author: Humphreys, J. McCulloch, C. J.,

text:
    Arkansas Railroad Commission v. Independent Bus Line Looney v. Caddo Transfer & Warehouse Company
    (No. 9800)
    (No. 9816).
    Opinion delivered July 12, 1926.
    Automobiles — regulation op motor busses. — Under Acts 1921, p. 183, § 5, conferring upon the Railroad Commission jurisdiction of all matters pertaining to the regulation and operation of common carriers, the Railroad Commission has no jurisdiction to require a certificate of public convenience and necessity to be secured to operate motor -busses over State highways, in view of the repeal of similar authority given to the Corporation Commission under Acts 1919, p. 423, § 13.
    Appeals from Pulaski Circuit Court, Second Division; Richard M. Mann, Judge';
    affirmed.

      H. W. Applegate, Attorney General, Brooks Hays, Assistant, and Davis Gosten, for appellant.

      R. M. Hutchins, Coulter & Coulter, Kirby & Hays, Oren Parmeter, W. G. Dinning, Peter A. Deisch, George A. McConnell and Downie & Schoggen, for appellee.
   Humphreys, J.

Cases Nos. 9800 and 9816 have been consolidated, since the legal question involved in each is identical.

Case No. 9800 arose out of an application on March 26, 1926, by the Independent-Bus Lines, Incorporated, to the Arkansas Eailroad Commission for a permit to operate a motor bus line on certain roads leading out of Helena, over which the Messino Bus Company was operating a motor bus line under a certificate of public convenience and necessity issued to it by the Eailroad Commission. The Messino Bus Company intervened and contested the right of the applicant to a permit on the ground that additional bus service was not necessary on said highways. The petition was heard and denied, from which order of denial an appeal was prosecuted to the circuit court of Pulaski County. On May 15, 1926, the appeal was heard in the circuit court, and a judgment was rendered setting aside the order of the Eailroad Commission, from which an appeal has been duly prosecuted to this court.

Case No. 9816 arose out of an application on March 13, 1926, by the Caddo Transfer & Warehouse Company to the Arkansas Railroad Commission for a permit to operate a motor bus line over certain public highways in Union and Ouachita counties, Arkansas, over which J. P. Looney was operating a motor bus line under a certificate of public convenience and necessity issued to him by the Railroad Commission. Notice of the application was given to J. P. Looney, who appeared and contested the applicant’s right to a permit on the ground that additional motor bus service was not necessary on said highways. Upon a hearing of the cause the Commission entered an order denying the application, from which an appeal was taken to the Pulaski Circuit Court, Second Division. On May 3Í, 1926, the appeal was heard and a judgment was rendered setting aside the order of the Commission, from which an appeal has been duly prosecuted to this court.

The record reflects that the Independent Bus Line, the Messino Bus Company, the Caddo Transfer & Warehouse Company and J. P. Looney had complied with the rules .and regulations. of the Arkansas Railroad Commission, and that it refused permits to the Independent Bus Line and the Caddo Transfer & Warehouse Company to operate motor bus lines upon the highways designated in the respective petitions because it had theretofore "ranted permits to the Messino Bus Company and J. P. Looney to operate motor bus lines over practically the same route and under the same schedules, and that the public convenience and necessity did not require the service of additional companies. •

In refusing the permits, the Arkansas Railroad Commission was guided by the following rule it had theretofore promulgated:

“No person or motor transportation company shall hoa’in to operate any motor-propelled vehicle for the transportation of persons or property, or both, for compensation between fixed termini or over a regular or irregular route in this State, without first obtaining from the Railroad Commission a certificate declaring that a public convenience and necessity require such operation.”

The applicants challenged the authority of the Railroad Commission to promulgate such a rule or to deny them the privilege of operating motor bus lines over the highways in question. The circuit court sustained the contention of the applicants. The sole question therefore presented by this appeal is whether the Legislature ever granted authority to the Arkansas Railroad Commission to issue permits or certificates of public convenience and necessity to individuals, partnerships or corporations to operate motor-propelled vehicles to transfer persons or property for compensation over the highways of the State. This is the very question which this court reserved for future decision in the case of Kinder v. Looney, 171 Ark. 16, 283 S. W. 9. If the Arkansas Railroad Commission has such authority, it was conferred by § 5, act 124, Acts of 1921, which is as follows:

“The jurisdiction of the commission shall extend to and include all matters pertaining to the regulation and operation of all common carriers.”

It was said in Kinder v. Looney, supra, that “the statute under consideration in this case does not confer express authority upon the Arkansas Railroad Commission to establish a rule that no automobile transportation company shall operate for the transportation of persons for hire over a regular route in this State without first having obtained from the Commission a certificate declaring the public convenience and necessity require such operation.” It follows then, that, if such authority exists in the Railroad Commission, it is by necessary implication from language used in the statute. The language is not broad enough to justify the implication. “Regulation and operation” does not import the right of denial or the right to grant an exclusive franchise or permit which, in effect, involves a denial to some. “Regulation” is not synonymous with “prohibition,” and a delegation of the authority by. the Legislature to regulate does not imply authority to prohibit. Tuck v. Waldron, 31 Ark. 462; Swaim v. Morris, 93 Ark. 363, 125 S. W. 432; Little Rock v. Reinman, 107 Ark. 174, 155 S. W. 105; Bryan v. Malvern, 122 Ark. 379, 183 S. W. 957; Incorporated Town of Paris v. Hall, 131 Ark. 134, 198 S. W. 705; North Little Rock v. Rose, 136 Ark. 298, 206 S. W. 449. We think the Legislature never intended for such an implication to be drawn from the language used in the statute, for the reason that the act in which the section appears specifically repealed § 13 of act 571 of the Acts of 1919, which conferred authority on the Arkansas Corporation Commission (now abolished) to grant certificates of convenience and necessity to public service corporations. The specific repeal of such power indicates very clearly that the Legislature had no intention of again conferring the power upon the new body through inference or implication.

No error appearing, the judgments are affirmed.

McCulloch, C. J.,

(dissenting). - It is well understood that an administrative body such as the Arkansas Railroad/Commission can exercise only such poAver as is delegated to it by the laAvmakers, either in express terms or by necessary implication. The -statute creating the Railroad Commission does not, in express Avords, confer authority to place a limit on the number of utilities to operate along a given route or in any given territory, and the question presented in this case is whether or not such authority is necessarily implied from the general powers expressly conferred. My conclusion is that the statute is so broad and comprehensive in its language in conferring’ upon the commission authority to control all public utilities that the power to place a limit on the number of utilities is necessarily implied. In testing the effect of the statute, consideration should be given to the matters sought to be controlled and the purpose of the lawmakers in placing those matters under statutory control.

The highways of the State are for common use, and, if we were dealing merely with the regulation of the ordinary use of highways, the authority to regulate such use would not imply authority to exclude, but the statute deals, not with such use of the highway as is common to all, but with special use which is merely a privilege, and which can be either granted or withheld by the lawmakers at will. In other words, the use of the public highway by a carrier for profit is not such use as is the common right of all, but is a special privilege. This principle has been recognized by all authorities on the subject. In a recent work on control of public utilities, it is said:

. “This private use of our streets and highways obviously differs very radically from that of converting them into places of business and using them for private gain or profit, such as operating motor vehicles thereon for the transportation of the public and its property for hire. This use is special and extraordinary, and may only be enjoyed as a privilege or licensed permission on such conditions as the State or its duly authorized agency may see fit to impose. The operation of motor vehicles for hire, being a privilege and not a right, may be granted or withheld as the State may determine, and, if granted, the State may decide to whom and under what conditions the grant shall he made. As permission to employ the highways to conduct business thereon for private gain may be entirely denied, it follows that the privilege may be extended on such conditions as the State may determine.” Pond on Public Utilities, § 753.

In the exercise of authority in determining who may enjoy the privilege of using the highways as a carrier and upon what terms the privilege may be exercised, sole consideration must be given to the convenience of the public, for, the use of the highways as a common carrier being merely a privilege, it may be withheld altogether. The term “certificate of convenience and necessity,” often used in statutes of this kind, refers to the convenience and necessity of the public, and not that of the corporation to which the privilege is granted.

"When the construction of the statute now before us is approached in the light of these principles, it seems clear to me that the language is broad enough to confer authority upon the Railroad Commission to determine the number of utilities which may occupy a given field or territory. The language is the same with regard to all utilities. It does not apply solely to bus lines, and, if the Commission has no authority to determine the number of bus lines which may operate along a given route, then there is no express authority in the statute to limit the number of other utilities, and all who apply for permits must be treated alike. I cannot believe that the lawmakers intended any such result.

It will be noted that the statute does not merely confer the right to regulate, but it declares that the power of the Commission shall “extend to and include all matters pertaining to the regulation and operation of all common carriers. ’ ’ The authority is not merely to regulate common carriers, but to control all matters pertaining to such regulation and operation. It would appear that the number of utilities to operate in a given territory or along a given route should be deemed a matter “pertaining to the regulation and operation” of common carriers, and this should apply with special force to a bus line operating along a public highway, for the safety and convenience of the public are necessarily involved in determining the number of such carriers which should operate along the same route. The principle is “as old as the hills” that, when power is conferred in express though general terms, there is a necessary implication of sufficient authority to carry those powers into execution. McCulloch v. Maryland, 4 Wheat. (U. S.) 316.

