text:
    Belding v. Whittington.
    Opinion delivered July 10, 1922.
    1. Vendor and purchaser — election of remedies. — Where a vendor fails to comply with his contract to execute a deed, the vendee may sue him for damages for his failure to comply therewith; but when he elects to do so, he necessarily abandons his right to require the vendor to perform the contract specifically -by executing the deed.
    2. Election of remedies — irrevocability—An election between remedies, in the absence of a mistake as to material facts, is irrevocable.
    8. Appeal and error — decree correct though based on erroneous reason. — Where, in answer to a plea in abatement setting up a prior action for damages for breach of contract to convey land as a bar to a suit for specific performance of Such contract, plaintiffs did not ask for a transfer to the law court in the event of an adverse decision on the plea, a decree dismissing the complaint, though assigning an erroneous reason, is correct, and will be affirmed.
    Appeal from Garland Chancery Court; Jethro P. Henderson, Chancellor;
    affirmed.

      A. B. Belding and G. T. Gotham, for appellants.
    Plaintiffs were entitled to specific performance of tlieir contract. 36 Cyc. 761 and cases cited in notes; 81 S. W. 419; 33 Ark. 550; 25 R. C. L. 327, and cases cited.

      L..E. Sawyer, and Martin, Wootton & Martin, for appellees.
    1. Appellants are precluded from recovering in this action because they elected to treat the contract as breached and sought remedy at law for damages, inconsistent with the equitable relief prayed for in this action. They are bound by their election. 83 Ark. 304; Elliott on Contracts, vol. 3, § 2097.
    2. The limitation in the power of attorney from Whittington and wife to Dr. Wootton, which expressly denied the right of the latter to sell real estate in Garland County belonging to the former, was known to the appellants, and makes inapplicable the principle of law that an agent, in the conduct of business for a principal, binds the principal as to all acts within the apparent scope of his authority. Moreover, in specific performance cases, an agent is held to strict compliance with his authority, or the principal must have subsequently ratified his contract. 104 Ark. 464.
    Courts will not decree specific performance where it is impossible. The title to the land, at the filing of this suit, was, and is, 'in an innocent purchaser.

      A. B. Belding and G. T. Gotham, in reply.
    The mere bringing of a suit for damages, which is "not prosecuted to a final decision but dismissed, does not amount to an election of remedy that will bar a subsequent action for specific performance of the contract. Ill Mass. 270; 227 Mo. 193; 21 R. I. 223; 72 N. J. Eq. 780; 141 la. 225; 144 Id. 187; 36 L. R. A. 195; 40 Minn. 424-8; 87 Fed. 390.
    The mere fact that a party mistakes his remedy and pursued the wrong • one at first may' not prevent him from afterwards pursuing -another remedy. This is the concluding statement of section 2097 of 3 Elliott on Contracts, relied on by appellants, and is our case exactly.
   Wood, J.

This action was instituted by the appellants against the appellees in the G-arland County Chancery Court. The appellants in their complaint set out the following contract: “Received of A. B. Belding and A. C. Jennings the sum of $200 (two hundred dollars) as a part of the agreed purchase price of the Plateau Hotel property. in the city of Hot Springs, being approximately 42x90 feet, the agreed purchase price being $24,500 (twenty-four thousand five hundred) nineteen thousand five hundred in cash, balance at rate of six per cent, per annum. I hereby agree to have same released from deed of trust now held by 'Southern Trust Co., of Little Rock, if possible. Deferred payments of five thousand to be carried by me for one year. As part payment I agree to accept Liberty bonds as part cash. (Signed)

“W. T. Wootton, Attorney in fact.
“H. A. Whittington,
“E. W. Wooton.”

The appellants, among other things, alleged the execution of the contract, and that the appellants had always been ready and willing to comply with all terms of the contract on their part; that the appellees, H. A. Whittington and the Woottons, had refused to perform the contract on their part, but on the contrary, in violation of the terms of the contract, had sold the land described in the contract to one Peter Grartenberg for.the consideration of $24,500, and had executed to- him a warranty deed for the property; that Grartenberg purchased the property with full knowledge of the rights of the appellants under their contract as above set forth. They further alleged that Mrs. Carolyn W. Whittington, the wife of H. A. Whittington, who had a dower interest in the property, had ratified the sale to the appellants; that she also joined in the. warranty deed, conveying her rights of dower and homestead to Grartenberg. The appellants alleged that Gartenberg and his wife on the 8th of May, 1919, executed a deed of trust to C. E. Marsh, as trustee, to secure the payment of certain promissory notes to H. & G. Strauss in the sum of $14,000; that at the time of the execution of this deed of trust Marsh, the trustee, and H. & G. Strauss had knowledge of the sale of the property to the appellants and of their rights therein; that Gartenberg, by reason of the above conveyance to him, was constituted a constructive trustee for the appellants; that the conveyance to H. & G. Strauss constituted a cloud on the title of appellants.

All of the above parties named were made defendants in the action, and the prayer of the complaint was that, upon the payment of the balance of the purchase money, the appellants be declared owners of the land, and that title thereto be divested out of the appellees and vested in them; that the appellees be directed to have proper conveyances executed to vest the fee title in the appellants. There was also a prayer for rents and profits, and an alternative prayer that, if specific performance were impossible, the appellants have judgment for their damages in addition to the rents and profits in the sum of $1,700, and for all other and general relief.

There was a general demurrer to the complaint, which was overruled. A “plea in abatement” was filed in which it was alleged that on the 3d day of May, 1919, appellants filed a complaint in the Garland 'Circuit Court against the Woottons and H. A. Whittington, alleging that the latter had breached their contract for the sale of the property to the appellants whereby they had damaged appellants in the sum of $1,320, for which they prayed judgment, and .also for a return of the $200 purchase money paid by the appellants. It was set up in the “plea in abatement” that, by reason of such action in the Garland Circuit Court, the appellants had waived any and all rights they had to the specific performance of the contract and for damages growing out of failure to specifically perform same.

The appellants replied to the “plea in abatement” and admitted that they filed a complaint in the Garland Circuit Court as alleged in the plea, but they averred that on the 13th day of September, 1919, the action for damages in the Garland' Circuit Court was dismissed without prejudice, and they attached to their reply a duly certified copy of the order dismissing the action without prejudice. They therefore alleged that they- had not waived, and were not barred of, their rights to prosecute the present action. The court overruled the “plea in abatement,” and the appellees filed separate answers, especially reserving therein their rights as set up in the “plea in abatement.” The execution of the contract set out above was admitted, and it was also admitted that the property was sold, as alleged, to Peter Gartenberg. All other material allegations of the complaint were specifically denied, and it was denied that the appellants were entitled to a specific performance of the contract.

The cause was heard upon the pleadings and the depositions of the witnesses. The court rendered a decree in favor of appellants against H. A. Whittington and the Woottons in the sum of $200 with interest from the 10th of April, 1919, and dismissed their complaint in all other respects for want of equity. Prom that decree is this appeal.

The first question for our consideration is whether or not the appellants are barred from maintaining the present action for specific performance because they had instituted an action in the circuit court of Garland County for damages for an alleged breach of the contract on the part of H. A: Whittington and the Woottons in failing to execute and deliver to the appellants a warranty deed to the land in controversy. An action at law for damages growing out of an alleged breach of contract for failurS to execute a deed is inconsistent with an action in equity seeking to have the contract specifically performed by having the deed executed. One cannot maintain an action at law for damages growing out of an alleged breach, of contract in failing to execute a deed and at the same time maintain an independent action in equity to require the same party to perform the contract by executing the deed. Where a vendor fails to comply with his contract to execute a deed, unquestionably the vendee may stand on the contract and sue the vendor for damages for his failure to comply therewith, but when the vendee elects to do this he necessarily abandons his right to require the vendor to specifically perform the contract by executing the deed.

In Bush v. Barksdale, 122 Ark. 262-265, we said: “The principle that an election of remedies is irrer vocable seems too plain for argument to the contrary, and its application to the proceeding now under discussion is obviously proper.” In 20 Corpus Juris, at page 38, the authors make this statement: “An election, once made between coexisting remedial rights which are inconsistent is not only irrevocable and cannot be withdrawn without due consent, even though it has not been acted upon by another to his detriment, but it is also conclusive and constitutes an absolute bar.” Among numerous authorities .cited to support the text is the case of Bush v. Barksdale, supra.

Elliott, in his work on Contracts, vol. 3. sec. 2097, says: “It is the doctrine of election of remedies that one having the choice of two or more inconsistent remedies for his relief is bound by his selection of the remedy he will pursue, and he cannot thereafter avail himself of the other remedies # * #. So, where the party brings an action at law for damages for the breach, he cannot thereafter maintain a suit in equity to enforce specific performance. * * *. It should be observed, however, that the mere fact that a party mistakes his remedy and pursues the wrong one at first may not prevent him from afterwards pursuing another remedy.”

In 9 R. C. L. p. 960, see. 7, is the following statement: “An election of a remedy which has the effect of an estoppel in pais or an estoppel 'by record, in that class of eases in which the remedies are really inconsistent, is generally considered made when an action has been commenced on one of such remedies. Some courts go so far as to say that in such oases the choice of a remedy once made cannot be withdrawn or reconsidered, though no advantage has been gained nor injury done by the choice, and no injury would be done by setting the choice aside. But the more reasonable rule is that the mere bringing of an action which has been dismissed before judgment, and in which no element of estoppel in pais has arisen, that is, where no advantage has been gained or no detriment has been occasioned, is not an election.”

