author: Wood, J. Wood, J.,

text:
    Burt v. Road Improvement District No. 11.
    Opinion delivered June 4, 1923.
    1. Highways — eoad improvement district — powers.—Road improvement districts created under Acts 1915, c. 81 (Crawford & Moses’ Digest, §§ 5399-5462) are quasi governmental agencies of special and limited powers which may he exercised in such manner as is authorized expressly or by necessary implication.
    2. Highways — improvement district — contractor’s bond.— Crawford & Moses’ Dig., § 5446, requiring a road improvement contractor to give a bond for the faithful performance of his contract and for the prompt payment of all persons furnishing him labor or materials in the prosecution if the work is mandatory, and a compliance therewith is a condition precedent to the validity of any contract between the district and the contractor for the building of roads which the district undertakes.
    3. Highways — contractor failing to execute bond. — Though a road improvement contractor failed to execute the bond required by Crawford & Moses’ Dig., § 5446, he was entitled, on a quantum meruit basis, to recover for work done for which the district received the benefit; but where a considerable portion of the roadway washed away before the district was able to complete the improvement, he was not entitled to recover for the work that had washed away.
    4. Highways — validity of contract. — A road contractor, in order to enable the district to get the money on its bonds, so that he could go on with the work, executed his note for $6,200 to the bond purchaser, by whom the note was subsequently transferred to the district. This ■ district agreed to permit the contractor to increase his bid for the work by the amount of such note. Held that the note was binding, though the contractor subsequently abandoned the work, and therefore never received the additional pay-
    5. Highways — right of subcontractor to recover. — Where a subcontractor did work on a road improvement for which the improvement district received the benefit, he was entitled to recover from the district on a quantum meruit basis for the value of the work.
    6. Judgment — joint judgment — satisfaction.—Where a sub-contractor recovered a joint judgment against his principal and the road improvement district for the value of work done by him, he is entitled to one satisfaction only.
    Appeal from Prairie Chancery Court, Southern District; John M. Elliott, Chancellor;
    reversed.

      Hughes & Hughes, for appellant.
    The contract with the district was valid without the giving of the bond in advance of the time of beginning work. Sees. 5399 to 5462, Crawford & Moses’ Digest. By allowing Burt to continue the work under the contract, urging his doing so, without the bond being given, his default in not making it cannot afterwards be treated as a total breach thereof. 102 Ark. 79. The contract was not terminated because of Burt’s failure to give the bond. The district’s failure to pay the installments as they became due for work done constituted a breach of the contract, and, being in default itself, it could not insist on performance by Burt as a condition precedent to payment. 88 Ark. 497. Any failure of making progress with the work arose from Burt’s not being paid for work done in accordance with the terms of the contract. Even if the compensation of Burt must be fixed on basis of quantum meruit, he is entitled to recover what the work was reasonably worth when it was done. The contract was kept alive in fact, and he should be paid according to its terms. The three notes of Burt should be surrendered and canceled. He agreed to stand that much loss in order that par could be paid for the bonds and in consideration that he should do the work. The plan failed, the man to whom he gave the notes, who transferred them to the district, could not handle the bonds, which were finally sold to another, and the work was taken away from Burt, and, if ever there was a consideration for the notes, it certainly failed. After Burt was deprived of the contract, he should not be held liable for deterioration of work done. The district had taken it over. Under the terms of the contract the district could take over the work, and could only deduct the cost of completing it from the sum which would otherwise have been payable to the contractor, liad he finished it.

      Emmet Vaughan, for appellant W. T. Burks.
    Burks, appellant, was a subcontractor for Burt, and the district owes him in any event for the work done under the supervision of its engineer and accepted by it. He also is entitled to recover from the district under § 5448, C. & M. Digest, the principal contractor having failed to pay him. If the commissioners knew the district was not liable to the contractor, Burt, because of his failure to file bond, then by allowing appellant, subcontractor, to proceed with the work under direction of its engineer, it became liable to payment for work done. 19' Ark. 671; 26 Ark. 360; 72 Ark. 354, 80 S. W. 749; 2 Ark. 370; 124 Ga. 61; 38 Ill. 266; 82 Ill. 259; 18 B. Man. (Ky.) 41; 17 N. Y. 499; 16 Pa. Super. Ot. 484; 61 Atl. (Vt.) 471; 127 N. F. 575.

      Cooper Thweatt, for appellee district.
    The contract between Burt and the district was void because the bond required by the statute was not given. Sec. 5446, C. & M. Digest; Carsivell v. Hammock, 127 Ark. 119; 2 Dillon on Municipal Corporations, 1263; 28 Cyc. 1040; Baker v. Southern, 47 S. W. (Ky.) 608; Bowditch v. Superintendent, 46 N. E. 1026. Acts of public-agents not binding on agency represented unless done in manner required by law. 19 R. C. L. 1063; 28 Cyc. 1043; 152 Ark. 507; 147 Ark. 267; 79 Ark. 234; 94 Ark. 381; 61 Ark. 79; 9 C. J. 730. The court erred in allowing Burt credit on a quantum meruit for the work done. 19 R. C. L. 1064; 28 Cyc. 1043; 124 Ark. 11; 146 Ark, 63. District is entitled to recover payment made to Burt. 117 Ark. 336; 114 Ark. 289. Even conceding that the bond could be waived, which it could not be, of course, it was only a waiver of one of the several breaches of the contract. Burt abandoned the work, and the district rescinded the contract, and the question of waiver is really unimportant. The commissioners often demanded that the bond be made, but it was never done. Burt was not making any substantial progress with the work, and finally abandoned it. Was in no position, being in default, to claim tlie district had breached the contract by failing to make a payment-on August 10. 93 Ark. 4-53; 142 Ark. 434; 61 L. R. A. 407. Payment of Aug. 10 did not become due because Burt had failed to pay subcontractor. The contract provides for building a completed road, and Burt, having abandoned the work, without fault on the part of the district, forfeited all rights thereunder, could not recover for work done, nor retain the payments received. 236 U. S. 512; 79 Ark. 506; 166 S. W. 556; 102 Ark. 152; 137 Ark. 375; 6 R. O. L. 974; 9 C. J. 819; 38 Ark. 103; 87 Ark. 328. The district did not accept but rather retained benefit of work performed. 64 Ark. 34. The district had the right to retain the certified check, under the terms of the contract, as liquidated damages. 2 Dillon, Municipal Corporations, 1222; 28 Cyic. 1032; 30 So. 694. Under facts of this case the district cannot be compelled to pay Burt the saving made in the completion of the contract after he had abandoned the work. 236 U. S. 512, 35 S. C. 298; 120 Ark. 435; 124 S. W. 900; 83 N. E„ 997.
   Wood, J.

On the 10th day of April, 1920, one J. A. Burt (hereafter called .appellant) entered into a contract with Road Improvement District No. 11 '(hereafter called district) to construct a road for the district. He was to complete the work within two hundred working days. The appellant deposited a certified check in the sum of $5,000 to guarantee the execution of the contract. The commissioners of the district refused to award the appellant the contract unless the bonds of the district could be sold for par. Appellant procured One H. C. Argo, president of the First National Bank of Cotton Plant, Arkansas, to make a contract with the district to buy the bonds at par. Appellant gave Argo his notes in the sum of $6,200 as a consideration therefor. Argo transferred the notes to the district as part payment of the purchase price of the bonds. Appellant began work on April 26 by putting a crew to moving fences and telephone poles and by employing one W. T. Burks as a subcontractor to grade part of the road. .

Appellant failed to make bond. The appellant was paid for the work done in May and June, amounting to the sum of $7,177.40. Appellant paid W. T. Burks for the work done by him in May, but failed to pay him for his work in June. The district .refused to pay appellant for the work done in July, due August 10, because of his alleged failure to give bond and to pay his subcontractor, but told him it would pay him if he would give the bond, pay his men, and proceed to expedite the work. On August 23 the district employed other contractors to assist appellant, by grading the road through the bottom lands. Burks performed his subcontract and completed the same about August 30. There was due him for his work the sum of $10,445.73. On September 27th the district cashed the $5,000 certified check of the appellant and paid same to Burks, leaving a balance due of $5,445.73. On October 27th the appellant made an assignment of all his property in this State for the benefit of his creditors.

This action was begun by Burks against the appellant and the district and its commissioners. He set up the contract between the appellant and the district, and alleged that he had a subcontract under appellant; that he performed work according to his contract, and that there was due him the balance of $5,445.73. He made the trustees of appellant in the assignment parties, and also the People’s Bank of DeVall’s Bluff, the depository of the district, and'sought to impound the funds in its hands for the payment of his claim.

The appellant and the trustees in the assignment answered and alleged that Burks had been paid all sums of money due him directly by the district. They, made their answer a cross-complaint against the district, setting up the contract of the district with the appellant, and alleged that he did all the work of clearing the right-' of-way, which amounted to the sum of $5,000; that'the district had never paid; that he had sublet the excavation work to Burks; that the district had breached the contract in letting out work to others; and' that, but for such breach, appellant would have been able to complete the work at a large profit. They alleged that appellant had deposited a certified check with the district for $5,000, which the district had cashed, and they prayed that an accounting be had, and that they be given a decree for the .amount due the appellant.

The district answered the cross-complaint, denying that it had violated the contract with appellant, and denying that it was indebted to him in any amount, and alleged that the appellant had failed to give bond, and had abandoned the contract; that he was indebted to the district in the sum of $6,200 on notes given by him to Argo, which had been transferred to the district, for which it asked judgment, or that these notes be set-off against any amount that might be found due the appellant. It .also made its answer a cross-complaint against Burks, and alleged that the appellant had refused to give bond, and had - abandoned his contract; that, under a provision of the contract with the appellant, the district might pay any subcontractor for the work performed by such subcontractor out of any money due the contractor, and that, under such' provision of - the contract, the district had paid to Burks the sum of $5,000; that at that time nothing was due from the district to the appellant, and that the payment of $5,000 to Burks was therefore contrary to the contract, and illegal. The district therefore prayed judgment against Burks in the sum of $5,000.

