author: Hart, J.,

text:
    Hatfield Products & Cooperative Association v. Mena Truck & Fruit Growers’ Association.
    Opinion delivered May 5, 1924.
    Evidence — letterhead.—On the issue whether a third person was agent for defendants in buying certain materials, evidence that he was using letterheads showing him to be manager for the defendants, and that the defendants were members of a certain association, was inadmissible, in the absence of evidence tending to show that the defendants knew of such use of their names.
    Appeal from Polk Circuit Court; B. E. Isbell, Judge;
    reversed.

      statement of facts.
    The Mena Truck & Fruit Growers’ Association sued the Hatfield Products & Cooperative Association to recover $745 alleged to be due for cantaloupe crates sold by the former to the latter. ’Both the plaintiffs and the defendants are alleged to be partnerships, which are composed of certain individuals named in the complaint.
    The defendants filed an answer in which they denied owing the plaintiffs any sum whatever.
    J. P. Callahan was the principal witness for the plaintiffs. According to his testimony, during the year 1921 he was chairman and manager of the- Mena Truck & Fruit Growers’ Association. About the first of June, 1921, his association sold a car of cantaloupe crates to Y. L. McFarland, who represented himself to be secretary and sales manager of the Hatfield Products & Cooperative Association, the members of which were engaged in growing cantaloupes. A written contract was entered into whereby the Mena Truck & Fruit Growers’ Association sold a car of cantaloupe crates to the Hatfield Products & Cooperative Association. The contract on the part of the buyers was signed by W. T. Meyers and V. L. McFarland, respectively, as president and secretary of said association. The car of orates was sold for $770. Subsequently W. T. Meyers paid $25 of the indebtedness, and the balance of it has not been paid. In 1922 Callahan went to Hatfield and interviewed some of the defendants about the account, and they stated that they were then members of the association which had bought the car of cantaloupe crates. The written contract signed by Meyers and McFarland has been lost. On May 15, 1921, V. L. McFarland wrote to J. P. Callahan, stating that the original contract had been signed and was being returned with the letter. The letter purports to give a list of the members of the association who had paid their membership fees in full. The names of the defendants to this action and others appear in the list. The letter was written on stationery purporting to be that of the Hatfield Products & Cooperative Association. The letterhead contains the names of the officers and directors of the association, and states that they are growers and shippers of fruits, vegetables and other commodities. Some of the defendants’ names, including those of S. E. Pottorff, Mrs. H. Russell, Y. L. McFarland, W. T. Meyers and others, appear on the letterhead of the association.
    Some of the defendants, including S. E. Pottorff, were witnesses for themselves. According to their testimony, J. P. Callahan bought the car of cantaloupe crates for himself, and some of them were sold to the defendants and others during the cantaloupe season of 1921, and again in 1922. They offered to pay the plaintiffs for the cantaloupe crates which they actually received, but refused to pay for the balance of them, because they had nothing whatever to do with buying them. They denied that they in any way joined in making the contract for the purchase of the cantaloupe crates, and stated positively that they had nothing whatever to do with making the contract. They admitted that V. L. McFarland attempted to form an association known as the Hatfield Products & Cooperative Association for the purpose of growing and selling cantaloupes, but said that the organization of the association was never completed. They denied knowing that McFarland had placed their names on the letterheads of the association, or that he had any authority to do so. They did not know that he had attempted to make the contract in the name of the organization or had represented them to be members of it. McFarland had left the State, and was in the State of Iowa at the time of the trial. The defendants offered to pay the plaintiffs for the crates which they had received and used.
    , The jury returned a verdict for,, the plaintiffs, and, from the judgment rendered, the defendants have duly prosecuted an appeal to this court.

      Norwood & Alley, for appellant.
    No articles of association, incorporation or partnership were ever signed by any of the appellants, and no authority was given McFarland to purchase crates for appellants, as an association or as partners, and they did not 'know that he was exercising snch authority. The case comes within the rule announced in 121 Ark. 541.

      Minor Piphin, for appellee.
    Where appellant makes objections to instructions different from those urged on appeal, the objections on appeal are waived. 137 Ark. 495. See also 65 Ark. 371.
   Hart, J.,

(after stating the facts). The assignment of error mainly relied upon for a reversal of the judgment relates to the admission of the letter signed by V. L. McFarland as secretary and sales manager of the Hatfield Products & Cooperative Association, which was written on the 15th day of May, 1921, stating, among other things, that the original contract for the purchase of the cantaloupe crates was inclosed in it. The letter also contains the names of the defendants and others who were represented to be members of the association, and to have paid their membership fees in full. This letter does not of itself authorize any inference against the defendants. Its contents are only the declarations of McFarland, and, unless his statement was adopted, or in some way sanctioned by the defendants, his act in the premises could not prejudice them.

On an issue as to whether McFarland, in purchasing the cantaloupe crates from the plaintiffs, had acted for the defendants, evidence that he was using letterheads showing him to be manager for the defendants, and that the defendants were members of a certain association, would be incompetent, in the absence of evidence tending to show that the defendants knew of such use of their names. Owen v. Jones, 14 Ark. 502; Estes v. Merrill, 121 Ark. 361; Donaghey v. Williams, 123 Ark. 411; and Ellis & Co. v. Farrell, 146 Ark. 274.

In the absence of proof tending to show that the defendants knew of, or had authorized, the use of their names on the letterheads of the association, it was necessary that this fact be testified to by the writer of the letter, or some one who had knowledge of the fact. So far as the defendants are concerned, McFarland was a third party, and his statements, either verbally or in writing, amounted to nothing but hearsay against them. He could not use letterheads containing their names as members of an association, and bind them thereby, without any knowledge on their part of his act in the premises. The letter in question tended to show that the defendants were members of an association which had purchased the cantaloupe crates, and its admission in evidence was highly prejudicial to them.

It is true that there was other evidence tending to show that some of the defendants were members of the association, but this did not remove the prejudice resulting from the admission of the letter, for the reason that the defendants denied that they were members of the association, and it could not be said therefore that the undisputed evidence showed that they were members at the time McFarland made the contract in question.

For the error in admitting in evidence the letter in question, as indicated in the opinion, the judgment must be reversed, and the cause will be remanded for a new trial.


source: Caselaw Access Project

author: Smith, J.

license: Public Domain

text:
    Blankenship v. McDaniel.
    Opinion delivered May 5, 1924.
    1. Justices op the peace — jurisdiction of counterclaim. — A • justice of the peace may not exercise jurisdiction of a counterclaim in excess of $300, where the defendant fails to remit so much of his demand as was in excess of the justice’s jurisdiction.
    2. Brokers — acting for both parties. — When a broker undertakes to act as agent for both buyer and seller, it is his duty to disclose to each the facts within his knowledge; and if he misrepresents the facts to either party, he cannot recover commissions from either.
    Appeal from Cfreene Circuit Court, First Division; W. W. Bandy, Judge;
    reversed.

      J. M. Futrell, for appellant.
    The court erred in refusing to submit the issue of fraud, and whether McDaniel was agent of Blankenship or of both. Blankenship and Hall. An agent must exercise the utmost good faith with his principal. 143 Ark. 1; 76 Ark. 395; 82 Ark. 381; Bishop on Contracts, 250.
   Smith, J.

Blankenship sued McDaniel on a note for $75 in the court of a justice of the peace, and McDaniel set up a counterclaim, which he appears to have used for the purpose only of extinguishing the debt evidenced by the note sued on: McDaniel testified that he contracted to buy from one Hall a tract of land for $3,000, but, before a deed was made, he contracted to sell it to Blankenship for $4,000. That he told Hall what he had done, and directed Hall to make the deed direct to Blankenship, and that, when he bronght Hall and Blankenship together, they ratified what he had done, but later refused to carry out that agreement, and Blankenship entered into another contract with Hall for the purchase of the land for $3,500, and that deal between Blankenship and Hall was consummated by the execution of a deed from Hall to Blankenship for the consideration of $3,500.

Before the institution of the suit in the justice court McDaniel brought a suit in the Randolph Circuit Court against both Hall and Blankenship, in which he set out the facts recited above, alleging also that both Blankenship and Hall were advised as to the price he was to pay and the price he was to receive, and that, after he had negotiated this deal, Hall and Blankenship colluded together to save the commission he had earned, and he prayed judgment against both Hall and Blankenship for the thousand dollars commission, after allowing credit to Blankenship for the note here sued on, the complaint admitting liability on this note. It does not appear that the suit in Randolph County was ever tried or that service was had, and, as has been said, McDaniel appears to have used the demand there sued on for the purpose only of extinguishing the debt evidenced by the note.

At the trial from which this appeal comes McDaniel testified that, at the conference between the parties, he produced Hall, who' was ready and willing to execute the deed, and that Hall entered into a written contract to convey, but Blankenship refused to carry out his agreement to pay the $4,000. The court told1 the jury, if they found the facts so to be, to find for the defendant, and there was a verdict for the defendant, from which is this appeal.

McDaniel could not in this suit have asked judgment for the full commission claimed, as that amount was in excess of the justice’s jurisdiction; but he had the right to remit so much of his demand as was in excess of the justice’s jurisdiction, but he appears to have asked only that this demand be offset against that of Blankenship. Section 6452, C. & M. Digest; Kilgore Lbr. Co. v. Thomas, 95 Ark. 43; Jones v. Blythe, 138 Ark. 81.

