, and is founded upon the contract which the plaintiff made with the receiver, still it may be referred to as explanatory of the allegations of the complaint. Abbott v. Rowan, 33 Ark. 593, and Rouldin v. Jennings, 92 Ark. 299.

When the allegations of the complaint are considered with reference to the account, we are of the opinion that the matters embraced in the account come fairly within the allegations of the complaint. The whole matter was developed by the proof, and it does not appear that the defendant was taken by surprise at any item of the account.

According to the testimony of the plaintiff, the amount of attorney’s fees expended by her for the benefit of the defendant was reasonable, and no effort is made by the defendant to show to the contrary. Her expense account was also reasonable, and was incurred while she was attending to the business of the defendant. It is inferable from the record that the railroad company was in an insolvent condition when it went into the hands of the receiver, and that the action of the receiver in managing it resulted in putting it back upon a sound financial basis. The plaintiff was of great assistance to the receiver in accomplishing this result. The railroad company had on hand the lands which it had attempted to colonize, and it was necessary to carry out its contracts in the premises. The whole matter was referred to the court and thoroughly explained by the receiver in the summer of 1920.

The judge of the Federal court which appointed the receiver, in discussing the affairs of the railroad company with the receiver, asked him about the contract with the plaintiff. It appears from the records that the railroad company had sold some of its lands to Bulgarian farmers who were very ignorant, and who were unable to carry out the'ir contracts. It was necessary for the receiver to take over some of these lands and to wind up the contracts with the Bulgarians. The plaintiff was directed to take charge of these lands, and to handle the business for the railroad company under the receiver. On account of the financial condition of the railroad company,- it was difficult to get ties, and for this reason arrangement was made with the plaintiff to get out the ties. It was almost impossible to buy ties through the regular channels, and, in addition, the prices were too high. The receiver made a detailed report of all of his actions in the premises, which was approved by the court. The report of .the receiver showed the terms of the contract with the plaintiff and the balance due her. The general rule is that, where a court of chancery takes possession of a railroad and operates the same through a receiver, it may authorize the receiver to make all contracts necessary to carry on the business of such railroad. The action of the court in ratifying the contract made by the receiver with the plaintiff made it as legal and binding as if the court had expressly authorized it in the first place.

It is also insisted that, the judgment should be reversed because the amount paid by the plaintiff as attorney’s fees was for her benefit, and not for the benefit of the railroad company. It is true that the legal title of the lands in question was in the plaintiff, but she held them in trust for the railroad company. According to her testimony, the legal services were performed for the benefit of the railroad company entirely. She acted throughout for the benefit of the railroad company, and did not claim any beneficial interest whatever in the lands. Her expense account, according to her testimony, was reasonable, and was authorized under her contract with the receiver. The respective theories of the plaintiff and of the defendant were submitted to the jury undér proper instructions, and the jury was warranted under the evidence in finding for the plaintiff.

There is no prejudicial error in the record, and the judgment will be affirmed.


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    Henry v. Irby.
    Opinion delivered March 29, 1926.
    Landlord and tenant—lien for back rents.—Under Crawford & Moses’ Dig., § 6889, a landlord has a lien upon the tenant’s crop only for the particular year in which it is grown, and not for the rents of previous years carried over.
    Appeal from Lawrence Chancery Court, Eastern District; Lyman F. Reeder, Chancellor;
    reversed.

      E. F. Duncan and H. P. Cleveland, for appellant.

      W. E. Reloate, for appellee.
   Smith, J.

Appellant, W. E. Henry, grew a crop of cotton and corn in the year 1922 on the farm of appellee, Mrs. Lizzie Burel, and in the course of the year he borrowed from a bank at Walnut Ridge the sum of $125. Certain parties signed the note which Henry executed to the bank as sureties, and, to indemnify them, Henry executed to them ia mortgage on his half interest in the crop. In the fall of the year 1922, Henry and his sureties brought this suit, and alleged that Mrs. Burel was wrongfully converting the proceeds of the entire crop, and there was a prayer that she be restrained from so doing, and that a receiver be appointed to take charge of the crop, and that an account be stated between Henry and Mrs. Burel. The prayer that a receiver be appointed was not insisted upon, and by consent it was agreed that Dave Bloom, a merchant at Walnut Ridge, should handle the crop, and should hold the proceeds thereof subject to the final order of the court.

