author: Johnson, C. J. McHaney', J.,

text:
    Sewer Improvement District No. 1 of Wynne v. Delinquent Lands.
    4-3343
    Opinion delivered February 5, 1934.

      John C. Patterson and Ogan & Shaver, for appellant.

      Henry Moore, Jr., Coleman & Gantt and L. H. Southmayd, amici curiae.

   Johnson, C. J.

This appeal brings into question the constitutionality of act 278 of the General Acts of 1933. The trial court held the act constitutional and valid, and this appeal is prosecuted therefrom.

Act 278 of 1933, in effect, provides: Section 1 amends § 5673 of Crawford & Moses’ Digest by giving to property owners, within the district, 90 days in which to make payment of past-due assessments instead of 30 days, as provided in § 5673 of Crawford & Moses’ Digest; also it reduces the penalty for nonpayment from 20 per cent, to 3 per cent.

Section 2 of said act gives to property owners six months in which to answer the complaint, after suit is instituted, instead of 5 days, as provided in § 5678 of Crawford & Moses’ Digest.

Section 3 of said act gives to nonresident landowners six months after publication of notice to file answer, instead of fifteen days, as provided in § 5679 of Crawford & Moses’ Digest.

Section 4 of said act gives to the chancery court wherein the suit is pending, power to grant to the property owner twelve months in which to pay the judgment or decree rendered, instead of ten days, as provided in § 5684 of Crawford & Moses’ Digest.

Section 5 of said act is the emergency clause, and directly repeals §§ 5686, 5687, 5688 and 5689 of Crawford & Moses’ Digest. The sections of Crawford & Moses’ Digest directly repealed by said act are to the following effect: § 5686 provides for the advancement of all causes pending in the Supreme Court wherein the foreclosure of assessments of benefits are involved. Section 5687 of Crawford & Moses ’ Digest gives to any aggrieved owner appealing only twenty days in which to file an authenticated transcript of the proceedings. Section 5688 of Crawford & Moses’ Digest restricts the record on appeal to such matters as may affect the property of the one so appealing. Section 5689, Crawford & Moses’ Digest, restricts the right of appeal to those who perfect the transcript of the record within twenty days from the date of rendition of the decree.

The contention urged is that act 278 of 1933 violates § 17 of article 2 of the Arkansas Constitution of 1874 and § 10 of article 1 of the Constitution of the United States, which sections provide against impairment of contract. Stated another way, appellant contends that the State Legislature is without authority to amend or repeal the sections of the digest referred to for the reason that they were the law at the time the district bonds were issued and sold.

In considering . the important question here presented, it is necessary that we take into consideration the economic conditions existing in this State at the time act 278 of 1033 was enacted. The conditions sought to be alleviated should be considered as a part of the enactment itself. At the time of the enactment, Arkansas was in the midst of the worst depression any member of this court has ever experienced. Thousands of home owners in the State were'without employment, and the bare necessities of life, because thereof, were denied them and their families. All real property in this State was without market value, the net result being that in many instances a five or ten thousand dollar home was sacrificed at public sale for from ten per cent, to twenty-five per cent, of its intrinsic value. The charitable spirit of the members of the Legislature must be commended by all, as the gravity of the question considered by them cannot be gainsaid or denied.

It must be remembered that all political power is inherent in the people, and the State Legislature has the absolute right to invoke this power in all cases except in such as may be prohibited by constitutional mandate. Section 1 of article 2 of the Arkansas Constitution "of 1874 provides: “All political power is inherent in the people, and government is instituted for their protection, security and benefit; and they have the right to alter, reform or abolish same in such manner as they may think proper.” Section 22 of the same article provides: “The right of property is before and higher than any constitutional sanction.” It will thus be seen that, by constitutional mandate, all political power in this State is reserved in the people, except such as may be expressly prohibited by constitutional mandate.

In the State v. Chester Ashley, 1 Ark. 513, this court expressly held: “A State Legislature can exercise all power that is not expressly or impliedly prohibited by the Constitution; for whatever powers are not limited or restricted they inherently possess as a portion of the sovereignty of the State.”

. The constitutional doctrine thus announced has been consistently followed by this court up to the present time. Bush v. Martineau, 174 Ark. 214, 295 S. W. 9. All legislative enactments are presumed to be constitutional and valid until it is otherwise made to appear. Patterson v. Temple, 27 Ark. 202.

“Neither should a statute be declared unconstitutional unless there is a clear incompatibility between the act and the Constitution.” Eason v. State, 11 Ark. 481.

“All doubts should be resolved in favor of the constitutionality of a statute.” Duke v. State, 56 Ark. 485, 20 S. W. 600; Graham v. Nix, 102 Ark. 277, 144 S. W. 214.

It is the long’ established policy of this court to declare no act of the Legislature unconstitutional save with greatest caution. State v. Moore, 76 Ark. 179, 88 S. W. 929.

And “a statute will not be declared unconstitutional unless no doubt exists On the question.” Stillwell v. Jackson, 77 Ark. 250, 93 S. W. 71.

There is a line of demarcation between the inherent reserved rights- of the people and those prohibited by constitutional mandate. The question always arises upon which side of the line the enactment may fall. The question should be approached with the gravest consideration, and all cases bearing on the question should be most seriously considered. Section 10 of article 1 of the Constitution of the United States and § 17 of árt. 2 of this State’s Constitution should not be considered as all inclusive. The dignity of these provisions rises no higher than the reserve power in the people.

From the synopsis of the act herein given, it necessarily appears that act 278 of 1933 affects only the remedy in the enforcement of contracts, and has nothing to do with the contract itself. Therefore the question narrows down to one of remedy. The rule seems to be well settled, by all American decisions on the subject, that the remedy of enforcing contracts in existence at the time of its execution cannot be taken • away by subsequent legislation. On the other hand, subsequent legislation affecting the remedy only which leaves a valid remedy in effect does not impair the obligations of contract, and is therefore valid. In re Sturges v. Crowninshield, 4 Wheat. 122. In the ease just referred to, the Supreme Court of the United States, on the question here under consideration, said: ‘ ‘ The distinction between the obligati on of a. contract and the remedy given by the Legislature to enforce that obligation, has been taken at the bar, and exists in the nature of things. Without impairing the obligation of the contract, the remedy may certainly be modified as the wisdom of the nation shall direct.”

The same court, in Von Hoffman v. City of Quincy, 4 Wall. 535, said: “It is competent for the States to change the form of the remedy, or to modify it otherwise, as they may see fit, provided no substantial right secured by the contract is thereby impaired. No attempt has been made to fix definitely the line between alterations of the remedy, which are to be deemed legitimate, and those which, under the form of modifying the remedy, impair substantial rights.”

In Antoni v. Greenhow, 107 U. S. 769, 2 S. Ct. 91, the Supreme Court of the United States said: “In all such cases the question becomes therefore one of reasonableness, and of that the Legislature is primarily the judge.”

A number of decisions of the Supreme Court of the United States are urged upon us as decisive of the question here presented. Among them are Bronson v. Kinzie, 1 How. 311. The act there under consideration required the property to be appraised and to bring not less than two-thirds of its appraised value upon sale. Act 278 of 1933 has no such requirement. This is entirely sufficient to differentiate the Bronson case from the one here under consideration. McCracken v. Hayward, 2 How. 608; Lessee v. Ewing, 3 How. 707, and Howard v. Bugbee, 24 How. 461, may be likewise differentiated. In Penniman’s case, 103 U. S. 714, the Supreme Court of the United States drew the line of demarcation as follows: “The general doctrine of this court on the subject may be thus stated: In modes of proceeding and forms to enforce the contract the Legislature has the control, and may enlarge, limit or alter them, provided it does not deny a remedy or so embarrass it with conditions or restrictions as seriously to impair the value of the right. ’ ’

The Supreme Court of the United States seems to be unalterably committed to the rule that all sovereign States retain a measure of control over remedial process and legislation, and to safeguard the vital interests of its people. Jackson v. Lamphire, 3 Pet. 280; Hawkings v. Barney, 5 Pet. 451; Railroad Co. v. Hecht, 95 U. S. 168; South Carolina v. Gillord, 106 U. S. 433; Louisiana v. New Orleans, 102 U. S. 203; Red River Valley Bank v. Craig, 181 U. S. 548, 21 S. Ct. 703; Security Savings Bank v. California, 263 U. S. 282, 44 S. Ct. 108. The same court is also committed to the doctrine that the mere modification of existing remedies for enforcing contracts is not the controlling question. Stephenson v. Binford, 287 U. S. 251, 53 S. Ct. 181.

All such contracts and legislation must be read in the light of the retained sovereignty of the State. Home Building & Loan Ass’n v. Blaisdell, 290 U. S. 398, 54 S. Ct. 231.

Moreover, the Supreme Court of the United States is committed to the doctrine that the constitutional provision against impairment of contracts was not impaired by an amendment of the State Constitution which puts an end to a lottery theretofore authorized by the State Legislature; Stone v. Mississippi, 101 U. S. 814. To the same effect is Douglas v. Kentucky, 168 U. S. 488, 18 S. Ct. 199, and New Orleans v. Houston, 119 U. S. 265, 7 S. Ct. 198.

