author: Mehaeey, J.

text:
    National Bank of Arkansas v. Interstate Packing Company.
    Opinion delivered November 7, 1927.
    1. Sales — right of conditional seller. — One who retains the title to property sold until payment of the purchase money may retake possession of it at any time after condition broken, whether from the original buyer or from any person to whom it has been transferred, unless he consented to the transfer or sale.
    2. Executors and administrators — right to retake property conditionally sold. — The title to merchandise conditionally sold remained in the seller, who had a right, upon default in payment of drafts, to retake it from the deceased buyer’s administrator.
    3. Sales — when conditional sale becomes absolute. — One who makes a conditional sale of property may treat the sale as absolute by suing for the debt.
    4. Executors and administrators — conversion of property conditionally sold. — Where a seller sold merchandise under a contract providing that the title should remain in the seller until the payment of certain drafts, and the buyer died before the drafts were paid, and his administrator sold the merchandise, his acts amounted to conversion of the property, and the seller was entitled to the proceeds of the sale in the administrator’s hands as representing the property belonging to the seller.
    Appeal from Jefferson Circuit Court; T. G. Parham, Judge;
    affirmed.

      Rowell & Alexander, for appellant.

      Bridges & McGaughy, for appellee.
   Mehaeey, J.

The Interstate Packing Company is a corporation of Winona, Minnesota, and C. A. Linaker was a merchant of Pine Bluff, Arkansas. On the 21st day of February, 1925, they entered into the following agreement :

“Agreement made February 21,1925, between Interstate Packing Company, a corporation, of Winona, Minnesota, party of tbe first part, herein called the seller, and C. A. Linaker, of Pine Bluff, Arkansas, party of tbe second part, herein called the buyer.
“The seller agrees to and does hereby sell to the buyer, and the buyer agrees to and does hereby buy from the seller, packinghouse products made by the seller, and consisting' of smoked and dry salt meats, fresh meats, lard, pickled goods and offal, in the amounts and upon terms and conditions and for prices as hereinafter set forth.
‘1 The period of this contract is and shall be for one year from date hereof, and it is agreed that the buyer shall take and the seller shall furnish hereunder not less than two carloads of said packinghouse products during each month of said period. The buyer agrees that he will each week advise the seller, in due time for shipment, of the variety and amount of each of said products to be shipped by the seller to him..
“Delivery by the seller to the carrier at Winona, Minnesota, of products sold hereunder, consigned to the buyer, shall be delivered to the buyer, but the seller shall pay freight from Winona, Minnesota, to Pine Bluff, Arkansas.
‘ ‘ The price which the buyer is to pay and the seller is to receive for the merchandise aforesaid is to be the current price therefor, based on Chicago market, as fixed by the seller to its customers generally each week, with freight added (subject to discount as hereinafter provided), and the seller shall each week advise the buyer of such prices, which shall control and apply to all shipments hereunder until a change in price by the seller and advice thereof to the buyer, provided that the seller shall have the right to advance or reduce the price of such merchandise at any time by wire in accordance with any sudden or unusual fluctuation in the Chicago market. From the prices above specified the buyer shall be entitled, as to all goods shipped hereunder for which he pays the drafts at maturity, to discounts as follows, which shall he credited to the buyer by the seller as and when the drafts against such shipments are paid, and the seller will, on or about the first day of each month, send buyer a statement of discount credits for the foregoing month: Two per cent, on smoked and dry salt meats and lard; five per cent, on pickled goods; fifty cents per hundred pounds on fresh meats and offal.
“When and as merchandise is shipped hereunder the seller will make on the buyer one draft for one-half the price of each shipment, payable in 15 days from date, and one draft for one-half such price, payable in 30 days from date, to which drafts the seller will attach invoice and bill of lading, the same to be transmitted and presented to buyer through usual banking channels, and buyer agrees to accept said drafts upon presentation and to pay the same at maturity, and title to merchandise shipped shall not pass from seller to buyer until payments of drafts, as aforesaid. Upon acceptance of such drafts, bill of lading is to be surrendered to buyer.
“Any failure on the part of the buyer to order and accept at least two carloads per month of said merchandise, or to-accept or to pay any draft drawn as aforesaid, may, at the option of the seller, be taken to be a repudiation of this contract, and the seller may, if it so elect, cancel this contract as for breach thereof on the part of the buyer. ’ ’

Under this agreement goods were shipped by appellee to C. A. Linaker, and drafts were sent.

Linaker died on the 24th day of August, 1925, and at that time drafts were due and unpaid and several thousand dollars worth of the products shipped hy appellee to Linaker were on hand.

The Interstate Packing* Company filed suit in the chancery court of Jefferson County, Arkansas, on December 16,1925, alleging that the National Bank of Arkansas, a corporation organized and existing as a national bank under the laws of the United States, and George H. Linaker were appointed by the probate court of Jefferson County administrators of the estate of C. A. Linaker, deceased; that, on August 25, plaintiff was the owner of certain meats which were in the former place of business of C. A. Linaker in Pine Bluff, Arkansas, giving a detailed description of the meats and the value of each item, the total value of which was $5,557.97. Plaintiffs alleged that the administrators and the National Bank of Arkansas and George H. Linaker individually took possession of the meats, which were of the value of $5,557.97, and that the National Bank of Arkansas and George II. Linaker received $5,557.97 for said goods, and that the identical money which was the purchase price of said goods is now in the hands of said defendants.

The prayer was for judgment against the administrators and against them as individuals for the above amount, with interest and cost, and they asked that a trust be impressed upon the funds in the hands of said defendants in favor of the plaintiffs to the amount of judgment prayed. And that the defendants be ordered to pay the same over to plaintiff.

The defendants answered, denying the material allegations in plaintiff’s complaint, and alleged that all of the property taken over by them as administrators of the estate of Linaker, deceased, was the actual property of said estate,'and has been handled by them in due course of administration. That, if the plaintiff has any claim against the estate of C. A. Linaker, it should be filed with (hese defendants as administrators of said estate as a claim against said estate. Defendants also filed motion for bond for cost, alleging that plaintiff was a foreign corporation. Defendants also filed a demurrer, and the court treated it as a motion to transfer to the circuit court, and transferred the cause to the circuit court of Jefferson County.

The plaintiff, on November 27, 1926, filed bond for cost.

The court made the following findings of fact:

“That, on the 21st day of February, 1925, the plaintiff, Interstate Packing Company, a corporation, of Win-011a, Minnesota, engaged in the business of packing and selling packinghouse products, - entered into a contract with one C. A. Linaker, of Pine Bluff, Arkansas, wherein and whereby the Interstate Packing Company contracted to sell to the said C. A. Linaker certain packinghouse products, said contract being set forth as an exhibit to the deposition of P. A. Jacobson.
“That, under the'terms of said contract, merchandise shipped thereunder was delivered to the said C. A. Linaker only upon the acceptance of two drafts for each carload of merchandise shipped, one draft evidencing one-half of the estimated purchase price of the car, being payable in fifteen days from date, and the other draft for one-half of the purchase price of said car, being payable in thirty days from date. That, upon the acceptance of said drafts, the bill of lading evidencing the shipment was delivered to the said C. A. Linaker, who then resold same in the course of his business, but said goods were not listed upon his books as assets of C. A. Linaker, nor was the debt therefor listed as a liability of C. A. Linaker, until after same had been resold. That, by the terms of said contract, the title to said merchandise did not pass from the Interstate Packing Company to the said C. A. Linaker until the payment of said drafts.
“That, on the 24th day of July, 1925, the Interstate Packing Company shipped to said C. A. Linaker one carload of merchandise for the estimated price of $5,210.45, drawing two drafts, one in the sum of $2,605.22 and the other for the sum of $2,605.23. Both of said drafts were accepted by C. A. Linaker upon presentation, one being-accepted for payment due August 10, 1925, and the other for payment due August 23,1925. The first of said drafts, maturing August 10, 1925, was duly paid. The second of said drafts, maturing August 23, 1925, has never been paid.
“That, on the 11th day of August, 1925, the Interstate Packing Company shipped another carload of merchandise to the said C. A. Linaker for the estimated price of $7,180.88, drawing two drafts, each for the sum of $3,590.44, which, upon presentation to the said C. A. Linaker, were accepted for payment due August 26, 1925, and September 10, 1925, respectively. Neither of these drafts have ever been paid. That, upon the acceptance of the drafts hereinabove mentioned, both carloads of merchandise were delivered to C. A. Linaker, who placed said merchandise in his wareroom and proceeded to sell from the same in due course of business, carrying same upon his books in the manner above noted. That all of the goods in said two cars were branded and kept physically separate from any other goods in the warehouse of Linaker.
“That, on the 24th day of August, 1925, one day after default in the payment of-the draft for $2,605.23, which was due and payable August 23,1925, C. A. Linaker died intestate in Jefferson County, Arkansas. • That thereafter, on August 27, 1925, the National Bank of Arkansas and Gr. H. Linaker, defendants herein, were duly appointed joint administrators of the estate of the said C. A. Linaker, deceased, and qualified as such. That, at the time of their appointment and qualification, there was in the wareroom of the said C. A. Linaker merchandise included in the above shipments of the agreed value of $5,748.28. That the National Bank of Arkansas and Gr. IT. Linaker, as administrators of the estate of C. A. Linaker, deceased, in good faith took possession of said merchandise immediately, and -procured an order from the probate court authorizing them to sell said property as perishable property belonging to the estate óf C. A. Linaker, deceased, and proceeded forthwith to sell the same, for which they received the sum of $5,748.28.
“The court further finds that, on'the 24th day of August, 1925, a few hours after the death of C. A. Linaker, one M. 0. Moore, who had been in the employ of C. A. Linaker, immediately wired the Interstate Packing Company that C. A. Linaker was dead. That, within the nest two or three days, and prior to the actual sale of said merchandise, telegrams were interchanged between the Interstate Packing Company and the said M. 0. Moore, which were exhibited to the administrators prior to the sale, from which it appeared that the Interstate Packing Company was asserting a claim of ownership to said merchandise. That, other than sending these telegrams to the said M. 0. Moore, the Interstate Packing Company made no effort, prior to the sale, to assert its rights, instituted no legal proceedings to recover said property, and made no formal demand on the administrators for the possession thereof, except in so far as was contained in a telegram to M. 0. Moore, marked Exhibit. E to his deposition, directing him to immediately sell said property for the account of the Interstate Packing Company, and not confuse same with the Linaker estate. That, during the time said telegrams were interchanged, the said M. 0. Moore was not in the employ of'the Interstate Packing* Company, nor was he in the employ of the administrators, but he subsequently assisted in making the inventory of the merchandise and assisted the administrator in selling and disposing of said merchandise. That the proceeds of said sale have at all times since then been in the possession of the administrators, who have held the same, claiming said funds as a part of the general assets of the estate of C. A. Linaker, deceased.”

