author: McHaney, J.,

text:
    Combs v. Combs.
    Opinion delivered March 7, 1927.
    1. Wills — construction b.y decree. — A decree finding- that the widow of testator’s son was, as sole legatee under the son’s will, owner in fee of all the son’s property, including property received under his father’s will, held to construe such will as devising a fee simple to the son, and not a defeasible fee.
    2. Wills — remainder in fee. — A devise to the testator’s wife and son during their natural lives with remainder in fee to the son if he should survive the wife, gave to the son a fee-simple title after the wife’s death, with power to convey by grant or devise.
    3. Wills — fee-simple estate — repugnant limitation. — Where a will conveyed a fee-simple estate to testator’s son, an attempted limitation directing the disposition of the property in ease of the son’s death seized and possessed of the property without leaving children, is void as repugnant to the fee already, given.

    4. Wills — acceptance under will. — In a suit by the sons of a nephew of a testator for partition claiming under a limitation in testator’s will in favor (S the sons of two nephews which was void as repugnant to a fee-simple remainder in testator’s son, the son’s devisee and the sons of the other nephew of the testator held not estopped to claim that the limitation in the will was invalid by the fact that, at such devisee’s request, the court vested the property in the sons of one of the testator’s nephews to the exclusion of the plaintiffs.
    5. Wills — estoppel operating as grant. — Where a widow, who became entitled to land as her husband’s sole devisee, surrendered ■ rights thereto and asked the court to decree the title to be in certain of her husband’s cousins, which order was made, the effect of her action was to grant the property to such cousins.
    6. Wills — description of devisees. — An attempted limitation over in a will to the sons of the testator’s three brothers, naming them, cannot be construed as applicable to the sons of two nephews so named, when the testator had only one brother, who was correctly named.
    7. Wills — designation of devisees. — Parol evidence is admissible to identify a beneficiary under a will where the designation of the beneficiary is uncertain or ambiguous.
    8. Wills — designation of beneficiaries. — A limitation in a will in favor of sons of “my three brothers, Alfred, Sewell and Isaac,” held not uncertain or ambiguous in designation so as to admit parol evidence to identify the beneficiaries, though the testator had one brother and two nephews bearing the names designated.

    Appeal from Washington Chancery Court; Lee Seamster, Chancellor;
    affirmed.
    Action by C. F. and H. C. Combs, sons of Sewell Combs, and others, against A. T. and J. W. Combs, sons of Isaac Gr. Combs and others. Complaint dismissed, and plaintiffs have appealed.
    STATEMENT BY THE COURT.
    On the 25th day of January, 1926, appellants commenced this action in the chancery court of Washington County, charging that, on the 25th of April, 1899, Nathan Combs, late a resident of Washington County, died testate, leaving surviving his widow, Elizabeth Combs, and his son, Isaac Combs; that said will was admitted to probate in Washington County, and by the terms of which he made certain specific bequests, and then disposed of the remainder of his estate in the following language:
    ‘ ‘ And I give and bequeath the residue of my estate, after my funeral expenses and just debts have all been paid, to my beloved wife, Elizabeth Combs, and to my son, Isaac Combs, for and during their natural lives, with the remainder in fee to Isaac Gr. Combs if he should survive my said wife, and in the event that my said son, Isaac G-. Combs, should fail to have a child or children born to him, and should die seized and possessed of any of said property, I desire and will that the same be divided equally between the sons of my three brothers, Alfred, Sewell and Isaac Combs.”
    It is further alleged that said Isaac G. Combs, son of the testator, survived his mother, and died testate without issue on the 26th of March, 1925, and that his will was admitted to probate in said county; that, at the time of his death, the said Isaac G. Combs was seized and possessed of a large amount of real property which had come to him through the estate of his father; that, at the August, 1925, term of the Washington Chancery Court, in an action between Martha Combs et al. against the unknown heirs of Henderson Combs et al. the court entered a decree finding that, under the will of Isaac G. Combs, his wife, Martha Combs, was the sole beneficiary and legatee, and, as such, was the owner in fee of all the real and personal property of which the said Isaac G. Combs died seized and possessed. The court then finds that he died without having born to him any child or children, and that he died seized and possessed of a large amount of real property which came to him under the will of his father, Nathan Combs, which is set out. and described at length. The court further found in its decree, after quoting the paragraph of the will above set out, that Elizabeth Combs, the wife of Nathan Combs, died prior to the death of Isaac G. Combs, and that Alfred Combs, brother of Nathan Combs, mentioned in his said will, as above, had six sons, all of whom died prior to the death of Isaac G. Combs; that Isaac Combs, brother of Nathan, mentioned in his will, had three sons, J. W., A. T. and R. L. Combs, and that said R. L. Combs died about the year 1900 and left surviving* him the plaintiffs, L. R. Combs and W. 0. Hicks, and that therefore the only sons of the brothers mentioned in the will of Nathan Combs who were living at the time of the death of Isaac G. Combs were the plaintiffs, A. T. and J. W. Combs.

      The court further found in said decree that, under said paragraph of the will of the said Nathan Combs, above set forth, any right, interest or property bequeathed, to the sons of said brothers was contingent and would not vest under said will until the death of the said Isaac G. Combs, and that therefore none of the children nor heirs at law of the sons of the brothers of Nathan Combs, who died prior to the death of the said Isaac G. Combs, acquired any interest under the will of said Nathan Combs, and that A. T. and J. W. Combs acquired all the interest or right conveyed by the above provision of said will.
    The court further found that the plaintiff, Martha Combs, his widow and sole legatee under the will of her husband, Isaac G. Combs, “announced in open court, by her counsel, that she desires that the property herein-before set out and described be vested and conveyed under and by virtue of the provisions of the will of the said Nathan Combs, deceased, as above set forth, and construed by this court as to the validity of said provisions of said will as against the said plaintiff, Martha Combs.”
    The court further found that Martha Combs was entitled in fee to all other property of which her husband, Isaac G. Combs, died possessed, and that she was entitled to the rents collected on the city property up to October 1, 1925, and the rents and profits from the farm lands for the year 1925, being the lands which the court found that the plaintiffs, A. T. and J. W. Combs, were entitled to.
    It further found that A. T. and J. W. Combs were each the owners in fee of an undivided one-half interest in said lands, and the court entered a decree based upon said findings; that thereafter the court entered a partition decree dividing the lands between the plaintiffs, A. T. and J. W. Combs, based on the report of the commissioners theretofore appointed.
    The complaint continued by alleging that C. F. and TI. H. Combs were the only sons of Sewell Combs, referred to as. a residuary legatee in the will of Nathan Combs, and that other of the plaintiffs are the daughters and widow of Sewell Combs; that T. A., W. M., I. N., S. S., Jr., and James H. Combs are the only sons of Alfred Combs, referred to as residuary legatee in the will of Nathan Combs, and, in November, 1904, they conveyed all their interest in the estate of Nathan Combs to Sewell Combs; that Alfred Combs and Sewell Combs, named in the will of Nathan Combs, were not his brothers, but were nephews, and that the will erroneously designated them as brothers of the testator, when, as a matter of fact, they were nephews, and that Nathan Combs did not have a brother named Sewell Combs, and that it was the intent of the testator, Nathan Combs, that the sons of his nephew, Alfred Combs, should receive an undivided one-third interest in the residue of his estate remaining in the hands of his son, Isaac Combs, at the time of his death; that it was the intent of said testator that the sons of his nephew, Sewell Combs, should receive a like undivided one-third share, and that the sons of his brother, Isaac, should receive a like undivided one-third share therein.
    It is further alleged that the plaintiffs, C. F. and H. H. Combs, as sole and only sons of the nephew, Sewell Combs, are the owners of an undivided one-third of the real property as a residuary legatee under the will of Nathan Combs; that the plaintiffs, C. F., H. H. and Annie Belle Combs and Alice Pieratt, are the owners of an undivided one-third interest therein, subject to the dower right of the plaintiff, Kate Combs, by virtue of inheritance from the nephew, Sewell Combs, of the share purchased by him from the said T. A., W. M., I. N., S. S. and James Combs; that these plaintiffs were not made parties to the action of Martha Combs and others against the unknown heirs of Henderson Combs and others, prosecuted in the chancery court at the August, 1925, term, and had no notice or knowledge of said action whatever; that the decree rendered in said action is erroneous in giving to J. "W. and A. T. Combs an equal share of all said property, when they were in fact entitled to only an undivided one-third share jointly in said estate.
    The complaint then sets up the decree of partition heretofore mentioned, and recites certain conveyances that A. T. and J. W. Combs and wife have made since said partition decree, and pray that both decrees be modified, canceled and annulled in so far as they attempt to decree the entire estate to A. T. and J. W. Combs, and that the share and interest of each of the plaintiffs in this action be decreed to them, for partition, and that the sales and incumbrances theretofore made under said decrees be set aside, and for other relief.
    To this complaint the appellees filed a general demurrer, which the court sustained, and entered a decree dismissing same for want of equity, from which comes this appeal.

      C. D. Atlcinson, for appellant.

      Johnson & Combs, W. N. Ivie, II. L. Pearson and E. B. Wall, for appellee.

      See Farmers’ & Merchants’ Bank v. Hammond, ante p. 1065 (Reporter).

      Compare Boone v. Boone, 114 Ark. 69, 4th headnote. (Reporter).