I attach no importance to the fact that the statute repealed a section of the former statute conferring power upon the Corporation Commission to issue certificates of convenience and necessity and failed to incorporate the same in the new statute defining the powers of the Railroad Commission. This change in the language of the statute occurred in transferring authority over local utilities to municipal corporations of the State, and did not manifest an intention on the part of the lawmakers to withhold such control and authority of the Railroad Commission over utilities outside of municipalities. On the contrary, the lawmakers, in passing the new statute, used different and broader language than that used in the old statute, and made it unnecessary to confer in express terms authority to refuse permits. The language of the old statute defining the authority of the Corporation Commission was that “the jurisdiction of the Commission shall extend to and include common carriers * * .” But, as we have already seen, the language of the present statute is much broader and declares that jurisdiction shall “extend to and include all matters pertaining to the regulation and operation of common carriers.” Section 1 of the act creating the Commission is not without considerable force in the solution of this question. That section roads as follows: “That the intent of this act is that the present Arkansas Corporation Commission be abolished, and that all its proper functions, not elsewhere herein delegated, be transferred to the Arkansas Railroad Commission as herein constituted.” Acts 1921, p. 177. This language used by the lawmakers clearly evinces an intention to transfer all of the powers originally vested in the Corporation Commission to the Railroad Commission except those which had been otherwise delegated. Now, the language of this .section may not of itself be sufficient to enlarge powers not otherwise expressly conferred, but it-is certainly of much value in construing the language of that part of the statute which defines the power and authority of the new Commission. The primary object of construction of statutes is to ascertain from the language used the true intention of the lawmakers, and mere form of expression should be disregarded. Rayder v. Warrick, 133 Ark. 491, 202 S. W. 8; Howell v. Lamberson, 149 Ark. 183, 231 S. W. 872; Standard Oil. Co. v. Brodie, 153 Ark. 124, 239 S. W. 753.

It seems to me therefore that the majority have taken a very narrow view of this language, and that the subject-matter calls for a liberal rather than a restricted interpretation.

. Much is said in the briefs of counsel about the definition of the term “regulation.” Standing by itself, the word may be .construed in many ways, but, when used with reference to the granting of a mere privilege, which is not a thing of common right and may be either granted or withheld at the will of the sovereign, it is a term of sufficient breadth to warrant the interpretation contended for by counsel for the State, and, when considered with the context, it seems clear to me that the lawmakers intended to commit to the Eailroad Commission authority to determine all matters relating to the regulation, control and operation of common carriers, and that this necessarily includes the power to determine when and by whom and under what circumstances the privilege should be exercised. The decisions referred to in the opinion of the majority relate to mere matters of regulation of business which is not necessarily of public character. Such lines of business covered by those decisions may be regulated, as they are not of a public nature, whereas the use of a public highway for profit is not of a private nature, but is one in which private rights are not involved and the public alone is concerned therein. Hence the power to regulate necessarily includes the right'to restrict the number of privileges to be granted.

The only decision bearing directly on the construction of a similar statute is the decision of the New Jersey court in Zellers v. Cumberland Traction Co., 127 Atl. 268, where it was held, under a statute almost identical with ours, that the Board of Public Utility Commissioners was authorized to limit the number of permits.

I am authorized to say that Mr. Justice Wood agrees with me in all that I have said on this subject.


source: Caselaw Access Project

license: Public Domain

text:
    Kavanaugh v. Morgan.
    Opinion delivered October 18, 1926.
    1. Evidence — declaration showing intention.' — In ejectment where defendant claimed that plaintiff had agreed to discourage coiripetitive bidding and to bid in the land at foreclosure sale at a low price and hold it in trust for him, plaintiff’s letters written before the sale, calling attention of prospective bidders to the sale and stating that the bank was interested in seeing that the lands should sell for a good price, were admissible as tending to show plaintiff’s intention when he purchased the land at the foreclosure sale.
    2. Trusts — constructive trust — evidence.—Evidence held not to establish a constructive trust in land purchased at foreclosure sale by plaintiff, which defendant alleged that he agreed to hold for defendant.
    Appeal from Union Chancery Court, First Division; J. Y. Stevens, Chancellor;
    reversed.

      Patterson & Rector, Rose, Hemingway, Cantrell & Loughborough, for appellant.

      J. N. Saye, H. S. Yocum and W. T. Saye, for appellee.
   Humphreys, J.

This suit was originally brought by one of the appellants, C. C. Kavanaugh, against appellee, S. R. Morgan, and others, to recover possession of a certain lot in the city.of El Dorado, Arkansas, upon the alleged ground that he was the owner thereof by deed of conveyance from the Central Bank, said bank having purchased same in a decree of foreclosure of a deed of trust executed to it by S. R. Morgan.

- S. R. Morgan filed an answer, denying the material allegations in the complaint, and a cross-complaint alleging that said lot and the other property covered- by the deed of trust was foreclosed under an agreement that all of the property described in the deed of trust should be purchased at the foreclosure sale by said bank and held in trust for him until he could dispose of enough thereof at private sale to liquidate the large indebtedness he owed the bank, at which time the remainder should be conveyed to him. He prayed that the cause be transferred to equity in order that he might have an accounting from the bank, offering to pay any amount he might owe it, and requesting that the lot in question and the other unsold real estate described in the deed of trust and commissioner’s deed under the foreclosure decree be returned to him.

The cause was transferred to the first division of the chancery court in said county, where it was tried upon the pleadings and testimony adduced by the respective parties. The court found the issues in favor of appellees, and rendered a decree divesting the title to the unsold real estate out of appellants and vesting same in S. R. Morgan, upon the payment of $11,135.75 to said bank by him within.ten days; from which findings and decree an appeal has been duly prosecuted to this court for trial de novo.

The record reflects, according to the undisputed testimony, that, prior to the year 1921, S. R. Morgan, who was doing business with the Central Bank, drew drafts in large sums upon parties who did not honor them when presented for payment, and deposited the proceeds to his account in said bank. Before the drafts were dishonored and returned, he had checked out the money. These returned drafts swelled his indebtedness to the bank to the sum of $80,000, and, as he was unable to redeem them, the stockholders of the bank were compelled to double their stock in order to sustain the credit and solvency of said bank. Although a part of his indebtedness to the bank was secured by collateral, a large part of it was unsecured'. • In order to secure same, upon the urgent solicitation of C. C. Kavanaugh, the president of said bank, S. R. Morgan executed it a deed of trust upon his real estate in El Dorado and Union County. The indebtedness was reduced, by payments and collections on collateral from time to time, to about $53,000, in May, 1921, when foreclosure proceedings upon the deed of trust were instituted in the chancery court of Union County. A default judgment was rendered on August 4, 1921, for $61,537.77 in favor of the bank against S. R. Morgan, and the real estate described in the deed of trust was ordered sold to satisfy said indebtedness. The commissioner appointed to execute the decree offered the real estate, after due notice, for sale at public auction on September 14, 1921, and the bank became the purchaser thereof for the sum of $10,000.

The sale was confirmed on December 5, 1921. After the sale the indebtedness involved in the foreclosure suit was carried on the bank books as accounts receivable, and the real estate was carried on the books until October, 1922, on the collection account instead of the real estate account. At that time, through the advice of attorneys, the real estate account of the bank was debited with $10,000, the bid for the real estate at the foreclosure sale.

C. C. Kavanaugh certified on December 31, 1921, immediately after the confirmation of the sale, that the bank owned $2,080.20 in real estate; and again, on March 10,1922, he certified that it owned $4,142.76 in real estate ; and again, on June 30, 1922, he certified that it owned $4,338.85 in real estate. In October, 1922, he debited the real estate account with $10,000, bid for the property at foreclosure sale, and on November 13, 1922, the books showed that the bank owned $14,268.05 in real estate. Mr. Kavanaugh gave two explanations as to why he carried the indebtedness of S. R. Morgan in the loans, discounts and collection account after the confirmation of the foreclosure sale, the first being that he did not know that it made any difference, until his attorneys informed him that the amount paid for the real estate at the foreclosure sale should be debited to the real estate account; and the second was that he did it as a matter of convenience, in order to make the accountings to the makers of the collateral notes, to Morgan, and to keep itself and the Bank Commissioner informed. Mr. Kavanaugh further explained that the Bank Commissioner understood how the transaction was handled from the beginning, and that he did not deceive, or intend to deceive, him by carrying the purchase price of the real estate at the foreclosure sale .in the collection account and by not debiting the amount to the real estate account until October, 1922. In this connection he stated that other foreclosure sales had been handled in this way and carried upon their books in the same manner.

After the confirmation of the foreclosure sale the bank paid' all of the taxes on the real estate and all expense items pertaining to the real estate, charging same to its own expense account, and not to S. R. Morgan.

The lands in Union County embraced in the sale were wild and unimproved. Prior to the foreclosure sale, S. R. Morgan had leased one piece of the said property embraced in the mortgage to the Ark-Mo Lumber Company and had collected the rent for the term in advance. The term ended in 1923, at which ■ time the bank leased the property to the Ark-Mo Lumber Company and collected the rent thereon. Another piece of said property was held by Downtain, who had purchased same and obtained a warranty deed from S. R. Morgan after he had executed the mortgage to the bank. M. B. Morgan erected three small houses upon another piece of the prop-' erty, after the foreclosure suit, and, when he refused to account for the rents, this suit in ejectment was brought against the Morgans. There is some dispute as to who had possession of the other city property. Kavanaugh testified'that he collected rents on one of the lots until the tenants moved out. M. B. Morgan testified that, after the date of the sale, he continued to look after all of the property, either for the bank or S. R. Morgan, or whoever owned it.

