author: Wood, J. McCulloch, C. J.

text:
    Wilson v. Biles.
    Opinion delivered July 12, 1926.
    1. Descent and distribution — negroes—legitimacy.—In the absence of evidence that unmarried negro parents were cohabiting in the State as husband and wife, when the act of February 6, 1867 (Crawford & Moses’ Dig., § 7040) was passed, legalizing such cohabitation and legitimizing their children, was passed, their right to inherit from their father was not established.
    2. Appeal and error — conclusiveness of chancellor’s finding.— A chancellor’s finding of fact will not be set aside unless clearlv against the weight of the evidence. ,

      3. Descent and distribution — failure of issue — surviving widow. —"Under Crawford & Moses’ Dig., § 3536, the widow of one who left no children takes a fee simple in an undivided half of his newly acquired land.
    4. Deeds — forgery—evidence.—In an action to quiet title, evidence held to show that a deed to an intervener was a forgery.
    5. Acknowledgment — proof of forgery. — A certificate of acknowledgment of a deed alleged to be a forgery does not preclude proof of such forgery.
    6. Principal and agent — acceptance of benefit of agent’s act.— A grantee is bound by the representation of his agent who negotiated a purchase of land that a deed would be made to the grantee as trustee to perfect the title, whereupon the grantor would convey title upon payment of an undetermined consideration.

      7. Vendor and purchaser — mutuality of contract. — Where the consideration to be paid for land was never agreed upon, the minds of the parties never met.
    8. Evidence — consideration of deed — parol evidence. — Parol evidence of the consideration of a deed which recites a nominal consideration is open to explanation by parol evidence.
    9. Vendor and purchaser — innocent purchaser. — The grantee in a deed reciting that the grahtor has no title to the land, on which a lis pendens has been filed, is not an innocent purchaser.
    10. Vendor and purchaser — failure of title — remedy of ¡purchaser. — Where the grantee in an oil lease placed in escrow wrongfully took possession of it and placed it on record' without the lessor’s knowledge or consent, one who in good faith purchased the lease from such grantee is entitled to judgment against him for the amount paid for the lease.
    11. Money received — nature of obligation. — An action for money had and received can be maintained whenever one man has received or obtained possession of the money of another which he ought, in equity and good conscience, to pay over.
    12. Escrow — performance of condition. — When a deed is delivered merely as an escrow, to take effect upon the performance of some condition by the grantee in the future, no title passes until the condition has been performed, even to an innocent purchaser without notice.
    Appeal from Union Chancery Court, First Division; J. Y. Stevems, Chancellor;
    reversed in part.

      J. W. Warren, J. B. Moore, Gaughan £ Sifford, Betts £ Betts, Powell, Smead £ Knox, for appellant.

      Davis & Costen, for appellees.

      Carmichael & Hendricks, for appellee Lockhart.
   Wood, J.

On March 5, 1923, Roxie Wilson Tatum, Rosie Wilson Winn, Major Wilson,- and Lyna Wilson Murdock, instituted their action in the Union Chancery Court against Willie Wilson, A. C. Benson, -C. J. Lock-hart et dl., to cancel and set aside a deed from Lizzie Wilson -to Willie Wilson and an oil and gas lease from Willie Wilson to A. C. Benson and by Benson assigned to C. J. Lockhart. The land' described 'in these instruments is the southeast quarter of the southwest quarter of section 6, township 16 .south, range 15 , west, . Union County, Arkansas. It-was alleged that the plaintiffs were the children and the only heirs of 'Charlie Wilson, who died in 1911, leaving.surviving him the plaintiffs and Lizzie Wilson, his widow, who was a second wife of Charlie Wilson and not the mother of plaintiffs. It was alleged that ¡Willie Wilson claimed to be the owner of the land in controversy by ‘deed from Lizzie Wilson, who died in 1922; that various and sundry persons were claiming to own the land through the above-named defendants. They prayed that these instruments be canceled as cloud.s on their title.' This action was .numbered 4272 in .the chancery court. . • •

On March 12, 1923, Walter G-.-Wilson instituted a separate action against the above-named plaintiffs and the defendants and others. He claimed'that he was the owner of an undivided half interest in the' above tract of land as the son of Robert Wilson, brother of Charlie Wilson, owner of the land, who died without issue in the year 1922; that his mother and father were.b.oth dead, and that all other collateral heirs of Charlie Wilson were dead, leaving him the only, surviving heir. He prayed that his title to an undivided half interest be quieted as against all other claimants. This action was numbered 4284. .

F. P. Vines filed an answer in the action numbered 4284 on May 15, 1923, in which he denied that Walter Wilson was a collateral heir of Charlie Wilson and that he had any interest in- the lands, and alleged that he was the owner of an undivided half interest by virtue of quitclaim deeds executed' to him by the collateral heirs of Charlie Wilson,-.and prayed that his title be quieted.

On June 4, 1923, one W. S. Biles, trustee, filed his intervention in the action numbered 4284, in which he" admitted that Charlie Wilson was the owner of the land, and alleged that he died without lineal descendants. Biles alleged that he was- the owner of all the lands, one-half thereof ¡through deeds'from certain parties named by him, who,-he alleged, were the collateral heirs of Charlie Wilson, and the other undivided half interest by virtue of a deed from Willie Wilson. - ■ -

On Juné 7; 1923, the two causes were consolidated and-ordered thereafter to- proceed under No.' 4284. November 28, 1923; C. H. Murphy' filed an answer- and cross-bill in-which he claimed under a' commissioner’s-deed' executed to him in pursuance of a foreclosure of a mortgage On the land. He prayed that the title be quieted in him as against all other claimants.

On" December 5, 1923, interventions were filed by Major-'Jackson and Cheney Lee, claiming to be the owners of an interest' as the grandchildren and collateral heirs of Charlie Wilson. -' On'January 9, 1924, Willie. Wilson and his wife,'Viola Wilson, filed their joint .answer to the complaints and-interventions,'in which they denied’ all material allegations of the complaints• and interven-' tions affecting their interest, and alleged, by way of cross- ' complaint, title to the land in controversy by deed from Lizzie Wilson to Willie Wilson and by adverse possession as their homestead since May 16, 1922. In their complaint they charged that the purported deed from Willie Wilson to W. S. Biles, trustee, was a forgery, and, in ' the alternative, if the court did not so decide, that the claim Biles was asserting under'it was a fraud on their - rights. On March' 1, 1924, Vines filed an amended answer and cross-complaint in which he denied 'the title of all claiming an interest in the land, and, by way of cross-complaint, stated that he was the owner of an undivided half interest by virtue of conveyances from the only descendants of the collateral heirs of Charlie Wilson, who died without issue.

Benson filed an answer on June 2, 1924, in which he denied the claims of Walter Wilson and the other plaintiffs and the claims of all the interveners. He denied that he obtained the lease under which he claims, and through which he conveyed the title to Lockhart, wrongfully or unlawfully, but states the same was executed and delivered to him in good faith. He denied that he was indebted to Lockhart, and admitted he had not paid the full purchase price of the property conveyed by Willie Wilson to him and by him in turn to Lockhart, but alleged that he was able and willing at all times to pay the same, and offered in his answer to do so. On October 6, 1924, Lockhart filed an answer and cross-complaint in which he alleged that he was the owner of oil and gas rights by mesne conveyances from Charlie Wilson, the owner in fee of the land, and deraigned title from him to Lizzie Wilson, his wife; from her to Willie Wilson; from him to A. C. Benson, who conveyed the lease to him, Lockhart. He denied that the other plaintiffs and interveners had any interest in the land. For cross-complaint against his codefendant, Benson, he alleged that he purchased from A. C. Benson an oil and gas lease on the southeast quarter of southwest quarter of section 6, township 16 south, range 15 west, Union County, Arkansas, and paid therefor the sum of $20,000, and, in the event the title thereto fails, the said Benson will be indebted to the said Lockhart for the sum of $20,000 with interest, etc. He then alleges that Benson is a nonresident of the State, and is the owner of an interest in oil and gas pleases of lands situated in Union County, Arkansas, ^which he describes, and alleges that he has given notice of the filing of lis pendens against this property. He prays for an equitable garnishment and that the property described be impounded until the final determination of these actions, and, in the event his title fails and judgment be rendered against him, he prays for judgment against Benson. By an amendment to his answer to all the plaintiffs and interveners he set up that he paid Benson $20,000 for the assignment of the lease, on the land in controversy, and, after acquiring such lease, he began to advertise units in said lease for sale and sold said units to others who had no notice of the claim of the plaintiffs or of the interveners. He stated that, after he had thoroughly advertised and sold a great many of the units, he expended the sum of $13,500 in drilling a well on the land. He alleged that the making of the lease and the assignment were matters of record in Union County, and that all knew that the land was being prospected and drilled. He alleged that Willie Wilson and all the plaintiffs and interveners knew that he was selling ■units to innocent purchasers, and that drillingjvas going ahead. Lockhart therefore set up that he and all claiming under him were innocent purchasers, and that Willie Wilson and all the plaintiffs and interveners were estopped, under the circumstances as above set forth, from maintaining their action as against him (Lockhart), and he prayed that all their complaints and interventions as against him be dismissed.

On October 10, 1924, one H. L. Armstrong filed an intervention in which he adopted the answer and ciosscomplaint of W. S. Biles, and alleged that on August 24, 1924, he acquired the property by warranty deed from Biles for a valuable consideration. He alleged that, if there was any secret agreement by which Biles was to hold the land in trust for Willie Wilson, he knew nothing of it, and demanded strict proof thereof. He specifically pleaded the statute of frauds against such an agreement, and set up that he was an innocent purchaser, and asked that his title be quieted.