In Craig v. Meriwether, 84 Ark. 298, 306, we quoted from Spread v. Morgan, 11 H. L. Cases, 588, as follows: “In order that a person who is put to his election should be concluded by it, two things are necessary: First, a full knowledge of the nature of the inconsistent rights, and of the necessity of electing between them. ¡Second, an intention to elect, manifested either expressly or by acts which imnly choice and acquiescence.” In the same case we held that one is “not bound by any election made in ignorance of material facts. ” 'Citing White v. Beal & Fletcher Gro. Co., 65 Ark. 278; Dudley E. Jones Co. v. Daniel, 67 Ark. 206.

Now, it cannot be said that the appellants, in electing to sue at law for damages for an alleged breach of contract on the part of the Woottons and H. A. Whittington in failing or refusing to make the deed, were pursuing this course on account of a material mistake of facts or ignorance of facts. At least they do npt set up any such mistake. Their only pontention is that they were not bound by such election of. remedies because their suit at law was afterwards voluntarily dismissed by them without prejudice. Appellants will not be heard to say that they did not have knowledge of the nature of their remedies and of the necessity for an election between them, for these are matters of law, and ignorance of the law will not excuse them. Therefore, in the absence of any facts showing that their election to institute an action at law for damages was based upon a misconception or mistake of facts,, they are bound by such election to pursue that course. Their intention to elect this remedy is manifested in the highest manner by the recor.I showing that they had instituted their action for damages.

We are aware that many very able courts hold that the mere bringing of an action which has been dismissed before judgment, and where no advantage has been gained by the party bringing the same, or no determent has been occasioned to the party against whom the same is brought, is no election. 'See cases cited in Connihan v. Thompson, 111 Mass. 370; Otto v. Young, 227 Mo. 193. and other cases cited in brief of learned counsel for appellant. But there is also excellent authority to ’ the contrary. See cases cited in 9 R. C. L. 260, notes 1 and 5.

The doctrine of our own court is in accord with the view that where there has once been an election between alternative and inconsistent remedies not occasioned by a mistake or ignorance of material facts, but as the result of a deliberate choice of election between the two, the party making such choice cannot afterwards recant, dismiss his pending action and invoke another remedy in the same or a different forum, even though no positive disadvantage or injury has resulted to the other party. We believe the better reason is to hold one to a deliberate choice once made between inconsistent remedies, where that choice involves nothing more than the determination by the party as to which of two remedies will best subserve his purpose. Certainly this doctrine has the merit of preventing one who is about to hale another into court from making a capricious choice between inconsistent remedies which he may pursue. Because he knows that whatever course he elects to pursue he will not thereafter be allowed to shift his ground, unless he can show-that his election was based upon a mistake of material facts. No such showing is presented by the facts of this record.

We conclude therefore that the appellants are barred from maintaining this action for specific performance of the contract because they first elected to prosecute an action for damages for a breach thereof.

In their answer to the plea in abatement the appellants did not ask the trial court, in the event of an adverse decision to them on the plea, to transfer the cause to the law court, and they have not asked this court to direct a transfer of the cause. The decree of the court dismissing the appellants’ complaint for want of equity, although for a different reason, is therefore correct, and it is affirmed.


source: Caselaw Access Project

author: Humphreys, J.

license: Public Domain

text:
    New York Life Insurance Company v. Watters.
    Opinion delivered July 3, 1922.
    1. Insurance — presumption against suicide. — In an action on a life insurance policy in -which suicide was an excepted risk, self-inflicted death is presumed to have been accidental until the contrary is made to appear.
    2. Insurance — evidence of suicide. — In an action on life insurance policies in which suicide was an excepted risk, evidence held to establish a case of suicide.
    Appeal from Pulaski Circuit Court, Second Division; Archie F. House, Judge;
    reversed.

      Rose, Hemingway, Cantrell da Loughborough, for appellants.
    A verdict should have been directed in appellants’ favor, as the undisputed physical facts and circumstances eliminated every other reasonable theory than that the wound was intentionally self-inflicted.' 95 Ark. 456; 182 N. W. 808; 146 S. W. 461 (Mo.); 117 S. W. 788 (Tex.).

      Coleman, Robinson & House and Hendricks é Snodgress, for appellee.
    When appellants complain of the refusal of the court to direct a verdict in their favor, they seem to overlook the following cases, in which there was a stronger presumption of suicide than in the present one, wherein the court refused to disturb a verdict returned by the jury. Guardian Life Ins. Go. v. Dixon, 152 Ark. 597; 80 Ark. 190; 113 Ark. 504; 221 S. W. 858.
   Humphreys, J.

Separate suits were instituted by appellee against appellants in the Pulaski Circuit Court upon life insurance policies issued by each to her husband, in which she was named as the beneficiary. The defense interposed to each suit was that the insured committed suicide, which was an excepted risk. The causes were consolidated by agreement and submitted to a jury upon the pleadings, evidence, and instructions, which resulted in a verdict and separate judgments against each appellant in favor of appellee, from which is this appeal.

At the conclusion of the testimony appellants requested the court to instruct a verdict for them, which was refused, over their objection and exception.

Appellant’s main contention for reversal is that the undisputed evidence clearly established that the insured committed suicide, and overcame the presumption of an accidental killing. The law applicable in this class of cases, gleaned from an array of authority, was very plainly and tersely enunciated in the case of Grand Lodge of A. O. U. W. v. Bannister, 80 Ark. 190, in the following language: “In the first place, there is a presumption against suicide or death by any other unlawful act, and this presumption arises even where it is shown by proof that death was self-inflicted; it is presumed to have been accidental until the contrary is made to appear. This rule is founded upon the natural human instinct or inclination of self-preservation, which renders self-destruction an improbability with a rational being.” In quoting and applying this rule to the facts in the case of Industrial Mutual Indemnity Co. v. Watt, 95 Ark. 456, this court said: “Hence we see that if reasonable men, viewing the facts, which are undisputed, might come to different conclusions as to whether the deceased committed suicide, then the facts, although undisputed, were properly submitted to the jury.” With the rule itself in mind, and the rule last quoted as a guide for the application thereof, after a careful consideration of the facts and circumstances in the instant case, we are unable to account for the death of the insured upon any other reasonable hypothesis than suicide. The record reveals that the insured was the head of a family consisting of his wife and two children. The family were devoted to each other and lived together happily. Until the latter part of September, 1920, he had been superintendent of the bauxite mining operations in Pulaski County of the Republic Mining & Manufacturing Company, at a good salary. He was succeeded by John T. Fuller, but was continued in the employ of the company during October, after which he was promised a vacation for two months on full salary, so that he might have an opportunity to seek other employment. He had been in the employ of the company since 1907, and had purchased a home in Little Rock. He was an old friend of the president of the company, who proffered assistance in getting him another position, and who. agreed to pay the expenses of the move should he sell his home in Little Rock and return to Georgia, from whence he came. According to the preponderance of the testimony, he was not despondent over the loss of his position. Naturally he was of a happy disposition. Nothing in his conversation or conduct in the past indicated that he contemplated suicide. He slept well the night before his death, and left home for the mines in his usual good humor, after joking and playing with the children. Being pay-day at the mines, he carried his pistol, according to custom. Such acouaintances as he met observed nothing unnatural about him. In the suburbs of the city he stopped at a negro garage to have his car repaired. He was in his usual happy frame of mind. He went behind the garage, remained there for a short time, returned and asked if his car was ready, complained of his stomach, and stepped behind the garage again. Almost immediately thereafter, while standing, seemingly in a leaning position against the house, his pistol fired. William Oliver, who was passing the garage just before the pistol fired, observed that the insured, who was standing in the rear of the garage, had on a gray cap. Just as the pistol fired he looked and observed the man still standing up and saw the cap shake just as one would see a shadow. When those near hurriedly reached the place of the tragedy the insured was lying on the ground and his pistol, a Savage automatic .32, was by his side. The ball had entered the right temple back of and about one-half inch above the right eyebrow, passed through his head almost on a level, and came out of the left temple at a point slightly higher than the point of entry. The powder-burn covered a space of about four inches, indicating, according to the expert evidence, that the point of the pistol was from nine to sixteen inches from the head of the deceased when it fired. G-us Leimer testified that such a pistol might be accidentally discharged.

Reasoning upon the undisputed physical facts in the case, we are unable to evolve any reasonable theory by which the insured could have been accidentally shot. He was standing when the pistol fired. The course of the ball was approximately straight through the head from temple to temple. Had the pistol accidentally dropped and fired either before or after it hit the ground, and if the ball had taken an upward course, it could not have passed on a level through a standing man’s head and have left powder-burns on the place of entry. Had the insured been examining or handling the pistol for ordinary purposes, and same had accidentally discharged, the ball would have necessarily entered the body from the front. The physical facts are not consistent with any reasonable theory of an accidental killing of which we can conceive. We are unable to reconcile them with any manner of killing except suicide. Learned counsel for appellee content themselves ydth relying on the presumption of accidental death, and do not suggest the particular manner in which it might have occurred. The entry and exit of the bullet, the powder-burn, and the standing position of the man, unerringly indicate that at the time the pistol fired it was in the hand of the insured and pointed directly at his right temple. This being the case, the purpose must have been suicidal. There is no suggestion in the record of any fact from which a reasonable inference might be drawn that the insured met his death through foul play. The case seems to have been fully developed, and, as the presumption of an accidental killing was overcome by the undisputed facts and circumstances, the court should have instructed a verdict for appellants.

