author: Hart, O. J.

text:
    Marable v. State.
    Opinion delivered November 21, 1927.
    1. Counties — pees of county clerk. — Fees and emoluments of the county clerk are public funds, and it is his duty to report them to the county court and to pay into the county treasury all except the compensation allowed him by Acts 1915, c. 211.
    2. Counties — payment of clerk’s fees into county treasury.— Constitution, art. 16, § 11, providing that no moneys arising from a tax levied for one purpose shall be used for another purpose, is not violated by requiring the county clerk to pay into the county treasury a portion of fees allowed him by the State, as well as a part allowed by the county for making out taxbooks.
    3. Counties — jurisdiction to surcharge clerk’s accounts. — After two years and before the expiration of five years from the time of settlements by the county clerk with the county court under Acts 1907, p. 953, § 10, the chancery court is the proper forum’ in which to bring suits to surcharge the clerk’s accounts and settlements with sums collected in excess of the compensation allowed him by Acts 1915, c. 211.
    4. Counties — pendency of appeal from void judgment. — Pendency of the county clerk’s appeal to the circuit court from the county court’s judgment readjusting his accounts and finding the amount due the county from him, held not a bar to a suit in chancery court- to readjust his quarterly settlements made more than two years previous; as the county court and the circuit court on appeal had no jurisdiction.
    5. Evidence — report op audit of clerk’s books. — Under Crawford & Moses’ Dig., § 664, the report of the auditor, appointed by the State’ Comptroller under § 661 to audit a county officer’s books and accounts, is prima facie evidence of its contents.
    6. Evidence — report of audit of clerk’s books. — Crawford & Moses’ Dig., § 664, providing that the report of one appointed by the State Comptroller under § 661 to audit a county officer’s books and accounts shall be accepted as evidence in any court or tribunal, does not violate any constitutional provision.
    7. Counties — report of auditor as evidence. — Persons appointed by the State Comptroller, under Crawford & Moses’ Dig., § 661, to audit the county clerk’s books and accounts as authorized by § 662, being required to give bond under § 663, and to make audit under their official oaths, a copy of their report filed and certified as required by § 664 would be evidence against the clerk and his sureties, though the successor of the auditor dying before the completion of the audit did not go over deceased’s work in detail.
    8. Counties — -impeachment of state audit. — In a suit under Acts 1907, p. 953, § 10, to surcharge a county clerk’s accounts and •quarterly settlements for sums collected in excess of the compensation allowed him by Acts 1915, c. 211, his testimony that he made out the amount due for taxbooks in accordance with the custom of his predecessor would not impeach the report of the state auditorial department, based on examination of the tax-books themselves, under Crawford & Moses’ Dig., §§ 661-664.
    9. Counties — accounting of fees by clerk. — The fact that part of the fees and emoluments allowed the county clerk for making out and extending taxes on the taxfoooks is paid by the State does not relieve him from the responsibility of accounting for such part in his quarterly reports to' the county court, under Acts 1907, p. 953, § 10.
    Appeal from Columbia Chancery Court; J. ' Y. Stevens, Chancellor;
    affirmed.
    statement by the court.
    Two separate suits were brought by the State of. Arkansas, for the use and benefit of Columbia County, to recover from John Marable, and the sureties on his bond as county clerk, sums alleged to have been collected by him under color of his office in excess of the compensation allowed him by law and which have not been accounted for by him in his quarterly settlements with the county court. The first suit was to surcharge his accounts for the years 1921 and 1922, and the second suit was to surcharge his quarterly settlements for the years 1923 and 1924.
    The cases were brought in chancery on the ground that the county clerk, in his quarterly settlements, had failed to change himself with the full amount allowed him under the statutes, as county clerk, for extending the taxes on the taxbooks during the aforesaid years, and to account for other fees. There was an audit of his account by the Auditorial Department of State, in accordance with the provisions of the statute creating that department and prescribing its duties. Auditors, duly qualified and acting pursuant to statutory authority, were sent by the State Auditorial Department to Columbia County to make a detailed examination of the accounts of the county clerk for the years designated. These auditors made a complete and detailed examination of the accounts of said county clerk, and made a detailed report of their findings -to the Auditorial Department. The principal items for which the county clerk had failed to charge himself were sums allowed him under the statute as county clerk for extending the taxes on the taxbooks during said years. The statement of accounts made by the Auditorial Department was full and complete, and showed exactly what fees were collected by the county clerk and what fees should have been collected by him during the aforesaid years. A copy of this report, duly certified'to, was filed with the county clerk of Columbia County, and what was called the original of the report was filed with the circuit judge of the district in which Columbia County is situated.
    The conclusions of law reached by us, and which will be stated in the opinion in this case, render it unnecessary to make a more detailed statement of the evidence in the case, because the findings of fact made by-the chancellor were based upon the report of the Auditorial Department, and the items embraced therein are not impeached by any evidence in the record. Hence no useful purpose could be served by setting out this report in detail or reviewing it in the same way.
    A decree of the chancery court was entered of record, based on its findings of fact in the report of the State Auditorial Department, and to reverse that decree appellants have duly prosecuted this appeal.

      McKay & Smith and J. E. Hawkins, for appellant.

      Walter L. Brown and Paul Cnmvpler, for appellee.
   Hart, O. J.

The compensation of the county and probate clerk of Columbia County was fixed by the Legislature of 1915 by act 211, which amends former acts relating to the same subject. Acts of 1915, p. 829. Section 2 of this act reads as follows:

“That, out of the fees and emoluments collected by him, the clerk of the county and probate court of Columbia County shall be entitled to have and receive as his salary the sum of one thousand eight hundred dollars per annum,; provided said fees and emoluments amount to more than one thousand eight hundred dollars, he shall have and receive one-half of the fees and emoluments collected by him in excess of one thousand eight hundred dollars per annum.”

The settlements of the county clerk are provided for in § 10 of act 377 of the Acts of 1907, which is found in Acts of 1907, page 951, and which reads as follows :

‘ ‘ The clerk of the circuit court and ex-officio recorder, the county and probate clerk, the sheriff, the collector of taxes, the assessor of taxes, and the treasurer -of said county, shall charge and collect the ¡same fees and commissions as are now or may be hereafter allowed them by ■law, and they shall each, by the fifth day of each quarterly term of the county court for Columbia County, held in January, April, July, October, of each year, file a sworn report showing the amount of all fees and commissions collected by them, respectively, up to and including the last day of the preceding quarter, and make settle■ment with said court by paying all amounts collected by them during the preceding quarter in excess of the salary and fees herein allowed, into the county treasury, and file the treasurer’s receipt therefor as a voucher in said settlement, and, in such settlement, said officers aforesaid shall each be chargeable with and liable for all fees and commissions that it was the duty of said officers to collect, whether the same was collected or not. Provided, a final settlement shall be made by each above named officer on the first day of November, 1910, and every two years thereafter, and shall include a tabulated statement of the entire term and an itemized statement for the month of October preceding such last settlement.”

Section 12 of the original act provides that the officers are required to keep a record of all fees and commissions earned and received by them from any source whatever, and that this record shall show the source from which such fees and commissions are received.

Section 33 makes it a penalty for the officers to fail to comply with the provisions and requirements of the act.

It is first earnestly insisted by counsel for appellant that the fees and emoluments received by the clerk are not received by him as money of the county, but are the amounts allowed him for his compensation, and that lie does not. owe the county anything until his compensation is first received by him. We do not agree with counsel in this contention. The county clerk is a public officer, and the fees and emoluments of his office are public, funds. This will become apparent when all the sections of the statute in reference to his compensation and duties relating to the collection of fees are read and considered together. It will be noted that he is required to keep a record of all fees collected by him showing the origin and source of such collections. The evident design of the Legislature was to constitute all the money collected by the officers designated in the act public funds and to make such officers account for such funds. It will be observed that the officers are required to make quarterly settlements with the county court and to file a sworn report showing the collection of all fees and commissions collected by them, and requiring them to pay into the county treasury all amounts collected by them in excess of the salary and fees allowed. We think the better view is to hold that the fees and emoluments of the various officers are public funds, and that it was the duty of the county clerk to make the reports required by the statute, and that it was his duty to pay into the county treasury all of the fees, except the compensation allowed him under the statute.

Under the holding of the chancery court, the county clerk was required to pay into the county treasury a portion of the fees allowed him by the county for-making out the taxbooks and also that part allowed him by the State for making out the taxbooks. It is claimed that this course is in violation of art. 16, § 11, of the Constitution, which provides, in effect, that no moneys arising from a tax levied for one. purpose shall be used for another purpose. We do not think that this provision of the Constitution would be violated by requiring the county clerk to pay into the county treasury any portion of the fees allowed for making out the taxbooks. His act in paying the money into the county treasury would end his responsibility in the matter, and he would not be concerned about any diversion of the funds. As we have already seen, the funds were public funds, and, after receiving his compensation, he was required to pay the balance of the fees and emoluments of office collected by him as county clerk into the county treasury, and he would be liable to the county for a failure to comply with the provisions of the statute.