C. C. Kavanaugh wrote to eight different parties, prior to the date of the foreclosure sale, giving notice that the lands embraced in its mortgage, describing them, would be publicly sold on September 14, 1921, in which it was stated that the bank was interested in seeing that the lands should sell for a good price. One of the letters was addressed to Hon. Tom Gaughan of Camden. Gaughan mailed the letter to the Standard Oil Company, and received a reply to the effect that it had checked the lands over and found nothing of interest to it.

On October 30,1922, Kavanaugh wrote S. R. Morgan by registered letter as follows:

“S. R. Morgan,
Moore & Turner Building,
Little Rock, Arkansas.
“Dear sir: Referring to your request to Mr. Simpson for an accurate statement of your account, beg to advise that the position which this bank takes, and has always taken, and has repeatedly explained to you, is that it is not seeking any profits out of foreclosure of real estate or collateral sales, but that it would be willing’ to resell to you any real estate which it has foreclosed and bought in, and surrender to you any collateral which it still holds in pledge, for the consideration of- enough in cash to reimburse it for your present indebtedness and for such sums as it has paid out in foreclosure purchases, plus all expenses that it may have been put to. The bank does not hold the real estate which it bought in at foreclosure in trust for you for security for any indebtedness which you may owe it. For instance, it foreclosed its mortgage on El Dorado and Union County property and bought it in at the sale by the commissioner at the consideration of $10,000. This sale was after-wards confirmed, and the report of the said commissioner to the court shows that the Central Bank credited its judgment to the amount of $10,000, and this credit is extended to you on its books. There would have been no object in foreclosing the mortgage and selling the property if it had been the intention of the bank to hold merely as security. With reference to the items of expense, such as attorney’s fees, abstract fees, railroad expenses, taxes, etc., which we have paid out on the El Dorádo and Union County property purchased at the foreclosure sale, beg to advise that these items were charged to our own expense account at the time the items were paid, and were not charged to your personal account. In writing you a memorandum, these items were included for the purpose of advising you for how much we would he willing to sell to you the El Dorado and Union County real estate. ¡We are offering the property we bought at foreclosure sale. If you wish to buy it, you can negotiate as any other person may do.”

S. E. Morgan did not answer this letter.

In April, 1921, before the foreclosure proceeding was commenced, C. C. Kavanaugh wrote S. E. Morgan the following letter:

“For the future protection of yourself and the bank, we hope you will use your influence with the clerk at El Dorado to prevent unnecessary publicity of the litigation. Judge Hendricks has the papers prepared, and if you think it will accomplish any good in securing this matter out of the newspapers, I would accompany Judge Hendricks to El Dorado. As we see it, neither party would be greatly benefited by any undue publicity of litigation.”

Mr. Kavanaugh explained that his reason for writing this letter was to avoid any damage which might result to the bank if publicity.was given to the institution of sucia a large foreclosure proceeding. This concludes the statement' of material facts revealed by the undisputed testimony.

The record reflects the following' material conflicting testimony:

S. E. Morgaaa testified, in substaaace, that he and Kavanaugh agreed that the bank should institute foreclosure proceedings on the deed of trust against Morgan in the circuit court of Union Couaaty, take judgment against him for this debt, foreclose its mortgage, buy the property in at the sale for $10,000, thus freeing it from junior judgment liens, then to resell it at a private sale, as opportunity presented itself, apply the proceeds, first, to the payment of its indebtedness to it, and return the residue to him. He also testified that, iaa order to effectually carry out the plan, he agreed with Kavanaaagh that he and his friends would not bid at the sale themselves, but would discourage competitive bidding, thus permitting Kavanaugh to bid the property in for the sum of $10,000.

Five other witnesses testified that Kavanaugh had told each of them that he bought the property at the foreclosure sale, in trust for S. R. Morgan.

C. C. Kavanaugh testified that the bank never authorized him to enter into an agreement with S. R. Morgan to foreclose its deed of trust and bid the property in and hold same in trust for Morgan; that he did not enter into such an agreement with him; that the foreclosure of the deed of trust was a bona fide transaction, and that he bought the property at the sale for the bank, and not in trust for Morgan; that he never told any one, either before or after the foreclosure sale, that he had bought the property in for Morgan and was holding same in trust for him; that, in order to get bidders and make the property bring as much as possible, he wrote eight different parties about the sale, calling their attention to the date of the sale, in which he told them that the bank was interested in the property selling for a good price.

Testimony was introduced by appellees tending to show that the real estate was worth from thirty to fifty thousand dollars at the time of the foreclosure sale. Kavanaugh testified that he bid as much as the property was worth at forced sale, in view of the fact that some of it was in litigation, some had been leased, and that the title had failed to several hundred acres.

Appellant contends for the reversal of the decree because the evidence is not full, clear and convincing enough to have warranted the trial court in decreeing a trust ex maleficio. The requirements of the rule in such cases announced in Tiller v. Henry, 75 Ark. 446, 88 S. W. 573, and recently approved in Eason v. Wheeler, 167 Ark. 320, 268 S. W. 29, are as follows:

Constructive trusts may be proved by parol, but parol evidence is received with great caution, and the courts uniformly inquire the evidence to establish such trusts to be clear and satisfactory. Sometimes it is expressed that the ‘evidence offered for this purpose must be of so positive a character as to leave no doubt of the fact’, and sometimes it is expressed as requiring the evidence to be ‘full, clear and convincing,’ and sometimes expressed as requiring, it ‘to be clearly established. ’ * * * Titles to real estate cannot be overturned by a bare preponderance of oral testimony seeking to establish a trust in opposition to written instruments. The conservatism.of the courts has prevented the tenure of realty being based on such shifting sands.”

The inherent probabilities in the instant case are that C. C. Kavanaugh did not make an agreement'with S. R. Morgan to buy the property in at the foreclosure sale and hold it for him as trustee. The bank owned the deed of trust, and it had not authorized its president to make such an agreement. Certainly the president of a bank would not convert a deed of trust, securing a large indebtedness, into a complicated trust to run for an indefinite period, contingent upon being able to sell the property at private sale, without first consulting the directors and obtaining permission to make such an agreement. The transaction would have been one out of the ordinary course of business, and could not .have redounded to the benefit of the bank.

A first mortgage was as good, or better, than an oral trust. Again, the plan was designed to strip the land of junior judgment liens, sell same, and, after paying the indebtedness to the bank, to pay the residue to S. R. Morgan. It is not probable that a bank in good standing, or its president, would have entered into an agreement of that kind. The unreasonableness of such a plan having been adopted by the parties is augmented by the fact that the bank paid the taxes upon the property for several years after buying it at the foreclosure sale, as well as the expenses incident to handling the property. Another strong circumstance tending to show that no such agreement was entered into, is that, according to the plan-of Morgan, competitive bids at the sale were to be discouraged. The letters written by Kavanaugh and mailed to prospective bidders, calling- tbeir attention to the sale, are in open conflict with Morgan’s plan. Appellees contend that the letters were inadmissible, but we think that they were admissible as circumstances tending to show what Kavanaugh’s intention was when he purchased the land at the sale. They clearly indicate that no agreement had been entered into by him to throttle competitive bidding and purchase the property for another. Declarations of this' kind showing intention are admissible. Wigmore on Evidence, 2 ed., vol. 3, page 822.

Another strong circumstance tending to sustain Kavanaugh’s version of the transaction is that Morgan failed to answer the letter Kavanaugh wrote and registered to him, in which he explained that he had not bought the property in trust for him, and in which he reiterated the terms upon which he .(Morgan) might buy the property.

The first letter written by Mr. Kavanaugh to Mr. ■Morgan, and the manner in which the account was carried on the bank books after the confirmation of the foreclosure sale, are circumstances tending to support Mr. Morgan in his statement that there was an oral trust, but the explanation of the letter and the reason assigned for carrying the accounts as they were greatly minimize the force of those circumstances as corroborative. evidence. The explanations are reasonable.

It is difficult from the testimony to determine definitely who had possession of the city property after the foreclosure sale was confirmed. M. B. Morgan testified that, after the sale, he continued to look after all of the property for the bank, or S. R. Morgan, or whoever owned it. He seemed to be in doubt whether he was acting in the management of the property for his brother, S. R. Morgan, or the bank. He tried to buy the property upon which he built three houses, from the Central Bank, after the houses were built. Under this condition of affairs, this piece of evidence is worth little as a circumstance tending to show whether or not there was an oral trust.'

The direct testimony upon whether there was an oral trust is conflicting.

In view of the open conflict in the testimony, we are-of the opinion that appellees have failed to establish a trust ex maleficio, under the rule'announced above. The testimony is not full, clear and convincing that the oral trust was agreed upon.

On account of the error indicated the decree is reversed, and the cause is remanded with directions to dismiss the crossbill of appellees for want of equity, and to decree the possession of the property to appellants.