The answer of Benson, to which we have already referred, denied that he was indebted to Lockhart in any' sum, and prayed that the cross-complaint of Lockhart and all complaints and interventions be dismissed as to him. On December 1, 1924, Willie Wilson and Viola •Wilson, his wife, filed their answer to the intervention of Armstrong, in which, they deny all material allegations set forth therein, and renew their prayer that all the complaints and interventions he dismissed for want of equity as against them, and that the conveyance from Biles to Armstrong be canceled as a cloud on their title, and for all proper and general relief.

On December 1, the court heard a demurrer by Willie and Viola Wilson to the intervention of Murphy, and sustained the same and dismissed the intervention. Murphy excepted and prayed an appeal, but has not perfected the same.

It is stipulated by ali parties that Charlie Wilson died intestate about the year 1910, and that, at the time of his death, he was the owner of the lands in controversy. It is further stipulated that all instruments of writing of record affecting the lands since 1910 are evidence in the cause.

Taxes for the year 1910 were paid by Charlie Wilson, in 1911 by Young and Anderson, in 1912 by Henry Crayton, from 1913 to 1921 'by Lizzie Wilson, and for 1922 and 1923 by Willie Wilson.

The trial court, after hearing all the testimony adduced on the above issues,, rendered a decree canceling the léase of Willie Wilson and Viola Wilson to A.. C. ■ Benson and its assignment by Benson to Lockhart, and quieting title of Biles, trustee, and his assignee Armstrong to the land in controversy, upon their payment to Willie Wilson of the sum of $3,000. The court entered a decree against Benson in favor of Lockhart in the sum of $2,800, and also a decree dismissing for want of equity the original complaint of Roxie Wilson Tatum and eo-plaintiffs, the complaint of Walter G-. Wilson, and the complaints and interventions of all parties claiming as lineal descendants and collateral heirs of Charlie Wilson, and of all parties claiming as grantees under them.

Appeals and cross-appeals have been perfected here by parties whose interests were adversely affected by the decree. The multitude of parties and the multiplicity of issues presented by this record make it wholly impractical to set out in detail and discuss at length the testimony on the issues in which we agree with the findings and decree of the trial court. We have thoroughly examined all'the testimony covering these issues, and the parties and their attorneys must be content with a brief statement of our conclusions concerning them.

As to Roxie Wilson Tatum et al., the original plaintiffs who claimed to be the children and lineal descendants, of Charlie,Wilson, the testimony is not sufficient to prove that' Charlie Wilson, their father, and Mollie Owens, their mother, were living and cohabiting together in Arkansas as husband and wife recognizing and holding each other out aa such, on February 6, 1867, when the act was passed providing that “all negroes and mulattoes who are now cohabiting as husband and wife and recognizing each other as such‘shall be deemed lawfully married.” There is some testimony to the effect that these four children were the children of Mollie Owens by Charlie Wilson, but the testimony falls far short of proving that they were born while Charlie Wilson and Mollie Owens were living and cohabiting together as husband and wife in Arkansas. Therefore these four plaintiffs do not prove that they are entitled to inherit as the children and heirs of Charles Wilson according to the act approved February 6, 1867, under which they claimed. Meekins v. Meekins, 169 Ark. 265.

As to Walter Wilson and all others who claim as and under collateral heirs of Charlie Wilson, the testimony is so vague, conflicting and uncertain, we are unable, after a careful reading and consideration of it, to say that, the finding of the trial court that none of them were entitled to inherit as the collateral heirs of. Charles Wilson is dearly against the preponderance of the.evidence. The decree dismissing the complaints and interventions of all who claim as and under collateral heirs is correct. 1 !

This brings us to the issue between Willie Wilson and those claiming by or under him. It is undisputed that Charles Wilson died owning 80 acres of land in Union County, Arkansas, of which the forty acres in controversy was a part, and that this land constituted his homestead; that he' died leaving his widow, Lizzie Wilson, in possession of the land; that the forty on which they resided at the time of his death was mortgaged, and she abandoned her claim to this forty and moved on to the forty now in controversy, and improved the same and claimed it as her own, whereon she lived until she died. Willie. Wilson, the illegitimate grandson of Charlie Wilson, and who had been reared by*him and Lizzie Wilson, continued to live with Lizzie Wilson until her death. Before her death she conveyed to Willie Wilson by warranty deed the land in controversy. The land was a new acquisition, and, as we have seen, Charlie Wilson had no children. Therefore at his death, his wife, Lizzie Wilson, was entitled to^bne-half of his real estate in fee simple, and took one-half the forty acres of land in controversy. Section 3536, C. & M. Digest. The effect of the decree in this case is to declare that Lizzie Wilson had title to an undivided half of the land in controversy, and that she had conveyed the same by warranty deed to Willie Wilson. The chancery court had jurisdiction to so decree, and its decree in this respect is correct. See Baxter v. Duvall, 152 Ark. 175-179, 237 S. W. 701; Maxwell v. Awtry, 154 Ark 85-89, 235 S. W. 384; Beal-Burrow Dry Goods Co. v. Kessinger, 132 Ark. 132-135, 200 S. W. 1002.

A'. We will now dispose of the issue between Willie Wilson and W. S. Biles and his grantee, Armstrong. Biles contends that Willie Wilson and his wife, Viola, on March 13, 1923, conveyed to him by quitclaim deed the lands in controversy, and he produced in evidence a deed purporting to be signed by Willie and Viola Wilson and duly acknowledged by A. C. Neygaard, notary public, and witnessed by M. T. Thompson and Robert Wilson, conveying to him, as trustee, the lands in controversy, subject -to an oil and gas lease previously given by Willie Wilson to A. ‘C. Benson. Biles testified in substance that the land was purchased pursuant to an agreement entered into between him and three others, including Chavis, that he and two associates would furnish 'Chavis and the other associate $2,500 with which Chavis was to procure for all of them deeds to property in the oil district of Union County, Arkansas, from certain parties named Wilson and others. This Chavis did. Title was taken in Biles ’ name as trustee for the benefit of himself and his associates. He exhibits an agreement signed by himself and associates as testified to by him, dated February 20,1923.

Chavis testified that he was a lawyer, and lived at Pine Bluff; that he procured a deed from Willie Wilson and his wife, Yiola Wilson, to-Biles, after fully explaining to them its purpose. The understanding was that the $10 consideration was paid to Wilson, and that the deed was to be given to Biles as trustee. Biles was to perfect the title to the lands for the parties owning the .same, and then Wilson and the parties conveying the lands were to sell the same to Biles-when the title was cleared up and it was ascertained who the owners were. He paid Wilson, and other parties from whom he had obtained like deeds, checks each in the sum of $10. Other parties who signed like deeds were present, whom witness named. He stated that the deed to Biles was witnessed by Robert Wilson and M. T. Thompson. Thompson testified that he witnessed the deed, and his testimony was to the same effect as that of 'Chavis.' Chavis was asked to produce the checks he had given in the sum of $10 each, and stated that he would, but did not do so. Demand was made also for the original deed, but it was not produced.

On the other hand, Willie Wilson alleged that this deed was a forgery, and he and his wife, Yiola Wilson, testified that they did not' sign and acknowledge such a deed; that they did not know A. C. Neygaard, the notary public who took the alleged acknowledgment. The other alleged witness to the deed, Robert Wilson, testified that he was not present and did not witness such a deed, and likewise the other parties who Chavis and Thompson stated were present, testified that they were not present . and did- not witness such a deed. The notary public, A. C. Neygaard, did not testify.

We are convinced that a preponderance of the evidence shows that the purported deed from Willie and Viola Wilson was a forgery. Since the charge is made that the deed is a forgery, the certificate of acknowledgment is not conclusive of the facts recited therein, and hence the makers of the deed were not precluded from showing that the deed was a forgery. Myers v. Jerry, 158 Ark. 314, 250 S. W. 34.

But, if we are mistaken in concluding that the deed was a forgery, it is certain, under the testimony of Biles’ agent, Chavis', who procured the deed, and the testimony of Thompson, the only other witness for Biles who testifiéd to the execution of the deed, that Willie Wilson and his wife Viola Wilson made the deed to Biles, as trustee, for the purpose of perfecting title, and under a promise that, when that was done, they would then convey the absolute title of the land to him. It must be borne in mind that the testimony of Chavis and Thompson was introduced on behalf of Biles. Biles certainly cannot be allowed to repudiate the testimony of his own agent as to the consideration for the deed, and the testimony of his agent, corroborated by the testimony of the only witness he introduced,'shows that Willie'Wilson and Viola Wilson executed the deed to Biles, not for the sum of $3,000, but for $10, and with the understanding that they would, when Biles cleared the title, convey to him absolute title to the land. It is very clear therefore that Biles himself has proved that the minds of the parties to the contract under which this deed of March 13, 1923, was executed never met, unless the deed was executed for the consideration and purposes as disclosed by the testimony adduced for Willie Wilson as well as that adduced by Biles through his own agent, Chavis. Biles is bound by the representation of his own agent who negotiated for him the purchase from Willie Wilson. The consideration for this deed was open to explanation. See McGill Lbr. Co. v. Lane-White Lbr. Co., 90 Ark. 426, 429, 119 S. W. 822, and cases there cited. The only consideration named in the deed is $10, and the only testimony in the record showing the real consideration for the deed was to the effect that the parties had not determined what Biles should pay for an absolute title. There is not a particle of testimony in the record to prove that Willie Wilson agreed with Biles that he would take $3,000 for the land in case, the lease to Benson were canceled. Therefore the decree ,of the court vesting the fee title in Biles, trustee, and Armstrong upon their payment to Willie Wilson of the sum . of $3,000 is wholly without any testimony to sustain it.