It is next insisted that the chancery court was not the proper forum in which to bring the suit. We think this, contention of counsel is settled against him by the decision in Sims v. Craig, 171 Ark. 492, 286 S. W. 867. Under the facts presented, the matters embraced in the present suit occurred after the expiration of two years and before the expiration of five years from the time of the various settlements made by the county clerk with the county court. In the case just cited, the court expressly said that, after two years had expired for the county court to correct the officer’s settlement, the chancery court could, within a period of five years from the date of the original settlement with the county court, surcharge and correct the accounts of the county, treasurer for errors caused by inadvertence, accident or mistake.

In this connection it may be stated that the first of the two present suits was filed by the Attorney General in July, 1927. Prior to this time the county court had undertaken to adjust the settlements of John Marable as county clerk, by reason of fraud and mistake alleged to have been practiced upon the county court in filing and securing confirmation of his quarterly reports. On the 28th day of December, 1925, the county court rendered judgment against Marable, readjusting his accounts and finding the amount due the county by him. Marable prosecuted an appeal to the circuit court from the judgment of the county court, and the appeal was pending at the time of the institution of the present suits by the Attorney General. It is earnestly insisted that the pendency of this appeal is a bar to the institution of the present suits in the chancery court. We do not think so. The proceeding in the chancery court to readjust the quarterly settlements of the county clerk was made more than two years after the quarterly settlements were made in the county court, and, under the. decision in the Sims case, just cited, the chancery court would have jurisdiction to correct the settlements, instead of the county court. The presumption is that the circuit court will decide the case according to law, and it necessarily follows that the judgment of the county court will be reversed, because it lacked jurisdiction in the premises. Of course, if the appellant should not prosecute his appeal, the judgment of the county court would remain upon its records; but, the judgment being void for lack of jurisdiction, because the record shows on its face that more than two years had elapsed before the county court undertook to readjust the accounts, it could not injuriously affect the county clerk. Taylor v. Bay St. Francis Drainage Dist., 171 Ark. 285, 284 S. W. 770.

It is next insisted tliat the court erred in basing its finding against appellants upon the report of the State Auditorial Department. The Legislature of 1917 created the State Auditorial Department and prescribed its powers and duties. Crawford & Moses’ Digest, chapter 14, § 661, provides that any county judge may call upon the State Auditorial Department for an audit of the books and accounts of the county officers. In such, event it is provided that it shall be the duty of the State Comptroller to appoint one or more experienced auditors for the purpose of making such audit.

Section 662 provides that the Comptroller or any auditor appointed by him shall have the power to make a thorough examination into the affairs of any county officer, when called upon by the county judge of such county to do so. The section also provides that they shall have access to any reports, books, accounts, papers and documents concerning the office undergoing such an audit. The auditing officers are also authorized to examine, under oath, any officei', agent, clerk or other person touching the matters inquired into and examined, and to compel the attendance of any person in the State to testify under oath before him in relation to the affairs of such office or officers.

Section 663 provides for bonds to be furnished by such auditors.

' Section 664 provides that the auditor making such audit shall make a full, detailed and certified report in triplicate and forward the same to the State Auditorial Department. A copy of the report is to be filed with the clerk of the county, and it shall be open to the inspection pf the public, and the section expressly provides that, when certified by the custodian thereof, said report shall be taken and accepted as evidence in any court or tribunal.

Thus it will be seen that the report in question is made by the provisions of.the statute evidence of the facts recited in it. Such report is therefore primia facie evidence of its contents, and the statute making' it evidence is not violative of any. provision of our Constitution. The Supreme Court of Massachusetts, in a well-considered opinion, held that a statute of that State making the report of an auditor prima facie evidence upon such matters as were embraced in the order to him is constitutional. Holmes v. Hunt, 122 Mass. 505, 22 Am. Rep. 381.

It is contended, however, that the chancery court erred in receiving the report as evidence under the facts disclosed by the record. It is pointed out that two auditors were engaged in making the audit, and one of them died before the audit was completed. Another auditor was appointed in his place, and continued the examination of the records of the county clerk, but did not go over the early work of the former auditor in detail. Hence it is contended that the case is ruled by Rouw v. Arts, 174 Ark. 79, 294 S. W. 993. We do not agree with counsel on this point. In the case relied upon the audit was made by private accountants, and the proof of the correctness of it should have been made by the persons making the audit. In the case at bar the audit was made pursuant to 'the provisions of the statute, and the auditors acted ip their official capacity in making it. They were required to give bond, and made the audit under the sanctity of their official oaths. Under these circumstances the statement of the accounts filed by them and certified according to law was a statement of all of them under their official oaths while in the performance of their official duties, and the copy filed in the office of the county clerk would be evidence, not only against him but his sureties. The chancery court could take the facts shown by the record, certified according to law, as the amount due by the clerk and his sureties, unless the accuracy of the items contained in the report was impeached by them. No serious offer was made by the county clerk to show that the items included in the report of the Auditorial Department were not correct. It is true that he testified that he made .out the amount due for taxbooks in accordance with the custom of his predecessors in office. Such testimony could not, in the nature of things, impeach the report of the Auditorial Department, which was based upon a detailed and accurate examination of the taxbooks themselves for the years in question. It is true that, under our statute, a part of the fees and emoluments allowed the county clerk in making out and extending the taxes on the taxbooks is paid by the State, but this did not relieve the county clerk from the responsibility of accounting for the part paid.him by the State in his quarterly reports. The amount was not paid him in his private or individual capacity by the State as for services rendered it. By the terms of the statute, all the fees and emoluments of the office were public funds, and the officers embraced in the act were only allowed to retain a part of these funds for their salary and compensation, and they were expressly required to account for all the fees and emoluments and commissions received by them in their quarterly reports, and, after deducting the amount of their compensation, to deposit the balance in the county treasury. This the county clerk failed to do in the present case, and because the report of the State Auditorial Department was not impeached by evidence introduced in behalf of the county clerk, the chancery court was warranted in adopting it as a basis for its finding of facts in the case.

No useful purpose could be served by setting out in detail the items embraced in the report of the Auditorial Department or in discussing the various items in detail. It is sufficient to say that it contains items omitted from the quarterly settlements of the county clerk sufficient to warrant the chancellor in finding the amounts due by the county clerk to the county as set out in the decree of the chancery court.

The result of our views is that the decree of the chancery, court was correct, and it will therefore be affirmed.


source: Caselaw Access Project

author: Kirby, J.

license: Public Domain

text:
    N. Friedman & Sons Cloak Company v. Hogins.
    Opinion delivered November 28, 1927.
    1. Bankruptcy — state insolvency act. — Where, under Crawford & Moses’ Dig., §§ 5885-5893, relative to insolvent debtors, an insolvent debtor had proceeded to have a receiver appointed to take charge of his property and distribute it among his creditors, held, in a suit by a creditor who had not filed his claim with the receiver, that such State insolvency act was binding on creditors until the Federal court’s bankruptcy jurisdiction was invoked under the Bankruptcy Act of 1898.
    2. Insolvency — garnishment against receiver. — Where an insolvent debtor had a receiver appointed to take charge of his property and distribute it among his creditors under the State insolvency act, such property in the hands of the receiver is not subject to garnishment by a creditor of the insolvent who had not submitted his claim to the receiver.
    Appeal from Pope Circuit Court; <7. T. Bulloch, Judge;
    affirmed.

      Clinton R. Barry, for ¡appellant.

      Robert Bailey, for appellee.
   Kirby, J.

Appellants brought this suit against A. M. Berry, a nonresident of the State at the time, and had a garnishment issued against Lucile Hogins, who had been appointed receiver in an insolvency proceeding under the State laws, brought on the 19th day of August, 1926, by the said Berry against the Courier-Democrat et al., in which he had been declared an insolvent, and a receiver appointed to take charge of his assets for the benefit of his creditors. The receiver took charge, made an inventory, and sold the merchandise of the insolvent debtor, and placed the proceeds, in the bank.

All the creditors of the insolvent debtor, Berry, except the appellants, filed their claims with the chancery court for allowance. On September 19, 1926, appellants brought this suit in the circuit court against Berry, who was a nonresident, having left the State after the ¡appointment of the receiver, and had a garnishment issued against said receiver. The receiver filed a demurrer to the complaint, which was sustained, and, upon appellante declining to plead, further, the suit was dismissed, and. from the judgment this appeal is prosecuted.

It is contended by appellants that the Federal Bankruptcy Act of 1898, in force, suspends and puts in abeyance the insolvency statutes of the State of Arkansas providing for the distribution of the assets of an insolvent debtor among his creditors, §§ 5885-5893, C. & M. Digest of the Statutes, and that the order of the chancery court appointing the receiver was void, and in no wise affected its rights under the law to subject the assets of this insolvent debtor to the payment of their debt, and that the court erred in holding otherwise.