Burks answered the cross-complaint of the district, and set up that, after the controversy arose .between the appellant and the district, the commissioners and its engineer had Burks to continue the work of the district, and that the $5,000 for which the district asked judgment against him was paid him for construction work which he performed for the district under supervision of its engineer, after the controversy arose between the appellant and the district. Burks also, in an amendment to his ■ complaint, asked that a writ of mandamus he awarded him, directed to the commissioners, commanding them to issue to him certificates of indebtedness for the amount found to Be due him by the district, and that they be required to levy a tax to pay the same.

After the suit had been filed the district, in the summer of 1921, made a new contract with Burks to complete the improvement at a much lower cost than that fixed in the original contract between the appellant and the district, and appellant asked that in the accounting he be allowed credit for the amount saved by the district under this new contract with Burks.

The trial court, after hearing the testimony, found that appellant failed to give the bond required by the statute and by his contract with the district, and that he was not entitled to recover on his claim for profits against the district; that the district was indebted to the appellant in the sum of $10,502.75, which amount should be credited by $7,177.40, leaving a balance due him of $3,325.35; that appellant was indebted to the district in the sum of $6,200, with interest thereon, for the notes, for which the district should have a decree against the appellant, and that, after deducting the $3,325.35 due appellant from the $6,200 and interest due the district, the appellant would be due the district the sum of $3,042, for which the district should be allowed judgment against'appellant and his trustees.

The court further found that the appellant was entitled to a credit in the sum of $5,000 for the certified check which he had deposited with the district, which amount should be set-off against the sum of $5,000 paid by the district for the appellant on his indebtedness to Burks. The court also found that Burks had no cause of action against the district, and dismissed his complaint for want of equity against the district and the Bank of DeVall’s Bluff, and also dismissed the cross-complaint of the district against Burks. The court rendered a decree in favor of Burks against the appellant in the sum of $5,445.73 principal, and $612.64 interest, making the total sum of $6,058.37. The appellant, the district, and Burks appeal from the decree in so far as it is adverse to their respective interests. Such other facts as we deem necessary will be stated as we proceed.

1. We will first dispose of the issues presented by the appeal of the appellant. The first question is, was the appellant entitled to recover under the contract? Section 5446 of C. & M. Digest provides as follows: “All contractors shall be required to give bond for the faithful performance of such contract as may be awarded to them, with good and sufficient security in an amount to be fixed by the board of commissioners, and said bond shall contain an additional obligation that such contractor, or contractors, shall promptly make payment to all persons supplying him, or them, labor and materials in the prosecution of work provided for in such contract.”

Road improvement districts created under what is. known as the Alexander road law, act 338 of the Acts of 1915, ch. 81, C. & M. Digest, §§ 5399 to 5462 inclusive, are g-wasi-governmental agencies of special and limited powers. They can only exercise such powers and in such manner as is expressly authorized by the law under which they are created, or which, by necessary implication, is included in the powers expressly conferred. The language of the above provision in regard to the bond shows that it is mandatory in terms, and a compliance therewith is prerequisite to the validity of any contract between the district and contractors for the building of roads which such district undertakes. The bond is for the benefit and protection, not only of the district, but also of those who supply labor or material to be used in the construction of the improvement.

We cannot agree therefore with learned counsel for the appellant that the giving of the bond is a condition subsequent, and that it does not affect the validity of the contract. On the contrary, the giving of this bond is a condition precedent, and essential to the validity of the contract for the building of roads under the road improvement district law. The commissioners therefore had no authority to enter into this contract with the appellant, and to allow him to enter upon the performance thereof, before he had executed the bond required by the above statute. While the statute does not specify whether the bond shall be made before or after the contract is actually signed, the language clearly contemplates * that no contract entered into between the district and contractors shall be binding on the district until the bond is made. Such is the effect, we believe, of the doctrine of our own cases construing similar pro-lusions, and the authorities generally. Wiegel v. Pulaski County, 61 Ark. 78; Altheimer v. Board, 79 Ark. 234; Carswell v. Hammock, 127 Ark. 119; Ellison v. Oliver, 147 Ark. 267; Ark. Nat. Bank v. School Dist., 152 Ark. 507; 19 R. C. L. 1063, sec. 352; 28 Cyc. 1043; 9 C. J. 730; Bowditch v. Supt. of Streets of Boston, 46 (Mass.) N. E. 1026; Baker v. So. Const Co. (Ky.), 47 S. W. 608; Donnelly on Public Contracts, § 17. It follows that the contract between the appellant and the district was ultra vires and void because no bond was executed in compliance with the statute, and appellant is entitled to recover nothing under the contract. The decree of the court was correct in so holding.

2. The court allowed appellant the sum of $10,-502.75 as quantum meruit for work lie had done, and of which the district had received the benefit, and charged him with the amount the district had paid him and with three notes in the aggregate sum of $6,200 which the district held, and rendered a judgment in favor of tb-^ district for the balance. The appellant contends that the amount allowed him for his work on a auantum meruit basis was too small, and that the court also erred in not. canceling his notes.

It could serve no useful purpose to set-out and discuss at length, the testimony bearing upon the issue as to whether or not the court should have allowed the appellant a greater sum for the work done by him. The testimony of the engineer of the district tended to show that the work done by appellant was of no real value to the district until the road was completed; that the road, which he had graded in spots, did not become of any real benefit to the district until the entire roadway was completed in 1921. In the meantime a considerable portion of the roadway which appellant had done had washed away because of appellant’s failure to properly drain the work. The engineer deducted the amount that was necessary to pay for the work that had washed away from the cost of doing the work at present prices, which left the sum of $10,502.75, the amount allowed the appellant. The appellant contends that he should have been allowed the amount that it cost him to do the work at the time it was done. But the district, on a quantum meruit, cannot be made to pay more than the value of the work at the time it received the benefit thereof, and, as the preponderance of the evidence shows, the district did not get the benefit of his work until the summer of 1921. Therefore the measure of appellant’s recovery, if he is entitled to recover at all, is the value of his work to the district at that time. 9 C. J. p. 820, § 157.

We cannot agree with learned counsel for the district that the appellant is not entitled to recover on a quantum meruit, and that the district is entitled to recover back the amount paid appellant, because, forsooth, the appellant failed to execute the bond, which thereby rendered the purported contract ultra vires and ineffectual. The district and the appellant were equally at fault and censurable, the one for permitting and the other for performing work without complying with the statute as to the execution of a bond. The commissioners of the district did not stop appellant from proceeding with the work after they knew that the bond had not been executed, but, ou tlie contrary, permitted bim to proceed with the same, and, in effect, received and accepted the benefits of his work by paying for what he had already done and allowing him to perform that for which he had not been paid before he abandoned the ' work. While the contract was ineffectual, the work which the appellant did, and the district permitted, did not involve any fraud against the district; and, while the contract was ultra vires, yet the entering into such contract is not immoral. The language of the statute does not expressly prohibit the making of such a contract and does not expressly make it unlawful to enter into such a contract. Therefore it does not come within the general rule that, where a contract is immoral or expressly prohibited, or is malum prohibitum, no court of justice will entertain an action upon it or upon any asserted rights growing out of it. See Thalman v. Lewis, 124 Ark. 6; Carter v. Bradley County Road Imp. Dists., 155 Ark. 288.

The appellant did the work, the district permitted him to perform it under the supervision of its engineer, and it received the benefit of such work, and it is but just and equitable that the district should pay for the value of the benefit it received at the time the benefit was realized. The court did not err in allowing judgment in favor of the appellant against the district in the sum of $10,502.75, less the amount that had already been paid him by the district.

The judgment rendered by the court in favor of the district against the appellant for the aggregate amount of the notes, $6,200 and interest, was likewise correct. The appellant testified that he gave Argo the notes to help him sell the bonds. He was willing to stand that much loss to hasten the sale of the bonds, so that he could go on with his work. His superintendent of the work advised him that he had a good profit in the job, and that he had best take that much loss in order for the district tb get money on the bonds. His idea in giving the notes was that .the’ bonds could be sold, the district get the money, and he would be paid for his work. Appellant’s superintendent testified that the contract could not be let because the bonds could not be sold at par. He told Arg’o, appellant’s banker, about it, and he got in touch with Thweatt, one of the attorneys of the district. The notes were given to make the bonds bring par. , Then they revised the bid to take up the $6,200. Appellant was still under all bidders.

Argo testified concerning this that he made a contract with the district to buy the bonds. * * * The notes for $6,200 were given him to take care of the difference between the bonds at 96c and at par. The district was not willing to sell below par. When the bonds were finally sold, he turned appellant’s notes over to the district as cash and as part of the purchase price of the bonds. The whole issue of bonds was $155,000. He sold $75,000. He paid $7,500 by paying $1,300 by check and giving the district appellant’s notes for $6,200. The district got $67,000 from the bond purchasers, $1,300 from witness by check, and $6,200 of appellant’s notes, and witness’ original deposit of $2,500, making $77,500 for $75,000 in bonds. Witness lost $3,800 on the transaction, and the arrangement was that the appellant should lose '$6,200.

The testimony of Thweatt, one of the'attorneys of the district, who was mainly instrumental in negotiating the contract for the district, was to the effect that the appellant was the successful bidder for the work of constructing the road for the district. The commissioners first determined not to award a contract unless they could dispose of the bonds at par. Appellant’s bid was $6,200 less than the piice of the next lowest bidder. Appellant agreed that he would find a buyer for the bonds at par if the district would permit him to add $6,200 to the price for his work. This proposition the district ac1 cepted, and the contract figure included the $6,200 added to the bid' prices. Appellant then arranged for Argo to lray the bonds at par, and gave him the $6,200 in notes as a consideration therefor. Argo had no knowledge of the arrangement between the district and the appellant that his bid might be increased the amount of the notes to Argo. Appellant wanted Argo to make the contract to buy the bonds, and agreed to give him $6,200 consideration therefor, which he did by executing his notes. Argo signed the contract to buy the bonds, and appellant carried out his contract with Argo, which was the consideration for the notes. The notes were afterwards transferred to the district. The district received them from Argo at the time of the transaction in lieu of that much cash.