In August, 1924, Biles, trustee, executed a warranty deed to H. L. Armstrong, conveying to him all Biles’ interests in the land in controversy, subject to the oil and gas leases given by Willie and Viola Wilson to A.. C. Benson. The consideration named was $2,500, and it is recited in the instrument that Biles, as-trustee and as individual, did, on the 12th of March, 1923, for a valuable consideration, transfer to Armstrong all his rights under a certain contract entered into on the 23rd of February, 1923. The contract here referred to was the contract between Biles and his associates whereby it was agreed to put up $2,500 for the purpose of acquiring title to 80 acres of land, including the lands in controversy, and perfecting the title to the same. At the time the deed or instrument of August, 1924, was executed by Biles to Armstrong, there was on record in Union County , a Us pendens of the lands in controversy. At the time Biles entered into the agreement on February 20, 1923, with his associates, he had no title to the land in controversy, and the agreement so recites. He never thereafter perfected the title as trustee, according to the understanding between his agent Chavis and Willie Wilson, and never obtained any title to the land such as his own agent testified was contemplated, in consideration of the alleged quitclaim deed of March 1, 1923, executed by Willie and Viola Wilson. Armstrong testified that he paid $2,500 for the land, and that he did not know anything about the alleged trust agreement between Chavis and Willie and Viola Wilson. But he obtained no title under the instrument of February 23, 1923, under which he claims, and the instrument itself was notice that he might never obtain title, therefore, even if the deed from Willie and Yiola Wilson to Biles was not a forgery, the above facts do not constitute Armstrong an innocent purchaser.

B. This brings us to a consideration of the issue between Willie Wilson and Lockhart. On May 18,. 1922, Willie Wilson executed a gas and oil lease on the land in controversy to one A. O. Benson, leasing to Benson in the usual form 7/8 of the oil and gas of the land in controversy. This lease was not delivered directly to Benson, but was delivered to one Patrick W. Murphy, to be held in escrow. Murphy testified concerning this substantially as follows: He identified the record of the purported lease for the lands in controversy, and stated that Willie Wilson was brought in to his office by Benson and a Mr. Reeves for the purpose of buying the lease and arranging to place the same in escrow during the examination of the abstract of title. The lease was to be executed by Willie Wilson and left with the witness in escrow, to be delivered to Benson upon his approval of the title and the payment to Wilson of the sum of $3,000. The escrow agreement and the lease were executed and delivered to witness with the abstract of title. Witness was informed by Mr. Abbott that Willie Wilson did not have a marketable title, and witness so informed Benson. Witness then placed the abstract and lease and escrow agreement on file. Witness was taken ill, and went to New Orleans, where he remained for ten months; on his return, he was informed by Abbott that Benson had come into his office, complained of their delay in not filing suit, and took the entire file from witness’ office. Witness did not deliver the lease and escrow agreement to Benson; had no authority to do so, and did not authorize Benson to record the lease or to dispose of it. Witness warned Benson not to pay Wilson any large sum of money on the lease, because the title was in such shape that the property would be worthless as an oil-producing property, after a lengthy litigation of several years. While witness was in New Orleans. Benson telephoned witness from Shreveport that, i,f witness had not completed the curative work, he would take the matter out of his hands. Witness replied that an arrangement of that kind would be satisfactory to witness. The testimony of the witness shows that no such an arrangement was made. The witness was asked what was the understanding as to the length of time that Benson would have to satisfy himself about the title, and answered that the owners agreed to bear the expense of the curative work, and there was a subsequent oral agreement between the parties as to the time limit. The testimony of Willie Wilson was to the same effect, and he stated that Benson paid him $200 and never offered to pay him the balance. He never made demand on witness with reference to getting the title straight. Witness did not authorize Mr. Pat Murphy to deliver the lease to Benson. When they undertook to drill a well on witness’ land, witness objected. Witness is a colored man, and Benson is a white man.' In the fall of 1922 they were preparing to drill a well on witness’ land. Witness came in to consult with Mr. Walter Reeves. He told witness that they had no right to drill on witness’ land. Witness did not know anything about the lease being in the possession of Benson. Witness told the driller that he did not want him to drill. Witness did not think they had the lease at that time — thought it was still in the hands of Mr. Murphy. The lease was put in escrow May, 1922, and they commenced cutting derrick timbers in November^ 1922. They told witness, at the time the papers were placed in escrow, that they would investigate the title in three weeks and pay the witness. He told witness if he did not pay him he would get the lease back. Witness asked the parties, when they started to cut derrick timber, and also when they started to drill, to quit. Witness did not ask them any more because he saw they were paying no attention to him, and witness thought the next time they might be hitting him. They did not say anying about hitting him, but they were not talking any too good.

Lockhart testified that he bought Benson’s interest in the land in controversy, for which he paid $20,000. He did not know of any outside claims at the time he bought. Benson did not furnish him an abstract of the title until the land was paid for. Witness did not demand an abstract.. A man by the name of Williams bought.the property in witness’ name. Witness was not accustomed to doing business, that way — had never done so before nor since. Witness did not get any attorney’s opinion as to the title before he purchased. He learned ¡that, after-the suit was brought,, various attorneys had .refused to approve the abstract of title. Williams and witness had adjoining offices, and they were working together-to sell the property after witness had bought it-. Witness stated that he was doing the paying for the property and the inside work, and Williams was doing the outside work. Witness did not demand an abstract because it would have been the same as interfering with another man’s business. Williams was. to get one-eighth when' he sold.:the property, and after the property was sold Williams got one-eighth as his compensation. . ■ . •

In Ford v. Moody, 169 Ark. 649, 276 S. W. 595, we said: ‘ ‘ The undisputed testimony shows that,- at the time Ford had-the instruments recorded, the .escrow agreement .was still in force and he had complied with .its terms; therefore there was no. delivery of the instruments to him, and, without, a delivery of- the instrument, no right or. title in the property conveyed therein passed to Ford. His act in having the instruments recorded while, the escrow agreement was in force was a. plain violation of the terms of., that agreement, . because, ■ although it gave him no real title to the lands in controversy, it operated to becloud the title of the Moodys.” In the above case we quoted from Bondurant v. Ennis, 152 Ark. 372, 238 S. W. 48, as follows: “When.a deed is delivered merely as.an escrow, to take effect upon the performance of some condition by the grantee in the future, no title -passes until the condition has been performed. The transaction is incomplete. It is not the grantor’s deed until the second delivery. Even.'if the grantee obtains possession of it before the condition has been performed, yet it is not the grantor’s deed, and .he may avoid it by pleading non est factum.” See also Chandler v. Chandler, 21 Ark. 95; Ober v. Pendleton, 30 Ark. 61, arid other authorities cited in brief of counsel for Willie Wilson.*

In Fisher v. Beckwith, 30 Wis. 55, it is held (quoting syllabus): “A- deed-purloined from the grantor or obtained from-him’fraudulently or wrongfully, without his. consent-or acquiescence* does- not pass the title even as-against a subsequent purchaser for value without notice.” See also 16 Cyc., p. 579-81; 10 R. C. L., p 636. Now, Benson has not testified, and no explanation is offered of his' conduct'in withdrawing the lease from the files of the escrow agent while the latter was' sick and absent- from his office, and without his knowledge or corisent. For the uneontroverted proof is that Benson took the lease' and escrow contract without any arrangement whatever with Murphy or Willie Wilson and without:.paying Willie Wilson the purchase money for the lease, .and had the lease placed on record. Without explanation, this- conduct of Benson justly opens him to impeachment for-the exploitation of Willie Wilson’s land, with no shadow of .excuse or. justification-for his unlawful and wrongful conduct. He took $20,000 from Lock-hart with nothing whatever- in law to give in return. Therefore Lockhart is entitled to a decree against Benson, for that amount of money, under the doctrine announced in Brand v. Williams, 29 Minn. 238, and approved by us in Arkansas National Bank v. Martin, 110 Ark. 578-585, as follows: “An action for money had and' received can-be maintained whenever one man. has received or obtained-possession of the money of another which-he ought in equity and good conscience to pay over. This proposition is elementary. ’ ’ But, as to Lockhart and Willie Wilson and third parties, Lockhart cannot- avail himself-of the doctrine of innocent purchaser predicated-on an instrument wrongfully and surreptitiously taken from escrow, as shown by the above authorities. Moreover, so far as the rights of Willie Wilson and third parties are concerned, the conduct of Lockhart himself, in the eyes of the law, is far from innocent. He took the assignment of the lease from Benson before the same was recorded, and paid his $20,000, without an abstract of title and without inquiry as to title. He took the assignment of the lease, wholly indifferent to a title which had been condemned by every lawyer and abstracter who had examined the same; and, in conjunction with his outside agent, Williams, they proceeded to unload the lease upon a gullible public. It occurs to us, when the circumstances are considered under which this lease was withdrawn from escrow and the rights of Willie Wilson ignored, and the precipitate haste with which it was exploited to the detriment of Wilson and the public who purchased an interest therein from Lockhart and Williams, that Benson, Lockhart and Williams are all tarred with the same stick. We find nothing in the testimony to warrant us in saying that Willie Wilson is estopped by laches from invoking the aid of a court of chancery to protect his property rights against those who have thus illegally endeavored to destroy them. He did not know that the lease had been withdrawn from the hands of his trusted escrow agent; he had not received pay for his property; he protested as vigorously as he deemed it expedient, considering those with1 whom he was dealing, at their first incursion upon his homestead. He was required to do no more. The trial court therefore was correct in finding that the lease had not been delivered to Benson and in canceling the same and the assignment thereof to Lock-hart.