The judgments are reversed and the cases dismissed.


author: Wood, J.

text:
    Doyle-Kidd Dry Goods Company v. A. W. Kennedy & Company.
    Opinion delivered July 10, 1922.
    1. Corporations — de facto corporation defined. — To constitute a corporation de facto, there need not be a strict or substantial compliance with the statutes, but there must be a colorable compliance therewith, that is, a color of a legal organization under the statutes and user of the proposed corporate franchise in good faith.
    2. Partnership — liability of members of joint stock company.— ■ Persons who associated themselves in business for the purpose of organizing a corporation, and who participated in the management of the business through a hoard of directors, but who failed in any way to comply with the statutory requirements as to formation of corporations or to limit their liability as partners, as provided by ch. 137 of. Crawford & Moses’ Dig., are liable as partners for the debts contracted by such managers; tha organization being a common-law joint-stock company.
    Appeal from Howard Circuit Court; Percy Steel, special judge;
    reversed.

      Graves & McFaddin, for appellant.
    A joint stock company was created by tbe articles of agreement entered into by the parties. 125 Ark. 146; 63 Ark. 518; 37 Ark. 308; 138 Ark. 281; 137 Ark. 80; 63 Ark. 581.
    Where the language of a contract, when considered as a whole, creates the partnership relation, then it should be so construed, even though the parties expressly provide that such was not their intention. 141. 111. 124; 30 Am. Dec. 596; 30 N. E. 442; 20 Ore. 132; 11 L. E. A. 149; 30 Cyc. 360. The rule is that members of a voluntary association of individuals or an unincorporated company are to be considered as partners in their relation to third persons, and it is immaterial that the proportions in the ownership of the associates in the common property are represented by certificates having a similarity to shares of stock in a corporation, or that the members call themselves stockholders and believe they incur no liability for losses beyond the actual amount paid for the shares. 89 N. E. 434; 133 A. S. E. 296; 12 Am. Dec. 495; 28 Am. Dec. 650; 49 Am. Eep. 313; 115 A. S. E. 407; 91 N. E. 439; 98 Term. 109; 60 A. S. A. 842; 36 L. E. A. 282; 303 Mass. 311; 89 N. E. 434; 133 A. S. E. 296; 128 Mass. 445; 124 N. E. 32; 23 Cyc. 474. Stockholders who take no active part in the business of a pretended corporation, which is acting without any charter or filed articles, and who supposed the corporation had been duly organized, are exempt from individual liability for debts incurred. 55 Hun 579; 57 N. Y. 23. Defendants are liable for .the acts of Kennedy on the principle of agency, as distinct from, and in addition to, the matter of partnership liablity. Ill Ark. 236; 117 Ark. 176.

      W. P. Feasel, for appellees.
    The partnership relation is always created by agreement between the parties and never by operation of law. 54 Ark. 384; 70 Miss. 193; 66 N. Y. 424; 116 U. S. 461; 118 U. S. 211. In determining whether or not the relation of partnership was created between the parties, their intention must control. 137 Ark. 8; 44 Ark. 423; 63-Ark. 518; 77 Ark. 390; 74 Ark. 437; 87 Ark. 412; 138 Ark. 281; 91 Ark. 206; Story on Partnership, § 49. The mere fact that persons associate themselves together to promote or organize a corporation does not make such person partners for the reason there is no agreement or intention to enter into such relation. 8 Col. App. 110; 96 111. App. 200; 9 Mass. 900; 135 Mass. 140; 34 Minn. 355; 62 Mian. 332; 60 Ohio St. 288; 123 Pa. 259; 158 Pa. 197; 121 Ark. 545.
   Wood, J.

The Doyle-Kidd Dry Goods Company is a domestic corporation, and will be hereafter referred to as the appellant. The appellant instituted this action against A. W. Kennedy, W. G. Gardner, H. B. Gardner, Jesse Johns, H. T. Smith,-J. S. Harrison and B. B. Harrison, as copartners trading under the firm name of A. W. Kennedy & Company. The parties named above, except Kennedy, will hereafter be referred to as the appellees. A. W. Kennedy & Company will be hereafter referred to as the company. The appellant alleged in its complaint that it was engaged in the wholesale dry goods business in the city of Little Book, Pulaski County, Arkansas, and that the appellees were partners trading under the firm name of the company; that the appellees were indebted to the appellant in the sum of $1,272.18 for merchandise' purchased by them. Appellant alleged that the merchandise was purchased on the 12-th of March,-, and at various other times, as shown in an itemized account, which is made an exhibit to its complaint. Kennedy did not answer the complaint, and judgment by default was rendered against him. He has not appealed, and thus passes out of the case. The appellees, in their answer, denied that they were indebted to the appellant in any sum whatever. They set up that some time in the month of November, 1919, A. W. Kennedy proposed to form a joint stock company for the purpose of conducting a mercantile business in their community in Howard County, the stock in the company to be sold at $100 per share, and that the appellees purchased stock in the company as represented by the respective number of shares taken by each of the appellees, which they specified, amounting in the aggregate to the sum of $6,000. The appellees alleged that it was understood between them and Kennedy at the time they purchased the shares'that the business would be incorporated, and that Kennedy should have the exclusive management and operation of the business, subject to the advice of the board of directors; that the appellees took no part toward the organization of the corporation or the management and direction of the business after it was put in operation. They alleged that they did not intend to form a partnership and did not hold themselves out as partners, and did not sign any articles of association, incorporation, or partnership. They alleged that the business was not incorporated, and that, while they knew that the business was in operation, they supposed it had been incorporated by Kennedy, and did not know that Kennedy was attempting to run the business as a partnership, and did not know that it had not been incorporated until immediately prior to the institution of this action. They therefore denied liability.

The cause was, by consent, tried by the court sitting as a jury. The facts developed at the hearing were substantially as follows: A. W. Kennedy, who had been running a small business in the rural community where the appellees resided, agreed with the appellees, who were farmers, that they would establish a new business. Kennedy prepared a document called “articles of agreement” which specified that the stockholders agreed to form a joint stock company for the purpose of conducting a general mercantile business to be styled A. W. Kennedy & Company, stock in the company to be sold at $100 per share. Kennedy was to be the president and general manager. The stockholders were to elect three directors, who were to advise with the manager in the conduct of the business. The manager was to do all the buying and selling and keep an accurate account of sales and expenditures, and furnish the directors a report of the business at any time desired. Kennedy was to receive as compensation for his services one-half of the profits of the business after all expenses were paid. The articles further provided that dividends should be declared the first of January, 1921, and that no stockholder should withdraw his stock except the first of each year, without the consent of the majority of the stockholders. The manager was to give a receipt showing that the entire assets of the corporation should stand as security to each stockholder for the amount of his investment, and the manager was to make bond to cover the fftll amount of the stock. These articles of agreement were circulated among the people, and the appellees and others paid in cash varying sums amounting in the aggregate to $6,000. The several amounts were paid by the appellees and others to Kennedy, who issued to them'a receipt for so many shares in the company at the rate of $100 per share, according to the amounts severally paid. After the above sum had been paid in, Kennedy called a meeting of those who had subscribed and paid the fund and they elected the three directors, as provided in the articles of agreement, and these directors signed the articles of agreement. The other stockholders who had paid did not sign, it being understood that the signatures of the three directors were sufficient. The directors met from time to time in an advisory capacity to Kennedy, who was the manager and had sole .control of the business. When the appellant was approached by Kennedy to purchase merchandise, it inquired of him what kind of a company he had, and he told the appellant that it was a joint stock company with a paid-up capital of $6,000, and he named the appellees as stockholders in the company. In March, 1920, after the company had been formed and had been operated for some time under the above .management, there was a meeting of the directors and some of the stockholders. The directors met from time to time, and some of the stockholders met with them at these meetings. No minutes were kept. At one of the meetings one of the original directors resigned, and W. Gr. Gardner, one of the appellees, was elected in his place. At the meeting in March, 1920, it was discovered that Kennedy had not incorporated, and it was again decided that the business should be incorporated. The undisputed testimony shows that it was the purpose of the appellees to have the business incorporated in order that they might be severally protected from any liability in excess of the amounts that they had subscribed and paid for shares of stock in the proposed corporation.

In January, 1921, the stockholders had a meeting at which all of the appellees were present except Smith. At that meeting Kennedy submitted a statement of the business of the company. Upon ascertaining that Kennedy was unable to pay any dividends, and that he had not had the business incorporated as he had promised, the appellees sold their interest in the business to him. He paid some of them a small amount in cash and executed his notes for the balance, which notes the appellees still have. Kennedy continued the business in the name of the company until the summer of 1921, when his business failed. The appellant sent a note to Smith, one of the appellees, for the amount of its debt, with a request that Smith and the other appellees sign the same. When this note was presented, the appellees ascertained that Kennedy had not incorporated, and that the business was a failure. They refused to sign the note.

Upon substantially the above facts the court found the facts and the law in favor of the appellees and entered a judgment in their favor against the appellant, dismissing its action, and for costs, from which judgment is this appeal.

