author: Habt, J.,

text:
    Lee v. Osceola & Little River Road Improvement District No. 1.
    Opinion delivered January 14, 1924.
    1. 'Taxation — government property. — The Legislature has no power to enforce a tax of any character upon any property of the United States, and this immunity applies to special assess-1 ments for local improvements.
    2. Taxation — title passing prom government. — Where the title to , land passed from the United States to purchasers or homesteaders, the land became subject to general taxation and to special assessments for local improvements.
    3. - Constitutional law — due process. — A State may, without violating the Fourteenth Amendment, exercise authority to assess property on account of special benefits resulting from an improvement already made.
    Appeal from Mississippi Chancery Court, Osceola District; J. M. Futrell, Chancellor;
    affirmed.

      STATEMENT OP PACTS.
    This action was brought in the chancery court'by a road improvement district against certain landowners to collect the assessment of benefits levied against their land's.
    „ The road district was created under § 5399 et seq. of Crawford & Moses’ Digest, providing for the establishment of road improvement districts. The lands involved in this suit are what are known as lake lands, or sunk lands. They were included in the organization of the district, and the benefits were assessed against them as lands of the riparian owners. Subsequently the lands were adjudged to belong to the United States. The claimants of the lands then homesteaded them under an act of Congress, and the title passed from the United States to the homesteaders. Subsequently the board of assessors of the improvement district reassessed all of the lands within the district, including the lands in controversy in this case. The reassessments were regularly made, according to the provisions of the statute made and provided in such eases, and there was a judgment of the county court confirming* the reassessment, which was also made in conformity with the statute. No appeal was taken from the order of the county court confirming the reassessment.
    The chancellor found the issues in favor of the road improvement district, and it was decreed that the statutory lien of the assessments be foreclosed and the lands sold to pay the same.
    The landowners have duly prosecuted an appeal to this court.

      D. F. Taylor, Prewitt Semmes, for appellant; Chas. M. Bryan, Arthur G. Brode, and Blan R. Maxwell, of counsel.
    The enhancement in value to the lands occurred while they were the property of the United States, and, when subsequently granted to appellants, were transferred in their enhanced value, and could not be assessed for a local improvement which had been created while the title to such property was in the United States. 73 Pac. 1056. In 155 Ark. 89 the court held that certain lands could1 be taxed in a drainage district, because, though owned by the government, 'Congress had expressly consented thereto. The logical converse of this proposition would be that the lands could not be taxed1 for the improvement formed while the lands were government owned, but subsequently transferred to appellants, if Congress had not assented to their taxation at the time of the formation of the district. To so hold would be an interference with the disposal of government property, and a violation of the 14th Amendment Const. U. S., and art. 2, § 22, Const, of Arkansas. There could be no valid “reassessment” of benefits against these lands, since there had been no original assessment. See 241 S. W. 389 (Ark.); 145 Ark. 438. There must be a special act of the Legislature or of Congress to legally reassess or assess benefits against lands which were, at'the time of the creation of the district, property of the United States.

      J. T. Goston, for appellee.
    Section 5430, C. & M. Digest, authorizes a reassessment of lands, which shall be made, etc., as in the case of the original assessment, and with like effect. A reassessment has been held to be valid, even if the original assessment was entirely void. 2 Page and Jones, § 962; 48 111. 449; 95 Minn. 183; 13 Wash. 144; 13 Wash. 428; 87 Cal. 499. When a person buys land, whether from an individual or the government, he takes it subject to the right of the sovereign and its sub-agents to assess it for special benefits arising from any improvement, present, past or future. See 195 U. S. 359; 239 U. S. 216; 104 N. W. 555 ;.39 N. E. 352. The term reassessment applies to all property of the district. 224 S. W. 967. Appellants had1 their day in court. C. & M. Digest, §§ 5430 and 5424.
   Habt, J.,

(after stating the facts). The landowners rely for a reversal of the decree upon the ground that the title to 'the lands in controversy was in the United States at the time the original assessment of benefits was made, and that, after the road wag constructed, there could be no reassessment of benefits so as to include the lands in controversy, notwithstanding the fact that the title at the time of the reassessment of benefits had passed from the United States to the landowners sued in this action.

We do not agree with the landowners in their contention. It is true, as contended by counsel for appellants, that the Legislature has no power to impose a tax of any character upon any property of the United States, and that this immunity includes special assessments for local improvement. Fagan v. Chicago, 84 Ill. 227; Ford v. City of Great Falls (Mont.), 127 Pac. 1004; Ivinson v. Hance, 1 Wyo. 270, and Whittaker v. Deadwood (S. D.), 139 Am. St. Rep. 1076. The reason is that the Federal Government is supreme within the purview of the powers granted to it by the Constitution, and the property of the United States cannot be subject to general taxation or to the levy of special assessments against it, without the consent of Congress. This view was recognized in the ease of Pierce v. Drainage District No. 17,155 Ark. 89. In that case the United States, through Congress, had expressly consented that the lands be taxed for drainage purposes.

So, too, in Ahern v. Board of Improvement District No. 3 of Texarkana, 69 Ark. 68, the principle was recognized when the court said that public property was not assessable, and was properly excluded from the , assessment of benefits in that .case. So it will be seen that the property is exempt from special assessments because the title is in the United States, and not because no benefits accrue to it. When, however, the title passes from the United States to purchasers or homesteaders, the reason for the rule ceases, and the rule therefore itself no longer obtains. The general rule is that, when the United States has ceased to have any proprietary interest in property, it becomes private property, and, as such, is subject to general taxation. People v. Shearer, 30 Cal. 645; and Carroll v. Safford, 3 How. (U. S.) 441. With like reason 'the lands would he subject to special assessments for local improvements after the title had passed from the United States to individuals.

But it is contended that such special assessments could not be made upon lands after the construction of the public improvement. This question has been expressly decided adversely to the contention of appellants by the- Supreme Court of the United States in Seattle v. Kelleher, 195 U. S. 351. In that case the .court held that, after the improvement of a street had been made, there could be a reassessment of benefits, notwithstanding a previous invalid attempt to asses-s. The court said that the reassessment might be a new assessment, and that whatever the Legislature could authorize, if it were ordering an assessment for the first time, it equally could authorize, although the first assessment was invalid.

Again, in Wagner v. Baltimore, 239 U. S. 207, the court held that a State may, without violating the Fourteenth Amendment, exercise authority to assess property on account of special benefits resulting from an improvement already made.

This court has held that the Legislature may provide for a new assessment of benefits in a drainage district for a reassessment of benefits of a road district. Burr v. Beaver Dam Drainage District, 145 Ark. 51, and Earle Road Imp. Dist. No. 6 v. Johnson, 145 Ark. 438.

'It results from the views that we have expressed that, when the title to the lands in question passed from the United States to private owners, the lands became subject, not only to ordinary taxes, but to special assessments for public improvements. The lands are included Within the boundaries of the improvement district, and the question of the amount of benefits assessed against the lands is not raised. The only issue raised by the appeal .is whether or not the lands are subject to the special assessment of benefits, and, that question being decided adversely to the landowners, it follows that the decree must "be affirmed.

It is so ordered.


source: Caselaw Access Project

author: Hart, J.,

license: Public Domain

text:
    Meyer v. Ring.
    Opinion delivered January 14, 1924.
    1. Municipal corporations — improvement.district—powers.—The powers of the commissioners of an improvement district are given by statute, and in exercising such powers the board-of commissioners acts as the agents of the property owners in the district.
    2. Municipal corporations — authority of improvement Districts • to borrow money. — Under Crawford & Moses’ Dig., § 5708, authorizing improvement districts to borrow money, a board of commissioners of a paving district may borrow not exceeding 90 per cent, of the estimated cost of the work as reported by the commissioners to the city council, and it was error to restrain the board from issuing bonds in a sum not exceeding 90 per cent, of a sum less than such estimated cost.
    Appeal from Pulaski Chancery Court; JoJin E. Martineau, Chancellor;
    reversed.
    STATEMENT OE EAOTS.
    Charles T. Meyer brought this suit against the commissioners of the board of •. improvement of Pulaski Street annex to Street Improvement District No. 288 of the city of Little Bock, Arkansas, to enjoin said commissioners from borrowing money or issuing bonds for the purpose of constructing said improvement. '
    According to the allegations of the complaint, the plaintiff is the owner of real property within the boundaries of said Pulaski Street annex, and the defendants are the commissioners duly authorized under the statute to construct the street improvement.
    The complaint is divided into paragraphs. In the first paragraph it is alleged that the said commissioners proposed to issue negotiable bonds for the purpose of raising money with which to make the improvement; that the said bonds, if issued, will be a lien upon the property of the plaintiff, and will- get into the hands of innocent purchasers and thereby constitute a cloud upon the title to his property.
    In the second paragraph it is alleged that the estimated cost of the work as shown by the report of the board of commissioners on file in the office of the city clerk is $19,195; but that the real estimated cost is $18,000; that said commissioners have declined to file a revised report and estimate, and1 propose to borrow money to the amount of 90 per cent, of said' sum of $19,195. The prayer of this paragraph is that the defendants be restrained from borrowing a greater amount of money than 90 per cent, of $18,000.
    The ease was submitted to ihe chancery court upon the complaint and a demurrer thereto. The court sustained the demurrer to the first paragraph and overruled it as to the second paragraph of the complaint.
    The plaintiff and defendants both declined to plead further. It was therefore decreed that the defendants be restrained from issuing bonds for more than 90' per cent, of $18,000. The case is here on appeal.