The decree of the court quieting the title of the lease of the lands in controversy in Biles and Armstrong is reversed. A decree should be entered in favor of Lock-hart against Benson in the sum of $20,000, with interest from the time the money was paid to Benson, and a decree should be entered canceling the lease of Willie Wilson to Benson and the assignment thereof to Lockhart, and quieting the title of Willie Wilson to an undivided one-half (20 acres) of the land in controversy. , For. the errors indicated the decree is reversed,- and the cause is remanded with directions to enter decrees herein indicated, and for such other and further proceedings as may be necessary according to law and not inconsistent with this opinion.

McCulloch, C. J.

(dissenting). The chancery court did not pass on the question of the válidity of the lease from appellant, Willie Wilson, to Benson. The decree was against Wilson, and the court canceled the «Benson lease only as against the -rights of appellees Biles and Armstrong,' and this was done for the reason that the title was in appellees and that the lease was not of any validity as against them. The question of the validity of the 'lease as against Wilson was not fully developed in the trial below. This is evident from a consideration of the -record and the appearance of the only testimony, that of - witness Murphy, in regard to the lease having been prematurely taken out of escrow by Benson. Opportunity for the trial of that issue should be given on the rfemand of the cause, instead of directing a. decree in favor of Wilson. In other words, the parties ought to have an opportunity to develop that question-and to have it decided upon all the testimony which could be adduced on that subject. But, even if the question of the validity, of the lease is to be decided-in this court, it seems to me that the court has adopted a very rigid rule in holding that Lockhart, the assignee of the Benson lease, is not entitled-to any protection at all. The rule of law on the subject is, as stated in the opinion.of the majority, that-a deed wrongfully and prematurely taken out of escrow without performance of the specified conditions of the deposit does not pass the title of the grantor, but this rule is subject to limitations which are consonant with conceptions of. equity and natural justice. In other words, the rule is to be applied only to the extent of protecting the interest of the grantor and no further as against an innocent purchaser. The ends of justice will be fully attained by compelling the innocent purchaser to pay the purchase price, which, was sought to be avoided by the wrongful taking of the instrument out of escrow. A court of equity should go no further in applying such a rigid rule.

The proof is undisputed that Lockhart, the assignee of the lease, was an innocent purchaser. He testified that he paid Benson $20,000 for the lease, and that he had no information or notice of any kind that the lease had Tjeen in escrow or prematurely taken out of escrow. It being proved that Lockhart paid a valuable consideration for the lease, the burden of proof was upon those attacking the validity of the lease to show that Lockhart had notice of any infirmity in the title. There is no proof at- all in the record charging Lockhart with notice.

My conclusion'is therefore that the. case ought to be sent back for a trial on this issue; but, if not, the decree ought to provide that Lockhart must pay the consideration named in the lease to Benson; otherwise that the lease be canceled, and only on such failure to pay.
      See 3 Washb., Real Property, p. 270: 16 Cyc. p. 579.


source: Caselaw Access Project

author: Wood, J.

license: Public Domain

text:
    Gregg v. England Loan Company.
    Opinion delivered October 4, 1926.
    1. Specific performance — agreement to bid. — An agreement to bid a certain amount at a foreclosure sale if the mortgagee would foreclose is not an agreement to purchase, and hence the mortgagee could not enforce specific performance.
    2. Contract — consideration.—Where defendants agreed to bid a particular amount at a foreclosure sale if the ■ mortgagee would authorize a certain attorney to institute the foreclosure proceedings, held that the employment of such attorney was not an essential part of the* contract, or, if so, was sufficiently complied with by his employment, though he was subsequently discharged by the mortgagee.
    3. Contracts — waiver of breach. — In an action for breach of a contract to bid a certain amount at a foreclosure sale, provided a certain attorney should be employed to institute the proceedings, defendants will be held to have waived such provision where another attorney was substituted, and defendants offered no objection thereto, but appeared at the sale and offered a bid for a less amount than agreed.

      Appeal from Pulaski Chancery Court; JohnE. Martineau, Chancellor;
    affirmed.

      D. K. Hawthorne, for appellant.

      MoMillen & Scott, for appellee.
   Wood, J.

This is an action in the chancery court by the appellee against the appellants. The facts are stated by counsel for appellants as follows:

The England Loan & Trust Company loaned Charles E. Taylor $3,000, and, as security therefor, took notes secured by a deed of trust on certain lots in Weil’s Addition to the city of Little Sock. Default was made in payment of said notes and interest, thereon, and the appellant, Gregg, entered into a contract with the appellee wherein he agreed that he would bid enough at the sale of the lots by foreclosure of the said deed of trust to pay the amount of the debt due thereunder, including improvement taxes, State and county taxes, interest, and costs, provided' the appellee would authorize D. K. Hawthorne to foreclose the deed of trust, and he agreed to pay D. K. Hawthorne such fee as he might charge for the foreclosure proceedings. Appellant Harrington guaranteed the performance of this contract. Pursuant to this agreement, the appellee authorized D. K. Hawthorne to bring suit to foreclose the deed of trust.on the property, and he brought the suit. The appellee became dissatisfied with the progress of the suit, and requested Harrington to authorize the substitution of Andrew H. Scott for D. K. Hawthorne. Harrington agreed to this, provided it was satisfactory to Gregg. The England Loan & Trust Company then authorized A.- H. Scott to bring suit to foreclose the mortgage, and he brought the suit after suit had-already been filed lay D. K. Hawthorne.

Decree was rendered in the second suit, and the property was advertised for sale. Appellant Gregg saw the advertisement of the sale the day before' the sale was to take place, and called his attorney’s attention to it. After investigation it was discovered by Mr. Gregg that Scott & McMillen had brought a second suit to foreclose the deed of trust given by Taylor to the England Loan & Trust Company, and that a decree' had been rendered thereunder, and the sale advertised to take place the next day. At this sale the property was struck off to Frank B. Gregg, but, on account of .some difference between him and W. E. Harrington, he declined to take the property. Inasmuch as Mrs. Frank B. Gregg had not been made a party to the original complaint, a supplemental complaint was filed,- making her a party, and in due course of time a decree was taken authorizing the foreclosure of the mortgage, and, at the sale under this second decree, the England Loan & Trust Company, now the England Loan Company, bid the sum of $3,050, and there was then due the England Loan Company the sum of $3,890.08.

At a.later time the England Loan Company sued W. E. Harrington and Frank B. Gregg, alleging a contract with Frank B. Gregg, guaranteed by W. E.' Harrington, in which Gregg agreed to bid enough at the sale of the property to protect the ’ England Loan Company from loss, and alleging that the loan company purchased the property at the sale and tendered a deed to the appellants, and asked that they be required to accept it and pay the sum of $5,813.92.

The appellants agreed to bid enough at the sale of the property under foreclosure proceedings to' protect the appellee, provided D. K. Hawthorne was authorized to bring the foreclosure proceedings. After these foreclosure proceedings were-brought by him, the appellee talked with Harrington and obtained his consent to substitution of attorneys, provided it was agreeable to Mr. Gregg. Mr. Gregg, however, was never consulted about the substitution, and knew nothing of it until the day before the sale of' the property under the foreclosure proceedings brought by Scott & MoMillen. Default had been made under the terms of the deed of trust executed by Charles E. Taylor to the England Loan & Trust Company at the time Gregg wrote the letter to -it proposing to bid at the sale of the property, if foreclosure proceedings were brought by D. K. Hawthorne.

A stipulation in the record shows that the difference between the amount due. the appellee by Charles E. Taylor and others on September 28, 1923, the date of the last sale of the property, and the amount bid by. appellant Gregg at that sale, together with the attorney’s fee of $150, amounted to the sum of $990.08. The trial court entered a decree for that sum, from which is, this appeal.

The undisputed testimony shows that there was no agreement upon the part of the appellants to purchase the property. The agreement, as shown by the letter of Gregg, was that he would bid enough at the sale of the lots by foreclosure of the trust deed to pay the amount of-the debt due the appellee thereunder by Taylor and others, including improvement, State and county taxes,interest, costs and attorney’s fee, provided the appellee would authorize D. K. Hawthorne to foreclose the deed of trust. Under this agreement the appellants could not be required to purchase the property, and therefore the court correctly held that the appellee was not entitled to specific performance. The appellants, however, contend that they are not liable because the appellee violated the contract in substituting the attorney Andrew H. Scott for D. K. Hawthorne, and in authorizing the foreclosure proceedings, after such substitution, to be conducted by. the. firm of Scott & McMillen instead of D. K. Hawthorne, as the contract contemplated.

We are convinced that the appellee’did not violate its contract. in the substitution of attorney Scott for attorney Hawthorne. This substitution was made on the authority of Harrington, as shown by the testimony of the appellant, Gregg. While Gregg was not informed of this substitution until the day before the sale, nevertheless he knew that the substitution had been made, and he did not on that account refuse to bid on the property, •but, on the contrary, did bid for himself and associates the sum of $3,000. This change of attorneys was not a material alteration of the contract. The consideration of the contract moving from the appellee to the appellant Gregg was the institution of the suit for foreclosure. That was the real purpose and the real consideration for the agreement. That was carried out on the part of the appellee. The testimony of Gregg showed that.it waé the agreement between him and Harrington that they were to obtain the lots and divide them, but they didn’t get together on the deal and didn’t complete the purchase of the lots because of this failure to agree upon a division after the sale. Although the letter specified that the suit of foreclosure was to be instituted by D. K. Hawthorne and that the appellant Gregg was to pay his fee, this did not constitute Hawthorne the attorney of appellant Gregg. On the contrary, he was employed to institute the action for the appellee, and was the appellee’s attorney, and appellee had the right to control the litigation and to discharge its attorney if he was not satisfactory to it, and to substitute another in his stead. The appellee ■complied with its contract in employing Hawthorne to institute the first action for foreclosure, and .did not violate its contract in substituting another attorney to conduct the litigation when it deemed it advisable to do so. It is apparent that the naming of Hawthorne as the attorney to institute the action for foreclosure in appellant Gregg’s letter was a mere incident and not the consideration, or, at least, not a material part of, the consideration for the contract. It occurs to us that the appellee had the right to assume, upon obtaining Harrington’s consent to the change, that there would be no objection upon the part of the. appellants because there was a change and substitution of attorney Scott for attorney Hawthorne. "We are persuaded that there was no breach of contract on the part of the appellee, because the real object which the parties had in mind, and the real consideration therefor, as we have stated, was the foreclosure, which was had.