The trial court, in one of its declarations of law, announced that “A. W. Kennedy & Company was in no sense at any time a corporation either de facto or de jure.” In this declaration the trial court was correct. Because, as is said in Rainwater v. Childress, 121 Ark. 541, at page 547: “To constitute a corporation de facto. there need not be a strict or. substantial compliance with the statute, but there must be a colorable compliance with the statute — that is to say, there must be color of a legal organization under the statutes and user of the supposed corporate franchise in good faith. Courts differ among themselves as to how much must be done in order to constitute a corporation de facto. But all of the courts agree that some of the statutory steps must be taken in an honest attempt to comply with the requirements of the law and exercised by the associates of the corporate powers.”

The undisputed testimony shows that there was no attempt upon the part of any of the appellees individually, or Kennedy acting for them, to comply with any of the requirements of the law as to the formation of corporations prescribed in chapter 38, C. & M. Digest, secs. 1700-01-11. The appellees therefore cannot be held liable as partners on the ground that they had associated themselves together for the purpose of transacting a general mercantile business as a corporation, and had taken some steps in compliance with the statute looking to the formation of the corporation, and that they had done business in the corporate name but without perfecting the corporate organization.

In Garnett v. Richardson, 34 Ark. 144, and Morse v. Burkhart Mfg. Co., ante p. 362, we held that those who associated themselves together for the purpose of organizing a corporation and who have taken some of the statutory steps looking to that end, and who have transacted business and incurred liabilities in the corporate name, but without finally completing the corporate entitv, are responsible as partners for the debts incurred by the de facto corporation. The liability of the appellees as partners cannot be predicated upon the doctrine of these cases because, as we have seen, the uncontroverted facts show that they had made no effort whatever to comply with the requirements of the law. They had not taken any of the steps prescribed by the statute for the organization of a business corporation.

Tt does not follow, however, that, because they were not liable as partners under the doctrine of the cases last above cited, they are not liable as partners at all. Under our law, when three or more persons shall associate themselves together for the purpose of carrying on a business in which they are to -share in the profits and losses, they can only transact such business as a corporation or as a partnership. If they desire to conduct a business as a partnership and to limit their liability, thev may do so under the provisions of chapter 137, C. & M. Digest; or, if they prefer to conduct the business as a corporation and to have their respective liabilities limited in proportion to the capital invested in the joint enterprise, then they may organize and do business as a corporation under the provisions of chapter 38 of C. & M. Digest, supra. But there is no middle ground between these two where ■persons may associate to carry on a business and not be liable for the debts incurred by that business, either as. partners, or as stockholders in a corporation. As we have shown, the appellees are not liable as stockholders in a corporation, either de facto or de jure. There is no pretense that they formed a limited partnership under the statute, and therefore, if liable at all, and they are, their liability is governed by the general law pertaining to partnerships. While our statute makes no provision for the existence of joint stock conipanies eo nominethey are not prohibited, and a mercantile business may be conducted in that form as a partnership.

We are convinced that the facts of this record show conclusively that the company in which the appellees were stockholders was a typical common-law joint stock company, according to the definition of that term as given by standard text-writers and by courts in various adjudications. “A joint stock company is an association of individuals for purposes of profit, possessing a common capital contributed by the members composing it, such capital being divided into shares of which each member possesses one or more, and which are transferable by the owner, the business of the association being under the control of certain selected individuals called directors.” 20 E. C. L. p. 321; 23 Cyc. 467, and cases cited in notes; see also Wrightington, Unincorporated Associations, secs. 10, 12, 14, 15; 2 Lindley on Partnership, ch. 5, p. 1532, and notes; Cook on Corporations, chap. 1, sec. 1, p. 3, note; ch. 29, sec. 504, p. 1465, and notes. Lindley says: “Unincorporated joint stock companies, as they exist in the United States, are, with the exception perhaps of those organized under the statutes of New York, merely copartnerships; and, as a general thing, subject to all the rules governing that branch of the law. The shareholders are therefore each personally liable for all the debts of the company, no matter what the private arrangements among themselves may be; and this notwithstanding they attempt to arrogate to themselves the attributes of copartners by doing business under a corporate name and appointing certain of their members to act as directors.” Ch. 5, p. 1532, sec. 1.

In 20 E. C. L. at page 808, the authors make the following statement: “Nevertheless at common law voluntary associations were regarded as partnerships in the transaction of business. And the rule generally recognized todav is that the members of the voluntary association of individuals or of an unincorporated company are to be considered as partners in their relations to third persons, and it is immaterial that the proportions of ownership of the associates in the common property are represented by certificates having a similarity to shares of stock in a corporation, or that the members call themselves stockholders and believe that they incur no liability for losses beyond the amount paid for the shares.” To support the text the authors cite the following cases: Ashley v. Downing (Mass.) 89 N. E. 434, 133 A. S. R. 296; Lynch v. Postlethwaite (La.), 12 Am. Dec. 495, and cases cited in note; Babb v. Reed (Pa.), 28 Am. Dec. 650; Farnum v. Patch (N. H.), 49 Am. Rep., 313.

In Ashley v. Downing, supra, (203 Mass. 311), it is said: “A voluntary unincorporated association of individuals for the purpose of conducting a business whose proportions of ownership in the assets are represented by certificates having similarity to shares of stock in a corporation has repeatedly and uniformly been held to be a partnership.” The facts of that case are very similar to the case in hand and cannot be distinguished in principle. See also Brotherton v. Gilchrist, 144 Mich. 274, 115 A. S. R. 397, and exhaustive case notes at p. 407; Hossack v. Ottawa Devel. Co. (Ill.) 91 N. E. 439; Carter v. McClure, 98 Tenn. 109, 60 A. S. R. 842, 36 L. R. A. 282.

The appellees rely upon the case of Rainwater v. Childress, supra, to support their contention that the appellees are not liable as partners. In that case, as in this, there was no attempt whatever to comply with the statutes relating to the formation of corporations. Some of the defendants subscribed for stock in a corporation, but took no further part looking toward the organization of the corporation or the management of the canning factory after it was put in operation. Other defendants did not intend to subscribe for stock in a corporation, but only intended to donate the amount subscribed by them to have a canning factory established at Morrilton. We held that such defendants are not liable as partners because “they took no part in the business transacted by the canning factory, either as principals, partners, agents, directors, or otherwise.” But three other parties, Childress, Rainwater, and Simpson, were held “liable as partners, because they were actively engaged in establishing the canning factory, and in operating it after it was established, and with the knowledge that no attempt had been made to incorporate it.”

Now, it cannot be said that the appellees in the present case intended to donate any funds to the company; nor can it be said that they paid their respective sums to Kennedy, but took no further part in the formation of the company and the management of the business, either as “principals, partners, agents, directors or otherwise.” On the contrary,.the facts set out above show that all of the appellees not only paid in their money but they took further interest in the establishment of the business and in the conduct thereof. They selected directors; they all knew of the articles of agreement and knew that they were signed by the three directors for the appellees. They attended various meetings, and they ascertained that the business had not been incorporated as they contemplated. They consulted with Kennedy and advised with him as to the buying out of another firm (Bedwell & Hughes) at Center Point, Arkansas. They, through their directors, advised with Kennedy as to the employment of a certain clerk in the store, and finally, after they ascertained that the business was not prosperous, they sold their interest to Kennedy. An analysis and comparison of the facts of this record with the facts in Rainwater v. Childress, supra, will discover that, while the appellees were not as active in the establishment and conduct of the business in this case as were Rainwater, Childress and Simpson in that case, nevertheless the difference is only in degree and not in principle. The relation of the appellees to the company in the present case, in principle, was like that of Rainwater, Childress and Simpson to the canning factory in that case. That case is certainly authority for the doctrine that where parties associate, intending to form a corporation, and join hands and capital in the conduct of the business under a name assumed by them, but without attempting to incorporate, they are liable as partners to third parties for the debts incurred. We conclude, therefore, that the case of Rainwater v. Childress, swpra, is authority for holding the appellees liable in the present case. Learned counsel for the appellees quote and rely upon the doctrine announced by Judge Story in sec. 49 of his work on Partnership, as follows: “In short, the true rule, ex aequo et bono, would seem to be, that the intention and agreement of the parties themselves should govern in all cases. If they intend to form a partnership in -the capital stock, or in the profits, or in both, then that same rule should apply in favor of third persons, even if the agreement was unknown to them, and, on the other hand, if no such partnership was intended between the parties, then there should be none as to third parties, unless the parties held themselves out as partners to the public, or their conduct operated as a fraud or deceit upon third persons.”

We recognize that the above is the rule in many jurisdictions. See cases cited in appellees’ brief. But our court has taken a definite stand contrary to the above doctrine as to the stockholders in a de facto corporation and holds that such stockholders are liable as partners. Morse v. Burkhart Mfg. Co., and cases there cited. If stockholders in a de facto corporation are liable as partners, then it occurs to us, a fortiori, that the stockholders in a joint stock company also would be liable as partners to third parties for the debts incurred by such company. Such unquestionably is the effect of our own decisions. Rainwater v. Childress, supra; see also, Pierce v. Scott, 37 Ark. 308. These are supported by able adjudications of other jurisdictions as shown by the cases already cited.

