text:
    Poe v. Walker.
    Opinion delivered April 20, 1931.

      Charles B. Thweatt and Tom Poe, for appellant. Carmichael <& Hendricks, for appellee.
   Smith, J.

Suits were brought by the American Southern Trust Company, hereinafter referred to as the bank, against Sam T. and Tom Poe to recover on notes executed by them to the bank’s order, and to foreclose deeds of trust securing the notes, which were consolidated and heard together. The execution of the notes was admitted, and the defendants alleged their willingness to pay the balance due on them after proper credits were allowed, and the extent and value of these credits was the controlling question in the trial of the case in the court below.

The defendants practiced law as partners, and had been previously employed by the bank as attorneys. Sam T. Poe, the senior member of the law firm, was also employed by the bank in connection with loans made by the bank to certain farmers engaged in the culture of rice. This latter employment was by the day, and Sam Poe was paid $25 per day when so employed. So much of Sam Poe’s time was required in connection with the loans to the rice farmers that a new contract was made between him and the bank, which was evidenced by the following letter:

“Little Rock, Arkansas, February 17, 1925.
“Dear Mr. Poe:
“Mr. Hicks informs me that he has made a deal with you on a basis of $7,200 per year starting with the first of January, and as we have already paid you $650 we have today credited your account with $250, bringing your salary up the close of business the 14th, and each pay day hereafter your account will be credited with $300,” signed by the cashier of the bank.

The parties operated under the contract evidenced by this letter during the remainder of the year 3925, and, without any additional contract, continued their relations until June 34, 3.926, at which time it was terminated, and the principal question in the case is the one of fact whether the contract was then rescinded and terminated by the mutual consent of the parties or by the act of the bank in wrongfully discharging Poe.

In addition to his salary, Poe was allowed an expense account, and a disagreement arose between Hicks, a vice president of. the bank, and Poe concerning the account. Hicks contended that improper and excessive expense charges were being made, although no attempt was made at the trial from which this appeal comes to sustain that contention. On the contrary, it was disclaimed that excessive items of expense had been charged. But it is certain there was such a controversy, and we think it also certain that, during the discussion of that controversy on June 14, 3926, Poe became angered and said that if his services were not satisfactory he would resign, and Hicks said the services had ceased to be satisfactory, and the offered resignation was accepted. It is equally as certain that after reflection Poe repented his haste and anger, for on the next day he wrote a letter in which he proposed to resume his relation as an employee, but this offer was not accepted.

By way of a set-off against the demands of the bank, it was alleged that Sam Poe was entitled to a credit to the extent of the balance of the 1926 salary, inasmuch as Poe had been unable to obtain other similar employment during the remainder of that year. It was also alleged that the law firm of which Sam and Tom Poe were members had been employed by the bank to make certain collections, and that this employment was apart from and had no relation to the annual employment of Sam Poe, and credit for these professional services was prayed.

The court below allowed the claim for salary for only the month of June, but allowed the attorney’s fees substantially as claimed. This finding of fact appears to have been made on February 17, 1930, but no notation thereof in writing was made upon any court record until May 9, 1930, at which time a decree was entered conforming to this finding, in which the court adjudged the balance due the bank after all proper credits had been allowed, and a foreclosure of the deeds of trust securing this balance was decreed, and from this decree the Poes have appealed, and the bank has prayed a cross-appeal. The transcript on the appeal was filed in this court on November 8, 1930.

It is also made to appear that subsequent to the rendition of the decree here appealed from the commissioner of the court who had been appointed for that purpose sold the property, under the authority of the decree of foreclosure, on September 5, 1930, and at this sale McDonald Poe, a member of the Poe law firm but not a party to the suit, bid the total amount of the debt, interest and costs, and became the purchaser of the property at said sale. The decree required the purchaser to execute bond, but the purchaser at the sale and his security declined to execute the bond until the bank had credited upon the decree an item of $1,250.

It is first insisted by the bank for the dismissal of the appeal that it was not taken in time, and, second, that an appeal from the decree could not be prosecuted for the reason that benefits under it had been accepted.

We do not think the appeal should be dismissed for either of the reasons assigned for that action. While it does appear that the cause was submitted to and heard by the court on February 17, 1930, at which time the court’s finding on the facts was indicated, yet it also appears that no memorandum was made in the order book or judge’s docket or on any other record of the Pulaski Chancery Court showing a final disposition of the case and the relief granted until May 9, 1930, when the decree to be entered was approved by the presiding judge and entered of record.

It is required by § 2140, Crawford & Moses ’ Digest, that appeals and writs of error shall be prosecuted within six months next after the rendition of the judgment, order or decree sought to be reviewed, and this statute was construed in the ease of Chatfield v. Jarrett, 108 Ark. 523, 158 S. W. 146, to mean that the time for appeal begins to run from the date of the rendition or pronouncement of the judgment, order or decree, and not from the entry thereof upon the records of the. court. But by § 6276, Crawford & Moses’ Digest, it is provided that “the judgment must be entered on the order book, and specify clearly the relief granted or other determination of the action.” In the recent case of McConnell v. Bourland, 175 Ark. 253, 299 S. W. 44, we said that: “There are authorities to the contrary, but we hold that, when a decision has been reached, announced by the court and sufficient memorandum on the chancery docket to show a final settlement of the case, it is a final judgment although it has not been spread in full upon the record.” Here the first written memorandum prepared or authorized by the presiding judge was written May 9, 1930, and, as the appeal was perfected within six months of that date, we hold that it was taken within the time required by § 2140, Crawford & Moses’ Digest.

We are also of the opinion that the appellants are not barred from prosecuting this appeal for the reason that they have accepted benefits under the decree appealed from. This insistence is based upon two circumstances. The first is that, subsequent to the rendition of the decree appealed from, the bank paid the Poes $1,250, which was indorsed as a credit upon the judgment. But it also appears that this item of $1,250 was for a fee which had become due after the rendition of the decree and which was not involved in the litigation. If this fee had not been credited upon the judgment, it would have been paid in cash by the bank to the Poes, and this without regard to the decision of the questions involved in this appeal. The appellants do not by this appeal question the correctness of the sum adjudged to be due b}?- them to the bank. This the}'- must pay in any event. They only insist that the court did not allow them sufficient credits, and, as the $1,250 fee became due after the rendition of the judgment here appealed from, it is not inconsistent for an appeal to be prosecuted from the judgment, although the $1,250 credit has been indorsed upon it.

The second insistence is that, having* purchased the property decreed to be sold at a price equal to the total amount of the debt, interest and all costs, there can be no appeal. It is not seriously questioned that McDonald Poe bid in the property at the foreclosure sale for the benefit of Sam T. Poe, and it is also conceded that the bid, which was secured bj7- a bond given by McDonald Poe, equals the entire debt and interest, together with all the costs, but this does not bar the Poes from prosecuting the appeal. They were unable to give the supersedeas bond required by the statute, and adopted this method of protecting their equity in the property ordered to be sold. This they had the right to do without waiving the right to appeal from the decree under the authority of which the property had been sold.

At § 47, chapter Appeal and Error, 2 R. C. L., page 65, it is said: “As a general rule, however, one against whom a judgment or decree for a sum of money has been rendered does not, by voluntarily paying* or satistying it, waive or lose his right to review it upon a writ of error or'appeal unless such payment or satisfaction was by way of compromise or with an agreement not to pursue an appeal or writ of error. This rule has been placed upon the ground that one against whom a judgment is entered, if he fails to satisfy it, must expect to see his property seized and sold at a sacrifice, and it is difficult to conceive liow his payment of the judgment can give rise to any estoppel against seeking to avoid it for error. The better view accordingly is that, though the execution has not issued, the payment of a judgment must be regarded as compulsory, and therefore as not releasing errors, nor depriving the payor of the right to appeal.”

We conclude, therefore, that the case is before us properly for a decision upon its merits.

We think that the appellant Sam Poe is correct in his contention that his employment was by the year. The letter to him from the cashier of the bank under date February 17, 1925, set out above, expressly states that Poe had been employed for the year 1925, at an annual salary of $7,200, payable in semi-monthly installments, and,'without additional understanding or agreement, the parties continued to operate under this contract until in June, 1926, up to which time the semimonthly payments were regularly made as they had been during the year 1925.

In the instant case, as in the case of Moline Lumber Co. v. Harrison, 128 Ark. 260, 194 S. W. 25, 11 A. L. R. 466, there was no proof of custom or usage with reference to the period of employment for this character of service, and we must therefore construe this letter to determine whether it constituted a contract for a period of service for a year, or was merely an employment at will. We reviewed the authorities, to which we must look for aid in the construction of this letter, in the Moline Lumber Co. case, supra, and the division in the authorities was there stated, but we concluded that * * the weight of authority is declared to be in favor of the rule that a hiring at so much a year, month or week is, in the absence of any other consideration impairing the force of the circumstances, sufficient to sustain a finding that the hiring was for that period.”

We conclude, therefore, that Poe was employed by the year, and not at will, and, as he was permitted to enter upon a second year without additional contract, the presumption is that he did so under a renewal or extension of the original contract. Our Moline Lumber Company case is annotated in 11 A. L. R. 466, the annotator’s note extending from page 469 to page 486.