McCulloch, C. J.,

(dissenting). The fact that the court treats as an essential part of appellants’ case the declaration contained in Mr. Kavanaugh’s letters to prospective bidders at the approaching sale constrains me to record my dissent, which I would not otherwise do upon any difference of opinion on the questions of fact, for I am convinced that the court is in error in holding that such declarations are competent as evidence-in the case. They are self-serving — nothing more nor less— and inadmissible. The decision of the majority is in direct conflict with numerous decisions of this court. Hamburg Bank v. George, 92 Ark. 472, 123 S. W. 654; Fechheimer-Kiefer Co. v. Kempner, 116 Ark. 482, 173 S. W. 179; Carter v. Younger, 123 Ark. 270, 185 S. W. 435; Donaghey v. Williams, 123 Ark. 411, 185 S. W. 778; Raymond v. Raymond, 134 Ark. 484, 204 S. W. 311; Davison v. Harris, 165 Ark. 518, 265 S. W. 67. The citation of 3 Wigmore on Evidence, p. 822, in support of the opinion of the majority, is not apt. The author merely lays down the rule that self-serving utterances or declarations are only competent for the purpose of establishing the state of mind, “knowledge, belief, rational emotion, or-the like,” of the speaker, and not as substantive proof of the facts stated in the utterance. The chancery court found that the proof was sufficient to establish the trust, and, in my opinion, the state of the . proof in the record is such that I do not think those • findings ought to be disturbed.


author: McCulloch, C. J.

text:
    McConnell v. McCord.
    Opinion delivered November 1, 1926.
    1. Appeal and error — -presumption in absence op evidence.— • Where the record on appeal contained no evidence upon, which the cause was heard, but merely the pleadings and record éntries, it will be presumed that the evidence supports the decree.
    2. Appeal — certiorari to complete record. — A petition for certiorari to reinstate a lost record of the testimony in a chancery case which does not allege that the court had made an order authorizing a stenographer to take testimony and file same, nor state when the stenographer’s notes were lost, but merely alleged that the stenographer lost his notes, but that he and bystanders remembered the substance of the testimony, did not state grounds for having the record of the proceedings at the trial brought up.
    Appeal from Sebastian Cbancery Court, G-reenwood District; J. V. Bourland, Chancellor;
    affirmed.

      Robert A. Rowe and Holland, Holland & Holland, for appellant.

      George W. Johnson and Evans S Evans, for appellee.
   McCulloch, C. J.

The case is here on appeal from a decree of the' chancery court, which recites that the cause was heard on oral and documentary evidence adduced by the respective parties. There was no attempt to preserve the record under the statutory method, by having the stenographer file a certified transcript of the testimony, and there was no order of court authorising the stenographer to take the testimony and file the transcript as a part of the record. McGraw v. Berry, 152 Ark. 452, 238 S. W. 613. Nor was the evidence properly preserved in a bill of exceptions certified and filed in apt time. Appellants filed what purported to be a bill of exceptions, supported by the affidavits of bystanders, but we decided, on motion of appellees, to strike this out of the record, that the same was not properly certified and filed. 170 Ark. 839, 281 S. W. 384. Appellants conld have adopted either of the methods of preserving the record, but failed to pursue either method in the proper manner. Therefore we have a record before us which does not properly contain any of the evidence, either documentary or oral, upon which the cause was heard as recited in the decree. There is nothing now in the record but. the pleadings and record entries. The presumption must therefore be indulged that the decree is supported by the evidence, and there is nothing on the face of the record now before us to indicate error in the proceedings.

Since the transcript was lodged in this court, appellants have brought up on certiorari the transcript of supplemental proceedings instituted by appellants below for the purpose of reinstating what is designated as the lost record containing the testimony in the - case. The original cause was submitted to the court on May 11, 1925, and the decision was rendered and filed on November 14, 1925. The supplemental complaint' now before us on certiorari was filed by appellants on March 6, 1926, and it is alleged in the complaint that, at the trial of the cause, the oral testimony was taken down by a stenographer, that the stenographer “claims that he lost, or somebody stole, the record of the proceedings and the notes of all the proceedings,” but that said stenographer “remembers the notes taken in shorthand and can reinstate all the record taken in shorthand,” and that there were several witnesses who heard the proceedings in the trial, and that the testimony could be reinstated from memory. The prayer of the complaint was that “all the testimony taken in the above entitled case by the court stenographer be reinstated, so that it can be in the Supreme Court in the trial of this case.” The court sustained a demurrer to this complaint', and dismissed the complaint, from which decree an appeal was prayed and granted. The complaint did not, we think, set forth any grounds for relief. There is no allegation that the court had made any order authorizing the stenographer to take down the testimony and file a transcript thereof, nor is there any allegation as to the time when the notes of the stenographer were lost. Hence there was nothing stated in the complaint which, if proved, would have justified the court in permitting the record of the proceedings to be made at that time. If the idea was to obtain relief on the ground of unavoidable casualty preventing the preparation of a bill of exceptions, the facts stated are not sufficient for that purpose, for the allegations of the complaint are that the stenographer remembered the substance of the testimony and that bystanders also remembered the testimony of the witnesses. The failure to perfect the record in apt time was not due to the stenographer’s loss of his notes; but was due solely to the fact that appellants failed to obtain a record of the proceedings in apt time by either of the methods authorized by law.

Decree affirmed.


author: Wood, ,J.

text:
    Clark v. State.
    Opinion delivered November 1, 1926.
    1. Witnesses — impeachment—general refutation. — Under Crawford & Moses’ Dig., § 4187, testimony as to the general reputation of a witness, either for truth or morality, is admissible to impeach him.
    2. Witnesses — impeachment-—proof of specific offense. — Where a witness was asked if he knew the general reputation of another witness for truth and morality, his answer that, as far as the truth was concerned, witness knew nothing against him, but that he had been arrested for dealing in whiskey, his answer was properly excluded, as amounting only to proof of a specific offense of immorality.
    3. Witnesses — test of credibility on cross-examination. — The credibility of a witness may be tested on his cross-examination by showing specific instances of immorality.
    4. Criminal law — exclusion of testimony- — harmless error.— The exclusion of testimony as to a witness’ reputation for morality held not prejudicial error where it was merely cumulative of other testimony that witness’ general reputation for morality was bad,
    5., Criminal law — -demonstrative evidence. — In a prosecution for assault with intent to kill, permitting the State to introduce wearing apparel of the prosecuting witness at the time of assault, by placing same on the body of such witness to assist the jury in understanding the nature and character of the assault, held not error, though the assault was admitted, and the nature of the wounds explained by a physician.
    6. Criminal law — exclusion of testimony — prejudice.—An assignment of error in a prosecution for assault with intent to kill for refusing permission to question a witness as to 'threats alleged to -have been made by the prosecuting witness against defendant without showing what the answer would have been, shows no prejudicial error.
    ■ 7. Criminal law- — repetition of instructions. — Where, in a prose- . cution for assault with intent to kill, the court gave a correct instruction on self-defense, it was not error to refuse a requested instruction on the same subject, especially where it was not an accurate statement of the law.
    Appeal from Pulaski Circuit Court,'First Division; John W. Wade, Judge;
    affirmed.

      John B. 'Gulley and Arthur J. Jones, for appellant.

      H. W. Applegate, Attorney General, and Darden Moose, Assistant, for appellee.
   Wood, ,J.

George W. Clark was indicted by the grand jury of Pulaski County for the crime of assault with intent to kill one Vernith Tucker. He was eonvictéd of the crime of aggravated assault, and his punishment fixed by the jury at a fine of $250 and imprisonment in the county jail for six months. Judgment was pronounced in accordance with the verdict, from which this appeal is duly prosecuted.

I. Witness J. L. McKahn was introduced on behalf of the State, and he gave testimony which the appellant deemed material and prejudicial to the appellant. The appellant sought to impeach the testimony by E. H. Hendricks. Appellant’s counsel asked Hendricks the following question: “Do you know his general reputation for morality?” Objection was made by the State, and the court remarked, “This is not a morality case.” Appellant saved his exceptions to the remarks of the coui:t. Counsel then asked, “Do you know his general reputation for truth and morality?” and witness answered, “Yes,” and stated, “As.far as the truth is concerned, I never knew anything against him. We have arrested him for dealing in whiskey. Q. His reputation for morality is bad? A. In that line — yes.” The State moved to exclude the testimony of the witness as to the morality of McKahn. The court sustained the motion, to which ruling the appellant excepted.

On cross-examination the witness stated that he had no reason to doubt McKahn where his oath was concerned ; that all he knew was that he had arrested McKahn on a whiskey charge.

In the recent case of Blevins v. State, 170 Ark. 765, 281 S. W. 17, we ruled that, under our statute, § 4187, C. & M. Digest, a witness may be impeached by evidence that his general reputation for truth or morality renders him unworthy of belief. Under this statute, testimony is admissible as to general reputation either for truth or morality. But an examination of the testimony shows that there was no prejudicial error to the appellant in the court’s ruling, for the reason that the witness,'in answer to questions, stated that he knew the general reputation of the witness McKahn for truth and morality, and that he knew nothing against his reputation for truth, and that he had no reason to doubt him where his oath was concerned. The witness further stated that McKahn’s reputation for morality was bad, but all he knew about that was that he had arrested McKahn on a whiskey charge. Thus, the examination as to morality wás narrowed to the specific offense of selling whiskey. A witness cannot he impeached by direct evidence showing that he had been guilty of specific acts of immorality. Dean v. State, 130 Ark. 322, 197 S. W. 684. Evidence introduced primarily for the purpose of impeachment must be confined to the general reputation of the witness for truth or morality. But the credibility of a witness, on cross-examination of such witness, may be tested by showing specific instances of immorality. Lockhart v. State, 136 Ark. 473, 207 S. W. 55. Moreover, the ruling of the court was not prejudicial, because other witnesses had testified that McKahn’s general reputation for morality was bad, and the testimony therefore of witness Hendricks would have been but cumulative.