One of the most illuminating of these cases is that of Carter v. McClure, supra. It is unnecessary to pursue the subject further or to discuss the rulings of the trial court upon the several declarations of law. These rulings were not in harmony with the law as above announced. The judgment is therefore reversed. The amount of appellant’s account is not challenged, and, inasmuch as the cause seems to have been fully developed on the facts, judgment will be entered here in favor of the appellant against the appellees for the amount claimed.

Hart, J., dissenting.


text:
    Farr v. St. Louis Southwestern Railway Company.
    Opinion delivered July 10, 1922.
    1. Railroads — process not changed by federal control. — The Director General of Railroads, upon being served with process as agent in control of a connecting carrier doing business in Arkansas, is not in ,court as representative of the delivering carrier, a Texas corporation bearing the same name; the provisions of general orders Nos. 18, 18a, and 50, issued under the Federal Control Act (U. S. Comp. Stat. Supp. §§ 3115%-3115%p) indicating that process must he served upon the Director General in the same way that service had been made against the corporation which he represents.
    2. Carriers — time to sue — limitation in bill of lading. — In an action by a shipper against a connecting carrier for damages from delay and neglect as to a shipment for which the shipper received from the initial carrier a bill of lading providing that, “except where the loss, damage or injury complained of is due to delay or damage while being loaded or unloaded, or damage in transit by carelessness, or negligence, as condition precedent to recovery, claims must te made in writing to the originating or delivering carrier within six months after reasonable time for delivery has elapsed, and suit for loss, damage or delay shall be instituted within two years and a day after a reasonable time for delivery has elapsed, held that suit must be brought within two years and a day, as the exception relates only to the written notice of the claim.
    Appeal from Columbia Circuit Court; C. W. Smith, Judge;
    affirmed.

      Joe Joiner, for appellant.
    1. Plaintiff’s right to sue in the county of his residence was never challenged by any special plea. Instruction No. 3, therefore, to the effect that if the damage occurred either on the'line of the St. Louis Southwestern Railway Company or the St. Louis Southwestern Railway Company of Texas, plaintiff would be entitled to judgment against the Federal agent, was clearly within the provisions of general order No. 18, and should have been given. Alabama & V. Ry. Go. v. Journey, 42 Sup. Ct. Reporter, p. 6.
    2. The limitation in the bill of lading issued by defendant Louisiana & Northwestern Railroad, to the effeet that in certain cases suit must be brought within two years and one day after the loss or damage, does not apply. This provision, having been written by the defendant, will be construed most strongly against it. The provision does not stipulate that suit must be brought for loss, damage or delay within two years and one day against each carrier or any one carrier of the shipment, such as the initial carrier. When suit was brought on November 4,1919, and service was had on the Director General on December 11, 1919, a suit was instituted for the damage within the meaning of the bill of lading. The regular three year statute applies to the others. The statute will not run while a suit is pending against any one of the defendants to a common cause of action. 67 Ark. 340; 85 Id. 144; 49 Id. 248; 223 S. W. (Tex.) 340; Id. 192; 218 S. W. (Tex.) 5.
    If there was loss or damage in this case, it was in transit. Therefore it falls within the exception in the bill of lading. At any rate, it was a jury question, and the court erred in taking it from the jury by its instruction. 53 Ark. 381.
    3. The plaintiff should have had judgment against the receiver. He did not answer, did not plead the limitation in the bill of lading. The receiving carrier is liable for loss or damages to goods or property when caused by negligence anywhere in transit. C. & M. Digest, § 924; 188 S. W. 1177.

      Daniel Upthegrove, J. R. Turney and Gaughan é Gifford, for the Director General.
    Appellant has confused the issue, which is, in fact, not a question of venue, but a question of jurisdiction. Under the Federal Control Act, and general order No. 50, in order to secure service of process on the Director General operating the St. Louis Southewestem Bail-road of Texas, it would be necessary to serve such process as would have been good service on the Texas company under existing laws. Sec. 10 of Federal Control Act. Service in this case on the agent of the St. Louis Southwestern Bailway, at Waldo, in Columbia County, an agent in no way connected with the St. Louis Southwestern Bailway Company of Texas, was not valid service on the Texas Company nor on the Director G-eneral operating the same. The trial court was therefore right in restricting plaintiff’s right of recovery to damages arising between McNeil and Texarkana on the line of the St. Louis Southwestern Bailway Company.

      Henry Stevens, for appellees, La. & N. W. B. B. and the receiver.
    1. Under the pleadings and the evidence, if plaintiff relied on the contract shown in the bill of lading for the prompt delivery of the car of potatoes to Dallas, it would devolve on him to show the failure of delivery by the Louisiana & Northwestern Bailroad Company and the damages sustained by such failure. 44 Ark. 439; 52 Id. 246; 74 Id. 606; Encyc. Ev. pp. 6, 7. He would have to show also that the failure of delivery and the damage complained of was not the result of any interference on his own part. 80 Ark. 288; 6 Cye. 379, 468.
    2. The limitation in the bill of lading as to time of bringing suits is valid. 83 Ark. 502; 120 Id. 43.
    A suit is begun when complaint is filed and summons issued thereon. C. & M. Dig., § 1049; 138 Ark. 10. Summons was issued and served on the Louisiana & Northwest Bailroad Company on August 2, 1921. The damage complained of is alleged to have occurred in November, 1918.
    There is nothing in the action against this defendant which is common to the other defendants. 6 Cyc. 487. The amendment filed in August, 1921, making the Louisiana & Northwest Bailroad Company, and issuing summons thereon, fixes the date when suit was begun against it. 17 Ark. 608.
    There is no merit in the contention that judgment should have been rendered against the receiver. A judgment against a receiver cannot be effectual unless it is also against the party for whom he was receiver. Í7 Encyc. PI. & Pr. 80; 27 S. W. 109.
   Humphreys, J.

Appellant instituted suit against the St. Louis South-western Bailway Company, and Walker D.Hines, Director General, in the Columbia Circuit Court, to recover damages in the sum of $698.50 to a car of sweet potatoes, shipped by him from Magnolia, Arkansas, to Dallas, Texas, alleged to have been occasioned through the delay and neglect of the defendants. It was alleged in the complaint that appellant delivered to the Louisiana & Northwestern By. Co. at Magnolia, Ark., for shipment to Dallas, Texas, by way of defendant’s line of railroad and that of the St. Louis Southwestern By. Co. of Texas, 450 bushels of potatoes in baskets, with the right of stopover at Nevada, Texas, receiving therefor from the initial carrier a bill of lading or shipment contract which contained the following clause: “Except where the loss, damage, or injury complained of is due to delay or damage while being loaded or unloaded, or damage in transit by carelessness or negligence, as condition precedent to recovery, claims must be made in writing to the originating or delivering carrier within six months after delivery of the property, or, in case of failure to make delivery, then within six months after a reasonable time for delivery has elapsed; and suit for loss, damage or delay shall be instituted within two years and one day after delivery of the property, or, in case of a failure to make delivery, then within two years and one day after a reasonable time for delivery has elapsed.” Summons was issued on November 4, 1919, and served December 11, 1919, on the agent of the Director General at Waldo, Arkansas, and issued and served on the St. Louis Southwestern By. Co. on August 2, 1921, by delivering a copy to its agent at Waldo, Arkansas. Answers were filed by both defendants denying the material allegations of the complaint. At the time of the shipment the initial carrier, which was not under government control, was in the hands of E. B. Bernstein as receiver. The initial carrier and its receiver were made parties to the suit, and both filed a motion to make the complaint more specifie, and said carrier a separate answer, denying the material allegations of the complaint, on February 25, 1921. It seems that later, on August 2, 1921, a summons was issued and served upon them by delivering a copy thereof to their agent at Magnolia, Arkansas. The receiver filed no answer. The cause was submitted upon the pleadings and testimony introduced by the respective parties, and the instructions of the court, which resulted in a verdict and judgment in favor of all the appellees, from which is this appeal.

The facts material to a determination of the issues involved in this appeal, as reflected by the record, are as follows: The initial carrier was never under the supervision of the Director General of Bailroads. The connecting carrier was a Missouri corporation, doing business in Arkansas, and the delivering carrier a Texas corporation, doing business in that State, being separate and distinct corporations, but both, at the time, being controlled and operated by the Director General of Bail-roads.

The shipment of potatoes was delivered to the initial carrier, in good condition, on November 1, 1918, at Magnolia, Arkansas, and left there at 7 p. m. The car was received by the St. Louis & Southwestern Bailroad Company, the connecting carrier, at McNeil, Ark., at 9:30 p. m. on the same date. The connecting carrier delivered the car to the St. Louis & Southwestern Bd. Co. at Texarkana, and it arrived at Nevada, Texas, its stopover place, on the 3rd or 4th of November, 1918. Appellant examined the car there, and after considerable effort, sold 20 bushels of potatoes, but was unable to sell more on account of the per cent, of rotten ones. The car did not reach Dallas, its destination, until November 11th, at which time the potatoes had greatly deteriorated. The evidence tended to show an unreasonable delay in delivery; that on this account the potatoes were damaged, and that the damage occurred in transit. There is no proof that the potatoes were damaged while in the possession of the initial or connecting carrier. The first deterioration in them was discovered when the car was opened at Nevada, Texas. They were then in possession of the delivering carrier.