It thus appears that the notes were unconditional. They were given for a consideration that had already been performed by Argo in the execution of the contract to buy bonds of the district. When the district accepted Argo as a satisfactory buyer for the bonds, the consideration for the. notes was performed. The fact that the commissioners of the district entered into a contract whereby they allowed appellant to increase his bid in the amount of the notes did not destroy the consideration upon which the notes were executed to Argo and the consideration from the district to Argo in the contract of the sale of the bonds to him. The district obtained the notes from Argo for a valid consideration, and owns the same, and the appellant is liable therefor. The statute under which this district was created does not prohibit the commissioners from selling bonds below par. The appellant was awarded the contract, and thus secured the opportunity and privilege for doing the work, and received in consideration for his notes an increase of $6,200 in the price that was to be paid him for work that he was to do. The preponderance of the testimony shows that he would have been paid this amount if he had not abandoned the work. Although the contract was ultra vires, there was nothing in the law prohibiting the commissioners from allowing him the sum of $6,200 increase in his original bid for the work that he had engaged to do, and, as we have stated, the preponderance of the evidence shows that he would have'realized this additional amount which the commissioners agreed to pay him if he had completed his work. The district therefore is entitled to recover the amount of the notes.

3. The court erred in not rendering a decree in favor of Burks against the district in the sum of $5,445.73, with interest. The testimony of Burks was to the effect that, as a subcontractor under the appellant, he did work for which the district received the benefit, and he had not been paid for such work. The total amount of his work in the aggregate was $13,706.82. The district had paid him .thereon the sum of $8,261.09, leaving’ a balance due him of $5,445.73. He performed the work under the supervision of the engine'er of the district. The engineer testified, among other things, that this sum was the correct amount due Burks for his work, and that this amount was due on or before August, 1920. He further testified that the work done by Burks was entirely satisfactory.

The testimony tended to prove that the district had withheld $5,000, the cash in its hands which had been deposited by the appellant, and which it had withheld from him because he had failed to pay his subcontractor, and that it turned over this amount to Burks, on the theory that he should have pay for his work and that they were authorized to pa3>- him under the provisions of § 5448 of 'Crawford & Moses’ Digest. That section provides, among other things, that “when it appears to the board of commissioners that the contractor is not paying for labor and material, they may withhold, in addition to the fifteen per cent., any and all amounts due the said contractor until the labor and material has been paid for, or, if they deem it best, they may, upon proper notice to the contractor, pay out to laborers and material-men such funds as are on hand to the credit of the contractor.”

While Burks’ contract was with the appellant, and while he had no contract with the district, yet the fact remains that Burks did the work under the supervision of the engineer of the district. The commissioners of the district knew that he had not been paid for the work. Neither had the district paid the appellant for this work. The work was satisfactory'; the district received the benefit of it; the district does not deny that the work was worth the amount which Burks claims; therefore it occurs to us that, in equity and good conscience, the district is liable upon a quantum meruit to Burks in the sum of $5,445.73, with interest at 6 per cent, from August, 1920. For this sum the court should have entered its decree. See Kramrath v. Albany, 127 N. Y 575; Buck v. Eureka, 124 Calif. 61; New Athens v. Thomas, 82 Ill. 259; Frankfort Bridge Co. v. Frankfort, 18 B. Monroe, 41; Hardwick v. Wolcott, 61 Atl. 471.

The cause will be remanded, with directions to the trial court to enter final decrees in accordance with this opinión, and for such other and further proceeding’s as may be necessary to conserve the rights of the parties.

Wood, J.,

(on rehearing). In its motion for rehearing the district complains because this court, in the original opinion, did not dispose of the issue between appellant and the district with reference to the certified check of $5,000. The lower court, as shown in the • original opinion, rendered a decree in favor of appellant against the district for the amount of this check, and set-off the decree with the sum of $5,000, which the district had paid to Burks on the indebtedness which appellant owed Burks for the work which the latter had done, and for which he had not been paid by appellant or the district. The trial court correctly held, under the circumstances and facts, which are set forth in the original opinion, that the $5,000 belonged to appellant and not to the district.

Judge Dillon says: “Where a bidder accompanies his bid for the performance of a public work with the deposit of a certain sum, under an agreement to forfeit the sum deposited in case of his neglect or refusal to enter into the contract for the work, and, tvithout default on the part of the board, he fails to execute the contract, he cannot recover hack his deposit, and the hoard may declare same forfeited.” 2 Dillon, Mun. Corp., p. 1222; 28 Cyc. 1032; Jackson v. Adams, 30 Sou. 694. This is sound doctrine which counsel for the district invokes, hut it does not apply to the facts of this record. The appellant did not neglect or refuse to enter into the contract for the work. The fact that he and the district entered into the contract for the work, and that he was allowed to enter upon the performance of the work, without executing the bond in .compliance with the statute, which was prerequisite to the validity of the contract, was, at least, as much the fault of the board as it was the fault of appellant. The court ruled correctly in not declaring a forfeiture against appellant of the "'five thousand dollars. This money belonged to appellant. ' But appellant owed Burks the sum of $10,502.75 for work which the latter had performed under his contract with appellant. The district was liable, as stated in the original opinion, to appellant for this work on the quaoitum meruit. It was likewise liable to the subcontractor Burks. For it had permitted appellant to have the work done by Burks Avithout first requiring appellant to execute the bond which the statute requires for the protection of the district as well as subcontractors. It received the benefit of the work, and had not paid appellant., nor had appellant paid Burks for same. The district was bound to pay appellant, and appellant was bound to pay Burks, and the district was likewise' bound, under the circumstances, to see that Burks was paid.

The appellant concedes here that it is indebted to Burks for the work done by him, and for which hé had not been paid. Appellant does not ask that the decree in favor of Burks against him be reversed. On the contrary Ms counsel say: “We do not ask a decree for the $5,000, because we owed Burks, and, if the district is made to refund this $5,000, Burks would pay it hack to the district, and his claim would he increased by the same amount. The result would be that we would owe $5,000; that is, instead of owing $5,445, we would owe him $10,445.” We -adopted this suggestion of counsel, and disregarded the matter of the certified check in the former opinion. But, as counsel for the district, on rehearing, ask for an express decision on the issue between the district and -appellant as to the certified check, we now affirm the decision of the chancery court on this issue. We also affirm its decree in favor of Burks against -appellant for the sum of $5,445, the balance due Burks after receiving the payment of $5,000, the amount of the certified check. We also direct, as in the original opinion, that the lower court enter a decree in favor of Burks against the -district for the sum -of $5,445, with accrued interest.

While this result gives Burks a decree against both •appellant and the district for the sum of $5,445, for the balance due him for his work, yet he can have only one satisfaction, and the chancery court can direct that, when the district or appellant shall have paid the amount of this decree to Burks, it shall be in satisfaction of the decree in his fav-or against the district and appellant. The trial court may also direct that, when the district has satisfied the decree in favor -of Burks, such satisfaction shall inure to the benefit of the district and set-off the decree in favor of appellant against the district for the same amount.

The decree -of the trial court is in all things affirmed, except in dismissing Burks’ complaint against the district. The decree in this particular is reversed, -and the cause is remanded with directions to -enter a decree in favor of Burks against the district for the -sum of $5,445, with accrued interest, and such further proceedings as may be necessary to conserve the rights of all the parties according to law and not inconsistent with this opinion.


source: Caselaw Access Project

author: Hart, J.

license: Public Domain

text:
    Procter & Gamble Distributing Co. v. D. C. Goff Co.
    Opinion delivered June 4, 1923.
    1. Contracts — evidence.—Contract may be made by telegrams and letters, and, when so evidenced, it is the duty of the trial court to interpret the contract and declare its terms.
    2. Contracts — construction.—Where, after having sold to a wholesale dealer a stock of soap and cooking compounds, including “Flakewhite,” the manufacturer decided to change its method of doing business by selling direct to the retail dealers, an agreement by the manufacturer to give the wholesale dealer its disposition of such goods upon being furnished a statement of the amounts and kinds on hand, constituted an agreement to take up all -the goods on hand, including “Flakewhite.”
    3. Sales — construction of contract. — Where, on a sale of goods, the manufacturer allowed the purchaser a discount of two per cent, for cash, on a subsequent repurchase of the goods by the manufacturer at the price of the goods on a certain date, the latter would not be entitled to such cash discount where it refused to take back and pay for a portion of the goods at the agreed price.
    4. Sales — agreement to repurchase — consideration.—Where a manufacturer changed its method of doing business from dealing with jobbers to dealing directly with retail merchants, an agreement by it to repurchase goods previously sold to a wholesale dealer at the price of the goods on a certain date is a valid contract.
    Appeal from Sevier Circuit Court; James 8. Steel, Judge;
    affirmed.

      E. K. Edwards and B. E. Isbell, for appellant.
    The court erred in directing a verdict against appellant. The correspondence, letters and telegrams did not show an agreement on part of appellant to take up or take back the “Flakewhite.” Appellee “took it-for granted,” and the question whether there was such agreement should have been left to the jury. 81 Ark. 337; 89 Ark. 368; 151 Ark. 81/ Contract, if one existed, was without mutuality or consideration. 90 Ark. 508. No evidence of a meeting- of .the minds of the parties in the letters and telegrams. Appellant should have liad credit for the $52.17 discount, in any event,

      Lake & Lake, for appellee.
    The verdict was properly directed for appellee. The facts are undisputed. The contract was made by letters and telegrams passing between the parties, and, when so evidenced, it is the duty of the court to interpret the contract .and declare its terms. 132 Ark. 197; 125 Ark. 199; 89 Ark. 239; 77 Ark. 261; 128 Ark. 114; 97 Ark. 613; 112 Ark. 380. Consideration sufficient. 13 C. J. 334-5; 96 Ark. 184; 91 Ark. 367; 134 Ark. 543; 101 Ark. 22.
   Hart, J.