The question stated appears to have been the only one submitted, yet the testimony on behalf of Blankenship raised another question which should also have been submitted. Blankenship and Hall testified that McDaniel attempted to negotiate a sal# of Hall’s land to Blankenship, and Hall testified that McDaniel represented to him that Blankenship was willing to pay only $3,000 for the land, and, • relying upon this statement, he agreed to accept that price; and Blankenship testified that McDaniel represented to him that Hall would not take less than $4,000 for the land, and, relying upon this statement, Blankenship agreed to give that price; but, when Hall and Blankenship got together, they found that they had both been deceived, whereupon they dismissed McDaniel and made another trade for $3,500, which was consummated by the execution and delivery of a deed.

It was error not to submit this theory of the case, and, in doing so, the court should have told the jury that, if McDaniel was attempting to act as agent for both the purchaser and the seller, it was his duty to disclose to each the facts within his knowledge, and that, if he misrepresented the facts to either Blankenship or Hall, he could not recover commissions from either of them. Murphy v. Willis, 143 Ark. 1; Gillette & English v. Carroll & Hogan, 157 Ark. 492.

This principle was announced in the case. of Felhauer v. Milam, 159 Ark. 178, in which, case the facts are very similar to those in the instant case. There Milam, a broker, concealed from Felhauer, his principal, the true amount he was offered for a tract of land, and, after obtaining authority to sell at $15,000, he negotiated a sale for $17,600 to Sheppard, a prospective purchaser, and, upon reporting the sale to his principal, Milam claimed this excess as profits, but finally sued and recovered a judgment for a commission of five per cent., amounting to $880. Upon the appeal to this court we held that Milam could not recover anything, either as profit or commission, and we reversed the judgment and dismissed the ease, and in doing so we said: “Appellee did not earn a commission on the $17,600 sale to Sheppard, because he did not report it to appellant until December 27, and, at that time, did not report it as a sale for that amount to appellant. On that date he reported it as a sale of $15,000 net to appellant, and $2,600 to himself as profits or commissions. Although authorized to sell the property for $15,000 net, it was his duty, in good faith and loyalty to his principal, to apprise him at once of the advantageous sale he had made to Sheppard. Appellant was entitled to the full purchase price on the sale, less a reasonable commission to appellee for making it. Appellee was not entitled to the excess over the list price, for a real estate broker cannot take advantage of his agency to make gain for himself. Appellee clearly lost his right to a commission by withholding valuable information from his principal, and by demanding the excess above the listed price as a profit to himself (Citing cases).”

As we have said, the testimony of Blankenship and Hall brings this case within the rule announced in the case of Felhauer v. Milam, supra, and that question should have been submitted to the jury under an instruction conforming to the law as there announced, and, for the error in failing to submit this question, the judgment must be reversed and the cause remanded. It is so ordered. ■


text:
    Finley v. Clift.
    Opinion delivered May 5, 1924.
    1. Justices of the peace — necessity for affidavit for appeal.— Under Crawford & Moses’ Dig., § 6513, making an affidavit a prerequisite for an appeal from a justice of the peace, where an affidavit for appeal signed hy one maker of a promissory note did not mention the other maker, and no evidence was offered to show that he was intended to be included therein, the appeal of such co-maker was properly dismissed, notwithstanding § 6520, Id., providing that no appeal shall be dismissed for any defect in the affidavit or obligation for appeal.
    2. Continuance — showing of diligence. — In the absence of a showing of diligence to secure the attendance of an absent witness, a motion for continuance on account of such absence was properly refused.
    Appeal from Izard Circuit Court; John G. Ashley, Judge;
    affirmed.

      John H. Woods and T. R. Wilson, for appellants.
    It was error to dismiss the appeal of Uz Finley; also error to refuse permission to amend the affidavit. 78 Ark. 597; 33 Ark. 745; 70 Ark. 99; 67 Ark. 493; 60 Ark. 525; 46 Ark. 302; 19 Ark. 649.

      P. G. Sherrill, for appellee.
    The motion to amend the affidavit, not being supported by any substantial evidence that C. B. Finley intended to make and did make affidavit for appeal for both defendants, was properly refused. In the absence of such evidence it will be presumed that he intended to make affidavit for appeal for himself alone. Cases cited by appellant have no application here, for the affidavit was not defective. 59 Ark. 177; C. & M. Dig., § 6513 ; 122 Ark. 278; 104 Ark. 276.
   Smith, J.

Appellee brought this suit in the court of a justice of the peace on a note executed by appellants, who defended the action on the ground that the note had been executed in consideration of an agreement that a bastardy proceeding pending in the county court of Izard County against appellant Uz Finley should be dismissed, without any order being entered on the records of the county court in that case, except an order of dismission, whereas, after the execution of the note, an order was entered directing appellant, Uz Finley, to pay costs amounting to $39.50.

The justice rendered judgment for the plaintiff (appellee), and, in the judgment, recited that “the attorney for the defendant prays an appeal to the circuit court, which is granted upon the condition that the defendants file their affidavit therefor within the time required by law. ’ ’ The justice issued an execution, which was recalled upon appellants filing a supersedeas bond, and, within the time limited by law for so doing, C. B. Finley filed an affidavit for appeal. This affidavit contained the caption of the case, and recited that “I, C. B. Finley, defendant in the above-entitled cause, do solemnly swear that the appeal taken by me from the judgment therein rendered is not taken for the purpose of delay, but that justice may be done me. (Signed) C. B. Finley.” A proper jurat appeared.

The justice filed a transcript of the proceedings before him with the clerk of the circuit court, and, on the first day of the term of the circuit court, appellee filed a motion to dismiss the appeal of Uz Finley on the ground that no affidavit for an appeal had been filed by him. In response to this motion Uz Finley filed a motion praying that the affidavit be amended to show that C. B. Finley had prayed the appeal, and intended the affidavit for Uz Finley as well as for C. B. Finley. This motion was overruled, and thereupon C. B. Finley filed a motion for a continuance on the ground of an absent witness. This motion was also overruled, and the record recites that C. B. Finley thereupon declined to plead further, and judgment was rendered on the appeal bond and against both Uz Finley and C. B. Finley, and this appeal is from that judgment.

An affidavit is a prerequisite for an appeal. Section 6513, C. & M. Digest. But by § 6520, 'C. & M. Digest, it is provided that no appeal shall be dismissed for any defect in the affidavit or obligation for appeal.

The affidavit in this case is not defective. It is in proper form, but does not include Uz Finley, and, if it were proper to admit proof that C. B. Finley did in fact pray an appeal for Uz Finley, and did1 intend to include him in the affidavit which he filed, no attempt.was made to show that fact. No testimony was offered that such was the fact, and the appeal of Uz Finley was therefore properly dismissed.

As to the motion for a continuance, it suffices to say that no showing of diligence was made to secure the attendance of the absent witness or that his attendance could be had if the case were continued, and that motion was therefore also properly overruled.

No error appearing, the judgment is affirmed.


author: Humphreys, J.

text:
    Viraldo v. Hohenschultz.
    Opinion delivered May 5, 1924.
    1. Appeal and error — conclusiveness of verdict. — A finding of the jury upon conflicting evidence is conclusive.
    2. Easements — grant of right-of-way — breach.—In the absence of restrictions in a grant of right-of-way there was nothing to prevent the grantor from plowing the right-of-way to keep down Johnson grass, or from erecting signs to prevent the public from trespassing.
    3. Easement — right to enjoyment — instruction.—An instruction that the grantor of a right-of-way easement had no right to interfere with the grantee’s “reasonable use” thereof was not open to general objection; being used by the court and understood by the jury to mean the free and full enjoyment of the easement.
    4. Trial — refusal of abstract instructions. — Requested instructions stating' abstract propositions of law fully covered by instructions given which were applicable to the facts of the case were properly refused.

      5. Trial — instruction to disregard attorney’s innuendpes.— Instructing the jury to disregard innuendoes of defendant’s attorney in cross-examination of plaintiff, and not to consider any hostility between the parties except as affecting their credibility held to cure any prejudice to plaintiff.
    Appeal from Pulaski Circuit Court, Second-Division; Richard M. Mann, Judge;
    affirmed.

      Harry H. Myers, for appellant.

      W. C. Adamson, for appellee.
   Humphreys, J.

This is a suit for damages in the sum of $1,000 for the alleged obstruction to the use of the right-of-way sold and conveyed to appellant by appellee. The sole issue presented by the pleadings was whether or not appellee, after selling appellant a right-of-way ten feet wide along the south line of his (appellee’s) land, leading to the Fourche Dam pike, continued to use said right-of-way for his private purposes, to the exclusion of appellant. This issue was submitted to a jury on conflicting evidence, and the finding of the jury on the question of fact is conclusive upon appellant. There was evidence tending to show that appellant had obstructed the right-of-way himself where it entered upon his own land, by building two wire fences on his land across the right-of-way. There was also evidence tending to show that Johnson grass grew in the right-of-way, and that appellee’s purpose in plowing and harrowing the right-of-way was to keep the Johnson grass down, and not for the purpose of preventing appellant from using the right-of-way. There was also evidence tending to show that the signs placed in the rig‘ht-of-way were warnings to the public not to use it, and were not intended as a warning to appellant. The signs were in the following words: “Private Eoad, No Trespassing.” “No Trespassing, $25 Fine.” Appellee also introduced evidence to the effect that he had not cultivated1 the right-of-way or otherwise obstructed it so as to prevent appellant from using it. The evidence recited above is substantial and sufficient to support the finding of the jury that appellee did not interfere with the free and unrestricted use of the right-of-way by appellant. The acquisition of the easement by appellant authorized him to use the right-of-way in that manner. There were no restrictions in the grant. First Baptist Society v. Weatherell, 34 R. I. 155; Lindeman v. Lindsey, 69 Pa. St. 93; Alley v. Carleton, 29 Tex. 74.