Mrs. Burel filed an answer, in which she alleged that Henry was indebted to her in a sum exceeding his interest in the crop, and that she had a landlord’s lien and a chattel mortgage also on his interest therein, and she prayed that this lien and mortgage be foreclosed.

Numerous motions and pleadings were filed during the progress of the cause, which we think unnecessary to set out, and upon final hearing the court adjudged the indebtedness due from Henry to Mrs. Burel and directed Bloom to pay this sum to Mrs. Burel, after first paying to the sureties the $125, which they had paid to the bank, with interest thereon at six per cent.

It appears that Henry had cultivated the same land for the years 1919, 1920 and 1921, and that Mrs. Burel had carried over a balance accumulated during this prior tenancy into her 1922 account. The testimony also shows that Henry agreed to give Mrs. Burel a chattel mortgage on his stock and his interest in the crop to secure this balance, but he did not do so.

The decree of the court below adjudged the balance due Mrs. Burel to be $521.11, and it is quite apparent that Bloom did not have in his hands a sufficient sum to pay the whole amount of this debt after first paying the sureties the $125 as he was directed to do.

It does not appear from the recitals of the decree upon what theory the court directed the whole of Mrs. Burel’s debt, including the balance brought into the 1922 account from, the previous years, to be paid out of the proceeds of the 1922 crop. All the money in Bloom’s hands was derived from the sale of the 1922 crop, and Mrs. Burel had no lien on this crop for any balance due prior to that year.

By § 6889, C. & M. Digest, it is provided that “every landlord shall have a lien upon the crop grown upon the demised premises in any year for rent that shall accrue for such year, and such lien shall continue for six months after such rent shall become due and payable.”

The court should not therefore have directed the appropriation of the proceeds of the 1922 crop to the prior debt, as there was no lien thereon to secure the indebtedness incurred prior to 1922.

This may not have been the theory upon which the decree was rendered. There was testimony' that Henry had agreed to execute a mortgage, but it is not contended that he did so. While the testimony shows there was an agreement to give a mortgage to secure this balance, the agreement was not carried out, and no mortgage was ever executed, so the rights of the parties must be adjudged as if the question of the mortgage was not in the case.

There is a controversy about the alleged refusal of Mrs. Burel to permit Henry to gather the crop, and about the state of her account, but the finding of the court on these issues in Mrs. Burel’s favor does not appear to be clearly against the preponderance of the evidence. But the court should have held that there was no lien except that of a landlord, and that this lien did not include any part of the indebtedness incurred prior to 1922. A simple judgment for debt should have been rendered for that indebtedness.

Appellee does not question the direction of the decree to Bloom to pay the sureties the $125, but appellants say that the court was in ei’ror in directing Bloom to pay only six per cent, interest on the loan. It appears that they are correct in this contention. The note bore interest at ten per cent., and the court should have directed Bloom to pay interest at that rate, as the interest was secured by this mortgage, and the rate was ten per cent., and not six.

No question is presented about the priority of the landlord’s lien over that of the mortgagee as to so much of the money in Bloom’s hands as is necessary to pay the mortgage.

The cause will therefore be reversed and remanded, with directions to the court below to enter a decree in accordance with this opinion.