Proceeding upon the theory that the Director General of Railroads was in court, under the summons issued and served upon his agent, at Waldo, Arkansas, only as the representative of the St. Louis Southwestern Railroad Company, and not the representative, by virtue of the service upon him, of the St. Louis Southwestern Railroad Company of Texas, the trial court instructed the jury that, before they could find against the Director General they must find that the damage occurred between McNeil and Texarkana, on the line of the St. Louis Southwestern Rd. Co.' We think the interpretation placed upon the Federal Control Act by the trial court, as reflected by the instruction, is correct. While under the act, general orders Nos. 18 and 18a were made di recting all suits against the Director General to be brought in the county or district where the plaintiff resides, or county or district where the cause of action arose, such orders were not intended to change the manner or mode for the service of process in the several States.- We think the provision relating to service of process under general order No. 50, dated October 28, 1918, indicates very clearly that the service of process in actions, suits, and proceedings against the Director General of Railroads shall be made in the same way as formerly made against the transportation entity he represents. In other words, to bring the Director General of a particular transportation corporation into court in this State, the same process must be resorted to necessary to bring the corporation itself into court. Under the process in the instant case the Director General of Railroads is in court only in his capacity as representative of the St. Louis Southwestern Railroad Company and not as the representative of the Texas corporation bearing the same name.

Proceeding on the theory that the hill of lading, made the basis of the snit, exempted the initial carrier and its receiver from liability unless suit was brought within two years and a day, the court instructed the jury to that effect. Appellant contends that on account of this instruction the judgment should be reversed. The correctness of this instruction must depend on the proper interpretation of the provision in the bill of lading heretofore set out. After a careful reading and consideration of the clause, we have concluded that the exceptions as to damage to property in transit applies only to the notice in writing of the claim required to be given to the originating or delivering carrier, and does not relate to the time in which suit must be commenced. The language, as well as the punctuation, indicates this. The exception is directly connected with the notice but is separated from the time in which to bring suit by a semicolon. Again, there is much reason in making an exception where only a short time is given to the injured party to notify the carrier, but no good reason why an exception should be made where ample time is given to commence a suit. The undisputed proof shows that suit was not commenced against the initial carrier and its receiver for more than two years and a day after delivery was made. The construction placed upon the clause in the bill of lading was correct. There was no joint liability between the initial and connecting carrier, so the pendency of the suit against the Director (xeneral and the connecting carrier does not prevent the application of the limitation in the bill of lading.

No error appearing, the judgment is affirmed.


author: McCulloch, C. J.

text:
    Clark v. State.
    Opinion delivered September 25, 1922.
    1. Criminal law — separation of jurors — new trial. — Where jurors violate the court’s order that they be kept together during the progress of the trial, and separate and expose themselves to improper influences, a new trial should be granted.
    2. Jury — membership in organization. — A showing that a juror was a member of the Ku Klux Klan which was opposed by the Miners’ Union, to which defendant belonged, would not disqualify such juror, unless it was shown that the particular juror had actual bias or was directly connected with the matter under investigation in a way from which bias or prejudice would be implied.
    3. jury — examination for purpose of peremptory challenge.— For the purpose of determining whether to exercise peremptory challenge, a party is entitled to the samé latitude in examining a juror as when seeking information relative to challenge for cause; but such examination must be conducted in good faith and subject to the discretion of the court.
    4. Jury — examination—abuse of discretion. — Where defendant’s counsel informed the court that the Miners’ Union, to which defendant belonged, had by resolution condemned the Ku Klux Klan, it was an abuse of discretion to refuse to permit him to ask a juror whether he belonged to the latter society, for the purpose of determining whether he would exercise the right bf per- . emptory challenge; the inquiry appearing to be made in good faith.
    Appeal from Johnson Circuit Court; A. B. Priddy, Judge;
    reversed.

      Webb Covington, for appellant.

      J. 8. Utley, Attorney General, Elbert Godwin and W. T. Hammock, Assistants,- for appellee. .
   McCulloch, C. J.

This is an appeal from a conviction of the statutory crime of nightriding. Crawford & Moses’ Digest, sec. 2795.

Appellant was jointly indicted with certain other persons upon the charge that he and the other persons named confederated and banded themselves together for the unlawful purpose of damaging and destroying the mining property of the Werner-Dunlap Coal Company. There was a severance, and on the trial of appellant there was, as before stated, a judgment of conviction, from which an appeal has been prosecuted.

At the first adjournment of the court after the commencement of the trial there was an order entered directing that the jury be kept together in charge of proper officers, and among other grounds assigned in appellant’s motion for a new trial there are several allegations in regard to the separation of the jury, in violation of the court’s order. Numerous affidavits were filed in support o.f the motion, showing that several of the jurors, during the recess of the court, separated themselves from their fellow' jurors, and mingled with bystanders and had an opportunity for exposure to improper influences.

The State made no effort to meet this issue. The Attorney General frankly concedes that in’ this state of the record a reversal of the judgment must necessarily follow. In other words, there is a confession of error on this ground, and under the settled rules announced by this court the confession is well founded.

Where the court orders the jurors kept together during the progress of 'the trial, and a showing is made in the motion for a new trial, supported by affidavits, that this order was violated and that the jurors separated themselves and exposed themselves to improper influences, the' only way to correct the- error is to grant a new trial; Maclin v. State, 44 Ark. 115; Reeves v. State, 84 Ark. 569; Ferguson v. State, 95 Ark. 428.

There are numerous other grounds for reversal urged by counsel for appellant, among others that the court erred in refusing to permit the counsel to interrogate jurors as to certain matters alleged to affect their qualifications as jurors, and it is insisted that we should pass upon these assignments in view of the fact that the same questions are likely to arise in the next trial of the case. Counsel have satisfied us that these questions will probably arise, and for that reason we deem it not improper to pass upon them, now.

It is shown that appellant was a coal miner by occupation, and that during the examination of one of the jurors it was. brought .to - the- attention of- the court- by statement of appellant’s counsel that appellant was a member of the miners’ union, a national association of coal miners. The juror was asked by appellant’s counsel whether or not he was a member of any organization or association that was interested in the prosecution of appellant, and the juror replied that he did not belong to any organization in which “this matter had been discussed at all.” The juror was then asked if he was a member of an organization known as the Ku Klux Klan, and over the objection of the State’s counsel the court refused to permit this question to be propounded. Counsel for appellant then stated to the court, as his reason for eliciting information from the juror as to membership in said organization, that the miners’ union had passed a resolution condemning the .organization known as the Ku Klux Klan, and that he wished to test out the qualifications of proposed jurors by ascertaining whether or not they were members of the klan and had any bias or prejudice against the members of the miners’ union.

The court overruled the contention of appellant’s counsel and refused to permit the question to be answered, on the ground that the inquiry was of too personal a nature and had a tendency merely to probe into the private affairs of the proposed juror. In other words, it was held that the question was impertinent. An exception was duly saved to the ruling of the court, aild the same thing happened with reference ta the examination of numerous other jurors.

It is argued, in the first place, that the showing that there was antagonism between the miners’ union and the Ku Klux Klan, by reason of the adoption of resolutions by the former condemning the latter, constituted bias upon the part of members of the organization which rendered them disqualified as jurors in a trial in which members of the other organization were interested.

We are of the opinion that there were not sufficient circumstances shown to render the jurors disqualified by reason of personal bias. There was nothing to show that the particular jurors were under the influence' of actual bias. It was merely sought to show that they were members of the organization known as the Ku Klux Klan.

The rule seems to be settled that mere membership in committees, or in societies, or other organizations for the suppression of crime, or the achievement of any other particular purposes, does not operate as a disqualification of a juror unless it is shown that the particular individual has actual bias or is directly connected with the matter under investigation in a way from which bias or prejudice will be 'implied. 16 R. C. L. p. 277; 17 Standard Ency. of Proc., p. 298; Conners v. United States, 158 U. S. 408; Dodd v. State (Tex. Crim.) 82 S. W. 510; Boyle v. The People, 4 Col. 176; Vanskike v. Potter, 53 Neb. 28.

It does not follow, however, from the fact that the information to be elicited might not constitute disqualifying bias that appellant was not entitled to propound the inquiry. On the contrary, we think that he was entitled to make the inquiry for the purpose of determining in what he should exercise a peremptory challenge allowed by the statute. Lavin v. People, 69 Ill. 303; Watson v. Whitney, 23 Cal. 375; State v. Mann, 83 Mo. 589; 17 Standard Ency. of Proc. p. 300.

The right of peremptory challenge is just as important and valuable to an accused person as the right to challenge for cause, and he is entitled to the same latitude in the examination of a proposed juror for either purpose. This examination must, however, be conducted in good faith, and is subject to the discretion of the trial judge. Williams v. Cantwell, 114 Ark. 542; Cooper v. Kelly, 131 Ark. 6.

This court will not reverse a judgment on account of the ruling of the court in the exercise of discretion unless abuse of such discretion is shown. If there were merely involved an inquiry by the accused as to membership in a particular organization, this alone would not show that the inquiry was material or that prejudice resulted, but in the present case appellant’s counsel informed the court of the fact that there were certain possible antagonisms between the membership of the organization to which appellant belonged and the one to which the proposed jnrors belonged, and he was entitled to ascertain the fact whether or not the jnrors were members of the other organization, so that he conld determine in what instances he would exercise his right of peremptory challenge. The question was not, under those circumstances, impertinent, and it was not a useless probe into the personal affairs of the jurors. It brings no reproach upon a juror to inquire concerning membership in any organization, and where it is shown that there are reasons why membership in an organization might influence the parties to the litigation in the exercise of peremptory challenges, the court ought to permit the inquiry to be made if it appears to be made in good faith.