Appellant prosecutes this appeal' to reverse a judgment against it in favor of appellee for damages resulting from appellant’s failure to perform a contract for the sale to it of certain merchandise by appellee. The appellant, who was the defendant below, is a foreign corporation located at Memphis, Tennessee, engaged in selling at wholesale soaps and cooking fats. The appellee is a corporation located at DeQueen, Ark., and is a jobber engaged in selling soaps, cooking fats, and other merchandise. Appellee was a customer of appellant, and purchased from it a considerable quantity of soaps and eookipg fats, which it had on hand on June 30, 1920. Prior to that time appellant had been selling its merchandise through jobbers, and appellee was one of its main customers in this part of the country. On the date above mentioned, appellant changed its method of business and began to sell directly to retailers. Upon learning this fact, appellee wrote to appellant, asking it to take up the merchandise which it had bought from appellant and had on hand.

It is conceded that the appellant agreed to relieve appellee of the stock of soap and Crisco which appellee had bought from it, and that a contract to that effect was entered into by means of certain letters and telegrams between the parties. On the other hand, it is the contention of appellee that appellant also agreed to repurchase the Flakewhite, which is a cooking fat, which ap-pellee had purchased from appellant,

It is well settled in this State that contracts may be made by telegrams and letters, and, when so evidenced, it is the duty of the trial court to interpret the contract and declare its terms. Hart v. Hammett Grocer Co., 132 Ark. 199, and cases cited.

This rule is conceded to be the law in this State, and the only issue raised by the appeal is whether or not the contract between the parties is such that the court was warranted in telling the jury, as a matter of law, to return a verdict in favor of appellee. The instruction to return a verdict for appellee was based on the ground that the letters and telegrams on their face showed an absolute agreement on the part of appellant to repurchase the Flakewhite which appellee had on hand on the same terms as it had agreed to repurchase the stock of soap and Crisco that appellee bad on hand.

The correspondence between the parties commenced on the 13th of July, 1920, and lasted until the 23rd day of December, 1920, at which time appellant denied that it had offered to relieve appellee of its stock of Flakewhite, and refused to do so.

The letters between the parties are numerous and somewhat lengthy. For this reason it is not practical' to set them out in full within the short compass of this opinion. We have reached the conclusion that the circuit court was right in telling the jury, in effect, as a matter of law, that the agreement of appellant to repur-' chase the stock on hand which appellee had originally purchased from it included the Flakewhite as well as the Crisco and the soaps.

On July 13, 1920, appellee wrote appellant as follows: •

“Dear sirs: We have heard rumors that, since you' have gone direct to the retail trade with the line of soaps and shortening, that it is your intention to take up' jobbers’ stocks. We have quite a lot of stock of your soap on hand, and which we bought with the expectation of selling for a profit, and of having your cooperation in doing- so, and we feel that, in justice to us, you should relieve us of the stock of soap and Criseo that we have on hand. Please advise us at once, and oblige.”

On the 16th day of July, 1920, appellants sent to appellee the following answer:

“Gentlemen: We acknowledge receipt of your letter of July 13th, in which you request that we relieve you of your stock our brands. We shall be very glad to adjust the matter, but will ask that you await a visit from one of our representatives before any action is taken.- We will have some one call at the earliest possible moment, but we request your indulgence, as it may be a matter of a week -or ten days before we are able to have our salesman visit you. You of course understand that any- adjustment made will be on the basis of cost-prices-as..of June 30,1920.” ■■

On July 28 appellee answered this letter., and notified appellant that its representative had not yet come. Appellee stated that it had goods of appellant which it was anxious for it to take up, and then enumerated the kind and amount of the goods. The enumeration included certain cases of Criseo, certain cases and drums of Flakewhite, and certain cases of different kinds of soap and washing powder. Appellee reminded appellant that, when it bought the goods, it received no information whatever that the distribution of the goods would be taken out of the hands of the jobbers, and that it had been an important factor in placing appellant’s goods on the market in the town of DeQueen.

Appellant answered this letter, and again told ap-pellee that its representative would soon be there to take up the goods. Appellant promised appellee in the letter that it should be remitted for these goods a't the prices in effect June 30, 1920. On August 14, 1920, ap-pellee wrote appellant that it would like to know something definite about its intention of taking úp the goods in question. On August 20, 1920, appellee sent to appellant a telegram as follows:

“Are you going- to relieve us of stocks of soaps and cooking compounds in yoiir brands? If so, when?”

On August 20 appellant wrote to appellee as follows:

“Gentlemen: In reply to your communication of August 14, we wish to advise that we will give you disposition upon receipt of an up-to-date statement of the merchandise that you have on hand, giving size and the exact number of cases.”

Appellee replied to this letter and gave to appellant a complete itemized list of the goods it had on hand. In the list were certain cases of Flakewhite and Crisco, and certain kinds of soaps. Other letters passed between the parties, but we do not deem it necessary to set them out. Appellant finally refused to take back the Flakewhite on the ground that, when it changed its method of doing-business, it did not relieve jobbers of cooking fats, and reminded appellee that cooking fats were perishable products.

We think it was too late then for appellant to refuse to take the eases of Flakewhite. On the 28th day of July, 1920, appellee sent to appellant an itemized list of the goods on hand which it had purchased from appellant. This itemized list included the Flakewhite as well as the Crisco and the soaps. This was followed by a telegram on August 20, 1920, asking the direct question if appellant was going to relieve appellee of its stock of soap and cooking compounds.- Flakewhite is included in the latter term. Appellant answered this letter by agreeing to give appellee its disposition of the goods upon an up-to-date statement of the amounts and kind on hand. This constituted a binding contract between the parties for the appellant to take up the amount of Flakewhite on hand which appellee had purchased from it, as well as the Crisco and the soap. Appellee included the number of cases of Flakewhite in its itemized list of goods, and appellant agreed to take up- all the goods on hand which it had sold to appellee, only insisting on ap-pellee’s giving a detailed statement of tbe amount and kind of goods on hand.

Appellant paid appellee for all the goods shipped under the agreement, except the Flakewhite, and the court instructed the jury to return a verdict against appellant in favor of appellee in the sum of $815.40. This was the price of the Flakewhite on the date of June 30, 1920.

Appellant insists that, in any event, the judgment should be reversed because it was not allowed the sum of $52.17 which should have been deducted from the amount it was to pay appellee for the goods actually taken back by it. A claim is made for this on the theory that in the original sale of the goods appellant allowed appellee a discount of two per cent, for cash. A sufficient answer to this claim of appellant, however, is that it only paid for part of the goods which it agreed to take back, and absolutely refused to take 'back and pay for the Flakewhite at the agreed price. Under this state of the record it would not, in any event, be entitled to any discount on the purchase price.

Finally it is insisted by appellant that the contract is void for want of mutuality, and for that reason the judgment should be reversed.

We think that there is nothing in this contention. It appears from the record that appellee had paid appellants for the goods it had purchased from it. When appellant changed its method of doing business from dealing with jobbers to dealing with retail merchants, appellee asked appellant to take back the goods it had on hand which it had purchased from appellant, and appellant agreed to do this at the price of these goods on a certain date, when it should receive an itemized list of such goods. This amounted to a repurchase of the goods by appellant from appellee, and this it had a right to do.

It follows that the judgment will be affirmed.


author: Hart, J.,

text:
    Wilmot Road Improvement District v. DeYampert.
    Opinion delivered June 4, 1923.
    1. Highways — vacation orders changing roads. — While the records of the county court showing that no proceedings were had on the general county court record is conclusive of that fact, under a special road improvement act providing that “all courts shall he deemed always open for the purposes of this act,” .one of which purposes was to lay out new roads or to change existing public roads within the boundaries of the district, held, that, though the general county court record showed that there was no •business transaacted on a certain day, an order entered on the same day in a special book establishing new roads and making changes in the old roads, though signed by the county judge, was an order by the county court, and it was immaterial.that it was not recorded in the general records of the county court, but in a special record kept for that purpose.
    2. Highways — orders changing roads — appeals.—A provision in a special act creating a road improvement district that appeals in “all suits involving the validity of the district” shall be taken within thirty days, has no application to a proceeding in the county court making changes in the roads sought to be improved.
    Appeal from Ashley Circuit Court; Turner Butler, Judge;
    reversed.
    STATEMENT OE EACTS.
    Appellants prosecute this appeal to reverse a judgment against them, in favor of appellees, in the circuit court, affirming a judgment of the county court setting aside a former order of that court making changes m certain public roads according to plans filed by Wilmot Road Improvement District.
    On April 7, 1921, W. B. DeYampert and numerous other taxpayers and owners of real property within the boundaries of Wilmot Road Improvement District in Ashley County, Ark., filed a petition in the county court to set aside an order made in said court, approving certain changes in the public roads and opening new roads according to the plans filed by the Wilmot Road Improvement District.
    The Wilmot Road Improvement District was created by special act No. 2, approved January 30, 1920, which, is one of the unpublished acts of the special session of the Legislature held in January, 1920.
    Sec. 5 of the act provides that the county court of Ashley County shall lay out public roads along- the lines selected by the hoard of improvement district commissioners in the manner provided by § 5249 of Crawford & Moses’ Digest.
    The regular docket of the county court shows affirmatively that the county court had no business before it and made no order on May 10, 1920. It also appears that there was a special record kept in the county clerk’s office for the.purpose of showing the orders made by the county court in the Arkansas-Louisiana Highway District. This book also contains certain orders made by the county court of Ashley County in the matter of laying out ánd changing the public highways in the Wilmot Road Improvement District. This record shows that on May 10,1920, an order was made laying out and changing the public highways in the Wilmot Road Improvement District in certain respects, and the order was signed “'C. D. Oslin, Judge.” Oslin was at that time the judge of the county court of Ashley County.
    According to his testimony, he made the order in question and signed it late in the afternoon on May 10, 1920. He had already made the general county court record show that there was no business transacted on that day. Late in the afternoon the commissioners of Wilmot Road Improvement District came into his office in the courthouse, and he made and signed the order making changes and laying out the public roads in the Wilmot Road Improvement District, and the clerk spread this order upon the book in which the records of the county court relating to the proceedings in the Arkansas-Louisiana Highway District were kept. The testimony of the county judge is corroborated by that of one of the commissioners of Wilmot Road Improvement District.