The same court has many times held that the respective States retain adequate power to protect the public health and the public safety. Fertilizing Co. v. Hyde Park, 97 U. S. 659; Chicago, B. & Q. Rd. Co. v. Nebraska, 170 U. S. 57, 18 S. Ct. 513; Texas & N. O. R. Co. v. Miller, 221 U. S. 408, 31 S. Ct. 534; Atlantic Coast Line R. Co. v. Goldsboro, 232 U. S. 548, 34 S. Ct. 364. Again, in Manigault v. Springs, 199 U. S. 473, 26 S. Ct. 127, that court held that the economic interest of the State may justify the exercise of its continuing- and dominant protective power, notwithstanding interference with contracts. The statute there in question was sustained upon the ground that private interests were subservient to the public right. Continuing, the court there said: “It is the settled law of this court that the interdiction of statutes impairing the obligation of contracts does not prevent the State from exercising such powers as are vested in it for the promotion of the common weal, or are necessary for the general good of the public, though contracts previously entered into between individuals may thereby be affected. This power, which, in its various ramifications, is known a-s the police power, is an exercise of the sovereign right of the government to protect the lives, health, morals, comfort and general welfare of the people, and is paramount to any rights under contracts between individuals.”

All doubts heretofore existing in reference to the retained protective power of the several states was recently removed by the decisions of the Supreme Court of the United States in the following cases: Block v. Hirsh, 265 U. S. 135, 41 S. Ct. 458; Marcus Browning Holding Co. v. Feldman, 256 U. S. 170, 41 S. Ct. 465; Edgar A. Levy Leasing Co. v. Siegel, 258 U. S. 242, 42 S. Ct. 289; and Home Building & Loan Ass’n v. Blaisdell, supra.

In the Blaisdell case, supra, the Supreme Court of the United States upheld the constitutionality of a Minnesota statute which gave to property owners relief during the present emergency. The attack was made there as here that the Minnesota statute impaired the obligations of contract. The act was upheld, however, upon the expressed theory that it fell within the reserved power of the State to protect its people from disaster. The court there said: ‘ ‘ Undoubtedly, whatever is reserved of State power must be consistent with the fair intent of the constitutional limitation of that power. The reserved power cannot be construed so as to destroy the limitation, nor is the limitation to be construed to destroy the reserved power in its essential aspects. They must be construed in harmony with each other. This principle precludes a construction which would permit the State to adopt as its policy the repudiation of debts or the destruction of contracts or the denial of means to enforce them. But it does not follow that conditions may not arise in which a temporary restraint of enforcement may not be consistent with the spirit and purpose of the constitutional provision and thus be found to be within the range of the reserved power of the State to protect the vital interests of the community. It cannot be maintained that the constitutional prohibition should be so construed as to prevent limited and temporary interpositions with respect to the enforcement of contracts if made necessary by a great public calamity such as fire, flood, or earthquake. ’ ’

Act 278 of 1933 comes within the spirit and letter of the Minnesota statute and the holding of the Supreme Court of the United States upholding it. The court there held that, since the Minnesota statute affected the remedy only and gave to the mortgagee the' rents and profits accruing during the statutory delay, it took from the mortgagee no substantial right.

It is true that act 278 does not, in terms, give the mortgagee rents and profits accruing from the property during the pendency of the suit, but this right may be invoked by the mortgagee under other legislation in this State.

Chapter 150, Crawford & Moses’ Digest, vests full power and authority in the chancery courts of the State to appoint receivers in all equitable proceedings, when it is shown that the trust property is in danger of being lost, removed or materially injured, or that the conditions of the trust have been broken and the property is probably insufficient to discharge the mortgage debt. Thus it will be seen that the mortgagee, by invoking the provisions of chapter 150 of Crawford & Moses’ Digest, has the legal status of a mortgagee -under the Minnesota statute.

Our attention has been directed to Adams v. Spillyards, 187 Ark. 641, 61 S. W. (2d) 686, as sustaining the contention that the act under consideration is unconstitutional and void. Such is not the effect of the case referred to. Section 1 of the act there under consideration reads as follows:

“In any foreclosure, in any court in the State of Arkansas in which real estate is involved, the real estate securing- the loan sought to be foreclosed shall be considered to be the value of the loan made, irrespective of the amount which may be realized from the sale of such real property.”

Certainly there is no analogy between the acts in question. A mere comparison will convince any one of the many differentiations.

Since the Legislature is primarily the judge as to when it becomes necessary to exercise the sovereign right of the State for the protection of its people; and, since the act in question impairs no contractual right existing between the parties other than to affect the remedy, and this to no substantial extent, we are unwilling to hold that the Legislature was without power to enact the legislation in question.

The chancellor’s views conforming to the reasons here expressed, his decree will in all things be affirmed.

McHaney', J.,

(dissenting). I regret that I cannot agree with the majority opinion in this case. It seems to me that we have departed from the ancient and modern landmarks of judicial construction and interpretation of statutes, and entered upon the sea of uncertainty, an exigency to meet what is thought to be an emergency. But emergency does not -create power.

Under the law as it existed prior to the passage of act 278 of 1933, property owners in municipal improvement districts had thirty days in which to pay their assessments after the date of the notice required to be given by the collector and published by him. Section 5671, Crawford & Moses’ Digest. If not paid within that time, the collector was required to add a penalty of 20 per cent, to the delinquents and immediately make a return of delinquents to the board of improvement. Section 5673, Id. The board was required straightway to bring- a suit against delinquents to enforce collection of such assessments. Section 5674, Id. In case of personal service, which the law requires (§ 5677, Id.), defendants were given 5 days to appear and answer, and upon default a decree was required to be then rendered against the property for the amount of the assessment, penalty, costs and attorney’s fee. Section 5678, Id. In case .the defendant property owner is a nonresident or unknown, 15 days constructiive service is required before default decree. Section 5679. In case of decree for the board, property owners were given 10 days in which to pay, but, if not paid in that time, the property was ordered sold upon 20 days’ notice. Section 5684, Id. If an appeal were prosecuted by any property owner, he was given 20 days to file his transcript with the clerk of the Supreme Court. Section 5687, Id. The Supreme Court was required to advance the case and determine it at the earliest date practicable, usually three weeks. So, it will be seen, that, from the time the assessment list was delivered to the collector until a sale of the delinquent property could be had, only 65 days were required in which to sell on personal service and 75 days on constructive service, in case there was no appeal to the Supreme Court, in which case onty about 50 days more were required. Act 278 changes all this in the following particulars: Instead of thirty days for collection by the collector, the time is extended to 90 days at the expiration of which time 3 per cent, penalty is added instead of 20 per cent., and, instead of making an immediate return of delinquents, the collector is required to wait 90 days more to make such return. Section 1, act 278. Instead of five days’ personal service in which to appear and answer, before default, the time is extended, to six months. If no answer, default may be had at that time. Section 2, act 278. Constructive service is the same. Section 3, Id. Instead of 10 days given in the decree after default in which to pay before sale, the time is extended to twelve months, and then upon six months ’ notice instead of 20 days. Section 4, Id. So it will be seen that the very minimum time in which to effectuate a foreclosure and sale under act 278 is 900 days,- The sections relating to appeals have all been repealed.

Under the statute as it existed prior to 1933, property owners had five years in which to redeem from such sales, (§ 5644, Crawford & Moses’ Digest), but the tax purchaser was given the right of possession from the date of confirmation until redemption without accounting for rents and profits. Section 5642, Id. This latter section was repealed by act 129, Acts 1933, p. 375. The five-year redemption period was changed to four years. Act 252, Acts 1933, p. 790. The repeal of the provisions relative to speedy appeals would require all cases in the future to take the course of any other appeal. Instead of 20 days to file a transcript on appeal as given by § 5687, six months could now be taken, and, instead of advancing the case on the docket, it would take the usual course, 40 days to appellant, 30 days to appellee and 7 days for reply, or a total of 77 days before it would be subject to submission under the rules of this court after being docketed.

Now, when appellant district was formed and sold bonds, the law was as heretofore stated prior to act 278, and the other acts mentioned. Instead of a speedy method of enforcing payment of taxes on assessments, one which forcibly encouraged prompt payment, a slow and dilatory system is substituted, one which encourages taxpayers to become delinquent.

But the majority opinion says this “affects only the remedy in the enforcement of contracts, and has nothing to do with the contract itself.” Let us see if this statement is correct. It must be admitted as a fundamental right of both the district and its bondholders to pay and have paid the obligations of the district at the time and in the manner provided in the contract between them. This can only be accomplished by prompt collection of taxes on assessed benefits which were so fixed and bond maturities so arranged that the annual collections would meet the bond interest and maturities. Under the new act, No. 278, unless all the property owners, or substantially all, voluntarily pay their improvement taxes, bonds and coupons will necessarily become delinquent, as they are not required to pay for a period of two and one-half years before sale, with four years for redemption after sale, and then a penalty of only 3 per cent, (not per annum) is permitted for nonpayment. This not only affects the remedy, but, in my opinion, virtually destroys it, and is therefore unconstitutional.