   McHaney, J.,

(after stating’the facts). The question for decision on this appeal is whether the complaint states facts sufficient to constitute a cause of action. Counsel for appellants first insist that the decree of the chancery court of October 2, 1925, construed the will of Nathan Combs “as devising a defeasible fee in said real property to Isaac G-. Combs, and, upon his death without issue, the remainder to the sons of Alfred, Sewell and Isaac Combs.” In this contention we believe counsel is in error, for this is not the effect of the finding of the chancery court. It found “that Isaac G-. Combs died testate in Washington County, Arkansas, March 6, 1925, and that his last will and testament has been duly probated in the manner required by law, and that said last will and testament provided ‘that, after the payme'ht of all my just debts and funeral expenses, I will, devise and bequeath all my property, both real and personal, to my beloved wife, Martha Combs, to her sole'use and benefit, ’ and that, under this provision of said will, plaintiff, Martha Combs, was the sole beneficiary and legatee under said will, and, as such sole legatee, was the owner in fee of all the real and persorial property of which the said Isaac Gr. Combs died seized and possessed, and that the said Isaac Gr. Combs died without having born to him any child or children, and that he died seized and possessed of the real estate situated in Washington County, Arkansas, which he derived from and under the last will and testament of his father.” Therefore it is manifest that, instead of the court decreeing that Isaac Gr. Combs was devised a defeasible estate under the will of his father, the court did find and decree that Isaac Gr. Combs, by the will of his father, Nathan, became the owner in fee simple of said lands, and that Martha Combs became the owner thereof in fee as sole beneficiary and legatee under the will of her husband. If Isaac G. Combs got only a defeasible fee, how could his wife get the absolute fee under his will? Certainly she could acquire by virtue of his will no greater interest in the lands than he had. This being true, appellants’ whole argument, based on this assumption, must fall, as it is without foundation to support it.

Under that paragraph of the will of Nathan Combs hereinbefore quoted, the residue of the testator’s estate was given to his wife, Elizabeth, and his son, Isaac, for and during their natural lives, “with remainder in fee to Isaac Gr. Combs, if he should survive my said wife.” The lower court found that this .clause gave to Isaac G. Combs the fee simple in said lands, and that his will gave to his wife, Martha, the same estate, the fee, and we think the court was right in so holding. The clause following, after vesting the fee in the remainder in Isaac G. Combs, is: “And in the event my said son, Isaac G. Combs, should fail to have a child or children born to him, and should die seized and possessed of any of said property, I desire and will that the same be divided equally between the sons of my three brothers,” naming them.

Under the decisions of this and other courts generally, this clause of the will must be held to be mere surplusage, and void, fox* the reasoxx that it is a subsequent clause attempting to limit a cleax* fee already given by the testator.

The gexxeral rule is laid down ixx 40 Cyc, pages 1585, as follows: “A limitation over, after a clear fee is given, oxx the death of the first taker, at a certain age, or without issue, children, or heirs, or intestate, or on his or her marriage, is usually void, aixd leaves a fee in the first taker. So a fee may be created notwithstanding other restrictions. Where property is given ixx clear language sufficient to convey an absolute fee, the interest thus given should not be taken away or diminished’ by any subsequexxt, vague, or gexxeral expressions in the will. Where fee .is clearly given, a limitation over of the remainder is void as inconsistent with the fee granted, whether the gift over is expressed to be of what remains, or may be left, or the residue, or is on death of the first taker without having disposed of the property.”

Many authorities are cited in the footnotes to sustain the above declaration of law.

Ixx the case of Bernstein v. Bramble, 81 Ark. 480, 99 S. W. 682, the following clause ixx a will was under consideration: “All the rest, residue and remainder of my estate, real as well as personal, and wheresoever situated, I hereby give, devise and bequeath to my beloved wife, Minna Elle, to have and to hold the same ixx fee simple forever. But, in the case of the death of my beloved wife, it is my will that all the estate then remaining and not disposed of by her by a last will or other writing shall pass to my said brother, Moritz Elle, and my sister,' Henrietta Bernstein, or their heirs ixx equal parts.” This is a very similar paragraph to the one ixx question, and, in construing same, this court said: “The property in controversy was devised to Minna Elle ixx fee simple 'with an absolute power of disposition either by will or devise clearly and unmistakably implied,’ accoi*ding to the authorities cited, the limitation over to Moritz Elle and Henrietta Bernstein is void.”

Tlie cases on this question were exhaustively reviewed by Judge Battle, who wrote the opinion in the Bernstein case, and, among others, he quoted from Page on Wills, '§ 684, which, as said in Davis v. Sparks, 135 Ark. 417, 205 S. W. 804, “is peculiarly applicable to the ease in hand.”

It follows: “It not infrequently happens that a testator disposes of property in fee, .and then attempts to provide for the disposition of the property after the death of the devisee in fee simple. A provision of this sort is to be carefully distinguished from the cases where a fee simple is cut down to a life estate by a devise over after the death of the first taker. The distinction between the two classes of cases, though not strongly marked, is well recognized by the courts. If the devise over upon the death of A is intended to pass entire property, it is evident that the testator contemplated that A should take only a life estate, without any power of disposing of his property for a longer term than his own life. But where the devise over upon the death of A shows that A was vested with a fee simple estate, and that testator wishes him to have such an estate, but to direct the course of its descent upon his death, the limitation over after the fee is repugnant to the nature of the estate, and void. * * * A condition that, if devisee does not dispose of his property in any way during his lifetime, it shall pass to certain named persons, is held to be void.” GarlLee v. Ellsberry, 82 Ark. 209, 101 S. W. 407; Davis v. Sparks, 135 Ark. 417, 205 S. W. 803; Archer v. Palmer, 112 Ark. 527, 167 S. W. 99; Fies v. Fiest, 145 Ark. 351, 224 S. W. 623.

Clearly Isaac G-. Combs took the fee, and had the power to convey, either by deed or by will, and this is further evidenced by the clause, “and should die seized and possessed of any of said property.” Evidently this contemplated that he might sell and dispose of the property during his lifetime, conveying the fee thereto, and, if so, he could dispose of it by will at his death. Having done so, the fee vested in his wife, Martha Combs.

Counsel for appellants nest contend that, even though this may be the correct rule, and although Martha Combs may have taken the fee, yet he says she renounced the will of her husband, and that she and J. W. and A. T. Combs are estopped to raise the question of the invalidity of the subsequent clause in the will of Nathan Combs, aforesaid; that a devisee or legatee who has accepted benefits under a will is estopped to deny its validity. No doubt this is a correct declaration of law, but we do not think the facts, as reflected solely by the decrees of the chancery court as set out in appellant’s complaint, which is the only evidence in the record now before us, justify the conclusion that appellees assumed or took any position in that cause contradictory to the one they now take in this case. The pleadings in the chancery court in the Martha Combs case are not before us. Judging from the decrees in the record we are of the opinion that appellees were seeking the construction of the two wills, that Martha Combs desired a construction of -the will of Nathan, in which the two appellees joined, to ascertain who was entitled to the property under said clause of said will, if same was legal, and the court decreed that appellees, J. W. and A. T. Combs, being the survivors of the class mentioned in said will, would take the whole of said property. She then asked that said property be decreed to them, or, in other words, that her title to said property under the will of her husband be divested out of her and vested in them. We do not think this amounted to a renunciation or a refusal to accept the legacy under the will of her husband. At least it cannot be said that either she or the other appellees accepted any benefits under the will by her action, but, on the contrary, she surrendered certain rights under the will, and the other appellees accepted her grant or gift. The effect of her action was to grant or give to J. W. and A. T. Combs, as the only survivors of the class mentioned in the will of Nathan Combs, the property in controversy, and the decree of the court passed the title as per her request.

Appellants’ next contention is that, the complaint having alleged that C. F. Comhs and H. H. Combs are the sons of Sewell Combs, named in the will of Nathan Combs, and that Nathan Combs .never had a brother named Sewell, bnt that said Sewell Combs, of which said appellants were sons, was in fact a nephew of Nathan Combs, and that it was the intention of Nathan Combs to designate the sons of his nephew, Sewell Combs, instead of his brother, Sewell Combs, states a cause of action. But the language of the will of Nathan Combs was: “To the sons of my three brothers, Alfred, Sewell and Isaac Combs.” The contention of appellants is that Nathan Combs intended only to mention the sons of one brother, Isaac Combs, and intended to mention his two nephews, Alfred and Sewell Combs, instead of his two brothers, Alfred and Sewell Combs. To do so, we would have to change the language of the will to read: “To the sons of one brother, Isaac Combs, and to the sons of two nephews, Alfred- and Sewell Combs.” We cannot do this, and we cannot hold that the testator intended to name the sons of two nephews instead of the sons of the two brothers named. This clause of the will, upon this allegation of the complaint, would be void for uncertainty. 40 Cyc., 1445, announces the rule of the law on this point as follows: “In order that a beneficiary may take under a will, he must be designated therein, either by name or by description, with such certainty that he can be readily identified and distinguished from every other person, otherwise the devise or bequest is void for uncertainty.”

But counsel contends that parol evidence is admissible for identifying the beneficiary. This is always true where there is uncertainty or ambiguity in the designation of the beneficiary. In the case of McDonald v. Shaw, 81. Ark. 240, 98 S. W. 953, cited by appellant, this court said: “It is an elementary rule of construction that a bequest or devise will not fail because of a mere inaccuracy in the designation of the beneficiary, where the meaning of the testator can be gathered with reasonable certainty from the instrument itself, or where the identity of the object of his bounty can be shown by extrinsic evidence; and such evidence is always admissible for the purpose of identifying the beneficiary, where there is uncertainty or ambiguity in the designation.”