But, if we are mistaken in this, unquestionably the conduct of Gregg, after he learned of the substitution, in not making any protest or objection to the appellee on that account, and in not giving the appellee an opportunity, as plaintiff in the foreclosure, to hold up the sale and to dismiss the action to foreclose, and in his appearance at the sale and bidding the amount he agreed to bid, and the express authority given by Harrington to substitute attorney Scott for attorney Hawthorne, all clearly constitute a waiver on the part of the appellants of any violation of the contract on the part of the appellee, if any, in the substitution of one attorney for another. See Grayson-McLeod Lbr. Co. v. Scott, 102 Ark. 79.

The decree is in all things correct, and it is therefore affirmed.


author: Humphreys, J.

text:
    Wright Motor Company v. Shaw.
    Opinion delivered October 4, 1926.
    1. Justices of tiie peace — duty of appellant. — One appealing a case from a magistrate’s court should he present when the case is called for trial in the circuit court.
    2. Pleading — ambiguous complaint — motion to make definite.— Where a complaint was ambiguous as to whether the action was for conversion of an automobile or on purchase-money notes, the defendant should raise the question by a motion to make the complaint more definite and certain.
    3. Sales — sufficiency of evidence. — Evidence held to support judgment for the seller of an automobile on a conditional contract against the buyer’s transferee, either on the theory of a conversion or of the assumption of payment of the purchase-money notes.
    4. Sales — remedies against third person — amount of damages.— Where an automobile sold on a conditional contract was worth more than the amount due on the purchase-money notes and interest, held that the face of the notes with interest was the measure of the seller’s damages for conversion of the automobile, in an action againdt the buyer’s transferee.
    Appeal from Independence Circuit Court; Dene H. Coleman, Judge;
    affirmed.

      Wills é Strangways, for appellant.

      S. M. Bone, for appellee.
   Humphreys, J.

Appellee instituted this suit against appellant and Gr. H. Briggs before R. B. Evans, a justice 'of the peace in and for Ruddell Township, in Independence County, upon the following - complaint, omi-tting the caption and signature-: •

' “Comes the plaintiff, and for its cause of action against the defendant says:
'“That plaintiff, on the 24th day of July, 1923, sold and delivered to the defendant, G. H. Briggs, one Star automobile; that said sale was made upon a conditional contract in writing in the form of promissory notes issued and signed by said defendants, for the purchase price, of same remaining unpaid, consisting of four notes of $58 each, with interest from maturity at 10 per cent, per annum; that defendant paid two of said notes, but has failed and refused to pay the other two, which are now past .due and unpaid.
“Copies of said notes are attached and filed herewith and made a part hereof, marked Exhibits A and B.
“That plaintiff retained title to said car, but that the defendant, G. H. Briggs, removed said car from this county without paying balance due on same, as above stated, and delivered same to the Wright M'otor Company of North Little Rock, Arkansas, in Pulaski County; that said Wright Motor 'Company has wrongfully converted said car to its own use, and has thus become liable to plaintiffs for the balance due on same by the said G. H. Briggs.
“That there is now due plaintiff on said notes as balance on purchase price of said car .the sum of $130.95.
“Wherefore plaintiff prays judgment against the defendants for said sum of $130.95, together with interest at 10 per cent., for all costs, and such further relief as may to the court seem proper.” .

Service was obtained and judgment rendered by default against appellant and Briggs for $131, from which an appeal was duly prosecuted by both defendants to the circuit court of said county.

On the second day after the circuit court convened, the cause was called up and tried upon the pleadings and testimony, in the absence of the appellant, resulting in a finding by the court that appellant agreed and undertook with defendant, Gr. H. Briggs, that it. would assume and pay the amount of the note sued upon, and a rendition of judgment against appellant and Briggs for $132.45, with interest from date at the rate of 10 per cent, per annum until paid, together with all costs in the case, from which appellant has duly prosecuted an appeal to this court. Two days after the rendition of the judgment aforesaid, and prior to this appeal, appellant filed a motion to set the judgment aside, and requested a new trial upon two grounds:

First, that the case was set down on the second day of the term without notice to appellant; and • •

•Second, that it did not indorse or assume the payment of the notes upon which it alleged the suit Was based.

The court overruled the motion, to which ■ ruling appellant duly objected and excepted. - '

Appellant did not bring itself by allegation or proof within any of the statutory-grounds to set the judgment aside and obtain a new trial. Appellant itself had appealed the case from the magistrate’s court, and the duty rested upon it to be present when the case Was called for trial in the circuit court.

The main contention of appellant, however, for a reversal of the judgment is that the allegations in the complaint, and the testimony adduced, are insufficient to support the verdict and judgment. It is contended that the suit is upon the debt, and not for a conversion of the automobile, and that there was no evidence whatever tending to show that it had assumed or agreed to pay the notes.

It is true that, if the suit was upon notes that this appellant did not assume or agree to pay, and not for a conversion of the automobile, then there could have been •no recovery against appellant. By referring to the complaint it will be seen that an ambiguity exists as to whether the suit was upon the notes or for a conversion of the automobile. In view of the ambiguity it was the appellant’s duty to raise the question hy a plea, which it failed to do. Had it been present and filed a motion to make the complaint more definite and certain, this ambiguity would have been eliminated.

G. H. Briggs testified that he sold the automobile in question to appellant for $350 in exchange for a new ear, and that it removed the car out of the county; that he had never seen it after he had made the trade; that he informed it of the existence of the two- unpaid purchase-notes and of the vendor’s lien upon the automobile to secure same when he made the trade, and that he traded upon condition that it would stand between him and the payment of the notes, taking the automobile subject to the notes.

We think this testimony sufficient to support a judgment, either upon the theory that appellant assumed the payment of the notes in trade, or that it converted the automobile to its own use.

Appellant argues that the evidence is insufficient to support the judgment upon the theory of a conversion of the automobile, because proof was not introduced showing the amount of damage sustained by reason of the conversion of the automobile.

It appears that the automobile was worth $350 for trading purposes, which larg’ely exceeded the amount due appellee upon the purchase money notes, so appellee would have been entitled to recover the full amount of the notes and interest out of the value of the automobile had it not been converted. By the conversion of the automobile it was prevented from doing it, so that the face of the notes and the interest thereon was the measure of its damage. As stated above, however, the evidence was sufficient to sustain the judgment upon the theory that appellant assumed the payment of the notes. This seems to have been the theory upon which the court rendered judgment.

No error appearing, the judgment is affirmed.


author: McCulloch, C. J.

text:
    Turley v. St. Francis County Road Improvement District No. 4.
    Opinion delivered October 11, 1926.
    1. TAXATION' — SALES—EXTINGUISHMENT OF ROAD TAX LIEN. — Special road tax lien secured by Crawford & Moses’ Dig., § 5433, held not extinguished by a sale under the State’s lien for general taxes.
    2. Taxation — enforcement of road tax lien. — Sale to the State of lands for nonpayment of general taxes suspends the enforcement of the special road tax lien so long as the title remains in the State; but such lien, under Crawford & Moses’ Dig., § 5433, may be enforced when the land goes back to private ownership.
    Appeal from St. Francis Chancery Court; John E. Martineau, Chancellor on exchange of circuits;
    affirmed.

      G. W. Norton, for appellant.

      M. B. Norfleet, Jr., for appellee.
   McCulloch, C. J.

St. Francis County Road Improvement District No. • 4 was organized under general-statutes of the State (Crawford & Moses’ Digest, § 5399 et seq.) authorizing the creation of improvement districts by order of the county court on petition of owners of property. -The statute authorizes the collection of special taxes upon assessed benefits, payable in installments, and the foreclosure of the tax lien by action in the chan■eery court. A section of the statute (Crawford & Moses’ Digest, § 5433) provides, in part, as follows:

“The tax so levied shall be a lien upon all the real property in the district from the time same is levied by the county court, and shall be entitled to preference over all demands, executions, incumbrances or liens whatsoever created, and shall continue until such assessments, with penalty and costs that may accrue thereon, have been paid.”