      Robert D. Lee and A. L. Rotenberry, for appellant.
    1. While the Legislature has authority to empower a board of improvement to issue negotiable bonds and borrow money to make a local improvement, yet such authority was not conferred by § 5708, O. & M. Digest. Under it the board can only pledge uncollected assessments. In the sense used1, there could be no pledge without delivery, and there could be no delivery of uncollected assessments. 186 Fed. 451. Municipal improvement districts have no powers except those expressly conferred by statute, and those necessarily implied from powers expressly given. 94 Ark. 380. Their power to borrow money and to issue bonds or other negotiable obligations must be found in the statute under which the district is created, else it does not exist at all. 79 Ark. 234; 138 U. S. 1076,1077; 134 U. S. 198, 203.
    2. The district is not authorized to issue bonds to the extent of 90 per cent, of the estimated cost of the work on file with the city council, and should be restricted to 90 per cent, of the present estimated cost, as prayed in the second count of the complaint. In this case, no bonds had been issued and passed into the hands of innocent purchasers, and the contention that the estimated cost referred to in § 5708, C. & M. Digest, is evidently the estimated cost referred to in §§ 5656 and 5657, Id., has no application. The board is not required to borrow the full amount of ninety per cent, of the estimated cost of the work, and the only way lenders could be affected would be for the board to attempt to borrow more than 90 per cent, of the estimated cost.
    3. It is evident that the purpose of the proposition to add to the 90 per cent, of the estimated cost of the work a sum amounting to six per cent, per annum, and to convert all of such loan into bonds bearing interest at 5% per cent, per annum, is to evade the limitation restricting the amount borrowed to 90 per cent, of the estimated cost of the work. 102 Ark. 308.

      Wallace Townsend and Bose, Hemingway, Cantrell <& Loughborough, for appellees.
    1. The power to issue negotiable bonds by improvement districts of this kind is so well established in this State that a change of the court’s ruling in this respect would amount to a disaster. 81 Ark. 286; 109 Ark. 90; 123 Ark. 471; 130 Ark. 44; 151 Ark. 398, 399; 156 Ark. 498; 130 Ark. 162; 135 Ark. 315; 155 Ark. 324; 70 Ark. 211, 215; 102 Ark. 307, 308; 131 Ark. 29; Id., 431; 148 Ark. 634; 135 Ark. 98. It is true that § 5708, C. & M. Digest, does not specifically authorize the issuing of negotiable paper, but that power is necessarily implied from the authority given to borrow money. 70 Ark. 211; 152 Ark. 422.
    2. The district is authorized to issue bonds to the extent of 90 per cent, of the estimated cost. C. & M. Digest, §§ 5656, 5657; Id., § 5708. It is evident that estimated cost referred to in the last-named section is the estimated cost referred to in the first two, and it means 90 per cent, of the estimated cost as it appears in the report filed by the commissioners with the city council.
    3. Appellant’s position might be tenable if the act had provided that the district could issue bonds only to the extent of 90 per cent, of the estimated cost, but such is not the case. The statute, § 5708, contains no limitation upon the power to issue bonds, but upon the borrowing power of the district, viz: that the district “may borrow money not exceeding 90 per cent, of the estimated cost of the work, at a rate of interest not exceeding 10 per cent, per annum.”
   Hart, J.,

(after stating the facts). Under our Constitution the Legislature is empowered to create local improvement districts in towns and cities, under such regulations as may be prescribed by law, to be ba,sed upon the consent of the majority in value of the property holders owning property adjoining the locality to be affected. According to the allegations of the complaint, the improvement district in question was organized in conformity with the provisions of the statute, and the defendants were duly appointed as commissioners to make the improvement. The powers of the commissioners are given by our statute, and, in exercising the powers conferred, the board of commissioners acts as the agent of the property owners in the district. Fitzgerald v. Walker, 55 Ark. 148.

Under § 5656 of Crawford & Moses ’ Digest the board is authorized to form plans for the improvement and to procure estimates for the cost thereof.

Section 5657 provides that, as soon as said board shall have formed said plans and1 shall have ascertained the cost of the improvement, it shall report the same to the city or town council.

According to the allegations of the complaint, the estimated cost of the work as shown by this report on file, as required by the statute, is $19,195.

Section 5708 of the Digest provides that, in order to hasten the work, the board may borrow money not exceeding 90 per centum of the estimated cost of the work, at a rate of interest not exceeding 10 per centum ner annum, and mav pledge all uncollected assessments for the repayment thereof.

. The Ian «mage of the statute is plain and unambiguous. It manifestly refers to the estimated cost of the work provided for in § 5656. There is no allegation in the complaint that the estimate of the cost of the work reported1 by the board to the city council was the result of fraud or gross mistake. Therefore, under the statute, the board had the authority to borrow-money, in any sum not exceeding 90 per centum of $19,195, which was the estimated cost of the work as reported by the commissioners to the city council, and on file with the city clerk.

It follows that the chancery court erred in restraining the commissioners from issuing bonds for more than 90 per centum of $18,000.

The court sustained a demurrer to the first paragraph of the complaint. This was not error. Under § 5708 the right to borrow money to construct the improvement is conferred upon the commissioners, and they are given the power to pledge all uncollected assessments for the repayment thereof. This section, by necessary implication, gives the board the power to borrow money and to issue bonds or other written evidence of the indebtedness to the creditors of the district. Altheimer v. Board, etc., Plum Bayou Levee Dist., 79 Ark. 229.

As we have already seen, the powers of the commissioners are given by the statute, and we cannot know in advance that there will be any innocent purchaser of bonds within the meaning of the law merchant. Certainly no such parties are before the court, and, as stated in the case of Fitzgerald v. Walker, 55 Ark. 148, we are not called upon to decide whether a board of improvement, bv making notes or bonds negotiable in form, can invest them with all the characteristics of commercial paper issued by individuals or private corporations. Questions of this sort will be decided when they arise, but will not be determined in anticipation of the possibility that they may arise.

It follows that the decree will be reversed, and the cause remanded with directions to sustain the demurrer to the second paragraph of the complaint.


author: Hart, J.

text:
    Anderson v. State.
    Opinion, delivered January 14, 1924.
    1. Intoxicating liquors — possession of still — evidence—Evidence held sufficient to sustain a conviction for having a substitute for a still for the purpose of using the same for the production of distilled spirits.
    2. Criminal law — question not raised below. — Where no objection was raised in the court below on account of a variance between the indictment and proof, such variance cannot be assigned as error on appeal.
    3. Criminal law — question not raised below. — Objection that an indictment charged defendant with having a still in his possession which, after being set up, may be used for the production of distilled spirits, instead of charging him with having such still for the purpose of producing distilled spirits, cannot be raised for the first time on appeal.
    Appeal from Baxter Circuit Court; John C. Ashley, Judge;
    affirmed.

      8am Williams, for appellant.

      J. 8. Utley, Attorney General, John L. Carter, Wm. T. Hammock and Darden Moose, Assistants, for .appellee.
   Hart, J.

Andrew Anderson prosecutes this appeal

to reverse a judgment of conviction against him for the crime of possessing a still in violation of the statute.

The indictment in this case is drawn under § 2 of act 321 of the General Acts of 1921, which reads as follows :

“No person shall keep in his possession any still-worm or still, without registering the same with the proper United States officer, and no person shall set up, to he used as a distillery, any stillworm or substitute therefor and] a still or substitute therefor, such as a kettle, washpot, metal tank, or any other vessel of any kind, for the purpose of using same, or which, after being so set up, may be used for the production of distilled spirits.” General Acts of 1921, p. 372.

It is first insisted that the evidence' is not legally sufficient to support the verdict. We cannot agree with counsel for the defendant in this contention. The sheriff and a deputy sheriff of Baxter County, Ark., were the principal witnesses for the State. According to their testimony, they received information that the defendant had a still on his place in Baxter County. His house was situated in his field. When they went to investigate the matter, they saw the defendant in his field, gathering corn. He ran off, hut was subsequently arrested. The sheriff and his deputy found a metal tank in the field, near a spring. A fire had been built under the tank, and there was some mash in it. There was also found near there an iron pipe and a smaller tank. There was a hole in the large tank in which the iron pipe fitted. The two tanks, with the pipe connecting them, could have been used as a still, and, from the evidence of fire which had been under the larger tank and the mash still in it, they had been used for that purpose. At the conclusion of his testimony the sheriff said that he subsequently went to the home of the defendant and arrested him. The defendant admitted to him that he had bought the apparatus mentioned above for the purpose of using it as a still, but said that he had never used it. The sheriff also testified that, when he arrested the defendant, he found two stills. One of them was in his house, and the other one was in his yard. He also found about thirty-five gallons of wine in the house of the defendant.

While the defendant denied his guilt, the evidence above set out was sufficient to warrant the jury in convicting him of having a substitute for a still for the purpose of using the same for the production of distilled spirits, contrary to the provisions of the section of the statute above quoted.

It is next insisted by counsel for the defendant that there is a fatal variance between the indictment and the proof. The body of the indictment reads as follows:

“The said Andrew Anderson, in the county and State aforesaid, on the 15th day of September, A. D. 1921, unlawfully, wilfully, and feloniously did have and keep in his possession a stillworm and still which, after being set np, may be used for the production of distilled spirits, without registering the same with the proper United States officer, against the peace and dignity of the State of Arkansas.”

No objection was made to the indictment in the court below, and for that reason the defendant cannot assign as error here a fatal variance between the second count in the indictment and the proof offered to sustain it. Beard v. State, 79 Ark. 293; Birones v. State, 105 Ark. 82; and Clayton v. State, 159 Ark. 592.

'■ It will be observed that the indictment charges the defendant with having a still in his possession, which, after being set up, may be used for the production of distilled spirits. This, inferentially at least, charges him with having such a still in his possession for the purpose of using it for' the production of distilled spirits. It' is tiue tliat the language in this respect is ambiguous, but, if the defendant intended to object to the indictment on that account, he should have done so in the trial court. He cannot submit to a trial on the merits and, after having been convicted, object that the indictment was ambiguous or misleading.