Appellant contends, however, that, in instructing the jury, the court used language which restricted his free and full use of the easement, and thereby led the jury to believe he was not entitled to the full enjoyment thereof. The language used by the court to which objection is made was that appellee had no right to interfere with the reasonable use of the right-of-way by appellant. We think “reasonable use” was used by the court in the sense of “free and full enjoyment,”' and that the jury so understood. If appellant thought otherwise, he should have specially called the court’s attention to the fact that the language was misleading, and suggested the substitution of other words. He only made a general objection to the instruction.

Appellant also contends that the court erred in refusing to give instructions .Nos. 1 and 2 requested by him. The first instruction-defined an easement, and the second explained the character of obstructions which would entitle the grantee to lay in a claim for damages. Both instructions were abstract propositions of law. The court announced the doctrines they contained, and applied them to the facts- in the case, in the oral instruction which he gave. Having been fully covered by the oral instruction, it was unnecessary to give them again.

Appellant makes the further contention that the judgment should be reversed, and the cause remanded for a new trial, because the attorney for appellee persistently attempted, in the cross-examination of appellant, to inject innuendoes calculated to prejudice the jury against him. The greater number of questions which has such a tendency were propounded in the presence of the jury, and the court emphatically told them to give no heed to them. In addition, the court instructed the jury to give no consideration to the attempted innuendoes. The instruction given is as follows: “You are instructed that any other suit these people have had besides this one will not have anything to do with this lawsuit. The jury are instructed that you are not to consider any malice or hostility between these two gentlemen in this lawsuit, other than going to the credibility of the witnesses.”

We think any prejudice which might have resulted from the questions asked was prevented by the prompt and emphatic manner in which the court excluded them, and by the instruction he gave regarding them.

No error appearing, the judgment is affirmed.


author: McCulloch, C. J.

text:
    Kissell v. Stevens.
    Opinion delivered May 12, 1924.
    1. Courts — decisions op state boundaries. — State courts are con-concluded on questions of State boundary lines by the decisions of the Supreme Court of the United States.
    2. States — boundary line. — The boundary line between the States of Arkansas and Tennessee is the middle of the main channel of navigation in the Mississippi River as it existed at the treaty of peace between the United. States and Great Britain in 1783, subject to such changes as have occurred since that time through natural and gradual processes.
    3. States — boundaries—avulsion.—Where an island in the Mississippi River, when formed, was on the east side of the main channel, and within the boundaries of Tennessee, the jurisdiction of that State was not altered by a change of the main channel by avulsion from the west side of the island to the east side.
    Appeal from Mississippi Chancery Court, Chickasawba District; Archer Wheatley, Chancellor;
    affirmed.

      Davis, Gosten S Harrison and J. A. Tellier, for appellant.
    The facts in this case are on all-fours with those in the case of St. Louis v. Rutz, 128 TT. S. 226, 84 L. ed. 941, and this case is ruled absolutely by the court’s decision in, that case. An examination of the original government plat or survey of township 16 north, range 13 east, 5th principal meridian, Arkansas, in connection with plaintiff’s exhibit C, will show that, as late as 1847, at which time the boundary line between Arkansas and Tennessee was determined, the middle of the main channel of the Mississippi River was east of the area on which the lands in suit are now situated, and that area was therefore included within the boundaries of the State of Arkansas. The burden is upon appellees to show any subsequent change in this boundary line at the point in question. 246 TJ. S. 158, 63 L. ed. 638. The beds of navigable rivers in the State belong to the State. 30 How. 212, 11 L. ed. 565; 113 Ark. 409. Islands formed on the beds of navigable rivers, subsequent to the admission of the State into the Union, belong to the State in which the river is located. C. & M. Dig., § 6796; 53 Ark. 314, 323; 227 U. S. 229, 57 L. ed. 490; 112 Iowa 714, 58 L. R. A. 673, and notes. Title by accretion is title by operation of law, which each State determines for itself. 138 U. S. 254; 94 U. S. 324, 34 L. ed. 951. Accretion is the increase of real estate by the addition of portions of soil by gradual deposition, through the operation of natural causes to that already in the possession of the owner. 53 Ark. 323. The doctrine of accretion has no application to a temporary denudation of a river bed, to a moving island, or to a moving mass of alluvial deposits which travels more than a mile within a limited number of years from one State to another, the progress not being imperceptible in a legal sense. Gould on Waters, 3d ed., 311; 116 U. S. 423; 138 U. S. 226; 134 Mo. 631. Under the law of this State, the point at which accretion begins on navigable rivers is the high-water mark, since this is the point at which private ownership ends and at which the title of the State begins. Any formations or additions upon land belonging to the State inure to the State. 61 Ark. 435, 436; 73 Ark. 199.

      E. E. Alexander and Little, Buck & Lasley, for appellee.

      Counsel, in seeking to show the similarity between this ease and the ease of St. Loms v. Ruts, 128 TJ. S. 226, apparently overlooks the fact that the court, in its finding of fact No. 18, found that the original island was washed away prior to the change of the channel from the east side to the west side of the river, and that the island in suit formed east of the main channel of the river, and after the original island had washed away. See also page 250 of that report, and 3.4 L. ed. 951. We think this case is controlled by the decision in Davis V. Anders on-Tulley Company, 252 Fed. 681. See also 270 Fed. 110. That the boundary between the States of Tennessee and Arkansas is the main navigable channel of the Mississippi River, or what is known as the “thalweg,” is so well established that citation of authorities appears to be useless. See, however, 246 TJ. S. 161, 62 L. ed. 638.
   McCulloch, C. J.

This is an action originally instituted at law by appellant against appellees to recover a tract of land which was formed as an island, or a portion of an island, in the Mississippi River. . The cause was, without objection, transferred to the chancéry court and proceeded there to a final decree in favor of appellees. ...

Appellant claims that the land in controversy lies within the jurisdiction of the State of Arkansas, and he asserts title under two deeds, one executed by the.State Land Commissioner pursuant to statute authorizing the sale of islands in navigable streams (Crawford & Moses’ Digest, §§ 6796 et seq.), and the other a deed from the St. Francis Levee District pursuant to the statute donating State lands to that agency. Acts 1899, p. 48., On the other hand, the contention of appellees is that the land in controversy is situated within the jurisdiction of t'he State of Tennessee, and they claim title under a grant from the State of Tennessee to W. T. Tate in the.year 1860, and under mesne conveyances from Tate to the ancestor of appellees, it being alleged that the original grant conveyed title to an island in the Mississippi River between the Missouri and Tennessee shores north of the present line between Arkansas and Missouri, and that the particular land in controversy was formed as an accretion to said island.

It is thus seen that on both sides of the controversy it is conceded that the locus in quo is-a formation in the Mississippi Eiver, and the controversy arises as to the situs at the time of its formation, whether it was in the jurisdiction of the State of Arkansas or within the jurisdiction of the State of Tennessee. Appellant claims that it was formed as an island on the Arkansas side of the boundary line, whilst appellees claim that the land was formed on the Tennessee side of the boundary, and that it was formed as an accretion to the island in the channel of the river north of the Arkansas-Missouri line and gradually extended southward across that line.

The facts of the case, in part undisputed and in other respects established by a preponderance of the evidence, are as follows: Prior to the year 1860 there was an island in the Mississippi Eiver known as Island No. 20, lying north of the Arkansas-Missouri line, between the Missouri and Tennessee shores. This island was on the east, or Tennessee side, of the main channel of the river; there was a narrow stream or chute between the island and the Tennessee shore. The land began to form in the river 'by gradual deposits on the south side of this island and from year to year extended down stream, across the Arkansas-Missouri line, until a large body of land was formed south of that line between the Arkansas and Tennessee shores. The land in controversy is a part of the land thus formed south of the Arkansas-Missouri line, between the Arkansas and Tennessee shores. During this process of formation a considerable portion, if not all, of Island No. 20 was washed away, but there is a controversy as to whether or not this applies to all of the original island. The conclusion reached on the law applicable to the facts of the case renders it unnecessary for us to settle that controversy.

A considerable portion of the particular tract in controversy is actually occupied by appellees, and is cultivated in crops of corn and cotton. The part in controversy lies on the east side of the island, the larger portion of the island lying between that and the Arkansas shore. At the time of the formation of the land by extension of the deposit southward to its present limits, the main channel of the Mississippi River still remained on the west side of the formation, between it and the Arkansas shore line. But some time between the years 1908 and 1913 — probably about the year 1912 — -the main channel changed and broke through the chute on the Tennessee side, thus changing the main channel of the river from its old location between the island and the Arkansas shore to the east side of the island, and the main channel is still thus "located. The original channel on the west side of the island became, after the change, a mere chute, and filled up and narrowed from year to year, becoming non-navigable except during times of Ihigjh water, and finally filled up entirely at the upper end. There is still a narrow channel there, which has very little water in it during dry seasons, the original Arkansas shore line still forming the west boundary of the chute, and being fronted by a wide mud-bar running out from the island to the east side of the chute.