There were no exceptions 'filed to the finding of facts, but the defendants excepted to the conclusions of law. And their first contention is that the court erred in holding that, upon the default in the payment of the draft maturing* August 23,1925, and the draft maturing August 26, 1925, the Interstate Packing* Company was the owner of and entitled to the immediate possession of the merchandise taken over by the defendants.

The contract itself expressly provides: “Title.to merchandise shipped shall not pass from seller to buyer until payments of draft as aforesaid.” It therefore appears that the parties contracted that the seller should-retain title, and the title was therefore in the seller, according to the express agreement of the parties. Even under a sale without any condition, where the seller does not retain the title, he has a right, as long as the merchandise is in the possession of the buyer, to bring suit and create a lien, and, when this is done, this lien is superior to any lien or claim thereafter created. But, where one retains title to the property sold, he may take possession of it at1 any time after condition broken, whether from the original bu3rer or from any person to whom it has been transferred, unless the seller has consented to the transfer or sale.

This court has often held that, in conditional sales, although the seller has the right to retake the property whenever there is a failure to pay for it, or when there is a violation of the contract which gives him a right to take possession, still the buyer has such an interest in the property, even though the sale is conditional, as that he may sell it or mortgage it. His sale or mortgage of the property, however, does not defeat the right of the seller to retake the property, unless, as we have said, the seller has agreed to the sale or mortgage.

Counsel relies on the case of Roach v. Whitfield, 94 Ark. 448, 127 S. W. 722, 140 Am. St. Rep. 131. In that case there was a conflict in the testimony, that on behalf of the appellant tending* to prove that the sale was absolute and not on consignment, and was to be disposed of by the consignee as their agents. The testimoity on behalf of the appellee tended to prove that she shipped the goods under a. consignment, and she had a written consignment agreement that, in such cases, she retain title for the purpose of securing the purchase price oifly. The appellant asked the court to instruct the jury, among other things, that, even if they found from the evidence that the goods were shipped on consignment and the title thereto was retained and that such goods were, without fault of defendants, destroyed b3^ fire, yet, if they further found from the evidence that such goods were delivered to the defendants at a fixed price, to be b3? them retailed in clue course of trade as merchandise, at any price fixed by them, and that title was retained by the plaintiffs solefy as security for the purchase price, and that, upon the payniont of purchase price, title was to vest in the defendants, then the loss must fall on the defendants. The court refused to give that instruction, and the court'held that that was error, and held that, under the facts in that case, the title was retained in appellant only for the purpose of security, but for no other purpose. The court stated further that the facts detailed tended to show that, when the goods consigned to appellees were received by them, they became the principal debtors to appellant. The title passed immediately to them on the payment of the purchase price. This is a statement by the court of what the facts in the particular case showed, and, these facts being true, the court said at least appellant was entitled to an instruction on the specific facts as set forth in the above testimony, telling them that, .if they found the facts to be as recited, the loss must fall on appellees.

We do not think that the above case is controlling here. In fact, the facts are not similar. In the present case, as we have already said, the contract entered into by the parties expressly provided that the seller should retain the title. Of course it will not be contended that appellee, if the buyer had lived, could not, at any time after default was made, have taken possession of 'the goods. Indeed, the appellants themselves say that, if it was a conditional sale, appellee would have had to repossess himself by replevin of such merchandise as was in the possession of Linaker, or would have had to sue for the unpaid purchase money and attach such merchandise, if any, remaining in his possession. In other words, if it were a conditional sale and any of the property was in the possession of the buyer, the seller could bring replevin and take the property, or he could elect to make the sale absolute and attach the property in the hands of the buyer. This latter course he could pursue if it had been an unconditional sale, as long as the property or any portion of it was in the hands of the vendee.

We think a case more nearly like this than the case above referred to is the case of Bryant v. Swafford Bros., 214 U. S. 279, 29 S. Ct. 614, 53 L. ed. 997. In that case the court said: “We think it clear that the contract under which the goods were delivered to the Newtons was one of conditional sale. ’ ’ Citing cases and continuing, the court said: “There is nothing in the nature of this contract which would forbid the parties from entering into it if it was valid by the laws of the State where made. ’ ’

The above case was in bankruptcy, and the court said that, in bankruptcy, the construction and validity of such a contract must be determined by the local laws of the State, and that such a contract is a conditional sale, and valid ■ without record in Arkansas, and it was further stated that the trustee had no higher rights than the bankrupt.

If this had been an unconditional sale of the merchandise, and the buyer had died and his administrators had taken charge of it, the seller could not have created a lien, because, under such circumstances, he only has a right to create a lien while in the hands of the vendee. But in this case the title to the merchandise was in the seller, and he had a right, of course, upon default, to retake it from the buyer. And the administrators in this case have no greater right than Linaker himself had. Moreover, the appellee wired, and, before there was any sale of the property, the administrators were advised of the claim of ownership by the seller, and they also knew that this merchandise was kept separate from the other merchandise of the buyer.

This case is distinguished from the case in 94 Ark. also, not only because the seller retained title and reserved the right upon default to declare a breach of the contract, but also because in this case the buyer not only did not keep these goods with his other merchandise, but he did not charge himself, but, as Moore testified, later kept the stock physically separate and listed the stock as assets of the packing company, and charg'ed the debt as a liability only upon the sale of it. That' Linaker considered it a consignment. Linaker certainly regarded it as a conditional sale. If he did not so regard it, there would be no reason for him keeping the stock separate and no reason for his keeping the books in the manner in which he did.

“Under a conditional sale, by the terms of which the seller reserves the title td the goods until payment of the price, no property passes to the buyer, notwithstanding the delivery, until performance of the condition as to payment. Nevertheless the buyer acquires a defeasible interest in the property, which, before default, he may sell or mortgage, and which may be attached by his creditors. So, too, he may maintain an action against one who wrongfully invades his possession. The seller may sell or mortgage his interest in the goods or in the contract, or it may be attached by his creditors. The provision that .title shall remain in the seller is, however, for his benefit, and he may elect to treat the sale as absolute and as passing the property in the goods to the buyer.” 35 Cyc. 667.

The seller treats the sale as absolute when, instead of bringing suit for the possession of the property, he brings a suit for the debt and attaches the property. He can pursue this remedy or the other, because the retaining title to the property is for his benefit, and he may waive it if he wishes to do so. But, where property is sold and the seller retains title until paid for, such property as remains in his possession may be taken at any time if it is not paid for, and, where the property is kept separate, as in this ease, he may take it from the administrators of the buyer.

We think the court was correct in holding that the Interstate Packing Company was the owner and entitled to the immediate possession of the merchandise, and that the acts of the defendants amounted to conversion of said property, and that the proceeds received by said defendants represent the property which belonged to the Interstate Packing Company, and that it is therefore entitled to the proceeds of said sale in lieu of being .able to recover said property.

We do not deem it necessary to cite further authorities, because this court has repeatedly upheld contracts for conditional sale of property, and there can be no question but tliat this was, under the express terms of tlie contract, a conditional sale, and that the property was kejit separate, and the particular property purchased from the packing company and' sold by the administrators was identified as the property sold under this contract, and we think that the circuit court correctly declared the law, and the judgment is affirmed.


source: Caselaw Access Project

author: Mehaffy, J.

license: Public Domain

text:
    Reynolds v. Winship.
    Opinion delivered November 7, 1927.
    1. Appeal and error — effect of appellant’s abstract. — On appeal the facts stated in appellant’s abstract may be assumed to be correct if not denied by appellee.
    2. Mortgages — consideration.—In an action to foreclose a mortgage, it is no defense that the mortgage indebtedness was not the personal obligation of the mortgagor, since the consideration may have been the satisfaction of the debt of a third person.
    3. Mortgages — provision as to payment. — A provision in a mortgage that the payment should be taken only from the interest of specified persons, held not to prevent a foreclosure and sale of the property mortgaged, where the mortgage provided for foreclosure and sale on default.
    4. Mortgages — liability of mortgagor. — In a foreclosure action it was no defense to the purchaser of an interest in the property that there was no lien on the property at 'the time of her purchase, where she subsequently signed a mortgage thereon.
    5. Judgment — correction of decree. — Though a court is without authority to set aside or modify its judgment or decree after expiration of the term, correction of an error made in entering a decree may be made at a term subsequent to that of its entry.
    6. Judgment — correction of decree at subsequent term. — Where, by mistake of the clerk, a decree of foreclosure provided for the sale of land, instead of a sale of oil and gas' leases thereon, the error may be corrected by court at a subsequent term.
    Appeal from Union Chancery Court, Second Division; George M. LeCroy, Chancellor;
    affirmed.