This is not a new question in this court. As said in the early case of Burt v. Williams, 24 Ark. 91: “The constitution prohibits the passage' of any law that impairs the obligation of contracts, and it is well-settled that any law which destroys the remedy for enforcing a contract, or so obstructs the remedy as to make the contract valueless, or greatly lessen its value, impairs its obligation. A right without a remedy to declare it is not a valuable right; a contract that cannot be enforced has no legal obligation ; and one that was cnforcible by law when made, but which cannot be compelled to be performed, by the law for its performance being repealed, or being so changed or clogged as materially to diminish its worth, has suffered from unconstitutional legislation.”

And in Jacoway v. Denton, 25 Ark. 625, it is said: “A contract is an agreement in which a party undertakes to do or not to do a particular thing. The law binds him to perform his undertakings, and this is of course the obligation of his contract. In the case at bar, the defendant has given his promissory note to pay the plaintiff a sum of money on or before a certain day. The contract binds him to pay that sum on that day, and this is its obligation. ’

Also in Leach v. Smith, 25 Ark. 247, it is said: ‘ ‘ The objections to a law on the ground of its impairing the obligation of a contract can never depend upon the extent of the change which the law affects in it. Any deviation from its terms, by postponing or accelerating the period of its performance, imposing conditions not expressed in the contract, and dispensing with those which are, however minute or immaterial in their effect upon the contract of the parties, impairs its obligation.”

The above is a quotation from Green v. Biddle, 18 Wheaton (U. S.) 84, and immediately following is a quotation from Ogden v. Sanders, 12 Wh. 256, that “it is perfectly clear that a law which enlarges, abridges, or in any manner changes the intention resulting from the stipulation of the contract, necessarily impairs it. ’ ’

Again in Oliver v. McClure, 28 Ark. 555, this court said: “A State law, passed subsequently to the execution of a mortgage, which declares that the equitable estate of the mortgagor shall not be extinguished for twelve months after a sale under a decree in chancery, and which prevents a sale, unless two-thirds of the amount at which the property had been valued by appraisers shall be bid therefor (as applied to prior contracts), is within the clause of the tenth section of the first article of the Constitution of the United States, which prohibits a State from passing a law impairing the obligation of contracts.”

In the recent case of Adams v. Spillyards, 187 Ark. 641, 61 S. W. (2d) 686, 86 A. L. R. 1493, after reviewing former decisions on the question of impairing the obligation of contract, this court, among other things, said: “The attack made on the validity of the act is based on article 1, § 10, Constitution of the United States, and article 2, § 17, of the Constitution of Arkansas, both prohibiting the State from passing any law impairing the obligation of contracts. * * * We said in Bush v. Martineau, 174 Ark. 214, 295 S. W. 9, that an act of the Legislature is presumed to be constitutional and will not be held by the courts to be otherwise unless there is a clear conflict between the act and the Constitution, and that all doubt should be resolved in favor of the act. * * * It is equally well settled that, if an act runs counter to the plain provisions of the Constitution, the courts should not hesitate to so declare and hold the act invalid.

“Another rule which is not open to dispute and is well settled both in this and the Supreme Court of the United States is thus stated in Robards v. Brown, 40 Ark. 423: ‘The laws which are in force at the time when, and the place where, a contract is made and to be performed,. enter into and form a part of it. This is only another mode of saying that parties are conclusively presumed to contract with reference to the existing law, ’ and in Walker v. Whitehead, 16 Wall. 314, it is said: ‘The laws which exist at the time of the making.of a contract and in the place where it is made and to''be performed enter into and make a part of it. This embraces those laws alike which affect its validity, construction, discharge and enforcement. The ideas of validity and remedy are inseparable, and both are parts of the obligation which is guaranteed by the Constitution against impairment. The obligation of a contract “is the law which binds the parties to perform their agreement.” Any impairment of the obligation of a contract — the degree of impairment is immaterial — is within the prohibition of the Constitution.’ ” To the same effect are the decisions of the Supreme Court of the United States. U. S. v. City of Quincy, 4 Wall. 535; Sturges v. Crowninshield, 4 Wheat. 122; Bronson v. Kinzie, 1 How. 311; McCracken v. Hayward, 2 How. 608; Port of Mobile v. Watson, 116 U. S. 289, 6 S. Ct. 398.

In Port of Mobile v. Watson, supra, the court said: “Therefore the remedies for the enforcement of such obligations assumed by a municipal corporation, which existed when the contract was made, must be left unimpaired by the Legislature, or, if they are changed, a substantial equivalent must be provided. Where the resource for the payment of the bonds of a municipal corporation is the power of taxation existing when the bonds were issued, any law which withdraws or limits the taxing power and leaves no adequate means for the payment of the bonds is forbidden by the Constitution of the United States, and is null and void.”

Barnitz v. Beverly, 163 U. S. 118, 16 S. Ct. 1042, is a very interesting case on the subject and so much in point, I feel justified in quoting from it at length. It was there said: “Without pursuing the subject further, we hold that a statute which authorizes the redemption of property sold upon foreclosure of a mortgage, where no right of redemption previously existed, or which extends the period of redemption beyond the time formerly allowed, cannot constitutionally apply to a sale under a mortgage executed before its passage.

“Let us briefly apply the conclusion thus reached to the facts of the present case. The plaintiff was the holder of several promissory notes, dated November 1, 1885, secured by a mortgage of the same date upon a tract of land in Shawnee County, Kansas. The mortgage contained ail express waiver' of an appraisement of the real estate. Default in payment having ensued, the suit was brought, praying that the mortgaged premises should be sold according to law, without appraisement, that the proceeds arising from the sale should be applied to the payment of the indebtedness due the plaintiff, and that the defendants should be forever barred and precluded of any right of redemption.

“Under the law as it existed at the time when the mortgage was made, after a foreclosure and sale of the mortgaged premises, the purchaser was given actual possession as soon as the sale was confirmed and the sheriff’s deed issued. Thereafter the mortgagor or the owner had no possession, title, or right in any way to the premises.

“Under the new law the mortgagor shall have eighteen months from date of sale within which to redeem, and, in the meantime, the rents, issues, and profits, except what is necessary to keep up repairs, shall go to the mortgagor or the owner of the legal title, who in the meantime shall be entitled to the possession of the property. The redemption payment is to consist, not of the mortgage debt, interest, and costs, but of the amount paid by the purchaser, with interest, cost,' and taxes.

“In other words, the act carves out for the mortgagor or the owner of the mortgaged property an estate of several months more than was obtainable by him under the former law, with full right of possession, and without paying rent or accounting for profits in the meantime. What is sold under this act is not the estate pledged (described in the mortgage as a good and indefeasible estate of inheritance, free and clear of all incumbrance), but a remainder — an estate subject to the possession, for eighteen months, of another person who is under no obligation to pay rent or to account for profits.

“The 23rd section of the act should not be "overlooked, providing that real estate once sold upon order of sale, special execution, or general execution, shall not again be liable for sale for any balance due upon the judgment or decree under which the same is sold, or any judgment or lien inferior thereto, and under which the holder of such lien had a right to redeem.

“Obviously this scheme of foreclosure renders it necessary for the mortgagee to himself bid, or procure others to bid, the entire amount of the mortgage debt, and thus, in effect release the debtor from his personal obligation.

“We, of course, have nothing to do with the fairness of the policy of such enactments as respects those who choose to contract in view of them. But it seems impossible to resist the conviction that such a change in the law is not merely the substitution of one remedy for another, but it is a substantial impairment of the rights of the mortgagee as expressed in the contract. Where, in a mortgage, an entire estate is pledged for the payment of a debt, with right to sell the mortgaged premises free from redemption, can that be valid legislation which would seek to substitute a right to sell the premises subject to an estate or right of possession in the debtor or his alienees for eighteen months ? ” * * *

“When we are asked to put this case within the rule of those cases in which we have held that it is competent for the States to change the form of the remedy or to modify it otherwise, as they may see fit, provided no substantial right secured by the contract is thereby impaired, we are bound to consider the entire scheme of the new statute, and to have regard to its probable effect on the rights of the parties.

“It is contended that the right to redeem, granted by the new statute, only operates on the purchaser and not on the mortgagee as such. This very argument was foreseen and disposed of in Bronson v. Kinzie, 42 U. S. (1 How.) 319, where this court said:

“It (the new act) declares that although the mortgaged premises should be sold under the decree of the court of chancery, yet that the equitable estate of the mortgagor shall not be extinguished, but shall continue for twelve months after the sale; and it moreover gives a new and like estate, which before had no existence, to the judgment creditor to continue for fifteen months. If such rights may be added to the original contract by subsequent legislation, it would be difficult to say at what point they must stop. An equitable interest in the premises may, in like manner, be conferred upon others; and the right to redeem may be so prolonged as to deprive the mortgagee of the benefit of his security by rendering the property unsalable for anything like its value. This law gives to the mortgagor and to the judgment creditors (meaning creditors other than the mortgagee) an equitable estate in the premises, which neither of them would have been entitled to under the original contract; and these new interests are directly and materially in conflict with those which the mortg’ag’ee acquired when the mortgage was made. Any such modification of a contract by subsequent legislation, against the consent of one of the parties, unquestionably impairs its obligations, and is prohibited by the Constitution.
“The judgment of the Supreme Court of Kansas is reversed, and the cause remanded to that court with directions for further proceedings not inconsistent with this opinion.”