' The court held, in Hickman v. Parlin-Orendorff, 88 Ark. 519, 115 S. W. 371, that the insolvency laws of Arkansas were suspended b3r the Bankruptcy Act of Congress of 1898 and have since that date remained in abe3mn.ce, so far as the3r relate to the same subject-matter and affect the same persons as the ¡act of Congress still in force. This holding* was reaffirmed in Roberts Cotton Oil Co. v. F. E. Morse & Co., 97 Ark. 513, 135 S. W. 334, which was distinguished because it did not affect the same persons as the bankruptcy act.

This court held, however, in a recent case, International Shoe Company v. Pinkus, 173 Ark. 316, 292 S. W. 996, that, in a jn’oceeding by the insolvent debtor for'the disposition of his assets under the laws of the State, through the chancery court, although: it constituted an act of bankruptcy, it would be binding and effective unless and until the jurisdiction of the Federal court was properly invoked, saying:

“Simply because an insolvent debtor nnry go into the bankruptcy court, or may be forced to go b3r a petition of creditors, does not prevent him from disposing of all his property for the benefit of all of his creditors, unless the jurisdiction of the bankrupt court is properly invoked, and we therefore conclude that, unless and until the jurisdiction of the bankrupt court is property invoked, the voluntary agreement of the creditors is binding.”

The present case is ruled by the Pinku-s case, supra, and, under its (authority, the majority i© of opinion that no error was committed in holding the complaint of plaintiff insufficient and dismissing its garnishment and cause of action. The judgment is affirmed.


author: Mehaeey, J.

text:
    Cammack v. Runyan Creamery.
    Opinion delivered November 28, 1927.
    1. Usury — sufficiency of evidence. — Evidence of an agreement to pay one undertaking to make a loan of $15,000 $100 a month for services as general manager of debtor until the loan was paid in addition to 9 per cent, interest, held sufficient to sustain a finding of usury.
    2. Usury — burden of proof. — The 'burden of proof is upon the party who pleads usury to show clearly that the transaction was usurious.
    3. Usury — agreement for illegal rate. — -To constitute usury, there must he an agreement between the parties by which the borrower promises to pay, and the lender knowingly receives, a higher rate of interest than the statute allows for the loan or forbearance of money.
    4. Usury — presumption.-—1The wrongful act of usury will not be. presumed or imputed to the parties, and will not he inferred, where the opposite conclusion can be reasonably reached.
    5. Appeal and error — conclusiveness of chancellor’s finding.— The chancellor’s finding of fact will not be reversed on appeal, unless against the preponderance of the evidence.
    Appeal from Pulaski Chancery Court; John 7?. Marti/necm, Chancellor;
    affirmed.

      L. P. Biggs, for appellant.

      Moore, Gray, Burrow & McDonnell, for appellee.
   Mehaeey, J.

The appellant, plaintiff below, filed suit in the Pulaski Chancery Court against the appellee, alleging that the appellee was a corporation, and that the Pulaski Ice Company, in August, 1922, offered to employ plaintiff as general adviser and financial adviser of said company and its operations, at a salary of $100 a month for a period of two years, or until a certain prospective loan of $15,000 Was paid, provided said plaintiff .would procure a loan of $15,000 to said company on the security of certain of its property. A copy of said offer is -hereto attached and made part of the complaint.

Plaintiff alleged that the offer was accepted, and that plaintiff succeeded in procuring a loan of $15,000, and that said company executed and delivered to said lender its notes, aggregating $15,000,' and a mortgage on its corporate property as security therefor, and received from said lender the isiurn of $15,000. That, upon the completion of said loan, the said Pulaski Ice Company became bound to plaintiff as set out in said offer. That the plaintiff has at all time been ready, willing and able .to render service as general supervisor of said business, and .stood ready at all timéis to render service when 'called on by said Pulaski Ice Company. That plaintiff has received from said company on said contract the sum of $400 in payment of his services for September, October, November and December, 1922. That no amount has 'been paid on said account since December, 1922.

Plaintiff then alleges that the loan to the ice company had been paid off on or about January 1, 1924, and, according to the contract, his employ terminated two years after date of said contract. That the Pulaiski Ice Company is indebted to him for two years’ salary, less the sum of $400, which was paid as aforesaid, leaving a total of $2,000. That the Pulaski Ice Company owned considerable property, describing same, and, about January 1, 1924, the defendant, Runyan Creamery, purchased all the assets of the Pulaski Ice Company and aissumed all the liabilities of the said ice company. That the Pulaski Ice Company and the defendant, Runyan Creamery, failed to comply with §§ 4870 to 4872, inclusive, of Crawford & Moses’ Digest, and as amended by act 374 of the Acts of 1913. That all of the property of the ice company was sold and transferred in bulk, otherwise than in the ordinary course of business and tdade, and was transferred and sold to the defendant without giving this plaintiff creditor ten days ’ notice before the sale thereof, as required (by law. That the defendant, Runyan Creamery, holds all of said property as receiver, and is accountable to plaintiff as such for all property coming into its possession from said Pulaski Ice Company. He prays for judgment for $2,000, with interest at 6 per cent, per annum, and costs.

The offer attached to plaintiff’s complaint is as followls:

“Little Rock, Ark., Aug. 11, ’22.
“Mr. W. D. Cammack,
821 Southern Trust Building,
Little Rock, Arkansas.
“Dear sir: We desire to negotiate a loan on the Pulaski Heights company property for $15,000, payable $5,000 per year, beginning September 1, 1923. This loan to be secured by first lien on the entire property of said company. Por this loan we propose to pay 7 per cent, interest per annum, plus 2 per cent, brokerage fee.
“If you can negotiate this loan for us on this basis we are willing and hereby propoise to pay you $100 per month for a general supervision of the property until the foregoing loan is paid in full. It is understood, however, that, in the event that this loan is paid before the expiration of two years, you are to receive $100 per month for a period of two years anyway, but, after the expiration of the two years, the $100 per month, as herein stated, shall terminate upon the payment of the balance due on the loan.
“This proposal is made subject to immediate acceptance, and shall not be binding upon the company if, for any reason, it is not accepted by you by 1 o’clock in the afternoon of August 12.
“Yours very truly,
“Pulaski Heights Ice Co.
“By W. P. Moody, President.”

Plaintiff thereafter filed an amendment increasing his demand to $2,600.

The defendant answered, denying all the material allegations of plaintiff’s complaint, and alleged that the ice company borrowed from either the plaintiff or from his brother-in-law, S. L. White, or from both of them, the sum of $15,000, and delivered to S. L. White a mortgage on its property to secure said notes. That the ice company paid, in addition to the 7 per cent, either to jS. L. White or the plaintiff', or both of them, a brokerage fee of three hundred dollars. That, in addition, to the brokerage fee, plaintiff’ demanded and the Pulaski lee Company agreed to pay plaintiff $100 per month for a period of two years, or until said loan of $15,000 was fully paid. That no employment or services of the plaintiff were contemplated, and the plaintiff rendered no services to the Pulaski Ice Company as general supervisor, financial adviser, agent, or in any other capacity, but that said $100 per month was simply an additional sum or bonus demanded by plaintiff as compensation for the use by the Pulaski Ice Company of the principal sum of $15,000. That the arrangement by which plaintiff was mentioned as financial adviser of the Pulaiski Ice Company at a s'alarv of one hundred dollars per month, was simply a cloak and a device to cover an usurious transaction. That either plaintiff was the principal lender of the money, or S. L. White was his agent, or ¡¡4. L. White was the principal lender and plaintiff was his agent. That the plaintiff was not its agent. That if the Pulaski Ice Company had paid the plaintiff $100 per month in addition to interest and brokerage fee, it would have paid more than the lawful rate of interetet of ten per cent, per annum upon this loan, and the defendant therefore pleads usury as a complete defense to this action.

S. L. White testified that Cammack came to him with a letter from Mr. Moody, and stated that he was figuring on negotiating’ a loan for the ice company on their property, located out on Pulaski Heights. Thai witness wont into the legal phases of the transad ion, and drafted a somewhat different letter from the one. presented for signature of the Pulaski Ice Company, which he understood was accepted, and he then prepared the waiver of notice of meeting of the director®, the minutes for the stockholders’ meeting, the minutes for the directors’ meeting, a deed of trust to he executed by witness, with a note to be executed for $15,000. Witness prepared these papers. Later the papers were presented to witness, showing that the corporate meetings had been held, and the deed of trust and note. Witness then islsued Iris check on the People’s Savings Bank for $15,000, payable to the order of the Pulaski Ice Company. Witness stated that ho did not make the loan himself. That the $15,000 Ava's furnished by the People’s SaAdngs Bank. That Mi’. Cammack and AAdtness did not borroAV the money from the People’s 'Bank. Witness did not guarantee the loan. That it Avas possible that Mr. Cammack made some sort of moral guaranty to the bank.

Witness then identifies the deed of trust and copies of minutes of stockholders’ meeting and directors.’ meeting and the coupon notes. The resolutions of the stockholders Avere introduced,’ authorizing1 the company to isisue notes and make the mortgage on the property, and also resolution that the board of directors Avas authorized t o employ W. D. Cammack as financial adviser of the property of the company for a period of three years, at a salary of $100 a month, the employment to cease at the expiration of two years, if the company can by that time arrange to liquidate all of its mortgage or bonded indebtedness.