2. The appellant complains of the ruling of the court in permitting the State to introduce the shirt, overcoat and other articles of wearing apparel worn b!y Vernith Tucker, the prosecuting witness, at the time of the alleged assault upon him by the appellant. In the case of Pate v. State, 152 Ark. 553-557, 239 S. W. 27, we ruled that the garments worn by the deceased at the time she was shot were admissible to show the location of the wounds. See.also Stepp v. State, 170 Ark. 1061, 282 S. W. 684; Hornsby v. State, 163 Ark. 396, 260 S. W. 41, and cases there cited.

The exhibition of the clothing* worn by the prosecuting witness on the night he is alleged to have been assaulted, by placing the same upon his body as it was at the time of the alleged assault, might have assisted the jury in more thoroughly understanding the nature and character of the assault, notwithstanding the assault was admitted by the appellant, and the nature of the wounds was explained by the physician who'attended the prosecuting* witness on the night he was assaulted.

3. The appellant assigns as error in his motion for a new trial the ruling of the court in refusing to allow the appellant to ask witness for the State, Mrs. Maude Clark, if McKahn had not made a statement that he would get even with the defendant, and if McKahn had not made threats against the defendant. The appellant does not show that the witness, if permitted to do so by the court, would have answered the above questions in the affirmative. The appellant therefore does not show any prejudicial error in this ruling of the court. See Dixon v. State, 162 Ark. 584-587, 258 S. W. 401.

4. The appellant prayed .the court to instruct the jury as follows: “The court instructs you that, if you find from the evidence that the prosecuting witness, Tucker, struck the defendant, and that the prosecuting witness at the time was attempting to do him injury, or, if it reasonably appeared to the defendant, viewed from his standpoint alone, by words or acts, that Tucker was making an unlawful attack upon him, then and in that event the defendant had a right to use whatever means was necessary to protect himself from serious bodily injury, and although it subsequently appeared that the defendant used more force than was actually necessary to protect himself from serious bodily injury.”

The court, on its own motion, gave the following instruction: “If you believe from the evidence that the defendant, without any fault or negligence on his part, was 'himself assaulted by the prosecuting witness, Tucker, with such violence so as to make it appear to the defendant at the time, while he was acting without fault or carelessness on his part in coming to such a conclusion, that Tucker manifestly intended and endeavored to kill him or to do him some great bodily harm, and that the danger was imminent and impending, then, and in that case, you are instructed that the defendant was not bound to retreat, but had the right to stand his ground under such circumstances and to repel force, and, if need be, to kill his adversary to save his own life or prevent his receiving great bodily injury.”

The instruction given by the court fully covered the subject-matter of appellant’s prayer for instruction. The court therefore did not err in refusing to grant appellant’s prayer. Furthermore, the appellant’s prayer was not an accurate statement of the law on his plea of self-defense, while the instruction given - correctly declared the law on that subject.

There is no error, and the judgment is therefore affirmed.


author: Smith, J.

text:
    Flannigan v. Beavers.
    Opinion delivered November 1, 1926.
    1. Appeal and error — conclusiveness of verdict. — Evidence held to sustain a finding that defendant had been in adverse possession of land in suit more than' seven years.
    2. Mortgages — defective execution — curative statute. — A mortgage which was not executed and acknowledged as required by § 5542, Crawford & Moses’ Dig., was cured by Acts 1923, p. 43.
    3. Adverse possession — sufficiency of possession. — Where the beneficiary in a trust deed bought property at an invalid trustee’s sale and conveyed same by warranty deed to defendant, who immediately entered into possession and occupied it openly, continuously and adversely for more than seven years before suit against him, held his possession was a bar to recovery.
    4. Adverse possession — extent.—Adverse possession of a part of a tract of land under color of title to the whole is sufficient to give title to the whole if maintained for the statutory period.
    Appeal from Columbia Circuit Court; L. S. Britt, Judge;
    affirmed.

      Joe Joiner and A. D Stevens, for appellant.

      McKay & Smith, for appellee.
   Smith, J.

Appellants are tbe heirs-at-law of Simon Flannigan, who died in 1899, and, at the time of his death, was in possession of a 120-acre tract of land in Columbia County, which he and his wife were- occupying as their homestead. Flannigan and his wife had executed a deed of trust on this land to one S. 0. Couch, but that instrument had not been acknowledged in a manner to conform to the act of March 18, 1887, entitled “An act to render more effectual the constitutional exemptions of homesteads,” which appears as § 5542, C. & M. Digest. This deed of trust contained a power of sale, and, pursuant to the authority" thereof, the trustee sold the land, and Couch became the purchaser. This trust deed was dated October 28, 1910, and in, 1913 appellee, Neely Beavers, purchased the land from Couch, and immediately entered into possession.

This suit was brought against Beavers to recover possession of the land. It was alleged in the complaint, and testimony was offered tending to show, that the indebtedness secured by the deed of trust was paid before the foreclosure sale. It was also alleged that the trustee’s sale was void because notice of the sale was not published as required by the deed of trust, and it was also insisted that the deed of trust was void because the land mortgaged was the homestead of Flannigan, and had not been acknowledged as required by §. 5542, C. & M. Digest.

A number of interesting questions are discussed in the briefs, which we find it unnecessary to decide, because the defendant Beavers defended his possession upon the ground that he had been in the open, actual, adverse and hostile possession of the land for a period of more than seven years, and this issue was submitted to the jury, and the finding in appellee’s favor is conclusive of this question of fact.

Appellants offered testimony tending to show that the indebtedness secured by the deed of trust had been paid, and also that, long’ after the alleged void foreclosure of the deed of trust, a grandson of Flannigan was left in possession of the land as the cotenant of the other heirs of Flannigan, and that he remained in the possession of a portion of the land until a few years before the institution of this suit — a period less than seven years before the suit was brought. On the other hand, the testimony on the part of Beavers was that this grandson of Flannigan occupied the land as the tenant of Beavers. This was of course a question of fact, which is concluded by the general finding of the jury.

The argument for the reversal of the judgment which was pronounced in Beavers’ favor is that the deed of trust was void because it had been paid, and because it was not executed and acknowledged as required by § 5542, 0. & M. Digest, which last argument is answered by reference to act 80, Acts 1923, page 43, which was an act to cure conveyances defective under § 5542, C. & M. Digest. An act of similar purport was upheld by this court in the case of Hanson v. Brown, 139 Ark. 60, 213 S. W. 12.

It is further argued for the reversal of the judgment of the court below that, even though the deed of trust had not been paid and was valid under the act of 1923, the foreclosure sale and the trustee’s deed were void because proper notice thereof was not given, and the case of Stallings v. Thomas, 55 Ark. 326, 18 S. W. 184, is cited in support of that contention. The insistence is that, if this foreclosure sale is void, then Couch became only a mortgagee in possession by his purchase at the trustee’s sale and his entry thereunder, and that Beavers, having purchased from Couch, acquired only, such rights as Couch had, which were nothing more nor less than that of a mortgagee in possession.

The deed from Conch to Beavers was a warranty deed, in usual form, and purported to convey the absolute title to the land, and it was at least color of title, and the testimony on behalf of Beavers was to the effect that he immediately entered into the possession of the land and occupied it openly, continuously and adversely for a period much longer than seven years before the institution of this suit, and, in our opinion, this possession was a bar to plaintiff’s right to recover the land.

It becomes unnecessary therefore to determine whether the indebtedness secured by the deed of trust had been paid, or to determine whether the deed of trust to Couch was void through failure to follow the directions of the power of sale incorporated in the deed of trust. There was a trustee’s sale, and a deed was executed pursuant thereto to Couch, who conveyed to Beavers, and these conveyances were color of title, and the jury has found that Beavers’ possession was at all times adverse and hostile and continued for- a period of more than seven years before the institution of this suit.

Adverse possession of a tract of land, under color of title to the whole, is sufficient to give title to the whole if maintained for the statutory period. Wheeler v. Foote, 80 Ark. 435, 97 S. W. 447.

We hold there ivas color of title, and the jury has found that more than seven years’ possession was had thereunder, and that the same was adverse and hostile, and, this being- true, the plaintiffs’ cause of action was barred, and the judgment of the court below is therefore correct, and is affirmed.


author: McCulloch, C. J. Hart, J.,

text:
    Home Life & Accident Company v. Schichtl.
    Opinion delivered November 8, 1926.
    1. Appeal and error — presumption in favor of decree. — Where the chancellor made no special finding- of facts, it will be presumed on appeal that he found in favor of the appellee upon all disputed questions, wherever essential to the support of the decree.
    2. Appeal and error — chancellor’s finding — preponderance of evidence. — The Supreme Court will accept the finding of the chancery court as conclusive unless against the preponderance of the evidence.
    3. Fraudulent conveyances — evidence.—In a suit by a mortgagee, holding a deficiency judgment after foreclosure, to set aside a conveyance by the mortgagor to his wife on the ground of fraud, a finding of the chancellor that the mortgaged land was of greater value than the debt secured was not against the preponderance of the evidence.
    4. Fraudulent conveyances — finding of chancellor — evidence.— In a suit by a mortgagee holding a deficiency judgment after foreclosure to set aside a conveyance by the mortgagor to his wife for fraud, a finding that the conveyance was made without actual intent to defraud and that the mortgagor was not then insolvent, held not against the preponderance of the evidence.
    5. Fraudulent conveyances — voluntary conveyance.. — A conveyance made without consideration is valid against creditors and purchasers if its execution is free from fraud, either actual or presumed.
    6. Fraudulent conveyances — voluntary conveyances — presumption. — As to subsequent creditors, there is no presumption of fraud in a voluntary conveyance by a debtor, but as to existing creditors there is a presumption in such case.
    7. Fraudulent conveyances — presumption as to secured creditor. —The presumption as to existing creditors which arises upon proof of a voluntary conveyance by a debtor does not arise in the case of a secured creditor, who will be held to have looked only to his security for collection of his debt.