      Steioart & Oliver, for appellant.

      Mahony, Yocum & Sage and Kitchen & Karris, for appellee.
   Mehaffy, J.

This is a suit brought by W. E. Win-ship against G. G. Baggett, C. G. Graham, G. L. Gano and Mary Reynolds, to foreclose a mortgage securing payment of a certain note, and a decree was entered against each of the defendants, Gano, Baggett and Graham, for $3,965.60, with interest.

The Continental Supply Company had intervened, and judgment was given in its favor against the defendants and each of them for $733.58, with interest, and the plaintiff recovered $3,965.60. The decree was entered November 4,1926. The decree, as. entered on the record, declared a lien on the land described in. plaintiff’s complaint, and ordered the sale of said land to pay the amount of said judgments. Thereafter it was discovered that the decree which was entered on the record was for the sale of the land, when it should have been for the sale of oil and gas leases. The record recites that, on December 7, 1927, a supplemental decree was entered correcting the error evidently made by the clerk in recording the decree. Of course the date on this record is incorrect. It is not yet December, 1927. Counsel for the appellant state that this supplemental decree was at a subsequent term of the court, and that this date should be February, 1927, instead of December. The record, however, does not in any manner show whether this was at the same or a subsequent term of court. If the supplemental decree was recorded in December, it was at the same term of court that the case was tried; if it was in February, that would be a subsequent term of court.- It is impossible, of course, to tell from the record whether it was at the same or at a subsequent term of court. The appellants say that the supplemental decree was at a subsequent term of the court, and the appellees, in their brief do not deny this. We think we may therefore assume that the correction was made after the term of court at which the decree was rendered had adjourned.

Appellants contend that the judgment should be reversed as to Mary Reynolds because she did not sign the note, and that the mortgage indebtedness was not her obligation. We cannot agree with counsel in this contention. The mortgage would be valid and binding against her, even if given to secure the debt of a third person. Rockefellow v. Peay, 40 Ark. 69.

“As has been noted, the consideration need not move to the mortgagor. Hence the debt may be the debt of another and the consideration, for example, may consist in a loan to a third person, or a satisfaction of a debt due the mortgagee from a third person, or in the release of a mortgage of a third person, or forbearance or extension to a third person debtor.” 41 C. J. 387.

Learned counsel also contend that no valid lien was proved for intervener. A sufficient answer to this com tention is that the intervener proved its claim, and defend-, ants did not deny the claim in the answer.

Appellant’s next contention is that, under clauses 6 and 7 of the mortgage, the payment should only be taken from the interests of other defendants. It is true- that the interests of other defendants, under the terms of the mortgage, shall be applied to the payment of the indebtedness, but it is also true that the mortgage gives the right to foreclose and sell the property if the debt is not paid as provided for in the mortgage.

Appellant says that Mary Reynolds did not sign the note, and that, at the time she purchased her interest, there was no-lien. The first of these contentions we have already disposed of, and it is .immaterial whether her interest was incumbered at the time she purchased it or not. Her liability or the liability against her interest in the property attached when she signed the mortgage.

Appellants next contend that the decree should be reversed as to all defendants because the decree was for the sale of the land, when it should have been for the sale of the oil and gas leases, and that the court was without authority to modify the decree after the expiration of the term of court.

This court has. many times held that a court is without authority to set aside or modify its judgment or decree after the expiration of the term. This is the set-tied rule in this State. If the supplemental decree was intended or was a modification of the decree after the expiration of the term at which it was rendered, it would be void, and would require a reversal of the case. If, however, the decree of the court was for a sale of leases, and the clerk simply made a mistake in recording' it, the court could require the clerk to record the decree that was rendered, and it would make no difference whether it was called a supplemental decree or a correction of the record.

The mortgage described the leases. The pleadings all referred to the leases. Plaintiffs did not ask for a sale of the land, but of the leasehold interest. All the evidence showed that it was the leasehold interests that were involved. The supplemental decree recites . that the court’s attention is called to the fact that an error was made in drafting’ the decree. It is not contended or not shown that there was an error in the judgment or decree of the court, but there was an error in drafting the decree. We assume that that means that the decree was not in conformity with the decree rendered. Certainly all of the evidence tends to show that the original decree was correct, and that there was an error in recording it. The court had the power, even after the term, to make the record speak the truth.

There are a number of other questions raised by appellants in their brief, but, after a careful examination of the record, we have reached the conclusion that there is no reversible error. The questions of fact were submitted to and decided by the chancellor, and we think the findings are sustained by the evidence, and the decree is therefore affirmed.


author: McHaney, J.

text:
    Powell v. Billingsley.
    Opinion delivered November 7, 1927.
    Mortgages — amendment of commissioner’s report of sale. — Where the evidence showed that a purchaser at a mortgage foreclosure sale of land, subject to a prior mortgage for $7,000, bid $19,500, which was $7,000 more than the indebtedness then being foreclosed, intending only to bid the amount of .the purchaser’s debt and assumption of the prior mortgage thereon, it was not error to permit the commissioner to amend the report of sale to show that the purchaser intended to bid only the amount of judgment and the prior mortgage; the purchaser of the mortgagor’s equity, complaining, being offered an opportunity to step into the purchaser’s shoes.
    Appeal from Izard Chancery Court; Alvin 8. Irby, Chancellor;
    affirmed.

      McCaleb & McCaleb, for appellant.

      8. M. Casey, for appellee.
   McHaney, J.

Appellees brought this action to foreclose ia mortgage on 975 acres of land which was given to secure a debt by the defendants, T. P. Powell and son, who are the father and brother of appellant, T. C. Powell, of approximately $11,000, subject to a prior mortgage to the Joint Stock Land Bank of St. Louis, of approximately $7,000. The case proceeded to judgment, in which a decree was rendered for ¡appellees, foreclosing the second mortgage, subject to the prior mortgage, and providing for a sale of said lands in satisfaction of said indebtedness, which should be sold “subject to a prior deed of trust executed to the Joint Stock Land Bank of St.'Louis, Missouri.” During the pendency of the suit, and before the sale, the defendants in this action became insolvent, and were adjudged bankrupts, and their equity in said mortgaged lands was sold by the trustee in bankruptcy, with the other assets of the bankrupt estate, and the appellant, who was not then a party to .this litigation, became the purchaser of the equity in the lands covered by said mortgages ¡and the other property. A sale was had by the commissioner, at which appellant was present, and the appellees bid the sum of $19,500 for the lands, which was about- $7,000 more than, the indebtedness then being foreclosed, and, this being the only bid, the land was struck off and sold to the appellees for said sum. The undisputed facts show that the appellees, in making their bid, only intended to bid the amount of their debt and the assumption of the prior mortgage against the lands, which amounted to the total-sum of $19,500, and were advised to do this by the commissioner, Hall, who made the sale, who understood that appellees were only bidding the amount of their indebtedness under the foreclosure, plus the amount of the prior mortgage, which they would pay off when it became due. Appellant claims that, inasmuch as the land was ordered sold subject to this prior debt, their bid being the flat sum of $19,500, appellees should be required to pay into the registry of the court for his benefit the sum of approximately $7,000. Under this state of the case the court permitted the commissioner to amend his report of sale.

The original report, showing that “at such sale so made and had by him, J. H. Landers, Ed Billingsley and R. D. Harris bid and offered the sum of $19,500 for said lands and premises, and, that being the highest bid, the same was struck off and sold to them for that sum, $19,-500. ’ ’ That report was amended so as to read as follows: “And at such sale so made and had by him, J. H. Landers, Ed Billingsley and R. D. Harris bid and offered the sum of $19,500 for the amount of judgment and costs, $12,-290.37, and debt to the St. Louis Joint Stock .Lank Bank, $7,229.63, for said land and premises, and that being the highest bid, the same was struck off and sold to them for that sum, $19,500.”

Thereupon appellant filed his intervention in the action setting out the foregoing facts, in which he alleged that he.was present at said sale, and would have bid the amount of the mortgage debt and costs for which it was being foreclosed, but that he would mot have bid more than $19,500, and prayed that the amended report of the commissioner be stricken from the files, and that the original report be confirmed, and that he be declared to be tlie owner of the sum so bid by appellees, in excess of their judgment debt, and that, upon the payment of said amount, the excess of the $19,500 over and above the mortgage debt then being foreclosed, be paid to him.

Appellees filed a reply to the intervention, setting out their theory of the matter, as hereinbefore stated. After hearing evidence on the intervention, the court entered a decree which recites that “the court tendered said lands to the intervener upon payment of said debt and cost, without interest from date of filing intervention, and upon refusal of said intervener to accept said tender of said lands, it is the opinion of the court that 'said amended report of the commissioner should be, and the same is, hereby confirmed, and said commissioner is hereby directed to execute a deed to the plaintiffs purchasing at said sale, upon their satisfying their judgment 'against the defendants and assuming the indebtedness of defendants to the Joint Stock Land Bank.” From this order confirming the amended report and sale of said lands the intervener has prosecuted an appeal to this court.