Minutes of the directors’ meeting Avere also intro-, duced, showing authority to the president of the company to make a deed of trust to S. L. White and to execute the note, and authorizing- the president to employ W. D. Cammack as financial supervisor for three years at $100 per month.

W. L. Lenon. testified that he is now and Avas the president of the People’s SaA-ings Bank in 1922. He knew the parties. That he talked to Mr. Moody,' the president of the ice company; that Mr. Cammack told him that he made that loan, and that he wished to sell it to us. That the result of the conver station with Cam-mack was that the bank agreed to buy it on the guaranty of .himself and Mr. White. They were to guarantee it. Cammack told witness: that he was going to look after the affairs of the ice complany. He made the loan largely on Cammack’s guaranty that it would be paid and that he was going to see that the affairs of the concern would be so operated that it would ¡be promptly taken care of. The last note was paid January or'February, 1926. Witness testified that the bank was looking to the property, and that, if the property didn’t make it, for Mr. Cam-mack to take care of it, and that the ¡bank would not have made the loan on the property alone.

Witness further testified that they bought the loan, which was secured by a mortgage on that property, but with the additional guaranty that it would be taken care of.

W> D. Cammack testified that he- was interested in the improvements and developments, in that part of town. That Mr. Moody started an ice plant. Witness, discussed it with him before the foundation was well under way. He tried to sell witness stock, -and they discussed the different features. He saw_ Mr. Moody at the bank, and Moody told him, briefly, that some of the stockholders had fallen down on him, or subscribers of stock, and that he Avas in need of funds. Witness displayed some interest, and lent Muody words of encouragement, and suggested that he come to the office for another conference. The}7 went into the physical property rather closely, and it finally resulted in a statement to Mr. Moody that witness thought he could negotiate and arrange for this money that he seemed so in need of, and work out a proposition as stated in the letter. Witness did not loan this money. Never had five cents invested in it; did not guarantee the payment of it, strictly speaking, to Mr. Lenon. He did assure him, however, that he had, by action of the board of directors and stockholders of the ice plant, representation of the company during the life of this indebtedness, and that he would stay in personal touch with it and see that he got his money. He testifies as to the reason for his handling the matter in that way. He may have stated to Mr. Lenon that Mr. White had made the loan, and that the papers were completed and passed on.

Witness had Mr. Lenon agree to take it, and had Mr. White issue a check on the People’s Bank in payment -of the notes. The check was only charged to Mr. White as a bookkeeping transaction. It wais simply a transfer of this record. Witness had in mind at the time that the People’s Bank might not take the loan, and he might be able to transfer it to some other bank, and, so long as it was in White’s name, he was in a position to borrow at most any bank in Little Rock. Witness did not put five cents of his own money into the loan. He wlais not in a position to make any such loan. He did not guarantee to Mr. Lenon it would be paid. He represented to Mr. Lenon he was interested in the ice company; that he had mortgages on their entire property, and, in addition, had the guaranty of Mr. Moody and Mr. Stanton that $5,000 of the loan would be taken by them personally in event the company defaulted. He also told Lenon that he was in touch with and would remain in touch with the company until the obligations were taken care of. He had an idea that he might have to do seme negotiations and maybe take over the management and keep it going until a deal could be worked out. Following this loan transaction he held many conferences with Mr. Moody and others up to the time Mr. Moody’s interest was sold on foreclosure. He conferred with Mr. Moose, who succeeded Mr. Moody, and, at the time Moody’s stock was sold, he was present, and, if it had been necessary, he would have bought the- same. Moose said that it was his intention to take care of these transactions, so he did not bid for the stock.

Witness stood ready to perform many services in connection with this transaction. He had many conferences with Mr. Moody about the affairs of the ice company and the conduct of it, its sales contracts, and the general run of the business. Afterwards there was a manager put in, and witness conferred with him many weeks, and listened to his troubles, and offered words of counsel and advice, and conferred with other people, at his suggestion, about the affairs of the ice company. That he was devoting his time when called upon, and stood ready and willing at all times. He told Mr. Moose that he stood ready to refinance the company if it was necessary. He stood ready to negotiate and help out any way that was necessary in order to keep faith. The service performed for the ice company would be necessarily for the benefit of this loan, but witness conferred with the company and many people about buying* stock in the company, and explained his. connection with it. All of those things were naturally for the benefit of the loan, tout they were also for the benefit of the ice company. The salary started concurrently with the loan. Witness was not a stockholder, and attended no stockholders’ meeting. The brokerage fee of $300 was paid to the People’s Bank. None of it went to White or witness. Witness discussed the affairs of the company with Moody and Moose.

W. F. Moody testified that he was the president of the Pulaski Ice Company in August, 1922. ' He was instrumental in organizing the company, and secured several subscriptions that were not paid, but went ahead and constructed the plant, with the understanding that these subscriptions would be paid at the time they needed the money. When tho plant was completed, some of the subscriptions were not paid, and it left them financially in pretty bad shape, and witness tried then every conceivlable place that he thought he might be able to get a loan on the property, without result, until he made this trade with Mr. Cammack. The arrangement with Mr.' Cammack was one of the terms and condition which he made in regard to the loan. It was contemplated that Mr. Cammack would act in an advisory capacity concerning financial matters whenever he was called upon. A financial supervisor at $100 a month was not needed by the Pulaski Ice Company after the loan was consummated. Mr. Cammack never rendered any service to the company other than in an advisory capacity.- Witness felt at liberty to call on Mr. Cammack at any time.

George D. Rumrill testified, in substance, that he was the manager of the Pulaski Ice Company from December, 1922, to March, 1924. That Mr. Cammack did not offer his services as financial adviser to- him. He did not attend any of the meetings of the stockholders or directors. The services of a financial supervisor were not needed during that period. Witness, after refreshing his memory, said he did have at least one conference with Mr. Cammack.

Miss E. Francis Rumrill testified, in substance, that she was secretary of the Pulaski Ice Company from the fall of 1922 to the same time in 1924, and kept its books during that time. During that time Mr. Cammack did not offer any financial advice. He did not come to the plant other than to buy ice cream. Mr. Cammack did not attend any directors’ or stockholders’ meetings.

I. 0. Runyan testified that he bought for the Runyan Creamery a controlling interest in the Pulaski Ice Company on February 1, 1924. At that time the Pulaski Ice Company owed Mr. White on the mortgage. The last note was paid in January, 1926. From February, 1924, to January, 1926, he had control of the company. Mr. Cammack did not offer any services as financial supervisor or fiscal agent. He performed no -service during that time.

The following letter was introduced, -by agreement:

“Little Rock, Ark., August 12, 1922.
“Mr. W. D. Cammack,
Southern Trust Building,
Little Rock,- Arkansas.
“Dear sir: I have just talked to Mr. Stanton with reference to our conversation of a few moments ago. He has agreed to indorse one of the $5,000 notes with me. In other words, then, this letter is a confirmation of our verbal agreement of this date, wherein you agreed to negotiate a $15,000 loan on the property of the Pulaski lee Company, secured by a first mortgage on the plant complete. The loan to bear 7 per cent, interest per annum, payable as follows: $5,000 paya ble September 1, 1923; $5,000 playable September 1, 1924; $5,000 payable September 1, 1925.
“In addition to the 7 per cent, interest per annum from date until paid, we agree to pay a brokerage fee of 2 per cent., or a total of $300 brokerage fee, and to pay you for general financial supervision, or as fiscal agent of the property, $100 per month for a period of two years, and thereafter until the loan aforesaid is paid in full, or until some other satisfactory arrangement shall have been made.
“Yours very truly,
“Pulaski Ice Co.,
“W. F. Moody, President.”

Mr. W. D. Cammack was then called as a Avitness again, and stated that he thought Mr. Rumrill’s memory was faulty, and that he conferred seA^eral times with him, and two instances were very distinct in his mind. One was the selling of some stock to Snodgrass & Bracy, or to some member of the firm. Witness saAV those gentlemen and discussed the matter with them at length; and also there was a transaction with Shoemaker-Bale. Witness did not borrow any money from the People’s Bank in connection Avith this transaction. The money came from the People’s Bank.

The question in this case is Avhether the agreement or contract betAveen the parties constituted usury. And, as contended by appellant, the burden of proof is upon the party who pleads usury to show clearly that the transaction was usurious. There must be an agreement between the parties by Avhich the borroAver promises to pay and the lender knowingly receives a higher rate of interest than the statute allows for the loan or forbearance of money, or such greater rate of interest must be knowingly reserved, taken or secured for such loan or forbearance. And tbe wrongful act of usury will not be presumed or imputed to the parties and it will not be inferred where the opposite conclusion can be reasonably and fairly reached. See Bryant v. CarlLee Bros., 158 Ark. 62, 249 S. W. 577, and cases cited there.