The present- action was instituted in the chancery court of St. Francis County by the commissioners of the district to foreclose liens for delinquent taxes for the years 1923, 1924 and 1925 on certain lands in the' district, including two tracts to which title is claimed by appellants. These two tracts of land were sold by the county tax collector in the year 1922 for the general taxes assessed against the same for the year 1921, and, there being no bidders, the lands were knocked off to the State, and, not ¡being redeemed within two years, were certified to the State as forfeited lands. Appellants purchased the State’s title, and received a deed from the Commissioner of State Lands. Appellants appealed in .this action and defended against the asserted lien of the road district on the ground that the sale for general taxes extinguished the lien of the road district for the special taxes and vested' an absolute title in appellants as purchasers, against all such liens. They asked that their' title be quieted as against all of the special taxes levied by the district, both delinquent and immature. The cause was heard by the chancery court upon an agreed statement of facts, which presents the sole question whether, as contended by appellants, the sale by the State • for general taxes extinguished the lien for improvement district taxes and vested the title in the purchaser at the tax sale, free of all such antecedent liens. ;The chancery court decided the question in favor of appellee, holding that the special tax liens were not extinguished by the sale under the State’s lien for general taxes, and that the sale under foreclosure of either one of the liens did not operate as an extinguishment of the other lien, but that the title obtained by the purchaser under such sale was subject to the other lien and subject to the right to redeem therefrom. The court in its decree dismissed the complaint of appellants for want of equity and declared a lien in favor of the road district for the unpaid delinquent taxes for the years 1923, 1924 and 1925, and ordered a sale of the lands if the amount decreed be not paid within the time specified in the decree. Appellants were given the right to redeem within a specified time. Our conclusion is that the decision of the chancery court was correct.

Counsel for appellants rests his case entirely upon the theory — an obviously sound one — that the State’s sovereign power of taxation is paramount and that all other liens are subordinate to it. It is declared in the Constitution of the-State that “the State’s ancient right of eminent domain and of taxation is herein fully and expressly conceded” * * * (art. 2, § 23, Constitution of 1874), but it does not follow that it is beyond the power of the lawmakers of the State to provide* in the enforcement of the State’s lien for taxes, for due • recognition of other charges against the taxed lands. . Such provision does not operate as an exemption from taxation, and therefore does not offend against the Constitution. Gould v. St. Paul, 110 Minn. 324. Such a provision falls within the general power of the lawmakers to control without hindrance* except such restrictions' as are expressly imposed in the. Constitution, all- the revenues of the State and its subordinate branches. Sanderson v. Texarkana, 103 Ark. 529, 146 S. W. 105; Cone v. Hope-Fulton-Emmett Rd. Imp. District, 169 Ark. 1032, 277 S. W. 544.

In § 2, act of March 27, 1925 (Acts 1925, p. 781), the lawmakers, in the. exercise of their, authority,, have provided for coordinate enforcement of liens of the State for general taxes and improvement districts in recognition of the continuation of both liens. That section'reads as •follows: . •

“Section 2. In any sales for delinquent State and county taxes, or sales for improvement district taxes made by improvement districts described in § 1 of this act, or any other improvement districts, the purchaser shall acquire title, subject to the liens of any unpaid State and county taxes and unpaid taxes in improvement districts. • Where, at sales for State and county taxes, the lands are struck off to the State, the cost of redemption therefrom shall include all past due and unpaid installments of improvement district taxes, together with their .respective penalties and costs, and in all sales to the State of lands forfeited for taxes the price of sale shall not be less than sufficient to pay all State and county taxes, penalties and costs, and all past due improvement district taxes, together with their respective penalties and costs, and all such sales shall transfer title, subject to the lien of improvement district taxes not due. ’ ’

This statute is well within the legislative power, as we have already seen, for it does not amount to an exemption from taxation or to a relinquishment of the State’s lien, but merely, operates as a continuation of the coordinate lien of one of the State’s agencies and establishes a method of preserving each one of the liens without extinguishing the other. That statute, of course, has no application to the present litigation, for it was enacted after the liens were acquired and after appellants had purchased the land in controversy from the State. But we think that the other .statute quoted above (Crawford & Moses’ Digést, § 5433) is equally potential in continuing the lien of the improvement district and in preventing its extinguishment by a sale, for general taxes. The words, “all demands, executions, incumbrances or liens whatsoever created,” have no reference to the State’s paramount lien for taxes. But the words which follow unmistakably carry the meaning that the special taxes of the improvement district shall continue until fully paid, and are not extinguished. Of course, the forfeiture to the S.tate of lands for general taxes necessarily suspends the enforcement of the special tax lien as long as the title remains in the State, but as the lien, under the terms of the statute, is not extinguished and continues until the special taxes are paid, the same can be enforced when the land goes back into private ownership. This construction of the statute gives full recognition to the State’s paramount right of taxation and in nowise detracts from the dignity and power of the State as against subordinate governmental agencies.

In the statute supra, in force at the time of the forfeiture of these lands to the State, there was not prescribed any method of redemption in recognition of the continued existence of other liens, as in the recent statute referred to above, but the court in this instance preserved the rights of the parties under the old statute by directing the enforcement of the special tax lien and at the same time protecting the purchasers from the State -by permitting redemption.

The language of this court in Faulkner Lake Drainage District v. Williams, 169 Ark. 592, 276 S. W. 704, referred to by counsel, is not in conflict with the views now expressed. We merely referred, in that case, to the tax forfeitures as a shrinkage in available revenues of the district, in testing the sufficiency of the revenues for retirement of outstanding bonds as they matured, and we did not say that the liens for the improvement taxes were extinguished by the forfeiture for general taxes.

The decree was correct, and the same is affirmed.


text:
    McClintock v. White River Bridge Company.
    Opinion delivered October 11, 1926.
    1. Judgment — res judicata. — Judgments in previous actions sustaining the condemnation of land for a public road and defendants’ right to build a toll bridge, as against plaintiff’s ferry privilege, held res judicatae, in a subsequent action between the same parties, on the. issue whether plaintiff’s land was .taken and his ferry rights invaded, in violation of the Fourteenth Amendment.
    2. Bridges — exclusive privilege op toll bridge. — Crawford & Moses’ Dig., §§ 10255-10260, conferring on the county courts the power to grant exclusive privileges to build toll bridges, was not repealed by Crawford & Moses’ Dig., §§ 4693-4721, authorizing the grant of exclusive ferry licenses, as the two acts are not in conflict.
    Appeal from Prairie Circuit Court, Northern District; George W. Clark, Judge;
    affirmed.

      Gregory é Holtsendorff and Emmet Vaughan, for appellant.

      Cooper and John D. Thweatt, G. DeMatt Henderson and Chas. B. Thweatt, for appellee.
   Wood, J.

This action was instituted hy J. M. MoClintock against the White River Bridge Company and Harry E. Bovay. For his first cause of action the plaintiff, in substance, alleged that the defendants were liable to him in damages which accrued by reason of the opening of a public road on his land two hundred feet wide, without notice to him, and the déstruction of his ferry business and equipment by the building and operation of a toll bridge on his land. The plaintiff alleged that he owned the east half of section 17, through which White River runs from north to south; that he had a franchise to operate a ferry near the half section line; that the county court granted a franchise to the defendant Bovay to build a bridge over White River, and contracted with' Bovay not to grant to any one else a bridge or ferry franchise for a distance of ten miles of the bridge; that Bovay transferred his franchise to the White River Bridge Company. The bridge franchise was secured on December 19, 1921, and covered a period of forty-nine years. The plaintiff alleged that the destruction of his ferry franchise and the taking of his land for a public road without compensation deprived him of his property without due process of law and denied him the equal. protection of the law, in. violation of the 14th Amendment to the Constitution of the United States; that the defendants had rested the abutments of their bridge on the roadway and taken the dirt from this roadway to build dumps for approaches to their bridge; that the dirt so taken was of the value of $6,948, and that the land taken for roadway and the ferry ¿quipment were of the value of $251,000, and that he was entitled to $75,000 for destruction of his ferry business, for-.which sum he prayed judgment. He further alleged, for a second cause of ¿ction, that the bridge company began operation on the first day of January, 1925 ; that this action of the bridge company was an infringement of plaintiff’s exclusive statutory right to operate his ferry, and that the operation of the bridge subjected the defendants to penalties imposed by § 4694 of C. & M. Digest. He therefore ‘ prayed judgment against the defendants in the sum of $100 per day from January 1, 1925, to' the date of judgment.

The defendants answered the first cause of action, denying that the road was opened on plaintiff’s land by the county court without notice to plaintiff, and alleged that plaintiff appeared and contested the proceedings; that he lost the contest in the county court and also in the circuit and Supreme courts, to which he appealed from the judgments against him. The defendants denied that the plaintiff had an exclusive ferry franchise, and denied all the other allegations of the complaint. They alleged that the plaintiff’s ferry rights had ceased to exist by reason of the bridge franchise, under the statute making such franchise exclusive. They pleaded the proceedings in the county, circuit and Supreme courts in'the case of McClintock v. Bovay, reported at 163 Ark. 388, 260 S. W. 395, as res judicata of the present action against them, for compensation for damages for the taking of the plaintiff’s land.

The defendants demurred to the second 'cause of action, on the ground that the complaint shows on its face that the plaintiff has no ferry rights; that his former ferry rights have ceased to exist by reason of a valid franchise and the operation of a toll-bridge thereunder, and that he is not entitled to recover any damages or penalties for the infringement of ferry rights.

The case was heard upon the pleadings and an agreed statement of facts, in which the orders of ‘ the county court opening the road and granting the toll-bridge " franchise, the proceedings in the case of McClintock v. Prairie County, and the order accepting the public road, were made evidence in this cause, and it was admitted that the plaintiff had no notice of the order of the county court opening the road, rendered October 25, and that he afterwards filed his petition in the county court to vacate the order, which was protested by Bovay and certain citizens of Prairie County, and the •case was heard, and the county court rendered the order opening the public road and authorizing Bovay and his successors and assigns to improve the same in such manner as would make the same suitable for passing to and from said bridge and for connecting tbe bridge with the improved highway. Plaintiff took an appeal from the adverse judgment of the county court to the circuit court, and from the adverse judgment of the circuit court to the Supreme Court, and the cause was decided by the Supreme Court, and is reported in 163 Arkansas at page 388, 260 S. W. 395.