As indicated by the decree above quoted from, the appellees offered to permit appellant to step into their shoes, as it were, on their bid as shown in the amended report, and accept from him the payment of their debt, and let him become the purchaser of the lands at the sale, subject to the prior mortgage. He refused to do this, and seeks to profit on a strict construction of appellee’s bid, as shown by the original report of the commissioner, to the extent of approximately $7,000, which bid was conclusively shown to have been erroneously made, or erroneously construed by appellant. There is no dispute in the evidence as to what appellees meant by their flat bid of $19,500, that is, that they meant to bid the amount of their debt and assume the first mortgage. This is not only shown by the testimony of the appellees and the commissioner, but the land itself is not worth more than the amount of both mortgages, at least it is not worth $7,000 more than both mortgages.

We think this case is controlled by the decision of this court in the case of Minick v. Ramey, 168 Ark. 180, 269 S. W. 565, where a similar state of facts was involved, and the court permitted the report of the commissioner to be amended in accordance with the intent of the parties, and confirmed it as amended.

No error appearing’, the decree is affirmed.


text:
    Old Colony Life Insurance Company v. Julian.
    Opinion delivered November 7, 1927.

      1. Insurance — fraudulent concealment of physical condition.— Where a life insurance company sought to cancel the insured’s policy on the ground of his fraudulent concealment from the medical examiner of his past physical condition, evidence held not to show such fraudulent concealment.
    2. Insurance^ — cancellation of policy — burden of proof. — In a suit by a life insurance company to cancel a policy on the ground of fraudulent concealment of insured’s' previous physical condition, the burden was -on the insurance company to establish affirmatively the falsity, materiality, and bad faith in the representations made by the insured in the application; the policy containing a statement that, in the absence of fraud, the statements in the application were deemed representations and not warranties.
    3. Insurance — knowledge of medical examiner. — Where, in a suit hy a life insurance company to cancel a policy on the ground of fraud of insured in making statements to the medical examiner relative to the condition of his health a few years previous to the examination, it was shown that the medical examiner knew of the condition of insured’s health -at the time in question, held that the knowledge of the medical examiner was the knowledge of the company, and precluded cancellation on the ground of fraud practiced through such statements.
    4. Insurance — insanity within disability provision. — Under a policy providing for payments by reason of a total and permanent disability of the insured due to bodily injuries or disease, insured is entitled to recover where it is shown that he became totally and permanently disabled by reason of insanity such as to prevent him from being intrusted with any responsibility.
    5. Insurance — notice of disability. — The requirement in a policy that notice should be given of a total and permanent disability,
      held that insanity operated to excuse the insured from giving the required notice.
    6. Insurance — sufficiency of notice of disability. — Where, under *a policy.requiring notice of disability, the insured’s sister wrote a letter to the company regarding the condition of her brother, inclosing a statement from physicians showing his condition, this was sufficient notice of his disability where the company had not advised that it required a particular form of proof of loss.
    7. Insurance — right to recover attorney’s fees. — Where, in a suit brought by a life insurance company to cancel insured’s policy, the defendant by counterclaim recovered for disability from insanity, held that the provision of Crawford & Moses’ Dig., § 6155, permitting one recovering against an insurance company to recover attorney’s fees, was applicable to such case.
    8. Insurance — amount of attorney’s fees. — Where, in an action by a life insurance company to cancel the policy of insurance, the insured by a counterclaim was awarded $200 under the disability provisions of the policy, and in addition thereto was awarded $250 as attorney’s fees, held that such attorney’s fees were not excessive, since, as the insured’s disability was of a permanent nature, the ultimate amount involved in such suit exceeded the $200 rendered.
    Appeal from Craighead Chancery Court, Western District; J. M. Futrell, Chancellor;
    affirmed.

      McKinley S Price and Gautney & Dudley, for appellant.

      Basil Balter, for appellee.
   McHaney, J.

On February 16, 1923, appellee, Orby Julian, made application to appellant for a policy of life insurance, in which his mother, the appellee, Annie Julian, was to be named as beneficiary. The application consists ■of two parts: Part 1, being- the questions and answers made at the time the agents, Webb and Neustadter, took his application; and part 2, being the questions and answers thereto given to the medical examiner, which is dated February 20, 1923. Under date of February 28, 1923, the medical examiner, who had filled out part 2 of the application, made a confidential report to the company, in which he answered all the questions called for in the confidential report, in which he stated that no other person was present at the examination except himself and the applicant. Also in this confidential report he stated that the age of the applicant as given by him was 28, bnt that his apparent age was 25, and stated that he had the general appearance of a healthy person, of normal gait, without defects or deformities, without impairment of sight or hearing, or disease of skin, bones or joints. Question 31 in this report is as follows: “Q. Do you see in the appearance, manner, occupation, residence, mode or station of life of the person examined, anything which would render him in any way undesirable as a risk, or make the proposal of insurance one of speculation or over-insurance?” His answer to that question was “No.” In part 2 of the application, consisting of answers made to the medical examiner, the applicant was asked if he had had any of the list of ailments therein stated, running through the alphabet from albumin in the urine to varicose veins, and consisting of about sixty-five dise'ases, influenza not being’ one of the diseases called for, and he answered “None.” Question 22 of said part 2 is as follows: “Name all • ailments, physical injuries and surgical operations said person has had in the last ten years, giving the names of all persons who attended said person in connection therewith, together with date and address.” He answered “None.” As a matter of fact this answer was untrue, for, in the year 1918, he had had a serious case of influenza, and had been treated by two physicians in Jonesboro. This fact is undisputed.

It appeared in evidence, on a trial of the case, that appellee, Annie Julian, and her son, C. L. Julian, who is a brother of appellee, Orhy Julian, were both present at the time part 2 of the application was filled out by the examining physician, Dr. Hartwig, who himself admitted that the mother was present, but did not remember the brother being’ present, although he had stated in his confidential report that no -other person was present. Both the mother and her son, C. L., testified that the examining physician, was told, in answer to question 22, as above set out, regarding the serious case of influenza the applicant, Orby Julian, had had in 1918, but that he stated it was not necessary to mention same in answer to said question, for the reason that it was not included in the list of diseases above mentioned, set out under question 20.

It was also .provided, in part 1 of the application, that the applicant agreed that there should be no contract unless the policy -was delivered to and accepted by the applicant while in good health, and it is further set out therein that "all statements and answers written in this application, marked part 1, as well as those made and to be made to the medical examiner in continuation hereof, marked part 2, are true and complete; that no material information or facts have been omitted therefrom, and that the same are offered to the company as a consideration for said insurance and any other or additional insurance for which policies may be issued by the company on this application. ’ ’ The application, medical examination and confidential report were thereafter mailed to the insurance company, on which it issued two policies for $1,000 each, both dated March 13, 1923, and both were delivered to the insured June 11,1923.

The policies contained the following provisions:

"Waiver of Premiums. The company will waive the payment of all premiums becoming due hereon after expiration of six months from the date of receipt by the company of satisfactory proof that the insured lias become totally and permanently disabled, as hereinafter defined, if such proof is received before the insured has. attained the age of sixty years and if all premiums becoming due hereon from the beginning of this insurance to the expiration of the aforesaid six months have been duly paid. - The payment so waived by the company will not be charged as an indebtedness against the' insured or this policy,-which will continue in full force towards maturity, with loan, cash and. other, guaranteed values increasing'and progressing from year’to year, in like manner as if the premiums were being duly and. regularly paid by the insured.
“Disability Annuity. If such proof is received by the company before the insured has attained the aforesaid age and premium payments liave been waived as herein provided, the company will, 'one year after the receipt of such proof, begin to pay the insured a disability annuity of one-tenth of the face amount hereof, and will make such annuity payments, annually on the anniversary of the first payment until the maturity of the policy, without charging* any such payments as an indebtedness against the insured or this policy.
“Miscellaneous Conditions. The total and permanent disability of the insured herein referred to must be due to bodily injuries or disease occurring* while this policy and this provision are in full force, and must be such as to prevent the insured then and at all times thereafter from performing any work or conducting any business for compensation or profit; provided that, notwithstanding proof of disability may have been accepted by the company as satisfactory, the company shall, at any time, on demand, be furnished satisfactory proof of the continuance of such disability; and if such proof is not furnished, or if it shall appear to the company that the insured is able to perform any work or to conduct any business for compensation or profit, no further premium payments shall be waived nor annuity payments made. In no event will premium payments be waived, or annuity payments made, except during total and permanent disability of the insured, as herein provided. Military or naval service in time of war is a risk not assumed by the company under any of the foregoing disability provisions.”

In the latter part of June, or the early part of July, 1923, Orby Julian, the insured, became insane. Appellant’s agents were notified of this condition, and, on March 19, 1924, Mrs. Pearl Turner, sister of the insured, wrote a letter to the appellant, inclosing a statement from the physician, regarding the condition of her brother; and again, on June 3, she communicated with appellant relative thereto, blit received no reply to either of these letters.