It is evident from, the proceedings at the trial that the defendant was fully advised of the charges against him, and met the same with such proof as he was capable of producing at the trial. He was not misled in any way to his prejudice, and the judgment will be affirmed.


author: Smith/ J.

text:
    McCormick v. Daggett.
    Opinion delivered January 14, 1924.
    1. Vendor and purchaser — diligence in rescinding. — A purchaser v of land who claims to have been deceived is required, as soon’as he learns the truth, to disaffirm the contract with' reasonable ; i. diligence, so that both parties may, as nearly as possible, be restored to their original positions; and if, after discovering '' the deceit,'he conducts himself with reference to the transaction *11 as"though;it were still*subsisting and binding,' he waives the !. rightitCY-escisSioh. >

      2. Vendor and purchaser — loss of right to rescind — right to recoup. — It does not follow that, because a purchaser of land has lost his right to rescission for fraud by his lack of diligence in disaffirming the contract, he has no right to recoup for the damages caused by the deceit.
    3. Bills and notes — accrual of interest — The rule that, when the maker of a note has the option of having accrued interest added to the principal and to bear interest as such, no action can ue brought for it until the principal becomes due, does not apply where the owner of a note has the option of demanding payment, and, if the payment is not made, the accrued interest becomes principal and bears the same rate of interest, hut remains payable at the option of the owner, and the right to enforce payment of the accrued interest is not postponed until the principal debt matures.
    4. Bills and notes — -maturity.—In determining the maturity of a note, a contemporaneous trust deed executed as a part of the same transaction should be read along with the note, and the maturity of the note may be accelerated by a clause appearing only in the deed of trust.
    5. Mortgages — acceleration clause. — An acceleration clause in ,a deed of trust which matures the debt matures it for all purposes.
    6. Bills and notes — acceleration—negotiability.—A note loses none of its negotiable properties because its payment is or may be accelerated upon default in payment of any installment.
    Appeal from. Lee Cliancery Court; A. L. Hutchins, Chancellor;
    judgment modified.

      Mann & McCulloch, for appellant.
    1. The suit was prematurely brought. The provision in the notes that interest, if not paid at maturity, should be added to the principal, and bear the same rate of interest, did not authorize suit for the interest until the principal of the notes matured. 7 Cyc. 864, § 16; 8 C. J., § 613; 67 Iowa 676, 25 N. W. 847.
    2. The acceleration clause in the mortgage did not mature the notes for the purpose of personal judgments upon them, but, if at all, only for the purpose of foreclosing the mortgage. 7 Cyc. 860; 133 Mo. 323; 40 L. E. A. 154, 157; 19 L. E. A. 673; 42 Ohio St. 113; 103 U. S. 766-761; 26 Law. ed. 554-556. See also 161 Mo. 270, 61 S. W. 811; 155 Mo. App. 678, 135 S. W. 511; 36 Mo. 348; 32 Mo. 438; 83 Mo. App. 425; 81 Id. 169;, 19 E. I. 149, 32 Atl. 305; 68 Kans. 612, 75 Pac. 1044; 69 Wash. 151, 124 Pac. 373; 63 Fla. 631; 94 Ore. 1. f
    3. The maturity of the notes, to render them negotiable, must be determined by the face of the notes, not by reference to the mortgage. If maturity may be determined by the mortgage, the notes lose their character of negotiability and render those transferred subject to the same defenses as are available between the original maker and payee. By our State negotiable instrument law, an instrument, to be negotiable, must be payable on demand or at a fixed and determined future time, and it is declared that, though the time may be uncertain, the event by which it is to be determined must be one that is certain to happen. There is nothing in the act which declares, or suggests, that collateral writings may be looked to for the purpose of changing any of the terms, but it is made clear that the instrument alone shall govern. See also 8 Corpus Juris, 113, § 206; Patón’s Digest of Legal Opinion, 554, § 2443, issued by American Bankers’ Association.
    4. The decree denying rescission of the contract, or recoupment for fraud and deceit, was contrary to, and not supported by, the evidence. 11 Ark. 58; 33 Ark. 425; 71 Ark. 99; 99 Ark. 442; 47 Ark. 148; 30 Ark. 535.

      Daggett & Daggett, for appellees.
    1. On the proposition that the suit was prematurely brought, attention is called to the interest clause in each of the notes, viz: “Interest payable annually, and, if not paid when due, to become principal and bear same rate of interest.” Counsel are in error in stating that, in default, the interest would be added to the principal. 42 L. R. A. (N. S.) 108.
    2. Appellant’s counsel seem .to overlook the fact that suit is brought on-the vendor’s lien retained in the deed from Bowen to McCormick, as well as on the deed of trust from the latter to the former, and that in the deed it is expressly stated that interest on the notes for deferred purchase money is payable annually, “and that, if either of said notes, or the interest thereon, be not paid, as the same becomes payable, then, at the option of the legal holder, the whole of the said debt may be declared due and • payable. ” These contemporaneous writings are to be construed together. 28 Ark. 387; 44 S. ,W. (Tex.) 936; 66 Ark. 367; 61 S. W. (Tex.) 386; 46 L. E. A. (N. S.) 475-479; 59 N. W. (Neb.) 115; 27 N. W. (Iowa) 296; 94 Fed. 347; 28 Fed. 741.
    3. Appellant was in no position to avail himself of the defense of fraudulent misrepresentations set up in his cross-complaint. He was advised of the alleged' shortage in acreage, as well as of the other alleged fraudulent misrepresentations, and, by his own conduct in paying the obligations then matured, and in continuing to oper-. ate the plantation, taking no steps to rescind the contract or to recoup, he is estopped to complain. 2 Pomeroy, 3d ed., §§ 897, 916, 917; Pomeroy, Specific Performance, § 222; 46 Ark. 348; 1 Ann. Cases, 906; 24 Sup. Ct. Eep. 259; 59 Ark. 251; 140 Ark. 336; 142 Ark. 553.
    4. Appellant’s contention that the acceleration clause in the deed and deed of trust, if read into the notes, renders the time of payment uncertain, and therefore destroys their negotiability, is contrary to the decided weight of authority. 89 Ark. 132; 96 Ark. 105; 10 Sup. Ct. Eep. 999; 25 Ann. Cases 163; Ann. Cases, 1916-C, 499; Id., 1914-A, 315.
    5. On the question of rescission and recoupment, counsel in their argument overlook the most essential element, scienter. 47 Ark. 164. As to the contention to the effect that if, by payment of the matured obligation, and subsequent occupancy of the plantation, appellant was estopped from rescinding the contract, he would still be entitled to recoup damages for the alleged fraud, we submit that the issue is not one of rescission or recoupment, but solely of a waiver of the right to rescind or recoup for the alleged fraud. 77 Ark. 261; 85 Fed. 740; 52 L. E. A. 745.
   Smith/ J.

In 1919 Sam Bowen was the owner of a tract of land in Lee County, known as the Horseshoe Plantation. He owned and operated the plantation during the years 1918 and 1919, having acquired it from. J. L. Hutton, and F. Gr. Jones, of Memphis, who had purchased it from R. L. Hope in 1916.

In June, 1919, Bowen listed the land for sale with Shelton & Ward, a. real estate firm in Memphis, who caused the land to be. advertised for sale in the Memphis papers, and the tract was described in the published advertisement as containing 1,735 acres, of which 800 .were in cultivation. A. L. McCormick, of Mississippi, read the advertisement and became interested in the proposition, and opened negotiations through the sales agents which resulted in the purchase of the land, but, before the deal was closed, McCormick visited the land and spent a few hours riding over it, and, being satisfied with the appearance of the farm and the representations made concerning it, he contracted to buy the land, including the growing crops, the live stock, and farming implements on the place, and'the tenants’ accounts. For all this he agreed to pay $147,475.03, payable $25,000 cash, $25,000 January 1, 1920, and $67,475.03 in ' seven equal annual payments' of $9,639.29 each, due January 1 in the years 1921, 1922, 1923, 1924, 1925; 1926 and 1927, and bearing interest at the rate of six per cent, per annum from-date until paid, and it was'recited in each note, that “interest payable annually, and, if not paid when due, to become principal and bear same rate of interest.”

A deed was executed on September 6, 1920, conveying the land and the other property traded for, which recited that, in addition to' the payments to be made in cash, McCormick had assumed and agreed to pay $30,000 due the Southern Trust Company, of Little Rock, which was evidenced by three notes of $10,000 each, of Sam •Bowen and wife, dated October 10, 1918, and due November 1, 1925, with interest at six per cent., payable annually, and, to secure the unpaid purchase money, a vendor’s lien was reserved in the deed from Bowen to McCormick, and, in addition, McCormick executed a deed of trust to 'C. E. Daggett, as trustee for Bowen.

The deed of trust was in usual form, and described the land and the personal property therein, and contained the following clause: “But, in the event of the failure of the party of the first part to pay said principal debt, together with interest tbereon, or any part of either, when the same shall become due and payable according to the tenor, date and effect thereof, or in the event the said party of the first part fails or refuses to comply with any or all of the covenants, agreements or conditions of this instrument, then, at the option of the legal holder or holders of the indebtedness hereby secured, the whole of the said indebtedness hereby secured shall, without notice, become immediately due and payable, and the trustee shall take immediate possession of said real estate and personal property and proceed to sell the same, or any part thereof, to the highest bidder, for cash, at such time and place as may be designated.”

Suit was filed October 14, 1921, to foreclose the deed of trust and to enforce the vendor’s lien, and it was alleged in the complaint that McCormick had paid the note for $25,000 due January 1, 1920, and also the note for $9,639.29 which fell due January 1, 1921, and had also paid the interest accruing on all of said notes up to and including September 6,1920, but that the interest on the remainder of the notes accruing from September 6, 1920, to September 6, 1921, amounting to $3,470.15, was past due and unpaid. It was alleged that,' default having been made in-the payment of this interest, the plaintiffs had elected, under their option so to do, to declare the whole of said indebtedness due and payable. It was also alleged that all the notes, except the notes due in 1926 and 1927, which were owned by Bowen, had been assigned for value to Jones and Hutton. There was an allegation that the interest due the Southern Trust Company was unpaid. It was also alleged that the land comprised a plantation of about 800 acres, and that arrangements would have to be made for its cultivation prior to January 1, 1922, and there was a prayer for a receiver, and a receiver was appointed by consent.