One of the parties (the appellant) claims title, as before stated, under grant from the State of Arkansas, while the others claim under grant from the State of Tennessee. The facts thus established bring the case within principles of law too well established to call for extended discussion. Appellant is the plaintiff in the action, and must recover, if at all, on the strength of his own title, and not on the weakness of the title of his adversaries. If the lands in controversy lie within the boundaries of the State of Arkansas, appellant has acquired title thereto, and is entitled to a recovery. On the other hand, if the lands lie within the boundaries of the State of Tennessee, appellant has no title, and is not entitled to recover, regardless of the question whether or not appellees have acquired title to the lands in controversy as accretion to the land origin-ally granted by the State of Tennessee to their ancestor, or whether the lands were formed, not as an accretion, but as a separate formation in the bed of the Mississippi River on the Tennessee side.

On the question as to the boundary line between the States of Arkansas and Tennessee, we are concluded by the decisions of the Supreme Court of the United States on that subject. The boundary line between the two States has been fixed by the treaty of 1763 between England, France and Spain, by the treaty of peace of September 3, 1783, between the United States and Great Britain, whereby the territory now comprising the State of Tennessee was acquired, and by the act of Congress of June 1, 1796, creating the State of Tennessee, and the subsequent Louisiana Purchase under the treaty of April 30, 1803, and the subsequent erection of Territories and States out of the great area thus purchased, at “a line drawn along the middle of the river Mississippi.” In the suit instituted by the State of Arkansas against the State of Tennessee (246 U. S. 158), the Supreme Court of the United States adjudicated the boundary line in the aforementioned treaties and statutes, fixing it as follows (quoting from the syllabus):

“When two States of the Union are separated by a navigable stream, their boundary being described as ‘a line drawn along the middle of the river,’ or as ‘the middle of the main channel of the river, ’ the boundary must be fixed (by the rule of the ‘thalweg’) as the middle of the main navigable channel, so that each State may enjoy an equal right of navigation. * # * Following this principle, the court holds that the true boundary line between the States of Arkansas and Tennessee is the middle of the main channel of navigation of the Mississippi, as it existed at the treaty of peace concluded between the United States and Great Britain -in 1783, subject to such changes as have occurred since that time through natural and gradual processes.”

The court cited many previous decisions as being conclusive of the law thus announced. Following this declaration of law, it is clear that the lands, when formed, were on the east, or Tennessee, side of the channel, and were within the boundaries of the State of Tennessee.

The remaining question is whether or not the situs of the land with respect to the jurisdiction of the adjoining States was altered by the change in the main channel of the river from one side of the island to the other. That question has also been put at rest by the Supreme Court of the United States in the case cited above. In the opinion in that case the court said: “It is settled beyond the possibility of dispute, that, where . running streams are the boundaries between States, the same rule applies as between private proprietors, namely, that when the bed and channel are changed by the natural and gradual processes known as erosion and accretion, the boundary follows the varying course of the stream; while if the stream, from any cause, natural or artificial, suddenly leaves its old bed and forms a new one, by the process known as an avulsion, the resulting change of channel works no change of boundary, which remains in the middle of the old channel, although no water may be flowing in it, and irrespective of subsequent changes in the new channel.” The facts in the case show that the change in the channel of the Mississippi River from the west to the east side of the island was by the process known as avulsion, and not by the gradual processes of accretion or reliction.

It follows therefore that the decree of the chancery court is correct, and the same is affirmed.


author: McCulloch:, C. J.

text:
    Hayes v. Bankers’ & Planters’ Life Association of Fort Smith.
    Opinion delivered May 12, 1924.
    1. . Insurance — right of beneficiary of matured policy. — -Where .- the only interest plaintiff had in a mutual benefit insurance company was as holder of a matured policy payable in accordance with the company’s by-laws, his only right of action was at law to recover the amount due, and, in the absence of a showing of insolvency, he was not entitled to the equitable relief of an accounting of insurer’s funds.
    2. Trial — wrong forum — transfer.-—Where a cause of action cognizable at law was improperly brought in equity, it was error to dismiss the action, hut the court on its own motion should have transferred the cause' to the circuit court.
    3. Costs — in equity. — Where a cause of action cognizable at law was dismissed in equity as improperly brought in that court, the plaintiff will be denied his costs on appeal if he failed to ask for a transfer to the law court.
    ■4. Costs — discretion in equity. — The matter of costs in equity is one of discretion.
    Appeal from Conway Chancery Court; W. E. Atkinson, Chancellor;
    reversed.

      Gordon ds Combs, for appellant.
    It was error to sustain the demurrer and dismiss the complaint, as the amended complaint alleged sufficient to.give a court of equity jurisdiction. A court of equity was the only place where he could obtain complete relief. 31 Ark 353; 2 Dev. Eq. R. 370; 4 Cowen 727. A -chancery court can require a public officer to pay back fees illegally collected-: 85 Ark. 89. • The complaint alleged fraud. Officers-of such an association are held’to be trustees for members and beneficiaries. 68 N. E. 1106. A beneficiary has an interest fixed and certain upon the death of a member, and he may compel the association to levy an assessment for its payment. 14 A. S. R. 519. Where an assessment is collected and wrongfully diverted to another purpose, the funds may be followed and recovered. 100-N. W. 622. It was the duty of the officers to at all times keep the circles full, 23 Am. S. R, 664. Money collected for the payment of death claims cannot be used to pay salaries. 100 N. W. 629. By-laws cannot be changed after the issuance of a policy so as to render it worthless. 47 L. R. A. 140.

      Strait & Strait, for appellee.
    By-laws of an association like appellee have been held valid where they limit the amount of recovery to .a beneficiary to one assessment levied upon members of the circle. 155 Ark. 450; 157 Ark. 597. A beneficiary has no right of action resulting from an illegal assessment or the failure to set apart reserve funds with which to discharge the certificate; he is only entitled to what can be realized under the certificate and by-laws. 4 L. R. A. (N. S.) 870; A. & E. Ene. L., vol. 3, p. 1015; 117 Ark. 121; 52 Ark. 201; 80 Ark. 419; 150 S. W. 561; 63 L, R. A. 347. Appellee had the right to amend its by-laws, and they are binding upon members. 154 Ark. 487.
   McCulloch:, C. J.

Appellant instituted this action in the chancery court of Conway County against the Bankers’ & Planters’ Life Association of Fort Smith, a domestic corporation doing business as a mutual benefit insurance company, to recover the sum of $1,000, alleged to be due on a policy issued to appellant’s wife, Mary J. Hayes, and payable to him. Appellant alleged in his complaint the issuance of the policy to Mary J. Hayes, payable to himself, and also alleged the death of Mary J. Hayes, giving the date. The president and also the secretary and treasurer of the company were joined as defendants. The complaint alleges various acts of misconduct on the part of the company and its officers in levying assessments on policyholders in other groups or circles than those in which a death occurred, and also in levying assessments when no death at all occurred, and in wrongfully and improperly paying out funds of the company. The prayer of the complaint is that appellees be required to render an accounting “showing a complete list of all members of said circle, the names and addresses, the amount assessed and collected, the amount paid out and for the purpose paid on each when an assessment was levied and collected against said Mary J. Hayes; ’ ’ that appellees be also required to furnish the names and addresses of each member of the circle who has died, giving the date thereof and the amount of funds received for the purpose of paying said death claims, and that, upon a final accounting, appellant have judgment against the Bankers’ & Planters’ Life Association and the sureties on its bond for the sum of $1,000.

' There was an amendment to the complaint,, not changing the purpose of the suit as stated above, and the court sustained a demurrer to the complaint as amended. Appellant stood on the complaint, and the court dismissed it.

Appellant was not a member of appellee association, and had no interest therein except that of a holder of a matured policy, which was payable in accordance with the by-laws. Whatever right of action appellant has under the policy is one at law to recover the amount due under the policy. He is not interested in the prior management of the association, and, in the- absence of a showing of insolvency, is not entitled to equitable relief for the purpose of having an accounting of the funds. The court was correct in holding that the complaint failed to state a cause of action cognizable in a court of equity. This, however, did not call for a dismissal of the action as to the defendant association, but the case should have been transferred to the law court. There was no motion made to transfer the cause, but the court should have done so on its own motion, rather than to dismiss the complaint. Newman v. Mountain Park Land Co., 85 Ark. 208. Having failed to ask for a transfer, appellant should not be permitted to recover cost of the appeal, as the matter of costs in equity cases is one of discretion.

The judgment is therefore reversed, and the cause is remanded with directions to transfer to the circuit court. It is so ordered.


author: McCulloch, O. J.

text:
    Tallman v. McGahhey.
    Opinion delivered May 12, 1924.
    1. Equity — jurisdiction.—Though an action in ejectment in which a legal title only was asserted was improperly transferred to equity, yet where one claiming to be tenant in common with defendant was made a party and asked cancellation of a deed from him to plaintiff alleged to have been obtained from him by fraud, equity properly retained jurisdiction.
    2. Ejectment — parties—independent claimant. — One claiming independently of both parties is not entitled to be made a party-in an action of ejectment, under Crawford & Moses’ Dig., § 1102, providing that, in an action for the recovery of real or personal property, any person claiming an interest therein may be made a party.
    3. Appeal and error — -new party — harmless . error. — Where the court permitted a new party to be admitted after the case was ready for submission, and plaintiff moved to strike out the new party’s plea solely on the ground that he was not a proper party, ■but requested no postponement and offered no additional testimony to rebut such plea, there was no prejudice in proceeding to trial.
    4. Deeds — false representations — relief.—Where plaintiff made false representations to defendant which induced the latter to execute a deed without consideration, equity will cancel same.
    5. Adverse possession — evidence.—-Evidence held not to establish by a preponderance plaintiff’s continuous, notorious and unbroken occupancy of town lots for a period of seven years.
    Appeal from Arkansas Chancery Court, Northern District; John M. Elliott, Chancellor;
    affirmed.