In the opinion of the majority it appears that the decision of the Supreme Court of the United States in the recent case of Home Building & Loan Ass’n v. Blaisdell, was of controlling influence. As I read this case, it has no bearing on this, and is not at all in point. The Minnesota statute, there under consideration, was temporary in character, expiring of its own terms May 1, 1935, and purported to be an emergency measure for a short period of time. There the court was given the power to determine the necessity for the delay and to require the owner to pay a reasonable rental for retaining possession in the event delay was decreed. Here the measure is permanent in character, and it is no answer to say that the Legislature may repeal it when the occasion for its enactment has ceased to exist. And no right to possession or to the rents and profits is accorded during the inore than two years’ delay, in addition to the four years allowed for redemption. The act of 1915, heretofore referred to, did give the right of possession, but the same Legislature that enacted act 278 of 1933 also repealed the statute giving’ such right by act 29. If, as indicated in the majority opinion, an improvement district may have a receiver appointed for all delinquent property in the district under the authority of chapter 150, Crawford & Moses’ Digest, I think they have dug up a bunch of snakes that will be harder to Mil than the job St. Patrick had in Ireland. That chapter, dealing with the powers of courts of equity to appoint receivers has been the law since January 15, 1857, except §§ 8611 to 8615, inclusive, which are parts of the Civil Code, and up to this time it has never been invoked in a proceeding to collect delinquent taxes in improvement districts. Moreover, it could not be invoked under the provisions of § 8612 relating to mortgaged property, as the court has jurisdiction to appoint a receiver under this section only “where it appears that the mortgaged property is in danger of being lost, removed or materially injured, or that the condition of the mortgage has not been performed, and that the property is probably insufficient to discharge the mortgage debt.” Undoubtedly the Mnd of mortgage referred to is the ordinary mortgage given to secure a personal indebtedness and not a lien upon the benefits assessed against property in an improvement district.

It is therefore clear to my mind that act 278 of 1933 is unconstitutional and void as to all contractual obligations of improvement districts created prior to the passage of said act.

I am authorized to say that Mr. Justice Smith concurs in this dissent.


source: Caselaw Access Project

author: Johnson, C. J.,

license: Public Domain

text:
    Blakemore v. Stevens.
    4-3333
    Opinion delivered February 5, 1934.

      Reid, Evrard & Henderson, for appellant.

      Harrison, Smith & Taylor, for appellee.
   Johnson, C. J.,

(after stating the facts). There are but two questions argued in briefs for determination. First, that appellant was guilty of no negligence in cutting the wheels of his car at the time of the injury, and that A. W. Stevens was guilty of contributory negligence in failing to get out of' danger.

Negligence is the failure to observe, for the protection of the interest of another person, that degree of care, precaution and vigilance which the circumstances justly demand whereby such other persons suffers injury. St. L. I. M. & S. Ry. Co. v. Secht, 38 Ark. 357; Railroad Co. v. Lewis, 60 Ark. 409, 30 S. W. 765; Missouri & North Arkansas Ry. Co. v. Clayton, 97 Ark. 347, 133 S. W. 1124.

It will be seen from the statement of facts that the jury was warranted in finding that appellant was negligent in cutting the front wheels of his car at the time and under the circumstances then existing without giving timely warning thereof to the deceased, Stevens. Appellant admitted, when testifying in his own behalf, that he knew Mr. Stevens was stationed on the right-hand side of his car in a position to assist in extricating the. car from the mire. In the exercise of ordinary care, appellant should have known that the cutting of the front wheels at the time and under the circumstances might do injury to those assisting him in extricating the car. There is no testimony* indicating that Mr. Stevens was guilty of contributory negligence in being at the place he was, at the time he was injured. The fact is, 1m invited by appellant to assist in pushing his car out of the mire. It would, indeed, be a strange doctrine which would hold him guilty of contributory negligence in doing the thing he was requested to do. We therefore conclude that the trial court was correct in submitting the issue of appellant’s negligence to the jury, and certainly no reversible error was ' c ommitted -in submitting the question of contributory negligence. -

It is next contended that the verdict is excessive. The jury found as a matter of fact that Mr. Stevens ’ death was caused from diverticulum. Therefore the only elements of damages considered by the. jury in the award were for pain and suffering from September 30, 1932, until March 12,1933, and his diminished earnings during this period of time. The jury awarded damages in the sum of $3,000. It was stipulated by counsel that Mr. Stevens’ doctor’s bill and hospital expenses attendant upon the car injury was $167.03. Also Mr. Stevens lost from his work twenty-three weeks, and the testimony shows that he was capable of earning $25 per week. These items, when added, aggregate approximately $750. The jury therefore awarded Mr. Stevens estate $2,250 for pain and suffering. Practically the uncontradicted testimony shows that Mr. Stevens was confined to his bed for six weeks after the injury; a part of which time he suffered excruciating pain; thereafter and. until his death he was required to wear a sacroiliac support; he was- never able to walk without the assistance of a cane. We are unwilling to say that the jury’s award is excessive.

Therefore the judgment will be affirmed.


text:
    Dillingham v. Kahn.
    4-3323
    Opinion delivered February 5, 1934.

      Fred A. Isgrig, for appellant.

      Louis M. Cohn, and Trieber & Lasley, for appellee.
   Johnson, C. J.,

(after stating the facts). The foregoing statement of facts demonstrates that appellee violated the terms and conditions of his bill of assurance, which was made a part and parcel of the deed from appellee to appellant conveying plot 23 in Prospect Terrace. The evidence on this point is too plain and certain to be ignored. In very plain language the bill of assurance provides: “No residences shall be erected on plot 1 to 39, inclusive * * *, the actual bona fide cost of which, exclusive of any outbuildings, shall be less than $10,000.” This language conveys what it means and means exactly what it says. “Exclusive of any outbuildings” means that no building other than the residence can or should be considered, and “the actual bona fide cost” does not include 25 per cent, or 30 per cent, of the contract price for supervision of construction.

The undisputed evidence shows that appellee, almost before the ink had dried on his bill of assurance and deed to appellant, contracted with one Bracy, a contractor and builder in Little Rock, for. the construction of a dwelling house on plot 26, which lot lies within the restricted area of the bill of assurance, at a contract cost price of $7,750. This is a palpable violation of the bill of assurance. Appellee undertakes to justify this construction contract by contending that he personally supervised the construction of the building, and that his services in so doing were worth 25 per cent, to 30 per cent, of the contract price of construction. If the bill of assurance may now receive the interpretation contended for by appellee, it would become absolutely worthless. If supervision costs can be invoked in this manner, then it may likewise be extended to 50, 60, 75 per cent, or any greater percentage of construction cost, and thereby nullify the clear intention of the parties as evidenced by their contract.

Appellee contends that a rescission should not now be directed because of appellant’s long delay in demanding it. It is true the deed was executed in 1926, and no demand was made for rescission until the cross-complaint was filed, but appellant could not possibly complain of something which he did not know. Appellant had the right to assume that appellee would live up to his contract in good faith until otherwise advised; he testified most positively that he knew nothing of the violation of the building restrictions until just prior to the filing of his eross-complaint. This testimony was entirely reasonable and consistent. Certainly, appellee’s contractor, Mr. Bracy, would not advise appellant of the violations of the building restriction so long as he was in the employ and good graces of appellee; certainly appellee would not be expected to advise appellant of his own infidelities. No other sources of information were open to appellant, and we think his testimony is entitled to full credence in this regard. Thus, when so considered, appellant’s cross-complaint seeking rescission was brought within a reasonable time. In Snyder v. Bridewell, 167 Ark. 8, 267 S. W. 561, we stated the rule as follows: “An offer to rescind a contract must be made within a reasonable time after having had an opportunity to discover the grounds therefor. ’ ’

We think appellant asserted his right of-rescission within a reasonable time after the facts came to his' knowledge.

Neither can we agree that appellant’s letters to appellee requesting additional time for payment preclude his asserted rights under his cross-complaint. These letters were written at a time when appellant was not advised of appellee’s violation of the covenants in the bill of assurance, and, when thus considered, do not preclude his right of rescission.

Since the restrictions contained in the bill of assurance, in reference to the cost of dwellings constructed within the restricted area, are a material part of the consideration; and, since the usual basis of the covenants for payments and restrictions are concurrent and dependent, the purchaser is entitled to rescind -upon breach of such covenant. Smith v. Home Seekers’ Realty Co., 97 Fla. 236, 122 So. 708, 67 L. R. A. 809; Laser v. Forbes, 105 Ark. 166, 150 S. W. 691.