But, while Poe’s contractual rights are referable to the letter quoted, there is no reason why that contract may not have been rescinded, and we have concluded that it was rescinded. This was no doubt done in anger, but it was nevertheless done. A disagreement had arisen between Poe and Hicks, as the representative of the bank. Hicks thought that Poe’s expense account was excessive, and, while he may have been mistaken as to the grounds upon which he had reached this conclusion, he had become dissatisfied with Poe’s services, and he so advised Poe, who stated that if his services were not satisfactory he would quit, and this statement of Poe was evidently considered a resignation and treated as such. There can be no question about the sufficiency of the consideration to support the rescission. Poe’s agreement to represent the bank in the matter of the farm loans was a sufficient consideration to support the contract on the part of the bank to pay him $7,200 a year for that service, and the release of Poe from this obligation was a sufficient consideration to support the rescission of the contract. It is, no doubt, true that in the discussion of their differences both Poe and Hicks had become somewhat irritated at each other, but this is no reason for setting aside a valid contract, executed by competent parties, upon a sufficient consideration, nor does the fact that Poe, upon further reflection, decided to withdraw his resignation, affect the case. The resignation had been tendered and accepted, and the contract was therefore at an end.

Upon the question of the attorney’s fees, which is raised by the cross-appeal, it may be said that the undisputed testimony shows that the services were actually rendered, and the compensation was fixed upon a quantum meruit basis, there being* no express contract as to the amount of the compensation, and we are unable to say that the finding* of the chancellor is contrary to the preponderance of the evidence.

One of the cases in which the Poes claimed and were allowed a fee is referred to as the Murray O. Smith case. In this case a fee of $250 was claimed for the recovery of certain real estate. When the bank failed to pay the fee charged in this case, the Poes sued and recovered judgment for the amount thereof, and caused the land which they had recovered to be sold under an execution, and they became the purchasers at the execution sale. But the Poes assert that they were only attempting to collect the fee, and that they have no intention of trying to acquire the title to the land against the bank if their fee is allowed. The court below treated the title as being in the bank and allowed the fee, thus, in effect, treating the judgment of the circuit court and the sale thereunder as a nullity. This action appears to accord with the equities of the case.

Upon the whole case, we are unable to say that any of the findings of fact upon which the decree was based are contrary to the preponderance of the evidence, and the decree must therefore be affirmed, and it is so ordered.

Hart, C. J., and Humphreys, J., dissent.


source: Caselaw Access Project

author: Humphreys, J.

license: Public Domain

text:
    Washington v. State.
    Opinion delivered April 20, 1931.

      Hal L. Norwood, Attorney General, and Pat Mehajfy, Assistant, for appellee.
   Humphreys, J.

Appellant was indicted, tried, and convicted in the circuit court of Hempstead County for unlawfully selling* or being- interested in the sale of intoxicating liquor, and, as a punishment therefor, was adjudged to serve a term of one year in the State Penitentiary, from which judgment an appeal has been duly prosecuted to this court.

No abstract or brief has been filed on behalf of appellant, but, the conviction being for a felony, it is incumbent upon this court to explore the record to ascertain whether any reversible error was committed in the trial of the cause.

A careful examination of the record reflects that the issue of whether appellant was interested in the sale of a pint of whiskey to Porter McClary on or about the 8th day of April, 1930, was submitted to the jury for decision under correct instructions. The jury was specifically and clearly instructed to acquit appellant if he represented Porter McClary in the purchase of the whiskey and should only convict him in case he was the agent of or assisting the seller in the sale thereof. This was a correct declaration of the law as announced in the case of Ellis v. State, 133 Ark. 540, 202 S. W. 702, and the cases cited therein.

We also find from an examination of the record that the sufficiency of the evidence to support the verdict and judgment was raised in the motion for a new trial, which motion was overruled b}1- the court.

The evidence introduced by the State was of a substantial nature and ample to sustain the verdict ■ and consequent judgment of conviction. Porter McClary testified for the State, in substance, that he went to the store of appellant on or about the eighth day of April, 1930, to buy some whiskey; that he told appellant he wanted to buy some whiskey and was directed b3r him to go down the road and overtake George Linton and bring him back to the store; that he did so, and upon Linton’s return, appellant conversed with him; that Linton then went across the road into the woods and, after he had done so, witness paid appellant $1.25 for the whiskey; that witness returned to his car and found a pint of whiskey in a fruit jar.

It is true that appellant denied selling or being interested in the sale of the whiskey to McClary, but this denial did not necessarily work his acquittal. It simply presented a disputed question of fact for determination of the jury under the decisions cited above. The testimony of McClary was of a substantial nature and sufficient, if believed, to sustain the conviction of appellant.

No error appearing, the judgment is affirmed.


author: Kirby, J.,

text:
    Chevrolet Motor Company v. Landers Chevrolet Company.
    Opinion delivered April 20, 1931.

      Barber $ Henry and Troy W. Leiois, for appellant.
   Kirby, J.,

(after stating the facts). The statute authorizes the circuit court to issue writs of certiorari (§ 3237, Crawford & Moses’ Digest); but in Baskins v. Wylds, 39 Ark. 347, this court said:

“The writ of certiorari cannot be used by the circuit courts, in the exercise of their appellate powers and superintending control over inferior courts, for the mere correction of errors, as a substitute for appeal, but when it appears upon the face of the record of the inferior court that it has no jurisdiction of the subject-matter, or of the person, its judgment may be quashed, on certiorari, by the circuit court.” See also Miller v. McCullough, 21 Ark. 426; Burgett v. Apperson, 52 Ark. 213, 12 S. W. 559; Knight v. Creswell, 82 Ark. 330, 101 S. W. 754, 118 Am. St. Rep. 74; Beal-Doyle D. G. Co. v. Odd Fellows, 109 Ark. 77, 158 S. W. 955.

Our statutes-provide how service of summons may be had upon corporations created by the laws of this State, and where such actions may be brought. Sections 1147, 1152 and 1171, Crawford & Moses ’ Digest.

The record herein shows appellant is a corporation created by the laws of this State, having its principal office or place of business in Little Rock, Pulaski County, Arkansas, in which its chief officers also reside; and that it does not keep or maintain in Fulton County, where this suit ivas brought, “a branch office or any other place of business,” and had no such office or place of business in that county at the time service was attempted to be made.'

Appellant appeared specially for the purpose and moved to quash the service of summons, but the court overruled its motion and rendered judgment by default against it. These facts are all alleged in the petition for certiorari, to which a general demurrer was filed and also an answer admitting appellant was a domestic corporation with its principal place of business in Little Rock, Pulaski County, Arkansas.

The court in passing upon the petition appeared to think that, if the court had jurisdiction of the subject-matter, then the only question for determination was the sufficiency of the summons, expressing the view that if the summons was insufficient even, appellant’s remedy would be by appeal and not certiorari, and denied the petition and affirmed the judgment.

This holding was erroneous, since appellant had the right to resort to the remedy of certiorari provided by the statute in such cases for the relief of void judgments, and was not compelled to appeal from such judgment, since under our holdings such appeal, without regard to the result of the determination, would enter its appearance to the suit. Since the record shows the justice acquired no jurisdiction to hear and determine the cause on the service of summons, it should have-quashed the service and dismissed the suit upon appellant’s motion duly made.

The judgment rendered without service upon appellant company was void, and the circuit court erred in not so holding* upon appellant’s petition for certiorari and quashing* such judgment. The judgment is accordingly reversed, and the cause remanded with directions to the circuit court to quash the judgment of the justice court against appellant company, being* void for want of proper service. It is so ordered.


author: Mehaffy, J.

text:
    Parham v. Parker.
    Opinion delivered April 20, 1931.

      Memberger <S Memberger, for appellant.

      Elmo Carl-Lee, for appellee.
   Mehaffy, J.

The appellant, Parham Construction Company, was engaged in the construction of a bridge on which appellee was working. The construction company is owned by J. E. Parham, an individual, and is not a corporation. The work was about one or one and one-half miles from Augusta, Arkansas, and the appellant agreed to convey employees, including appellee, to and from Augusta to the place of work. The regular driver of the truck which carried the employees from Augusta to their work and back had been disabled for two or three days, and another employee was driving’ the truck.

It is alleged that the truck was overloaded and stuck in the road, and that appellee and other employees were compelled to unload and extricate the bus by hand, and that the bus ran over plaintiff’s right foot and struck his knee, injuring him. There is no controversy about the extent of the injury or the amount of the verdict. Therefore it is unnecessary to set out the evidence as to the extent of the injury.