      Geo. C. Leivis, Stuttgart, for appellant.
    The title asserted by appellant is one by adverse possession, and not under the Allen deed. No deed or muniment of title is necessary where the possession is indicated by actual occupation and any other evidence of an .adverse -claim exists. 24 Wend. 604. The case shoul-d have been tried in the law court. Allen should not have been allowed to become a party after the case was made. 28 Ark. 151; 15 Cyc. 85.

      E. G. Shofner and J. E. Ray, for appellee.
    Appellant must prevail, if at all, upon his own title. Until he has made a prima facie -case by showing title sufficient upon which, to base a right of recovery, the defendant is not required to offer evidence of his title. 9 ft. C. L., p. 76, § 76. The case was properly transferred to the chancery court. 59 Ark. 6; 80 Ark. 31; 26 Ark. 99. In order for the possession of a tenant in common to be adverse to that of his co-tenants, knowledge of his adverse claim must be broug’ht home to them directly or by such notorious acts that notice may be presumed. 102 Ark. 615. See also 117 Ark. 418; 154 Ark. 124.
   McCulloch, O. J.

Appellant instituted this action at law ag’ainst A. C. McGahhey, one of the appellees, to recover possession of four town lots in Stuttgart. He did not attempt to show title back to its origin or to a common source, but alleged in his complaint that he received a deed on January 31, 1912, from J. W. Allen, purporting to convey the lots to him, that he entered into actual possession thereof and occupied the same, claiming title thereto from then until said appellee, in the year 1920, wrongfully took possession, and he therefore pleads title by adverse possession for the statutory period of seven years. Appellee McGahhey answered, setting up title through John F. Park back to the State, and alleging that the deed from Allen to appellant had been procured by fraudulent misrepresentation. Said appellee moved to transfer the cause to the chancery court, which was ordered, over appellant’s objection. After the testimony in the case had been taken by depositions, Mrs. Emma A. Turner, one of the appellees, filed a petition to be made party-defendant as a substitute for appellee McGahhey, and alleged, as grounds for being made party, that she had succeeded to the rights of McGahhey under a foreclosure sale under mortgage executed by the latter. Mrs. Turner was made defendant as prayed. Later, J. W. Allen was, at his own request, made a party, and claimed an undivided half interest in the property by joint purchase with John F. Park from Mrs. Mary J. Wright, the State’s grantee. He alleged that he had never parted with his title until he conveyed to appellant, and that appellant’s conveyance was procured through false and fraudulent misrepresentation. He alleged that appellant had falsely represented to him that he was the holder of the title from Sallie L. Price, to whom Park had executed a deed purporting to convey the whole title, but in fact had conveyed only an undivided half. Appellant moved to strike out Allen’s plea, which motion the court overruled, and the cause proceeded to final decree, with Allen as well as Mrs. Turner parties. The court rendered a final decree, dismissing appellant’s complaint for want of equity and quieting the title, one-half in Mrs. Turner and the other in Allen.

It is first contended that the court erred in transferring the cause to equity, the argument of learned counsel being that, the action being merely for the recovery of property to which only legal title (investiture by limitations) is asserted, the cause was exclusively cognizable at law, and that there were no grounds for equitable relief. This contention was true at the time the order of transfer was made, for there was nothing involved in the case except appellant’s assertion of title by adverse possession. The fact that appellant may have obtained title from Allen by fraud, as alleged, did not change the nature of the relief sought nor the defense asserted so as to call for the application to a court of equity for relief. The advent into the action of appellee Allen changed, however, the status of the litigation, and the rights asserted by him called for equitable relief in the cancellation of the deed alleged to have been obtained from him by fraud. Under the allegations of his complaint he was entitled to equitable relief, and was therefore an interested party and entitled, under the statute, to be made a party to the action. Crawford & Moses’ Digest,' § 1102. He was not claiming independently of the parties, but was asserting a right of action directly against the appellant, and was claiming also as tenant in common with his co-defendant, Mrs. Turner. One claiming independently of both parties is not entitled to be made a party under the statute (Files v. Watt, 28 Ark. 151), but, as before stated, appellant was not claiming independently of the other parties, but in privity as tenant in common with his codefendant. Appellee Allen, having been properly made a party, and having asserted the right of equitable relief, the chancery court properly exercised jurisdiction in the trial of the whole cause. Conceding that the transfer was erroneous at the time it was ordered, it was proper to retain the jurisdiction after Allen was made a party with his plea for equitable relief.

It is further contended by counsel that the court' erred to the prejudice of appellant in permitting Allen to be made a party after all the proof in the case had been taken and when the case was ready for submission. It is argued that this gave an advantage over appellant in that he had no opportunity to prepare a defense against Allen.’s claim. The answer to that contention is that appellant moved to strike out Allen’s plea solely on the ground that he was not a proper party. There was no request for a postponement of the trial in order to give appellant an opportunity to prepare his defense. The proof had already been taken touching the question of fraud in the procurement of the deed from Allen, and appellant did not offer to introduce any further testimony on that issue nor ask for time to procure testimony. There was no prejudice shown therefore in proceeding to trial after making Allen a party.

The next question presented relates to the question of fraud in obtaining the deed from Allen. Prior to the year 1912, J. W. Allen and John P. Park had purchased the lots in question, together with the remainder of the block, from Mary J. Wright, the .State’s grantee, and Park had later conveyed these lots to Sallie L. Price, his deed purporting to convey the whole property, whereas he only owned an undivided half. ■ This seems to have occurred by..mistake on the part of Park, and Allen was willing to rectify it as soon as he discovered it, by conveying his undivided half to Park’s successors in title. Appellant applied to Allen, by letter written January 8. 1912, for a conveyance of the property, and inclosed in his letter a check for the sum of one dollar to pay the expense of the deed. He called attention in the letter to the fact that the'property had been originally conveyed to Park and Allen, and that Park had conveyed the land away, but there was no record of a deed from Allen. It was not stated in the letter, in express terms, that appellant was claiming title under the Park conveyance, but such was the clear inference from the statements made in the letter. Allen answered the letter, referring to the deed of conveyance executed by Park to Sallie L, Price, and stated that he was willing to execute a quitclaim deed to appellant to any lots which he might hold under Sallie L. Price or her grantees. To this letter appellant made reply, stating that he had made a mistake as to the particular lots which he claimed and to which he wished to obtain a quitclaim deed, and requested Allen to change the description in the deed and execute it and send it to him at once, which Allen did. This letter did not, either, contain any express assertion that appellant was claiming under Sallie L. Price, but such is the only reasonable inference, in view of the inquiry in Allen’s letter to appellant stating that he was willing to convey his interest to any one holding under Sallie L. Price. In other words, it is clear from this testimony that Allen’s willingness to execute a conveyance without consideration was solely on the ground that his tenant in common, Park, had erroneously conveyed the property to Sallie L. Price, and that he (Allen) was desirous of making good the title which Park had attempted to convey. He was induced by an implied representation made to him by appellant that the latter was holding the Price title. This is a fraud against which a court of equity should give relief. Allen was willing to convey the land for a nominal consideration to a grantee of Mrs. Price, but he was unwilling to donate the land to a stranger. He could have ascertained the facts by examining the record, but he.was not bound to do so, and, appellant having paid no consideration for the deed, he is in no position to complain because Allen accepted his representations as true and made a deed on the faith of those representations. ' '" .

We next come to the question of appellant’s claim of title by adverse possession. This is purely a question of fact. Appellant testified that he went into possession of the property immediately after receiving the deed from Allen in January, 1912, and remained in possession by his tenants until McGahhey took possession in the year 1920. There were no buildings or other improvements on the property, except a fence, until McGahhey took possession in 19'20 and moved two buildings to the premises from another nearby lot. Appellant testified that he was continuously in possession during that time, and operated a woodyard on it part of the time, and leased it to tenants, who cultivated it. The testimony of appellant himself and the testimony of other witnesses introduced by him tended to establish his claim that he was continuously in possession of the property and that his occupancy was such as to -constitute notice to the world of his adverse holding. It tended to show that he had .erected a fence around the property and maintained it up to the time McGahhey took possession. Testimony, was introduced, however, on the part of appellees, tending to show that appellant did not erect any fence around the property, but that, during the period appellant claimed to be in possession, there was some evidence of the presence of an old broken-down wire fence which had been built by a former occupant, and that the land had not been continuously occupied, either by cultivation or by the operation of a wood-yard thereon. If appellant has title at all, it rests upon a showing of continuous adverse occupancy from the year 1912 to the year .1920, a period of about eight years. We think that there is a preponderance of the evidence in favor of appellant’s contention to the extent that, at the time McGahhey took possession in 1920 and moved the buildings to the property, there was a wire fence around the lots sufficient to show actual occupancy, but we are unable to say that the evidence preponderated to the extent that it showed that appellant’s occupancy was actual, open and contimious for the full period of seven years. There is testimony of several witnesses that tends to show that, for a considerable length of time, there was nothing to indicate actual occupancy of the property, and nothing to show that it ever had been occupied, except the scant remains ox an old wire fence. This evidence tends to show that at times the continuity of the possession was broken, if it had ever existed prior to that time. It devolved upon appellant to prove, not only that his occupancy began more than seven years before it was broken by the entry of McG-alihey, but that it continued without break for a period of seven years, for nothing short of that would constitute an investiture of title. If the occupancy was broken short of the complete period of seven years, there was no investiture of title, and we cannot say from the evidence that there is a preponderance of the testimony showing continuous, notorious and unbroken occupancy for the full period of limitation.