On September 24, 1924, appellant filed suit in the Craighead Chancery Court, Western District, in which it .sought to cancel the policies in question, on the ground that- the insured had fraudulently concealed material facts from the company in the answers to the questions in the application heretofore referred to, and in accepting delivery of the policies at a time when he was not in good health. Appellees filed an answer, in which they denied the allegations of the complaint, and a cross-complaint seeking a recovery, under the disability annuity provision of the policy, of one-tenth of the face amount thereof, $100 on each policy, together with penalty and attorney’s fees. On a trial of the case the court dismissed the complaint of the plaintiff for want of equity, rendered judgment against it on the cross-complaint for $200, $24 penalty and a $250 attorney’s fee, from which comes this appeal.

It is first contended, for a reversal of this case, that the insured fraudulently concealed from the medical examiner his illness in 1918. We do not think the preponderance of the evidence supports appellant’s contention in this regard. On the other hand, we think a decided preponderance of the evidence shows that the medical examiner was advised of the illness of 1918, and made, the statement to them that it was not necessary to report it in part 2 of the application, as it was not one of the diseases listed. This fact was positively testified to by the insured’s mother and brother, and the medical examiner himself, when asked regarding this statement, first testified that he did not remember. While he later denied this conversation, still we think his manner of testifying on this point leaves their statement about this occurrence practically undenied. But, even though it be admitted that no such conversation took place,'and that he neglected to tell the medical examiner regarding- his illness in 1918, still it does not necessarily follow that it was fraudulently done, for, at the time of the examination and the answer to the question, according to the medical examiner’s own confidential report and other evidence, he was a man in fine physical condition and a good insurable risk, without any apparent disease, either of body or mind, and appeared to be younger than he actually was. Therefore, whatever impairment of his health there might have been by the attack of influenza in 1918, he had apparently fully recovered therefrom in 1923, when he was examined for this insurance, and there is no substantial evidence in the record connecting the disease from which he now suffers with the attack of influenza in 1918. The burden is upon appellant to establish the fraud by proving affirmatively the falsity, materiality and bad faith in the representations made by the insured in the application regarding his health. Moreover, the policy provides that “all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and no such statement shall avoid this policy, or be used in defense of a claim hereunder, unless it is contained in said written application.” In the recent case of Bankers’ Reserve Life Co. v. Crowley, 171 Ark. 135, 284 S. W. 4, this court said:

“It is expressly agreed that the answers of the applicant copied above are representations and not warranties. In this connection it may be stated that a noncompliance with a warranty operates as an express breach of the contract of insurance, while false representations render the policy void on the ground of fraud. The questions propounded in the application as set out above call for answers founded on the knowledge or belief of the applicant, and a misrepresentation or omission will not avoid the policy unless willfully or knowingly made with an intent to deceive. Metropolitan Life Ins. Co. v. Johnson, 105 Ark. 101, 150 S. W. 393. In Mutual Aid Union v. Blacknall, 129 Ark. 450, 196 S. W. 792, it was held that knowledge affecting the rights of the insured, which comes to the agent of the insurance company while he is performing the duties of his agency in receiving applications for insurance and delivering policies, becomes the knowledge of the company; and the insurance company is bound thereby, where the agent who solicited the business was charged with the duty of asking the applicant questions concerning his physical condition. ’ ’

Hence, in this case, the knowledge of - the medical examiner was the knowledge of the company, and the policy cannot be canceled on this account.

It is next contended that the disability of the insured does not come within the terms of the policy, and it is urged -that the uncontradicted evidence shows that the insured’s physical condition is as good now as it ever was. The disability referred to in the policy is defined under miscellaneous conditions to be “the total and permanent disability of the insured herein referred to must be due to bodily injuries or disease, * * * such as to prevent the insured then and at all times thereafter from performing any work or conducting any business for compensation or profit.” While it is true that he is strong physically, it is also shown that he is totally -and permanently disabled by reason of insanity that amounts almost to imbecility, such as to prevent him from being intrusted with any responsibility. We therefore hold that he is totally ..disabled within the meaning of the policy, and that there is no substantial evidence in the record tending to show that this disability has any connection with the case of influenza he had in 1918.

It is next urged that the court erred in holding that there was any proof of disability, or that the company had waived such proof. Let it be remembered that the insured in this ease became totally and permanently insane shortly after the delivery of the policies. In the recent case of Pfeiffer v. Mo. State Life Ins. Co., 174 Ark. 783, 297 S. W. 847, we said:

“The clause of the policy with respect to giving notice of permanent disability of the insured is a condition subsequent, and, as we have already seen, should be construed liberally in favor of the beneficiary. The condition of the policy in respect to giving notice of permanent disability as well as making proof of death operates upon the contract subsequent to the fact of loss. The insured has done all that he can do towards carrying out his part of the contract, and the liability of the company under the terms of the policy has attached. Nothing remains to be done except to give the company notice of its liability and make proof thereof. If the insured has become permanently insane at the time the permanent disability attaches, it is evident that he is in no condition of mind to give the notice or make proof of his disability. Hence, if the policy in such case is to receive a liberal and reasonable construction in favor of the beneficiaries, it should be said that permanent insanity, which causes, in whole or in part, permanent disability, should operate to excuse the insured from giving the required notice. The very object and purpose of the policy, in a large part, would be defeated where the company inserted in the policy a condition which it knew that the insured could not perform in person and would not be in a state of mind to obtain its performance at the hands of others. There is nothing in the terms of the policy from which it might be said that it was the duty of the beneficiary to give the notice.”

This case cites other cases in point to this same effect, and we now hold again, in line with this and other-decisions of this court,, that insanity, obviates the- necessity of‘complying with'the conditions subsequent in-the policy, such as giving notice of .a total and permanent-disability. ' Moreover, the chancellor was■ justified-in holding' that the' notice given by the sister of the insured, together ■ with the statements of the physicians, -was • sufficient notice, and, if the company.had required a particular form of proof of .loss, it should have so advised the appellee, or his sister, of this. fact.

It is finally insisted that the court erred in allowing a $250 attorney’s fee, since there was a recovery of only $200, plus the penalty in this case, and because the statute, § 6155, C. & M. Digest, has no application in the defense of a suit brought to cancel the policy. This is something more than the defense of the action to cancel the policy. There is a cross-complaint seeking affirmative relief under the terms of the policy, and appellees have recovéred the full amount sought to be recovered on the cross-complaint. The same procedure was resorted to in the case of Bankers’ Reserve Life v. Crowley, supra, as here, being a suit in chancery to cancel the policy, and it was there held that the 12 per cent, allowed by the statute is recoverable as damages against the company for failure to comply with the contract by making payment, and that the attorney’s fee is allowed as compensation for the cost of collecting the debt, and that it may be collected in a chancery case as well as at law. We therefore hold that the statute is applicable in this. case.

On the question of the reasonableness of the fee, we are of the opinion that the fee is not excessive, although only one installment on each of the policies, which was due and payable at the time of the suit, could be - collected. The determination of this question determined also the liability of the company for future installments under this policy, and the liability on the policy for the face value thereof in case of death, without change of health. Therefore it cannot be said that only $200 was involved in the action. In Smith v. Adams, 130 U. S. 167, 9 S. Ct. 566, 32 L. ed. 895, the Supreme Court of the United States used this language:

“By matter in dispute is meant the subject of litigation, the matter upon which the action is brought and issue is joined, and in relation to which, if the issue be one of fact, testimony is. taken. It is conceded that the pecuniary value of the matter in dispute may be determined, not only by the judgment' prayed, where such is the case, but in some cases by the increased or diminished value of the property directly affected by the relief prayed, or by the pecuniary result to one of the parties immediately from the judgment.”

The case of New York Life Ins. Co. v. English, 96 Tex. 268, 72 S. W. 58, was a suit on a life insurance policy which called for the payment of the insurance in ten annual installments, commencing with the death of the insured. The insurance company failed to make payment, suit was brought to recover the first installment when due, and, while the court held that a recovery could not be had for the whole amount of the insurance, with execution to issue for the various installments as they fell due, yet it was held that “the liability of the insurance company, so far as put in issue by the pleadings, would have been determined as to the whole policy if the suit had been instituted for one installment only.”