      8. Fraudulent conveyances — presumption of fraud. — There is no conclusive presumption of fraud as to existing creditors where a debtor executed a voluntary conveyance, if he was not at the time insolvent.
    9. Fraudulent conveyances — presumption of fraud — rebuttal.— In a suit by a mortgagee holding a deficiency judgment after foreclosure to set aside a voluntary conveyance by the mortgagor to his wife, where the court found ,that there was neither insolvency nor intention to defraud, the presumption- of fraud, if any, was overcome by the proof.
    Appeal from Lee Chancery Court; A. L. Hutchins, Chancellor;
    affirmed.

      Daggett & Daggett, for appellant.

      Mann é McCulloch, for appellee.
   McCulloch, C. J.

In September, 1919, John N. Schichtl, one of the appellees, became the owner in fee simple of a tract of land in Lee County, Arkansas, containing 643 acres, known as the Sullivan place, the consideration- for the purchase being the sum of $40,000, of which $10,000 was paid in cash to J. K. Sullivan, the vendor, and annual installment notes were executed for the balance, with a mortgage on the land to secure the same. Sullivan subsequently assigned the notes to appellant. About the same time, Schichtl purchased an adjoining tract of land containing about 1,100 acres, known as the Highland place, the consideration for the purchase being $28,500, which was all paid in cash except $5,000, a note and mortgage on the land securing the same being executed, and this note also was assigned -to appellant. Neither of these debts was paid, and on June 22, 1922, appellant, being still the legal holder of said notes, instituted actions in the chancery court to recover judgment against Schichtl and to foreclose the lien on said tracts of land. The amount of the several debts for which the decree was rendered was $31,950, the indebtedness against the Sullivan Place, and $5,000, the indebtedness against the Highland place. This decree was rendered on September 27,1922, and a sale of said lands was ordered to pay the debt. The sale was made by the court’s commissioner on January 23,1923, and appellant became the purchaser of the Sullivan place for the consideration of $35,000, and of the Highland place for the sum of $5,000, the amount of the indebtedness against that place. .

It appears from the undisputed proof adduced in the present litigation that, during the time that Schichtl owned these lands and a year or two before the foreclosure of the mortgages, he collected from the St. Francis Levee District the sum of $20,000 as damages caused by the taking of a right-of-way along the Mississippi River for reconstructing the levee. Out of this fund thus collected, Schichtl spent $9,000 fn the erection of a gin on the Sullivan place, and he also erected three houses on the farm, the cost thereof not being disclosed in the evidence. Schichtl was also the owner of 630 acres of wild and unoccupied lands in Lee County, the value thereof not being shown in the record in the present case, and, during the pendency of the foreclosure proceedings and prior to-the rendition of the decree in the case, he conveyed those lands to his wife, Annie G-. Schichtl, one of the appellees, for the recited consideration of ten dollars and love and affection and funds which she had previously advanced to him.

Appellant commenced this action in the chancery court of Lee County on August 11, 1923, to set aside the said conveyance of John N. Schichtl to his wife and to subject the lands to the payment of the unpaid balance of appellant’s debt represented by the decree agninst John N. Schichtl. It was alleged in the complaint that the conveyance was executed bjr Schichtl to his wife without any valuable consideration and with fraudulent intent to cheat, hinder and delay appellant as his creditor. The answer contained denials of all the allegations of fraudulent intent in regard to the conveyance in question. The cause was heard upon oral testimony and upon an agreed statement as to some of the material facts in-the case, and the chancery court rendered a decree in favor of appellees, dismissing appellant’s complaint for want of equity.

There was a sharp conflict in the testimony upon some of the material facts, principally as to the market value of the Sullivan place and the Highland place at the time of the execution of the deed by Schichtl to his wife which is alleged to have been executed with fraudulent intent. The chancellor made no special findings of fact, but we must assume that he found in favor of appellees upon all disputed facts which are essential to the support of the court’s decree.

Tt is undisputed that the consideration for the purchase of these lands in September, 1919, aggregated the sum of $68,500;'that the lands were worth that sum at that time, aiid that Schichtl spent $9,000 in improving the lands -by building a gin thereon, making a total valuation of $77,500. There is proof of further improvement of the Sullivan place by building three houses, but we find no statement in the record of the cost of those houses. If the $20,000 received by Schichtl from the St. Francis Levee Board should be deducted from the total valuation stated above in arriving at the true valuation, it would leave an aggregate valuation on the two farms of $57,500. According to the testimony in the case, the appraisers for the levee boards fixed the value of the lands taken at $250 an acre, and no improvements on the farm were taken into the right-of-way. The aforementioned settlement with Schichtl was made upon that appraisement.

The amount of the indebtedness against the two tracts of land at the time of the conveyance now under investigation was about $37,000. The commissioner’s sale of the two farms left a deficiency decree of something over $16,000. There was, as before stated, a conflict in the testimony concerning the value of the Sullivan place and the Highland place at the time of the conveyance under consideration, but we must accept the finding of the chancery court as conclusive, unless it is against the preponderance of the evidence. The testimony adduced by the appellees concerning the value of the two farms at the time of the execution of this deed was from $50,000 to $60,000, and the testimony adduced by appellant tended to show that the value of the two tracts at that time was from $35,000 to $40,000. According to the preponderance of the evidence, the value of the lands at that time was considerably above the amount of Schichtl’s indebtedness to appellant. The finding of the chancellor that the value was as much as that shown by the testimony of witnesses adduced by appellees is not against the preponderance of the testimony, and we must therefore accept that finding as correct. In addition to that, it appears from undisputed evidence that, after 'appellant became the owner of the Highland place, it sold timber therefrom at the price of $2,000. It is undisputed that Schichtl had no other indebtedness of any character except that to appellant, as above stated. Schichtl testified, as his reason for making the conveyance to his wife, that she had been in very bad health for two or three years, and constantly needed money, and that he conveyed the lands to her so that she could be prepared to take care of herself, He testified that he had no idea of defrauding appellant, and supposed that it would realize a sufficient sum from the sale under the mortgages to collect its debt.

It is thus seen that we have a finding of the chancery court in accordance with the preponderance of the evidence to the effect .that the deed of conveyance under investigation was executed without any actual intention to defraud creditors, and that the grantor was not insolvent at the time of the execution of the deed. The question then presented is, whether or not there was constructive or legal fraud conclusively presumed from the execution of the deed without consideration other than the grantor’s affection for his wife, the grantee. It should be noted, in the beginning of the consideration of this question, that our statute (Crawford & Moses’ Digest, § 4874) renders invalid only those conveyances “made or contrived with the intent to hinder, delay or defraud creditors * * * or as against creditors and purchasers prior and subsequent.” A conveyance, even without consideration, is valid against creditors and purchasers if its execution is free from fraud, either actual or presumed. Nearly every phase of the subject of fraudulent conveyances has been dealt with in numerous decisions -of this court. The subject was treated at length by Mr. Justice Compton in delivering the opinion of the court in Bertrand v. Elder, 23 Ark. 494. Reference was there made to the opinion of Chancellor Kent in Reade v. Livingston, 3 Johns. Ch. Rep. 479, where it was directly decided that a voluntary conveyance of property is, as against existing creditors, conclusively presumed to be fraudulent, and that no circumstances will he permitted to repel the presumption. But that decision was directly rejected by this court in the following'language: “Though the decision in this case is not unsupported, the decided preponderance of authority, both in this country and in England, is against it, and establishes a rule less rigid, and, in our opinion, more consistent with the sound interpretation of the statute of frauds.” After a full discussion of the authorities, the court said:

“The principle, as we apprehend, to be extracted from the decisions in England and .America, is that the voluntary conveyance of a party to his wife or child, though he be indebted at the time, is prima facie only, and not conclusively, fraudulent, in respect to the claim of an existing creditor, and that the presumption thus raised may be met and repelled by proof on the other side. The question of fraud must depend on all the circumstances of the case, looking to the state and condition of the grantor, the extent of the property conveyed, and the direct tendency of the conveyance respecting the claims of creditors.”

Numerous decisions of the Supreme Court of the United States are cited in support of that statement of the law.