Carl O'. Richardson testified that he was employed as labor foreman and rigger for appellant, and had been for the last six years. He drove the truck from the job to Augusta at the request of some workmen. On the way the truck stalled and some of the men got out, among them Parker. The driver had not been driving more than a day or two and was doing this because the driver ■was sick. Saw three men put appellee in the truck and brought him on to town and took him home. Saw Parker back at -work on December 30. The injury occurred on November 18. The truck was a P/t-ton Ford; it had stalled two or three times before that; it stalled every time they passed this particular place. Parker liad been riding the truck two days, and it was for the convenience of the 'workmen. There was no agreement to carry them back and forth. Does not know how Parker was injured. No one asked or instructed Parker to get on the truck. Witness had been driving a truck for two years. No one told the workmen to get out and shove; they did it of their own free will. After the accident Parker said he had hung his foot in a wire and that threw him under the truck. Knew nothing- about whether there was an agreement to haul Parker. The truck may have been overloaded; maybe twenty-five men). The engine did not have ordinary power; could not say what was wrong with the truck. This was the first or second day witness had driven this truck on this job. He testified that he just knew when a truck was running, but did not know what was the matter with it; that was out of his line of business. All he knew was that it was not doing its work as it should. Parker said he tried to get on but hung his foot on a wire. They had been unloading at this place for the past week. The truck belonged to Parham or the company.

G. C. Parker, the appellee, testified that he is now working for the Austin Bridge Company, but worked for the appellant the past year; had made an agreement with W. H. Thomas, superintendent for appellant, for transportation before he was employed. There were about twenty-five men on the truck the night of November 18; it stalled, and the men walked through. After that, with the men shoving, the truck started, and appellee held on uphill and started to get on and his foot struck something, possibly a wire, and he was jerked under the truck. His right foot caught in the wire and the truck ran over it. Witness then testified about the extent of his injury and loss of time and said he was off duty at the time of the accident. Considered the truck a matter of convenience, was not compelled to ride on it. Saw the truck before entering and saw that it was overloaded, but did not know it was overloaded at the time as he did not know the capacity of the truck until after the injury. When truck stopped, some one said to shove it, but no one in authority told him to. He helped shove so as to speed up journey home for the workmen. Kan along side truck and tried to get on while it was moving. Did this voluntarily and caught foot on something in road. Some of the workmen used their own cars and some walked back and forth.

The appellant, J. E. Parham, testified that he made no agreement with appellee to transport him to and from work, and no one had authority to make such agreement. He furnished a truck for the workmen.

The above is the substance of all the evidence as to the injury and how it occurred. There was a verdict and judgment for appellee, and this appeal is prosecuted to reverse said judgment.

The appellant contends that there is no substantial evidence to support the verdict. Negligence on the part of the master is essential to his liability for injury sustained by the servant. He is not an insurer of his servant’s safety. He is liable only for the consequences of his negligence, and, before there can be a recovery by an injured servant, the servant must show that the master owed him a duty which he failed to perform, and that suoh failure was the proximate cause of the injury. The test as to whether the master was guilty of negligence is whether he did what a person of ordinary prudence would have done under the circumstances. Negligence means the doing of something that a person of ordinary prudence would not do, or the failure to do something which a person of ordinary prudence would do under the circumstances. The presumption is that the master was not guilty of negligence, and the burden is upon the injured servant to prove the negligence of the master, and that such negligence was the proximate cause of the injury. When tested by these rules, does the evidence show that the master was guilty of negligence?

The undisputed evidence shows that at this particular place the truck had been stalling for several days. There was nothing about the overloading of the truck that appellee did not know as well as any one. It is true he says that he did not know the capacity until after the injury, but he did know how many people were on the truck, and he did know that it had been stalling at this place. The master was certainly not guilty of negligence in furnishing a truck to transport the workmen, and there is no evidence that the master was guilty of any negligence in any respect.

The appellee, however, contends that the master was guilty of negligence in employing an incompetent driver and cites and relies on the case of Duff v. Ayers, 156 Ark. 17, 246 S. W. 508.

In that case, however, the driver was a boy nine or ten years old, and the .court said it was a question for the jury to determine whether or not the appellee in that ease assumed the risk because he continued in the employment with an inexperienced fellow-servant with a knowledge of his inexperience and with an appreciation of the danger. One employing a boy that young, of course, knows of his youth and inexperience, and whether or not the employment of one that age and inexperience is negligence is a question for the jury.

“The fact that the delinquent servant was a minor is an important, though not decisive element in determining his competency. Its evidential weight depends upon the character of the work to be done, the servant’s previous experience, and his actual knowledge.” Labatt’s Master and Servant, vol. 3, 2881.

Whenever there is an3r substantial evidence of the negligence of the master in the employment of a fellow-servant, the master’s negligence is a question for the jury. But the master is not liable for an injury to a servant unless there is some evidence of negligence of the master.

In this case the regular driver of the truck was sick, and at the time of the accident the truck was being driven by Carl C. Richardson. The undisputed proof shows that Richardson had driven a truck in 1920 at Bauxite, Arkansas, and that he had had at least two years’ experience in driving a truck. It is true he said he did not know what was wrong with the truck. He was evidently not a mechanic, and was not employed as a mechanic, but there is no negligence in employing a person to drive a truck who had had two years’ experience, and when there is no evidence tending to show either that he was incompetent or that there was any reason known to the master indicating his incompetency. There is nothing-.to submit to the jury.

The master in this case, not being a corporation, is not liable to a servant who has been injured by the negligence of a fellow-servant, unless the evidence shows that the master himself was guilty of some negligence. It is contended in this case that the master was negligent in employing an incompetent or unskillful driver, but, as we have already said, there is no evidence tending to show that the driver was inefficient and no evidence of any negligence of the master. Of course, the evidence shows that this was probably the second time this driver had driven this truck, but it would make no difference if it were the first time if he had had two years’ experience in driving a truck. The master would not be guilty of negligence in employing him unless he knew something that would indicate the incompetency of the servant. L. R. & S. F. R. Co. v. Duffie, 35 Ark. 602; Fones v. Phillips, 39 Ark. 17, 43 Am. Rep. 264.

This injury occurred when the appellee attempted to get back on the truck while it was moving, and his foot was caught in a wire, causing it to be run over by the truck. It was an unfortunate accident for which no one was liable.

The judgment of the circuit court is reversed, and the cause is dismissed.


author: Mehaffey, J.

text:
    Winfree v. Jones.
    Opinion delivered April 20, 1931.

      Reed & Beard and O. E. Williams, for appellant.

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

The parties to this suit inherited the lands sought to be partitioned or sold, and the appellees filed complaint in partition in the Lonoke Chancery Court in which suit they sought to have the land divided into four parts, which would be held by the heirs of the four brothers and sisters of Governor James P. Eagle as tenants in common.

The appellants filed a demurrer, answer, and cross-complaint in which they asked for a partition of said lands, and, in event they could not be divided in kind among the twenty-eight heirs according to their respective interests, that said lands be sold and the proceeds divided, and that in the meantime a receiver be appointed to take charge of said lands, and that he be authorized to rent the same and otherwise protect said property during the pendency of this action.

The chancellor entered a decree for partition and appointed commissioners who reported that the lands could not be divided in kind without great prejudice to the owners. They reported that there were twenty-eight heirs at law owning' interests in said lands, and that these interests ranged from one-forty-eighth to one-sixteenth and that it was impossible to divide said lands in kind, and the commissioners recommended that said lands be sold and the proceeds distributed.

The court thereupon ordered the land sold and appointed a commissioner to sell same and fixed the date of sale for November 14, 1930. The lands were duly advertised for sale as required by law, and on the 10th of November, 1930, the appellees filed a petition to postpone the sale of said lands and on said date an order was made postponing the sale indefinitely.

On November 17, 1930, the appellants insisted that the lands be sold, and the court ordered the same to be sold on December 27, 1930. Proper notice was given and the lands were sold in accordance with the provisions of the decree, on that date.

E. S. Long, Joe P. Eagle and E. S. Boyd became the purchasers of certain tracts of said lands. On January 2, 1930, the purchasers having filed bonds to secure the payment of the purchase money, and the commissioner having reported the sale, the appellees filed exceptions to the report of sale and asked that the same be not confirmed upon the ground that the price bid for said lands was so grossly inadequate as to shock the conscience of any court.

After hearing the evidence, the court held that the prices bid for said lands were so grossly inadequate as to shock the conscience and ordered the sales set aside and continued until further orders and that the receivership be continued, the court theretofore having appointed a receiver.

The court recited in its decree that it was stated in open court by one of the parties interested that, if the court- would order said lands to be sold, he would see that the same brought their fair market value, and that some of the lands were worth as high as $75 per acre. The decree further recites that it was under these conditions that the land was ordered sold, and the court expressly stated to all parties interested at the time that it would not approve any sale unless the land brought its fair market value. The court further stated and recited in the decree that the prices at which some of the lands were sold were so grossly inadequate as to shock the conscience of a court of equity. The court further stated and recited in the decree that the land was being sold for the purpose of partition, and that there was no incumbrance, mortgage, or lien against said land and no pressing reason why the same should be sold under existing conditions, and that it would work an irreparable injury upon substantially all the heirs at law who are interested in said lands if said sale is permitted to stand. The case is here on appeal.

Appellants first contend that the court’s finding is against the preponderance of the evidence and is an abuse of discretion. Several witnesses testified as to the value of the land and also testified that the reason that the lands did not sell for a higher price was the condition of the country caused by drouth, bank failures, and general depression, and that the conditions were such that people who wanted to buy could not get the money with which to buy and the finding of the chancellor, we think, that the price was grossly inadequate is not against the preponderance of the evidence.