We are therefore of the opinion that the fee allowed was not excessive, and the judgment is accordingly affirmed.


author: Hart, C. J.,

text:
    Jeffett v. Cook.
    Opinion delivered November 14, 1927.
    1. Appeal and error — opinion on former appeal. — The opinion of the Supreme Court on a former appeal becomes the law of the case on a subsequent appeal.
    2. Wills — revocation.—Where the cancellation by the testatrix of clauses in a will by running a pencil through a part of it showed her intention not to revoke the remainder of the will, it was error to submit to the jury the question of revocation of the entire will.
    3. Wills — revocation.—A testator may revoke his whole entire will by marking out material parts thereof, in such manner as to indicate his purpose to revoke the whole will, although it might leave it as legible as it was before.
    Appeal from Woodruff Circuit Court, Southern District; E. D. Robertson, Judge;
    reversed.
    STATEMENT OF FACTS.
    This suit involves a conflict between the devisees and legatees of two wills executed by Nannie L. Jeffett, but the appeal only involves the validity of the judgment of the circuit court declaring’ the first will to - have been revoked by cancellation. Both wills were executed by the testatrix and attested in the manner provided by statute. Both of them were offered for probate in the county where the testatrix resided at the time of her death. In thé circuit court the proceedings were consolidated for the purpose of trial.
    The facts out of which the question raised by.this appeal arises are briefly as follows: On July 17, 1917, Mrs. Nannie L. Jeffett executed a will, the body of which reads as follows:
    “Last will and testament of Nannie L. Jeffett: I, Nannie L. Jeffett, being of sound and disposing mind and memory, but of an advanced age, hereby make, publish and declare this to be my last will and testament, specially revoking all former wills made, if any such there be.
    “Item 1. I desire that all my just debts be paid.
    “Item 2. I give, bequeath and advise to my two nieces, Mary Cook and Margaret Crebs, my homestead in the town of Cotton Plant, Woodruff County, Arkansas, west 15 feet of lot 3, and all of lot' 4, block 9 (65).
    “Item 3. I give, bequeath and advise to- my stepchildren, Fannie McKelvey and Sidney L. Jeffett, the property in' Cotton Plant, Arkansas, that stood in the name of their father at his,death,-and which said property has been, quitclaimed to me by said two stepchildren and Dr. W. F. Jeffett, they to take said property subject .to the incumbrances thereon,- and to pay off 'añd disr charge the incumbrances,’ holding my estate harmless against'any liability by reason, of, same. ,, ,.- , ■ . . ■■
    “Item 4. It is not my intention by this, my last, will and testament, to* devise my’personal property, consisting of jewels, wearing apparel, and household and kitchen furniture. As to this property I -will dispose of hereafter by such yerbal directions-as -to me may seem proper. I have'some money in the Planters’ National Bank of Cotton Plant; after the payment of my debts out of this fund I'desire that my brother, B. B. Cook, be paid the sum of $200, and the remainder, if any, to he paid to my nieces, Margaret Crebs, Fannie McKelvey,' Sidney Jeffett and Janie Yinyard.
    “Signed, published and declared as and for my last will and testament, in the presence of the persons whose names appear below as witnesses hereto, and signed by them in my presence and in the presence of each other as such witnesses, this the day and year first above written. ’ ’
    After this will was executed, Mrs. Jeffett frequently expressed a wish to change the will, and finally marked out certain words in the will with a pencil. The whole of item 2, as copied above, was canceled by running pencil marks across all the words in the clause. The pencil marks were made through each and every word of the clause, but they did not render the typewriting of the will illegible. In item 4 of the will the'words “to my nieces, Margaret Crebs, Fannie McKelvey, Sidney Jeffett and Janie Yinyard,” were marked out with a pencil, and the remainder of the item was left intact. The body of the will was typewritten, and it was found with the personal effects of the testatrix after her death.
    On the 2d day of November, 1920, the testatrix executed another wdll. In it she provided for the payment of her just debts and funeral expenses, and then gave certain legacies to be divided equally between her four nieces. She gave other small legacies to various relatives, and, in item 7, left the residue of her property to her brother, R. B. Cook.
    S. J. Jeffett, devisee under the' first will, contested the second will, and introduced witnesses wdio testified that the testatrix was not of sound and disposing mind and memory at the time she executed the wdll of the date of November 2, 1920. On the other hand, R. B. Cook, the proponent of the will, introduced witnesses who testified that Nannie L. Jeffett was of sound and disposing mind at the time she executed said wdll. Sidney J. Jeffett was a stepson of Nannie L. Jeffett, and lived with her for twenty-two years, until he married.

      The jury returned the following verdict:
    “We, the jury, find both wills void, and ask the court to dispose of the property. The first will being void on account of mutilations and erasures; the second will void on account of our inability to decide from the evidence in the case of the sanity of Mrs. Jeffett.”
    The circuit court considered this verdict to mean that Mrs. Jeffett was. insane at the time she executed the will of the date of November 2, 1920, and judgment was rendered accordingly. It was adjudged that both wills were of no effect and void, and, to reverse the judgment holding illegal and void the will of July 17, 1917, Sidney J. Jeffett has duly prosecuted an appeal to this court.

      Jonas F. Dyson and Ross Mathis, for appellant.

      R. D. Campbell and W. G. Dinning, for appellee.
   Hart, C. J.,

(after stating the facts). This is the second appeal in the case. The opinion on the former appeal will be found in 169 Ark. 62, 272 S. W. 893, under the style of Cook v. Jeffett. On that appeal, in the construction of our statute relating to the revocation and alteration of wills, it was held that a will can be revoked in whole or in part by cancellation or obliteration. It was held that the words ‘ ‘ to cancel ’ ’ and ‘ ‘ to obliterate ’ mean practically the same thing, and that, where the whole or a part of the clause of :a will is crossed out, the will i's canceled or obliterated, although the words crossed out may be legible. The effect of that opinion was to hold that, if that which is essential-to the validity of the whole will is canceled or obliterated with the intention of revoking it, the whole will is revoked. On the other hand, if a clause or a part of a clause is so canceled or obliterated as not to affect the rest of the will, then that clause or part of a clause only is revoked. In other words, upon the former appeal we held that the power to revoke a will given by the statute includes the power to revoke any part of it by cancellation or obliteration, and that, when such cancellation or obliteration of a part of a will does not affect tlie remainder thereof, such cancellation or obliteration is only effective as to such parts.

The opinion upon the former appeal, under our rules of practice, becomes the law of the case, and, in the application of the principles there decided, we are of the opinion that counsel for appellant are correct in their contention that the court erred in giving instruction No. E-l, which reads as follows:

“You are instructed that, should your verdict be against the probation and establishing of the will executed by Mrs. Nannie L. Jeffett on the 2d day of November, 1920, for any cause, then your verdict will be to probate and establish the one executed by her on the 17th day of July, 1917, as her last will and testament, provided you further find that the same has been properly and legally executed and authenticated by her, and provided you further find that said will has not been revoked by her by being canceled, obliterated or destroyed for the purpose of revoking the same by the testatrix herself, or by some other person in her presence and by her direction and consent.”

There is no fact in the record from which the jury might legally infer that the testatrix intended to revoke her whole will by canceling item 2 in whole and item 4 in part. As indicated in our statement of facts, the whole of item 2 was marked out by running a pencil through each word and figure therein, but this was not done in such a way as to render the typewriting illegible. Again, in item 4 of the will, the legatees named therein were marked out by running a pencil mark through their names, but the rest of the item was not in any way changed; and the words were not crossed out in such a way as to indicate that the testatrix intended to revoke any other part of the will than the two clauses in which the pencil was run through the words contained therein, as indicated above. It may be that the testatrix did not intend to cancel either one of the clauses of the will, and only marked out the words in the one in whole and in the other in part with the view of subsequently changing her will, and that she died without doing so. Be that as it may, the manner in which these clauses were canceled, by running a pencil through the words contained in them, plainly shows that the testatrix did not intend by the cancellation of such part of the will to revoke the remainder of it. Hence the court erred in submitting to the .jury the question of the revocation of the whole will by the proof presented in'the record.

Undoubtedly, as above indicated, a testator might revoke his whole will by marking out a material part thereof in such a way as to indicate that his purpose was to revoke the whole will, although it might leave it as legible as it was before. We do mean to say, however, that the manner of marking out or crossing out the clauses of the will in question, when we consider this clause in connection with the rest of the will, plainly shows that it was the intention of the testatrix only to revoke her wjll in so far as these two clauses were concerned, and this left the rest of the will as it was before. Under the facts as disclosed by the record, it was entitled to probate after the death of the testatrix, and the circuit court erred' in submitting to the jury the question of whether the testatrix intended to revoke her whole will.

No appeal was taken from that part of the judgment of the circuit court which held that the will executed of the date of November 2, 1920, was void and of no effect. It follows that that will passes out of the case, and the judgment of the circuit court holding it void remains as a judgment of the circuit court unappealed from.

The result of our views is that the judgment of the circuit court holding void the will executed July 17, 1917, must. be reversed, because the court erred in . giving instruction E-l over the objection of appellant, and the cause will be remanded. Inasmuch as the facts on this appeal with regard to the cancellation of the will of July 17,1917, are practically the same as the facts stated upon the former appeal, it appears that the facts have been fully developed, and no useful purpose could be served by remanding the casó for a new triál. The drcuit court will therefore be directed to render judgment admitting the will of July 17, 1917, to probate, and to certify its judgment down to the probate court for further proceedings according to law and not inconsistent with this opinion. It is so ordered.