If the contract for service by Cammack, the agreement to pay him $100 per month, was a contract in good faith, intended as a payment for services performed and not as a device to hide usury, the contract would be valid. It would not be usurious. This, however, is a question that must be determined from all the evidence in the case.

The appellant contends that the loan was not made by him as principal, but was procured as agent of the Pulaski Ice Company. He argues that, even if it was made by appellant as principal, it was not usurious. The appellant contends that the loan was made by the People’s Savings Bank, and Mr. White testifies that he did not make the loan himself, but the People’s Savings Bank furnished the money.

Mr. W. E. Lenon, president of the People’s Savings Bank, testified that the bank did not make the loan. They bought a loan which had already been made.

It appears that the note and mortgage were made to Mr. White, and that the bank purchased the loan, as stated by Mr. Lenon, and that neither Mr. White nor Mr. Cammack put any of their money into it. What they did was to prepare the papers as if Mr. White was lending the money; arrange with the bank to take the loan, which Mr. Lenon says had already been made, and the papers were carried to the bank, and White gave his check on the People’s Savings Bank for the $15,000.

Appellant states in his brief: “Both testified they not only did not advance the money themselves, but did not even borrow the money from the People’s Bank”. But, as they say, the undisputed facts are that the deed of trust was drawn and the notes made payable to White; White drew his check on the People’s Savings Bank to the order of the Pulaski Ice Company, and indorsed the notes to the People’s Savings Bank without recourse. No matter where the money came from, the fact remains that the ice company made its note and mortgage to White, and, on the execution of this note and mortgage, received from White the money or the check for the money. The note was for $15,000, with 7 per cent, interest, and the proof shows that, in addition to this, interest, $300 was paid as brokerage fees, and that Mr. Cammack was to receive $100 per month for two years, or until the entire $15,000 had been paid by the ice company.

The appellant argues that the reasonableness of the contract must be tested by the condition existing at the time it was made, and states that Moody, the president and general manager of the ice company, had tried, as he testified, in every way to secure a loan for the company, without success. This was the condition, according to the evidence, when Mr. Cammack agreed to assist them in getting the $15,000. But apparently as a part of this transaction was the agreement to pay Mr. Cammack $100 per month, as above stated, and the letter from the Pulaski Ice Company to Mr. Cammack, introduced by the appellant, contains the following: “If you’can negotiate this loan for us on this basis we are willing and hereby propose to pay you $100 per month for a general supervision of the property until the foregoing loan is paid in full. It is understood, however, that, in the event that this loan is paid before the expiration of two years, you are to receive $100 per month for a period of two years anyway, but, after the expiration of the two years, the $100 per month as herein stated shall terminate upon the payment of the balance due on the loan.”

There is some little conflict in the testimony, but Mr. Cammack in his testimony does not claim that he performed any services, except he had numerous conferences, and not only discussed the matter with the president and manager, but had conferences'with some other people, and names at least two of them. Mr. Cammack also testifies that the salary started concurrently with the loan. That he was not a stockholder, and attended no stockholders’ meetings. As a matter of fact he was simply, according to the testimony, to act in an advisory capacity.

Mr. Moody, the president, was asked this question:

“Q. I will ask you if that arrangement was one of the terms and conditions which he made in regard to this loan? A. Yes; that was one of the terms under which the loan could be made.”

He then said it was contemplated that he would act in an advisory capacity concerning financial matters whenever he was called upon.

"When asked if a financial supervisor was needed after the loan was consummated, he stated that he did not think so. That Mr. Cammack never rendered any service other than in an advisory capacity. It is true, he testified, that he felt at liberty to call on Mr. Cammack at any time.

Mr. Rumrill, who was manager afterwards, testified that Mr. Cammack did not offer his services as financial adviser to him. That he did not attend any of the meetings of the stockholders or directors. After refreshing his memory, he testified that he did have at least one conference with Mr. Cammack.

Miss Rumrill testified that she was secretary from the fall of 1922 to some time in 1924, and that Mr. Cam-mack did not offer any financial advice. He did not come to the plant other than to buy ice cream. A financial adviser was not needed during that period.

Mr. Runyan testified that he bought a controlling interest in the ice company, and at that time the ice company was indebted to Mr. White on the mortgage. That he had control of the company from February, 1924, to January, 1926, and that Mr. Cammack did not offer any services as financial adviser or fiscal agent. He performed no service during that time.

Whether this contract for the services of Mr. Cam-mack was made in good faith and not as a payment for the loan of the $15,000 is a question of fact.

The appellant in his brief states: “Had the People’s Savings Bank received the $100 per month, it might be suggested that the transaction is tainted with usury. But the facts are that the bank made the loan. It only received the brokerage.”

The chancellor evidently found that the bank did not make the loan, because Mr. Lenon testified positively that the bank purchased the loan that had already been made. If the People’s Bank did not make the loan,'.and Mr. Lenon testified that it did not, but bought a loan already made, then either Mr. Cammack or Mr. White made the loan, and if, as stated by appellant in his brief, it would have been tainted with usury 'if the People’s Bank had received the $100 per month, certainly if the person who did lend the money received the $100 per month it would be tainted with usury.

The chancellor found for the defendant, and it is the settled rule of this court that, unless the finding of the chancellor is against the preponderance of the evidence, his decree will not be reversed by this court. There is no controversy or difference of opinion about the law. But whether the contract was usurious or not depends entirely upon the evidence.

And, since we cannot say that the chancellor’s finding- was against the preponderance of the evidence, the decree must be affirmed.


text:
    Henry v. Irby.
    Opinion delivered November 28, 1927.
    1. Appeal and error — proceedings after remandi of case. — A decree remanding a case with directions to enter a decree in accordance with the opinion, holding that the lower court erred in directing appropriation of the proceeds of the landlord’s sale of the crop to tenant’s debt for prior years, because there was no lien on the crop to secure such indebtedness, held• not to prevent either party from stating an account or pleading any claims they may have, as authorized by Crawford & Moses’ Dig., §§ 1194, 1195 and 1197.
    2. Appeal and error — former appeal as law of case. — So much of plaintiff’s cause of action as was adjudicated on the former appeal cannot be litigated again in the lower court, such decision being the law of the case.
    3. Appeal and error — remand of case. — Directions of the Supreme Court in remanding a case must be followed by the lower court.
    4. Appeal and error — conclusiveness of chancellor’s finding.— On appeals from the chancery court trials are de nova, but the chancellor’s findings of fact will be sustained unless they are clearly against the preponderance of the evidence.
    Appeal from Lawrence Chancery Court, Eastern District ; W. P. Smith, Special Chancellor;
    ¡affirmed.

      E. F. Duncan, for appellant.

      W. E. Beloate and H. L. Ponder, for appellee.
   Mehaeey, J.

This is the second appeal in this case. The case on former appeal is reported in 170 Ark. 928, 282 S. W. 3. On the former appeal the court stated that:

“It appears that Henry had cultivated the same land for the years 1919, 1920 and 1921, and that Mrs, Burel had carried over a balance accumulated during this pxbor tenaxxcy'into her 1922 aecouxxt. The testimony also shows that Henry agreed to give Mrs. Burel a chattel mortgage on his stock and his interest ixx the crop to secure this balance, but did xiot do so.”

The court also held that all the money in Bloom’s haxxds was derived from the sale of the 1922 crop, and that Mi’s. Burel had no liexx on this crop for any balance due prior to that year. That is, she had xxo liexx oxx the 1922 crop for the balaxxces carried over for the years 1919,1920 and 1921. Axxd it was therefore held, when the case was here oxx former appeal, that the court should not have directed the appropriation of the proceeds of the 1922 crop to the prior debt, as there was xxo lien thereon to secure the ixxdebtedness incurred thereon prior to 1922. This was the only questioxx decided by the court, except the decisioix with reference to the $1.25 note, axxd there is now no controversy about that.

It is true that the court reversed and remanded the case, with directions to the court below to enter a. decree in accordance with the opinion. It was not the intention, however, of the court to prevent either party from stating an account or pleading and litigatixxg axxy claixns that either might have. What the court evidently meant, and the only thing it could have meant, was that the court below was directed to enter a decree in accordance with this opinion with reference to the indebtedness accruing prior to the 1922 crop and giving a lien on the proceeds of the 1922 crop for the indebtedness incurred in 1922, and that there should be no lien for the prior indebtedness.

The facts are sufficiently stated in the case of Henry v. Irby, 170 Ark. 928, 282 S. W. 3.

The lower court complied with the mandate of this court if it followed the directions of this court with reference to the indebtedness and that part of it with reference to the indebtedness accruing that year, and followed the directions as to the $125 note. The appellant filed a statement of account, after the case was remanded; and the statute provides, paragraph 4 of § 1194, C. & M. Digest

“The defendant may set forth in his answer as many grounds of defense,' counterclaim and set-off, whether legal or equitable, as he shall have. Each shall be distinctly stated in a separate paragraph, and numbered. The several defenses must refer to the causes of action which they are intended to answer in a manner by which they may be intelligibly distinguished. ’ ’

And § 1195 of C. & M. Digest provides:

“The counterclaim mentioned in this chapter may be any cause of action in favor of the defendants or some of them against the plaintiffs or some of them.”