The next contention of the appellants and the one chiefly relied on for reversal is that inadequacy of price, however gross, is not sufficient ground to set aside a judicial sale unless it be so gross and unreasonable as to indicate misconduct, fraud, and unfairness.

R. S. Boyd testified that he was one of the heirs and familiar with the lands; that the 100-acre tract, with more than 55 acres cleared, brought $2,000; that this land had rented the year before for $6 an acre. There were a little more than 44 acres of uncleared land and 32 acres in timber. He testified that the east one-half of section 2 contains 259 34/100 acres with 122 acres cleared. This tract sold for $1,500 and had rented that year for more than $6 an acre. He testified about the 116 acres, that it sold for $5.80 an acre; that it was very valuable land, but not in cultivation. The testimony of this witness as to other lands was substantially the same. He testified that the 75 acres along the pike this side of W. K. Oldham’s home and 40 acres just back of his home was as good as any land in the upper rich woods and that under conditions now it would be cheap at $75 an acre.

This witness testified that he bid in a tract of land for Mrs. R. S. Boyd at about one-half its value; that in 1919 he sold 487 acres of timbered land for $150 an acre. He testified that the reason the land did not sell for its value was the condition of the times, and that it would have brought more any time in the past 10 years. He said he knew that some of the parties interested were depending on the protection of the court and on the report that they had it would bring its value. He said neither land nor anything else is bringing a big price now. He further said that this land did not owe a dollar in the world,' and that there was no reason to sell it.

W. K. Oldham testified to substantially the same with reference to the price that the land brought and the condition of the country, and he said he did not think that any land forced on the market at the present time would bring anything like its market value because nobody is prepared to take care of it except a few people. He said that he supposed you could not sell land at all now for cash because of the financial depression. If the land had been put up any time within the past 10 years, it would have brought from $70 to $100 an acre except right since this depression. He knew of no reason that kept anybody from bidding-' except that they did not have the money and could not get it.

E. G-. Kirk, Mrs. Prude Barton, Mrs. Eose Sullivan, Mr. W. M. McCrary, and Mr. John C. Bradford all testified as to the low price the land brought and to the general depression and inability of people to buy.

Mr. Joe P. Eagle testified that, if the land had sold on the 14th, it would have brought more money because there were some twenty banks that failed that day, and he said the half had not been told, and that something like 100 banks in Arkansas have gone broke, and that banks are failing all the time. Mr. Eagle was one of the purchasers, but he testified that any of them or all of them were welcome to take his bid.

The condition of the country is not only shown by the evidence, but it is a matter of common knowledge that many banks failed about the time of the sale, some insurance companies failed, and the country was suffering from the worst drouth we had ever had, and it was not only impossible for many people to get money, but thousands of people had to have assistance in order to live.

While there is no evidence or no claim of fraud, the inadequacy of the price for which the land sold, together with the financial depression, justified the court in refusing to confirm the sale and in setting aside the sale. There was no market value for land at the time of the sale. As one of the witnesses said, you could not sell land at all for cash.

Appellants cite numerous cases of this court in support of their contention that, in the absence of fraud and unfairness, mere inadequacy of price, however gross, will not invalidate the sale. In the instant case there is not only inadequacy of price, but it would be manifestly inequitable and unfair to confirm a sale for a grossly inadequate price when the.sale was made at such a time that there was no market, and when the condition of the country was such, because of bank failures and drouth, that no one could obtain the money with which to buy. This court has always held that the trial court has and may exercise discretion in either confirming or rejecting judicial sales. This discretion however, must be exercised according to fixed rules and not arbitrarily.

It cannot be said that the chancellor in this case exercised his discretion arbitrarily, but from the recitals in the decree the chancellor evidently would not have ordered the sale if it had not been stated in open court by one of the heirs interested that, if the court would order the said lands sold, he would see that same brought their fair market value, and that some of the lands were worth as high as $75 per acre. It was under these conditions that the lands were ordered sold.

Under the conditions that existed at the time the sale was made, it is impossible to suppose that the property would bring anything like its fair value and inadequacy of price, together with fraud, unfairness, or any other unforeseen circumstances, which make it impossible to sell the lands at anything like a fair value, justifies the chancery court in refusing to confirm the sale. No one could foresee the bank failures and the financial distress following same.

In the case of Kirkland v. Texas Express Co., the Supreme Court of Mississippi held that the prevalence of yellow fever at adjacent places and at a time when the entire county was under quarantine, justified the setting aside of the sale. Kirkland v. Texas Express Co., 57 Miss. 316.

The Minnesota Supreme Court said: “Under the circumstances and especially in view of the fact satisfactorily established to the court that exceptional financial stringency prevailing at the time, and which paralyzed real estate sales, prevented a sale at a reasonable price, the court, in its discretion, refused to confirm the sale, and ordered a resale. The statute contemplates that the liens shall be extinguished if a sale is made, and does not permit a sale to he ordered unless it is reasonably probable that the property will sell for enoug’h to pay off such liens and the costs of sale. The court judged that it would be inequitable to allow the sale to stand, and we cannot say that there was any abuse of discretion in refusing its confirmation.” Johnson v. Avery, 60 Minn. 262, 57 N. W. 217.

The Supreme Court of Minnesota in the above case affirmed the decision of the lower court in Refusing to. confirm the sale, and the same case came before the Supreme Court of Minnesota again about two years later. This last appeal was from an order of the lower court confirming the sale, and the Supreme Court of Minnesota said: “But where as in this case inadequacy of price bid combines with other matters in the case fully justifying an inference that the sale was unfair and grossly injurious to the rights of the various owners, the sale should not be confirmed. We think the learned judge, usually so careful, must have overlooked some of the salient points in the case and erred in confirming the referee’s report of the sale. Such order is therefore reversed.” Johnson v. Avery, 60 Minn. 262, 62 N. W. 283, 51 Am. St. Rep. 529.

The Alabama Supreme Court held that inadequacy of price combined with the yellow fever epidemic afforded ample reason for setting’ aside the sale. Littell v. Zuntz, 2 Ala. 256, 36 Am. Dec. 415.

In this case there are no liens on the lands, no debts to be paid, but the sale is for the purpose of dividing the proceeds among the heirs. The financial stringency and distress at the time of the sale destroyed the market value for lands and prevented persons who might want to purchase from being able to obtain the money, and we think the chancellor was justified in setting aside the sale.

The decree is affirmed.


author: Smith, J.

text:
    American Exchange Trust Company v. Gates.
    Opinion delivered April 27, 1931.

      Carmichael Hendriclcs, for appellant.

      Hal L. Nonvood, Attorney General, and Walter L. Pope, Assistant, and Charles W. Mehaffy, for appellee.
   Smith, J.

This appeal involves the question whether the collateral heirs of a deceased person have an exemption in any amount, and, if so, to what amount, from the payment of inheritance taxes on property which they have taken by “transfer” from such deceased person, a transfer being defined in the Inheritance Tax law as any method whereby one acquires title to the property of a deceased person. Subdivision (4), § 10,217, Crawford & Moses’ Digest.

The question involved can only be determined by a consideration and construction of 10,221 and 10,222, Crawford & Moses’ Digest, and the acts amendatory thereof; said sections being a part of the chapter on Taxation — subtitle Inheritance Taxes — Crawford & Moses’ Digest.

¡Section 10,221, Crawford & Moses’ Digest, has the caption, “Exemptions,” and consists of four paragraphs. Paragraph (1) exempts charitable and similar transfers. Paragraph (2) exempts property of the clear value of three thousand dollars transferred to a widow or a minor child of the decedent, and “* * * one thousand dollars transferred to each of the persons described in § 10,222, * * A’’ Paragraph (3) exempts property of the clear value of five hundred dollars transferred to any person or corporation other than the persons described.in § 10,222. Paragraph (4) provides when the tax shall be paid in full without exemption.

The exemptions allowed by § 10,221, Crawford & Moses’ Digest, may therefore be summarized by saying that the widow and minor child of a decedent were allowed $3,000, and transferees described in § 10,222 were each allowed $1,000, and all other persons or corporations other than the persons described in § 10,222 were allowed $500.

Section 10,222, Crawford & Moses’ Digest, bears the title, “Primary rates,” and consists of two paragraphs. Paragraph (1) provides that, the rate of taxation on all taxable values not in excess of five thousand dollars are, for convenience, termed “primary rates,” and shall be as follows: Upon a taxable transfer to any father, mother, husband, wife, child, brother or sister, and certain others, at the rate of one per cent.

Paragraph (2) of § 10,222 reads as follows: “Upon a transfer, taxable under this act, of property or any beneficial interest therein of an amount in excess of the exemptions provided for in subdivision three of § 10,221, and not in excess of $5,000, to any person or corporation, other than those enumerated in subdivision one, of this section, the tax shall be at the rate of four per cent, of the clear value of such interest in such property. ’ ’

Section 10,222, Crawford & Moses’ Digest, was amended by act 438 of the Acts of 1923 (General Acts 1923, page 384). Paragraph (1) was amended in a respect unimportant in the decision of the question now before us.