text:
    Fry v. Poe.
    Opinion delivered November 14, 1927.
    1. Municipal corporations- — improvement district — consent of property owners. — Under Const., art. 19, § 27, a municipal corporation cannot construct a local improvement by assessment of ■benefits on real property, unless a majority in value of the owners of real property within the proposed district have consented thereto.
    2. Municipal corporations — improvement district — valuation of land. — Crawford & Moses’. Dig-., § 5653, providing that the city council should be governed iby the valuation placed on the property as shown by the last county assessment in determining whether a petition for improvement is signed by a majority in value of the owners of realty in the district, is valid as fixing the method of procedure in determining the value of real property in the proposed district.
    3. Municipal corporations — consent of property owners to improvement. — The constitutional requirement that a majority in value of pro-perty owners within the proposed improvement district must consent to the improvement’ by assessment of benefits cannot be taken away under the guise of enacting a method of procedure.
    4. Municipal corporations — improvement district — omission . of realty. — Where the procedure provided for the assessment of property in a proposed improvement district, contemplated the inclusion in the assessment of all the realty within the district, the statute is valid, although in the particular case property may have been omitted from the assessment roll for a particular year, since such omission is not the result of the statute, but is .the' fault of the' assessing officer. . ■
    5. Taxation — -railroad right-ofway. — The right-of-way and roadbed of .the railroad are to. be considered, for taxing purposes, as a unit from one 'end to -the other, and hence are to be assessed by the State board, instead of by the county assessor.
    6. Municipal ooRporations-^improveiment district — assessment OF ■ RIGHT-Óf-WÁy. — Where the' State hoard assessed a railroad right-of-way and roadbed on.the mileage basis, certifying same •to the county officials to be used in making assessment for county purposes, and it was easy to. calculate the proportionate part of the mileage assessment in the improvement district within the municipality, such assessment became part of the assessment roll, and should be considered by the council in determining whether a majority in value of the landowners have petitioned for the improvement.
    7. Municipal corporations — improvement districts — assessment op roll. — It is the duty of the county clerk to certify the assessment by the State board of a railroad as part of the county assessment roll, to be used in determining whether a majority in value of the.owners of realty in the improvement district have petitioned for improvement, as required by Crawford & Moses’ Dig., § 5653.
    8. Evidence — secondary evidence. — In a suit to enjoin commissioners from proceeding with an improvement on the ground that a majority in value of the owners of real property had not signed the petition for improvement, as required by Const., art. 19, § 27, admission by the county clerk that the assessment of railroad property in the district -was left out by him and was on 'file in his. office was equivalent to a refusal to certify the assessment of railroad property as part of the county assessment roll and to let in secondary evidence to prove the assessment.
    9. Municipal corporations — improvement district — majority op owners. — In a suit to enjoin commissioners from proceeding with an improvement on the ground that a majority in value of the property owners did not sign the petition for the improvement as required by Const., art. 19, § 27, evidence by the Secretary of State showing the assessment of the railroad property by the State board, held to show that a majority in value of the owners of realty within the district did not petition for the improvement, ■ and hence entitled plaintiffs to the injunction.
    Appeal from G-arland Chancery Court; W. B. Duffie, Chancellor;
    reversed.
    STATEMENT OF FACTS.
    John W. Fry and other owners of real property in Street Improvement District No. 95 of the city of Hot Springs, Arkansas, brought this suit in equity against W. R. Poe and others, as commissioners of said improvement district, to enjoin them from forming plans and proceeding further with the improvement in said district, on the ground that a. majority in value of the owners of real property in said district had not signed the petition for the improvement, as required by our Constitution.
    The facts necessary to a decision of the questions at issue on the appeal may be briefly stated as follows: According to the certificate of the county clerk, the total valuation of real property situated within the contemplated street improvement district in question, as shown by the last county assessment, exclusive of the railroad right-of-way, amounted to $78,200. Owners of real property of the assessed value of $41,500 signed the petition for the improvement. The county clerk was a witness in the case, and stated that he prepared the certificate of the real property within the boundaries of Street Improvement District No. 95 as shown by the assessment of 1925, which was the last assessment roll prior to the organization of the district. His certificate contains the total amount of the assessed value of property owned by private individuals and corporations, but does not include the right-of-way and roadbed of the Chicago, Bock Island & Pacific Railway Company, situated within the boundaries of the district. He was asked why no property belonging to said railroad company was included in his certificate,- and stated that it was just left out. The clerk prepared the list of property and the certificate at the request of one of the attorneys for the commissioners, and said that he just left out the railroad property.
    The plaintiffs introduced in evidence a certificate from the secretary of the Arkansas Railroad Commission, showing the assessment of the right-of-way and other property of the Chicago, Rock Island & Pacific Railway Company in Garland County and in the city of Hot Springs, in that county. The secretary of said Arkansas Railroad Commission also testified that he had filed said assessment of said railroad company in the office of the county clerk of Garland County, Arkansas. According to the assessment, the main track of said railroad was $14,000 per mile, the sidetrack was $3,000 per mile, and tlie rolling stock was $2,000 per mile. The assessment list also contained the buildings of the railroad company situated on its right-of way and a separate valuation of the same, which amounted to $10,087.
    According to the testimony of a land surveyor, the length of the track of said railroad company within the limits of the boundaries of the district amounted to 2,016 feet. He was then asked to figure out what the assessed valuation of trackage would be under the assessment of the Arkansas Railroad Commission, and he testified that it would be something over $5,000. There were also 4,546 feet of sidetrack within the limits of the district. The county clerk also testified that, assuming that there were 2,016 feet of main track and 4,546 feet of sidetrack within the limits of the district, and taking said railroad assessments for 1925 as made by the Arkansas Railroad Commission, the proportionate assessed value of said main track would be $5,345.45 and of the sidetrack $2,582.95, making a total of $7,928.40.
    The chancellor was of the opinion that the property of said railroad company situate on its right-of-way and its right-of-way situated within the limits of the district should not be considered by the court in determining whether or not the second petition for the formation of the district was signed by a majority in value of the owners of real property in the district. Consequently the chancellor found that a majority in value of the owners of real property within said district had signed the second petition, and that the city council properly established the district. It was therefore decreed that the action of the city council of Hot Springs in forming the district should be approved and confirmed, and that said street improvement district had been legally organized. It was further decreed that the complaint of the plaintiffs should be dismissed for want of equity. The case is here on appeal.

      G. T. Gotham, for appellant.

      Murphy & Wood, for appellee.
   Hart, C. J.,

(after stating the facts). Hnder §27, art. 19, of our Constitution, a municipal corporation cannot construct a local improvement by assessment of benefits on real property until and unless a majority in value of the owners of real property within the proposed district have consented thereto. We have many times held that this section of the Constitution is mandatory and jurisdictional, and that no improvement districts can be established within the limits of a municipal corporation without complying with its provisions.

In the case at bar the chancellor, in determining whether or not a majority in value of real property within the proposed district had signed the second petition provided by the statute for the establishment of said district, refused to take into consideration the assessed value of the ¡right-of-way of a railroad company which had a part of its main track and of its sidetrack within the limits of the district. If the chancellor was correct in his interpretation of law as applied to the facts of the present case, the decree should be affirmed. On the other hand, if the right-of-way included in the limits of the boundaries of the district is to be counted as a part of the property shown by the last county assessment, then, under the undisputed facts, a majority in value of the owners of real property within the district did not sign a petition for the establishment of the district, and the city council had no power to establish the district, and the chancery court erred in not so holding.

The question thus raised by the appeal depends upon the construction to be placed upon § 5653 of Crawford & Moses’ Digest, formerly § 5717 of Kirby’s Digest, when read and considered in the light of our previous decisions construing it. The section reads as follows:

“In ascertaining whether the petition for improvement of any kind is signed by a majority of the owners in value of the real property in the district adjoining the property to be affected, the council shall take and be governed by the valuation placed upon the property as shown'by the last county assessment on file in'the county clerk’s office.”

This section o.f the statute has been held valid and to be a reasonable and proper method of procedure in determining the value of the real property in an'improvement district in a municipal corporation, to be used as a basis for finding whether or not the consent of a majority of the owers in. value of real property in such districts has been obtained. Kansas City, Pittsburg & Gulf Ry. v. Waterworks Imp. Dist. No. 1 of Siloam Springs, 68 Ark. 376, 59 S. W. 248; Imp. Dist. No. 1 of Clarendon v. St. Louis Southwestern Ry. Co., 99 Ark. 508, 139 S. W. 308; City of Malvern v. Nunn, 127 Ark. 418, 192 S. W. 909; Walton v. Light Imp. Dist. No. 1, 144 Ark. 249, 222 S. W. 1056; and Hill v. Walthour, 166 Ark. 277, 266 S. W. 85.

In Craig v. Russellville Waterworks Imp. Dist., 84 Ark. 390, 105 S. W. 867, it was said that the constitutional limitation in question created a vested property right in owners of real estate in cities and towns, and that the only way the constitutional guaranty can be fulfilled is by the enactment of reasonable statutes of procedure to obtain the consent of a majority in value and a forum to determine whether such consent has been obtained. It is plain from all our previous decisions that the constitutional requirement cannot be taken away under the gmise of enacting a method of procedure.

In the case first cited it was expressly held that our Constitution and statutes make all real estate situated within a proposed district in a municipal corporation the subject of local assessments, and that under our statutes rights-of-Avay of railroads, depot ground, etc., are real estate, and are to be assessed as such. In that case it was also held that under our revenue laws the right-of-way and roadbed of railroads should be valued as units or by the entire lines by a State board appointed for that purpose, and that, when their assessments are certified to the various counties, as provided by statute, they become a part of the county assessment from which values for. local assessments are taken.

Our later cases have recognized that a railroad must be regarded, for purposes of taxation, as a unit, and that the track of the railroad is but one track from one end of it to the other, and, except in its use as. one track, is of little value.

It is true, as contended by counsel for the defendants, that, in some of the cases cited, this court has held-that church property and other property exempt from general taxation should not be counted in determining whether or not a majority in value of the owners of real property within a proposed municipal improvement district have consented to the establishment thereof, unless such church property has been placed upon the taxbooks of the county by the proper officers. In doing so, however, the court has called attention to the fact that it is the duty of the assessing officers to list this property upon tht> taxbooks and place a valuation upon it for tax purposes. In City of Malvern v. Nunn, 127 Ark. 418, 192 S. W. 909, the court upheld the decision of the chancellor excluding school property because it had not been included in the last assessment roll. So it will be observed that church and school property, although exempt under our Constitution from general taxation, are subject to local assessments, and our statutes require the assessor to list churches, sehoolhouses and other property, exempt from general taxation, and the value thereof. Crawford & Moses’ Digest, § 9935.