And § 1197 defines set-off to be: “A set-off may be pleaded in any action for the recovery of money, and may be a cause of action arising either upon contract or tort. ’

Appellant contends that the directions on the former appeal constituted the law of the case, and that the former decision is conclusive. This is correct, but the former decision in this case did not direct the court to enter any specific decree. It directed the court below to enter a decree in accordance with this opinion.

We think the decree is in accordance with the opinion on the former appeal.

In the case of Walker v. Goodlett, 109 Ark. 525, 160 S. W. 399, relied on by appellant, the conrt said: “This conrt having directed a decree to be entered in favor of the plaintiff, no issne of fact could be tendered thereon in the lower court.”

In the above case the court also said the only issue which the chancellor was called on by the pleadings to decide was whether or not the appellant here was under twenty-one years of age when he executed the deed. As that was the only issue, this court gave specific directions to enter a decree in favor of plaintiff, and, of course, the court below could not enter any other decree.

In the next case relied on by appellant, the court said:

“We gave special directions to enter a decree quieting the title of the petitioners to all except the one-acre tract, permitting further proof to be taken as to the description of that tract.” Gaither v. Campbell, 94 Ark. 329, 126 S. W. 1061.

The court in the above case called attention to the case of Chicago Mill & Lbr. Co. v. Osceola Land Co., 94 Ark. 183, 126 S. W. 380, where the court said: “So much of plaintiff’s cause was unadjudicated, and they were entitled to damages sustained by them from waste.”

In this case so much of plaintiff’s cause as was adjudicated on the former appeal cannot be litigated again.

As to the question settled in the former appeal, this court’s opinion is conclusive. The decision on those questions is the law of the case.

The next case relied on by appellant announced the rule as follows: “It is the duty of the chancellor to enter a decree in accordance with the directions of the Supreme Court.” Hopson v. Frierson, 106 Ark. 296, 152 S. W. 1008, 1009.

Appellant calls attention to a number of other cases. All of them announce the same rule.

The directions of this court must be followed by the lower court, but we do not think that the lower court in this case disobeyed the directions given by this court.

In appeals from the chancery court trials are cle novo, but the findings of fact made by the chancellor are allowed to stand, unless they are clearly against the prejjonderance of the evidence. Doane v. Rising Sun Mining Co., 139 Ark. 605, 213 S. W. 399; Hyner v. Bordean, 129 Ark. 120, 195 S. W. 3; Midyett v. Kirby, 129 Ark. 301, 195 S. W. 604; Houser v. Burchart & Levy, 130 Ark. 178, 197 S. W. 28; Ferguson v. Guydon, 148 Ark. 295, 230 S. W. 260.

The finding of the chancellor is not ag'ainst the preponderance of the evidence, and the case is therefore affirmed.


author: Mehaeby, J.

text:
    Sakaba Oil Company v. Parish.
    Opinion delivered November 28, 1927.
    1: Master and servant — personal injuries op servant — evidence. —Evidence held sufficient to support a verdict for an employee in an action for personal injuries caused by the master’s negligence.
    2. Appeal and error — conclusiveness of verdict. — The jury’s verdict supported by sufficient, evidence is conclusive.
    3. Corporations — evidence of corporate existence. — A certificate of the Secretary of State that -a corporation has complied with Crawford & Moses’ Dig., § 1826, and has been given a certificate authorizing it to do business in the State as a foreign corporation, is sufficient evidence of its corporate existence.

      4: Corporations — corporate "existence. — Defendant,-sued as a corporation and answering in its corporate name, without showing ■ that it is an unincorporated association or that the name was assumed by a partnership or person, admits its corporate existence. . "
    51. Appeal and error — harmless error. — Admission of testimony as to what defendant’s foreman, had told the witness was. not - prejudicial error where the foreman himself testified to the same fact. y,......";","'
    6. Appeal and error — invited error. — Defendant on-appeal cannot complain of an instruction containing an alleged prejudicial statement, if defendant asked for an instruction containing the- same -• ■ statement; ■ • '
    7, Appeal and error — harmless - error. — A case will not... -be reversed for giving an erroneous instruction .if the jury could not have been misled thereby.

      8. Damages — personal" injuries — excessiveness.—A verdict of $2,400 for the fracture of both bones of the leg, and pain still being- suffered, held not excessive.
    Appeal from Hot Spring Circuit Court; Thomas E. Toler, Judge;
    affirmed.

      John L. McGlellaoi and Busbee, Pugh & Harrison, for appellant.

      D. D. Glover, H. E. Farabee and Quiom. Glover, for appellee.
   Mehaeby, J.

Appellee, plaintiff below, brought suit against the appellant, defendant below, for personal injuries, alleging that the appellant is a corporation! organized and existing under the laws of the State of Louisiana, authorized to do business in Arkansas, and is engaged in the business of drilling oil wells and handling machinery used for that purpose; that, on the 21st day of December, 1925, appellee, who was in the employ of appellant, was working under orders and directions of appellant’s foreman, and was engaged in moving a cable from one well to another; that, after one end of the cable had been hauled along the ground by a team and attached to shaft, which was run by an engine, to wind the cable on the shaft, and thus to pull it from one well to the other, appellee was told by the foreman to put the men on the line so as to keep the cable straightened out and released from stumps and trees while it was being drawn along on the ground in the process of winding it on to the shaft; that, after plaintiff had walked about three hundred feet away from the engine, and had placed -the other men along the cable, appellant’s servant in charge of the engine negligently and carelessly and without warning started up said engine, thereby tightening up the cable while it was lying against a stump in the curved position, thus causing it to pull over the stump and strike appellee on the leg with great force, breaking both bones of his leg; that he was taken to the hospital, where he remained several days, and suffered severe and excruciating pain of both body and mind, and that he ivas thus made a cripple for life, and still suffered from said injuries. He asked for damages in the sum of $3,000.

The appellant answered, denying all the material allegations, and denying that it was a corporation.

The evidence offered by appellee tended to show that, when he went ont on the line, the engine was not running, the cable was not moving, and that it was the understanding that the engine w;ould not be started without a signal; that no signal was given; that the engineer, without signal and without warning, negligently started the engine, tightened the cable, and thereby caused it to hit appellee on the leg, breaking his leg, as alleged in his complaint.

The undisputed evidence showed that Lantz was the foreman, and had directed the appellee and other employees to get out on the line and keep the kinks out of the cable.

Appellant’s testimony tended to show that he could see only one of the men, but that man signaled him to start the engine, and he then kept on a continuous pulling until the accident.

There is some conflict in the evidence, but the jury’s finding on the facts is conclusive as to the facts, since there was sufficient evidence to support its verdict.

The appellant’s first contention is that there was not sufficient proof that the appellant was a corporation. We do not agree with the appellant in this contention. It was alleged that the appellant was a foreign corporation organized under the laws of the State of Louisiana. The appellant, in its answer, denies that it was a corporation duly organized under the laws of the State of Louisiana. It admits that it is engaged in drilling- oil wells and handling machinery for that purpose, and employing laborers.

The appellee introduced in evidence the certificate of the Secretary of State, which stated, among other things, that the appellant was a corporation organized under the laws of the State of Louisiana, and was issued a certificate of authority to do business in the State of Arkansas on the 23d day of July,.1921, and that said corporation designated Mr. H. P. Cottingham of El Dorado,' Arkansas, as their agent, upon whom service of process may be. served, and did in all ways comply with the law in order to secure said certificate of authority.

The law provides how a foreign corporation may be authorized to do business in this State. Among other things, it shall file in the office of the Secretary of State a copy of its charter or articles of incorporation or association, or a copy of its certificate of incorporation, duly authenticated and certified by the proper authority, etc. According to the certificate of the Secretary of State, the appellant complied with this law, and was doing business in the State of Arkansas under the authority given it after complying with the law, as provided in § 1826 of Crawford & Moses ’ Digest.

The other section of the Digest referred to by appellant relates to domestic corporations alone. This company complied with the law prescribing how foreign corporations might do business in this State. The certificate introduced showed that it had complied with the law, and, of course, a partnership or a person other than a corporation would not have to comply with this law, but could do business in Arkansas just as a resident or citizen of this State could. The filing of its articles as certified to by the Secretary of State, and asking to do business in the State of Arkansas as a corporation, is shown by the Secretary of State’s certificate. In addition to this, at least one witness testified that he understood that the appellant was a corporation. Appellant’s attorney referred to it during the progress of the trial as a corporation. Of course, calling it a corporation during the trial would not be proof that it was, because the attorney might refer to it in that manner thoughtlessly.

This'appellant appeared in court, filed a motion for continuance and an answer, appearing in the suit that was brought against it as a corporation. It is true it denied in the answer that it was a corporation organized under the laws of the State of Louisiana, but the very fact of appearing and answering in its corporate name, without showing that it was an unincorporated association,- or a name assumed by a partnership or a person, is, we think, an admission of its corporate existence.