For the reasons assigned, the case is reversed, and the cause remanded to the Pulaski Chancery Court, with directions to ascertain the total amount paid by appellant to appellee on the purchase price, exclusive of interest and taxes paid by appellant, and render a decree therefor, after restoring the fee simple title in appellee.

It is so ordered.

Smith and McHaney, J J., dissent.


author: Smith, J.

text:
    Ebbing v. Hassler.
    4-3334
    Opinion delivered February 5, 1934.

      A. D. Whitehead, for appellant.

      Brewer & Cracraft, for appellee.
   Smith, J.

Appellee sued the Detroit Edge Tool Works, a Michigan corporation, for a broker’s commission, and, upon allegations that the Pekin Wood Products Company, an Arkansas corporation, domiciled in Phillips County, was indebted to the defendant, caused a writ of garnishment to issue requiring the Arkansas corporation to answer in what sum it was indebted to the defendant. The garnishee filed an answer, admitting indebtedness to the defendant in excess of the sum sued for. The defendant filed no answer.

An intervention was filed, however, by W. E. Ebbing, as trustee for the defendant, in which he alleged that he was in possession of all the defendant’s assets under a certain writing dated May 10, 1932, which had been executed in Detroit, Michigan, the home office of the defendant, and which had been duly recorded in the county in which Detroit is situated. This intervention alleged that the assets in the hands of the trustee were held by him in trust for all the defendant’s creditors, and were not therefore subject to garnishment.

The instrument creating the alleged trust is lengthy, and we copy only so much of it as is important here to consider. It transferred to W. P. Ebbing, the president of the defendant corporation, as trustee, for the benefit of its' creditors, all the cash, stocks, bonds, accounts receivable, miscellaneous items, and certain, physical properties. None of the items of cash, accounts receivable, or miscellaneous items, were listed, and only the aggregate value thereof was set forth. The instrument appears to have been recorded as a chattel mortgage in -Detroit, Michigan, on July 13, 1932, but was never recorded nor filed for record in Phillips County, where the garnishee corporation has its situs. *

The instrument recites that it does grant, sell and mortgage to the trustee, for the purpose of securing payment of said sums of money so owing to said creditors, and all future sums for which it may hereafter become indebted to said creditors while the agreement is in force. It contains the following defeasance clause: “Provided always, and these presents are made upon the express condition that if first party, on May 15th shall pay to the second party as trustee the amount of the various claims scheduled in schedule ‘A’ and simultaneously delivered to second party, and the charges and expenses herein provided for and all other claims for which this instrument is security, then this obligation shall be void, otherwise to be in full force and effect.”

The instrument further provides that, if default be made in the payment of the debts as provided, or if the grantor shall sell or dispose of the goods except in the ordinary course of retail trade, the trustee shall take possession and sell same, and, with the proceeds of sale, pay the expenses of the trust and the claims referred to, it being intended to secure all liquidated claims. It directs that the trustee shall notify all creditors to file their claims, and, unless the claims are filed within sixty days, the trustee is not obliged to accept them. In the event the trustee and creditor cannot agree as to the allowance of a claim, the creditor must file suit in a court of competent jurisdiction, and, if he fails to do so, he shall forfeit his right to the security of the instrument. Prom the money realized under the instrument there shall be paid, in order, (1) the expenses of the trust; (2) trustee’s expenses; (3) the claims of creditors pro rata; (4) any residue shall go to the grantor.

The instrument covers not only existing debts but future indebtedness, and apparently authorizes the continued operation of the business and incurring additional obligations, and excludes creditors not complying with the method provided for establishing claims.

There was offered in evidence a letter received from the trustee, in answer to an inquiry addressed to the defendant about the claim sued on, in which it was stated: “Just because we are in the hands of a trustee does not mean that we are through. I am operating the plant as trustee for the benefit of creditors, pending a reorganization. ’ ’ It will be remembered that the trustee who wrote the letter was also the president of the defendant corporation.

There was a verdict and judgment for the plaintiff, from which is this appeal.

It is very clear that the instrument under review is not a deed of assignment, but is rather a chattel mortgage, in which a trustee is named to execute its provisions. Numerous cases have pointed out the difference between a mortgage and an assignment. In one of these, Marquese v. Felsenthal, 58 Ark. 293, 24 S. W. 493, it was said that the distinction between a mortgage and an assignment is well understood; that one is intended to secure, the other to satisfy, a debt; that a mortgage contemplates personal effort on the part of the mortgagor to pay the debt and reserving the right, by doing so, to restore his title to the mortgaged property, or of such of it as is not consumed in paying the debt, whereas an assignment implies surrender of property to the use of creditors “without the hope of redeeming it. ’ ’

In the case of Robson v. Tomlinson, 54 Ark. 229, 15 S. W. 456, it was said that: “The controlling guide, according to the previous decisions of the court, is, was it the intention of the parties, at the time the instrument was executed, to divest the debtor of the title and so make an appropriation of the property to raise a fund to pay debts? (Citing cases.) If the equity of redemption remains in the debtor, his title is not divested, and an absolute- appropriation of the property is not made. In arriving at the intent of the parties, therefore, the question is, not whether the debtor intended to avail himself of the equity of redemption by payment of the debt, but was it the intention to reserve the equity? If so, the instrument is a mortgage, and not an assignment.”

These and other eases were reviewed in the later case of Brown v. Wilkes, 153 Ark. 545, 241 S. W. 383, where it was held that a conveyance to trustees for the payment of the grantor’s debts without a defeasance clause in the event of payment by the grantor constituted a general assignment for the benefit of creditors.

The instrument here under review not only contains a defeasance clause, but contemplated the continuance of the business and the sale of assets in the usual course of retail trade, also the incurring of additional obligations, which, when incurred, were to be paid pro rata along with existing obligations. It is certain therefore that the instrument was not an assignment for the benefit of creditors, and did not create a trust which is exempt from legal process by creditors to collect their debts. Cases cited and relied upon by appellant, like that of State National Bank v. Wheeler-Motter Mercantile Co., 104 Ark. 222, 148 S. W. 1033, holding that funds of a debtor held by a trustee to be paid pro rata to all of his creditors cannot be seized by garnishment or other process at the instance of one of the creditors, do not apply to the facts of this case.

It may be said also of the instrument, which we construe to be a mortgage and not to be a deed of assignment, that it attempts to mortgage certain choses in action, and does so by merely designating them as “accounts receivable, $4,913.62.” It may be seriously questioned whether the instrument, if otherwise sufficient to constitute a valid mortgage lien, was sufficient to constitute a lien on the mortgage debt which furnished the subject-matter of the garnishment. In the chapter on Chattel Mortgages, at § 53 of 5 R. C. L., page 422, it is said: “There is some question whether choses in action are proper subjects of chattel mortgage; but, in any event, they must be referred to with sufficient definiteness to enable third persons to identify them.” The question is discussed in the annotator’s note to the case of Milwaukee & Minnesota R. R. Co. v. Milwaukee & Western R. R. Co., 88 Am. Dec. 740.

But, considering the instrument as an intended chattel mortgage, it affords no defense to this suit. As has been said, it contemplated the continued operation of the business and the sale of its assets and products in the usual and ordinary course of business. In EndicottJohnson Corporation v. Davis, 186 Ark. 791, 56 S. W. (2d) 178, it was said: “It is true also, as was said in the case of Coffman v. Citizens’ Loan & Inv. Co., 172 Ark. 889, 290 S. W. 961, that goods and chattels exposed daily for indiscriminate sale to the general public, at the place of business of the owner, and over which the dealer or merchant is permitted to exercise dominion, cannot be made the subject of a valid chattel mortgage. ’ ’

Finally, it may be said that this mortgage was never recorded in Phillips County (or elsewhere in this State), where the garnishee resided and was served with process. It has many times been held that, while a mortgage is good between the parties, though not acknowledged and recorded, yet it constitutes no lien upon the mortgaged property as against creditors unless it is acknowledged and recorded, even though they may have actual notice of its existence. It is so expressly provided by statute. Section 7381, Crawford & Moses’ Digest. Combs v. Owen, 182 Ark. 217, 31 S. W. (2d) 127.

Other reasons are assigned for the affirmance of the judgment, which appear to be well taken, but which we find it unnecessary to discuss, as the judgment must be otherwise affirmed. It is so ordered.


author: Humphreys, J.

text:
    Wasson v. Tapscott.
    4-3328
    Opinion delivered February 5, 1934.

      Brundidge & Neelly, for appellant.

      John E. Miller, C. E. Yingling and Rowland H. Lindsey, for appellee.
   Humphreys, J.