There was a prayer for judgment against McCormick for the balance of purchase money, and the interest thereon, and that the judgment be declared a lien on the land, subject to the prior incumbrance to the trust company, and that the property be ordered sold.

McCormick filed an answer and cross-complaint, in which he admitted the execution of the notes sued on, and the deed of trust sought to be foreclosed, and he admitted that the interest due September 6, 1921, had not been paid.- By way of cross-complaint, it was alleged that the sale of the land had been induced by reason of false and fraudulent representations in the following particulars: It was represented there were 800 acres in cultivation, whereas there were in fact less than 400. That it was represented the land was free from noxious grasses, when a considerable area was infested with coco -grass. That the land was represented to be above overflow, when, as a matter of fact, it was subject to annual overflows from the St. Francis River. It was also alleged that a certain tract of land was falsely designated as being within the boundaries of the land-conveyed. There was a prayer in the cross-complaint that the sale be rescinded on account of fraud, and McCormick executed and tendered a deed to the land. There was also a prayer that, if rescission were denied, judgment be. rendered in McCormick’s favor for the -difference between the market value of the land as represented by Bowen and its actual value at the time of the ■sale, as shown by the testimony.

An answer to the cross-complaint denied that there was any fraud or misrepresentations.

Upon final hearing the court dismissed the cross-complaint as being without equity, and rendered judgment as prayed for in the complaint, from which is this appeal.

It is clear that McCormick is not now entitled to rescind the contract. One who claims to have been deceived is required, as soon as he learns the truth, to disaffirm the contract with all reasonable diligence, so that both of the parties may, as nearly as possible, be restored to their original position. “He is not,” says Pomeroy, “allowed to go on and derive all possible benefits from the transaction, and then claim ,to be relieved from his own obligations by a rescission or a refusal to perform on his own part. If, after discovering the untruth of the representations, he conducts himself with reference to the transaction as though it were still subsisting and binding, he thereby waives all benefit of and relief from the misrepresentations.” Pomeroy’s Equity Jurisprudence (4th ed.) vol. 2, § 897.

This doctrine finds expression and approval in a number of our own eases, and, among others, the following: Fitzhugh v. Davis, 46 Ark. 337; Bowden v. Spellman, 59 Ark. 251; Kilgo v. Continental Casualty Co., 140 Ark. 336; Fleming v. Harris, 142 Ark. 553.

Appellant practically concedes, because of his delay, that he can not ask rescission on the ground only of misrepresentation in regard to the acreage, as he discovered, soon after taking over the land, the presence of the coco grass, and discovered, during the first year of his possession, the fact that the land was subject to overflow from the St. Francis Eiver, and he made two crops after acquiring this knowledge, and he must necessarily have soon known of the shortage in’the acreage of the cultivated land.

It does not follow, however, that, because there is no right of rescission, there is no right of recoupment. A leading case on the subject is that of Matlock v. Reppy, 47 Ark. 148. A syllabus in that case reads as follows: “To maintain an action for damages for false and fraudulent representations as to land sold, the vendee must prove: 1. That the fraud related to some matter of inducement in the making of the contract. 2. That it wrought injury to him. 3. That the relative position of the parties was such, and their means of information such, that he must necessarily be presumed to have contracted upon the faith reposed in the statements of the vendor; and, 4. That he did rely upon them and had a right to rely upon them, in full belief of their truth. Yeates v. Pryor, 11 Ark. 58.”

We think these tests are met by the proof in the instant case, and especially is this true in regard to the deficiency in the cleared land. The testimony very clearly establishes the fact that the representation was made that there were 800 acres; indeed, the advertisement of sale so stated, and the complaint asking the appointment of a receiver to take charge of and to rent the land so alleged. It is now practically conceded that there are not to exceed 400 acres of cleared land, and, according to one survey, there is but little over 300 acres; but figures are submitted by counsel for appellee attempting to show that, even on the basis of 400 acres, appellant is entitled to no relief, because of the value of the other property included in the sale.

We have carefully considered this question, and, while it is difficult to say, with any feeling of certainty, just what recoupment should be allowed for the difference in value, we have decided that it at least equals the face of two of the notes given for purchase money, which notes were for $9,639.29 each.

Several interesting questions are raised by appellant. It is insisted, (1) that the suit was prematurely brought; (2) that the accelerating clause in the mortgage did not mature the notes for the purpose of personal judgment upon them, but, if at all, only for the purpose of foreclosure of the mortgage; (3) the maturity of the notes cannot be determined by a reference to the deed of trust, and, if so determined, their negotiability is destroyed, and they become subject to the same defenses as are available between the original maker and the payee.

Upon the question of the suit having been prematurely brought, authorities are cited to the effect that, when the maker of a note has the option of having accrued interest added to the principal and to bear interest as such, no action can be brought for it until the principal becomes due. But here the maker of the note has no option, and it is not provided that accrued interest shall be added to the principal. The owner of the note has the option of demanding payment, and, if payment is not made, the accrued interest becomes principal and bears the same rate of interest, but it remains payable at the option of the owner, and the right to enforce payment of this accrued interest is not postponed until the principal debt matures because the accrued interest becomes principal and bears interest.

In addition to the clause in regard to acceleration of payment copied from the deed of trust above, there was a clause in the deed from Bowen to appellant which reads as follows: “It is expressly agreed and understood that a vendor’s lien is hereby retained by the grantors herein on the lands herein described, for the purpose of securing the remainder of the purchase money due on said lands, as hereinbefore set out, and that, if either of said notes, or the interest thereon, be not paid, as the same matures and becomes payable, then, at the option of the legal holder, the whole of the said debt may be declared due and payable.”

It is familiar law that these contemporaneous writings, which were executed as a part of the same transaction, are to be read together to interpret the contract of the parties; and, when they are so read, we think it was the clear purpose of the parties to make the entire debt payable upon default in payment of any part thereof, either of principal or interest.

It is true the acceleration clause does not appear in the notes themselves; but it does appear in the deed of trust and in the deed, and, as we have said,, these instruments are all to be read together.

In Fairbairn v. Bofahl, 144 Ark. 313, the attempt to accelerate the payment of certain notes was resisted upon the ground that the acceleration clause appeared only in the contract of sale, and did not appear in any of the notes. The opinion cited the case of Farnsworth v. Hoover, 66 Ark. 367, where the acceleration clause was in the notes but not in the mortgage. The acceleration clause was enforced in both of the cases, the effect of the two cases being to make the acceleration clause valid and enforceable if it appears in either the notes or the deed, or deed of trust.

In this connection, it may be pointed out that the deed in which the vendor’s lien was reserved does not contain any provision as to the manner in which Bowen should proceed to collect or enforce the maturing obligations ; and, if the accelerating clause did not mature the entire indebtedness upon default being made, it is difficult to see just what meaning can be given it.

The point stated was considered by the Supreme Court of Washington in the case of Castor v. Muramoto, 69 Wash. 145, 125 Pac. 153, 42 L. R. A. (N. S.) 108, and the court said: “If respondent’s contention be true, this last provision of the mortgage is meaningless, since the only time the mortgage would be subject to foreclosure, irrespective of prior defaults in the payment of interest, would be a default in the payment of the original and the increased principal with the last annual interest at the maturity of the note, when, under all theories, all sums payable .under the note and mortgage were subject to default for nonpayment. What need, then, for stipulating that, in case of a foreclosure, ‘the whole of said principal and interest, whether the same shall be then due or not,’ shall be retained? If the only foreclosure can take place subsequent to the maturity of the note, what sum is it, not then due, that is to be retained in case of a sale because of a default in the payment of principal or interest? Manifestly such a clause in this mortgage is indicative of the intention of the parties that the mortgage did stipulate for its foreclosure prior to the maturity of the note, in case of any default in the pavment of the annual interest, as such a foreclosure could be the only one when the whole of the principal and interest would not be due, which situation is further illustrated by describing the note as one in which the interest is payable annually.”

The case of Clark v. Paddock, 132 Pac. 795, is extensively annotated in 46 L. R. A. (N. S.) 475. The annotator, in; his note, says: “Upon the weight tof authority a clause only in the mortgage providing that the debt shall become due upon a contingency therein set forth will mature the note, although it be not due by its terms.”

Many of the cases cited in the annotator’s note have been examined, and we have concluded that the better rule, as well as the weight of authority, is.that an acceleration clause which matures the debt, matures it for all purposes.

We are also of the opinion that the note loses none of its attributes as a negotiable instrument, because its payment is, or may be, accelerated by the recitals of the instrument securing its payment. The argument is that the acceleration clause in the deed and in the deed of trust, if read into the note, renders the time of payment, and consequently the amount to be paid, uncertain, and thereby destroys the quality of the note as a negotiable instrument. The weight of authority appears, however, to be against this view, although the authorities are divided.

But the negotiable instruments law, which has been adopted in this State, appears to settle this question. Section 1 of this act (which is § 7767, C. & M. Digest) defines the requirements of negotiable instruments, the second of which is that the instrument must contain an unconditional promise or order to pay a sum certain in money, and the third that it must be payable on demand, or at a fixed or determinable future time. Section 2 of this negotiable instruments act (which is § 7768, C. & M. Digest) defines the conditions under which the sum payable is a sum certain, the third of which reads as follows: “ (3). By stated installments with a provision that, upon default in payment of any installment or of interest, the whole shall become due.”

Thus it appears that- sanction is given in the negotiable instruments act to the acceleration of payment, and that negotiability is not thereby destroyed. Thorpe v. Mindeman, 68 L. R. A. 146.

However, as we are allowing credit by way of recoupment to the extent -only of two notes, and as there are two notes which are owned by Bowen, the relief to which appellant is entitled may be granted by canceling these two notes as being without consideration, and that relief will be granted.