A complete answer to this contention is that, in the case at bar, there is no uncertainty or ambiguity in the designation, “to the sons of my three brothers, Alfred, Sewell and Isaac Combs. ’ ’ It does not read to the sons of one brother and two nephews, but to- the sons of three brothers. Therefore parol evidence would not have been admissible in proof of the allegation in the complaint. 40 Cyc., 1440.

The decree of the chancery court dismissing appellants ’ complaint for want of equity is therefore affirmed.


source: Caselaw Access Project

author: Wood, J.

license: Public Domain

text:
    Berry v. Gross.
    Opinion delivered February 21, 1927.
    Appeal and error — effect op reversal of decree. — Where the Supreme Court in a former case concluded its opinion with the words, “the decree is therefore reversed,” it referred to the decree as a whole, including the- part not expressly discussed, since, if it was the purpose to reverse in part only, the court would expressly so declare and indicate the part affirmed.
    Appeal from Woodruff Chancery Court, Southern District; A. L. Hutchins, Chancellor;
    affirmed.

      J. F. Summers, for appellant.

      Roy D. Campbell, for appellee.
   Wood, J.

Gross and Shields instituted an action in the chancery court of Woodruff County to recover of Berry et al. damages for the value of timber on 4,300 acres of land in Woodruff County, Arkansas, which they alleged was due them by the defendants. Berry et al. instituted an action against the Standard Shingle Company et al. to enjoin it from cutting and removing cypress timber from these lands. Berry claimed title to the timber under mesne conveyances from Gross and Shields. He alleged that Gross and Shields had released their vendor’s lien on the standing timber and that the Standard Shingle Company, which had a prior timber deed to the cypress timber, had forfeited its right by failure to pay taxes on the land in accordance with the terms of its timber deed. The shingle company answered Berry’s complaint, and denied that it had forfeited the right to remove the timber by failure to pay taxes on the land, and it made its answer a cross-complaint, alleging that it owned the cypress timber, and prayed judgment against Berry for the valué of the timber which it alleged he had cut and removed from the land.

The cause was submitted to the court upon the pleadings and the testimony, which consisted of the deeds in the chain of title of the respective parties back to the common source of title, Gross and Shields, and the testimony responsive to the issues as to the amount and value of the timber cut and removed by the respective parties from said lands. The trial court found that Berry was the owner of the cypress timber claimed by the shingle company, and entered a decree for the value of such timber and restraining the shingle company from further cutting and removing such timber from the lands. The trial court also found that the complaint of Gross and Shields should be dismissed for want of equity, and rendered a decree in accordance with its findings. The causes had been consolidated for trial. Those causes as consolidated were appealed to this court, and the case is reported under the style of Standard Shingle Co. v. Berry, 168 Ark. 923, 271 S. W. 969. In the opinion we took up specifically the issue between the appellant and the appellee and disposed of the cause as to the shingle company, holding that that company had not forfeited its right to the cypress timber by failure to pay the taxes according to the provisions of one of the timber deeds under which that company claimed title. We there said: “We are unable to determine from the record the amount and value of the timber removed from the land by Berry. This feature of the case was not fully developed. The Standard Shingle Company was entitled to the dismissal of Berry’s bill and to a judgment ag*ainst him for $917.50, the value of the timber which he cut on the premises, and an order restraining’ Berry from cutting and removing any timber from the lands. The decree is therefore reversed, and the cause remanded with directions to determine the amount and value of the cypress timber removed from the land by Berry, and to render a decree in accordance with this opinion. ’ ’

After the mandate of this court was filed in the lower court, a decree was entered by consent in favor of the Standard Shingle Company against Berry. Gross and Shields filed a motion in which they set up that, under the mandate, they were also entitled to a decree in their favor. Berry responded to that motion, and alleged that, under the mandate, Gross and Shields were .not entitled to a decree in their favor foreclosing their alleged vendor’s lien on the timber on the lands mentioned. The court sustained the motion of Gross and Shields, and entered a decree in their favor in the sum of $29,045, purchase price of. the timber, and directed that a lien be declared on all timber except the cypress timber, and that the same be sold to satisfy the decree if the same were not paid within ten days, from which decree Berry et al. duly prosecute this appeal.

The opinion of this court in the case of Standard Shingle Co. v. Berry, 168 Ark. 923, 271 S. W. 969, supra, it must be conceded, did not expressly discuss and distinctly determine the issue between Berry et al. and Gross and Shields. But, when the opinion of the-court in that case is considered as a whole, we are convinced that it was the purpose of the court to dispose of all the issues presented by the appeal and to reverse the finding and decree of the lower court which was adverse to Gross and Shields as well as the finding and decree adverse to the Standard Shingle Company. The decree of the trial court in the case of Standard Shingle Co. v. Berry, 168 Ark. supra, was treated by us as one decree, and was found erroneous in its entirety. "While we discussed specifically and separately the issue between the shingle company and Berry, we did not mean by so doing and by a failure to separately discuss the issue between Gross and Shields and Berry, to hold that the decree of the trial court adverse to them was not likewise erroneous. We considered all the testimony presented by the record in that case, and we were firmly convinced that the decree of the trial court was erroneous, not only as it affected the interests of the shingle company but as it affected the interests of Gross and Shields as well.

In Standard Shingle Co. v. Berry, supra, the opinion concludes as follows: “The decree is therefore reversed, and the cause remanded with directions to determine the amount and value of the cypress timber removed from the land by Berry and to render a decree in accordance with this opinion.” This language means what it says, that is, that the decree of the trial court is reversed. We were speaking of the decree of the trial court as a whole and not that part only which referred to the finding of the trial court with reference to the Standard Shingle Company. The trial court found that the complaint of Gross and Shields should be dismissed for want of equity. That part of the decree was reversed as well as that part relating to the shingle company. For, as we have stated, the decree was reversed as a whole, and not in part. If it had been the purpose of this court to reverse the decree in part and affirm in part, we would have expressly so declared, and indicated that part which was affirmed and that part reversed, and given directions accordingly. By declaring that “the decree is therefore reversed” and directing the trial court “to render a decree in accordance with this opinion,” we intended, and the language necessarily means, that the trial court should understand that its entire decree was erroneous, and that a decree should be entered by it accordingly, in effect changing and reversing its former decree in toto. There was therefore no error in the ruling of the court in granting the motion of appellees praying a decree in their favor and in rendering a decree as therein prayed.

The decree is affirmed.


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

text:
    J. C. Engleman, Incorporated, v. Briscoe.
    Opinion delivered February 21, 1927.
    1. Process — waiver of defect. — When a party applies for or agrees to a continuance of the case, this makes him a party to the record, and any defect that might exist as to the service of process upon him is waived.
    2. Contracts — oral modification of written contract. — Parties to a written contract may, subsequent to its execution, modify it and substitute a valid oral agreement therefor, and the change in the terms of the contract is a sufficient consideration for the execution of the new contract.
    3. Contracts — burden of proof. — Where a subsequent oral agreement was substituted for a written contract, the burden is upon the party relying upon the new contract to prove its terms.
    4. Brokers — contract of employment. — A contract employing an agent to find a purchaser for land is not within the statute of frauds, and need not be in writing.
    5. Trial — applicability of instructions. — The court, by its instructions, should concretely apply to the facts the principles of law applicable thereto, as shown by the issues raised in the pleadings.
    6. Trial — sufficiency of instructions. — When the instructions given sufficiently set forth the claims of the respective parties in such concrete form as to give the jury a proper understanding of the issues raised by the pleadings, a repetition of the instructions is not necessary, and may serve to confuse and mislead the jury, as an indirect expression of the court upon the weight to be given to the evidence.
    7. Appearance — effect of granting continuance. — Where, in a joint suit against a corporation and its president, a continuance was asked on account of sickness by the president, who represented the corporation and was a necessary witness on its behalf as well as for himself, the granting of the continuance was for the benefit of both parties and resulted in the entry of appearance of both of them.
    8. Attachment — sufficiency of evidence. — Evidence held, sufficient to take to the jury the question whether land attached belonged to a nonresident corporation or to its president where lands of the corporation were exchanged for the land attached, but title to the latter was taken in the name of such president.
    Appeal from Logan Circuit Court, Southern District ; Jumes Cochran, Judge;
    affirmed.
    statement oe eacts.
    S. M. Briscoe instituted this action in the circuit court against J. C. Engleman, Inc., and J. C. Engleman, Jr., to recover damages for an alleged breach of contract of employment of the plaintiff to sell real estate for the defendants.
    According to the allegations of the complaint, the defendants were engaged, during the year 1923, in the business of selling land in the Bio Grande Valley, in the State of Texas, and, in the course of business, employed agents in order to induce people to go to Texas to look at said lands with a view to purchasing them. On the 3d day of August, 1923, the defendant, J. C. Engleman, Inc., entered into a written contract with the plaintiff and J. C. Engleman, Jr., to procure purchasers for their Texas lands, at a commission of fifteen per cent, of the sale price of the lands sold to purchasers procured by the agents. The instrument contained other terms relating to the contract between the parties which it is not necessary to state in order to review the issues raised by the appeal.
    After the execution of the written contract referred to, the plaintiff and the defendants entered into a verbal contract whereby the defendants contracted with the plaintiff to be their agents to procure purchasers for their Texas lands. The plaintiff was given the power to employ subagents to assist him. The plaintiff earned commissions under the contract in the sum of $3,000, and sought .judgment against the defendants for that amount.
    The defendants denied liability under the written contract, and denied entering into an oral contract. The defendants are nonresidents of the State of Arkansas, and a writ of attachment was sued out by the plaintiff and levied upon lands claimed to be owned by them in Logan County, Arkansas, where the suit was commenced.
    S. M. Briscoe was a witness for himself. According to his testimony, the verbal contract sued on'was entered into between him and J. C. Engleman, Jr., for-himself and the defendant, J. C. Engleman, Inc., while they were coming back from Texas in August, 1923. J. C. Engleman, Jr., was the president and manager of J. C. Engleman, Inc., which is a foreign corporation organized under the laws of the State of Delaware. It was understood that the oral contract should be substituted for the written contract, which had been executed a few days prior thereto. The written contract was executed on the 3d day of August, 1923, and the verbal contract was made on the 17th day of August, 1923. The purpose of the verbal contract was to employ the plaintiff to procure purchasers for lands owned by the defendant in the Rio Grande Valley, in the State of Texas. The plaintiff was given the power to appoint subagents to work under him. The plaintiff was to receive as compensation for his services seven and a-half per cent, commission on the purchase price of the lands sold- or procured to be sold for the defendants. According to his own testimony and the testimony of other witnesses, sales were procured by the plaintiff amounting to something over $30,000,’ and he was entitled to a commission of seven and a half per cent, on all these sales.
    On December 30, 1923, J. O. Engleman, Inc., in a letter written to S. M. Briscoe, recognized that Briscoe was in the employment of the defendant to sell its lands, and gave him directions about carrying out a certain designated contract. Again, in 1924, the defendants wrote to the plaintiff, urging him to procure people to go down into Texas and examine their lands:
    J. C. Engleman, Jr., was the principal witness for defendants. According to his testimony, the written contract executed between the plaintiff and the defendants was canceled in the fall of 1923. At the time of its cancellation they did not owe the plaintiff anything. On the other hand, the plaintiff owed the defendants at that time. Engleman denied that the defendants owed the plaintiff anything at all, and denied making the oral contract testified to by the plaintiff.
    The jury returned a verdict in favor of the plaintiff in the sum of $2,000. From the judgment rendered the defendants have duly prosecuted an appeal to this court.