These observations concerning the law on this subject and the proper practice to be followed by the trial courts are, as before stated, made in view of the next trial and for the guidance of the court if the same questions again arise.

The confession of error of the Attorney General is sustained, the judgment is reversed, and the cause remanded for a new trial.


text:
    Clendenning v. State.
    Opinion delivered September 25, 1922.
    1. Criminal law — failure of record to show that jury was sworn. — Where the record in'a felony case fails to show that the jury was sworn as required by statute, a conviction will be reversed.
    2. Criminal law — failure to prove venue. — Where there was no evidence tending to show where the alleged offense was committed, a conviction will be set aside.
    3. Criminal law — failure to prove when offense was committed. — Where the State failed to prove that the defendant made mash and possessed an unregistered still subsequent to the enactment of Acts 1921, p. 372, convictions for such offenses will be reversed.

      4. Criminal law — judicial notice. — The courts will not take judicial notice of the location of property owned by a private corporation.
    Appeal from Mississippi Circuit Court, Osceola District; E. E. L. Johnson, Judge;
    reversed.

      D. F. Taylor and Prewitt Semmes, for appellant.
    J. 8. Utley, Attorney General, Elbert Godwin and W. T. Hammoch, Assistants, for appellee.
   McCulloch, C. J.

Two separate indictments against appellant were returned by tbe grand jury for tbe Osceola District of Mississippi County, one charging the crime of making mash, and the other the crime of keeping an unregistered still. The two cases were consolidated by consent and tried together, and the result was appellant’s conviction under both charges.

The Attorney General confesses error on three grounds; first, that the record fails to show that the trial jury was sworn as required by statute; second, that there was no proof tending to establish the venue; and third, that there was no proof tending to show the commission of either of the offenses after the enactment of the statute creating the offenses, which was approved March 23, 1921, Acts 1921, p. 373.

We are of the opinion that the confession of error is well founded and that the judgment must be reversed on each of the grounds stated above. A careful search of the record discloses nothing which shows that the trial jury was sworn, nor is there any evidence tending to show where the alleged offenses were committed. Witnesses testified that they found the mash and still at the home of appellant, on the property of the Three States Lumber Company, but the record does not show whether that property was in Mississippi County, or elsewhere. The trial court could not take judicial knowledge of the location of individual property, or property owned by a •private corporation.

The State also failed to prove the dates of the alleged offenses, and failed to prove that the time appellant made the mash and had the still in his possession was subsequent to the date of the enactment of the statute creating those offenses.

It is unnecessary to discuss other assignments of error, for upon the grounds stated above the judgment will be reversed and the cause remanded for a new trial.


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    Outler v. State.
    Opinion delivered September 25, 1922.
    1. Criminal law — appeals in capital cases. — Crawford & Moses’ Dig., § 3404, requiring appeals to be allowed by a judge of the Supreme Court in convictions in capital cases, applies only where accused is sentenced to he electrocuted, and in other cases an appeal may be granted by the trial court under ■Crawford & Moses’ Dig., § 3396.
    2. Homicide — evidence as to cause of death.— In the absence of other cause of death, which occurred a few hours after defendant struck deceased a violent blow across the head with a gun, knocking him down, the jury were warranted in making the inference, without direct proof on the subject, that death resulted from the blow.
    3. Homicide — evidence of malice and deliberation. — Evidence of - malice and deliberation held sufficient for conviction of murder in the first degree.
    4. Criminal law — improper evidence — effect of withdrawal.— The prejudicial effect of admitting statements by defendant’s brother, made in defendant’s absence, was cured by the court's subsequent withdrawal thereof from .the jury.
    5. Criminal law — conduct of defendant and brother. — Joint conduct of defendant and his brother immediately after the fatal blow was admissible as part of res gestae.

    6. Homicide — harmless error. — Any error in refusing an instruction on manslaughter was harmless where the jury, on correct instructions as to the degrees of murder, found defendant guilty of murder in the first degree.
    7. Criminal law — coercing jury. — No improper argument or pressure was brought to bear on the jury to induce a verdict where, after they had returned and announced their inability to agree, the court merely declared that it would hold them together as long as there was any possibility of a verdict, and that it was their duty, without yielding any. positive conviction, to exert every reasonable effort to reach a verdict.
    Appeal from Montgomery Circuit Court; Scott Wood, Judge;
    affirmed.

      G. H. Herndon and Earl Witt, for appellant.

      J. S. Utley, Attorney General; Elbert Godwin and W. T. Hammock, Assistants, for appellee.
   McCulloch, C. J.

Appellant, Buck Outler, was convicted of the crime of murder in the first degree, alleged to have been committed on December 24, 1921, in Montgomery County, by striking with a gun and killing Will Blackburn. The jury fixed appellant’s punishment at' imprisonment in the penitentiary for life, and, upon the overruling of appellant’s motion for a new trial, the court granted an appeal to this court.

It is first contended by the Attorney General that the case is not properly here for review because the appeal was granted by the trial court and not by this court or by one of the judges of this court. The Attorney General relies upon the statute (Crawford & Moses’ Digest, § 3404) which provides that “in cases of conviction of a capital offense” an appeal must be allowed by a judge of the Supreme Court. We are of the opinion that the words “capital offense” refers to the degree of offense named in the judgment of -conviction,' and not to the original charge in the indictment. The point is, we think, ruled by the decision of this court in Walker v. State, 137 Ark. 402, where we held that, upon conviction of murder in the first degree, with the punishment fixed at life imprisonment, the .accused was entitled to bail on appeal. It follows that, since the statute does not require the appeal to be granted by this court or one of the judges, the method of appeal falls within another statute, which authorizes the trial court to grant an appeal in a felony case. Crawford & Moses’ Digest, sec. 3396.

The killing occurred, according to the evidence, on the night of December 24, 1921, at a certain schoolhouse in Montgomery County, where a Christmas tree celebration was being held by the people of the neighborhood. Appellant and his brother Leroy were present, and were intoxicated. Their father, Joe Outler, was also present and was acting as a special deputy sheriff for the purpose of preserving order on the occasion, and he deputized deceased, Blackburn, to assist in preserving order.

Jim Taylor and Edgar Taylor, two young men of the neighborhood, were also present, and an altercation arose between appellant and Jim Taylor. They came to blows, but were separated by the elder Outler, who placed his son, appellant, in charge of Blackburn. After holding appellant in custody for a short time outside of the building, Blackburn decided to release appellant, and did so, telling him to go back in the house and behave himself. Appellant went home at once and armed himself with a shotgun and returned to the school'llouse, where the celebration was still in progress. He met Edgar Taylor at the door, and after a word Or two passed between them— not of an unfriendly nature — appellant struck Taylor with the gun, which was acfeidentally discharged.

Blackburn was standing on the inside of the door w[ien the shot was fired, and he picked up a lantern from a shelf and started out of the door. As he reached the bottom of the steps he spoke to appellant, who was in the act of striking Edgar Taylor, saying, “Don’t do that,” whereupon appellant turned and advanced upon Blackburn several steps, and raising himself up, as witnesses say, upon his toes, struck Blackburn a violent blow across ■ the head with the gun. He knocked Blackburn down, and some of the witnesses say he struck him the second time.

About that time appellant and his brother Leroy rushed into the room and into the presence of the excited crowd, cursing and commanding the people to stand back, and, among other things, they said, referring to deceased, “He come out there and drawed a damn little short gun on me like this.” They also spoke of Blackburn having been deputized, exclaiming, “If any damn son of a bitch wants to be deputized, come on.” These profane and vulgar expressions were made by Leroy, however, and repeated by appellant.

Blackburn walked into the room with blood streaming down from his head and face, and was engaged in wiping his face with a cloth. The testimony tends to show that it was not thought, either by Blackburn himself or those present, that Blackburn was seriously hurt, at least there is no testimony directly on this subject, some of the witnesses merely stating that Blackburn was wiping blood from his face and seemed to be conscious. None of the witnesses detailed the circumstances under which Blackburn left the house, or what occurred after that time, but it was proved that Blackburn went home and died early the next morning.

It is earnestly contended that the evidence is insufficient to warrant the conviction, for the reason that it was not proved that death resulted from the blow delivered by appellant. There is nothing, however, in the record to show that there was any other cause for the death which resulted so soon after the infliction of the blow, and the jury were authorized, we think, in drawing the inference, even in the absence of direct proof on the subject, that death resulted from the blow.

Again, it is insisted that the evidence is insufficient to justify conviction of the highest degree of homicide for the reason that the proof shows that deceased and appellant were on friendly terms up to the time the blow was struck, and that there was no proof to show either malice or deliberation. The evidence shows clearly, however, that appellant assaulted Blackburn without any provocation whatever, and that the assault was of such a violent nature that the jury were warranted in the conclusion that it was made with the intent to take the life of deceased, and that it was done after such deliberation as constituted murder in the first degree.