A new paragraph was added and numbered (2), which fixed the primary rate of brothers and sisters, of both the whole and the half blood, at two per cent.

Paragraph (2) of § 10,222 was slightly amended and re-enacted as paragraph (3) of the amendatory act of 1923, and, as it there appears, reads as follows: “Upon a transfer, taxable under this act, of property or any beneficial interest therein of an amount in excess of the exemptions provided for in subdivision 3 of § 10,221, and not in excess of five thousand dollars, to any person, corporation, other than those enumerated in subdivisions one and two of this section, the tax shall be at the rate of four per cent, of the clear value of such interest in such property.”

At the 1929 session of the General Assembly Act 106 was passed, entitled, “An Act to amend the Inheritance Tax Law of the State of Arkansas,” vol. 1, Acts 1929, page 526, and §§ 10,221 and 10,222, Crawford & Moses’ Digest, were both amended by the Amendatory Act of 1929.

Paragraph (1) of § 10,221, Crawford & Moses’ Digest, was re-enacted without change.

Paragraph (2) was amended to read as follows: “(2) Property of the clear market value of six thousand dollars transferred to the widow of the decedent, ■whether by dower or otherwise, of four thousand dollars transferred to a minor child of the decedent, and of two thousand dollars transferred to each of the persons described in § 10,222 shall be exempt.”

Paragraphs (3) and (4) of § 10,221, Crawford & Moses’ Digest, were omitted.

The amendatory act of 1929 amended § 10,222, Crawford & Moses’ Digest, in the following particulars. Paragraph (1) was amended slightly in a particular unimportant here. Paragraphs (2) and (3) were amended to read as follows:

“(2) Upon the transfer taxable under this act of property or any beneficial interest therein, of an amount not in excess of five thousand dollars to any brother or sister, including the brother or sister of the half blood, the tax shall be at the rate of two per cent, of the clear value of such interest in such property.
“(3) Upon a transfer, taxable under this act, of property or any beneficial interest therein of an amount not in excess of five thousand dollars, to any person, corporation, other than those enumerated in subdivision (1) and (2) of this section the tax shall be at the rate of four per cent, of the clear value of such interest in such property.”

The probate court originally, and the circuit court on appeal, denied the claim of the collateral heirs to any exemption, and this appeal questions that construction of the statutes set out herein.

The claim of exemption is based upon paragraph (2) of the Amendatory Act of 1929 as it amends % 10,221, Crawford & Moses’ Digest, which reads as follows: “* * *, and of two thousand dollars transferred to each of the persons described in § 10,222 shall be exempt.”

The portion of the act of 1929 last quoted allows an exemption of two thousand dollars transferred to each of the persons described in § 10,222, and the question for decision is, therefore, whether collateral heirs are persons described in § 10,222, and, if not, who are such persons.

The contention of the collateral heirs is that they and all other transferees have an exemption of two thousand dollars because they are persons described in § 10,222, as amended by the act of 1929. If this is true, the General Assembly has adopted a most involved method of allowing an exemption which might have been granted in language so simple that no doubt could arise, and has also increased the exemption of such persons from five hundred dollars, originally allowed by paragraph (3) of § 10,221, which paragraph, as we have stated, was omitted from the subsequent legislation, to two thousand dollars.

But we think there is no such exemption. It is to be remembered that § 10,221 deals with exemptions, and § 10,222 with primary rates. Amended § 10,221 allows the Avidow an exemption of six thousand dollars, and each minor child an exemption of four thousand dollars, and the persons referred to in amended § 10,222 are each alloAved an exemption of two thousand dollars. Who are these persons? The persons referred to are enumerated in paragraphs (1) and (2) of the section. Paragraph (1) names father, mother, or other lineal descendants, or husband, wife, child, wife or widow of a son, or the husband of a daughter, certain adopted children, or any lineal descendant born in lawful wedlock. All the persons here described have a preferential rate of one per cent, on any transfer to them not in excess of five thousand dollars. The other persons described in § 10,222 are mentioned in paragraph (2), and these are brothers and sisters, both of the whole and the half blood; they also have a preferential rate of two per cent.

No other persons are described in the amended § 10,222, but all other persons, whether of the blood of the decedent or not, as well as any corporation which acquires property by any kind of a transfer, pay tax thereon at the rate of four per cent. This is the basic or primary rate applicable to valuations of five thousand dollars, or less, such as the estate here involved.

All persons not described in paragraphs (1) and (2) who, or corporations which, pay anything (not being exempt from all taxes under paragraph (1) of § 10,221, pay at the primary rate of four per cent. Two classes of persons are described in § 10,222 who pay this tax but do not pay at this rate. The first class are those mentioned in paragraph (1) who pay at the rate of one per cent. The other class are those mentioned in paragraph (2) who pay at the rate of two per cent. The persons mentioned in paragraphs (1) and (2) are the only persons described. All other persons are undescribed, and these persons, and all corporations, pay the basic rate of four per cent., without benefit of any exemption.

We are re-enforced in this conclusion by a consideration of the fact that paragraph (2) of § 10,221, Crawford & Moses ’ Digest, was amended and carried into the amendatory act of 1929, while paragraph (3) of § 10,221 was omitted from the amendatory act of 1929. Paragraph (2) of § 10,221 allowed an exemption to a widow and minor child of three thousand dollars each, and of a thousand dollars to each of the persons described in § 10,222. Section 10,222 described certain persons, and referred to others without description, and to this latter class there was allowed by paragraph (3) of § 10,221 an exemption of five hundred dollars. This paragraph (3) of § 10,221 was omitted in the amendatory legislation, and the persons who had not been otherwise described remained without description. Those persons, and all corporations, pay the basic or primary rate of four per cent., without deduction for exemptions.'

This construction of the statute results in holding that only those persons are allowed exemptions who are described in paragraphs (1) and (2) of-§ 10,222, Crawford & Moses’ Digest, as amended by the act of 1929, supra, these being the persons to whom an exemption of two thousand dollars each was allowed by paragraph (2) of § 10,221, Crawford & Moses’ Digest, as amended by the act of 1929, supra-.

The judgment of the court below is in accordance with this construction of the statute, and it is therefore affirmed.


text:
    Springfield Life Insurance Company v. Slaughter.
    Opinion delivered April 27, 1931.

      Duty Duty and Breioer & Cracraft, for appellant.

      Jo M. Walker, for appellee.
   Humphreys, J.

This appeal is an appeal from a judgment for $500, statutory penalty and attorney’s fee recovered by appellees against appellant in the circuit court of Phillips County upon a life insurance policy issued on June 27, 1931, to Sam Butler, in which appellees were the beneficiaries. When the testimony in the trial court had been concluded, appellant requested an instructed verdict in its favor, which the court refused, over its objection and exception.

Appellant contends that the trial court erred in refusing to peremptorily instruct a verdict for it, and requests a reversal of the judgment for that reason.

The policy sued upon contained the following provision:

“This policy is issued in consideration of the application of the insured which is made a part of this contract, a copy of which is attached hereto, etc.” •

The application, made a part of the contract, contained the following questions, answers, and provisions:

“ Are you in good health? If not, state facts fully. Yes.
“Have you ever had or do you now have any of the following diseases? Dropsy — No.
“All the statements as to my physical condition, age, nationality and occupation are true and correct and are made to enable me to obtain life insurance in the Springfield Life Insurance Company. I further covenant and warrant that I have read eách of the foregoing questions and answers before signing my name to this application and each of said answers are full, complete and true in every particular and are only statements and answers upon Avhich this application for insurance is made.
“I further agree that if it should de\relop that I have misrepresented any material fact covered by the above interrogatories or failed to make full disclosures of any material fact, the policy shall be null and void.
“The applicant assumes the entire burden of making-full disclosures and true statements and revelations as to his bodily condition and history and of fully informing himself Avith reference thereto before signing and delivering this application; and further expressly agrees that no lack of knowledge with reference thereto shall to any extent whatsoever excuse him from any error or misrepresentation made herein.”

The provisions of the policy set out above clearly made the ansAvers relating to the health of the insured Avarranties and not mere reioresentations. They Avere in the nature of an absolute agreement and not statements of belief. This construction of the contract leaves only one question to be determined here, and that is whether the undisputed evidence reflects that the insured Avas in had health when the application for the policy was made. The undisputed testimony discloses that the insured Avas in bad health and had been for a long time when he applied for the policy. He was suffering from dropsy at the time he made the application and died therefrom within two months after the policy was delivered to him. Based upon these facts, the trial court should have granted appellant’s request for an instructed verdict and dismissed appellees’ complaint.

On account of the error indicated, the judgment is reversed, and the complaint of appellees is dismissed.


text:
    Standard Accident Insurance Company v. Philpot Construction Company.
    Opinion delivered April 27, 1931.

      Moore, Gray «é Burrow and Everett B. Gibson, Jr., for appellant.

      Harry T. Wooldridge, for appellee.
   Kirby, J.,

(after stating the facts). Appellant insists that the law does not warrant the taxing of an attorney’s fee and judgment for 12 per cent, damages upon the recovery of a judgment against the insurer upon a policy of liability insurance, and its contention must be sustained.