      Warner, TIardin & Warner, for appellant.

      U. C. May and Evans S Evans, for appellee.
   Hart, C. J.,

(after stating facts). The defendant, J. C. Engleman, Inc., is a corporation organized under the laws of the State of Delaware, and the defendant, J. C. Engleman, Jr., is a nonresident of the State of Arkansas. They filed a motion to quash the service of summons against them and to dismiss the attachment levied on their property, and saved their exceptions to the action of the court in overruling their motion. Subsequently J. C. Engleman, Jr., president and manager of J. C. Engleman, Inc., filed a motion to continue the case for the term on the ground that he was physically disabled to attend court and was confined in a hospital in Temple, Texas, and would necessarily be confined in the hospital for an indefinite period, and that it was necessary for him to be present at the trial of the case, both for the purpose of advising his attorneys and testifying as a witness in the case. The case was continued for the term on his motion. When the case was tried, he was the principal witness for both defendants.

The object of the service of summons upon a party to a lawsuit is to apprise him of the nature of the proceedings against him. When a party applies for or agrees to a continuance of the case, this makes him a party to the record, and any defect that might exist as to service of process upon him is waived. Rogers v. Conway, 4 Ark. 70; St. L. I. M. & S. Ry. Co. v. Barnes, 35 Ark. 95; and Sager v. Jung & Sons Co., 143 Ark. 503, 220 S. W. 801. Therefore we hold that the assignment of error of the defendants, that the judgment should be reversed because there was a personal judgment against them in favor of the plaintiff, is not well taken.

It is next contended by counsel for the defendants that there was no consideration for the oral contract sued on. This court has held that parties to a written contract may, subsequent to its execution, modify it and substitute a valid oral agreement therefor. The change in the terms of the contract is a sufficient consideration for the execution of the new contract. Of course, the burden of proof is upon the party relying upon the new contract to prove its terms. Cook v. Cave, 163 Ark. 407, 260 S. W. 49.

In Moore v. Exelby, 170 Ark. 908, 281 S. W. 671, it was held that it is not necessary that authority to sell and make a binding contract for the sale of lands be in writing, for a contract employing an agent to find a purchaser is not within the statute of frauds; and several earlier cases are cited in support of the ruling.

In the application of these principles of law to the facts at issue in the present case, it will be seen that the plaintiff was entitled to recover, if the jury believed his testimony. According to his evidence, the oral contract was made in substitution of a previous written contract. The parties agreed to be bound by the terms of the oral contract. The plaintiff was to receive seven and one-half per cent, commission on the amount of all sales of land made by him or' by his subag’ents for the defendants. According to the evidence adduced in his favor, sales to the amount of over $30,000 were made by the plaintiff and his subagents. At seven and a half per cent, commission, this would be more than $2,000, the amount for which the jury returned a verdict in his favor and for which judgment was rendered in his favor against the defendants.

Numerous assignments of error in the refusal of the court to give instructions asked by the defendants are urged for a reversal of the judgment. We do not deem it necessary to set out these instructions or to review them. The object of instructing the jury by trial courts is to state and apply the law to the facts of a particular case. The court, by its instructions, should concretely apply to the facts the principles of la.w applicable thereto as shown by the issues raised in the pleadings. When the instructions sufficiently set forth the claims of the respective parties in such concrete form as to give the-jury a proper understanding of the issues raised by the pleadings, a repetition of the instructions is not necessary, and may serve to confuse and mislead the .jury. It is proper to refuse instructions embodying principles of law substantially covered by other instructions given, which fully and fairly submit to the jury in a concrete form the respective theories of the parties to the lawsuit. The reason is that, if the court should repeat in varying form the principles of law applying to a particular state of facts, the instructions might be considered by the jury as an argument by the court and as an indirect expression of the court upon the weight to be given to the evidence, which is prohibited under our Constitution. Redman v. Hudson, 124 Ark. 26, 186 S. W. 312, and North American Union v. Oliphint, 141 Ark. 346, 217 S. W. 1.

In the case at bar the issues were plain and simple. The court told the jury that the burden of proof was upon the plaintiff to show by a preponderance of the evidence that he furnished buyers that actually bought and paid for the lands of J. C. Engleman, Inc., and that he had not received his commissions for such sales. The court further stated that, if he did not establish these facts by a preponderance of the evidence, he was not entitled to recover. In other instructions the respective theories of the parties were fairly and fully submitted to the jury; and, as we have already seen, the court was not required to repeat the instructions in varying form.

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

Hart, C. J.,

(on rehearing). Counsel for J. E. Engleman, Inc., earnestly insist that a rehearing should be granted because the opinion of the court is contrary to the well-known rule that the officers of a corporation are distinct and separate from the corporation itself, and that the appearance of an officer of a corporation is not an appearance by the corporation.

We are of the opinion that the peculiar facts of the case at bar make it an exception to this well-settled rule. The record shows that J. C. Engleman, Inc., is a Delaware corporation, and that the wife of J. C. Engleman, Jr., owns practically all the stock in it. The corporation was engaged in selling lands in Texas to persons in Arkansas, and J. C. Engleman, Jr., alone had charge of its affairs and conducted its business in the State of Texas. He had the authority to employ attorneys for it and to conduct its litigation. Constructive service was had upon the corporation and upon Engleman as an individual. The presumption is that both the corporation and Engleman individually were sued in order to prevent a shifting of responsibility in the premises. J. C. Engleman, Jr., was .just as necessary as a witness for the corporation as he was for himself. He alone conducted the business of the corporation, and he alone could advise the attorneys of the corporation about this particular lawsuit. The continuance was had at his request, because he was sick and unable to attend court. In his motion for a continuance he stated that his presence was necessary to advise the lawyers about the conduct of the case and to be a witness in it. The interest of the corporation and of Engleman as an individual • was so commingled that the same testimony would be introduced in each case, and the presence of Engleman was just as necessary for the corporation as it was for himself. Under these circumstances it is inferable that the continuance was had for the benefit of both parties and resulted in the entry of the appearance of both of them.

It is also insisted that the court erred in submitting to the jury whether the land attached in Logan County belonged to the corporation or to Engleman. It is earnestly insisted that there is no testimony in the record upon which to predicate such an instruction. We do not agree with counsel in this contention. As we have already seen, the corporation was organized under the laws of the State of Delaware, and was engaged in selling land in the State of Texas. Practically the whole of the stock of the corporation belonged to the wife of J. C. Engleman, Jr., who alone had charge of its affairs in this part of the country. It is true that he testified that he never took any Arkansas lands for the corporation in exchange for its Texas lands. He states that he took the lands for himself. Under the circumstances, the jury was warranted in finding that the taking of the title in himself was colorable merely, and that the corporation owned the beneficial interest in the lands. It is inferable from the evidence in the record that the Texas lands of the corporation were often exchanged for lands in Arkansas. Agents were especially employed by J. C. Engleman, Jr., to sell lands to persons in'Arkansas. Frequently the owners of lands in the State of Arkansas were induced to exchange their lands for lands belonging to the corporation in the State of Texas. The owners of the Arkansas lands would not convey their lands directly to the corporation, but would convey them to J. C. Engleman, Jr. It is not shown that he had any interest in the matter except as an agent of the corporation, and it is fairly inferable from all the attendant circumstances that the beneficial interest or equitable title was in the corporation. Therefore we hold there was no error in sustaining the attachment on the ground that the lands attached belonged to a nonresident corporation.