It was agreed that the defendants did not take charge of or appropriate any lands of plaintiff whatever except under the authority of the order of the county court opening the road. It was agreed that they had constructed the bridge under the authority of the act of Congress and the bridge franchise granted by. the county court; that they built the abutments to. the bridge entirely upon the .right-of-way of the road so opened up by the orders of the county court, and that these abutments are so built as to connect the new road with the bridge over White River. The dirt used in constructing the. embankments was.taken from the right-of-way of the road opened by the orders of the county court; that the alleged usurpation of ferry privileges of the plaintiff and the destruction of.his land and equipment for ferry purposes by the building and operation of the toll-bridge by the bridge company was done entirely under the bridge franchise granted to Bovay and transferred to the bridge company; that the plaintiff had operated his ferry at a point five hundred feet above the bridge on White River for ten years past under an annual license from the county court "of Prairie County, until January 1,1925, when he applied for an annual license for the year 1925, and same was refused, because the county court had granted a bridge franchise, and the operation of the toll-bridge thereunder began on January 1, 1925.

It was agreed that the cases of McClintock v. Bovay, 163 Ark. 388, 260 S. W. 395, and McClintock v. Bovay, 164 Ark. 482, 262 S. W. 669, were between the same parties and related to the same bridge and ferry as the present suit, and the case of White River Bridge Company v. Hurd, 159 Ark. 652, 252 S. W. 917, also related to the same bridge. The court rendered a judgment sustaining the demurrer to the plaintiff’s second cause of action, and, the plaintiff refusing to plead further, dismissed his complaint. On the first cause of action the court found that the defendants were not liable to the plaintiff, and dismissed this cause of action also. From the judgment is this appeal.

It is disclosed by the pleadings and the agreed statement of'facts that the land in controversy had been condemned and set apart by the county court of Prairie County as a public highway on the petition of Bovay and certain other citizens and taxpayers of Prairie County, in which proceedings the appellant was allowed to intervene and contest the right of Prairie County and Bovay- and others to have the land condemned and taken as a public road. That cause was finally adjudicated in the Supreme Court in McClintock v. Bovay, 163 Ark. 388, 260 S. W. 395, and the judgment of the county court condemning the land in controversy as a public road was sustained.

In the case of McClintock v. Bovay, 164 Ark. 482, 262 S. W. 669, McClintock instituted an action against Bovay and his successors, alleging that they were building a bridge over White River contrary to his right to exercise ferry privileges under his license hnd as the owner of the land on both sides of the river. The defendants in that action set up that they were building the bridge under a franchise' granted them by the county court of PrairiéCounty. In that case we held as follows: ‘ ‘ That the rights conferred under a franchise to build a toll-bridge were superior to ferry privileges, and that the county court could not grant a ferry privilege which would interfere with the exclusive privilege to build and operate a toll-bridge. * * * The fact that appellant' has obtained his license from year to year does not deprive the county court of the power, under the statute, to grant an exclusive privilege in that territory to construct and operate a toll-bridge. * * * The question of appellant’s com-' pensation for his property taken as a bridge-site and his rights in that regard are not affectéd by the decree in this case, as this is not á suit to condemn the bridge-site. ”

In the case of White River Bridge Co. v. Hurd, 159 Ark. 652, 252 S. W. 917, we held that county courts-have exclusive jurisdiction of the matter of building bridges over watercourses. We concluded the opinion in that case as follows: “The county court is the agency of the State in the matter, and has the power to grant an exclusive franchise for the construction of a toll-bridge, and this itself would prevent the granting of a franchise to another bridge company or to another ferry company.”

In the agreed statement of facts in the case at bar it is agreed that “McClintock v. Bovay, 163 Ark. 388, 260 S. W. 395, and McClintock v. Bovay, 164 Ark. 482, 262 S. W. 669, were between the same parties and related to the same bridge and ferry as the present suit; that the case of White River Bridge Company v. Hurd, 159 Ark. 652, 252 S. W. 917, relates to the same bridge as is involved in the present suit.”

The above cases (McClintock v. Bovay) are res judicata on the issue between the appellant and the appellees in this action, that appellant’s lands were taken and his ferry rights invaded and destroyed by appellees contrary to law, and for which they were liable- to him in damages. These decisions are likewise res judicata on the issue as to whether or not appellee had damaged the appellant by taking dirt from his land for the building of the dumps connecting the bridge with the roadway. The dirt for these dumps, it appears from the agreed statement, was taken from the 200-foot strip of land which had been condemned as a public road by the county court, and it appears also that the abutments of the bridge rested upon this roadway. Therefore appellees, under the former decisions of this court, are not liable to the appellant in this action in damages as compensation for the value of the dirt taken from his land to build a roadway for the bridge, nor for the destruction of his ferry business and the value of his ferry equipment. In building these dumps for bridge purposes and to connect the bridge with the highway, and in placing the abutments thereon all within the 200-foot strip of public roadway condemned by the county court, the appellees were exercising rights which had been legally conferred upon them by the county court, as held in the above decisions. Under our statutes, and decisions construing them, the appellant, as the owner of land on both sides of White River, had the exclusive right to ferriage privileges, provided a license was conferred upon him by the county court to exercise such privileges. To obtain such license, the applicant therefor must satisfy the court that public convenience will be subserved; and the license to exercise the privilege continues only one year from the date of such license. See §§ 4694, 4696, 4699, 4704, C. & M. Digest. In this connection see Murray v. Menifee, 20 Ark. 265; Bell v. Clegg, 25 Ark. 28; Little Rock v. McGehee, 41 Ark. 209; Finley v. Shemwell, 94 Ark. 193, 126 S. W. 719; Shemwell v. Finley, 95 Ark. 344, 129 S. W. 792; Shults v. Munn, 124 Ark. 418, 187 S. W. 316; Munn v. Shults, 130 Ark. 300, 197 S. W. 570. It follows, under the above decisions of the court, that the trial court did not err in dismissing the appellant’s complaint on his first cause of action.

It follows likewise, under the decisions in White River Bridge Company v. Hurd, supra, and McClintock v. Bovay, 164 Ark., supra, that the court did not err in sustaining the appellee’s demurrer to appellant’s complaint setting forth his second cause of action and in dismissing that cause of action. Learned counsel for appellant argue that these decisions were made upon the authority of § 10258, C. & M. Digest, which is as follows: “No county court, after conferring the privileges of this act upon any persons, shall again have power to confer the same or like privileges upon any person, to the injury of him upon whom such privileges were first conferred.” This is § 4 of act of March 6, 1875, which confers upon the county courts of this State the power to grant privileges to any person or persons to build toll-bridges over watercourses, etc., whenever the interests of the county or of the traveling public shall, in the discretion of'the county court, demand such improvements. See § 10255, C. & M. Digest. Counsel contend that the above provision of the act of March 6, 1875, making bridge franchises exclusive, was repealed by act 50 of the Acts of 1913, p. 163, approved Feb. 13, 1913, as follows:

“Section 1. That § 3556 of Kirby’s Digest of the Laws of Arkansas be amended so as to read as follows:
“‘Section 3556. Every person owning the' land fronting on any public navigable stream shall be entitled to the privilege of keeping .a public ferry over or across such navigable stream; if he owns the lands on both sides or banks, or if he shall have possession of both sides or banks, by preemption or settlement right, he shall be entitled to the solé and exclusive right of ferriage at such place; and if he owns the land on one side only, or has possession thereof, by preemption or settlement right, he shall have the privilege of a public ferry from his own shore and making the landing and road up said opposite bank, and keeping the same at all times in good repair and condition for ascending and descending, and an exclusive right to all ferry privileges in any such case shall follow any leasehold interest during the life of said lease and the faithful performance of all municipal, county and State obligations, and the right shall not be impaired by any packet trade or company, or otherwise, under penalty of one hundred dollars’ fine of any such owner or manager of said packet enterprise or the party in any way violating the spirit or letter hereof, to • be recovered by appropriate action in any court having .jurisdiction, at the instance of the injured party, and each day’s interference shall constitute a separate offense.
“ ‘Section 2. That all laws and parts of laws in conflict herewith are hereby' repealed. This act being necessary for the immediate preservation of the public ‘peace, health and safety, the same shall take effect and be in force from and after its passage’. ”

This act of February 13, 1913, was a reenactment of § 3556 of Kirby’s Digest, which was a part of the Revised Statutes. The amendment, after reenacting-this provision of the Revised Statutes as to ferry privileges, merely extends the privileges therein granted so as to include those holding a leasehold interest as well as those owning the fee; and the right or privilege, when granted by license from the county court to the owner or the owner holding a leasehold interest under the act, could not be impaired by any packet, trade, or company or otherwise, as prescribed in the amendment, under a penalty of $100. It was not the design of the lawmakers in. any way to change the provisions of the laws pertaining to ferries and digested in chapter 66, §§ 3555 to 3562, Kirby’s Digest, and later digested -in ch. 65 of C. &. M. Digest. All the provisions, such as authorizing the county court to issue a license only upon a showing that the ferry is needed for public convenience, and limiting the privileges under the license for a period of only one year, etc., are left intact. The amendatory act confers the exclusive right of ferriage, but it has no reference whatever to the act of 1875, conferring upon county courts the power to grant certain toll-bridge privileges, as contained in ch. 172, C. & M. Digest, §§ 10255 to 10260, inclusive.