This appeal comes from the chancery court of White County, and involves the sole question of the priority of two mortgage liens on the same property, both of which secured valid subsisting debts. The oldest mortgage in point of time, and the one first recorded, was executed by W. H. Capps to the Union iBank & Trust Company on January 21, 1920. The other mortgage was executed on January 9, 1925, by W. H. Capps to the Union Bank & Trust Company. Each mortgage was duly recorded a few days after its execution. At the time of the execution of each mortgage, J. E. Lightle was vice-president of said bank and actively in charge of its affairs, and continued in the active management thereof until it became insolvent on November 4, 1930. S. P. Tapscott was a customer of said bank during the entire period from 1920 until the State Bank Commissioner took charge thereof, and, during all that time, J. E. Lightle, as his representative and that of the bank, was authorized to use the funds he had on deposit to purchase notes from the bank on his account, and to collect the interest and principal of said notes. On February 23, 1920, J. E. Lightle sold the W. H. Capps note then owned by the bank to S. P. Tapscott and assigned it to him without recourse on the bank. Thereafter, J. E. Lightle collected the interest on the note for seven years and placed the amount to the credit of Tapscott, the last collection being made on January 1, 1927. No notations of these collections or payments were entered on the margin of the record where the mortgage was recorded. At the time said bank took its own mortgage on the same property from W. H. 'Capps, the debt and mortgage wbicb it bad sold to Tapscott was still a valid and subsisting lien against said land, and, according to the weight of the evidence, it was the intention and agreement of the bank that tbis mortgage should constitute a second lien on said property. After the bank went into liquidation, there was entered on the margin of the record of the last mortgage by the special deputy commissioner, a payment of $257, wbicb bad been paid on the note and mortgage on March 3, 1929.

The Bank Commissioner acquired only such rights as existed in favor of the bank on the day the doors closed. He stepped into the shoes of the bank and could not by any act change the relationship existing at that time between the bank and Tapscott relative to these mortgages. If the bank bad estopped itself to claim priority of it own mortgage over that of Tapscott, the Bank Commissioner could not change the status by making the marginal entry mentioned above.

The bank in the instant case is not a third party or stranger to these mortgages, and cannot invoke the benefit of § 7382, Crawford & Moses’ Digest, by complying with the requirements therein. The Bank Commissioner gained nothing by an attempt to comply with the provisions of said act.

Again, the agreement that its mortgage should not have priority over the Tapscott mortgage and its conduct in reference to the Tapscott mortgage equitably estops it and the Bank Commissioner from claiming priority of the second over the first mortgage. The facts bring the instant case well within the case of Merchants’ & Planters’ Bank v. Citizens’ Bank of Grady, 175 Ark. 417, 299 S. W. 753. In that case, we find tbis excerpt from Jones on Mortgages, 7th ed., vol. 1, § 608, peculiarly applicable to the instant case:

“Parties may, as between themselves, make a valid agreement, though it be verbal only, that one of two mortgages shall be prior to tbe other.”

No error appearing, the decree is affirmed.


text:
    Booe v. State.
    Crim. 3871.
    Opinion delivered February 5, 1934.

      Claude Cruse, C. C. Beard and Reed & Beard, for appellant.

      Hal L. Norwood, Attorney General, and John R. Caldwell, Assistant, for appellee.
   Humphreys, J.

Appellant was indicted, tried and convicted in tbe circuit court of PulasM County, First Division, for the crime of murder in the first degree for Mlling M. E. Stephens, and was adjudged to serve a life term in the State Penitentiary as punishment therefor, from which is this appeal.

Appellant’s first assignment of error is that the evidence is insufficient to support the verdict and judgment and, for that matter, any degree of homicide except manslaughter.

It is argued that the evidence fails to reflect any malicious intent on the part of appellant to kill M. E. Stephens which was put into execution after premeditation and deliberation. The suggestion is made that appellant and deceased were entire strangers, and that the killing occurred in such a short time after they met that the elements of malice, premeditation and deliberation could not have been conceived in the mind of appellant before he shot and killed deceased. The law fixes no time in which the elements of murder in the first degree must be formed in the mind of one who takes life, but the existence of the fact is a matter for determination by a jury from all the facts and circumstances surrounding and entering into the homicide. Green v. State, 51 Ark. 189, 10 S. W. 266; Ferguson v. State, 92 Ark. 120, 122 S. W. 236; Weldon v. State, 168 Ark. 534, 270 S. W. 968. Applying this rule to the facts and circumstances in the instant case, we are of opinion that they fully warranted the jury in finding that the killing of M. E. Stephens by appellant was murder in the first degree. Stating the facts most strongly in favor of the State, the record of the evidence reflects that appellant, in company with a friend and companion by the name of Jim Jones, drove his car to the filling station of deceased, ordered some gasoline, and killed him when he demanded payment for his gasoline. According to the testimony of Jones, when appellant refused to pay for the gasoline, deceased got on the running board and tried to stop them so as to get his pay by striking at appellant with his fist; whereupon appellant picked up a pistol lying between them on the seat and shot at deceased twice, one shot taking effect and killing him, and that they then absconded and successfully made their escape. Appellant himself confessed that he killed deceased.

Appellant also contends that the confession of appellant after arrest that he killed deceased was not sufficient corroboration of his accomplice, Jones, to warrant the conviction. The rule is to the contrary. Knowles v. State, 113 Ark. 257, 168 S. W. 148, Ann. Cas. 1916C, 568.

Appellant also contends that the confession did not show the degree of the crime, but merely admitted the killing. The rule is that the corroborating evidence need not be sufficient to convict, but is sufficient if it tends to connect the defendant -with the commission of the crime. Hawkins v. State, 148 Ark. 351, 230 S. W. 5. Certainly appellant’s confession connected him sufficiently with the commission of the crime.

The court also properly admitted the confession for consideration of the jury after finding that it was made voluntarily and without the promise of immunity.

Appellant also assigns as error the refusal of the court to give his requested instruction No. 2A, which proposed to tell the jury that accomplice Jones’ testimony must be corroborated by other testimony connecting him with the crime before they can convict him. This was a correct declaration of the law, and should have been given, but the error was cured by instruction No. 19, which was given by the court before submitting the case to the jury. Instruction No. 19 fully covered instruction No. 2A requested by appellant.

Appellant also assigns as error the refusal of the court to give his requested instruction No. 3A, which is as follows: ‘ ‘ There has been evidence offered tending to show that the witness Jones has been promised some immunity from the part witness Jones took in his acts connected with the killing of Stephens. If you believe from the evidence in this case that witness Jones had been promised by any one as an officer of this court any less punishment or immunity for testifying against this defendant, you have a right to take into consideration, in determining whether witness Jones is telling the truth in this case, or is testifying against defendant, Booe, in order to incur favor with the State to the end that his punishment would be lighter for the part he took, either in taking the life of Stephens, or in accessory after the fact to said killing of Stephens.”

This instruction is clearly argumentative, and, for that reason, the court properly excluded it.

By reference to the instructions, it will be seen that the court gave the following instruction:

“You may judge of the credibility of a witness by the manner in which he gives his testimony, his demeanor upon the stand, the reasonableness or unreasonableness of his testimony, the means of knowledge as to the facts about which he testifies, the consistency or inconsistency of his testimony with itself or the other testimony in the case, his interest in the case, the feeling he may have for -or against the defendant, his bias for or prejudice against the defendant, or any other fact or cricumstance tending to shed light upon the truth or falsity of such testimony, and it is for you at last to say what weight you will give the testimony of any or all witnesses.”

The other assignments of errors discussed by appellant were not prejudicial.

No error appearing, the judgment is affirmed.


text:
    Quick v. Knight.
    4-3335
    Opinion delivered February 5, 1934.

      Patterson & Patterson, for appellant.

      Williams & Williams and J. H. Brock, for appellee.
   Humphreys, J.

This is an appeal from a judgment for damages for the wrongful taking of the property of appellees by appellants. The property consisted of household goods, such as furniture, beds, bedding, etc. The property was removed from appellees’ home on January 29,1932, by Andy Crabtree, who ran a truck, on the written order of C. E. Quick, who claimed to be the owner of a chattel mortgage thereon which he had theretofore purchased from the mortgagee, Thompson Brothers. The suit for damages was based upon the theory that the mortgage had been paid, and this became an issue of fact in the case upon which testimony was introduced pro and con. Appellees also introduced testimony to the effect that, on account of the removal of their household goods, Cora Knight was compelled to sleep on the floor without sufficient bedding or covering, which resulted in her contracting “flu,” which developed the following day into pneumonia lasting seven weeks in addition to pain, suffering, and loss of time incident to her illness, and that she had to expend large sums for medical treatment.

Appellant contends for a reversal of the judgment because the court instructed the jury to the effect that if they should find that the mortgage had been paid, and that it was not extended by agreement as security for further advances, then the seizing and removing of the property would be wrongful, and, in addition to the value of the property, appellees -would be entitled to recover damages on account of sickness resulting directly from the wrongful taking of the property. Appellant argues that the measure of damages for the wrongful taking was the market value of the property taken. If the taking was wrongful, and the jury so found, the takers were tortfeasors, and this court has announced the following rule as to tort feasors in the case of Carson v. Fort Smith Light & Traction Company, 108 Ark. 452, 158 S. W. 129:

“A tort feasor is answerable for all damages directly traceable to the wrong done and arising therefrom -without an intervening agency and without fault of the person injured.”

No error appearing, the judgment is affirmed.


author: Kirby, J.,

text:
    Bank of Cabot v. Wilson & Company.
    4-3329
    Opinion delivered February 5, 1934.

      John R. Thompson, for appellant.