The motion for a rehearing will be denied.


author: Smith, J.

text:
    Clark v. Dennis.
    Opinion delivered February 21, 1927.
    1. Mines and minerals — oil and gas lease. — An oil and gas lease conveys, not merely a license, but an interest and easement in the land i-tself.
    2. Venue — lien on oil and gas lease. — A suit to impose a lien on an oil and gas lease is not a transitory, but a local, cause of action and is properly brought in the .county where the land is located, under Crawford & Moses’ Dig., § 1164.
    3. Mines and minerals — lease agreement. — In an action on a draft and to enforce a lien on an oil and gas lease, it was immaterial whether the agreement contemplated that the lessee should have a reasonable time for examination of the abstract of title, where there was no evidence that a marketable title was not shown by the abstract nor any claim that the draft would have been paid if the abstract showed a good title.
    Appeal from Columbia Chancery Court; J. Y. Stevens, Chancellor;
    affirmed.

      W. B. Sorrels, for appellant.

      Paul Crumpler, for appellee.
   Smith, J.

The complaint in this cause alleged that appellee, the plaintiff below, owned a forty-acre tract of land in Columbia County, on which he sold appellant an oil and gas lease for the sum of $1,000, it being agreed that the purchase price therefor should be paid by the draft of appellant for that amount on the Cotton Belt Saving's & Trust Company of Pine Bluff; that the draft was drawn and delivered and duly presented, but was dishonored. "Wherefore plaintiff prayed judgment for the amount of said draft, and that a lien be declared in his favor on the lease and the same ordered sold in satisfaction of the judgment, if it were not otherwise paid.

Appellant, defendant below, is a resident of Jefferson County, and was served with process in that county to appear and answer in the Columbia Chancery Court, where the cause was pending*. He filed a motion to quash the service and to dismiss the cause for the reason that it was a transitory action, and he had not been served with process in the county where the suit was brought. This objection to the jurisdiction of the Columbia Chancery' Court was duly preserved by appellant in the answer which he filed, after his motion to quash was overruled, and throughout the trial.

The lease made an exhibit to the complaint appears to be an ordinary oil and gas lease, wherein the lessor granted to the lessee the right to explore for oil and gas for a period of five years, in consideration of one-eighth of the oil or gas produced. The land there described is in Columbia County.

The answer filed alleged that plaintiff agreed, within a given time, to furnish an abstract showing a marketable title, and that the lease and draft were placed in escrow; that the abstract was never furnished, and that the draft was prematurely and improperly delivered by the escrow agent.

There was a general finding in favor of the plaintiff for the amount of the draft, and the amount thereof was adjudged to be a lien on the land, which was ordered sold if the judgment was not paid, and this appeal is from that decree.

The motion to quash the service was properly overruled. An oil and gas lease conveys, not merely a license, but an interest and easement in the land itself. Standard Oil Co. v. Oil Well Salvage Co., 170 Ark. 729, 281 S. W. 360. The suit to impose a lien upon the lease was a local, and not a transitory, cause of action, and was properly brought, in the county where the land was located. Section 1164, C. & M. Digest.

The cashier of the bank which acted as escrow agent testified that the lease and the draft were placed in escrow in the bank, and when the abstract was completed it-was attached co the draft, which was sent for collection to the bank upon which it was drawn. The witness did not understand that there was any stipulation as to the time within which the abstract was to be finished, and it is not shown that there was any unreasonable delay in the preparation of the abstract.

If it be said tbat the escrow agreement contemplated, not only the delivery of the abstract, but a reasonable time for the examination to determine whether a marketable title was shown, it may be answered that no attempt was made to prove that a marketable title was not shown by the abstract. No claim is made that the draft would have been paid had the abstract shown a good title, nor, as we have said, was there any proof that plaintiff’s title was not a marketable one.

We discover no error in the decree, and it is therefore affirmed.


author: Humphreys, J.

text:
    Life & Casualty Insurance Company of Tennessee v. Ford.
    Opinion delivered February 21, 1927.
    1. Insurance — construction of policy. — An insurance policy must 'be liberally construed in favor of the insured or beneficiary, and the limitations or restrictions upon the liability contracted for should be construed strictly and most strongly against the insurer.
    2. Insurance — construction of policy. — Ambiguities in limitations or restrictions in insurance policies should be resolved against the insurer.
    3. Insurance — construction of policy. — A provision in an accident policy that no indemnity will be paid “where the death or loss of members or eyesight does not occur within 30 days from the date of the accident,” held to relate to the loss of two members, and not to the loss of one member only; the recovery for loss of one member being less than for the loss of two members.
    4. Pleading — effect op demurrer. — A demurrer to a complaint admits the truth of allegations and all reasonable inferences which can be drawn therefrom.
    5. Insurance — construction of complaint. — Under an accident policy, in which plaintiff is named beneficiary, providing that “indemnity for the loss of life of the insured is payable to -the beneficiary if surviving the insured,” and that “all other indemnities of this policy are payable to the insured,” a complaint alleging the loss of a limb of plaintiff’s insured, a child six years old and bearing the same surname, from which loss the child subsequently died, held to justify a presumption, on general demurrer, that plaintiff was related to the child and entitled to his estate.

      Appeal from Bradley Circuit Court; Turner Butler, Judge;
    affirmed.

      Wilson & Martin and Compere & Compere, for appellant.

      DuVal L. Burkins, for appellee.
   Humphreys, J.

Appellee instituted this suit against appellant in the circuit court of Bradley County on an accident insurance policy to recover, as beneficiary therein, $500 for the loss of the left limb of appellant’s insured, Eugene Layton Ford, through external, violent and accidental means. The policy was made a part of the complaint, and contains two paragraphs which, appellant contends, exempts it from liability under the facts alleged in the complaint. The paragraphs referred to are as follows:

“No indemnity will be paid as the result of, or for injuries caused by, other means or under other conditions than those set forth above, nor where death or the loss of the members or eyesight does not occur within thirty days from the date of the accident.”
“Indemnity for loss of life of the insured is payable to the beneficiary if surviving the insured, and otherwise to the estate of the insured. All other indemnities of this policy are payable to the insured.”

The indemnities provided for in the policy are as follows:

For loss of:
Life ................................................................................................l...$l,000
Both hands .......................................................... 1,000
Both feet....................................................................................... 1,000
Sight of both eyes ......................................................... 1,000
One hand and one foot.,................................................. 1,000
One hand and sight of one eye.............................. 1,000
One foot and sight of one' eye..............................1,000
Either hand .............................................................................. 500
Either foot ............................. 500
Sight of either eye............................................................ 500

It was alleged in the complaint that, on or about October 20,1924, appellant’s insured, a boy six years old, •was standing on a little bridge, or culvert, which extends over the west curb just north of the Y. M. C. A. building in the city of Warren, Arkansas, when an automobile came down the street and turned upon said bridge or culvert, and, in some manner, struck and knocked the insured into a ditch and injured his left limb; that medical treatment was rendered him promptly, and that, on the 28th day of October, 1921, he was removed to a hospital, where an operation was performed on his left limb with a view to saving same without severance; that, no relief having been afforded, a second operation on said limb was performed on November 20,1921, to determine finally if amputation was necessary, which operation determined the necessity of the removal of the limb, and, on the 29th day of November, 1921, the injured limb was removed above the knee joint; that, despite the removal of the limb and the best medical treatment, the insured showed no improvement, and, after lingering from the date of the injury, he died on the 19th day of February, 1925, from the result of the injury.

The first paragraph quoted herein is one of several liability limitations following the schedule of payments for losses set out above.

Appellant filed a general demurrer to the complaint, alleging that it failed to state sufficient facts to constitute a cause of action under the law, which was overruled by the court; and, declining to plead further, a judgment was rendered against it in the total sum of $660; the judgment includes the amount of the indemnity sued for, $100 attorney’s fee, and a penalty of $60.

Appellant has duly prosecuted an appeal to this' court from the judgment.

We understand that appellant does not question the amount of the judgment if any liability exists under the terms of the policy and the facts alleged in the complaint.

Its first contention for a reversal of the judgment is that, because the leg of the insured was not amputated within thirty days after the injury, it is exempt from liability by reason of the provision in the policy to the effect “that no indemnity will bo paid * '* * where the death, or the loss of members or eyesight does not occur within thirty days from the date of the accident.” Appellant is the author of the policy, so its provisions must be lib^ erally construed in favor of the insured or beneficiary. Another way of stating the rule is that the limitations or restrictions upon the liability contracted- for should be construed strictly and most strongly against the insurer. Another well-settled rule of construction is that, if the limitations or restrictions against liability contain ambiguities, they should be resolved against the insurer rather than the insured or beneficiary. Applying these rules to the paragraph referred to, we think it necessarily relates to the loss of two members or the entire eyesight for which the insured agreed to pay $1,000 in the schedule of indemnities. There are two classes of indemnities in the schedule, one of $1,000 for the loss of two members of the body, and the other of $500 for the loss of one member. It will be observed that the language of the limitation is that “the loss of members or eyesight” must occur within thirty days from the date of the accident. It does not say that the loss of one member or one eye, or the loss of any member or either eye, must occur within thirty days from the date of the accident before the insurer shall be liable. Since two classes of indemnities are provided for in the schedule, and the restrictive clause mentions the “loss of the members or eyesight,” it should be construed as relating to the class providing for payment in the event of loss of two members of the body and not to the class providing for the payment in the event of the loss of one member. Certainly it cannot be said that the limitation phrase is unambiguous, when read in connection with the schedule of indemnities. The construction put upon the limitation paragraph by us finds support, by parity of reasoning, in the well considered case of Marshall v. Commercial Travelers’ Mutual Accident Assn., 170 N. Y. 434, 63 N. E. 446.