In the case of Driggs & Co.’s Bank v. Norwood, 50 Ark. 42, S. W. 323, 7 Am. St. 78, Mr. Justice Smith, speaking for the court, used the following language, which is in line with that used in the case cited above: “Every voluntary alienation of his property by an embarrassed debtor is presumptively fraudulent against existing creditors. Indebtedness raises a presumption of fraud, which becomes conclusive upon insolvency. But, as to subsequent creditors, a voluntary conveyance by a person in debt is not per se fraudulent. To make it so, proof of actual or intentional fraud is required.” AYe find in Judge Battle’s opinion in the case of Rudy v. Austin, 56 Ark. 73, 19 S. W. 111, 35 Am. St. 85, the following statement, ivhich is not only a most lucid exposition of the law on the subject, but has been often referred to in subsequent decisions:

“A debtor has the right to make reasonable provisions in property for his Avife or children, according to his state and condition in life. But, in doing so, he must retain in his possession property amply sufficient to pay all his debts. If he does so fairly and honestly, the child or AAdfe for AAdiom the provision Avas made is not bound to refund the advancement for the benefit of creditors, in the eA^ent the parent or husband should subsequently fail or become unable to pay the debts he owed when the provision Avas made. The law-requires every man to be just before he is generous. If he makes a voluntary conveyance AAdiile he is in debt, it presumes that it is fraudulent as to existing creditors, and the burden is on those claiming under the conveyance to repel the presumption. If he be iusoNent, unable to pay his debts, the presumption that it is fraudulent as to antecedent creditors is conclusive. ’ ’

The line as to the presumption of fraud is thus clearly draAvn betAveen attacks by prior existing creditors and subsequent creditors. The statute sibpra protects creditors of both classes, but there is a distinction as to presumption in the rules of evidence in the two classes of cases. As to subsequent creditors there is no presumption, and the burden of proof as to fraud rests upon the attacking creditor, Avhilst in the case of existing creditors there is a presumption of fraud arising from a voluntary conveyance by the insolvent debtor. Williams-Echols D. G. Co. v. Bloyd, 169 Ark. 529, 276 S. W. 1. The proof in this case and the finding of the court thereon is that Schichtl, the grantor, was not insolvent at the time he' made the conveyance to his wife, therefore there is no conclusive presumption of fraud under the rule stated by Judge Battle, even though appellant be placed in the same category with reference to presumptions as a prior existing creditor. There are authorities to the effect that a contingent liability, or one dependent upon a future contingency, is not to be treated as an existing debt within the meaning of the rule as to presumptive evidence. Severs v. Dodson, 53 N. J. Eq. 633, 34 Atl. 7. There are, however, authorities to the contrary. Thomson v. Crain, 73 Fed. 327; Sallaske v. Fletcher, 73 Wash. 593, 132 Pac. 648; Crocker v. Huntsinger, 113 Wis. 181, 88 N. W. 232. Some of those authorities, particularly the Washington case supra, do not relate to the statute on fraudulent conveyances, but merely to a statute which provides that a conveyance by one of the spouses to the other of community property ‘ ‘ shall not affect any existing equity in favor of creditors of the grantor,” and no reference is made to the question of fraud. We are not, however, dealing merely with the question whether the indebtedness is one which literally existed at the time of the conveyance alleged to have been executed with fraudulent intent, but the question is whether or not the indebtedness is held under circumstances which would call into operation a presumption of fraud. We have a case now of mortgage indebtedness, and the real question, so far as the case relates to presumption, is whether or not such conclusive presumption should be indulged in favor of the holder of the secured debt. The reason for indulging presumptions does not apply, we think, under those circumstances, and the authorities support the view that there is no presumption under those circumstances. May on Fraudulent Conveyances, p. 163; Bigelow on Fraudulent Conveyances, p. 188; Welch v. Mann, 193 Mo. 304, 92 S. W. 98; Cromby v. Young, 26 Ont. 194. The reason for this distinction in putting secured creditors in the same category as subsequent creditors is that, whatever presumption is to be indulged, the creditor, in selecting his security, has, unlike a general creditor, disregarded other property of the debtor and looked only to his security for the collection of his debt, hence he is entitled to no presumption of fraud in the conveyance of other property. Such a creditor is one who has already been given a preference over others, and is not in-the attitude of an existing general creditor, hence his reliance is deemed to have been founded on his security rather than on the solvency of the debtor. It seems to us that this is a sound distinction, but, at any rate, the trial court has necessarily found in this case that there was no insolvency on the part of the debtor, and no intention to defraud; therefore, even if there was a rebuttable presumption, it has been overcome by the proof. This view of the law is not in conflict with our decision in First National Bank v. Herring, 159 Ark. 317, 252 S. W. 37, which was a case of undisputed insolvency. Nor is it in conflict with the decision of this court in Wilks v. Vaughan, 73 Ark. 174, 83 S. W. 913, and James v. Mallory, 76 Ark. 509, 85 S. W. 472. In both of those cases the court dealt with the question of actual insolvency of the debtors, who were indebted ,to numerous general creditors, and in each instance such conditions were found by the court to exist. The term “embarrassed debtors,’’usedin Wilks v. Vaughan, supra, was evidently meant in the sense of insolvency in fact, which the court found was the condition of the debtor at the time the conveyance under investigation was executed. In James v. Mallory, supra, the court treated a mortgage creditor as an existing creditor, but, in doing so, it was in response to the argument that the renewal of a prior debt constituted a subsequent debt. The question now under consideration in regard to the status of a mortgage debt was not presented to us in the argument. In that ease, as in Wilks v. Vaughn, supra, there were numerous general creditors, and the debtor was insolvent at the time the conveyance was executed, and the court found that there was constructive fraud based on actual insolvency. In the present case there was neither insolvency nor actual fraudulent intention.

The finding of the chancery court is, as we have already said, not against the preponderance of the testimpny, and therefore should be affirmed. It is so ordered.

Hart, J.,

(dissenting). Judge Smith and I dissent in this case because we believe that, when the evidence is viewed in the light most favorable to appellee, we have the case of an insolvent debtor, or one whose embarrassment resulted in insolvenc3r, making' a- voluntar3r conveyance of a"part of his lands to his wife, which prevented appellant from collecting its debt.

Under our former decisions, such disposition is conclusively fraudulent as against existing creditors; and a mortgagee whose debt is due at the time of the voluntary conve3rance is an existing creditor. In Wilks v. Vaughan, 73 Ark. 175, Chief Justice Hill, speaking for the court, said:

“It is thoroughly settled in equity jurisprudence that conveyances made to members of the household and near relatives of an embarrassed debtor are looked upon with suspicion and scrutinized with care; and, when they are voluntary, they are prima facie fraudulent, and, when the embarrassment of the debtor proceeds to financial wreck, the3r are presumed conclusively to be fraudulent as to existing creditors.”

This holding has been quoted with approval in our later decisions. McConnell v. Hopkins, 86 Ark. 225, 110 S. W. 1039; Brady v. Irby, 101 Ark. 573, 142 S. W. 1124; Simon v. Reynolds-Davis Gro. Co., 108 Ark. 164, 156 S. W. 1015; Burke v. New England National Bank, 132 Ark. 268, 200 S. W. 1018; Davis v. Cramer, 133 Ark. 224, 202 S. W. 239; Farmers’ State Bank v. Foshee, 170 Ark. 445, 280 S. W. 380; and Papan v. Nahay, 106 Ark. 230, 152 S. W. 107.

These cases are cited in 27 C. J. 643 in support of the text, which is as follows:

“In other jurisdictions, if the conveyance is voluntary, it is only prima facie fraudulent; but, where the debtor is insolvent at the time of the transfer, or his embarrassment results in insolvency, such conveyances are conclusively presumed to be fraudulent as against existing creditors, although there is no actual fraudulent intent.”

As above stated, the undisputed facts bring .this case within the rule. In June, 1922, appellant brought suit against John H. Schichtl to foreclose a mortgage given to secure an indebtedness which was due and unpaid. On the 20th day of September, 1922, John H. Schichtl made the voluntary conveyance in question- to his wife. Appellant, who was the plaintiff in the foreclosure suit, proved its mortgage' debt; and, no proof having been adduced therein by appellees, who were the defendants in the suit, judgment was rendered against them for the amount of the mortgage debt, and a foreclosure decree was entered of record on September 27, 1922. The lands were sold under the foreclosure decree on January 23, 1923, and appellant became the purchaser, as stated in the majority opinion. This left a deficiency decree of over $16,000. Schichtl had no property out of which to satisfy the deficiency judgment except the property he conveyed to his wife just seven days before the decree in the foreclosure suit.

Our later decisions support the above interpretation. In Brady v. Irby, 101 Ark. 573, 142 S. W. 1124, Mr. Justice Frauenthal delivered the opinion of the court, and said: “But it is also well settled that a voluntary transfer of property by one in debt is presumptively fraudulent as to creditors then existing; and if the debtor is, at the time of such gift, insolvent, or if the gift is of such amount, or made under such circumstances, that it will hinder or delay or defraud existing creditors of such donor, then such voluntary conveyance or transfer becomes conclusively fraudulent and invalid as to such existing creditors.”

At the conclusion of the discussion it was said: “From this it results that we have here a case where a husband, engaged in business and involved in debt resulting in insolvency, made a voluntary transfer of property to his wife. Under the law, it follows that, as against existing creditors, snch transfer was fraudulent, no matter how pure the motive which induced it, because, from the testimony, the result of such transfer was to reduce the assets of the husband to such an extent as to delay and hinder his creditors in the collection of their debt. May v. State Nat. Bank, supra.”

In Simon v. Reynolds-Davis Grocery Co., 108 Ark. 164, the court said: “While the burden of proof is upon the plaintiff who alleges fraud to show it, yet that burden has been discharged where, as in this case, he shows that an embarrassed debtor, pending a suit against him by his creditors, has made conveyance of all the land he owned, except his homestead, to his sons, for a consideration which, upon the face of the conveyance, appears to be a grossly inadequate one. Such circumstances are sufficient to raise a suspicion of fraud and to cast a doubt upon the legality of the transaction, and the burden is then on the one holding under the deed to show a consideration. (Leonard v. Flood, supra).”

In Farmers’ State Bank v. Foshee, 170 Ark. 451, 280 S. W. 382, the court said: “It impresses us that the purpose of all these conveyances of the property of W. F. Foshee was to place the property beyond the reach of his creditors. The result of all the conveyances was that the property, which was the property of W. F. Foshee when the debts were contracted, became, through the various deeds, the property of Mrs. Foshee, the wife and mother. The law is well established in this State, and by the authorities generally, that ‘where an embarrassed debtor makes conveyances to members of his own family — his near relatives — such conveyances are looked upon with suspicion and scrutinized with care; when voluntary, they are prima facie fraudulent; and, when the embarrassment of the debtor proceeds to financial wreck, they are presumed conclusively to be fraudulent as to existing’ creditors.’ Wilkes v. Vaughan, 73 Ark. 174-179; Harris v. Smith, 133 Ark. 250-260; Davis v. Cramer, 133 Ark. 224.”