It is therefore ordered that the decree of the court below be modified by crediting thereon the amount of two notes held and owned by Bowen, the same being the notes which mature in 1926 and 1927, and in all other respects the decree will be affirmed.


author: Smith, J.

text:
    Leming v. Herring.
    Opinion delivered January 14, 1924.
    Brokers — loan op stock — conversion.-—The delivering- or loaning by a broker of a stock certificate to another, who sells it, and later returns another certificate for the same number of shares in the same company in its place, does not constitute a conversion for which the broker is liable.
    Appeal from Pulaski Circuit Court, Second Division ; Richard M. Mann, Judge-;
    affirmed.

      •Sam T. <& Tom Poe, for appellant.
    1. Disposal of the ten shares of stock, without authority, amounted to a conversion which rendered appellees liable in damages. 4 R. C. L. 286; 50 Am. Rep. 507; 93 Am. Dec. 174 and note; 13 Am. Rep. 507; 4 Thompson on Corporations, 667; 72 Am. St. Rep. 557, 75 N. W. 443; 58 N. Y. 425 ; 18 Mich. 60, 100 Am. Dec. 146; 51 Am. Rep. 91; 36 111. 513; 40 111. 313.
    2. The attempt of appellees to show the custom among brokers in Little Rock, in dealing with oil stock, was inadmissible, and admission of such testimony was erroneous. 4 it. C. L. 288-289; 42 Am. Dec. 87»

      John P. Streepey, for appellee.
    Cases cited by appellant deal with the right of a broker to sell stock of liis customer and later replace it with other stock bought on a lower market; but this is not a case of that kind. Appellee never sold1 the stock, nor reaped any benefit therefrom. It was the custom amongst brokers to lend each other small blocks of stock in making daily sales, until larger blocks could be broken up, and another certificate given back to the broker who made the loan. It was competent to prove this custom. 9 Corpus Juris, 530, § 30; 4 R. C. L. 271, § 21.
   Smith, J.

This suit was begun by appellant, who sued for himself and his infant son, to recover the par value of eleven shares of the capital stock of the Little Giant Oil & Gas Company, it being alleged that appellee, the defendant below, had wrongfully converted and disposed of the stock. Appellee is a stockbroker engaged in buying and selling stock.

There was a controversy as to whether the letter of transmission contained the direction to sell the stock at par, and a special interrogatory was submitted to the jury on that question, and the jury answered in the negative.

The testimony was to the effect that appellant owned ten shares of the stock, which was covered by one certificate, and that his infant son owned one share, which was. covered by a separate certificate, and that the par value of the stock was ten dollars per share.

Appellee sold the one share, and sent appellant a check for six dollars as the net proceeds, less commissions; but, when the point was made that the instruction was to sell at par, appellee tendered ten dollars, the face value of the stock.

The ten shares were not sold, and it developed that appellee had let another broker have this certificate, with the understanding that it should be replaced when appellee found a purchaser. This was done because the other broker had for sale a certificate for a large number of shares which he desired to have “broken up” into certificates for smaller number of shares to meet the demands of prospective purchasers. There was some delay in having this done, on account of the absence of the secretary of the corporation. Later, the large certificate which the other broker had was broken up, and a certificate for ten shares of this. Little Giant Oil &■ Gas Company stock was delivered to appellee for the one which appellee had loaned to the other broker, and this certificate was tendered to . appellant by appellee. It was shown that this transaction accorded with the custom of the local brokers.

It was the opinion of the trial court that the only question in the case was whether the direction to appellee was to sell at par, and the jury was told to find for appellant for the face of the stock, if they found that such was the direction to appellee. It was evidently the opinion of the trial court that, in the absence of specific direction, appellee had the right to handle and dispose of' the stock in accordance with the local custom. Appellant insists, however, that the court should have submitted the question of the conversion of the stock to the jury, and insists that it was a conversion of the stock for appellee to deliver the certificate, to the other broker.

We think it unnecessary to pass upon this question, for the reason that appellee returned ten shares of the Little Giant Oil & Gas Company stock, and tendered the sum claimed for the other share. There is no contention that one share of this stock was worth any more than any other share. Appellant sent ten shares to be sold, and ten shares were returned to him.

Of course, the question of depreciation in value of the stock might have been raised if any loss had been sustained on account of appellee not having the stock to return on demand; but no such issue was submitted to the jury, nor was the court asked to submit that question. Recovery was sought upon the sole ground of a conversion; and we think the failure to return the identical certificate was not a conversion, where another certificate for the same number of shares in the same corporation was returned.

At section 21 of the chapter on Brokers, in 4 B. C. L., page 271, it is said: ‘As in the case of any other bailee, a broker is usually bound to keep and return the identical property that has come into his hands, but with respect to stocks a different rule obtains. Courts have -said that no good reason exists for requiring stockbrokers to whom clients have pledged or intrusted their shares of stock to preserve at all times a careful separation of distinguished certificates connected with each transaction or pledge, and maintain the identity of each certificate distinct and unbroken. Consequently it is held to be unnecessary for a broker to retain in his possession the identical stock purchased by him on his customer’s order, or received as collateral security, so long as he has in his possession at all times a sufficient quantity of like stock to respond to the call of his customer.”

No error appearing, the judgment is affirmed.


text:
    Hovis v. State.
    Opinion delivered January 14, 1924.
    Miscegenation — concubinage.—Under Crawford & Moses’ Dig., § 2605, defining the offense of concubinage as the unlawful cohabitation of persons of the Caucasian and negro races, the offense is not proved by evidence of specific instances of illicit intercourse; the term “cohabitation” conveying the idea of living or dwelling together as husband and wife.
    Appeal from Yell Circuit Court, Dardanelle District ; J. T. Bulloch, Judge;
    reversed.

      Wilson & Majors and Herbert G. Scott, for appellant.

      J. S. TJtley, Attorney General, John L. Garter, Assistant, for appellee.
   Smith, J.

Appellant, a Caucasian, was convicted and sentenced to the penitentiary on a charge of concubinage, alleged to have been committed by illegally cohabiting with Nona Thompson, a female person-of the negro race. The prosecution was had under §§ 2601 and 2602, C. & M. Digest. By § 2601 it is provided that concubinage between a person of the -Caucasian or white race and a person of the negro or black race shall be a felony. Section 2602 defines concubinage as follows: “The living together or cohabitation of persons of the Caucasian and the negro race shall be proof of the violation of the provisions of § 2601. For the purpose of this act, concubinage is hereby defined to be the unlawful cohabitation of persons of the Caucasian race and of the negro race, whether open or secret.” By § 2605, C. & M. Digest, it is provided that no person shall be convicted of the crime of concubinage upon the testimony of the female, unless the same 'be corroborated by other evidence.

'The testimony shows that Nona Thompson was employed as a domestic servant by a white family in Dardanelle, and that she resided in a servant’s house in the rear of the premises, and that appellant frequently went to the room of Nona Thompson for purposes of sexual intercourse, and that on each occasion he paid her the price charged.

There was no corroboration of the testimony of Nona Thompson about these visits. There, was testimony, however, that appellant’s visits were suspected, and the sheriff caused him to be watched, and, while the family of Nona’s employer was away for the summer, Nona was in charge of the premises, and on one -occasion she permitted appellant to visit her in the home of her employer. The sheriff, who was watching, saw appellant enter the house, and he and two deputies attempted to-enter, but the officers found all the entrances securely fastened. When appellant left the house he discovered that the officers were after him, and he -attempted to run .away,-but-one of the officers overtook him. Both appellant and the colored girl asked to be allowed to plead guilty that night, but the sheriff told them the case would have to be investigated. The testimony shows that appellant had met the colored girl for the purpose of having sexual intercourse with her on the night of his arrest, and that he had met her on frequent prior occasions for the same purpose.

This, however, does not constitute concubinage as defined by the statute. The statute creates and defines the offense. There was no testimony that appellant and the colored woman were living together, or had ever done so.

The word “cohabitation” has a well-defined meaning. We have long had a statute (§ 2600, C. & M. Digest) against illegal cohabitation, which is an offense that can be committed by persons of the same race as well as those of opposite races. The statute under which appellant was convicted is directed solely against persons of opposite races who cohabit, but the act of cohabiting is common to both offenses and means the same in each.

Among other cases which define the word “cohabit” is that of Turney v. State, 60 Ark. 259. It was there said: “ ‘Cohabit’ means ‘to dwell with; to dwell or live together as husband and wife.’ Webster. To ‘dwell’ means ‘to abide as a permanent resident, or to inhabit for a time; to live during a considerable period in a place, to have a habitation for some time or permanence; to be domiciled; to remain.’ Webster. The law lexicographers define it: ‘To dwell together in the same house; to live together as husband and wife; to live together in the same house, claiming to be married.’ Rapalje’s, Bur-rill’s, Bouvier’s, and Kinney’s Law Dictionaries, verbo, ‘■Cohabit.’ ” In the same case it was further said: “The term ‘cohabitation’ has a definite legal signification, and, when used in criminal statutes, conveys the idea of living or dwelling together as husband and wife.”

Other cases to the same effect are Sullivan v. State, 32 Ark. 187; Lyerly v. State, 36 Ark. 39; Bush v. State, 37 Ark. 215; Tylor v. State, 36 Ark. 84; McNeely v. State, 84 Ark. 484; Leonard v. State, 106 Ark. 449.

There being no testimony that appellant and Nona Thompson lived or cohabited together, the judgment of conviction must be reversed, and it is so ordered.


text:
    Morgan v. State.
    Opinion delivered January 14, 1924.
    1. Banks and banking — accepting deposit while insolvent.— Crawford & Moses’ Dig., § 697, making it a felony for officers of a bank to receive deposits after knowledge of its insolvency, means a general deposit by which the bank becomes the debtor of the depositor, but does not apply in the case of special deposits.
    2. Banks and banking — covering overdraft not a general deposit. — Where money was deposited in bank to cover an overdraft, this was not a general deposit, ¡but a payment of an existing debt.
    Appeal from Perry Circuit Court; Marvin Harris, Judge;
    reversed.