Appellant’s next and last contention for a reversal of the judgment is that, under the terms of thé policy, appellee, the beneficiary therein, is entitled to recover indemnity for the death of the insured only. The paragraph relied upon by appellant in support of this contention is set out in the statement of the case, so it is unnecessary to quote it again. A general demurrer was filed to the complaint, which raised the question below of the right of appellee to sue at all. The question is therefore before us for consideration on appeal. In determining the question, all inferences fairly deducible from the express allegations of the complaint must be considered. The demurrer admits the allegations and all reasonable inferences which can be drawn therefrom. The basis of the suit is the policy. It reflects that the insured, Eugene Layton Ford, was a child six years old, and that the beneficiary is Yol C. Ford. It is clearly inferable that Yol C. Ford has some family relationship with the insured, Eugene Layton Ford, else he would not have had an insurable interest in him; and it is reasonably conceivable from the latter fact, and the further fact that they both bore the same surname, that the beneficiary was related in such a way to the insured as to entitle him to some part of the estate left by the deceased at his death. Appellee did not sue for the death indemnity but for the indemnity covering the loss of the child’s limb, indicating that he was suing as the sole heir for the estate of the deceased. We think it reasonable to indulge the presumption, on general demurrer, that he was related to and entitled to the estate of the child.

No error appearing, the judgment is affirmed.

Justices Smith and Kirby dissent.


author: Kirby, J.,

text:
    Patrick v. Arkansas National Bank.
    Opinion delivered February 21, 1927.
    1. Appeal and error — transcript of evidence. — In a suit in chancery where the parties agreed that oral testimony might be taken in shorthand by a stenographer named and transcribed and filed, and, when so filed, should be treated as depositions of the witnesses and become part of the record, held that typewritten testimony, presented to the clerk and by him filed and certified as a complete transfeript of the depositions of the witnesses, was sufficient showing of the evidence, though such testimony was not certified by the stenographer; there being no contention that any material part of the testimony was not in the transjdpt.
    2. Bills and notes — liability of accommodation parties. — Persons interested in a corporation who, to avoid Rev. Stat. §§ 5200, 5239, limiting the amount a national bank may loan to a corporation, executed and indorsed to such bank their personal note for money turned over by them to the corporation for its use, held liable as accommodation parties, though the bank may have known that they were only accommodation parties.
    3. Corporations — contract for liquidation. — In a national bank’s action on a note, proceeds of which were paid to a corporation to which a direct loan by a national bank would have been excessive, under Rev. Stat. U. S. §§ 5200, 5239, a cross-complaint of the maker and indorsers of the note, praying specific performance of a contract with a third person for sale and liquidation of the corporation’s assets, was properly dismissed, where such defendants had first broken the contract.
    4. Banks and banking — liability of president. — Where 'one interested in a corporation executed a note to a national bank, which was indorsed by other persons interested, and the proceeds were paid to the corporation, to which a direct loan would have been excessive under Rev. Stat. §§ 5200, 5239, held that the estate of the president of the bank, who was interested in such corporation and who knew of such arrangement, was not liable to the bank for the amount of the note, which was accepted by the cashier and approved by the board of directors in absence of the president.
    Appeal from Washington Chancery Court; 8am Williams, Chancellor on exchange;
    reversed in part.
    statement by the court.
    The Arkansas National Bank brought suit in the Washington Circuit Court against F. M. Patrick, M. L. Price and R. M. Clark upon a promissory note for $10,000 executed to it by F. M. Patrick as maker, and indorsed by M. L. Price and E. M. Clark. The defendants answered, denying the execution of the note; that the copy attached was a cojjy thereof; that they had ever paid interest thereon as alleged; and, as a further defense, alleged that the note sued, on was executed for a loan made to the Ozark Poultry & Egg Company by the said bank; that said loan was an excess loan-; that the $10,000 proceeds was paid over to the corporation, Ozark Poultry & Egg Company, the bank and its officials knowing at the time that the loan was an excess loan under the Federal statutes; and, by way of cross-complaint, in "which M. L. Price and E. M. Clark joined, set up a contract between themselves and Mrs. Eoberta Fulbright, to which the bank was not a party, entered into on about the 11th day of August; 1923, almost a year after the execution of the note sued on.
    In the cross-complaint they prayed for a specific performance of the contract between Patrick, Price and Clark on one hand, Mrs. Eoberta Fulbright on the other, for the sale of the holdings of the Ozark Poultry & ■Egg Company and it liquidation, and, in the alternative, if specific performance could not be had, for damages against Mrs. Fulbright for the alleged breach of the contract, and asked that a receiver be appointed to take charge of the assets of the said corporation. A copy of the contract for the sale of the holdings of the Ozark Poultry & Egg Company for payment of its debts was attached as an exhibit to the cross-complaint, which also contained a motion to transfer to equity.
    On February 20,1924, the bank replied to the answer of F. M. Patrick, and, in answer to the cross-complaint, denied the allegation made against the bank and its directors, and, by way of cross-complaint, set up the contract made between Patrick, Price and Clark and Eoberta Fulbright on August 11, 1923, the same contract set out by said defendants in their cross-complaint, and alleged that Mrs. Fulbright was thereby constituted a trustee of the assets of the Ozark Poultry & Egg Company, and asked that she be held to account for the property of said corporation disposed of under said contract; and also that there was an agreement therein by which the parties bound themselves to liability for payment of all the debts of said corporation, and prayed judgment against the defendants and each of them by reason of said agreement, and against her, Roberta Fulbright, as administratrix of Jay Fulbright, deceased; alleged that the loan represented by the notes sued upon was an excess loan made by Jay Fulbright in his lifetime, as president and director of the Arkansas National Bank, to the Ozark Poultry & Egg Company, and that she, as administratrix, was liable under 5200 and 5239 of the Revised Statutes of the United States for the amount thereof, and prayed a 'recovery from her as such administratrix for same.
    Roberta Fulbright, after moving the court to dismiss the cross-complaint for misjoinder of parties and the overruling of the demurrer to the cross-complaint, answered, denying all the allegations of both cross-complaints, that of Patrick, Price and Clark and of the Arkansas National Bank, attempting to fix a liability against her individually or in her representative capacity as administratrix of her husband’s estate.
    The contract for liquidation and sale of the assets of the Ozark Poultry & Egg Company, and the purchase of the stock or interest of Price, Patrick and Clark therein by Roberta Fulbright, administratrix of the estate of Jay Fulbright, was introduced in evidence, and expressly provides for the appointment of liquidation agents, and after inventory made by the parties selected for appraisement of the property, as follows:
    “That the party of the first part and the parties of the second part shall each select a good and competent man, and the two selected shall select a third, and a majority of the three shall place what they believe to be a fair value on the building and real estate and holdings of the corporation, including the machinery, refrigeration, holdings, equipment, and all holdings, and the party of the first part shall accept the property so valued at the price so placed upon it.* * * In case the appraisement of the fixed assets shall be thought to be unreasonable by either party, a second appraisement shall be had by appraisers appointed by the parties as in the first instance, and such second appraisement shall be that to be accepted.”
    The testimony shows that Roberta Fulbright made a written demand for a second appraisement, in accordance with the terms of said contract; that the other parties objected to the appraisers she suggested; that she finally named another person for appraiser; that they continued to refuse to have a second appraisement, and finally filed a suit or cross-complaint, in which a receiver of the assets was asked for. The concern was then put into bankruptcy, and its remaining assets distributed in bankruptcy.
    The testimony of Patrick, Clark and Price indicated that their refusal or failure to appoint an appraiser and have a second appraisement made was on account of their belief that the demand therefor was not made in good faith.
    T. L. Hart, cashier of the bank, testified that he had been cashier since 1913, and identified the Patrick note sued on, which was a demand note for $10,000, payable to the order of said bank, with interest from date until paid, with the clause providing that the indorsers waive demand or presentation, etc., signed by F. M. Patrick, indorsed on the back “M. L. Price and R. M. Clark,” with three credits, 2-7-23, $200; 5-16-23, $200; 9-11-23, $200. He stated that, on .the morning of November 15, 1922, he met Mr. Jay Fulbright in the street, and “he told me he had arrang’ed for Mr. Patrick to sign the note for $10,000, and Mr. Price would be up and fix it up. About something like an hour after that Mr. Price came in with the note already made out and indorsed, and I placed the proceeds of the note to the credit of F. M, Patrick. A little later in the day I went to Mr. Fulbright to find out if the note was signed like he understood it was to be signed, and he told me it was. ”