The statute (§ 6155, Crawford & Moses’ Digest) provides: “In all cases where loss occurs, and the fire, life, health or accident insurance company liable therefor shall fail to pay the same within the time specified in the policy, after demand therefor, such company shall be liable to pay the holder of such policy, in addition to the amount of such loss, twelve per cent, damages upon the amount of such loss, together with all reasonable attorneys ’ fees for the prosecution and collection of said loss; said attorneys’ fees to be taxed by the court where the same is heard on original action, by appeal or otherwise and to be taxed up as a part of the costs therein and collected as other costs are or may be by law collected.”

This statute is highly penal, and should not be held to apply to any loss or insurance company not therein expressly named; as was said in Home Fire Insurance Co. v. Stancell, 94 Ark. 578, 127 S. W. 966, where it was held it did not apply to cases for loss caused by cyclone and for which a cyclone insurance company was liable. In National Union Fire Ins. Co. v. Crabtree, 151 Ark. 561, 237 S. W. 97, the court reversing the judgment of a lower court allowing plaintiff to recover penalties and attorneys’ fees on an automobile theft policy, said: “The court erred, howeyer, in rendering judgment for penalty and attorney’s fees. The imposition of penalties and attorney’s fees is limited to suits against fire, life, health and accident insurance companies, and the statute does not apply to a suit for loss caused by theft under that kind of insurance. Crawford & Moses’ Digest, § 6155. We held, in the case of Home Fire Ins. Co. v. Stancell, 94 Ark. 578 [127 S. W. 966], that the statute, being penal, should not be held to apply except in cases falling within its particular terms. We decided in that case that the statute did not apply to a loss caused by a cyclone under a policy of insurance against that character of loss.”

The court has also held that the attorney’s fees and penalty provided by the statute could not be recovered under a policy of tornado insurance issued by a fire insurance company. National Union Fire Ins. Co. v. Henry, 181 Ark. 637, 27 S. W. (2d) 786. See also Mears Mining Co. v. Maryland Casualty Co., 162 Mo. App. 178, 144 S. W. 883; Western Indemnity Co. Free and Accepted Masons of Texas, (Tex.) 198 S. W. 1092; Ocean Accident and Guaranty Corporation v. Northern Texas Traction Co., (Tex.) 224 S. W. 212.

Only 4 kinds of insurance companies are included in said statute, fire, life, health, or accident insurance companies, and it makes no provision for the allowance of damages and attorney’s fees where the loss is caused or claimed under any other kind of policy of insurance. Liability insurance, of the kind provided for in the policy issued by appellant company to appellee company, is a distinct and important line of insurance and was already well developed when the statute was passed, and, since it was not named therein, such companies or the company issuing the policies of insurance is not liable to the holder of the policy in case of loss for the damages and attorney’s fees allowed by said statute.

The authority of our cases supra are not impaired by the decisions in Springfield Mutual Assn. v. Atnip, 169 Ark. 968, 279 S. W. 15; and Illinois Banker’s Life Assn. v. Mann, 158 Ark. 425, 250 S. W. 887, both suits are life insurance contracts relied on by appellee. The language of the court in the last case construing such statute being: “This apparently includes all insurance companies, and does include all companies except those exempted by other legislation from the operation of that section,” which obviously means “ah insurance companies” named in said statute 6155, Crawford & Moses’ Digest) or issuing contracts or policies of insurance of the class or kind issued by such designated companies, and these cases relate especially to whether the companies issuing such insurance as that named in such statute had been exempted from the provisions and operation thereof by statute later enacted exempting’ fraternal insurance societies from such penalties; and certainly the court erred in allowing the recovery of damages and attorney’s fees herein on the judgment upon suit brought for an attorney’s fee earned and agreed to be paid for the defense of any suit based upon such policy of insurance upon which there was no recovery.

The majority is of opinion that there is sufficient testimony to support the judgment for recovery of the fee by appellee for defense of the Strobel suit against it, since appellant company agreed to pay the expenses thereof. It was not bound to defend the suit or to the payment of damages under its policy for the injury to Miss Strobel, since its liability was conditioned against and expressly limited by the policy to exclude liability for any such injury.

For the error of the court in allowing the recovery of damages and attorney’s fees on the amount appellant was liable to the payment for under its agreement with appellee to defend the Strobel suit against it, the judgment must be modified and reduced in said sum and amount, and, as modified, will be affirmed. It is so ordered.

Butler, J., concurs in the judgment only.


author: Butler, J.

text:
    First National Bank of Ft. Smith v. Marre.
    Opinion delivered April 27, 1931.

      Daily <& Woods, for appellant.

      Warner & Warner, for appellee.
   Butler, J.

This litigation involves the construction of the will of Antonio Marre which was properly executed and duly probated upon the death of the testator. After making certain specific bequests, the fifth paragraph of the will is as follows:

“5. I give, devise and bequeath all the residue of my estate, real, personal and mixed, of which I may die seized or possessed, or to which I may at the time of niy death be entitled, to my son, Louis Marre, and my daughters, Eosa Marre Fleming and Cecile Marre, in equal parts. I fully realize that all of the bequests and gifts above made are subject to the dower interest of my wife, Marie Marre, which dower rights will fully provide for her.”

The sixth paragraph of the will contained the direction that the bequests provided for in paragraph No. 5 should be paid to the beneficiaries in ten equal installments, and that the real estate should not be sold until twenty years after the death of the testator. Provision was made for the management of the property by the executor during these times with authority to invest the property, and for payment of the net interest arising from the investments each twelve months and for the rents accruing from the real estate, payable every three months in equal shares to the beneficiaries.

The seventh paragraph provided that, should the specific bequests made for any reason fail, they were to become a part of the residuary estate and be disposed of as provided in paragraph No. 6 of the will.

By the eighth paragraph the appellant was nomiuated as executor with power of sale of the personal property for the purpose of payment of debts, reinvestment and distribution. The power with reference to the real estate is given in the following language: “And this same authority is given my said executor to sell, lease or otherwise dispose of the real estate belonging to my estate, at the time designated for the sale of the real estate, in paragraph six of this, my will, and when said real estate is sold the proceeds shall be distributed at once as provided in said paragraph six of my will.”

The ninth and last paragraph is as follows: “Ninth: After my said estate has been duly administered, as required by law, I hereby direct that my said executor, the First National Bank of Fort Smith, Arkansas, retain control of the residue of mv said estate, both real and personal, as trustee, and administer the same in the manner, lime and form hereinbefore set out in this, my will.”

It is the contention of the appellant that this will created a valid trust in it. From an adverse decree of the trial court, it has appealed, and that question is the only one presented here for our decision. The appellant invokes the well-settled rule that, in construing the provisions of a will, the intention of the maker is first to be ascertained, and, wrhen not at variance with recognized rules of law, must govern. The intention of the testator must be gathered from all parts of the will, and such construction be given as best comports with the purposes and objects of the testator and as will least conflict. Parker v. Wilson, 88 Ark. 553, 136 S. W. 981.

The appellant contends that the trust sought to be created was an active trust, and, although there was not an express grant of the estate to the trustee by which the legal title would vest in it, such title would be implied. With this contention we agree. Appellant’s counsel cite as authority for their contention Perry on Trusts (4th Ed.), par. 313 et seq. The doctrine of the text we recognize, but it is only in those cases where a valid active trust is created that the title impliedly vests in the trustee to enable him to carry out the purposes of the trust. As suggested by the appellant, it is the duty of the court to ascertain and effectuate the intention of the testator, but this rule is subject to an important qualification, namely, that the intention must not be at variance with recognized rules of law; and, when it is so found, the attempt by the testator to carry this intention into effect will prove abortive. The effect of the fifth paragraph of the will was to make an absolute gift of the personal property of the testator to the beneficiaries and a devise to them of the real estate in fee simple. By subsequent paragraphs, an attempt was made to limit the use and to defer the acquisition of the property theretofore given outright and to create a trust to effectuate these limitations. This was repugnant to the absolute disposition of the property before made and in violation of the well-settled rule that, where an absolute gift or devise is made, subsequent, attempt in the, will to limit the possession, enjoyment or disposition of the property is void. Immediately upon the death of the testator the property vested absolutely in the beneficiaries, and as a necessary incident to the ownership, they became entitled to the immediate possession and enjoyment of the property with the right of present alienation. This rule was recognized by our court at an early date and has .since been consistently adhered to. “If a testator gives property absolutely in the first instance to a legatee, he cannot afterwards subject it to any limitation or provision whatever.” Moody v. Walker, 3 Ark. 147-187. In Letzkus v. Nothwang, 170 Ark. 403, 279 S. W. 1006, the testator, in paragraph No. 3 of his will, made provision that “any and all other property of which I may die possessed, real, personal and mixed, I give to my said sons, David Henry Nothwang and Frederick Nothwang, share and share alike.” By paragraph No. 4 following an attempt is made to limit the estate theretofore conveyed by prohibiting the mortgaging or sale of the property until after ten years from the death of the testator, and that the income only from the personal property be used by the beneficiaries. This limitation the court held void on the ground that the will of the testator devised a fee simple estate to his sons which vested at his death, and the attempt to deprive this estate of alienability is void. In passing upon this question, the court said: “The devise was not to trustees, but was direct to the devisees named, and we think there can be no question but that the title vested in them Immediately upon the death of the testator. Necessarily so, for the title could not have been in any one except the devisees after the death of the testator, and the provisions that these devisees should not sell, mortgage or incumber the property devised to them for a period of ten years after the title had vested in them is a condition subsequent, and is void because it is repugnant to the estate conveyed.”