It lias been said:

“The rule then is that a corporation, by appearing in a suit which has been brought against it, admits its corporate existence, and estops itself of denying the same. * * * But a party may not come into court and deny his own existence. He may deny his' liability to suit, Ms power to act, or responsibility for his actions; but, coming in, he admits that he exists, so that, when a bill of particulars is filed, stating a cause of action against an alleged corporation, if the party upon whom service is made comes in, and pleads, and goes to trial as the ■defendant sued, there is no need of the plaintiff’s proving that it is the defendant, and that it exists. The defendant thus coming in has admitted its own existence. It will be observed that the present case is not one in which the. defendant corporation makes answer, by special plea or otherwise, that it has ceased to exist, or that it has been dissolved. Its denial is that it ever existed. This it cannot do while appearing and answering as the corporation named as the defendant, and whose liability is soug'ht to be enforced.” Perris Irr. Dist. v. Thompson, (C. C. A.) 116 Federal Reporter 833.

This court, in passing on a similar question, said:

“The court allowed appellant to introduce this certificate over the objection of appellees, but, in finally submitting the case to the jury, the court gave instructions telling the jury that they must return a verdict for defendants unless they found from a' preponderance of the evidence that the laws of this State had been complied with. * * * The effect of the court’s rulings was to first hold that the certificate of the Secretary of State was admissible, and later, by its instructions, to take that evidence away from the jury or weaken its force, because, if the certificate was admissible, it made a case of undisputed evidence as to the right of appellant to do business here. * * * On the other hand, it seems equally clear that, if the statutes of the State, which prescribe the terms upon which corporations shall do business in the State, direct the issuance by the Secretary of a certificate of authority to do business, then such certificate is the best evidence of such authority, and must be received in evidence by the courts when the right of a corporation to do business here is called in question. * * * It is not conceivable that the Legislature intended to prescribe two methods of proving the authority of a corporation to do business in this State, and the method impliedly prescribed by the act of 1907 and expressly by the act of 1911, are identical, and afford the exclusive' method, which is by a certificate of the Secretary of State, and not a certified copy of the articles of incorporation and other documents required to be filed in that office.” J. R. Watkins Medical Co. v. Martin, 132 Ark. 108, 200 S. W. 283, 2 A. L. R. 1230.
“In an action by or against an alleged corporation, plaintiff is not bound to prove its corporate existence or that of defendant, as the case may be, unless an issue as to corporate existence is properly raised by the pleadings ; and if a defendant corporation demurs, answers, ox otherwise appears generally to the action, its corporate existence is thereby admitted, and need not be proved.” 14 C. J. 163.

It is also said, in speaking of making a prima facie case:

‘ ‘ On the other hand, it is generally sufficient to meet the collateral attack by showing a de facto corporate existence or a prima facie estoppel when an action is brought for relief with respect to contracts or dealings by plaintiffs with a body claiming to be a corporation. * * * And it is generally held that there is such presumption of corporate existence, unless it is rebutted by the facts, where an association has contracted in a name or a style usual to corporations, and which discloses no individuals.” 14 C. J. 164.

Since foreign corporations are authorized to do business in Arkansas by a compliance with the laws of this State, prescribing the manner in which they may enter the State and do business, and their e laws apply to’f oreign corporations alone, and they require- the filing of the articles with the Secretary of State, the certificate of the Secretary of State that this has been done and that a certificate has been given to the applicant authorizing it to do business in Arkansas as a foreign corporation, is sufficient evidence of its corporate existence.

The appellant’s next contention is that the court erred in admitting the testimony of witness Sprouse to the effect that appellee, Parish, told him that Lantz had told him, etc. We think this testimony was not prejudicial, bemuse Lantz himself testified about what he told the parties, and testified to other facts that witness Sprouse testified to. We also think the error, if any, in admitting other evidence objected to by 'appellant was harmless. See Chancellor v. Stephens, 136 Ark. 175, 206 S. W. 145; Underdown v. Desha, 142 Ark. 258, 219 S. W. 19; Payne v. Thurston, 148 Ark. 456, 230 S. W. 561; L. J. Smith Const. Co. v. Tate, 151 Ark. 278, 237 S. W. 83.

As to appellant’s third and fourth contentions, we have examined the entire evidence carefully, and think that the verdict of the jury, so far as the facts are concerned, is conclusive; that there is substantial evidence to support the verdict.

The appellant contends that instruction number 8 was erroneous. And, while learned counsel do not state in what particular it is erroneous, we assume that it is because of the statement of the court that, under certain circumstances, “ plaintiff would not be guilty of negligence in crossing over the line as he did, before giving a signal to start.” We think that it would have been proper to have submitted that question to the jury, but instruction number 10,’given at the request of the appellant, contained a similar statement. It told the jury that, under certain circumstances, as a matter of law plaintiff was guilty of contributory negligence, if they found certain facts to be true.

Plaintiff’s instruction number 8 told the jury that, if they found certain facts to be true, they would find that he was' not guilty of contributory negligence. We do not think there was any prejudicial . error in giving instruction number 8. It told the jury that, if they found that plaintiff was instructed by his f oreman, Lantz, to go back on its line that was being pulled to give instructions to its other men while the line was still and not being pulled, and that its line was not to be pulled until the one in charge of the engine was signaled to start it, the plaintiff would not be guilty of contributory negligence. The jury could not have been misled by these instructions, and this court has often held that a case will not be reversed for the giving of an erroneous instruction if the jury could not have been misled.

There is no dispute about the injury to plaintiff nor about his suffering. And, while the appellant says the verdict is excessive, we think the injury yrould have sustained a larger verdict. Both bones of appellee’s leg were broken, and he suffered great pain, and the evidence shows that he still continues to suffer, and the jury returned a verdict for only $2,400. This amount cannot be said to be excessive.

We conclude therefore that there was no prejudicial error in giving instruction number 8 at the request of the appellee. The instructions' taken together,, we think, clearly state the law to the jury, and, while instruction number 8, given at the request of the appellee, and instruction number 10, given at the request of the appellant, should have been given in different form, there was no prejudicial error in this case in giving them in the form in which they were given.

There was substantial evidence to support the verdict, and the case is therefore affirmed.


author: MoHaney, J.

text:
    Smith v. Missouri Pacific Railroad Company.
    Opinion delivered November 28, 1927.
    1. Death — statutory cause of action. — The right to maintain an action for personal injury, resulting in death,- depends on the statutes of the State, since at common law no cause of action for personal injury survives the death of the injured person.
    2. Death — action for pain and suffering — limitation.—The right of action for benefit of the estate for conscious pain and suffering of plaintiff’s intestate before death is governed by Crawford & Moses’ Dig., §§ 1070 and 6950, fixing a three-year limitation.
    3. Death — action for benefit of widow and next of kin — limitation. — A cause of action for the wrongful act, neglect, or default, of another, causing death, brought for the benefit of the widow and next of kin, under Crawford & Moses’ Dig., § 1074, is barred under § 1075, after two years.
    4. Limitation of actions — when defense raised by demurrer.— Where a complaint shows on its face that it is barred by the statute -of limitations, and no ground of avoidance is shown, the question may be raised by demurrer.
    Appeal from Jackson Circuit Court; Bene II. Goleman, Judge;
    reversed in part.

      E. F. Bunccm, for appellant.

      Thos. B. Pryor and II. L. Ponder, for appellee.
   MoHaney, J.

Appellant ’© intestate, Heairl Smith, received a personal injury on June 9, 1921, at a public crossing on appellee’s railroad at or near Hoxie, Arkansas, from which he suffered conscious p-ain and suffering for a period of twelve hours, and thereafter died. His mother, the appellant, was thereafter appointed administratrix, and on June-5, 1924, nearly three years after the death of said intestate, suit ivas brought in the Lawrence Circuit Court for the Eastern District, to recover damages for the estate against appellee, for the alleged wrongful injury, causing conscious pain and suffering, and the alleged wrongful death of said intestate, •for the benefit of the next of kin. This cause was, on the petition of appellee, removed to the Federal court at Jonesboro, where, on May 4,1925, a nonsuit was taken, and the present action was instituted in the Jackson Circuit Court on April 29, 1926. The above facts were alleged in tlie complaint. In apt time appellee demurred to the complaint, on the grounds, first, that the complaint did not state a cause of action; and, second, that the complaint showed on its face that the deceased was killed by a train of appellee on the 9th day of June, 1921, and that the first complaint in this cause was filed on June 5, 1924, and the action was therefore barred by the statute of limitations. The court sustained the demurrer, and, upon appellant’s declining to plead further, judgment was rendered for appellee, and appellant has duly prosecuted an appeal to this court.

