author: Humphreys, J.,

text:
    Scoggin v. City National Bank.
    Opinion delivered November 21, 1927.
    1. Corporations — dissolution.—In a suit against a corporation where the pleadings and testimony did not raise the issue of insolvency, it was error to dissolve the corporation and appoint a receiver.
    2. Corporations — right to sue for dissolution. — An 'individual creditor of the chief stockholder of a corporation could not, under Crawford & Moses’ Dig., §§ 1820, 1821, sue to dissolve the corporation on the ground of insolvency without having obtained judgment against the stockholder and purchased his stock after levy, as the statute confefs this right only on creditors and stockholders of the corporation.

      3. Fraudulent conveyances — estoppel.—Where a creditor of a stockholder in a corporation sued the corporation as well as the stockholder for the stockholder’s debt, claiming that the purchase by another corporation of the property of the former corporation was fraudulent, held that the creditor’s action in dealing with the second corporation as a bona fide corporation, and accepting the personal indorsement of incorporators of the latter, estoppéd such creditor from maintaining that the transfer of the property of the first corporation to the second was fraudulent.
    4. Estoppel — when held not to arise. — Where a creditor sued the indorser of a note of a corporation, such creditor was not estopped to assert its rights against the indorser, merely because, at the latter’s request, it had permitted the corporation to remove its assets from the State.
    5. Fraudulent conveyances — voluntary conveyance. — Where the indorser-of a note without consideration transferred stock in the corporation to another, the payee could follow such stock and subject it to the indorser’s debts.
    6. Insurance — duty to reinsure. — Where a bank had accepted as collateral certain property of a corporation, the insurance on which expired during the time the property was pledged as collateral, without the bank reinsuring, and thereafter the property was destroyed-by fire, held in an action by the bank on the note, that the bank could not be held liable to the defendant indorser foy failure to reinsure, where the insurance companies refused to insure.
    Appeal from Sebastian Chancery Court, Fort Smith District; J. V. Bourland, Chancellor;
    reversed in part.
    STATEMENT OF FACTS.
    The Model Window Glass Company was organized and incorporated in the latter part of 1917, with a capitalization of $75,000. C. P. Zenor, Sr., owned $24,000 of the stock. The owners of the balance of the stock resided in West Virginia. The plant was located in Fort Smith, Arkansas, and was operated by C. P. Zenor, Sr., very successfully. The profits were so large that he purchased the balance of the stock through the efforts of T. H. Nakdimen at $1.30 on .the par value thereof, giving Nakdimen $10,000 for his services. It does not appear just what proportion of the stock was assigned to the various members of the family, or whether any of it was ever delivered to them, but the absolute, control and disposition of the corporation and the plant was vested in C. P. Zenor, Sr. The corporation was dominated and operated by him. A large insurance was carried upon the property or plant and assets, and eventually it wa's destroyed by fire. C. P. Zenor, Sr., collected $135,000 insurance, and rebuilt the plant. He ■began the reconstruction of it in 1923 and completed it in the summer of 1924, but was unable to procure any insurance thereon as a result of the fire, and on account of an attempt to operate same without any union employees. In the latter part of the summer of 1925 the plant ivas shut down, and remained idle, on account of Zenor’s inability to get insurance and sufficient money to pay the existing indebtedness and with which to repair and operate the plant. At the time it OAved the City National Bank about $23,000, to secure which it had pledged glass to the value of about $35,000 or $38,000; and about $10,447, to secure Avhich it had assigned bills receivable in an equal or greater amount. It also had on hand assets or salable stock of the value of $6,761. Its other indebtedness did not exceed $16,000. Its plant and real estate were Avorth between $100,000 and $125,000, according to the weight of the evidence.
    In 1922 C. P. Zenor, Sr., organized and incorporated the Zenor Bottle Company. I. H. Nakdimen and J. B. McDonough Avere stockholders and officers in that company, Nakdimen having subscribed for $1,000 of the stock and McDonough for $2,000. The balance of the stock Avas owned by C. P. Zenor, Sr., and his family. ■ He dominated and operated this corporation also. The plant was insured for $34,000. This insurance was assigned to the City National Bank to secure certain notes given to it for borrowed money. The plant, while in operation, together Avith its salable assets, was worth about $75,000. C. P. Zenor, Sr., purchased I. H. Nakdimen’s stock and contracted to purchase J. B. McDonough’s stock. A part of the indebtedness OAved by the company to the City National Bank and all of the indebtedness it owed I. H. Nakdimen Avas secured by the personal indorsement of C. P. Zenor, Sr. The company owed a considerable sum to its creditors. Twenty-three thousand dollars of the insurance- assigned to the City National Bank expired, and Nakdimen was unable to get it renewed or written by other companies, on account of C. P. Zenor, Sr., owning stock therein. The insurance companies refused to insure property in which he was interested.