      It appears also from the testimony of the comity clerk that there is a book in 1ns office -which contains the proceedings of the county court in regard to the Arkansas-Louisiana Highway Improvement District, and also purports to be a record of the proceedings in the county court with regard to the Wilmot Road Improvement District.
    A new county judge had come into office when the proceedings in the instant case came on for hearing. Upon tire showing recited above, the county court ordered that the judgment in question establishing new roads and making changes in the old roads in the Wilmot Road improvement District should he annulled and set aside. .
    Upon appeal to the circuit court the case was heard upon .the same records and evidence. The circuit court was also of the opinion that the judgment of the county court in question establishiilg new roads and changing the old public roads in the Wilmot Road Improvement District should he annulled and set aside.
    Judgment was rendered accordingly, and to reverse that judgment this appeal has been prosecuted.

      Coleman, Robinson •& House, for appellant.
    The Legislature had power to provide that all courts should be deemed always open for the purpose of this act, as was done by § 11 of the act. Presumption in favor of validity of acts of courts, when done in term time. Ex parte Baldwin, 118 Ark. 416. The record' shows that the county court was open on May 10, and that the order was entered on the same day approving the plans and opening up the new road. 57 Neb. 391, 73 Am. St. Rep. 519. It must be presumed that the order was made by the county court in regular session. .

      Williamson & Williamson, for appellees.
    Conrt should strike transcript from the files, as it does not comply with requirements of rules XYI and XVIII. The appeal should he dismissed as not taken within time prescribed by the act, thirty days. Unless tlie county court first laid out the roads to he' improved, all subsequent proceedings were void. See. 28, art. 7, Constitution 1874; 148 Arle. 365; 89 Ark. 513; 138 Ark. 549. Oral testimony not admissible to contradict the plain record of a court of justice. 7 R. C. L. 1018. 118 Ark. 416, cited by appellant, not in point, and 57 Neb. 391 is in conflict with the court’s decision in 134 Ark. 447. The Nebraska case is easily distinguished from the instant case in any event. The county court, not the judge, has power to open new roads.- Sec. 5249, Crawford and Moses’ Digest; § 8, art. 7, Constitution. A county court is an organized body in session a.t a fixed place and' a designated time, consisting of a judge, a sheriff and a clerk, acting pursuant to legal authority. Secs. 1392, ,2272, 2274, C. & M. Digest. A judge acting alone is not a court. 103 Ark. 573; 2 Ark. 229; 20 Ark. 77; 27 Ark. 353; 60 Ark. 158; 134 Arid 455; 133 Ark. 197; 138 Ark. 221; 15 C. J. 718, 875. Sec. 11 of the act creating the district, providing “all courts shall be deemed alwavs open for the purposes of this apt,” does not remedy the condition, because the uncontradicted evidence shows court was not convened, was not in session at the time the expunged record was signed informally by ’the judge. The-provision only relates to the suits authorized by the act in some section therewith.
   Hart, J.,

(after stating the facts). The judgment of the circuit court was wrong. It is true that, according to Light v. Self, 138 Ark. 221, and other decisions of this court, the records of the county court showing that no proceedings were had on the general county court record is conclusive of that fact. The order in question, however, laying out new public roads and changing the old ones in Wilmot Road Improvement District, was not made under the general provisions of the statutes in regard to laying out public roads, but was made under a provision of the special act of the Legislature creating the Wilmot Road Improvement District referred to above.

As set out in our statement of facts, this special act was approved on the 30th day of January, 1920, and contains a provision authorizing the county court of Ashley County to lay out public roads in the district along the lines selected by the board of improvement commissioners in the manner provided by § 5249 of Crawford & Moses’ Digest.

This special act also contains a provision to the effect that “all courts shall be deemed always open for the purposes of this act.” As we have just seen, one of the purposes of the act was for the county court to lay out new roads, or to change existing public roads within the boundaries of the road improvement district.

Under this section of the act creating AYilmot Road Improvement District the county court was always open for the transaction of business relating to said road improvement district. It is true that the order in question mating the changes in the public road was signed by C. D. Oslin, Judge, but it was in effect made by him as a court. The order was made in his character as a judge, and was in its nature judicial. Hence it did not make any difference whether Oslin declared himself in words to be acting as a court or not.

The statute requires the county court to be always kept open for the purpose of making orders with regard to the road improvement district, and any judicial order made by the county judge is, under the terms of the statute, an order made by the county court. The judge of the county court having been authorized and directed, under the statute, to hold court in vacation for that kind of business, the order was, under the statute, a court order.'

In Courts and Their Jurisdiction, by John D. Works, p. 377, the law is stated as follows:

“Although terms of court may be provided for generally, the Legislature may provide that, for the transaction of business of an urgent character, the court shall be open at all times, and, under such legislation, the court may act with reference to such business during what is, as to other business, vacation. But this is not the act of a judge in vacation, but of the court. And where a judge is authoifized to appoint a receiver, or perform other like judicial acts, it is held that his acts, orders, and proceedings, although had in vacation, are the judicial proceedings of the court whereof he is judge. This, however, is based upon the-ground that the words ‘judge’ and ‘court’ are, as used in the statute authorizing the appointment -of' a receiver in vacation, synonymous.”

The United States Supreme Court has uniformly upheld the act of Congress providing that bankruptcy courts shall always be open for certain purposes in bankruptcy proceedings. United States v. Finnell, 185 U. S. 136, and United States v. Marvin, 212 U. S. 275.

It would be too narrow an interpretation of the statute to hold that the business was not transacted by the court because it was signed by C. D. Oslin, Judge. The power of the Legislature to provide that a court shall always be open for the purposes named in the act has never been denied, so far as we are informed, by any court where these questions have been presented for its consideration. Hence we think the exercise of judicial power in accordance with the provisions of the special act constituted an act of the court.

The county court had the power to adjourn the county court for all purposes with regard to the jurisdiction it might exercise under the Constitution and the other statutes of the State; but, the statute in question having provided that it should be always open for the purposes of the act, any judicial power exercised by the county judge for any purpose coming within the provisions of the act necessarily constituted an action by the court. It did not make any difference that the order of the court was not kept on the records for general countv court proceedings. It was sufficient if a proper record was kept in tlie county clerk’s office for the purpose. It seems that, for tlie purpose of convenience, tlie county clerk kept tlie proceedings of the county court with regard to the Wilmot Road Improvement District in a special record, and, as we have above indicated, this fact could not in any sense render the proceeding void. The essential fact was that the order was a judicial act, and was made by the county judge, who, under the provisions of the special act creating the road improvement district, was authorized to make it any time, and whose court was deemed to be always in session for that purpose.

As above stated, it is well settled that by statute a court may have terms for certain purposes, and be regarded as always open for other purposes designated by the statute.

It is also insisted that the appeal should be dismissed because it is not taken within The time provided by the statute.

Sec. 11 of the special act creating the Wilmot Road Improvement District provides, “all suits involving the validity of the district * * * shall be deemed matters of public' interest and advanced in all courts and heard at the earliest moment, and all appeals therein will be taken and perfected within thirty days.”

This provision of the special act is not applicable to this suit. This proceeding does not involve in any manner the validity of the district. The order of the county court making the changes in the public roads might be valid or invalid, yet the validity of the district would in no wise be affected. Hence the special provision just quoted does not amply. The appeal was taken within six months, and that is sufficient.

It follows tliat the judgment must be reversed, and the cause will be remanded for further proceedings according to law7 and not inconsistent with this opinion.


author: Smith, J-.

text:
    Caddo Central Oil & Refining Corporation v. Boat-Right & Cheesman.
    Opinion delivered June 4, 1923.
    1. New trial — newly discovered evidence. — It was not an abuse of discretion to refuse a new trial for newly discovered evidence, in the absence of a showing of diligence and where such evidence was merely cumulative.
    2. Evidence — photograph.—Where a photograph of the scene of a fire was not identified 'by the person who took it as a correct representation of the place of the fire, but a witness testified that it represented the appearance of the place on the morning after the fire, it was not error to permit its introduction with the explanation by the court that it might be considered by the jury as explanatory of the testimony of such witness.
    3. Negligence — fire—evidence.—Evidence held to support a finding that a fire which destroyed plaintiff's property was negligently set out by defendant’s employees.
    Appeal from Lafayette Circuit Court; George B. Haynie, Judge;
    affirmed.

      Mahoney & Yocum and Searcy & Searcy, for appellants.
    The court erred in refusing to grant a new trial on account of newly discovered evidence. The court erred in not allowing the introduction of the photograph showing the condition, the brush heaps, from which the fire originated, and in making the comment on it, which indicated that court’s opinion of its weight. Note 114, A. S. B>. 440; 1 Greenleaf on Evidence, § 439-h; 91 Ark. 179; general rule for admission, 106 S. W. (Ky.) 795; 118 N. Y. 77, 23 N. E. 35; 68 L. B. A. (Ore.) 477; 58 S. W. (Tenn.) 270; 26 L. E. A. (Mass.) 430, 48 S. E. (S. C.) 591; 41 Atl. (Pa.) 617. The evidence is insufficient to support the verdict. The verdict is excessive, is for $3,923.06 in excess of the maximum damage based on appellee’s evidence.

      W: W. McDonald and King & Whatley, for appel-lees.