Our statutes also authorize the listing and valuation aud entering upon the assessment book of any such exempt property when it has been omitted at the regular time for making the assessment of real property subject to taxation. Crawford & Moses’ Digest, § 9936. Hence the court expressly said that such property has a voice in the organization of the district according to its value fixed by the assessment roll. The court properly held that, if the assessing officer failed to do his duty for any particular year, it would not abrogate the statute nor prevent its application to the formation of improvement districts in cities and towns during that year. If he failed to do his duty, interested parties might require him to do so in order that the property might be counted in forming the district. If he did not do his duty, the statute would apply to the assessment, and the omitted property could not be counted or considered in determining whether a majority in value of the ’Owners of real property had petitioned for the formation of the district. The case would be the same as if the officer had failed to assess a particular lot or lots belonging to a private individual or corporation. In such a case the failure of thé assessor to do his duty would not have the effect to prevent the statute from applying. The property could not be considered because it was not included in the assessment roll.

So, in the case ¡at bar, if the State board had failed to assess or certify to the proper officer of Garland County the assessment of the right-of-way and roadbed of the Chicago, Rock Island & Pacific Railway Company in Garland County, it would not be reasonable to contend that this omission should ’suspend the operation of the statute or affect the interpretation of it. The railroad property simply would not be considered in determining whether a majority in value of owners of real property in the district had petitioned for the improvement.

The case would be quite different, however, if the statute under consideration had not provided for the inclusion of such property in the assessment roll. Under our statute, the right-of-way and roadbed of railroads are treated as real estate for taxation purposes, and,, along with churches and schoolhouses, are subject to local assessments in municipal improvement districts. Hence a statute which provided for the exclusion of such property from the assessment roll to be considered by a municipal council in determining whether or not a majority in value of the owners of real property in a proposed municipal district 'would not be valid. The reason is that such a statute would disregard a plain provision of the Constitution, and would cease to be a statute providing a method of procedure to obtain the consent of real owners in forming a municipal improvement district and a basis by which to determine whether such consent has been obtained. The Constitution requires all property in the district to bo considered in determining such consent, and a statute which, by its terms, omitted any class or species of property, would be in conflict with the provision of the Constitution. It is one tiling- to hold a statute valid -when it provides for the inclusion of all property in-the assessment roll and the council should follow its provisions in the formation of municipal improvement districts, although the assessing officer has omitted a particular part of such property, and on that account it cannot be considered because not included in the assessment roll, and quite another thing to hold that a statute itself would be considered constitutional which, by its own terms, provided for the exclusion from the assessment roll of some class or species of property. In other words, if the plan or procedure provided by the statute contemplates the inclusion in the assessment roll of all the real property in the district, such a statute is reasonable and valid, ¡although, in a particular case, property has been omitted from the assessment roll for that year, for the reason that such omission is not the result of the statute, but is the fault of the assessing officer. In such cases the Legislature has even provided for the inclusion in the assessment roll of such omitted property. If the Legislature should pass a statute which, by its own terms, omitted property in a municipal improvement district,, it is plain that the statute itself contemplated ¡a violation of the provision of the Constitution looking to the formation of municipal improvement districts, and for that reason the statute could not stand.

In this connection it may be stated that the decision of the chancellor was especially based upon the decision in Hill v. Walthour, 166 Ark. 277, 266 S. W. 85. In that case it was held that a lot of irregular shape and size, which lies partly in and partly out of the district, should not be considered by the council in determining whether there was a majority in value of real property owners in the district favoring the improvement. The object of the statute under consideration is to secure equality and uniformity in ascertaining whether a majority in value of the owners of real property wish the improvement. This can best be accomplished by taking the estimate of value placed upon the property by officers whose duty it is to assess property for taxation. Otherwise, the value of property being so much a matter of opinion, it would never be the same in any given case. The valuation of the property in different districts in the same city would vary greatly, and even property in the same area would be valued differently in different improvement districts. To illustrate, if two districts are formed at the same time with the same boundaries-for the establishment of a street improvement district and a sewer district, if the testimony of witnesses should be used to fix the value of the property, it might be that the value of the property would be materially different in the two districts. If the value of the property as shown by the last assessment roll is to be determinative, then it is evident that the assessments will be equal and uniform in the two districts.

The case last cited referred to the fact that the formation of an improvement district is the voluntary act of the owners of real property, and they, in fixing the boundaries of the district, could put in or leave out a particular piece of property, and not place it partly in and partly out of the district. It was further stated that, if the inclusion of a certain area could not be done, such an exceptional condition would not and ought not to affect the general rule.

In the matter of the right-of-way and roadbed of a railroad, the situation is essentially different.. As we have already seen, the right-of-way and roadbed of a railway company is to be considered for tax purposes as a unit, and the track and roadbed of the railroad are but one from one end to the other, and that part of it which could be in a municipal improvement district is, in the very nature of things, only a very small part of its length. Such property, on that account, has always been assessed by a State board instead of by county assessors. In this way only could equality and uniformity in taxation of such property be effected. Because a railroad must be regarded as a unit for tlie purposes of taxation, it is taxed upon a mileage basis.

In the present case the State board taxed the property upon a mileage basis, and certified it to the proper officer of Garland County, to be used in making the assessment for county purposes there. The method adopted in ascertaining the assessed value of the railroad property in the improvement district is the only one that could be adopted. No element of uncertainty in fixing the value arises. The Value is fixed by the State board, and the only element of uncertainty which could arise -would be in measuring the length of the track and right-of-way in the district, and this would be negligible in all cases. It is easy to measure the length of the track in the contemplated district and thereby ascertain definitely the length of the track. The State board assessed the roadbed according to mileage, and it is easy to calculate what proportionate part of the mileage assessment should be borne by the railroad for trackage less than a mile in length. No element of estimating the vialue enters into the case, as when a part of a lot is in and a part out of the district, and the whole of a lot is assessed as one unity.

We think this holding is in accord with the principles decided in Walton v. Commissioners of Light Imp. Dist., 144 Ark. 249, 222 S. W. 1056. In that case it was held that, in determining whether the required majority had been obtained for the establishment of a light improvement district in the city of Benton, the value of real property of railroad companies -within the district must be considered. In discussing the question the court said:

“Had the railroad company desired this improvement and, by proper authorization, had signed the petition for it, we think, without question, it would have been proper for the value of its property, as shown by the last county assessment on file in the county clerk’s office, to be taken into account, because, within the meaning of the statute, the assessment made by the Tax Commission is a part of the county assessment. And. if this be true, it must also be true that the value of the railroad property should be taken into account in determining whether the requisite majority in value had been obtained by those who petitioned for the establishment of the improvement district. ’ ’

It is sought to differentiate that case from this in the fact that the whole of the city of Benton was included in the improvement district, and that the assessment of the State board showed the exact mileage and valuation of the right-of-way and roadbed in the city of Benton. It is true that only a part of the area of the city is in the improvement district in the present case, but, if we should hold that railroad property could not be included, although assessed for taxation by the State board, such holding would result in excluding .railroad property in improvement districts where the whole area of the town or city was not included within the district. In other words, the effect of such a holding would be to exclude from the consideration of the council in determining whether there -was a majority in value of real property owners within a proposed municipal improvement district, a valuable class of property, although it had been assessed in the manner provided by law. This would violate the plain terms of the Constitution, and could not be done without rendering the statute invalid.

The result of our views is that we think that, when a State board has assessed the right-of-way and roadbed of a railroad company in accordance with law. and has certified that value down to the proper county authorities, such assessment becomes a part of the assessment roll within the provisions of the statute in question, and should be considered by the council in determining whether a majority in value of the owners of real property have petitioned for the improvement.

Finally, it is insisted that the assessment of the State board was not proved by the best evidence. It is claimed that the county clerk should have certified the assessment of the State board of the railroad in question as part of the county assessment roll. This is true, and should be the course pursued in general. In the case at bar, however, the county clerk admitted that the assessment of the railroad property was left out by him, and was on file in his office. This was tantamount to a refusal by him to certify the assessment as part of the county assessment roll, and let in secondary evidence to prove the assessment. The secretary of the State board was introduced as a witness, and made a certificate showing the assessment which was made by the State board, and also testified that this 'assessment- was filed with the county clerk, where the law required it to be filed. According to the testimony of the county clerk himself, when the mileage assessment made by the State board of the railway property in question was considered with reference to the amount of main track and sidetrack proved to be in the district, a total valuation of $7,928.40 should be added to the assessment roll. It is only claimed that property owners owning real property in the district of the assessed value of $41,550 have signed the petition. The county assessment roll showed property within the district of the total value of $78,200. If we add to this, as we must do, the assessed value of the railroad property in the district, which was $7,928.40, we have a total of $86,128.40. Thus it will be seen that a majority in value of the owners of real property within the district did not petition for the improvement.

It follows that the chancellor erred in holding that a majority in value of the owners of real property in the proposed street improvement district signed the petition and in dismissing the complaint of the plaintiffs for want of equity. Therefore the decree will be reversed, and the case will be remanded with directions to grant the prayer of the complaint, and for further proceedings in accordance with the principles of equity and not- inconsistent with this opinion. It is so ordered.