There is no conflict, certainly no invincible repugnancy, between the provisions of § 10258, C. & M. Digest, pertaining to exclusive toll-bridge privileges, and the provisions of § 4694, C. & M. Digest, pertaining to exclusive ferry privileges. Repeals by implication are not favored. The cases of White River Bridge Company v. Hurd, supra, and McClintock v. Bovay, supra, were decided since the enactment of the act of February 13, 1913. In the case of Bridge Company v. Hurd, one of the contentions was that the toll-bridge privilege was exclusive, and, when conferred by the county court, that court could not thereafter grant a ferry license to any one to operate a ferry within a mile of the bridge. We upheld this contention, and cited § 10258, C. & M. Digest, concerning the exclusive toll-bridge privileges. And in the case of McClintock v. Bovay, supra, we cited the case of White River Bridge Co. v. Hurd, supra, and stated: “The effect of that decision was to hold that a franchise to build a toll-bridge is superior to a ferry franchise, for the reason that a bridge is more to the convenience and benefit of the public, and for that reason the statute in express terms had made the bridge franchise exclusive. The fact that appellant has obtained his license from year to year (to operate a ferry) does not deprive the county court of the power, under the statute, to grant an exclusive privilege in that territory to construct and operate a toll-bridge.” These decisions, thus holding,would both be erroneous and should be overruled if act 50 of the Acts of 1913, supra, pertaining to ferry privileges, repealed the provisions of § 10258 of C. & M. Digest, making toll-bridge franchises exclusive, as contended by counsel for -the appellant. But, as we have stated, their contention is not well taken, and the court did not err in dismissing the complaint as to the second cause of action.

There is no error in the record. The judgment is correct, and it is therefore affirmed.


text:
    Mutual Relief Association v. Parker and Justice.
    Opinion delivered October 18, 1926.
    1. Insurance — regulation by state. — The State has power to regulate insurance companies and the method of conducting their business.
    2. Insurance — regulation—prospective effect of statute. — Acts . 1925, p. 405, requiring payment of the amount specified in a membership certificate issued by a benefit association, has no application to such certificates issued before passage of the act.
    3. Statutes — prospective operation. — All statutes must be • construed to be prospective in operation unless otherwise declared or a clear intent to the contrary is shown.

      4. Insurance — construction of by-laws. — By-laws of a mutual benefit association doing business under the assessment plan, adopted in conformity with Acts 1925, p.- 465, requiring payment of the maximum amount specified in the certificate, do not affect rights vested under certificates already in existence.
    Appeal from Pope Circuit Court; J. T. Bulloch, Judge;
    modified.

      John P. Roberts, for appellant.

      Robert Bailey and Joe D. Shepherd, for appellee.
   McCulloch, C. J.

Appellant is a mutual insurance association, doing business on the assessment plan, the members or policy-holders being grouped into circles and the members of each group being assessed to pay the benefits maturing upon the death of a member of that circle. The policy, or certificate, issued to members pursuant to the by-laws, provides a maximum amount of $500, with $60 payable if death occurs during the first or second month of the life of the certificate and $20 per month for each month thereafter for 22 months, and provides further that ‘ ‘ the liability of the Mutual Relief Association hereunder shall, in no event, exceed the amount produced by one assessment on the members of the circle in which said member may be placed, less the cost of collecting said assessment. ’ ’

J. C. Parker became a member of the association on November 30, 1920, and a policy or certificate of insurance was issued to him in accordance with the above form and substance, payable, in case of death, to J. L. Parker, one of the appellees herein. J. C. Parker died on January 15, 1926, and the amount produced at that time by one assessment on the circle in which said member had been placed, less the cost of collecting the assessment, is shown to have been in the sum of $150.7Í.

On October 20, 1921, Mary M. Amos became a member of said association, and a policy or certificate of insurance was issued to her, payable to her son, W. H. Justice, one of the appellees herein. Mary M. Amos died in January, 1926, and the amount produced at that time by one assessment on the circle in -which she had been placed is shown to have been the sum of $108.20.

Appellees instituted separate actions against appellant on said certificates to recover $500, the maximum amount specified in each policy, and the two cases were consolidated and tried together, resulting in a judgment in favor of each appellee for the sum of $500, together with twelve per cent, penalty, and attorneys ’ fees. The cases are presented here as consolidated actions, and the only question presented relates to the amount of recovery — whether the appellees are each entitled to the maximum specified in the policy, or the respective amounts which were produced by one assessment on the members of the circle as shown .by the evidence.

Counsel for appellees rely, in support of the judgment, upon the terms and effect of a recent statute enacted since the parties named became members of the association (Acts 1925, p. 4Ó5), which, they contend, applies to these certificates, and requires payment of the maximum amount specified therein. Counsel for appellant contends, in the first place, that this statute is unconstitutional as impairing the obligation of contracts, and that i-t does not unconditionally require the payment of the maximum amount specified in certificates, but that, if the statute is so interpreted, it is not retroactive in effect so as to be applicable to policies or certificates of membership issued prior to its enactment. The purposes of the statute, as stated in the caption, are “to define assessment life, health and accident associations or companies, industrial insurance companies, to provide how same may be organized and transact business in this State, for proper regulation of same, and for other purposes.” There are numerous sections not involved in the present controversy, but § 3-B, upon the construction of which it is claimed the result of this litigation depends, reads as follows: tory proof is filed when, such payment will be made. Upon the occurrence of such contingency, unless tbe contract shall have been voided by fraud or by breach of its conditions, the corporation shall be obligated to the beneficiary for such payment at the time and in the • amount specified in the policy or certificate. If such corporation shall refuse or fail to make such payment, after final judgment has been obtained upon such' claim, the Insurance Commissioner shall notify the corporation not to issue any new policies or certificates until such indebtedness is fully paid; and no officer of agent of the corporation shall make, sign or issue any policy or certificate of insurance while such notice is in force. ’ ’

“Such association shall specify in their policy or membership certificate forms the sum of money they promise to pay and the number of days after satisfac-

Conceding, without deciding, that the language of this section means what counsel for appellees contend, we do not think that the decision of the ease turns upon its interpretation, but the controlling question is whether or not it applies to policies or certificates issued by the association prior to 'the enactment of the statue. It must be conceded that it was within the power of the lawmakers to regulate insurance companies and the method of conducting that kind of business. In Lewelling v. Manufacturing Wood Workers’ Underwriters, 140 Ark. 124, 215 S. W. 258, we said:

“The State, in the exercise of its police power, may fully and completely regulate the business of insurance; and it may prescribe the conditions, under which persons or corporations outside the State may exchange insurance with persons or corporations within the State. ”

Many authorities could be cited sustaining this power. The statute is valid in so far as it undertakes to regulate the business of such companies -as are specified therein. Penalties are prescribed in the statute for doing business without compliance with the statute, and a period of six months after approval of the statute is allowed for reorganization of companies and changes in the method of doing business so as to conform to the-statute. We are of the opinion that this statute, when

its terms and provisions are considered as a whole, was intended to act prospectively and has no application to policies or certificates theretofore issued so as to increase the amounts payable different from the specifications of amounts therein when issued. It is a settled rule of law that all statutes must be construed to be only prospective in operation, unless otherwise expressly declared or a clear intent otherwise shown. Many authorities recognizing this principle are cited in the case of Mosaic Templars of America v. Bean, 147 Ark. 24, 226 S. W. 525. In that case the question presented for decision was whether or not a statute which, if applicable, would have invalidated a policy in a mutual assessment association, should be declared to be retroactive^ and in the opinion it was said:

“The statute under consideration pertains to the regulation and incorporation of fraternal beneficiary associations, and is very lengthy, containing 32 sections. There is nothing in any of them that tends to show that the Legislature intended the statute to have a retroactive effect. On the other hand, considering the language used in the light of the well-known rule of construction above stated, it is apparent that the Legislature did not intend to give a retrospective effect to the statute. At the time of the passage of the act there were doubtless many members of fraternal societies who were acting under the rules and constitutions of-the societies as they then existed. There is nothing to indicate that the Legislature, intended the statute to affect the. rights of such members. Given a prospective operation, as we think it should be given, the statute has reference to the regulation of the rights and privileges between the societies and such members as should thereafter join them, and did not attempt to cut off or destroy the rights or privileges of those members who had already joined and secured benefit certificates under the constitution and by-laws of the associations 'as they then existed.”

The statute now under consideration, and all such statutes, are reciprocal in their burdens and benefits and apply alike to the association and to its members. This association has no reserve fund, and its only method of paying benefits is by assessment upon the members. The statute, if given a retroactive effect, would necessarily increase the burden of the persistent members by requiring them to pay additional or higher assessments than those specified in their contract. The rule stated above forbids that that interpretation be given to the new statute. Moreover, the language of the statute itself shows affirmatively, we think, that a retroactive effect was not intended. The section above manifestly applies only to certificates issued after the enactment of the statute.

It is further contended by appellees that the association, after the enactment of the statute, adopted by-laws in conformity with the statute, so as to be able to do business in accordance with its provisions. These by-laws, however, must be confined in their operation to a prospective effect so as not to disturb rights vested under the certificates already in existence. Mosaic Templars of America v. Crook, 170 Ark. 474, 280 S. W. 3. It follows therefore that the judgments were each for an excessive amount. . We have decided that a similar provision in by-laws or policies of such an association limiting the amount of the benefit to the sum raised by a single assessment on the members in a circle is valid and enforceable, and controls the amount to be recovered under the policy. Home Mutual Benefit Ass’n. v. Rowland, 155 Ark. 450, 244 S. W. 719, 2 A. L. R. 86; Home Mutual Benefit Ass’n. v. Rownd, 157 Ark. 597, 249 S. W. 3.

The .judgment in each case is reversed, and judgment will be entered here as of the date of ,the judgment below in favor of appellee Parker for the sum of $150.71, and in favor of appellee Justice for the sum of $108.20. No recovery is allowed for penalty or attorneys’ fees, for the reason that the sum recovered in each instance is less than the amount demanded. It is so ordered.