As in that case, so in this. The devise was not to trustees, but direct to the devisees named, the title neces-' sarily vested in them immediately upon the death of the testator and the limitation over, being inconsistent with the necessary incidents to the estate conveyed, is unenforcible. The appellant, while recognizing the soundness of the view’s expressed in these cases and others cited by counsel for appellee, seeks to distinguish these cases from the case at bar because in none of them was there a will involved wdiere the testator had created, or attempted to create, a trust as in the instant case. This distinction we hold to be immaterial, for it is unimportant how the limitation on an estate already conveyed is attempted to be imposed; it is the limitation that has no binding force and the manner or method by which it is sought to be imposed is of no moment.

The wdlls construed in the cases of Holcomb v. Palmer, 106 Maine 17, 75 Atl. 324, and Webb v. Hayden, 166 Mo. 39, 65 S. W. 760, relied on by the apyiellant as supporting- its contention, are u’hollv unlike the one under consideration. In the first case the residuary clause is as follow’s: “I give, bequeath and devise all the rest and remainder of my estate to such of my children who may outlive me, share and share alike, but I will that the portion which would fall to my son, Clinton, shall be held in trust for him by my son, Francis, to be used for his comfort and necessities according to the discretion of my said son.” The court said: “The position of the plaintiff is that the first part of this clause gave an absolute estate in fee to the five children, all of whom survived the mother, and that the last clause attempting to put the share of Clinton in the hands of Francis in trust was an attempt to cut down this absolute fee and therefore repugnant and void.” In holding- against this contention, the court further said: “After making- numerous specific bequests, she gathers together all her remaining property and gives it equally to her five children, share and share alike, but at the same time and in the same sentence that she gives four their share outright, she gives the fifth his share in trust, making his brother the trustee. There is no attempt on her part to make any gift or devise over, but the whole estate passes out of her, absolutely as to the four-fifths, in trust as to the one-fifth. ’ ’

In the case of Webb v. Hayden, supra, the language of the will construed is as follows: ‘ ‘ I give, devise and bequeath to my son, Ernest Webb, the sum of $10,000, said sum to be held by my executrix, hereinafter named, in trust until my said son arrives at the age of twenty-on'e, and then given to him. ’ ’ It will be seen that the residuary clause in this case is almost identical with that considered in the case of Holcomb v. Palmer, for in the same sentence and essentially a part of the devise the trust is created, and in neither case is there a subsequent attempt to limit an absolute estate already devised, as in the ease at bar.

In the case of Snedeker v. Congdon, 58 N. Y. Supp. 885, the will construed is similar in effect to the one under consideration here, the material parts of which are as follows: “I give to my said brother and sister the use, interest and income of personal property during their joint lives and the life of the survivor. Subject to such life estate, I give the principal of the rest, residue and remainder of my property and estate to my five nephews and nieces. ” In a subsequent paragraph a trust is sought to be created in that part of the estate going to one of the nieces, Enriquita Emma, daughter of a deceased brother of the testator. That paragraph is as follows: “To Enriquita Emma, daughter of my said brother, deceased, now wife of Winfield Scott Shrigley, of Valparaiso, Chili, one-fifth part of such property, but it is my will, and I hereby direct, that such part shall be paid to and held in trust by her brothers to apply to same and such parts thereof as they may deem proper to the separate use of their sister.” After disposing of certain questions raised which have no relevancy to the question at issue here, the court said: “We now come to the question of the validity and effect of the trust created in the share of Mrs. Shrigley, considered apart from the previous provisions of the will. We first find an absolute and present gift to this defendant, subject only to tlie previous life estates. This gift is followed by a direction that the share be paid to, and held in trust by, her brothers, ‘to apply the same and such parts thereof as tljey may deem proper to the separate use of their sister.’ It is contended that this limitation imposed on the gift to Mrs. Shrigley is repugnant to the gift, and therefore void. Such is our judgment.” Referring- to other cases in support of its judgment, the court further said: “In Josselyn v. Josselyn, 9 Sim. 63, the testator gave his residuary estate unto his cousin, and ordered his executors to invest the same and pay the principal to the legatee on his attaining the age of 24 years. It was held-that, as the interest of the legatee was absolute, he was entitled to the principal of his share when he became of the age of 21 years, notwithstanding the direction of the will to the contrary. In Saunders v. Vautier, 14 Beav. 115, and in Rocke v. Rocke, 9 Beav. 66, exactly the same rule was held. In Re Young’s Settlement, 18 Beav. 199, the testator gave his estate to trustees to divide between his two children when they arrived at the age of 25, their several shares to vest at 21, or upon marriage. He directed that his daughter’s share should, on her marriage, be settled upon her, but that until marriage she should only receive the income. The daughter, after arriving at the age of 21 years, remained unmarried. It was held that she was entitled to payment of the property. As the absolute ownership of this share is in Mrs. Shrigley, and she has therefore an absolute power of disposition, she is also entitled to the immediate possession of the fund.” See also Vaughan v. Wise, 152 N. C. 31, 67 S. E. 33; Keating v. McAdoo, 180 Pa. St. 5, 36 Atl. 18; Bank of Charleston v. Bowling, 52 S. C. 345, 29 S. E. 78; Wilmoth v. Wilmoth, 34 W. Va. 426, 12 S. E. 731.

The law favors the early vesting of estates, and, if a will is susceptible of a double construction, by one of which the estate becomes vested and by the other the vesting is postponed, the first construction will be adopted, even though it might have been the intention of the testator to limit its present enjoyment where that intention, if executed, would overthrow a legal principle. So in this case, it having been seen that by paragraph No. 5 of the will the beneficiaries became vested at the death of the testator in the estate devised, the subsequent attempt. to limit its enjoyment must be held void. “The title to property, once given away, cannot be regained by the hand that gave it. Notwithstanding this rule sometimes appears to operate harshly iu defeating’ the probable intention of the testator, which is presumed to be the goal of judicial construction, its observance has been deemed safer than one which, for want of strictness, ivould be attended in its application Avith all sorts and shades of doubt and uncertainty. ’ ’

It is our conclusion that the decree of the trial court was in accordance with the principles herein announced, and it must therefore lie affirmed.


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    Nathan Special School District No. 4 v. Bullock Springs Special School District No. 36.
    Opinion delivered April 27, 1931.

      Tom Kidd, for appellant.

      Jas. S. McConnell and J. M. Jackson, for appellee.
   Butler, J.

On April 5, 1930, there was a petition filed with the county board of education of Pike County for the consolidation of Nathan Special School District No. 4 with Bullock Springs Special School District No. 36. A short time after the filing of the petition, notices signed by four of the petitioners were posted by the sheriff in the manner provided by law and more than thirty days before May 24,1930, on which day the hearing of the petition was to be held. The school board made the order of consolidation, from which there was an appeal to the circuit court -where the case was heard upon the petition, the remonstrance filed before the county board of education, and the testimony of a number of witnesses. The court found in favor of the remonstrance, from which judgment is this appeal. .

It was contended by remonstrants before the county board of education, and before the circuit court on appeal, (1) that no proper notice had been given of the proposed consolidation, in that the notice posted was signed by four only of those who had signed the petition, and that said notice should have been signed by all of the petitioners; (2) that the petition was not signed by a majority of the electors in the territory affected; (3) that the county board of education had no jurisdiction to hear and determine the petition because a part of the territory affected was situated in Howard County.

The trial court properly held that the notice was sufficient and properly given. The only purpose vdiich the notice serves is to inform those interested of the nature and effect of the proceeding and the date upon which it would bo submitted for a hearing. Those of the petitioners who sign the notice do so for themselves and all the other signers.

The court did not pass upon the question whether the petitions were signed by a majority of the electors, but ruled that those who signed it might not, after the petition was filed, arbitrarily withdraw their names therefrom.

Act No. 156, Ads 1927, authorized the county board of education of any county to change the boundary lines of school districts within the county, and it was under this act that the petitions were filed and the board acted. Under the provisions of act No. 12 of the Acts of 1929, amending § 8858 of Crawford & Moses’ Digest, where it is proposed to consolidate school districts adjoining but lying in more than one county, it is necessary for the board of education of both counties to act by ordering an election. None of the provisions of that act were complied with.

The trial court found the facts to be that Bullock Springs Special School District No. 36 sought to be annexed to Nathan Special, in Pike County, lay partly in Pike County and partly in Howard County, and, since the present proceeding was not attempted to be made in compliance with the provisions of act No. 12 of the Acts of 1929, the order for consolidation was improvidently made and void.