Decree affirmed.


author: Hart, J. Hart, J.,

text:
    Huff v. State.
    Opinion delivered April 28, 1924.
    I.' Indictment — information—statutory misdemeanor. — An indictment for a statutory misdemeanor is sufficient if it describes the offense in the words of the statute.
    '2. Indictment and information — sufficiency of indictment.— An indictment under the Code is sufficient upon demurrer if it describes the offense with sufficient certainty to enable accused to prepare his defense. .
    3. Gaming — indictment for dealing in futures. — An indictment charging that defendant became a party to an unlawful contract to buy 100 bales of cotton to be settled for on a margin, without any intention of the cotton being actually delivered, was sufficient to charge the offense of dealing in futures, under Crawford & Moses’ Dig., § 2653.
    4. Gaming — dealing in futures — evidence.—Under Crawford & Moses’ Dig., § 2653, defining dealing in futures, conviction may be had on proof that one of the parties to the transaction did not, in good faith, intend actual delivery at the time the contract was made.

      5. Criminal law — power to direct verdict. — In misdemeanor cases where the punishment is by fine only, the circuit court has the power to direct a verdict of guilty where the facts are undisputed and guilt is the only inference that can be legally drawn from them.
    6. Gaming — wagers on turn op prices. — Where ventures are made on the turn of prices alone, with no bona fide intent to deal in the article, but merely to risk the difference between the rise and fall of the price at a given time, and no money is invested except so much as is required to cover the margin, the transaction represents not a transfer of property but a mere stake or wager upon the future price.
    7. Gaming — dealing in futures — validity op statute. — Crawford & Moses’ Dig., § 2653, making unlawful every contract whereby any person shall agree to buy or sell certain articles when an actual delivery is not fin good faith intended by the parties or either of them, whether made or to be performed wholly within the State or partly within and partly without the State, is valid.
    8. Gaming — dealing in futures — interstate commerce. — A contract dealing in futures in Louisiana, made in Arkansas, is not protected by the interstate commerce clause of the Federal Constitution.
    9. Criminal law — power op state. — A State may determine what acts committed within its limits shall be deemed criminal.
    10. Criminal law — exclusion op evidence — harmless error. — In a prosecution for dealing in futures, the court did not err in-excluding depositions which only tended to prove that the seller intended to make delivery if so required by the purchaser, where the purchaser testified that there was no intention to require delivery.
    11. Gaming — evidence op intention to deliver. — In a prosecution for dealing in cotton futures, the court did not err in excluding evidence that an actual delivery of cotton was intended where defendant failed to produce a certificate from the clerk of the circuit court showing that a sale for actual delivery had been filed and recorded in his office, as required by Crawford & Moses’ Dig., § 2665.
    12. Gaming — requirement that sales be recorded. — The Legislature has the power to make transactions in futures illegal unless filed for record in the clerk’s office, as required by Crawford & Moses’ Dig., § 2665.
    Appeal from Faulkner Circuit Court; George W. Ciarle, Judge;
    affirmed.

      R. W. Robins, for appellant.

      J. 8. Utley, Attorney General, and John L. Carter, Assistant, for appellee.
   Hart, J.

E. F. Huff prosecutes this appeal to reverse a judgment of conviction against him for violating the provisions of § 2653 of Crawford & Moses’ Digest, which defines what is dealing in futures and prescribes the penalty for a violation of the act.

The first assignment of error is that the court erred in not sustaining a demurrer to the indictment. The body of the indictment reads as follows: “The grand jury of Faulkner County, in the name and by the authority of the State of Arkansas, accuse E. F. Huff of the crime of misdemeanor, committed as follows, to-wit: The said E. F. Huff, in the county and State aforesaid, on the 25th day of October, 1923, did unlawfully become a party to an unlawful contract to buy 100 bales of cotton, said cotton so pretended-to be purchased was bought on margin without any intention of being actually delivered, said contract of purchase and sale being such as is commonly denominated as dealing in futures, and with the understanding that settlement was to be made on difference between contract price and market price, and did unlawfully, directly and indirectly participate in making, furthering and effectuating said contract, against the peace and dignity of the State of Arkansas.”

. It is well settled in this State that an indictment for a statutory misdemeanor is sufficient if it describes the offense in the words of the statute. This court has often said that an indictment under the Code is sufficient upon demurrer where it describes the offense with sufficient certainty to enable the accused to prepare his defense.

The section under which the indictment was founded, and which is referred to above, substantially provides that every contract whereby any person shall agree to buy, or sell and deliver, or sell with an agreement to deliver, any wheat, cotton, corn or other commodity, when in fact it is not in good faith intended by the parties, or either -of them, that an actual delivery of the article shall be made, is hereby declared to -be unlawful, whether made or to .be performed wholly within this State or partly within and partly without the State.

If dealing in futures means contracts of sale -or purchase for the purpose -of speculating upon the course of the market, where no actual transfer of property is intended by the parties, or either of them, and settlements are to be made upon margins, then there is no uncertainty in the description of the offense.

The indictment in plain language charges that the defendant, on the 25th day of October, 1923, in Faulkner County, Ark., became a party to an unlawful contract to buy one hundred bales -of -cotton, to be settled f-or on margin, without any intention of the cotton being actually delivered. Thus the defendant was apprised -of the time, place, and manner of -committing the offense charged, and, as a man of common experience in affairs of that kind, he knew what was the character and nature of the offense the State expected to prove -against him, and what kind of evidence would be required of him to disprove the charge. Hence we hold that the indictment was not subject to demurrer under the rule announced in our decisions. Fortenbury v. State, 47 Ark. 188; Barnes v. State, 77 Ark. 124; and State v. Western Union Tel. Co., 160 Ark. 444.

In the first mentioned case it was held that an indictment for dealing in futures in the language of the statute is sufficient. The difference between that -statute and the present one is that, in the former, it was necessary to prove that both parties to the contract did not contémplate a delivery of the articles sold, and, under the present statute, to convict, it is only necessary to prove that one of the parties did not in good faith intend an actual delivery of the article at the time the contract was made.

H. C. Carpenter was the witness relied upon by the State for a -conviction. According to his testimony, he was a member of tbe cotton exchange which operated in Conway, Faulkner County, Arkansas, in the fall of 1923. He was engaged in buying cotton at the time. The defendant, E. F. Huff, was operating the cotton exchange. The way the witness did .in buying the hundred bales of cotton in question was to put up on the contract a margin of $750, and if the cotton fell in value before the day of final payment, he was to advance more margin to cover the difference. He was asked to explain what he meant by a margin, and he described it as follows :

“A. Well, the margin, we had to put up in the bank $750' to buy 100 bales of cotton, and the bank, I presume they wired H. & B. Beer at New Orleans that they had the margin up there to protect the brokers, then we could place our order and buy 100 bales of cotton on the futures, so when I went to make the deal to buy 100 bales, and Mr. Huff was there, I would tell him to buy 100 bales of futures, and Mr. Huff was there, and of course, he would wire the order into New Orleans, and of course I got my contract then for the 100 bales.”

Carpenter further stated that he bought the cotton as a mere speculation, and did not remember the price that he agreed to pay for it. It was never intended that the cotton shoRild be delivered to him. If cotton went down, the buyer would have to put up more margin, or lose the amount of money he had put up in the beginning.

Carpenter further stated that he had made profits on his purchases a few times, and had lost some.

Under this testimony the court directed the jury to find the defendant guilty, and assess his punishment in any sum not less $500 nor more than $5,000.

. The jury returned a verdict of guilty, and fixed the punishment of the defendant at a fine of $500.

•- ■ It is the settled rule in this State that, in a misdemeanor case where the punishment is by fine only, the circuit court, having the power to set aside a verdict of acquittal, also has the power to direct a verdict of guilty, where the facts are undisputed and where guilt is the only inference that can be legally .drawn from them. Roberts v. State, 84 Ark. 564; Josey v. State, 88 Ark. 269; Burton v. State, 135 Ark. 164.

This brings us to a consideration of the validity of Hie statute. The evidence of Carpenter is undisputed, and the defendant fell under the ban of the statute if it is valid. Under our former statute prohibiting gambling in futures it was necessary to show the intention of both the buyer and the seller at the time of the contract in order to establish guilt. In other words, it was necessary to prove that the transaction between the buyer and seller was a mere cover for a gambling operation, and that neither party intended any delivery of the articles. Fortenbury v. State, 47 Ark. 188; Phelps v. Holderness, 56 Ark. 300, and Barnes v. State, 77 Ark. 124.

It will be noted that the present statute is essentially different. It makes the transaction a gambling one when in fact it is not, in good faith, intended by the parties, or either of them, that an actual delivery of the articles shall be made, and the transaction is unlawful whether made or to be performed wholly within the State or partly within and partly without the State.