      G. E. Garner and Jjetvis Rhoton, for appellant.

      J. S. Utley, Attorney General, John L. Carter, Wm. T. Hammock, Darden Moose and J. S. Abercrombie, Assistants, for appellee.
   Smith, J.

Appellant was indicted upon a charge that, while president of the Bigelow State Bank, he did assent to and receive a deposit from W. E. Jones, knowing, at the time, that the bank was insolvent.

The testimony shows that Jones, who was a depositor in the bank, drew a check on the bank in payment of a bill which he owed. He did not have the money in the bank to take the check up, but he advised the cashier of the bank that the check had been drawn, and he requested the cashier to let Mm know when the check had gone the rounds and had been returned to the bank for payment, and promised, upon receipt of this information, to malee a deposit to take care of the check. After a' few days the check came to hand, and the cashier advised Jones of that fact, whereupon Jones came to the bank and deposited a sum of money which was sufficient, when added to the sum he previously had on deposit, to take up the check. Upon this testimony it was insisted that no deposit was made within the meaning of the statute.

There are a number of other assignments of error, but we do not discuss them, as we are of opinion that the testimony set out above is insufficient to show that a deposit was made.

By § 697, C. & M. Digest, it is made a felony for any president, director, manager, cashier or other officer or employee of any bank, or member of a firm, after having had knowledge of the fact that it is insolvent, or in a failing condition, to assent to the reception of any deposits or the creation of any debts by it.

Evidently the deposit here referred to is a general deposit, whereby the bank would acquire the title and control of the deposit and the relation of debtor and creditor be created between the bank and the depositor. It is settled law that, in case of a general deposit of money in bank, the moment the money is deposited it becomes the property of the bank, and the bank and the depositor assume the legal relation of debtor and creditor. 3 R. C. L. p. 519.

Of course, the bank contracts to repay this money on the check of the depositor; but there is no contract to keep any particular money, and the depositor, having made a general deposit, parts with the title to the deposit and takes his place as one of the bank’s general creditors. There may, of course, be a special deposit, the title to which remains in the depositor, in which case the bank has usually only some agency to perform, generally that of returning the deposit upon demand made. “In the case of a special 'deposit, the bank assumes merely the charge or custody of property, without authority to use it, and the depositor is entitled to receive back the identical money or thing deposited. In such case, the right of property remains in the depositor, and, if the deposit is of money, the hank may not mingle it with its own funds. The relation created is that of bailor and bailee, and not that of creditor and debtor. Thus, the depositor may always guard against the • effect of a.n insolvency of the institution by making a special deposit; that is, by depositing his money in a bag or box, or by affixing some mark upon it by which it can be distinguished from the general funds of the institution. * * * ” Section 150 of the chapter on Banks in 3 R. C. L., page 522.

Here the sum deposited by Jones was not a general •deposit.. It was not made for the purpose of creating the relation of debtor and creditor between the bank and Jones and of giving the bank the title to the deposit. It was, in fact, the purpose of Jones to take' up an outstanding check — to pay an existing debt, the ownership of which was evidenced by the indorsements on the check.

We do not think the transaction which Jones had with the bank constituted the reception of a deposit within either the letter or the spirit of the law, and the court should have so instructed the jury.

The judgment will be reversed, and, as the facts appear to have been fully developed, the cause will be dismissed.


text:
    Mitchell v. Williams.
    Opinion delivered January 14, 1924.
    1. Appeal and error — conclusiveness of verdict. — Questions of fact are conclusively determined by the jury where there was sufficient evidence to support their finding.
    2. Account stated — evidence.—Evidence that an account rendered by a materialman to a building contractor covered only items furnished during the current month, and allowed no credits for damages caused by delay, and where there were items of damage that could not then have been determined, held to warrant refusal to submit the issue whether the account sued on was an account stated.

      Appeal from Sebastian Circuit Court, Fort Smith District; Joht% Brissolara, Judge;
    affirmed.

      E. L. Matlock, for appellant.

      Holland & Holland, for appellee Williams, and Warner, Hardin & Warner, for appellee Wright.
    The evidence is legally sufficient to support the verdict, and this court will not disturb it. 133 Ark. 30; .136 Ark. 310; láá .Ark. 641; 148 Ark. 654. The surety was released by failure to bring suit within six months after completion of the building. C. & M. Digest, § 6913; Davis v. Chrisp, 159 Ark. 335. An account stated was not pleaded by the plaintiff either in the original complaint, the amended complaint, or in the reply to the defendant’s answer. It is not available here. 137 Ark. 565. It is not available, under the facts in this case, even had it been pleaded. 23 App. Div. 498; 1 C. J., § 278; Id., § 279; 1 C.'J., §§ 281, 288, 290, 292; 150 Ark. 197, 203; 73 Fed. 983; 74 Ark. 468.
   Smith, J.

This suit was brought by the appellant lumber company against A. R. Williams, contractor, and Ozette Wright, surety on the contractor’s bond, for a bill of material used by him in .the construction of a school building for a rural special school district in Crawford -County. The account of the lumber company was practically unquestioned, the main issue being upon the counterclaim of the defendant Williams for damages growing out of alleged delays in furnishing the material sued for.

The jury found for the plaintiff in the sum of $249.19, and found also that the surety was not liable for that amount, and the plaintiff has appealed.

The principal claim of the defendant Williams for an offset against the plaintiff’s account is that the plaintiff agreed and undertook to furnish him the material known as the “mill-work” to be used in the construction of the school building, and that the -delay in so doing was responsible for the damages claimed by Williams. A delay in delivering shingles was also alleged as a cause of' damage. The lumber company denied that it had agreed to furnish the mill-work, but had merely ordered it for Williams from another -dealer; and -denied that there was any delay causing damages in the delivery of the shingles.

These questions of fact were submitted to the jury, and are concluded by the verdict, and, without setting out the testimony, it suffices to say that it was legally sufficient to support a finding either way, as it was conflicting.

An objection is urged to an instruction numbered 1, which substantially -submitted the issues, on the ground that the jury might have interpreted the instruction to permit either Williams or his men to take credit for the delay. We think, however, the instruction was not open to the objection made. The laborers were not parties to the suit, and we do not understand the instruction, when fairly interpreted, to permit a double recovery, or to permit the laborers to recover at all.

The bond sued on was executed in compliance with § 6913, C. & M. Digest, and -the defense of the surety was that suit had not been brought within six months after the completion of the building, -as required by § 6914, C. & M. Digest.

There was a question as to the time of the completion of the building, and this question of fact was -submitted to the jury, and is concluded by the verdict in favor of the surety, as there wa-s testimony legally sufficient to support the finding that the suit was not brought until more than six months had expired after the -completion of the building.

It is also insisted, for the reversal -of the judgment, that the account sued on had become an account .stated. It is insisted that this issue was not raised by the pleadings in apt time against the defendant Williams, and was not raised at all against his surety. We do not decide that question, however, as, in our opinion, the testimony did not warrant the submission of the question whether the account sued on had become an account stated. The account rendered covered items furnished during the current month, and took no account whatever of the credits claimed by way of damages; indeed, isuch credit has at all times been, and is now, denied. There were items of damage for which Williams could not claim credit until he had settled with the school district, among which was the claim of the district for liquidated damages for delay in completing -the building beyond the contract period.

The ease appears to have been properly submitted to the jury, and the testimony is sufficient to support the verdict, so the judgment must be affirmed.


author: Humphreys, J.

text:
    Martin v. Blaylock.
    Opinion delivered January 14, 1924.
    Drains — order establishing district. — An order of the county-court establishing a drainage district was not invalidated by ' adding to the description of the lands “and of other lands which might be benefited by system of ditches,” evidently added in recognition of authority to subsequently extend the boundary so as to include other lands under Crawford & Moses’ Dig., § 3614, as it will be regarded as surplusage.
    Appeal from Craighead Chancery Court, Western 'District; Archer Wheatley, Chancellor;
    affirmed.

      Lamb & Frierson, for appellant.
    1. The order undertaking to create the district is void for uncertainty in the description. Not only is there no description of “all other lands which would be benefited by such system of ditches,” but no possible way is suggested whereby it might be determined what other lands should be included. 122 Ark. 491; 105 Ark. 380.
    2. The county court was without power, at a subsequent term, to cure defects in the order establishing the district. 96 Ark. 434; 92 Ark. 305; 87 Ark. 438.

      Frierson & Penicc, for appellees.

      1. The language in the order creating the district, with reference to the inclusion of other lands, was without effect, jeopardized the rights of no one, and does not affect the validity of the order. If it can reasonably be determined what lands the court intended to include in the district, this court will uphold its validity, regardless of ambiguities. 138 Ark. 339, 344; 122 Ark. 491, 497.
    2. It was within the well recognized powers of the court, on the ground' -that the language complained of did not constitute a part of the court’s original judgment, to order the language stricken from record at a subsequent term. 103 Ark. 453; 40 Ark. 224; 33 Ark. 218; 23 Cyc. 864; Id. 867; 15 Corpus Juris, 975, 976; 35 Ark. 278; 34 Ark. 291; 35 Ark. 585; 33 Ark. 475.
   Humphreys, J.

The main and only question necessary to be determined on this appeal is whether the order or judgment of the county court establishing Drainage District No. 25 of Craighead County, Arkansas, was invalidated by adding to the description of the lands the following expression, “and of other lands which might be benefited by such a system of ditches.”

The act under which the district was formed makes provision for subsequently including lands in the district then outside of the district, if benefited by the improvement. Section 3614 of Crawford & Moses’ Digest. We think the .added words attributable to the power conferred in the act to embrace additional territory within-the district, rather than an attempt to describe lands and include -same in the district. It was simply added in recognition of the authority to subsequently extend the boundaries of the district so as to include other lands which might be benefited by the improvement. In this view the added expression must be regarded as surplus-age in nowise affecting the order.