The only question presented for our consideration is the statute of limitations controlling in such case. At common law, no cause of action for personal injury survived the death of the injured person, and therefore appellant’s right to maintain this action depends upon the statutes of this State, the injury and death having occurred in this State. In the case of Ernest v. St. Louis, Memphis & S. E. Ry. Co., 87 Ark. 65, 112 S. W. 141, this court said: “At common law a right of action existed for the injury of a person, which did not result in death, but no right of action existed for the death of a human being.” Again, in the same case, the court said: “The general rule is that, where a cause of action does not exist at common law, but is created by the 'statutes of a State, it only exists in the manner and form and for the length of time prescribed by the statutes of the State which created it.” The court cited a number of caises sustaining this proposition of law. Again the court said, in the same case: “Therefore we conclude that it js now well settled that, where a statutory right of action is given which did not exist at common law, and the*statute giving the right also fixes the time within which the light maybe enforced, the time so fixed becomes a limitation or condition upon the right of action, and will control, no matter in what forum the action is brought.” Anthony v. St. Louis, I. M. & S. Ry. Co., 108 Ark. 219, 157 S. W. 394.

The next question to be determined is what statute of limitations is applicable. Appellant contends that the three-year statute is applicable, and, having brought her first action within three years, on which a nonsuit was taken after removal to the Federal court, and having reinstated the same within one year after nonsuit, she is within the period of limitations, and contends that the action is governed" by §§ 1070 and 6950, C. & M. Digest. The first of these sections is as follows:

“For wrongs done to the person or property of another, an action may be maintained against the wrongdoers, and such action may be brought by the person injured, or, after his death, by his executor or administrator, against such wrongdoer, in the same manner and with like effect in all respects as actions founded on con.tracts. ’ ’ And § 6950 is the ¡statute fixing three years of limitations on “all actions founded upon any contract or liability, express or implied, not in writing.” Section 1070 is applicable to this case for the benefit of the estate for conscious pain and suffering, and the three-year statute applies. St. L. I. M. & S. Ry. Co. v. Robertson, 103 Ark. 361, 146 S. W. 482.

The section of the Digest providing for a cause of action for wrongful act, neglect or default of another, causing death, for the benefit of the widow and next of kin, is § 1074, and the section immediately following, § 1075, provides how the action shall be brought and the period of limitations governing. It reads as follows:

“Every such action shall be brought by, and in the name of, the personal representatives of such deceased person, and, if there be no personal representatives, then the same may be brought by the heirs at. law of such deceased person; and the amount recovered in every such action shall be for the'exclusive benefit of the wfidow and next of kin of such deceased person, and shall be distributed to such widow and next of kin, in the proportion provided by law in relation to the distribution of personal property left by persons dying intestate; and, in every such action, the jury may give such damages as 'they shall deem a fair and just compensation, with reference to the pecuniary injuries resulting from such death, to the wife and next of kin of such deceased person. Provided, every such action shall be commenced within two years after the death of such person.”

The above section is commonly known and referred to as “Lord Campbell’s Act.” And this court, in the case of Anthony v. St. Louis, I. M. & S. Ry. Co., supra, held that the period of limitations fixed in the proviso “that every such action shall be commenced within two years after the death of isuch person,” precludes every person, including minors, from maintaining a cause of action thereunder after the two-year statutory bar has elapsed. In that case the court said: “It follows, that the bringing of the suit within two years from the death of the person whose death has been caused by the wrongful act is made an essential element of the right to sue. ’ ’ It will therefore be seen that tha very sections of the statute giving rise to the cause of action for the benefit of the next of kin on account of death provide a limitation of two years in which the suit may be brought, and is controlling here. It necessarily follows that this part of the cause of action was barred by the two-year statute, and appellant, not having brought her original suit for this damage within that time, is barred- now from maintaining same, provided this question can be raised by demurrer, as was done in this case. This court has frequently held, and we now hold again, that, where the complaint shows on its face that it is barred by the statute of limitations, and no ground of avoidance is shown, the question may be raised by demurrer. Rogers v. Ogburn, 116 Ark. 233, 172 S. W. 867; Ernest v. St. Louis, N. & S. E. Ry. Co., 87 Ark. 65, 112 S. W. 141; Flanagan v. Ray, 149 Ark. 411, 232 S. W. 600; Anthony v. St. Louis, I. M. & S. Ry. Co., 108 Ark. 219, 157 S. W. 394; St. Louis, I. M. & S. Ry. Co. v. Sweet, 63 Ark. 563, 40 S. W. 463.

No ground of avoidance is shown in the complaint. The court erred in sustaining the demurrer to that part of the complaint claiming damages for the benefit of the estate for conscious pain and isiuffering, and correct ly sustained it as to all other damages.

Reversed, and remanded.


text:
    St. Louis-San Francisco Railway Company v. McDonald.
    Opinion delivered November 28, 1927.
    1. Railroads — liability op railroad acquiring property of another railroad. — Under Crawford & Moses’ Dig., § 8512, a railroad acquiring the property of another railroad against which damage was claimed for loss of freight in shipment, becomes liable therefor, as it succeeds to the liability to such railroad, though it did not handle the shipment.
    2. Carriers — evidence of shortage. — In an action against a railroad for loss of hogs in shipment, evidence relative to the question of the shortage of hogs on delivery held sufficient for the jury.
    3. Carriers — damage for loss in shipment. — Evidence in an action against a railroad for loss of hogs in shipment, basing the damage on the average value of the remaining hogs, held sufficient on question of damage, though the better method would have.been to establish the market value of 'the hogs at the time and place of delivery.
    4. Railroads — venue op action. — Under Crawford & Moses5 Dig., § 1176, authorizing an action in any county in which a defendant or one of several defendants resides, the circuit court had jurisdiction of an action against a railroad sued jointly with another railroad having a line within such county.
    Appeal from Craighead Circuit Court, Lake City District; G. E. Keck, Judge;
    affirmed.

      Thomas B. Pryor, Gordon Frierson, E. T. Miller, E. L. Westbrooke, Jr., and E. L. Westbrooke, for appellant.

      J. F. Gautney and Dudley $ Dudley for appellee.
   MoHaney, J.

Appellees brought this action against appellants in the Lake City District of Craighead County, to recover the value of 24 hogs lost in two separate shipments from Monette, Arkansas, consigned to YeachAndrews Commission Company, National Stock Yards, East St. Louis, Illinois, of the value of $239.50.- One' of the shipments, containing 96 hogs, went out in a car with cattle and was billed January 31, 1925. The other contained 163 hogs, and was billed February 23. The first car was short 10 hogs and the second 14 hogs, on unloading at destination. Damage was laid, based on the average value of the remaining hogs in each shipment. The case was tried to a jury, which resulted in a verdict and judgment for the sum claimed against appellants, and wherefore this appeal.

Since the shipments in question were made, appellant, St. Lonis-San Francisco Bailway Company, has acquired all the property of the Jonesboro, Lake City & Eastern Railroad Company, and separate briefs have been filed by it and the Missouri Pacific Railroad Company. The Frisco was made a party to this action, for the reason it had acquired said property. It had nothing to do with these shipments át the time they originated, and it first contends that it did not succeed to any of the liabilities of the Jonesboro, Lake City & Eastern, and, since it did not handle the shipment, it is not liable. The statute, § 8512, is against this contention.

The only serious contention, and this is made by all the appellants, is that there is not sufficient evidence— in fact, it is insisted that there is no evidence that the number of hogs delivered for shipment was not delivered to the consignee. In this contention we cannot agree with appellants. Both appellees testified that the correct number of hogs was loaded, and the bills of lading call for such numbers. Mr. McDonald accompanied these cars to their destination, except that he got off the train at Dupo, about 10 miles out, and wont in on a street car directly to the stock yards. He testifies positively that only 149 hogs were delivered from the car containing 163, and that this car was therefore 14 short, and that only 86 were delivered from the other car, or 10 short. He testified that the hogs had been unloaded into the consignee’s pens when he .arrived; that he counted the hogs immediately, and they were short in the number stated. We think this sufficient evidence to take the case to the jury on the question of the shortage, and the further fact that the consignee only paid for 86 in one car and 149 in the other is a circumstance tending’ to show the shortage, from all of which the jury has found ag’ainst appellants, and we cannot say, under the settled rules of this court, that there was no substantial evidence to support the verdict.

On the question of damages, counsel for the Frisco say no damages are proved. While it would have been better to have established the market value of such hogs at that time and place, according to the usual methods of making such proof, yet we think it sufficiently appears that appellees received the market value for the hogs delivered. It was also shown that it is the custom in settling claims to base the settlement on the average weight and price of those delivered.

It is finally insisted by the Missouri Pacific that the court erred in overruling’ its demurrer to the jurisdiction of the court. This assignment is based on the fact that it owns no line of railroad in the Lake City District of Craighead County, and that said district is a separate county, so far as concerns process and jurisdiction of the circuit court. While this is true, it was jointly sued with the Jonesboro, Lake City & Eastern, which did have a line of railroad in said district, and it was therefore properly served, and the court had jurisdiction under § 1176, C. & M. Digest, which is as follows: “Every other action may be brought in any county in which the defendant, or one of several defendants, resides, or is summoned.” And this applies to corporations as well as individuals. 27 B. C. L., page 804, § 25.

No error appearing, the judgment is affirmed.