In Phelps v. Holderness, 56 Ark. 300, the court said that, according to the ruling in some of the States, the broker or operator of the cotton exchange might be said to be the vendor of the purchaser, instead of his agent. The case- of Flagg v. Baldwin, 38 N. J. Eq. 219, is cited in support of the holding. In that case the authorities are discussed and reviewed at great length, and the court held: “Contracts for speculation in stocks upon margins,- when the broker and the customer do not contemplate or intend that the stock purchased or sold «ball become or be treated as the -stock of the customer, but the real transaction is a mere dealing in the differences between prices — that is, in the payment of future profits or losses, as the event may be, are contracts of wager, dependent on a change or casualty. Such contracts, if made in this State, are unlawful, and securities given therefor are void by force of the provisions of the act to prevent gaming’.”,

By a section of the Criminal Code of Illinois it is provided that whoever contracts to have or give himself or another the option to sell or buy, at a future time, any grain or other commodity, etc., shall be fined not less than $10 nor more than $1,000, or confined in the county jail not exceeding one year, or both; and all contracts made in violation of this section shall be considered gambling contracts, and shall be void. The Supreme Court of that State upheld the validity of the statute. The court said that the practice of gambling on .the market prices of grain and other commodities is a great evil, and that the suppression of such evil is within the proper exercise of the police power of the State. The case was carried to the Supreme Court of the United States, where it was contended that the statute was repugnant to the Fourteenth Amendment of the Constitution of the United States. That court upheld the constitutionality of the statute in an opinion delivered by Mr. Justice Harlan. Booth v. Illinois, 184 U. S. 425. The holding of the court is well stated in the syllabus, and we copy it as follows:

“1. If, looking at all the circumstances which attend, or may ordinarily attend, the pursuit of a particular calling, a State thinks that certain admitted evils cannot be successfully reached unless that calling be actually prohibited, the courts cannot interfere unless, looking through mere forms and at the substance of the matter, they can say that the statute, enacted professedly to protect the public morals, has no real or substantial relation to that object, but is a clear, unmistakable infringement of rights secured by the fundamental law.
“2. It must be assumed, with regard' to § 130 of the Criminal Code of Illinois, touching options to sell or buy grain or other property at a future time, that the Legislature of the State was of the opinion that an effectual mode to suppress gambling grain contracts was to declare illegal all operations to sell or ¡buy at a future time; and that this court cannot say that the means employed were not appropriate to the end sought to be attained and which it was competent for the State to accomplish. ’ ’

It has been said that gambling transactions of this sort are not to be confounded with legitimate speculations. Merchants may speculate upon the future prices of commodities in which they deal, and buy and sell accordingly. The case is different, however, when ventures are made upon the turn of prices alone, with no bona fide intent to deal in the article, but merely to risk the difference between the rise and fall of the price at a given time. In auch cases the purpose is not to deal in the article, but to stake upon the rise or fall of its price. No money is invested in the purchase, but so much only is required as will cover the difference — a margin, as it is termed. Then the bargain represents not a transfer of property, but a mere stake or wager upon its future price. Kirkpatrick v. Bonsall, 72 Pa. St. 155.

Under the principles of law announced in the cases above cited, the transaction proved in the present case is a gambling contract, and the defendant falls under the ban of the statute. The undisputed testimony shows that there was no intention to require actual delivery of the cotton on the part of the purchaser, who is the prosecuting witness. The test which the statute requires is the intention on the part of either party not to actually deliver the articles bought or sold for future delivery. It does not make any difference how explicit the language of the contract is, if in fact there is no intention on the part of either of the parties to deliver; but when the real understanding is that, at the stipulated date, the losing party shall pay to the other the difference between the market price and the contract price, the transaction is a gambling contract, and unlawful under the statute.

Nor can it be said that such gambling contracts are protected by the interstate commerce clause of the Federal Constitution. The statute makes it indictable where the contract is made or to be performed wholly within this State, or partly within and partly without the State. The contract in question was made within the State, and the State has the power to determine what acts committed within its limits shall be deemed criminal. When a shot is fired across the State line, at common law the crime is triable in the State where the shot took effect. But by statute the offense may be made punishable by the State in which the person stood when firing the shot. It is for the State to determine what acts committed within its limits shall be deemed criminal. State v. Hall (N. C.), 28 L. R. A. 59, and State v. Clayton (N. C.), 50 S. E. 866.

It follows that the statute is valid, and that the undisputed evidence establishes the guilt of the defendant.

The next assignment of error is that the court erred in refusing to permit the defendant to introduce in evidence certain depositions taken by him in New Orleans, Louisiana. These depositions only went to show that the cotton exchange at New Orleans intended to make a delivery of the cotton, if required to do so by the purchaser. As we have already seen, this would constitute no defense to the charge. The purchaser testified that there was no intention on his part, in the beginning, to require a delivery of the cotton, and that it was strictly a dealing between him and the defendant on margins. His testimony in this respect is corroborated by the fact that he only put up enough money to cover the difference between the contract and the market price of the cotton. Hence the defendant could not have been prejudiced by the refusal of the court to allow to be read to the jury the depositions of witnesses whose testimony could not have affected the result of the charge.

It is next insisted that the court erred in not allowing the defendant to introduce in evidence the contract signed by H. & B. Beer of the cotton exchange of New Orleans, Louisiana, in which it is stated that the transaction is subject to the rules and customs of the exchange where executed, and also with the distinct understanding that actual delivery is contemplated.

Under § 2665 of Crawford & Moses’ Digest, before the defendant could insist, under a criminal prosecution, that he was selling or buying cotton, grain, or other commodities named in the act, for actual delivery, he must produce a certificate from the clerk of the circuit court of the county in which said transaction is said to have occurred, showing that said sale or purchase for actual delivery has been in good faith filed and recorded in his office, just as chattel mortgages or other conveyances of personal property are filed; and that this shall be admissible as evidence in defense of said prosecution.

Without complying with the statute in this regard, it could not be said that there was any intention for an actual delivery of the cotton. If the Legislature had the power to make transactions of this sort indictable, it also had the power to render them illegal, unless filed for record in the clerk’s office in the manner required by the statute, and to prescribe the method of proving the same. In other words, the transaction would fall under the ban of the statute unless there was a substantial compliance by the parties in interest with the terms of the act.

It follows that there is no reversible error in the record, and the judgment will be affirmed.

Hart, J.,

(on rehearing). Counsel for the defendant earnestly insists that the court erred in holding the statute under which the defendant was convicted to be constitutional, and also in holding that the evidence was legally sufficient to support a directed verdict.

As pointed out in our original opinion, our former statute, which has .been upheld by this court, forbade and punished wagering contracts; that is, contracts in which the parties stipulate that they shall gain or lose upon the happening of an uncertain event, in which they have no interest, except that arising from the possibility of such gain or loss. Under that statute it was necessary, in order to convict, for the court or jury trying the case to find that there was no intention on the part of the parties to deliver the cotton or other commodity in question. Under it the intention not to deliver must have been participated in by both parties. Section 2653 of Crawford & Moses’ Digest has changed the rule, and provides in effect that transactions in wheat, cotton, corn, or other commodities and stocks or bonds, by way of margin, settlement or differences, and payment of the gain or loss, without any intent to deliver the article by the parties or either of them, are mere wagers, and fall within the penalty provided in the statute. In Pennsylvania and New Jersey, it has been held that one who enters into a stock speculation on margin, with a stock broker, is to he considered as dealing with the broker as a principal, and not as an agent. Flagg v. Baldwin, 38 N. J. Eq. 219, and Puchizky v. DeHaven, 97 Pa. St. 202.

The effect of our present statute is to make the customer and the broker principals in contracts like the one under consideration. If this end could be accomplished by the decisions of the courts of last resort in the States named, it is equally certain that the result could be obtained by the Legislature by the passage of a statute to that effect. The whole policy of dealing with wagering contracts as an offense against the State falls within the province of the Legislature. No good reason is given and none is perceived why the Legislature might not make contracts like the present one wagering contracts where either of the parties did not in good faith intend a delivery of the commodity in question as well as where the delivery was not contemplated by both parties. The subject of prohibiting wagering contracts falls within the police power of the State, and the Legislature no doubt felt that it might more effectively stop the practice by making such contracts unlawful where either of the parties intended nothing but the wager on the rise or fall in the price of the article and not to deal in it as a bona fide purchase. Hence we adhere to our original opinion that the act is constitutional.

We also adhere to our original opinion that the court was justified in directing the jury to find the defendant guilty under the evidence. Carpenter was engaged in buying and selling cotton in Conway in the fall of 1923; but he testified that there was no intention on his part that the cotton in question should be delivered to him. He does not recollect what the market price of the cotton was at that time, but says that it was something like 30 or 31 cents per pound. This would amount to $150 per bale or $15,000 for the hundred bales. Carpenter was only required to put up $750 for the hundred bales. No money was invested in the purchase of the cotton, but only so much was required of him as would cover the “margin,” as it is called. The contract represents not a purchase of cotton, but a mere stake or wager upon its future price. The broker did not care whether or not the customer had the actual money with which to purr chase the cotton. He was only interested in his having the necessary margin when the contract was made. The broker could close out the customer if it became necessary for him to put up more margin and he refused to do so. It was never intended, according to the testimony of Carpenter, that he. should’be required to pay anything whatever towards the purchase price of the cotton.

His testimony is corroborated by all the attending circumstances, and is not contradicted by any testimony introduced in evidence.