The decree will therefore be affirmed.


text:
    Cordell v. Enis.
    Opinion delivered January 14, 1924.
    1. Mines and minerals — forfeiture of oil lease — waiver.—The fule that equity will follow the law and declare a forfeiture against defaulting lessees in oil leases wherever inequitable results would follow failure to do so, does not impair the general rule that equity will refuse to enforce forfeitures where there has been a waiver.
    2. Equity — forfeitures.—Equity abhors a forfeiture, and will seize upon slight circumstances indicating a waiver to avoid them.
    3. Mines and minerals — waiver of forfeiture of lease. — Retention for about a week of a rental check tendered 16 or 17 days aftpr it was due according to the terms of an oil and gas lease before returning it and declaring a forfeiture, held a waiver of the forfeiture when the delay in tendering the rent was inadvertent, and where a valuable consideration of $4,000 had been paid for the lease, and the parties lived near each other, and the lessor could have acted promptly.
    Appeal from Union Chancery Court; J. T. Stevens, Chancellor;
    reversed.

      Franh M. Betts, for appellant.
    In view of equity’s abhorrence of forfeitures, this is a case which, under the facts, makes peculiarly applicable the principle that a forfeiture will not be declared where it would be unjust, inequitable or unconscionable to do so. 125 S. W. (Ark.) 345; 16 Cyo. 78; 59 Ark. 405; 77 Ark. 168; 220 S. W. 1078; Id. 578; 79 Texas 391; 98 Ark. 328. The clause providing for the drilling of a well or payment of rentals is in a subsequent clause, and in direct conflict with the preceding, granting clause, providing that the lease shall remain in force five years and as long thereafter as oil or gas should be produced by the lessee, and is therefore void. Bodcaw Lumber Co. v. Goode, 160 Ark. 48; Graysonia-McLeod Lumber Co. v. Buhe, 160 Ark. 76; 93 Ark. 5; 94 Ark. 615.

      Pat McNalley and Robert A. Kitchen, for appellee.
    True that equity abhors forfeitures, but not to the extent that it will deny a forfeiture when, by so doing, it will work inequity and fail to protect a landowner from laches of the lessee under a lease while exploring for oil and gas. Such leases commonly contain covenants for diligent operation and for forfeiture in case of suspension. Moreover they yield nothing to the landowner unless worked1, and are an incumbrance on the land, standing in the way of its sale or lease to others. 96 Pa. St. 307; 225 S. W. 345; 97 Ark. 167; 133 S. W. 837; 177 Pac. 86; 3 A. L. R. 352. Appellant had drawn the lease in question, and the blanks and additions to the agreements and covenants therein were made at her suggestion. The lease therefore, as it now stands, contains an expression of her contract, from which she seeks relief from the court, merely because she neglected to pay the rentals when due, and because' her affairs were in such shape that she forg’ot to pay them. 96 Pa. St. 307; 169 Ind. 53, 79 N. E. 971; 225 S. W. 345, and cases cited. This court has already upheld leases of the same form as the lease in controversy, and there is no merit in appellant’s contention that the drilling and rental payment clause is void.
   Humphreys, J.

Appellees instituted suit .against appellant in the chancery court of Union County to cancel an oil and gas lease which they executed to her on a ten-acre tract of land in said county, upon the alleged ground that she failed to drill a well on the land therein described, or to pay rent thereon, within the time specified in the lease.

In apt time appellant filed an answer denying that she had forfeited her contract on account of her failure to drill a well or pay delay rentals, and interposing, among other defenses, a waiver by her to pay delay rentals within the time specified1 in the lease.

The cause was submitted upon the pleading’s and testimony introduced by appellees and appellant, which resulted in a decree canceling the lease, from which is this appeal.

There is no material dispute in the testimony. On the 19th day of February, 1921, appellees executed1 an oil and gas lease to appellant, who was their friend and .-..■neighbor, upon ten acres of land, for a cash consideration of $4,000, in which, she was required to drill a well on said lands or to pay d'elay rentals thereon of $1 per acre before February 19, 1922. After particularly describing the land, the lease contained the two following clauses pertinent to the issues involved on this appeal:

“It is agreed that this lease shall remain in force for a term of five years from this date, and as long thereafter as oil and gas, or either of them, is produced from said land by the lessee. ”
“If no well be commenced on said land on or before the 19th day of February, 1922, this lease shall terminate as to both parties, unless the lessee, on or before that date, shall pay or tender to the lessor, or to the lessor’s credit in the 'Citizens’ National Baqk of El Dorado, which shall continue as the depository, regardless of changes in the ownership of said lands, the sum of one dollar ($1) per acre, which shall operate as a rental and cover the privilege of deferring the commencement of a well for twelve (12) months from said date.” Appellant did not drill a well or pay the delay rentals prior to the 19th day of February, 1922. Appellees did not declare a forfeiture of the lease for the nonpayment of rent until a check therefor had been received by them for same.

Appellees lived about four miles from El Dorado, and in going to town passed appellant’s home. They were good friends, and met each other frequently. Appellant had taught the school patronized by appellees. On March 7, 1922, sixteen or seventeen days after the last day specified in the lease for the payment of delay rentals, appellant mailed appellee, C. F. Enis, a check therefor, which he received not later than March 9. On March 7 appellant had occasion to offer the lease as collateral to her banker, at which time her attention was called to the fact that she had not paid the delay rentals. She had overlooked this clause in the lease, and in an attempt to comply therewith immediately mailed a check to Mr. Enis for the amount. Enis retained the check for about a week, and then mailed it back to appellant, claiming a forfeiture of the lease because the amount had not been paid or deposited prior to the 19th day of February, 1922. On the day he mailed her the check he passed her home going to El Dorado. He testified that he regarded the check as good' and did not return same because it was her personal check, but because she had not sent it within the time specified in the lease.

In the case of Epperson v. Helbron, 145 Ark. 566, this court had under consideration a lease similar to the one in the case at bar, with one exception. The amount of the cash consideration in the Epperson case was only one dollar, whereas in the case at bar the cash consideration paid1 by appellant was $4,000. In construing the Epperson lease this court recognized that the drilling of a well in .the specified time was a part of the consideration, which could not be avoided except by paying the delay rentals yearly in advance, which were stipulated for in the lease. In construing- the lease the court took occasion to say: “Leases of this kind are prepared by the lessee, and holding to the lease after ceasing to search for oil or gas is often for the purpose of speculation. When the lessee is not exploring the land for oil or gas, he is out nothing, and it is valuable for him to hold the lease for the purpose of speculation, or to await developments of other persons in that vicinity. Hence, we think that time is of the essence of the contract. It is contemplated that the lessee should do the affirmative act of paying the annual rental in advance in order to prevent the lease from being declared forfeited by the lessor. ” For this and other reasons assigned by the court in the Epperson case, courts of equity will follow the law and enforce forfeitures against defaulting lessees in oil and gas leases, where inequitable results follow if they refused to do so. This rule, however, does not impair the general rule that courts of equity will refuse to enforce forfeitures where there has been a waiver thereof. Equity abhors forfeitures and will seize upon slight circumstances indicating a waiver, to avoid or prevent them. In the case at bar appellees retained the check of appellant, covering the contract rentals for delay in drilling, for about a week before returning same, although living only a short distance from her. In good conscience it was their duty to act promptly. They were not warranted in holding the check for an unreasonable time so that they might speculate upon whether it would be more profitable to declare or not declare a forfeiture of the lease. The retention of the check for this unreasonable length of time constituted a waiver of the forfeiture.

For the error indicated the decree is reversed, and the cause is remanded with directions to dismiss appellees ’ bill for want of equity.


text:
    McMillar v. State.
    Opinion delivered January 14, 1924.
    Criminal law — evidence.—In a prosecution for selling intoxicating liquor, testimony as to previous raids upon defendant’s home and the finding of intoxicating liquor in her possession was a competent circumstance tending to show that she was engaged in the illegal sale of whiskey, though it was insufficient within itself to establish the sale.
    Appeal from Garland Circuit Court; Earl Witt, Judge;
    affirmed.

      Randolph & Cobb, for appellant.

      J. 8. TJtley, Attorney General, John L. Garter, Wm. T. EammocJc and Darden Moose, Assistants, for appellee.
   Humphreys, J.

■ Appellant was indicted, tried and convicted of selling whiskey, in the Garland County Circuit Court, and, as punishment therefor, was adjudged to serve a term of one year in the State Penitentiary. She has prosecuted an appeal to this court.

The only assignment of error insisted upon for a reversal of the judgment is the admission by the trial court, over the objection and exception of appellant, of testimony of the sheriff and city detective, to the effect that they raided the home of appellant several times subsequent to the alleged sale and found liquors in her possession. The testimony introduced by the State showed that appellant sold1 whiskey in the fall of 1922 and winter of 1923 at her home. The raids were made in the spring, summer, and fall of 1923. The trial court admitted the testimony relative to the discovery of intoxicating liquors in the possession of appellant as a circumstance tending to show that she was engaged in the illegal sale of whiskey. While the testimony was not sufficient, within itself, to establish the sale, it was a competent circumstance tending to prove said charge. Ketchum v. State, 125 Ark. 275; Larkin v. State, 131 Ark. 445; Marsh v. State, 146 Ark. 77; Casteel v. State, 151 Ark. 70.

No error appearing, the judgment is affirmed.


text:
    Central Bank v. Downtain.
    Opinion delivered January 21, 1924.
    1. Appeal and error — omission of testimony — presumption.— Where a decree recited that oral testimony was heard by the chancellor, and such testimony is not preserved and incorporated in a bill of exceptions, it will ordinarily be presumed that the omitted testimony would have supported the decree, in so far as the decree is dependent upon the facts established by the testimony.
    2. Appeal and error — agreed statement — necessity for bill of exceptions. — No bill of exceptions is necessary when a cause is heard upon an agreed statement of facts which is incorporated in the decree itself.
    3. Adverse possession — occupancy of tenant as notice. — One who takes a mortgage upon land in possession of a tenant is not charged with notice of a subsequent purchase of the land by such tenant.
    4. Specific performance — verbal contract of purchase. — When a vendee of land under an oral purchase was already in possession as tenant, his continuance in possession was not such part performance as to warrant specific performance.
    Appeal from Union Chancery Court; J. Y. Stevens, Chancellor;
    reversed.