      Reed & Beard, for appellee.
   Kirby, J.,

(after stating the facts). The undisputed testimony showed that Lucas, appellee’s salesman, purchased the draft from the bank as he was authorized to do, indorsed the checks and drafts to be collected by the bank in payment of the purchase money, and gave his own personal check for the balance, $162.79; that his personal check was not paid, and, upon being notified thereof, he gave two checks for the amount upon other banks in the State, both of which were returned marked “insufficient funds”; that the bank drew on appellee company for the amount of the checks, attaching said unpaid checks to the draft in accordance with the draft purchasing agreement, and that appellee company páid said draft.

' It is true that appellee claimed in its action to recover this amount from the bank, as for money had and received, paid through mistake, that the bank had failed to notify it by wire of the return of the checks of Lucas given for part of the purchase money of the draft, and that therefore under the contract it was not liable to the repayment of such money. The purchasing agreement provides, however, that the bank get in touch with appellee’s salesman, if possible, notifying him that the item had been returned, etc., and also gives the bank authority to draw on appellee at Kansas City, Kansas, attaching to the draft a memorandum of the checks, etc.

Appellee knew the provisions of the draft purchasing contract, and knew necessarily, when these particular checks were attached to the draft drawn by the bank, that they were unpaid and presented for payment to the company because of the money sent in the draft purchased by the agent not having been collected or realized, and made no objection to the payment of this draft refunding to the bank the money it had advanced under the draft purchased by the company’s agent. It is therefore estopped to deny that the payment was not made in satisfaction of the balance of the amount of the draft purchased for appellee company, which was paid for with said checks returned to it unpaid, and for the payment of which the Bank of Cabot was duly authorized to draw on appellee company under the draft purchasing-agreement. Although, the Bank of Cabot did not wire the appellee company about the failure of the maker of the checks to pay them, it called that fact to the attention of appellee’s agent, J. H. Lucas, maker of the checks, as required under the contract; and, as already said, the company had sufficient notice of the return of the checks when it paid the bank’s draft for the collection of it, and it cannot now repudiate its action, and recover the money it was liable to the payment of under said contract and draft.

The court erred in holding otherwise, and the judgment is reversed, and, the case appearing to have been fully developed, the cause will be dismissed. It is so ordered.


author:
Mehaffy, J.
      Butler, J.,

text:
    McDonald v. Wasson.
    4-3330
    Opinion delivered February 5, 1934.

      Hal L. Norwood, Attorney General, and Robert F. Smith, Assistant, for appellant.

      Trieber & Lasley, for appellee.
   Mehaffy, J.

This suit was instituted by Marion Wasson, Bank Commissioner, against Ed McDonald, Secretary of State, by filing’ in the Pulaski Chancery Court the following complaint:

“The plaintiff, Marion Wasson, is the duly appointed, qualified and acting Bank Commissioner of the State of Arkansas, and as such he is charged with the execution of all laws of the State of Arkansas, relating to the organization, inspection, supervision, control, liquidation and dissolution of the banks and the banking business of the said State.
“The defendant, Ed McDonald, is the duly elected, qualified and acting Secretary of State of the State of Arkansas, and as such he is charged by act 63'2 of the Acts of the General Assembly of the said State for the year 1921 with the duty of receiving, filing, attesting and returning articles of incorporation of persons associating themselves together as a cooperative association, for the purpose of conducting a banking business on the cooperative plan pursuant to the provisions of said act.
“On July 6, 1933, the said plaintiff, as such Bank Commissioner, duly made and promulgated, and the requisite number of members of the Bank Advisory Council of the said .State duly approved, rules and regulations relating to the organization, supervision, control, liquidation and dissolution of the cooperative banking associations aforesaid, which said rules and regulations were so made and promulgated, and were so approved, under and pursuant to the provisions of act 88 of the Acts of the General Assembly of said State for the year 1933. A copy of the said rules and regulations bearing the signature and seal of office of the said plaintiff, and the signatures of said members of said Bank Advisory Council, and marked Exhibit A, is hereto attached as a part of this complaint.
“The plaintiff is informed, and believes, and so charges, that certain citizens of the State of Arkansas are now about to associate themselves together as such cooperative banking association for the purpose of conducting a banking business at Corning, Arkansas, and that the said persons are about to file their articles of incorporation with the said defendant as such Secretary of State, and further that the said defendant, unless restrained by this court, will, upon the filing of said articles with him as aforesaid, take such steps, as set out in said act 632 of the Acts of 1921, as will result in the authorization of said cooperative 'banking association to commence business as such, although the said persons so associating themselves together, have not applied to the plaintiff, Bank Commissioner, for a certificate of public necessity in respect of said banking association, as required by the said rules and regulations, and the said persons have not in any otherwise complied with, or attempted to comply with, and have no intention of com-' plying with, any of the other requirements of said rules and regulations.
“That plaintiff has no adequate remedy at law, and as immediate restraining order is necessary herein in order to prevent the said .proposed cooperative banking association from beginning its business without authority of law, and to the detriment of the community wherein the said association proposes to conduct its business and to the public.
“Wherefore plaintiff prays that this court issue forthwith, and pending final determination of the within cause, its order restraining the said defendant from in any wise authorizing the said applicants or any other applicants to conduct a banking business, without first applying to the plaintiff for a certificate of public necessity respectively thereof, and otherwise complying with the said rules and regulations; that upon final hearing the said order be made perpetual, and the said defendant enjoined accordingly; for costs herein expended, and for all other and further relief.”

The court issued a temporary restraining order, and thereafter appellant filed a demurrer, the court overruled the demurrer, and this appeal is prosecuted to reverse the decree and judgment of the chancery court in overruling said demurrer.

There is but one question for our consideration, and that is -whether act 88 of the Acts of 1933 suspended by implication act 632 of the Acts of 1921, or, as stated by appellee: “Whether or not the Legislature, in its passage of act 88 of the Acts of 1933, intended, as stated in the title of the act, that the provisions of act 88 should have reference to all banks.”

It is contended by the appellee that by the use of the words “all banks” the Legislature intended to suspend act 632, which was an act for the formation and carrying on of cooperative associations, and providing for the rights, powers, liabilities and duties of same.

The primary rule in the construction of statutes is to ascertain and give effect to the intention of the Legislature. 25 R. C. L. 960.

The first section of act 632 is as follows: “The purpose of this act is to provide for the formation and carrying on of cooperative associations and to provide for the rights, powers, liabilities and duties of such cooperative associations. The provisions of this act shall be administered by the Commissioner of Mines, Manufactures and Agriculture, who shall have power to employ such help as in his judgment is necessary to carry into effect the provisions of this act.”

Section 11 provides, among other things: “No association organized under this act shall be required to do or perform anything not specifically required herein, in order to become a corporation, or to continue its business as such.”

It should be remembered that, at the time this law was passed by the Legislature in 1921, we already had a general banking law. The 1921 act provided for a cooperative association. Any number of persons more than 20 could associate themselves together as a cooperative corporation for the conducting of the business of agriculture, dairy, mercantile, banking, mining, manufacturing or other mechanical business on the cooperative plan. It has no reference to 'banking in the ordinary sense. It is not only not organized under the general banking law, but, under the express provisions of the act, the Bank Commissioner has nothing to do with corporations organized under the cooperative act.

Under the. general banking law five persons can organize a bank. The cooperative act also expressly provides that the votes of the association are by members and not by stock. It also provides that it shall distribute its net profits first by paying a fixed dividend, and, second, that the remainder of its profits are prorated to its several stockholders.

The act further provides that the title of a corporation organized under the cooperative plan shall begin with “The” and end with “association,” “company,” “corporation,” “exchange,” “society,” or “union.” Everything in the act shows that whatever business it did was to be done on the cooperative plan, and its business was in no way connected with the banking system.

Again in 1923 the Legislature passed another act, No. 627, amending the banking act, the title to which is as follows: “An Act to Amend Act 113 of the Acts of the General Assembly of 1913, entitled An Act for the Regulation and Control of Banks, Trust Companies and Savings Banks’ as amended.”

Section 19 of act 627 of the Acts of 1923, provides as follows: “Nothing in this act shall repeal, modify or in any manner affect act 632 of the Acts of the General Assembly of 1921, approved March 29, 1921, nor shall it affect any bank or other corporation organized thereunder, and said act 632 and every part thereof shall stand and be. in full force and effect, the same as if this act had not been passed. ’ ’

It is clear that when act 88 was passed, and all times prior thereto, the Bank Commissioner had no supervision or control over associations formed under the cooperative act, and had no connection with such associations. We think therefore that it is clear that when act 88 uses the word “hank” it means a bank under the supervision of the Bank Commissioner, and has no reference to cooperative associations.

Under the cooperative plan no person is allowed to own or have an interest in more than 10 per cent, of the capital stock of such corporation, and voting upon all questions shall be by members and not by stock. The organization, management, control and purposes of an association organized under the cooperative plan is wholly 'different from the organizations, management, control and purposes under the general banking law.

There is, we think, no conflict between the provisions of act 88 and the provisions of act 632 of 1921.