      The proceeds of the note were placed to the credit of Mr. F. M. Patrick. Later on in the day Mr. Patrick checked the money to the Ozark Poultry & Egg Company. Later witness made a demand on Price and Patrick for payment of the note, writing them a letter. The interest was paid on September 1, 1923. At the time the note was given by Mr. Patrick, the Ozark Poultry & Egg Company was indebted to the Arkansas National Bank in the sum of $12,000, represented by promissory notes. The capital and surplus of the bank at that time amounted to $130,000. Witness had not been consulted about making this loan to Patrick, except as in the conversation with Mr. Fulbright, already stated. On cross-examination witness stated that he placed the proceeds of the $10,000 note to the credit of F. M. Patrick, and it was entered in the account of Patrick on the books of the bank, but afterwards $10,000 was cheeked out of the bank by Patrick to the Ozark Poultry & Egg Company; that he had no control of Patrick’s account in the bank, and had no authority to control the disposition of his account; had no specific knowledge that the loan was made for any other person than Patrick; was under the impression that it was a loan for the Ozark Poultry & Egg Company, as he did not know what Mr. Patrick, would be borrowing that much money for.
    Witness had no knowledge of what arrangement had been made between Mr. Patrick and the Ozark Poultry & Egg Company, and did not know the company had given to Mr. Patrick a note representing the amount borrowed. His only reason to believe it was a loan for the Ozark Poultry & Egg Company was the fact that Mr. Patrick checked the proceeds out to that company.
    Witness did not believe at the time that it was an-excess loan. It was reported to the board of directors afterwards, and the board took the regular action as on most loans, approving them as they read them. Mr. Fulbright had told me a number of times he considered Mr. Patrick good for his obligations. Mr. Fulbright was the principal financial power connected with the Ozark Poultry & Egg Company, and, when loans were • made to that company, they were arranged for 'through him.
    This loan -was never submitted to the loan committee of the bank, but was submitted to the hoard of directors after the loan was made. Mr. Fulbright was a director and president of the Arkansas National Bank, and was active in his office as president.of the hank. “We paid a check drawn by the Ozark Poultry & Egg Company in favor of the First National Bank of Fort Smith for $10,000, as I remember, on the 16th day.of November, 1922.” Witness said if the loan had been made direct to the Ozark Poultry & Egg Company at that time it would have been an excess loan; did not recall that any excess loan had ever been made by the bank to the Ozark Poultry & Egg Company prior to that time. Stated that Mrs. Fulbright sat with the board of directors of the bank after his death, and suggested that the outstanding loan due should be looked after. Don’t remember just what she said, but understood she wanted the matter looked after, and complied with her request. Think application was made to our attorney, Mr. Davidson, to bring suit upon this note.
    Witness is unable to state regarding the listing of this note as a liability of the Ozark Poultry & Egg Company by the member's of that company. Does not recall whether any of the checks received in payment of the interest on the note were signed by Price, Jordan, or Mr. Clark as manager. Does recall that Jay Fulbright never signed any of those checks. Witness was engaged during this time actively discharging the duties of cashier of the bank. The bank filed a claim in bankruptcy against the Ozark Poultry & Egg Company for $10,000 and received dividends from the bankruptcy court out of the estate; does not know whether Mr. Patrick filed such claim or not.
    Introduced-copy of bank record of the account of the Ozark Poultry & Egg Company, dated November 35, 1922, showing deposit on that date in favor of that company of $10,494.77, and a cheek paid on November 16, 1922, for $10,000; also the minutes of the meeting of the board of directors on the 15th, showing the names of those present; that it did not show that Jay Fulbright was present at the meeting; otherwise his name would have been included; that the numbers of the notes which were read and approved at that meeting included the note for $10,000 sued on in this action.
    Witness also introduced evidence of F. M. Patrick’s personal account in the bank, showing a deposit to that account on November 15, 1922, of $10,000.
    Patrick testified he had signed the note for $10,000; that it was prepared at the Ozark Poultry & Egg building, and the money was borrowed by him for the Ozark Poultry & Egg Company, which was $10,000 to pay a note at Fort Smith. The notes at the Fort Smith bank were signed by the poultry company, F. M. Patrick and Jay Fulbright as indorsers. “My impression was, in talking to Mr. Fulbright, he signified his dissatisfaction of borrowing so much money at Fort Smith and indorsing these notes, and I understand M.r. Fulbright fixed up this plan for me to sign this $10,000 note to retire one down there; that is the impression I had. There was a note due there, and they needed their money, and Mr. Fulbright would rather have interest in his own bank than to pay it down there, and that was the impression I received, to get the money up here instead of down there. ’ ’
    Witness denied it was agreed upon between him and the other members of the corporation, the Ozark Poultry & Egg Company, that he was to give the note and draw the money individually, instead of having the company do it; did say his understanding.was that the company owed the bank its limit and could-not borrow any more money in its own name. ‘ ‘ That was the way it was represented to me. When he drew the check for the Ozark Poultry & Egg Company for $10,000, he gave it to Mr. Price, manager down at the house.”

      Price testified he was secretary and manager of the poultry and egg company from 1917 to August 13, 1923; that the note sued on in this case was prepared by his secretary in the office of that company, and signed and indorsed there. At the time the company had $25,000 borrowed money from Fort' Smith on the "First National Bank at Fort Smith, and it seemed the Arkansas National Bank had considerable money. The rate of interest at Fort Smith was virtually the same as at Fayetteville. ‘ ‘ The Fort Smith bank having written a letter and advised that we could reduce our indebtedness $10,000, I mentioned the matter to Mr. Fulbright, and asked him what arrangement we had better make. He suggested that Patrick sign the noté, in order to avert the banking laws, and it would be all right for him to sign it, and the Ozark Poultry & Egg Company could take credit for it, as we had the $12,000 borrowed at the Arkansas National Bank.” Witness prepared the note at the office, let Mr. Patrick sign it, and took it to the bank for the purpose of getting credit for'it; handed the note to Mr. Hart, cashier, as had been done in borrowing money heretofore. “1 suggested it would be much better if we" would deposit this $10,000 to the credit of Mr. Patrick and let Mr. Patrick give the check to the Ozark Poultry & Egg Company for a like amount, which was done. He mailed a check of the Ozark Poultry & Egg Company to Fort Smith on the same date to take up its $10,000 note held there by the First National Bank. I talked to Mr. Fulbright about reducing our loan in Fort Smith; told him I thought we had better take $10,000 off down there and put it in the Arkansas National Bank, and he said go ahead and have Mr. Patrick make a note for the $10,000;” said that at numerous times various members of the corporation of the Ozark Poultry & Égg Company made notes to the Arkansas National Bank for various sums, but that the company’s signature was never for more than $12,000 borrowed money. Mr. Fulbright looked after the financial end of the company to a certain extent. He was down there a great deal, and appeared to be very much interested in that line of business.

      Prank A. Handlin testified lie was president of the First National Bank of Port Smith, and that that hank, on about the 15th of November, ’22, held five notes of the Ozark Poultry & Egg Company, three for $10,000 each and two for $5,000 each; that all the notes were guaranteed or indorsed by Jay Pulbright, P. M. Patrick and M. L. Price, and one of these $10,000 notes was paid November 15,1922.
    The chancellor, on hearing, held that Roberta Pulbright was not liable individually or as administratrix to the defendants, Patrick, Price and Clark, on their cross-complaint; that they refused to agree to a second appraisement of the assets of the poultry and egg ' corporation, and, by filing the cross-complaint herein, had breached the said contract for its liquidation, and released her from its performance; that there was no liability against her individually or as administratrix to the Arkansas National Bank on account of the contract of August 11,1923, between herself and the other defendants of the Ozark Poultry & Egg Company, but held that the loan represented by the note signed by Patrick November 15,1922, and indorsed by Price and Clark, was made to the Ozark Poultry & Egg Company, was made and knowingly assented to by Jay Pulbright, her intestate, as president and director of the Arkansas National Bank, and was an excess loan, for which he was liable to the bank, and that she, as administratrix, and Patrick, Price and Clark, were each liaNTe to the bank for the amount due thereon, $7,585.46, and decreed accordingly.
    Roberta Pulbright, as administratrix, appealed from that part of the decree holding her liable to the bank for said sum. The other defendants appealed from the decree dismissing their cross-complaint and rendering judgment against them upon the notes sued on by the bank.
    The decree also recites that:
    “It is agreed in open court, by all the parties to this suit, that the oral testimony of the witnesses may be taken in shorthand by Marcus Fietz and by him transcribed in typewritten form and filed herein, either in term time or vacation, and, when so taken and filed, shall be treated as depositions of the witnesses and become a part of the record in this cause, and the costs of the taking of said testimony in shorthand and the transcribing of same shall be taxed as costs in this suit as other costs are taxed.”
    The testimony of the witnesses was transcribed with the caption of this recital of the decree, and marked “Filed March 22, 1926. E. P. Watson, clerk.” The testimony of all these witnesses and all the testimony so transcribed and filed was brought up to this court by certiorari, with the clerk’s certificate that the above and foregoing pages from 2 to 301 in volume 2 contained a true, perfect and complete transcript of all the depositions, exhibits thereto, entries and proceedings of the witnesses mentioned in the writ of certiorari in the cases,” giving the style thereof, Arkansas National Bank v. F. M. Patrick et al., defendants, “as the same now appears on file in my office,” which makes a true and complete transcript of the diminution suggested by said writ, etc.