      Bose, Hemingway, Cantrell £ Loughborough, for appellants.
    1. The agreed statement of facts upon which the suit was tried having been incorporated in the decree, a bill of exceptions, or other preservation of the evidence, is not necessary. 66 Ark. 182; 111 Ark. 356; 141 Ark. 374; 150 Ark. 193.
    2. Appellee had no enforceable contract, since his possession was not sufficient to take his contract of purchase out of the statute of frauds. Having entered into possession as a mere tenant, the fact that he later agreed to purchase would give him no equities which might be enforced against third parties. 136 Ark. 447; 123 Pac. 1118.
    3. Morgan’s act of conveying to appellant amounted to a repudiation of the oral agreement, and appellant, being in privity with Morgan, is entitled to plead the statute against the appellee, as to the validity of the oral agreement. 106 S. E. 243; 137 N. W. 575; 123 Pac. 1118; 25 R, C. L. 732-734; 130 U. S. 123. It cannot be said that Morgan’s act in executing the warranty deed after the execution of the mortgage was a ratification of the prior oral agreement; on the contrary, when he executed the mortgage conveying the property to the bank as security for his indebtedness, he absolutely repudiated the contract with appellee. 59 N. E. 763.

      F. M. Betts, for appellee.
    1. The appeal should be dismissed, or the decree of the lower court be affirmed, for failure of the appellant to file a complete transcript of the record. It is deficient in failing to include the demurrer of appellee, Downtain, together with two letters or statements of Downtain and J. T. Tatum, as also some receipts and exhibits, and fails to bring before this court any of the oral proceedings of the lower court. Rule 9 of the Supreme Court; 89 Ark. 349; 154 Ark. 263; 156 Ark. 473; 144 Ark. 436; 149 Ark. 215; Floyd v. Booher, 161 Ark. 87. If the court holds that the record is sufficient to justify a trial here de novo, we insist that, since none of the evidence upon which the case was submitted to the lower court is before this court, the presumption in favor of the correctness of the decree ought to prevail, and it should be affirmed.
    2. It should be affirmed also because the record does disclose the filing of appellee’s demurrer, the effect of which was to show that the mortgage sought to be foreclosed did not include the “other indebtedness” clause; and all indebtedness alleged, as shown by the exhibits filed by appellants, was incurred subsequent to the mortgage. 78 Ark. 141; 91 Ark. 458; 12 Ark. 581,
    3. Downtain’s possession of the land was notice to the world of his claims thereto. It was appellees’ duty to inquire of him what rights he claimed in the land. 33 Ark. 465; 105 Ark. 201; 101 Ark. 163.
   Smith, J.

This appeal is from a decree which contains the following recitals: “On this day come the plaintiffs, Central Bank of Little Rock, and O. C. Kavanaugh, trustee, by their solicitors, Snodgress & Snodgress, and comes the defendant, O. W. Downtain, by his solicitor, George M. LeCroy, and announce ready for trial. Thereupon tins cause is submitted to the court upon the original complaint of the plaintiffs with its exhibits, the amendment to the complaint filed May 7, 1921, the demurrer of the defendant, O. W. Downtain, to the plaintiff’s complaint and exhibits, and the answer of the defendant, O. W. Downtain, and the following-agreed statement of facts:

“ ‘ J. T. Tatum was the duly authorized agent of S. R. Morgan, the latter owning the following described real estate, to-wit: (Describing it).
“ ‘In 1915 or 1916 O. W. Downtain orally agreed to purchase the above property from S'. R. Morgan, but was unable to do so. It was then orally agreed between him and Tatum that he should rent the property, and that if, later, he was able to purchase, Morgan would sell it to him. Rent was paid until April 22, 1920. At that time Tatum, in behalf of Morgan, orally agreed to sell Downtain the above property for $1,100. Downtain orally agreed to purchase, and instructed Tatum to have prepared an abstract, orally agreeing to pay the $1,100 when the abstract was furnished, showing a fee simple title in Morgan, free of all incumbrances. The abstract as prepared omitted the deed of trust executed by Morgan to plaintiff, and on October 26, 1920, Morgan, by warranty deed, conveyed the above property to Downtain for the consideration of $1,100, which was paid to Morgan on that day.
“ ‘In the meantime Morgan executed a deed of trust to C. C. Kavanaugh, as trustee for the Central Bank of Little Bock, the plaintiff herein, conveying the above described property. The said deed of trust was duly executed, acknowledged and filed for record on May 17, 1920, with the clerk and ex-officio recorder of Union County, as appears in record book 89, page 414, of the records of Union County, Arkansas. That the said deed of trust is the one sought to he foreclosed in this action, and that the said Morgan has defaulted in the obligations therein undertaken by him.’ The foregoing was all the evidence submitted to the court.”

Upon these recitals the court dismissed the complaint of the bank as being without equity, and quieted the title of Downtain.

When the transcript was prepared the exhibits referred to in the decree were lost, whereupon the bank instituted proceedings to restore them. This proceeding was heard, and the court made an order supplying the exhibits. Later, appellee filed a petition praying the court to make a nunc pro tunc order amending the decree copied above, showing that the cause was submitted and heard on (1) the demurrer of Downtain; (2) a letter written by J. T. Tatum; (3) a letter written by Downtain; (4) oral testimony taken before the court. The court heard the petition for a mmc pro tunc order, and decreed that the pleadings and the matters of evidence above referred to were offered and were considered on the original hearing, and it was ordered that the original decree be amended to reflect this fact.

This mmc pro tunc decree presents an anomalous situation. It is thus made to appear that, in addition to the two letters, there was oral testimony, which does not appear in the record. There was no bill of exceptions.

The ordinary rule in such -cases is that a presumption arises that the omitted testimony, had it been preserved and incorporated in a bill of exceptions, would have supported the court’s decree in so far as the decree was dependent upon the facts established by the testimony. But it is an established rule of practice that no bill of exceptions is necessary when the cause is heard upon an agreed statement of facts which is incorporated in the decree itself. Carroll County v. Poynor, 142 Ark. 546; Cummins Bros. v. Subiaco Coal Co., 150 Ark. 187; Sizer v. Midland Valley R. Co., 141 Ark. 369; Winn v. Simpson, 156 Ark. 60N

In Webster v. Goolsby, 130 Ark. 141, we quoted from 1 R. C. L., page 778, paragraph 5, the following statement of the law: “Where parties to a case agree to submit the same for decision upon an agreed statement of facts,’ and nothing is said in the agreement to the contrary, each party is absolutely bound and concluded by the statements of fact thus agreed to, so far as the trial in which the stipulation is made is concerned; and where the agreement is not expressly limited to use in the trial in which it is made, it is admissible in evidence as an admission in any other trial or litig’ation between the same parties, where the same issues are involved, but it is not absolutely binding and conclusive upon the parties in other litigation.”

We do not understand the effect of the decree on the petition for a nunc pro tunc order to be to question the agreed statement of facts. 'We must assume therefore that the facts are, so far as the decree recites them, as stated in the decree which we have copied. This being true, the decree rendered was erroneous.

It appears, from this agreed statement of facts, that Downtain was in possession as tenant, but on April 22, 1920, he made an oral contract to acquire the title, which contract was consummated by a deed executed and delivered to him on October 26, 1920. Bnt on May 17, 1920, the mortgage sought to be foreclosed was filed for record.

It is true, ordinarily, that possession by a person under a contract of purchase, although unrecorded, is notice of his equitable rights and interests in the property. As was said in American Bldg. & Loan Assn. v. Warren, 101 Ark. 169, “Actual possession is evidence of some title in the possessor, and puts the subsequent purchaser or mortgagee on notice as to the title which the occupant holds or claims in the property. (Generally, actual, visible and exclusive possession is notice to the world of the title and interest of the possessor in the property, and it is incumbent upon the subsequent purchaser or mortgagee to make diligent inquiry to learn the nature of the interest and claim of such possessor; and if he does not do so, notice thereof will be imputed to him.”

The rule just stated does not apply here, however, for the reason, as stated in the agreed statement of facts, that Downtain was in possession as a tenant when his contract of purchase was made. In Ashcraft v. Tucker, 136 Ark. 447, it was said: “It has been held by this court that delivery of possession of land to the vendee under a parol contract of purchase takes the case out of the operation of the statute of frauds, and that possession alone is sufficient part'performance of an oral contract for the sale of land to sustain a decree for a specific performance. But possession alone, in order to be sufficient, must be taken pursuant to the contract. Where the alleged purchaser is already in possession as tenant, and merely continues in possession after making the contract, that alone is not sufficient to take the case out of the operation of the statute. Phillips v. Jones, 79 Ark. 100, and Moore v. Gordon, 44 Ark. 334. In the instant case Tucker was the tenant of Ashcraft, and merely continued in possession of the land after making the oral contract for the purchase of it. Under the authorities just cited, this was not sufficient part performance to warrant specific performance.” In addition to the authorities cited in appellant’s brief, see also Rugan v. Vaughan, 142 Ark. 176; McNeill v. Jones, 21 Ark. 277.

It follows therefore that the decree of the court dismissing the complaint must be reversed, because the error thereof appears from the face of the record; but it does not follow that the cause should be remanded with directions to foreclose the mortgage, as appellant insists. We have an anomalous record before us. The mortgage sought to be foreclosed is not copied into the record; but it does appear that most, if not all, of the exhibits which were supplied by the petition of appellee are items dated subsequent to the date of the mortgage, and it is insisted that these were negotiable instruments which the bank discounted and placed to the credit of its mortgagor, after the execution of the mortgage, whereas, in fact, the mortgage secured only the indebtedness then existing, and not any indebtedness subsequently created, and that this fact would appear if the mortgage were before us. As this may be true, although the case was not disposed of on that theory in the court below, as appears from the agreed statement of facts, we remand the cause for further proceedings, and it is so ordered.