    On March 8,1925, the plant of the Zenor Bottle Company was destroyed by fire. The unexpired insurance was collected and applied on the notes secured by an assignment -of the insurance, policies. After the fire C. P. Zenor, Sr., executed a note to J. B. McDonough, for $2,000 to pay for his stock, and for $1,000 to- pay I. H. Nakdimen for his stock. The machinery saved from the fire was probably worth about $15,000, and, according to the weight of the testimony, was moved to Bristow, Oklahoma, and used in the construction of a glass plant there, which the Zenor Bottle Company acquired as a bonus to put up the plant. Before moving all of the property to Oklahoma, all of the creditors were notified, and acquiesced in its removal. The balance which the Zenor Bottle Company owed the City National Bank and I. H. Nakdimen, after giving credit for the amount paid by the insurance companies, was $11,715.07, which bore interest at the rate of 10 per cent, per annum from the 4th day of October, 1926; and the amount C. P. Zenor, Sr., owed J. B. McDonough, was $2,164.33, with interest from the 4th .day of October, 1926. The amount it owed, the City National Bank was secured by the personal indorsement •of C. P. Zenor, ,Sr.
    • C.P.- Zenor, Sr., being desirous of operating-the Model Window Glass Company, entered into an agreement with J. S. Hill and A. H. Scoggin by which they were to advance not to exceed $15,000 with which to pay the urgent debts of the Model Window Glass' Company, make necessary repairs on the plant, take out insurance thereon, .and to pay immediate running expenses. The agreement contemplated the organization of a new corporation, to be known as the Magnolia Window Glass Company, with a stock capitalization of $75,000, to which the real estate and plant of the Model Window Glass Company should be transferred. As a part of the agreement one-half of the stock in the new corporation was to be issued to J. S. Hill and A. II. Scoggin and the other half to J. R. Miller, a son-in-law of C. P. Zenor, Sr. The purpose of issuing one-lialf of the stock in the new corporation to J. R. Miller was to eliminate the name of C. P. Zenor, Sr., so that insurance could be procured on the plant. Both C. P. Zenor, Sr., and J. R. Miller testified that Miller executed a note to Zenor for the stock, but that it was not paid, and no one seemed to know what became of it. The only reasonable inference that can be drawn is that C. P. Zenor, Sr., made his son-in-law a present of the stock, or else that J. R. Miller is holding it in trust for C. P. Zenor, Sr., the latter inference being the more probable. Pursuant to the arrangement, the Magnolia Window Glass Company was incorporated on August 1, 1925, with a stock capitalization of $75,000, $37,000' of which was issued to J. S. Hill and A. H. Scoggin and $37,500 to J. R. Miller, but none of them paid anything into the treasury of the Magnolia Window Glass Company for the stock, and its articles of incorporation were filed with the county clerk of Sebastian County, Fort Smith District, on August 5,1925, and the real estate and plant of the Model Window Glass Company were conveyed by it to the Magnolia Window Glass Company for the nominal consideration of $10. This deed was placed on record on August 7, 1925. The real consideration for the transfer of the property and for the stock issued to J. S. Hill and A. H. Scoggin in the Magnolia Window Glass Company was the agreement on their part to advance not to exceed $15,000 to put the plant in operation. ^Subsequent to the transfer J. S. Hill and A. H. Scoggin purchased the salable stock or personal assets which the Model Window Glass Company had on hand, valued at $6,761, the consideration therefor being paid on the debts of the Model Window Glass Company. It is not made plain whether this money constituted a part of the $15,000 they agreed to advance, and, if so, whether they sold these assets to the Magnolia Window Glass Company. If they turned them over to the new corporation, we think the presumption should be indulged .that the company paid for them. A. H. Scoggin testified that he and Hill paid out about $12,000 on the debts of the Model Window Glass Company and for repairs on the plant, labor, etc. They began to operate the plant on the ..................day of September, 1925. A. H. Scoggin became president, J. S. Hill vice president, and J. R. Miller secretary and treasurer. C. P. Zenor, Sr., supervised the manufacture of the glass. Scoggin, Miller and Zenor drew salaries for their services. It does not appear definitely whether the money they paid for the assets of the Model Window Glass Company, which was used in the payment of its debts, constituted a part of the $12,000 they advanced. The items specified by A. H. Scoggin as entering into the amount paid out by them was $1,401 on a trade acceptance of the National Zinc Company, which was collected by J. B. McDonough, $1,100 to the National Glass Window Association, $5,357 for labor before the plant was in shape to run, and $6,000 for repairs and improvements.