      No abuse- of discretion in denying motion for new trial on ground of newly discovered testimony. 148 S. W. (Ark.) 271; 85 Ark. 33, 106 S. W. 203; 73 Ark. 528, 84 S. W. 728; 2 Ark. 133; 2 Ark. 346; Hinhlc v. Lassiter, 142 Ark. 223; 144 Ark. 58. No error in allowing tlie introduction of the pliotograpli by witness who had not made them, and telling the jury that they could be considered for what they were worth. Appellant voluntarily withdrew the picture and refused to offer in evidence the others. If there was error, it was invited. 151 Ark. 35; 145 Ark. 303. Case in point 15 L. R. A (N. S.) 1162. See also 85 Ark 30; 98 Ark. 583; 142 Ark. 584; 9 L. R. A. (N. S.) 1007. The verdict is supported by the evidence. 96 Ark. 405,131 S. W. 878; 17 Ark. 478; 92 Ark. 569, 123 S. W. 781; 87 Ark. 65, 113 S. W. 639; 89 Ark. Ill, 115 S. W. 950; 74 Ark. 16; 82 Ark. 372, 101 S; W. 738. Verdict conclusive on appeal if there is any evidence legally sufficient to support it. 102 Ark. 200, 143 S. W. 92; 75 Ark. Ill, 86 S. W. 1001; 78 Ark. 19, 3 S. W. 58; 73 Ark. 377; 84 S. W. 469; 89 Ark. 321, 116 S. W. 660; 99 Ark. 648, 139 S. W. 543; 145 Ark. 273; 144 Ark. 402. The verdict is not excessive.
   Smith, J-.

Appellees, plaintiffs below, compose a partnership doing business as Boatright & Cheesman, and for their cause of action alleged that in July, 1921, they were engaged in Union County in drilling for oil under a contract with an oil company on a lease known as the Pratt lease. That at the same time appellant, a corporation, the defendant below, was preparing ’to operate on an adjoining lease known as the Fitzgerald lease. That in drilling operations great care must be exercised to prevent disasters from fire, the character of the work making necessary the presence of inflammable material, a fact known to defendant and to all' other persons in the drilling business; yet, notwithstanding this knowledge which the defendant possessed, it did,- on ,1 uly 23,1921, permit its employees to build and maintain a large fire on the Fitzgerald lease, presumably for tire purpose of destroying underbrush, and it negligently permitted the fire to spread to the Pratt lease, and there ignited and partially destroyed plaintiffs’ drilling rig, equipment and accessories, and so badly damaged the remainder as to render their practical use impossible. There was a prayer for the damages done the drilling outfit and for the loss of its use pending its repair.

Plaintiffs offered testimony which supported the allegation of negligence in allowing the fire to spread, and this notwithstanding the fact that notice was given by plaintiffs to the employees of defendant, having ' charge of the fire, of its danger. Plaintiffs also offered testimony as to the extent of the damages, the testimony being sufficient to sustain the verdict returned.

Defendant answered and denied negligence or responsibility for the fire, and denied the damages.

A verdict for $14,000 was returned in favor of the plaintiffs, and from the judgment pronounced thereon is this appeal.

The first assignment of error argued is that the trial court erred in refusing to grant a new trial on account of newly discovered evidence. This newly discovered evidence was to the effect that the employees of another oil company had set fire to the brush on a tract of land known as the Caddo Central lease, and that the fire which damaged plaintiffs originated there.

The record shows that the suit was commenced February 4, and that at the February term in March defendant was given sixty days in which to file answer, and this resulted in giving the defendant six months to prepare for trial, which occurred at the following term of court. Moreover, testimony was offered at the trial tending to show that the fire had originated in this manner/ so that the newly-discovered testimony was merely cumulative, and we cannot therefore say the trial court abused its discretion in refusing to grant'a new trial on this account. St. Louis S. W. Ry. Co. v. Goodwin, 73 Ark. 528; Arkansas Mut. Fire Ins. Co. v. Stuckey, 85 Ark. 33; McDonald v. Daniel, 103 Ark. 589; Hinkle v. Lassiter, 142 Ark. 223; New Coronado Coal Co. v. Jasper, 144 Ark. 58.

As tending to show that the fire which damaged plaintiffs did not originate on the Fitzgerald lease, defendant offered in evidence a photograph which had been taken by a Mr. Taylor. The witness who offered the photograph in evidence was a Mr. Doyle, who did not take it, but who did testify that it represented the appearance of the Fitzgerald lease on the morning after the fire when the picture was taken. Objection was made to the introduction of the photograph upon the ground that it had not been properly identified. In ruling upon the objection made, the court said there was no testimony to show that the picture was taken from the negative prepared by the photographer, and that the photograph was hearsay evidence, but that, as the witness had testified that the photograph resembled the place of the fire, he would allow the picture to be offered in evidence and be considered by the jury for what it was worth. Objection was made to this comment, whereupon the court said: “I want to make myself clear on that, gentlemen. The witness testified that this picture resembles the condition down there at the time ho saw it on the evening of the 23rd, and the picture may go, and it goes as the testimony of this witness — simply as a picture which he says resembles the condition there at the time, but there is no legal testimony here that the jury could consider as to who made that picture or where it came from.” After this remark, defendant refused to offer the photograph in evidence-, and now insists that the comment of the court destroyed its value as testimony and constituted a charge on the weight of the testimony.

The court might have permitted the introduction of the photograph without comment, but we do not think the court’s comment is open to the objection made. ' The fact, stated by the court was undisputed. The witness liad not taken the picture, and did not know that it had been properly developed. He did testify that the photograph resembled the place of the fire, and the court ordered it admitted as explanatory of the witness’ testimony.

In the case of Sellers v. State, 91 Ark. 179, we quoted from 1 Wigmore on Evidence, §§ 790-792, as follows: “As a general rule, photographs are admissible in evidence when they are shown to have been accurately taken, and to be correct represéntations of the subject in controversy, and are of such a nature as to throw light upon it.” 9 Enc. of Ev., 771; Wharton’s Crim. Ev., § 544; Blair v. Pelham, 118 Mass. 420; Church v. Milwaukee, 31 Wis. 512; Underhill on Criminal Ev., 551. The general objection to the photographs as evidence was sufficient to raise the question of their relevancy. Photographs are admissible as primary evidence upon the same grounds for the same purposes as diagrams, maps and plats. Underhill’s Crim. Ev., § 50; 1 Wig. Ev. 792. They aid the jury to understand the evidence of the witnesses by illustrating the situation of the persons, places or things connected with the subject-matter of the inquiry. People v. Buddensieck, 103 N. Y. 487.” See also Zinn and Cheney v. State, 135 Ark. 342.

The ruling of the court conformed to the statement of the law quoted above. The photograph was admissible only as a map or a plat would have been admissible, to enable the jury to comprehend, to visualize, the testimony of the witness.

It is insisted that the testimony does not support the verdict. On that question, it may be said that piles of brush were fired on the Fitzgerald lease on July 22; and there was also testimony that there were no other fires on that day except the ones on this lease, and that the persons who had set the fires 'were warned of the danger, but, notwithstanding this warning, these employees left the fires burning, unattended, on the afternoon of the 22d.

Objection is made that the-verdict is excessive. Two instructions were given on the measure of damages, one on the court’s own motion, the other at the request of the defendant, and, while they cover the same ground, there appears to be no conflict between them. The testimony shows tliat plaintiffs were drilling in a -producing field, and expedition was highly desirable, and this fire not only involved a suspension of drilling operations, which the testimony .shows were highly profitable to the plaintiffs, but required them to practically rebuild their outfit by way of repairing. The jury has awarded what appears to be full compensation, but we cannot say the testimony does not support the verdict returned. Indeed, the testimony on the part of appellees would have supported an even larger verdict under the instruction on the measure of damages which was given at appellant’s request.

We find no prejudicial error, and the judgment is affirmed.


author: Smith, J.

text:
    Byrd v. Mullinix.
    Opinion delivered June 4, 1923.
    1. Bankruptcy — effect of filing petition. — The filing of a petition toy one’s creditors operates to impound money then in his possession, and he could not defeat their right to have it applied towards the satisfaction of their demands.
    2. Bankruptcy — liabilities enforceable against homestead.— Where, after a petition in bankruptcy has been filed, and before an adjudication in bankruptcy is made, the bankrupt used funds belonging to him to pay off a mortgage indebtedness on the homestead owned jointly by him and his wife, the court properly decreed that the trustee in bankruptcy should have a lien on the homestead, though the wife was not a party to the bankruptcy procedings, and likewise that the trustee should have judgment against the mortgagee to whom the money was unlawfully paid.

      Appeal from Craighead Chancery Court, Western District; Archer Wheat-ley, Chancellor;
    affirmed.

      Basil Baker and Gautney & Dudley, for appellants.
    The filing of the involuntary petition in bankruptcy against appellant did not operate to impound money in his hands for the creditors, did not operate as an attachment of his property until after adjudication. 5 Cyc. 342, par. B; 98 Fed. 582, § 704, Bankruptcy Act, 1898. Bankrupt had the right at any time to the date of adjudication to convert non-exempt assets into exempt property. 33 Am. Bankruptcy Rep. 677, adopts rule in 39 Ark. 571. See also 99 Ark. 45; 109 Ark. 443. The court erroneously relied on a statement contained in 184 IT. S., 1, 46 L. ed. 405, which is fully discussed in 183 Fed. 913; 219 Fed. (C. C. A.) 397; 7 C. J. 158-160, par. 5. Undisputed testimony shows that the money paid to West was the property of Ada Y. Byrd. Court erred in decreeing a lien in favor of the trustee in bankruptcy, upon property held by Byrd and wife as tenants by entirety. 124 Ark. 390; 66 Ark. 305; 144 Ark. 159.