Appellee calls attention to 57 C. J. 903, and says that in some jurisdictions such a clause is referred to as an express repeal. The clause, referred to in C. J., cited by appellee, was the clause that “all laws and parts of laws in conflict or all acts and parts of acts inconsistent with the statute are repealed.” There is no such provision in act 88.

Section 12 of the act says that the act is cumulative and shall not repeal, but merely suspend any law in conflict therewith. There is no repealing clause found anywhere in act 88. Therefore, so far as this citation is concerned, it has no application, because, it could be neither express nor implied repeal, when no such clause is found in the act. It could not suspend the act by implication because there is no conflict, as we conclude, that the word “bank” used in act 88 necessarily means the bank over which the Bank Commissioner has jurisdiction.

The contention by the appellee is that act 88, an act regulating the banking department, suspends for two years the operation of the law regulating cooperative associations, without mentioning said law. The laws are on different subjects, and we know of no rule of construction that would justify the conclusion that a law passed on one subject would suspend the. operation of a law on a different subject by implication, and without mentioning the law claimed to be suspended.

The law as to implied repeal is stated in 59 C. J. 904, as follows: “An implied repeal is one which takes place when a new law contains provisions which are contrary to, but do not expressly repeal, those of a former law. A statute, or a provision thereof, may be repealed by implication. Whether it has been so repealed is a question of legislative intent. While such a repeal is not favored, nevertheless it must be recognized and accorded effect where it is apparent that it was intended. Conversely, there is no room for repeal by implication where no legislative intent to repeal is indicated or expressed, or an intent not to repeal is apparent or manifest. ’ ’

The same authority also states: “The repeal of statutes by implication is not favored. The courts are slow to hold that one statute has repealed another by implication, and they will not make such an adjudication if they can avoid doing so consistently or on any reasonable hypothesis, or if they can arrive at another result by any construction which is fair and reasonable. Also, the courts will not enlarge the meaning of one act in order to hold that it repeals another by implication, nor will they adopt an interpretation leading to an adjudication of repeal by implication unless it is inevitable, and a very clear and definite reason therefor can be assigned. Furthermore, the courts will not adjudge a statute to have been repealed by implication unless a legislative intention to repeal or supersede the statute plainly and clearly appears. The implication must be clear, necessary and irresistible.” 59 C. J. 905 et seq.

Keeping these rules of interpretation in mind, it seems clear to us that there was no intention on the part of the Legislature to repeal or suspend the Act of 1921.

Appellee concedes that if the Legislature did not intend that act 88 should have reference to all banks but only some banks, then there is no conflict. There is no repugnancy, and there was no intention to repeal or suspend any part of the provisions of the Act of 1921, relative to cooperative banks.

Appellee calls attention to 59 C. J. 958, § 570. That' section provides: ‘ ‘ While the intent of the Legislature is to be found primarily in language of the statute, where such language is vague, ambiguous, or uncertain, the court may look, not only to language but to the subject-matter of the act, the object to be accomplished, or the purpose to be subserved; it may also look in this connection to the expediency of the act, or its occasion and necessity, the remedy provided, the condition of the country to be affected by the act, the consequences following upon its enactment, or various extrinsic matters which throw some light on the legislative intent.”

These things are to be considered where the language of the statute is vague, ambiguous or uncertain. Under this authority we think it is proper to take into consideration that the two acts are for wholly different purposes; the one having reference to the banking system, and the other to cooperative associations, and certainly it cannot be said when these things are considered that it is clear and inevitable that the Legislature intended the Act of 1921, the act which authorizes cooperative associations, to be suspended by act 88. As to whether it is wise or unwise legislation is a matter for the Legislature and not for the courts.

R. C. L. states the rules as follows: “The intention and meaning of the Legislature must primarily be determined from the language of the statute itself, and not from conjectures aliunde. * * * No motive, purpose, or intent can be imputed to the Legislature in the enactment of a law other than such as are apparent upon the face and to be gathered from the terms of the law itself.” 25 R. C. L. 961 et seq.

“The responsibility for the justice or wisdom, of legislation rests ;with the Legislature, and it is the province of the courts to construe, not to make, the laws. ” 25 R. C. L. 964.

This court has many times announced the principles and rules governing the courts in the construction of statutes. We recently said: “It is a well-settled principle of statutory construction that repeals by implication are not favored.” La. Oil Ref. Co. v. Rainwater, 183 Ark. 482, 37 S. W. (2d) 96; Ark. Tax Commission v. Crittenden County, 183 Ark. 738, 38 S. W. (2d) 318.

We should consider the two acts, the banking act and the cooperative act, legislating upon entirely different subjects, and consider the purpose of each act in order to arrive at the intention of the Legislature. Rose v. W. B. Worthen Co., 186 Ark. 205, 53 S. W. (2d) 15; Rural Special School Dist. No. 19 v. Special School Dist. No. 37, 186 Ark. 370, 53 S. W. (2d) 579.

We said in a recent case: “Such a construction ought to be put upon the statute as may best answer the intention which the lawmakers have in view, and this intention is sometimes to be collected from the cause or necessity of making the statute, and sometimes from other considerations; and, whenever such intention can be discovered, it ought to be followed with reason and discretion in the construction of the statute, although such construction seems contradictory to the letter of the statute.” Koser v. Oliver, 186 Ark. 567, 54 S. W. (2d) 411; Broadway-Main Street Bridge Dist. v. Taylor, 186 Ark. 1158, 57 S. W. (2d) 1041.

The fact that the acts are for wholly different purposes, the fact that the Legislature has uniformly treated them as separate and distinct acts, covering separate and distinct subjects, together with the fact that no mention is made of the act of 1921, the act providing for cooperative associations, and the fact that the Bank Commissioner at the time of the enactment of act 88 had no supervision over associations created by the act of 1921, all seem to indicate that the Legislature did not intend to repeal or suspend the act of 1921. It would have been an easy matter to mention the act of 1921, and since this was not done, and the acts had always been treated as relating to different subjects, we think there was no manifest intention of the Legislature to repeal the act of 1921. In fact, act 88 did not undertake to repeal any act, but only to suspend acts in conflict.

The decree of the chancery court is reversed, and the cause remanded with directions to sustain the demurrer.

Butler, J.,

(concurring). I agree to the opinion written by Mr. Justice Mehaffy, but go further and think the court should have defined the powers of the association. I take this view because, while the opinion does not warrant it, associations formed under act No. 632 of the Acts of 1921 may assume that they are authorized to do a general banking business. This position, if taken, is not warranted by any reasonable interpretation of that act when it is viewed in the light of, and considered in connection with, contemporaneous legislation.

At the session of the General Assembly at which act No. 632, supra, was passed, the Legislature, by act No. 496, covered the entire field of the control of banks and the manner in which their affairs might be conducted, and, as there was no reference made to this legislation by act No. 632, which was approved only three days later, it is clear that the Legislature did not intend to clothe cooperative associations with the power to carry on the business intrusted to banks. In arriving at the meaning of any statute, it should be placed beside other relevant statutes giving it a meaning and effect derived from the combined whole (State v. Sewell, 45 Ark. 387), for the Legislature must be presumed to have had knowledge of existing statutes and to have had reference thereto when dealing with any subject embraced in prior acts and intend the provisions of later statutes to be read in the light of the provisions of the former relating to the same subject. This is especially true where the statutes were enacted at the same session of the Legislature. Ex parte Trapnall, 6 Ark. 9; Town of Benton v. Willis, 76 Ark. 443, 88 S. W. 1000; Lonoke County v. Reed, 122 Ark. 111, 182 S. W. 563.

The nature of the association, its membership, voting-power and manner in which its income is to be disbursed is pointed out in the opinion. The act itself defines cooperative associations as “a business concern that distributes the net profits of its business by: First, by the payment of a fixed dividend upon its stock; the remainder of its profits are :pro-rated to its several stockholders upon their purchases from, or sales to, said concern, or both such purchases and sales. ’ ’ By section 2, it is provided that twenty or more persons may form the association “for the purpose of conducting any agricultural, dairy, mercantile, banking*, mining, manufacturing, or mechanical business on the cooperative plan.”

When the definition quoted is read in connection with the grant of power, the real reason and purpose of the act is better understood. This was to give groups of individuals an opportunity to co-ordinate their efforts, provide for collective bargaining and share the profits of the enterprise conducted. The conduct of any of the acts named is ancillary and in aid of this main purpose, and the right to pursue and perform these is not unlimited but is to be confined within the bounds of the association’s membership where such acts comprise the engaging in any business clothed with a public interest, and, as such, subject to regulation and supervision by the State. Banks are such institutions over which, by appropriate legislation, the State had exercised its powers of regulation prior to the passage of act No. 632. Therefore, the banking business mentioned in that act must be deemed to be different from the business conducted by a bank properly so-called and of a special and restricted character limited solely to the membership from which perhaps it may receive deposits and make loans to the members, but has no power to engage in the business of a bank which deals with the public generally and which was created and regulated by existing laws.

I am authorized to state that Johnson, C. J., joins in the views I have expressed.