If, as stated in the majority opinion, the language referred to in Wilks v. Vaughn, supra, refers to insolvency at the time the voluntary conveyance is made, the result would be the same. The words “when the embarrassment of the debtor proceeds to financial wreck” would certainly be a definition of insolvency, or they would mean nothing and had better never have been used.

.As we have already seen, the conveyance was.made just seven days before the foreclosure decree, and no attempt was made to disprove the amount of the mortgage. This shows that Schichtl knew that he owed the amount of the debt secured by the mortgage, and that a decree of foreclosure would be entered when the case was reached on the call of the calendar. There i's no claim that there was any fraud in the foreclosure sale. It was made in due course, and the voluntary conveyance to his wife left Schichtl without any property to satisfy the deficiency decree. Thus it will be seen that the embarrassment of Schichtl proceeded to financial wreck within four months after the voluntary conveyance was made, and no new cause contributed to this result. These facts are undisputed; and it does not make any difference what caused the depreciation in the value of lands between the date of the execution of the mortgage' and the date of the foreclosure sale, for it was a depreciation common to all lands, and existed at the time the voluntary conveyance was made. No matter how pure his motives were, Schichtl made the voluntary conveyance to his wife at a time when he was being sued for a debt past due, which he was unable to pay, and the embarrassment resulted in his financial wreck within four months.

That appellant was an existing creditor is settled by James v. Mallory, 76 Ark. 509, 89 S. W. 472. In that case tlié court said: “If he (James) was insolvent at the time, and voluntarily conveyed away his property without consideration, the conveyance is void as against creditors, even though he used no actual' intent to defraud. ’?

The court then said that the conveyance of J ames to Mallory & Company, although absolute in form, was not, under the facts, in extinguishment of the debt, but as security therefor. Hence it was said that Mallory & Company must be treated as creditors whose debts existed at the time of the fraudulent conveyance.

In 27 C. J., 472, it is said that existing creditors are, as the words imply, persons having1 subsisting obligations .against the debtor at the time the fraudulent alienation was made.

In accordance with this rule is the case of Papan v. Nahay, 106 Ark. 230, 152 S. W. 107. There a voluntary conveyance was made by a person against whom a suit for unliquidated damages was pending. No defense was made to the action, and it resulted in a judgment against the defendant. The plaintiff was held to he an existing creditor.

Indeed, in the absence of authorities, it would seem to be rather a strange and novel doctrine to hold that the holder of a note and mortgage, which are past due, and whose satisfaction is being sought by a pending suit, is not an existing creditor.


author: Hart/ J.

text:
    Sloan v. State.
    Opinion delivered November 8, 1926.
    1. -Seduction — corroboration of prosecutrix. — One cannot be convicted of seduction on the testimony of a prosecuting witness unless she is corroborated both as to the promise of marriage and the fact of sexual intercourse.
    2. Seduction — sufficiency of corroboration. — Corroboration of the prosecutrix in a seduction case is sufficient if it tends to support her testimony and satisfies the jury that she is worthy of credit.
    3. Seduction — sufficiency of corroboration. — Evidence held sufficient to corroborate the prosecutrix in a seduction case.
    4. Seduction — presumption of chastity. — In a prosecution for seduction, the prosecutrix is presumed to be chaste, and the burden is on the defendant to show the contrary.

      5. Criminal law- — misleading instruction. — Specific objection should be made to an instruction thought to be misleading.
    6. Seduction — evidence of preparation for wedding. — In a prosecution for seduction it” is not error to permit the prosecutrix to testify as to her preparations for the wedding.
    7. Seduction — -evidence’ of preparation for wedding. — In a prosecution for seduction, testimony of a witness that she made a dress for the prosecutrix, without permitting witness to state what prosecutrix told her the dress was for, held proper.
    8. Criminal law — verdict—assessment of punishment. — Where the court instructed the jury in a seduction case that the punishment for seduction was not less than one nor more than five years and a fine of not exceeding' $5,000, as provided by Crawford & Moses’ Dig., § 2414, and the jury brought in a verdict imposing a fine of $500, it w-as not error to refuse to receive the verdict and to direct the jury to retire and fix the penalty.
    Appeal from Crawford Circuit Court; James Cochran, Judge;
    affirmed.

      W.H. Neal and C. M. Wofford, for appellant.

      H. W. Applegate, Attorney General, and John L. Carter, Assistant, for appellee. .
   Hart/ J.

Reves Sloan prosecutes tliis appeal to reverse a judgment against him for seduction.

Under our statute, the defendant in a seduction case shall not he convicted upon the testimony of the prosecuting witness unless corroborated by other evidence as to the promise of marriage and the fact of sexual intercourse. Lasater v. State, 77 Ark. 468, 94 S. W. 59; Bethel v. State, 162 Ark. 76, 257 S. W. 740; Jones v. State, 166 Ark. 324, 266 S. W. 262; and Babers v. State, 168 Ark. 1055, 272 S. W. 659.

The prosecutrix testified to the promise of marriage and seduction. It is earnestly insisted, however,' that her testimony is not sufficiently corroborated. Under the authorities cited above, the corroboration is sufficient if it consists of such facts'or circumstances as tend to support the testimony of the prosecuting witness and shall satisfy the jury that she was worthy of credit.

In the ease at bar, the prosecuting witness testified that she yielded to the defendant because she loved him, and he promised to marry her. As a result of their illicit intercourse, a child was born to her on November 5, 1925, when she was about sixteen years of age.. The last intercourse that she had with' the defendant was on the 5th day of February, 1925, and all this occurred in Crawford County, Arkansas.

According to the testimony of Joe Webb, the defendant and the prosecuting witness kept company from 1923 to early in 1925. About the first of February, 1925, the defendant told the witness that the father of the prosecutrix was raising a little hell, and that he was going to get the chance to raise a little more pretty soon. Soon after this the defendant quit going with the prosecuting witness.

Another witness testified that the defendant admitted, on the witness stand in a camal abuse case, that he had had illicit intercourse with the prosecuting witness. It was shown that, for two years, the ‘defendant and the prosecuting witness constantly kept company together, and that the .other boys quit going with the prosecuting witness.

The prosecuting witness testified that she had her wedding dress made about a certain date, and another witness testified that she knew the dress had been made for the prosecuting witness. When all these facts are considered in connection with the testimony of the prosecutrix, we think the evidence was legally sufficient to support a judgment of conviction.

The next assignment of error is that the court erred in giving instruction No. 3, which tells the jury that it is necessary to prove that a woman has illicit intercourse with a man other than the defendant in order to prove that shé is unchaste. We do not think so. The instruction only means to tell the jury that the statute considers that women are chaste, -and imposes on the defendant in a seduction case the burden of showing to the contrary. This is in accordance with the law laid down in Wilhite v. State, 84 Ark. 67, 104 S. W. 531. We do not deem it necessary to copy the instruction in the opinion. In addition to what wo have said, it may be stated that, if the defendant thought the instruction was calculated to mislead the jury, he should have made a specific objection to it. When the instructions are considered as a whole, it clearly intended to instruct the jury in accordance with the principles of law laid down in the cases cited above.

The next assignment of error is that the court erred in permitting a witness for the State to testify that she made a dress for the prosecuting witness and that the prosecuting witness told her for. what purpose the dress was being made. An examination of the record shows that the prosecutrix testified that this witness had made a wedding dress for her. The witness was not allowed to state what the prosecutrix had told her, but was only allowed to testify that she had made a dress for the prosecutrix. In a prosecution for seduction, it is not erroneous to permit the prosecutrix to testify as to her preparations for the wedding. Jones v. State, 166 Ark. 324, 266 S. W. 262. As we have just seen, the witness was only permitted to testify that she made the dress, and was not permitted to state what the prosecutrix told her the dress was made for. Hence this assignment of error is not well taken.

The last assignment of error relates to the circuit court’s action in refusing- to receive a verdict which assessed a fine of $500 against the defendant. Our statute provides that any person convicted of seduction shall be imprisoned in the penitentiary not less than one year nor more than ten years, and fined in any amount not exceeding $5,000. Crawford & Moses’ Digest, § 2414.

When the jury brought in the verdict imposing a fine and leaving off imprisonment in the State Penitentiary, the court told the jury that this verdict could not be accepted, except by agreement on both sides, and instructed the jury to return to their jury room with the following statement: “Gentlemen, you will have to go back to your jury room and fix this penalty.”

The court had already told the jury, in its original instructions, what punishment was imposed by the statute f-ór the crime. When the court refused to receive the verdict finding the defendant guilty and fixing his punishment at a fine only, and told the jury to go back and fix the penalty, it evidently had in mind the punishment fixed by statute, and did not in any wise attempt to direct the jury to return a verdict of guilty, nor did it in any wise express an opinion upon the weight of the evidence. The court simply meant to tell the jury that, if it found the defendant guilty, it had no discretion in the matter of fixing punishment except within the limits of the statute. If counsel for the-defendant thought otherwise, he should have made a specific objection to the ruling of the court, and no doubt the court would have made the matter as plain to the jury as the defendant had requested.

We find no reversible error in the record, and the judgment will therefore be affirmed.