      Cooley & Adams, for appellee.
    The $1,000 paid to West was the property of the bankrupt, not the property of his wife, as claimed. 14 Ark. 69; 45 Ark. 520; 73 Ark. 174; 133 Ark. 250; 134 Ark. 241; 136 Ark. 115; 132 Ark. 268; 132 Ark. 123; §§ 60-a and 60-b, Bankruptcy Act 1898, as amended. The filing of the petition in bankruptcy conferred jurisdiction upon the bankruptcy court over all property of the alleged bankrupt for all purposes as of that date. Sec. 1 Bankruptcy Act 1898 as amended. 148 U. S. 1; 7 Am. B. R. 224, 46 L. ed. 405; 137 Fed. 881, 14 Am. B. R. 404; 172 Fed. (C. C. A.) 353, 22 Am. B. R. 753; 169 Fed. 92, 22 Am. B. R. 209; 222 U. S. 300, 56 L. ed. 208, 27 Am. B. R. 262; 228 U. S. 474, 57 L. ed. 927, 30 Am. B. R. 1; 239 U. S. 268, 60 L. ed. 275, 35 Am. B. R. 814; 236 Fed. (C. C. A.) 644, 38 Am. B. R. 394; Collier on Bankruptcy, $§ 18-111, pp. 458, 459, and notes. See also 88 Ark. 519; 114 Ark. 316; 242 S. W. (Ark.) 384. The court did not create a lieu on ail estate held by the entirety. 61 Ark. 388; 66 Ark. 305. Preferred creditor or gratuitous donee need not be a party to the bankruptcy proceeding’ to be held to account for their preference. Sec.. 60-a, Bankruptcy Act 1898, as amended; 3 R. C. L. 271, sec. 96.
   Smith, J.

On April 13, 1922, appellee, as trustee in bankruptcy, filed a complaint in the chancery court against W. W. Byrd and Ada Y. Byrd, his wife, and J. R. West, alleging that on February 2, 1922, the creditors of W. W. Byrd filed in the United States District Court at Jonesboro a petition to have W. W. Byrd declared an involuntary bankrupt, and' that on February 24,1922, the court made an order so adjudging. That on February 11,1922, B3)-rd paid to West a thousand dollars in partial satisfaction of a note held by West, executed by Byrd and his wife, in part payment of the purchase price on the homestead occupied by Byrd, and which he had bought from West. Byrd bought the house from West on March 1, 1919, and the purchase price was $5,000, of which $1,250 was paid in cash; $2,500 of the purchase money was represented by a mortgage on the house in favor of the American Trust Company of Jones-boro, which Byrd assumed; and the remaining $1,250 was represented by a note.due March 1, 1920, on which the thousand-dollar payment was made. The complaint alleged that the payment to West was fraudulent and void because Byrd was insolvent. His place of business had been levied upon under an execution, and the payment had been made after the petition in bankruptcy had been filed, and when West had knowledge thereof. The complaint prayed that the payment be declared'void as against the creditors of Byrd, and that West be required to reimburse the creditors in said amount, and. that he be required to rely upon and proceed under his mortgage security to obtain satisfaction of his own debt, and that a lien be declared upon the homestead for the payment of said thousand dollars.

Byrd and bis wife answered and denied all the allegations of the complaint, and .alleged that the payment was made by Mrs. Byrd with her individual funds.

West answered and admitted the receipt of the thousand dollars, but denied knowing that the money belonged to the trustee in bankruptcy, but he admitted that he knew the creditors had filed the petition at the time the payment was made to him. He prayed that, in the event he was required to refund the money, his lien he declared superior to that of the other creditors, and that his'lien on the homestead be foreclosed for the full amount of said indebtedness.

The question of fact in the case is whether the thousand-dollar payment was made with funds belonging to Mr. Byrd or with the funds of his wife; and the court expressly found the fact to be that the money belonged to him. We concur in this finding, and announce that conclusion, without attempting to review the testimony leading -thereto.

Having made this finding, the court below directed West to repay to the trustee in bankruptcy, the plaintiff in the action, the thousand-dollar payment, and then granted West the relief prayed by him in his cross-complaint.

Counsel for Byrd insists the decree should be reversed, even though that finding is made from the testimony, on the following grounds:

1. That the filing of an involuntary petition in bankruptcy does not operate as an attachment of the propertjr of the bankrupt until adjudication.

2. That the bankrupt had the right at any time, up to the date of adjudication, to convert non-exempt assets into exempt property.

3. The indebtedness to West, secured by a vendor’s lien on the homestead, was past due, and West had the right to receive payment and Byrd had the right to make the payment up to the date of adjudication.

4. The court erred in undertaking to give to the trustee in bankruptcy a lien upon the joint homestead property of Byrd and his wife, or in attempting to sub-rogate the creditors to the rights of West, since Mrs. Byrd was not a party to the bankruptcy proceeding.

We think the finding that the payment was made with Byrd’s money is decisive of the question stated, because the payment was made after the petition had been filed, and West had notice thereof when he accepted the payment.

We think it immaterial that Byrd was adjudged a bankrupt upon an involuntary petition, rather than upon his own voluntary petition, for the fact adjudged was that he was a bankrupt, and this adjudication was made upon a petition filed before the payment was made.

An involuntary petition was filed in the case of Acme Harvester Co. v. Beekman Lumber Co., 222 U. S. 300, and what was there decided is conclusive of the questions raised here. Mr. Justice Day, for the court, said: “Whatever may be the limitations of the doctrine declared by this court, speaking by the late Chief Justice Fuller in Mueller v. Nugent, 184 U. S. 1, 34, 46 L. ed. 405, 411, 22 Sup. Ct. Rep. 269, where it is said: ‘It is as true of the present law (1898) (30 Stat. at L. 544, chap. 541, U. S. Comp. Stat. 1901, p. 3418) as it was that of 1867 (14 Stat. at L. 517, ch. 176), that the filing of the petition is a caveat to all the world, and, in effect, an attachment and injunction. International Bank v. Sherman, 101 U. S. 403, 25 L. ed. 866. And, on adjudication, title to the bankrupt’s property became vested in the trustee (§§ 70, 21e) with actual or constructive possession, and placed in the custody of the bankruptcy court,’ it is none the less certain that an attachment of the bankrupt’s property, after the filing of the petition and before adjudication, cannot operate to remove the bankrupt’s estate from the jurisdiction of the bankruptcy court for the purpose of administration under the act of Congress. It is the purpose of the bankruptcy law, passed in pursuance of the power of Congress, to establish a uniform system of bankruptcy throughout the United States, to place the property of the bankrupt under the control of the court, wherever it is found, with a view to its equal distribution among the creditors. The filing of the petition is an assertion of jurisdiction with a view to the determination of the status of the bankrupt and a settlement and distribution of his estate. The exclusive jurisdiction of the bankruptcy court is so far in rem that the estate is regarded as in custodia legis from the filing of the petition. It is true that, under sec. 70a of the act of 1898, the trustee of the estate, on his appointment and qualification, is vested by operation of law with the title of the bankrupt as of the date he was adjudicated a bankrupt; but there are many provisions of the law which show its purpose to hold the property of the bankrupt intact from the time of the filing of the petition, in order that it may be administered under the law if an adjudication in bankruptcy shall follow the beginning of the proceedings. Paragraph 5, sec. 70a, in reciting the property which vests in the trustee, says there shall vest ‘property which, prior to the filing of the petition, (the bankrupt) * * * could by any means have transferred or which might have been levied upon and sold under judicial process against * * * (the bankrupt).’ Under sec. 67c attachments within four months before the filing of the petition are dissolved by the adjudication, in the event of the insolvency of the bankrupt, if their enforcement would work a preference. Provision is made for the prompt taking possession of the bankrupt’s property, before adjudication, if necessary (69a). Every person is forbidden to receive any property after the filing of the petition, with intent to defeat the purposes of the act. These provisions, and others might be recited, show the policy and purpose of the bankruptcy act to hold the estate in the custody of the court for the benefit of creditors after the filing of the petition and until the question of adjudication is determined. To permit creditors to attacli the bankrupt’s property between the filing of the petition and the time of adjudication would be to encourage a race of diligence to defeat the purposes of the act and prevent the equal distribution of the estate among all creditors of the same class, which is the policy of the law. The filing of the petition, asserts the jurisdiction of the Federal court, the issuing of its process brings the defendant into court, the selection of the trustee is to follow upon the. adjudication, and thereupon the estate belonging to the bankrupt, held by him or for him, vests in the trustee. Pending the proceedings, the law holds the property to abide the decision of the court upon the question of adjudication as effectively as if an attachment had been issued, and prevents creditors from defeating the purposes of the law by bringing separate attacli•ment suits, which would virtually amount to preferences in favor of such creditors. See in this connection the well-considered cases of State Bank v. Cox, 74 C. C. A. 285, 143 Fed. 91 (C. C. A. Seventh C); Shawnee County v. Hurley, (C. C. A. Eighth C.) 94 C. C. A. 362, 169 Fed. 92, 94.”

We have quoted thus at length "because the questions there decided are conclusive of the points raised by appellant; and upon the authority of that case we hold that the filing of a petition by Byrd’s creditors operated to impound the money then in his possession, and he could not defeat their right to have it applied towards the satisfaction of their demands.

It appears that Byrd and his wife took title to their homestead as tenants by the entirety, and it also appears that Mrs. Byrd was not a party to the bankruptcy proceeding. We think, however, that, notwithstanding these facts, no error was committed in adjudging a lien on the homestead to the extent of the thousand-dollar payment. The effect of the decree below is to adjudge that Byrd .con'd not put the money in property which was itself beyond the reach of creditors, and to compel its disgorgement. West had a lien on the homestead to secure the payment of the $1,250 and the interest thereon. The court adjudged the thousand dollars was wrongfully paid West by Byrd, because of the pendency of the bankruptcy proceeding, and we concur in that view. West should therefore pay this thousand dollars to the trustee in bankruptcy, and when he has done so the payment to him is annulled and his debt is left unimpaired, as is also his security. It is to be assumed that West will refund the. thousand dollars to the trustee, as the court directs; and it is in the event only that he does not do so that the trustee is given the right to enforce the lien of West to the extent of this payment.