The sole question is whether or not such finding of fact was warranted. It appears from the evidence in the case that Bullock Springs Special School District, as originally formed, lay wholly in Pike County. Prior to 1918 certain patrons in Howard County transferred to the Bullock Springs District in Pike County because the territory in which they lived was not accessible to the school in the district in Howard County. This territory comprised about two sections of land and is called in this controversy “the Howard strip.” Prom time to time controversies arose between Bullock Springs Special School District and the school authorities in Howard County regarding the right of those residing in Howard County strip to send their* children to the school in Bullock Springs Special School District, but during all of the time the children continued to attend the school in that district. In order to compensate the district the authorities in the school district in Howard County, in which the children resided, paid to the Bullock Springs Special School District certain sums of money, and at other times the property in the Howard County strip was assessed as in Bullock Springs Special School District and the taxes paid to the credit of that district. It is certain that the patrons in the Howard County strip transferred to Bullock Springs Special School District, hut- it is not clear just what other proceedings were had. However, it is apparent that the situation was not altogether satisfactory, and about the year 1920, or a year or two later, there ivas an attempt made to detach the Howard County strip from the School District in Howard County and to consolidate it with Bullock Springs Special School District. A petition was circulated in Howard County in the territory affected and presented to the school board of that county, and a like petition was also circulated in Pike County and presented to the school board of that county.

There is no evidence that the school boards of either county took any formal action on the petitions or made any order with respect thereto. It seems that on the advice of one of the prominent citizens the patrons residing in the Howard County strip sent their children to school and paid their taxes in Bullock Springs Special School District and said nothing further about their differences. This continued until the time of the filing' of the petition in this proceeding, one or more of the electors in the Howard County strip being elected on the school board of Bullock Springs Special School District and taking part in the management of the school affairs.

Prom these facts the learned trial .judge concluded that “the territory known as the ‘Howard County strip’ and the Bullock Spring’s Special School District No. 36 were formed into a special school district and recognized as such by the school authorities of both counties. The proceedings under wliicli the district was formed are irregular, but these irregularities were cured by act No. 156 of the Acts of 1927,” and he cites the case of Allen v. Harmony Grove Consolidated School District No. 19, 175 Ark. 212, 298 S. W. 997, in support of the conclusion reached. It is very evident that for all practical purposes the Howard County strip was treated as a part of Bullock Springs Special School District, but it was not annexed or consolidated therewith, for, as we have seen, there was never any order made by the school board of either county to that effect. Therefore, there was no act or proceeding done or had bj? said county boards to be ratified and rendered valid by act No. 156 of the Acts of 1927. That part of the act relevant to the question is as follows: “Any and all acts and proceedings heretofore done and had by the county boards of education are hereby ratified and declared valid.”

In Allen v. Harmony Grove, supra, the county board of education made an order consolidating two certain districts, and this court held that this order was erroneously made for certain reasons given in the opinion, but that the effect of that part of act No. 156 quoted above was to render valid the irregular order made. In the instant case, however, there was no order made, and consequently there was nothing to render valid. Therefore all the territory of Bullock Special and of Nathan Special is situated in Pike County, and the board of .education of said county was authorized to make the order annexing the two districts, and the order made must be upheld, if a majority of the qualified electors within the territory affected signed the petitions. The judgment of the court below must therefore be reversed, and the cause remanded for a determination of the question.

We deem it proper in this connection to say that the action of the trial court in refusing to allow certain signers of the consolidation petition to have their names removed from the petition was correct. The petition had already been filed and something more than a mere change of mind would be necessary before they would be permitted to withdraw their names. Before the filing of a petition, a signer would be privileged to have his name taken from the petition as a matter of right, but after the filing of the petition this could be done only where the signature had been procured by some improper method by which the signer was deceived and a fraud perpetrated upon him. Williams v. Citizens, 40 Ark. 290; McCullough v. Blackwell, 51 Ark. 164, 10 S. W. 259; Bordwell v. Dills, 70 Ark. 175, 66 S. W. 646. Thus stood the law at the time of this proceeding.

For the error indicated the judgment is reversed, and the cause remanded for further proceedings in conformity to law and not inconsistent with this opinion.


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    Market Produce Company v. Holland.
    Opinion delivered May 4, 1931.

      R. S. Dun-n, for appellant.

      Williams <& Williams, for appellee.
   Smith, J.

This litigation arose out of the sale of twenty-five cases of eggs to appellant by appellee, which were delivered at Mansfield, Arkansas, and carried by appellant therefrom in a truck to Shreveport, Louisiana, a distance of '230 miles. This trip was made on a very hot day, over a road in which there were several detours, and when the eggs reached Shreveport and were there inspected many of them were in bad condition. When appellant discovered the unsalable condition of many of the eggs, lie called appellee over the long distance telephone, and the parties discussed the condition of the eggs, but they differ as to the settlement arrived at in their conversation over the telephone.

At the trial from -which this appeal comes, appellee testified that the eggs were in good condition when delivered at Mansfield, while appellant testified that the condition of the eggs when they reached Shreveport was such as to demonstrate that their condition was bad when they were delivered at Mansfield. This issue of fact was submitted to the jury and is concluded by the jury’s verdict.

The eggs were sold at $5.75 per case, which made the contract price for the entire 25 cases $143.75, and suit was brought for this amount, less a credit of $66.26, and from a judgment for that amount is this appeal.

After the telephone conversation, and pursuant to it, as appellant contends, a statement of the condition of the eggs, as disclosed by this inspection, was prepared, which reads as follows:

“237 Doz. No. 1 eggs at $5.75 per case.........$45.42
193 Doz. No. 2 eggs at $3.25 per case......... 20.84.
31i8 Doz. Notts ..............................................................................
Total ..............................................................................$66.26”

This statement was attached to a check, upon the upper left-hand corner of which this notation was printed, in small type:

“This check is in settlement of the following account, if incorrect please return without alteration. ’ ’

Appellee, plaintiff below, testified that he did not read this notation, but he did not deny knowing that the check had been tendered in full settlement of the account for the eggs.

After receiving this statement, with the check attached, appellee sent appellant a telegram reading as follows:

“I am returning- yon check and drafting in full as per agreement, letter following.”

But appellee did not return the check, as the telegram stated. On the contrary, he consulted his attorney, who advised him to cash the check and sue for the balance due on the eggs, and this he did. This advice was upon the assumption that appellee had delivered the eggs of the quality contracted for at Mansfield, and that there was no hona fide controversy as to the amount due.

But there was a controversy about the amount due, and, while the verdict of the jury reflects that appellant was wrong in its contention, the fact remains that there was a controversy. The telephone conversation, the telegram, and the fact that appellee advised with his attorney before cashing the check, are conclusive of that fact.

"We have therefore the case of a party who contends that he owed a certain amount, and no more, and who furnished a statement of the account owing to the other party in accordance with his contention, and, in satisfaction of this disputed account, attached thereto a check as payment in full. After wiring appellant that the check would not be accepted as payment, appellee cashed it and gave credit for the amount thereof on the account as he contended it should bo stated. This he could not do. He had the option of accepting the check as tendered, or of returning it as he stated in his telegram that he had done, and when, under these circumstances, the cheek was cashed and its proceeds appropriated, appellee estopped himself from denying that the account had been paid in full.

Our leading case on the effect of the acceptance of a sum less than the amount claimed in settlement of a disputed account is that of Barham v. Bank of Delight, 94 Ark. 158, 126 S. W. 394, 27 L. R. A. (N. S.) 439, where it was said: “It is true that, in order to constitute an accord and satisfaction, it is necessary that the offer of the payment should be made by one party in full satisfaction of the demand, and should be accepted as such by the other. But when the claim is disputed and unliquidated, and a less amount than is demanded is offered in full payment, the question as to whether the creditor in such case does so agree to accept the amount offered in full satisfaction of his demand is a mixed question of law and fact. If the offer or tender is accompanied by declarations and acts so as to amount to a condition that, if the creditor accepts the amount offered, it must be in satisfaction of his demand, and the creditor understands therefrom that, if he takes it subject to that condition, then an acceptance by the creditor will estop him from denying- that he has agreed to accept the amount in full payment of his demand. His action in accepting the tender under such conditions will speak, and his words of protest only will not avail him.”

The doctrine of that case has been reaffirmed and followed in numerous subsequent cases. Barham v. Kizzia, 100 Ark. 251, 140 S. W. 6; Cunningham v. Rauch-Darragh, 98 Ark. 269, 135 S. W. 831; Emerson v. Stevens Grocer Co., 95 Ark. 421, 130 S. W. 541; Pekin Cooperage Co. v. Gills, 114 Ark. 559, 170 S. W. 574; Longstreth v. Halter, 122 Ark. 212, 183 S. W. 177; Mosaic Templars v. Austin, 126 Ark. 327, 190 S. W. 571; O’Leary v. Keith, 134 Ark. 36, 250 S. W. 518; Beeson v. Brewer, 158 Ark. 512, 250 S. W. 518; American Ins. Union v. Wilson, 172 Ark. 841, 291 S. W. 417.

We conclude therefore that under the undisputed evidence in this case the verdict should have been directed in appellant’s favor, and for the error in not so doing the judgment in appellee’s favor will be reversed, and the cause dismissed. It is so ordered.