- Appellant testified that Edgar Taylor was the aggressor in the difficulty in which he was engaged at the time Blackburn came out of the door, and that he thought Blackburn was one of the Taylor boys coming out to join in the assault. But other witnesses testified that Blackburn came out with a lantern in his hand, and that he called out to appellant “not to do that,’’ meaning not to strike Taylor- again. These circumstances warranted the conclusion by the jury that appellant knew it was Blackburn, and that he deliberately turned on him with a murderous intent.

The court permitted the State not only to prove the conduct of appellant and his brother Leroy immediately after the blow was delivered as those parties returned into the schoolhouse, but also to prove statements made by Leroy in the absence of appellant. The court subsequently withdrew from the jury the statements made by Leroy in the absence of appellant, and this, we think, cured any prejudicial effect that might have resulted from the original ruling of the court in allowing the testimony to be heard by the jury. It was competent -for the State to show the joint conduct and declarations of appellant and his brother immediately after the blow was struck. The evidence showed that the men walked into the room immediately after the blow was struck, and that they were cursing and declaring that deceased had drawn a gun. These declarations were competent as a necessary part of the transaction under investigation. Childs v. State, 98 Ark. 430.

The court refused to grant appellant’s request for an instruction on manslaughter, and this ruling is assigned as error. Conceding that there was evidence warranting the submission of the issue as to that degree of homicide, we are of the opinion that there was no prejudice in the ruling of the court, for the reason that the jury, upon instructions correctly submitting the degrees of murder, found appellant guilty of murder in the first degree, which implies a finding that the killing was done with malice and after deliberation. Jones v. State, 102 Ark. 195. : 1

The court gave correct instructions defining the difference between the two degrees of murder and stating the elements of those two crimes. Among other instructions, the court gave the following:

“You will first determine whether or not the evidence proves that the defendant is guilty of murder in the first degree. If, after fully and fairly considering all the evidence in the case, you are convinced that the defendant killed Will Blackburn with malice aforethought and after premeditation.and deliberation, it would be your duty to find him guilty of murder in the first degree. But if, after such consideration of the evidence, you entertain a reasonable doubt as to whether deliberation and premeditation have been proved, you should not find him guilty of murder in the first degree, but you should then consider whether or not he is guilty of murder in the second degree. If, after fully and fairly considering the evidence, you are convinced that the defendant killed the deceased without considerable nrovocation, or on account of a desire to harm him or do him evil, or to avenge some real or fancied injury, then you should find the defendant guilty of murder in the second degree; but if you have a reasonable doubt as to whether or not the defendant killed the deceased with malice aforethought, express or implied, you should find him not guilty.

It will be observed that the court told the jury in this instruction that if they entertained a reasonable doubt “as to whether deliberation and premeditation have been proven, you should not find him guilty of murder in the first degree,” and the jury returned a verdict of murder in the first degree, which showed that they found beyond a reasonable doubt that the killing was done with deliberation and premeditation.

Again, the instruction told the jury that if they had any doubt as to whether or not appellant killed the deceased with malice aforethought they should find him not guilty. This was more favorable than appellant was entitled to, for, even though it was found that the killing was done without malice, it would have constituted manslaughter, unless the killing was justifiable as an act of self-defense. At any rate, the verdict of the jury under this instruction necessarily implied a finding that the killing was not done under circumstances which would reduce the degree of the offense to manslaughter, and no prejudice resulted from the failure of the court to instruct on the subject of manslaughter.

Finally, it is contended that the court erred in its final charge to the jury after the jury had returned to the courtroom and announced the inability of the jurors to agree upon a verdict. When the whole statement of the trial judge is considered together, it is clear that no improper argument or pressure was' brought to bear upon the jury to induce a verdict. The court declared, in substance, that it would hold the jury together as long as there was any possibility of a verdict, and that it was the duty of the jurors, without yielding any positive convictions, to exert every reasonable effort to reach a verdict.

We are of the opinion that there was no prejudicial error in the record, and that the evidence is sufficient to support the verdict.

The judgment is therefore affirmed.


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    Brown v. State.
    Opinion delivered September 25, 1922.
    1. Indictment and information — statutory offense. — An indictment for a statutory offense, framed in the language of the statute, is ordinarily sufficient, unless other words are necessary to put the accused on notice" of the charge involved.
    2. - Intoxicating liquors — sufficiency of evidence. — Evidence held sufficient to warrant a conviction under Acts 1921, No. 324, declaring it a crime to make mash for use in the distillation of spirits or for the manufacture of beer or wine.
    3. Intoxicating liquors — evidence.—In a prosecution for the illegal manufacture of mash for the making of intoxicating liquors, testimony of a search of defendant’s home, made three months after finding of mash in a nearby shanty, held admissible over the objection that the se.arch was too remote in point of time from the finding of the mash.
    4. Criminal law — effect of allowance of appeal. — The allowance of an appeal in a criminal case suspends the judgment, and the incarceration of the defendant in the State Penitentiary during the pendency of the appeal is improper.
    Appeal from Greene Circuit Court; R. E. L. Johnson, Judge;
    affirmed.

      Jeff Bratton, for appellant.

      J. 8. TJtley, Attorney General, Elbert Godwin and W. T. Hammock, Assistants, for appellee.
   McCulloch, C. J.

This is an appeal from the conviction of appellant of the statutory crime of making mash for distillation of spirits or for the manufacture of beer or wine. Acts 1921, p. 324.

There was a demurrer to the indictment on the ground that it failed to state a public offense, in that it was not alleged that the mash was made for use in the distillation of spirits or the manufacture of wine or beer. The charge was framed in the precise language of the statute itself, which- is ordinarily sufficient unless other words are necessary to put the accused on notice of the charge involved in the indictment.

It is also contended, as grounds for reversal, that the evidence is not sufficient to support the judgment of conviction, but we are of the opinion that the evidence is abundant. Appellant resided in Greene County, and a certain quantity of mash fit for use in the distillation of spirits was found in a small shanty, or house, about two hundred yards distant from appellant’s home. The shanty was near a levee and adjoined appellant’s land, but, as a matter of fact, was on land said to be owned by the government, the markers indicating the line of the government’s land being near the shanty itself. There was found in this shanty sis barrels of mash in process of fermentation, and it was still warm from the process when appellant and two other persons were seen tq copie from the shanty, and the officers went in and examined it. They also found meal and sugar in large quantities.

Certain officers of the county received information that appellant was making mash for manufacturing intoxicating liquors, and they went to his place for the purpose of ascertaining the truth of the charge, and making arrests, if necessary. ' This was about the middle of September, 1921, and when they got to a place near appellant’s home, having passed it in an effort to secrete themselves from view, they heard a sound emanating from appellant’s kitchen like the blowing of a horn, or shell. They were secreted in the bushes at that time, and they saw appellant and a boy and a man come out of the shanty door and come along the path toward appellant’s house. A few minutes later a woman living with appellant came from his home and walked on down the path, meeting them. The officers accosted the party, and subsequently examined the shanty and found, as before stated, the mash and other articles to be used in its preparation.

When appellant and his companions 'were seen emerging from the door of the shanty they trotted along the p.ath at a rapid gait, and when they reached the officers appellant seemed to be hot and covered with perspiration, and had meal on his shoes and clothing. There was a plain path running from the shanty to appellant’s house, and there was no other path leading from the shanty.

About three months iater appellant’s house was searched and bottles were found that smelled of whiskey, and also a stillworm was found.

There were other suspicious circumstances in connection with appellant and his conduct about this time, and we are of the opinion that the evidence warranted the finding that appellant had.made the mash and was keeping it in possession for the purpose of distilling spirituous liquor.

It is .also contended that the court erred in admitting testimony of the search of appellant’s house three months after the finding of the mash. The search was made under a warrant, but the ground of the objection is that it was too remote in point of time from the finding of the mash. ' •

' We think that the finding of the apparatus for the distillation of spirits was competent evidence, and was of high probative force as tending to show that appellant was engaged in the unlawful manufacture and distillation of spirituous liquors, and tended to show that the mash found in the shanty near his home was kept by him for such purpose. There was no error, therefore, in permitting the State to introduce this testimony.

We think there wa's no error in any of the rulings of the court, and that the evidence was sufficient to support the verdict. It follows that the judgment is correct and must be affirmed, and it is so ordered.

At the time of the submission of this cause appellant presented to the court a petition for a writ of habeas corpus for the purpose of challenging the legality of appellant’s incarceration in the State Penitentiary. The petition was based upon the theory that the allowance of an appeal to this court suspended the judgment, and that, even though appellant did not give an appeal bond, the appeal itself operated as a suspension of the judgment during the pendency of the appeal to this court.

We think that appellant is correct in the contention, and that while the appeal is pending here we have jurisdiction over the person of appellant for the purpose.of releasing him from improper incarceration in the peniteniary. This is not the exercise of original jurisdiction, but is incident to the exercise of appellate jurisdiction.

It is true, as contended by counsel for appellant, that the appeal suspends the judgment, and as appellant was unable to give bond, lie should remain in the custody of the jailer of Greene County until the case is determined here on appeal.

The affirmance of the judgment is now entered,, but it will not become final, under the statute, for fifteen days, and during that time appellant has the right to insist that he be remanded to the custody of the jailer of Greene County, to remain there until the judgment of this court becomes final. An order will be entered here to that effect, and the keepers of the penitentiary will be directed to return appellant to the custody of the jailer of Greene County. ,