In other words, Byrd is denied the right of having the mortgage on his home reduced by the payment which he wrongfully made to West, and the creditors are awarded the benefit of this payment, and their right thereto is worked out either through West or against the property itself. This decree does Mrs. Byrd no injustice, although she was not a party to the bankruptcy proceeding, because she has no right to have the mortgage lien on her home discharged, in whole or in part, by a payment of money by her husband to which his creditors are entitled.

The decree of the court below is therefore affirmed.


author: Humphreys, J.

text:
    First National Bank v. Herring.
    Opinion delivered June 4, 1923.
    Fraudulent conveyances — use by husband of wife’s money.^When a wife allows her husband to use her money ás his' own for a long period of time, and to purchase property with it in his own name, and to'obtain credit upon the faith of his being the owner thereof, she will not fee allowed to claim such property against his creditors.

      Appeal from Johnson Chancery Court; W. E. Atkinson, Chancellor;
    reversed.

      Patterson & Rogers, for appellant.
    The findings of the chancellor are against the preponderance of the testimony. Conveyances made to members of the household and near relatives of -an embarrassed debtor, when voluntary, are prima facie fraudulent, and when, the embarrassment of the debtor proceeds to final wreck they arc presumed conclusively to be fraudulent as to existing creditors. 73 Ark. 174; 133 Ark. 260. In such conveyances from husband to wife the ¡burden of showing’ .good faith is upon the wife. 134 Ark. 242; 133 Ark. 224; 71 Ark. 613; 74 Ark. 166; 20 Cyc. 527; 200 Ill. 257; 134 Ill. 350; 159 Ind. 613; 109 Iowa 484; 200 Ill. 267; 65 N. E. 625; 32 West Ya. 447; 20 Cyc. 529; 171 Mo. 682.

      J. J. Montgomery and Webb Covington, for appel-lees.
    The chancellor’s findings are supported by the preponderance of the testimony. The deed to Lizzie C. Herring was not a voluntary conveyance without 'consideration-. A prior lien creditor has no right to complain of subsequent conveyances made by debtor. 20 Cyc. 422. A voluntary conveyance made with intent to defraud either existing or subsequent creditors is void as to both classes. 110 Ark. 343; 59 Ark. 614. The cases cited for appellant are not applicable to state of facts herein. Lizzie C. Herring was a bona fide creditor of her husband, and entitled to protection as such. 76 Ark. 252; 119 Ark. 497. Herring was not insolvent when the conveyance was executed to her. The bank and J. Y. Herring both considered the Mayo property ample security for the bank’s debt. No testimony offered to show insolvency of Y. I. Herring, joint judgment debtor. Sec. 488, C. & M. Digest;. 66 Ark. 486; §4257, C. & M Digest. If it can be held that there was a fraudulent design against the bank, the wife certainly liad no knowledge of nor participation in it. 20 Cyc. 472; 12 R. C. L., § 62; 31 Ark. 163; 60 Ark. 425; 61 Ark. 442. Mere knowledge by tlie grantee of the grantor’s intent not sufficient to invalidate transaction. 46 Am. Dec. 519; 201 Pa. St. 286; 88 A. S. E. 811.
   Humphreys, J.

This is a suit in equity to set aside as fraudulent two deeds of date December 28, 1920, and to subject the real estate therein conveyed to the payment of a deficiency judgment in the sum of $4,377.81, obtained by appellant against appellee in a foreclosure proceeding in the chancery court of Johnson County. The foreclosure proceeding was upon a renewal note of $8,367.93 dated June 1, 1921, and secured by a mortgage on the Sam Mayes place. The renewal note and mortgage represented a balance due upon a $9,500 note and mortgage of date April 3, 1920, and due June 1, 1921. The $9,500 note and mortgage evidenced a loan from appellant to appellee and Ms son, V. I. Herring, obtained upon the following financial statement of J. V. Herring, filed in writing with the appellant as a basis for credit:

“For the purpose of procuring credit from time to time with you, for my negotiable paper or otherwise, I ■furnish the following as a true and accurate statement of my financial condition on April 1, 1920, which may hereafter be considered as representing a true statement of my financial condition, unless notice of change.
“assets.
Cash in bank..$ 103.00
Bills receivable. 3,220.00
Accounts receivable... 500.00
Real estate in name of firm. 19,000.00
Machinery and fixtures. 1,000.00
Livestock on hand. 750.00
“Total. .$24,573.00
‘1 LIABILITIES.
Notes payable to bank.$ 9,500.00
Total liabilities..■.$ 9,500.00
Net worth . 15,073.00
“Total.$24,573.00
“ J. Y. Herring/-’

Seven thousand dollars of the money was borrowed to pay the purchase price of the Sam Mayes place and the balance to cover advances which had been made to buy mules. The title to the Mayes place was taken in the name of Y. I. Herring. The $9,500 note, as well as the renewal note for $8,367.93, was signed by appellee and Y. I. Herring. The mortgage given to secure the respective notes on the Mayes place was signed by Y. I. Herring and his wife. In addition to this mortgage, appellee transferred notes in the sum of $3,000 to appellant, which he had taken in payment for mules, as collateral security for the payment of the notes. On December 28, 1920, appellee conveyed all of Ms real estate to his son, Y. I. Herring, for an expressed consideration of $8,000, $1,000 cash and the balance on time, with a vendor’s lien for same retained in the deed. On the same day Y. I. Herring conveyed said real estate to his mother, Elizabeth C. Herring. The deeds were recorded immediately after execution. A short time after the deeds were delivered appellee executed a deed to his wife, Elizabeth C. Herring, releasing the vendor’s lien of $7,000 retained in the deed from appellant to his son. No present consideration passed upon the execution and delivery of either deed. According to the testimony of ap-pellee, his .purpose was to vest title to said real estate in his wife in satisfaction of various sums she had advanced to him from time to time to use in his business. Concerning the indirect manner of placing the title of the real caíate in Elizabeth'C. Herring, appellee said he was advised by Mr. Byington, an abstracter, of the method by which it should be done. In a few days after the execution of the deeds aforesaid appellee transferred his personal property, consisting largely of household goods, to his wife, being under the impression at the time that it was necessary to do so in order to keep other creditors from reaching1 it. The household goods, however, were exempt under the law. When appellee and his son renewed their note on June 1, 1921, they did not inform appellant that all the real estate included in the statement as a basis for credit had been conveyed to Elizabeth 0. Herring’. When the renewal note matured, appellee and his son were unable to pay it, and a foreclosure suit was instituted and prosecuted to a conclusion in the chancery court of Johnson County. In that suit the indebtedness was reduced to a judgment, and the proceeds from the foreclosure sale of the Mayes place, together with a small collection on the mule notes, were applied as a payment thereon, leaving a balance of $4,377.81. It is sought by the instant suit to.collect this balance out of the real estate conveyed by appellee to his wife, the insolvency of appellee and his son being alleged in the bill and not specifically denied in the answer thereto. The deeds are attacked upon the ground that the transfer of the lands contained therein rendered ap-pellee insolvent, and was without consideration. The chancery court found this issue against appellant, and dismissed its bill for want of equity, from which is this appeal.

Appellant contends tit at the findings of the trial court are against the weight of the evidence. Appellee conveyed all his property, both real and personal, to his wife, except the Mayes place and the mule notes. According to his testimony, this did not affect his solvency. He testified that about the time he conveyed the lands to his wife he was offered $8,000 for the Mayes place, which he refused,.holding same for $10,000. A. N. Ragon, tlie president of appellant bank, testified that appellee tried to sell the place, but was unable to do so. Appellee purchased it for $7,000, and at the foreclosure sale it brought only $5,000. The mule notes proved to be worthless. Appellant succeeded in collecting' only $81 out of them. A. N. Ragon and the cashier of appellant bank, R. D. Dunlap, testified that the loan was greater than the value of the Mayes place. A careful reading of the testimony bearing upon this point has convinced us that the mule notes and the Mayes place were insufficient in value to pay the indebtedness at the time appellee conveyed his other lands to his wife. We are also of the opinion, after reading the testimony, that the circuitous conveyances of the real estate by ap-pellee to his wife were without consideration. No present consideration passed when the conveyances were made. The claim is that the conveyances were -^ade in satisfaction of a preexisting indebtedness of about $8,000 from appellee to his wife. Appellee and his wife testified that she had advanced him various sums of money, covering a period of five or six years, to use in his business. Tt is not claimed that the amounts advanced were charged by appellee’s wife to him or that accounts were kept between them. No evidences of indebtedness were issued by appellee and delivered to his wife, and there was no promise on Ins paid to pay 'her any definite amount at any certain time. Mrs. Herring produced checks for small amounts, totaling $600, covering a long period of time, which-she had drawn in favor of her husband, and which were cashed by him. Some of these checks were used by him in his business and others were used for her personal benefit. Appellee made a written statement at the time he procured the loan from appellant, that he did not owe any one except appellant bank. He did not intimate that he owed his wife anything. We think the testimony insufficient to show that appellee and his wife dealt with each other as debtor and creditor. The manner of making such advances as were made indicated very clearly that they were intended as gifts. They were not treated by the parties as loans. This court said, in the case of Davis v. Yonge, 74 Ark. 166, that “when a wife allows her husband to use her money as his own for a long period of time, to purchase property with it in his own name, and to obtain credit upon the faith of his being the owner thereof, she will not be allowed to claim such propert}^ against his creditors.” The same doctrine was announced in the later cases of Harris v. Smith, 133 Ark. 260, and Bunch v. Crowe, 134 Ark. 242. It was necessary to prove the insolvency of V. I. Herring as a prerequisite to recovery herein, as his insolvency was alleged and not denied.

For the error indicated the decree is reversed and the cause remanded, with instructions to cancel the conveyances and to subject the real estate conveyed in them, as far as may be necessary, to the payment of appellant’s deficiency judgment.