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    Short v. Thompson.
    Opinion delivered April 5, 1926.
    1. Partnership—accounting—jurisdiction of equity.—In a suit for an accounting and settlement of partnership affairs the jurisdiction of equity is practically exclusive.
    2. Equity—jurisdiction to administer complete relief.—Equity frowns upon a multiplicity of suits, and, when it takes jurisdiction of a case for a matter exclusively cognizable in equity, it retains the cause to administer the legal after the equitable relief.
    Appeal from White Chancery Court; John E. Marfineau, Chancellor;
    affirmed.
    statement by the court.
    This is the second appeal in this case. W. A. Thompson first instituted the action against W. J. Short in the circuit court to recover damages for an alleged breach of contract to clear 165 acres of land in White County, Arkansas. There was a verdict and judgment for the defendant in the circuit court. Thompson appealed to this court. The judgment was reversed because the court erred in assuming that the defendant was entitled to recover, if it should find that the plaintiff had failed to comply with the contract, regardless of whether or not the defendant had breached it. Thompson v. Short, 157 Ark. 314. •

      Upon the remand of the case,' the plaintiff was allowed to file an amendment to his complaint. In it he sets tip that the time for the performance of the original contract was extended from time to time to the first day of January, 1920.
    It also alleges that there is involved in this suit the settlement of a partnership account between the plaintiff and the defendant growing out of a partnership contract which they made with a share-cropper to work the land. That the affairs of the partnership are complicated, and that there has been no settlement of their accounts with regard to it.
    The plaintiff prayed that the cause be transferred to the ‘White Chancery Court, which was accordingly done. The défendant made a motion in the chancery court to transfer it back to the circuit court and excepted to the action of the court in overruling his motion.
    The case was tried in the chancery court by agreement upon the record made on the original trial of the action in the circuit court and upon certain depositions afterwards taken by the parties.
    The chancellor found that there was nothing due either the plaintiff or the defendant on the Mason contract, but that the defendant was indebted to the plaintiff on account of the breach of the contract for clearing land in the sum of $260. A decree was entered of record accordingly, and the defendant has duly prosecuted an appeal to this court.

      Utley & Hammock, for appellant.

      Brundidge & Neelly, for appellee.
   Hart, J.,

(after stating the facts). The record shows that the original contract was in writing’ and was executed by the parties on the 13th day of September, 1916. It recites that iW. A. Thompson is the owner of certain land, which is described in the contract, and that W. J. Short agrees to clear 165 acres of said land fpr the sum of $400. Short agreed to remove from the land so cleared all timber and growth by using that part that was marketable and burning the remainder. The contract provides that the term “cleared land” as used means land with all timber removed in such a way as that all stumps over eight inches in diameter be of such a height as they may happen to be cut; while all stumps eight inches or less in diameter shall not exceed eight inches in height. That it is meant that when the land is cleared, it is to be ready for the plow and free from timber and kindred growth. It is also provided that Short should clear 100 acres of the land by April 1, 1917, and that the remainder should be cleared by April 1, 1918. It was agreed that when 60 acres of the land had been cleared as specified, Thompson should pay to Short the sum of $50. That, when each additional ten acres should be cleared, Thompson should be due Short the sum of $50, and so on until the entire land had been cleared.

It is first earnestly insisted that the decree should be reversed because the court erred in transferring the case from the circuit to the chancery court. We do not agree with counsel for the defendant in this contention. When the plaintiff amended his complaint by alleging that he and the defendant farmed the land in partnership for one year with a share-cropper and that there had been no settlement of their partnership account, this gave the chancery court jurisdiction. Equity jurisdiction is practically exclusive in proceedings for an account and a settlement of partnership affairs, and this includes suits for an accounting between the partners themselves. Choate v. O’Neal, 57 Ark. 299; Jones v. Jones, 23 Ark. 212, and Pomeroy’s Eq. Jurisprudence, 3 ed., vol. 4,§ 1421.

It is well settled that equity frowns upon a multiplicity of suits, and, when it takes jurisdiction of a case for a matter exclusively cognizable in equity, it retains the cause to administer the legal after the equitable relief. McGaughey v. Brown, 46 Ark. 25; Horstman v. LaFargue, 140 Ark. 558, and Tallman v. McGahhey, 164 Ark. 205.