It follows that the motion for a rehearing will be denied.


text:
    Dewberry-Hargett Company v. Arkansas State Bank.
    Opinion delivered May 12, 1924.
    1. Carriers — assignment of bill of lading. — Assignment of a nonnegotiable bill of lading vests in the assignee such interest only as the assignor had.
    2. Carriers — assignment of bill of lading.. — The effectiveness of the assignment of a nonnegotiable bill of lading to pass title depends entirely upon the intent of the parties.
    3. Sales — open shipment — presumption.—Though an open shipment raises a presumption of intent to deliver the commodity and to pass title immediately to the consignee, such presumption may be overcome by proof of a contrary intent.
    4. Carriers — effect of assignment of bill of lading. — Where the seller of two carloads of lumber before shipment arranged for assignment of the bills of lading to a bank, and the buyer, before accepting the lumber, was notified of such assignment, the buyer became a purchaser from the bank and bound to pay the contract price for it.
    5. Carriers — assignment of bill of lading — parties.—In an •action by the assignees of nonnegotiable bills of lading covering-shipments of lumber to recover the price for same from the consignee, the consignor was not a necessary party, under Crawford & Moses’ Dig., § 1090.
    Appeal from Miller Circuit Court; James H. Mc-Collum, Judge;
    affirmed.

      Arnold £ Arnold, for appellant.
    The case should have been dismissed below on account of defect of parties, the assignor of the account sued on herein not being joined as a party. C. & M. Dig. 1090; 80 Ark. 167; 47 Ark. 541. The bills of lading in question were not negotiable or assignable. • Although it has been said that “shipper’s order” or “order notify” bills of lading are negotiable, nothing more is meant by this than that the transfer of such bills passes only such right and title as the transferer had to the goods therein described. See 99 Ala. 130; 57 Ga. 410; 62 Ala. 537; 86 Kv. 176; 115 Mass. 224; 6 Mo. App. 76; 9 Daly (N. Y.) 275; 160 S. W. 403; 79 S. W. (Tex.) 1094. In the cases at 105 A. S. R. 321, 99 Md. 661, and 101 Pac. 877; 63 Wash. 302, it was held that a bill of lading which stated that it was not negotiable or assignable was in effect a receipt for the goods, and a contract between the shipper and the carrier that it should be neither negotiated or assigned, and a delivery of the bill of lading without indorsement, together with the invoice properly assigned, passed no title or right to the goods. This principle applies with equal force under statutes which declare bills of lading negotiable unless plainly marked nonnegotiable, as does our law. 102 Md. 573; 102 Minn. 147, 112 N. W. 1030. Even had this 'been a suit to recover the lumber, appellee would have no interest therein, because the title passed to appellant before the bank became interested. 53 Ark. 196, and cases cited; 128 Ark. 121, and cases cited; 38 Ark. 614. The failure to send the bills of lading was no obstacle to the delivery of the goods, to appellee. 115 Ark. 14; 79 Ark. 456; 64 Ark. 169. Had the bills of lading been issued to shipper’s order, the carrier would have been liable. 77 Ark. 482, 113 A. S. R. 160, 207 U. S. 270; 89 Ark. 342; 112 Ark. 110.

      M. E. Sanderson, for appellee.
    The defective statement of the cause of action could only be questioned by motion to make the complaint more definite and certain. 87 .Ark. 136. The answer of appellant was a specific denial of any right or interest in-said lumber on the part of appellee. This was prima facie evidence of the conversion of such property by appellant. 63 Ark. 268. As to what constitutes a conversion, see 34 Ark. 421. Where testimony is introduced without objection upon an issue not specifically raised by the pleadings, the -court should treat them as- amended, or may permit an amendment to be made. 43 Ark. 451; 62 Ark. 262; -65 Ark. 422; 84 Ark. 37; 85 Ark. 217; 88 Ark. 181. The delivery of the bills of lading to the bank transferred the lumber which they represented. 115 Mass. 219; 4 N. T. 497. The bill of lading was assignable by delivery, and, notwithstanding the fact that it was stamped not negotiable, represented the goods which had been shipped, and transferred the goods. 107 Mass. 129; 11 R. I. 278; 101 IT. S. 557; 64 Ark. 244; 100 Am. Dec. 363. When bills of lading are attached to drafts, the title to the property passes with the draft, and the purchaser of the draft has a special ownership which he may assert against every one. 79 Ark. 353.
   Humphreys, J.

Appellee instituted suit against appellant in the circuit court of Miller County to recover $440.22, the contract price of two cars of lumber, one of said cars having been shipped from Ashdown and the other from Arkinda by C. T. Brewer to appellant, on the 27th and 29th days of November, 1922, on bills of lading, which, together with the invoices uf the lumber, were assigned and delivered on said respective dates to appellees by said Brewer, for a valuable consideration.

Appellant interposed the defenses, first, that the invoices and bills of lading were not negotiable, and for that reason vested no interest to the lumber in appellee; second, that, under and by virtue of an oral contract between C. T. Brewer and appellant, the title to the lumber passed to it upon the delivery thereof to the St. Louis-San Francisco Railway Company and the issuance of the bills of lading by it and delivery of them to the consignor; and third, that there is a defect of parties.

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

The facts are in substance as follows: Appellant and C. T. Brewer entered into a verbal contract whereby appellant was to exchange a certain Paige car, valued at $1,000, for dimension hardwood lumber, at $12.50 per thousand, and to buy three cars of oak lumber a,t $20 per thousand, which should not be paid for until all the lumber had been delivered. C. T. Brewer inquired of appellee whether it would purchase bills of lading evidencing consignments of lumber to appellant. After investigating appellant’s financial condition, it agreed to do so. On November 27 and 29 thereafter Brewer consigned two cars of lumber to appellant, and received therefor bills of lading with the words “Non-Negotiable’.’ plainly printed on the face of each. These bills of lading with the invoices attached were sold, assigned, and delivered to appellee on the dates of their issuance. J. W. Waters, president of appellee bank, testified that drafts for the contract price of the lumber were attached to the bills of lading and invoices and inclosed in letters of advice, which were mailed in registered letters directly to appellant. Dan Dewberry, president of appellant company, admitted receiving the letters containing the original bills of lading and invoices, but denied receiving the drafts. The next day Brewer appeared in appellant’s office in Texarkana, and was questioned about the letters of advice, invoices, and bills of. lading received from appellee, and he informed it that this was his method of doing business, and to pay no attention to the letters from appellee. When the lumber arrived, it was unloaded and stacked in the yards of the Consolidated Lumber Company on the Texas side. No response was made to appellee’s letters by appellant until after the lumber had been received and stacked, and until it received a second communication from appellee demanding payment for the lumber. It then informed appellee of the verbal contract it had entered into with Brewer, and refused to pay for the lumber, under the claim that it was not to pay cash to Brewer for any lumber until he delivered all the lumber which he had agreed to deliver in exchange for the Paige car: This suit was then instituted, with the result indicated above.

Appellant contends for a reversal of the judgment apon the theory that- the title to the lumber passed to it when Brewer delivered same to the St. Louis & San Francisco Railway Company and accepted a nonnegotiable bill of lading therefor. Under the terms of §§ 791 and 792 of Crawford & Moses’ Digest, bills of lading are nonnegotiable if the words “Not Negotiable” are plainly written or stamped on the face thereof. The bills of lading in question had said words plainly printed bn the face of each. The assignment therefore for value of said bills of lading only vested in appellee, the purchaser, such interest in the property as Brewer had when he assigned and delivered them. ' His interest at the time must have depended on his intention when he delivered the lumber to the carrier. An effective delivery so as to pass the title is dependent entirely upon the intention of the par.ties to the transaction. Russell v. Haltom, 76 Ark. 105; Hodges Bros. v. Bank of Cove, 119 Ark. 215; Vance v. Bell, 153 Ark. 229. Appellant argues that, because this was an open shipment, the title to the lumber immediately passed to appellant, the consignee. Presumptively such a shipment would evidence an intention to deliver the commodity to the consignee and thereby immediately pass the title to him, but such a presumption may be overcome by proof showing a contrary intention. In the ease at bar, before loading the cars, Brewer arranged with appellant to handle the shipment by assigning the bills of lading to it, with invoices attached, for the purpose of burdening the shipment with the contract price of the lumber. In other words, the assignment of the bills of lading, which were muniments of title, to appellee by Brewer manifested an intention on his part to make a conditional delivery only of the lumber to appellant, the condition being that it might acquire title to the property upon the payment of the contract price to appellee. The special interest of appellee in the lumber acquired by the assignment of the bills of lading with invoices attached was communicated at once to appellant, and it accepted the lumber when it reached Texarkana with full knowledge that appellee had purchased an interest therein. By virtue of the acceptance with this knowledge, appellant became a purchaser directly from appellee, and is bound to pay the contract price therefor. Under this view of the law the court submitted the case to the jury on a correct declaration of law.

Appellant also insists upon a reversal of the judgment upon the alleged ground that there is a defect of parties. It is argued that this is a suit upon an unassignable open account, and for that reason it was necessary for appellee to make its assignor, C. T. Brewer, a party. This would be true if appellee had purchased an open account ag’ainst appellant from Brewer. Section 1090, Crawford & Moses’ Digest; St. L. I. M. & S. R. Co. v. Camden Bank, 47 Ark. 541; Jett v. Theo. Maxfield Co., 80 Ark. 167. While the bills of lading in the instant case are nonnegotiable in the sense of the law merchant, they represented the property, and, when assigned and delivered to appellee with intent to transfer an interest in the property to it, that purpose was accomplished. Being assignable for that purpose, it was unnecessary to join Brewer as a party.

No error appearing, the judgment is affirmed.