      W. N. Ivie, for Patrick ei al., appellants.

      Jolm W. Grabiel and John W. Nance, for Fulbright

      J. V. Walker and B. R. Davidson, for appellee.
   Kirby, J.,

(after stating the facts). It is first urged that there is ¿10 oral testimony properly included in the record, that the decree of the chancellor must be presumed to be correct, and the case affirmed accordingly. The decree recites that all the parties agreed in open court that the oral testimony of the witnesses may be taken in shorthand by the stenographer, naming him, and by him transcribed in typewritten form and filed herein, either in term time or vacation, and, when so taken and filed, shall be treated as depositions of the witnesses and become a part of the record in this cause. What purports to be the testimony of the witnesses was presented to the clerk in typewritten form and by him filed and certified to this court as a true, perfect and complete transcript of all the depositions, exhibits thereto, entries and proceedings of the witnesses mentioned, etc.

Couns'el for appellant contend that this transcript of testimony is not sufficiently identified as having been taken by the stenographer in accordance with the agreement, there being no certificate by him thereto, nor properly made a part of the record of the case by bill of exceptions, submitted to them for examination and certified by the trial judge. They do not contend, however, that there was any material testimony that is not included in the corrected record here. The court is of opinion that, under the agreement of the parties that the oral testimony, when transcribed and filed, either in term time or in vacation, shall be treated as depositions of the witnesses and become a part of the record in this cause with the certificates of filing by the clerk, and to the transcript that it contains all the testimony, etc., is sufficient to show the evidence upon which the cause was heard. Lenon v. Brodie, 81 Ark. 208, 98 S. W. 979; Sanders v. W. B. Worthen, 122 Ark. 104, 182 S. W. 549; Massey v. Kissire, 149 Ark. 215, 232 S. W. 24; McMillan v. Brookfield, 150 Ark. 518, 234 S. W. 621.

Although appellants, Price, Patrick and-Clark, denied the execution of the note to the bank, in their answer, the note itself, with their signatures and their admissions in testimony, shows its execution and indorsement by them, and the undisputed testimony shows that the bank loaned the money thereon, and passed it to the credit of the maker, Patrick, who afterwards checked it out to the corporation, which used it in payment for a note they were liable on to another bank. At the very least, they could not be considered other than"accommodation parties and liable on the instrument to the holder for value, notwithstanding- such holder may have known, when taking it, that they were only accommodation parties. Crawford & Moses’ Digest, § 7795; Hamilton v. Brown, 88 Ark, 97, 113 S. W. 1014; Fox v. State, 102 Ark. 451, 145 S. W. 228; First National Bank v. Allen, 141 Ark. 328, 216 S. W. 1039.

It is next contended that the court erred in dismissing- their cross-complaint against Roberta Fulbright on the contract for the sale of their stock in, and liquidation of the debts of, the Ozark Poultry & Egg Company. The court found, however, that these parties had, in violation of the terms of the said contract, refused and failed to select an appraiser and to make a second appraisement of the fixed assets of said corporation, upon the demand of Roberta Fulbright, in accordance with the express agreement therein that such second appraisement should be made if either party thought the first appraisement unreasonable, and by filing of the cross-complaint herein, which amounted to a substantial breach of the contract and released her from'its performance. This finding of the facts is supported by the testimony, and no error was thereby committed, nor in declaring such finding a breach of the contract that released Roberta Fulbright from liability to them for any failure to perform it. They claimed that she was liable to them for payment of the value of their stock in said corporation, to be ascertained by the appraisement and sale of its assets and property, in accordance with the terms of the agreement therefor.

It is undisputed, however, that one of them, Price, shortly before the mailing of said contract, had offered to buy the one-half of the stock of the Ozark Poultry & Egg Company owned by her intestate, her husband, at the time telling- her that he found that the company had come to the end of their row. They were heavily indebted, owed $50,000 to the banks, and the liquid assets amounted to about $39,000; “that the company was worth $18,000 less than nothing, ’ ’ but that he would see that she would not lose anything, and would give her $6,000 par value for the stock.

The liquidation of the corporation proceeded under the agreement until the appellants filed their cross-complaint against her, asking for receiver of the assets, and the corporation was then put into bankruptcy, and its administration there failed to show the payment of its debts and that the stock of appellant was of any value whatever.

The decree as to these appellants is correct, and is affirmed.

The court erroneously held the estate of Jay Pulbright, a director and president of the bank at the time the loan was made, responsible for the payment of the balance due thereon, adjudging it an excess loan knowingly made by him as a director of the bank.

The bank first brought suit against Patrick, Price and Clark on the note executed by Patrick and indorsed by the other, and finally, in the denial of the allegations of the answer and cross-complaint of Patrick, alleged that the loan represented by the note sued on was an excess loan to the Ozark Poultry & Egg Company, made by Jay Pulbright, the director and president of the bank, knowingly and in violation of the National Banking law, and that Roberta Pulbright, as his administratrix, was liable to the bank to the payment of the balance due thereon, under §§ 5200 and 5239 of said statute. On this point it made the following finding of fact:

“That on said date aforesaid (November 15, 1922), the deceased, Jay Fulbright, while acting both as president and director of the plaintiff, Arkansas National Bank, and as president and director of the said Ozark Poultry & Egg.Company, negotiated, granted and made to the defendant, P. M. Patrick, a loan of $10,000, which was evidenced by a promissory note executed by said defendant, Patrick, and indorsed by the defendants, M. L. Price and R. M. Clark; that said loan was made to the defendant, Patrick, for the benefit of the Ozark Poultry & Egg Company.”

The Ozark Poultry & Egg Company, hereafter called the corporation, was indebted, at the time of this loan, to the bank in such a sum as that the amount of the loan, $10,000, would have been in excess of the amount the bank, with its capital and surplus, could lend to any one person, firm or'Corporation. The testimony shows that Pulbright was the president of the corporation, which had been doing an extensive business, as well as director and president of the bank. The directors of the corporation, before the making’ of this loan, had on numerous times borrowed money from the bank on paper executed by them.

This loan was applied for by Patrick, the maker, presenting’ the note, which had already been signed and indorsed at the office of the corporation, to the cashier of the bank, who advanced the money thereon, placing it to the credit of the maker of the note, who, later that day, checked it out to the corporation, which used it inpayment of one of its notes due to a bank in Port Smith. The corporation charged itself with the money as having been received from and due to Patrick, the maker of the note.

Unquestionably these individuals, the maker and indorsers of the note, had the right to borrow money from the bank, and it was not unusual for them to do so, and lend it to the corporation, of which they were directors and stockholders. They were separate and distinct persons from the corporation, and not personally liable to the payment o'f its debts. The money borrowed by the corporation from the bank constituted no liability against them, personally or individually. They were not an association, or a company or firm, nor with the corporation any person within the meaning of said § 5200 of the statute, providing that total liability of any borrower shall at no time exceed one-tenth part in amount of the capital stock. This corporation was not thought to be insolvent at the time this money was borrowed from the bank by Patrick and his indorsers, and by them loaned to it. The cashier, after making the loan, later asked Pulbright, the president of the bank and also of the corporation, first, after telling him that the loan had been made on the note signed by Patrick and indorsed by the other two, if it was signed as it should have been, and he replied that it was.

It is true some of the witnesses liable to the payment of the note stated it was agreed to be made and the loan procured for the corporation in that way to avoid the appearance of its being a loan to tbe corporation, which would have been an excess loan made to one borrower in violation of the statute. The witnesses, however, were liable to the payment of the note in any event, and seeking to escape such liability by transferring it to the estate of Fulbright, who could not testify about the transaction.

The chancellor found, too, that Jay Fulbright, while acting both as president and director of the plaintiff bank and of the corporation, “negotiated, granted and made to defendant, F. M. Patrick, a loan for $10,000, which was evidenced by a promissory note executed by said defendant, Patrick, and indorsed by the defendants, L. M. Price and R. M. Clark;” that said loan was made to the defendant, Patrick, “for the benefit of the corporation.”

Even if it could be said' that the $10,000 loan to Patrick was a loan indirectly to the corporation, of which Fulbright was president, and for the making of which the directors of the bank would be liable for the resulting damages under the law prohibiting an excess loan to one borrower, corporation, association, individual, partnership and members thereof, then it is more nearly true, and the proof would have warranted the finding, that Fulbright only procured the making of the loan, which was granted by the cashier of the bank, and later approved by its board of directors, at a meeting from which he was absent, and in the making of which loan he did not knowingly participate in his capacity as director or officer of the bank. This transaction is unlike that in the case of the Corsicana National Banh v. Johnson, 251 U. S. 68, where the testimony showed there was an excess loan to two persons, individuals, in making which the bank director knowingly participated, rather than two loans, neither of them excessive, made to borrowers severally. It was shown that one of the parties indorsed the note of the other, the maker of which in turn indorsed his note for a like sum, which would not have been an excess amount. These individuals had been partners and jointly interested in many ventures, and were still partners in some, and the transaction was treated as one in the making of the ioan by the bank, the money being forwarded by check or draft payable to the order of the two individuáis jointly, as though they were a firm or partnership.

Here, as already said, while it is true the maker and indorsers of this note were directors of'the corporation to which they loaned the money borrowed by them, they were entirely separate and distinct persons from said corporation, and without personal liability to the payment of its debts or performance of its obligations.

It follows that the court erred in holding Roberta Fulbright, as administratrix of the estate of her deceased husband, liable to the payment of the balance due on said Patrick note. The cause is therefore remanded to the chancery court, with directions to dismiss the action as against the said administratrix.