With regard to the Mason contract but little need be said. The record shows that Thompson and Short formed a partnership to work the land one year with Mason as a share-cropper. The parties were to furnish supplies and tools to Mason for making the crop and to share equally the profits and losses arising therefrom. After the crop was gathered they made a final settlement of their account in the premises. Mason made the crop under the contract in the year 1918, and Thompson made the last payment on it to Short in 1919. This last payment settled up the partnership beween the parties with respect to this crop. Besides, each party testified that he did not owe the other on account of this transaction, and the chancellor properly found that nothing was due by either party under the Mason contract.

With reference to the breach of contract for clearing the land, the case presents an issue more difficult to determine. According to the testimony of Thompson, the entire tract contained 240 acres, and he paid $6,750 to W. J. Short for it. He was induced to pay that much for the land by the fact that he was to get as much as 165 acres cleared for $500. He has paid the whole of the purchase price. He paid $5,500 by transferring without recourse certain notes for that amount to W. J. Short. He paid him the balance of the purchase price in cash. Fifty acres of the land to be cleared and put in cultivation had at one time been cleared but had grown up. Thompson paid Short $75 before he ever cleared any of the land, •and that took care of 65 acres under the contract, applying to the land which had once been in cultivation.

By mutual agreement between the parties an extension of time for clearing the land was given to Short until January, 1920, when Thompson wrote to Short that there had been only 84 acres of the land cleared and that 80.1 acres remained to he cleared. A further extension was given until March.l, 1920, and after that time no further extension was granted.

It appears from the testimony that the various extensions were granted for the mutual benefit of the parties. Thompson had been drafted in the United States Army during the World War and did not know whether or not he would be sent to France. He was having the land cleared for the purpose of farming it himself, and if he was sent to France he did not care anything about having the land cleared. Under the contract, Short was to get the commercial timber on the land in part payment for clearing it, and, on account of the depreciation in value of the commercial timber, he wished to secure an extension of time for clearing the land.

According to the testimony of Thompson, Short left trees and bushes on the land at various places and did-not comply with the contract as to the land which he attempted to clear. In this respect the testimony of the plaintiff is corroborated by . that of the county surveyor of White County. He made a survey of the land, and testified that Short cleared 88.62 acres .in all, and that there were three and a half acres of unfinished clearing. He also testified that there were trees and bushes which had been left standing and lying on the ground .in places in the land cleared. He made a plat which indicated that several pieces were unfinished where trees were left standing or lying on the ground.

Several witnesses testified that it would cost from $15 to $25 an acre to finish clearing the land under the contract. The reason for this is that the value of the commercial timber on the land has greatly depreciated. It is also shown by the plaintiff that, in the spring or summer of 1920, Short refused to proceed further under the contract. Short admitted this, but testified that he refused to carry out the contract because of the fact that Thompson had committed a prior breach of it.

Short introduced witnesses who testified that the land could be cleared at a price of from five to eight dollars per acre by including the commercial timber on the land. We do not deem it necessary to set out the evidence on this phase of the case in detail. It is true that the burden of proof was upon Thompson to show that Short had committed the first breach of the contract and the amount of damages suffered by himself. But in this respect the chancellor found in favor of Thompson. Under our settled rules of practice, the findings of fact by a chancery court are allowed to stand unless they are clearly against the preponderance of the evidence, and we are not convinced that the findings of the chancellor to the effect that Short first breached the contract and that Thompson was damaged thereby in the- sum of $260' is clearly against the weight of the evidence.

Thompson has taken a cross-appeal, and his counsel earnestly insist that the amount of damages suffered by him by reason of Short’s breach of the contract should be substantially increased.

After duly considering this point we have decided against counsel in this contention. Our reading of the record leads us to the conclusion that the chancellor carefully considered the evidence, and it can not be said that his estimate of the damages suffered by Thompson on account of Short’s breach of the contract was too low.

The result of our views is that the decree of the chancery court should be affirmed.