    On September 3, 1925, J. S. Hill and A. H. Scoggin indorsed notes of the Model Window Glass Company to the City National Bank for either $33,447 or $33,667.79, and took an assignment of the glass and bills receivable which the Model Window Glass Company had pledged and assigned to said bank and to secure the notes which they indorsed. This was a separate transaction entirely from the transfer of the real estate and plant of the Model Window Glass Company to the Magnolia Window Glass Company. It seems that on September 5, 1925, J. S. Hill and A. H. Scoggin required J. R. Miller to assign them $31,500 of the stock which had been issued to him in the Magnolia Window Glass Company as additional security to protect them against loss on account of this indorsement or any other amounts they had or might advance or become responsible for. Several months afterwards they paid the notes which they had indorsed to the City National Bank. They collected the bills receivable and sold the major portion of the glass which was returned to them in consideration for the indorsement of the notes which they afterwards paid. It does not appear definitely what they received for the glass. The presumption must be indulged that they received their money back which they paid out on the indorsement, especially in view of the fact that the window glass they received ivas worth between $35,000 and $38,000. If not worth this much, we think that the weight of the evidence shows that there was a nice margin or equity in the value of the glass above the amount necessary to pay the City National Bank for which the glass had been pledged.
    The bills receivable which they collected were ample to pay about one-third of the amount for which they indorsed. The balance of the Miller stock in the Magnolia Window Glass Company, amounting to $6,000, was assigned to Thomas F. Lilly to secure an indebtedness of $2,600, which the Model Window Glass Company owed him as commissions for selling window glass before the sale of its plant to the Magnolia Window Glass Company. There were other creditors of the Model Window Glass Company besides the City National Bank and Lilly at the time it sold its real estate and plant to the Magnolia Window Glass Company, but they have not asked to set the sale aside or made any complaint concerning- the transfer of real estate and plant of the Model Window Glass Company to the Magnolia Window Glass Company.
    There was no secret about the organization of the Magnolia Window Glass Company nor purpose for which it was organized. The articles of incorporation were filed with the county clerk, and the deed conveying the real estate and plant of the Model Window Glass Company to it was filed and recorded afterwards. I. II. Nakdimen, president of the City National Bank, had dealings with Hill and Scoggin with refereilce to indorsing tlie bank7s notes against, the Model "Window Glass Company and J. B. McDonough in the collection of the claim of the National Zinc Company, which revealed a personal knowledge on their part of facts sufficient to put them on inquiry.
    At the time the case was tried, on April 28, 1926, A. H. Scoggin testified it had 16,000 boxes of glass on hand, worth $50,000, material worth $4,000, and accounts receivable in the amount of $6,005; that during the period it operated the plant it sold $133,000 worth of glass. This included the glass of the Model Window Glass Company that was pledged to the City National Bank and after-wards assigned to J. S. Hill and A. H. Scoggin; that it owed the Merchants’ National Bank $35,000, which Hill and Scoggin had indorsed, and owed Hill $2,100, and himself $600. According to his statement, and it seems to be undisputed, the products,- materials and bills receivable were sufficient to pay all its debts and leave a margin of $15,000 or $20,000, besides the plant and real estate in the clear for the stockholders.
    The City National Bank as plaintiff, and J. B. McDonough as intervener, brought suit in the chancery court of Sebastian County, Fort Smith District, to obtain personal judgment against C. P. Zenor, Sr., for their respective claims, and against all of the appellants to set aside the sale of the real estate and plant of the Model Window Glass Company to the Magnolia Window Glass Company, and to invalidate the incorporation of the Magnolia Window Glass Company, if necessary, in order that the capital stock and assets of the Model Window Glass- Company might be subjected to the payment of said indebtedness. The gist of the complaint is that the whole transaction was a fraudulent scheme to withdraw and cover up C. P. Zenor’s stock and properly interest in the Model Window Glass Company for the purpose of cheating and hindering appellees and iheir creditors from collecting their claims. No aclual fraud was charged against A. H. Scoggin and J. S. Hill, but it was- alleged that they acquired their stock in the- Mag-nolia Window Glass Company and through it an interest in the real estate and plant of the Model Window Glass Company without consideration. Actual fraud was charged against ,C. P. Zenor, Sr.,, and J. R. Miller, hut was not charged against A. H. Scoggin and J. S. Hill, and no personal judgment was priayed against them on account of their participation in the transaction.
    The substance of the prayer of the complaint was for personal judgment against C. P. Zenor, Sr., for the amount ¡stated; that his stock in the Model Window Glass Company he impounded land brought into court and held subject to the order of the court; that the stock of Miller in the Magnolia Window Glass Company be impounded, and the stock of C. P. Zenor, Sr., be held subject to the order of the court; that the deed from the Model to the Magnolia be canceled and held for naught; that Miller be required to deliver up the stock in his name in the Magnolia and Zenor be required to deliver up his stock in the Model, and that the claims be declared a lien upon said stock and all interest of Zenor, Sr., therein, and that the stock of Zenor, Sr., be sold to satisfy the claims; and that, if necessary, in order to subject the interest of C. P. Zenor, Sr., to the payment of appellees’ debts, the incorporation of the Magnolia Window Glass Company be set aside land held for naught; and to all general and special relief to which they might be entitled.
    In the several answers filed the indebtedness was admitted, but all other material allegations in the complaint were denied, it being alleged that the transfer of the real estate and plant of the Model Window Glass Company to the Magnolia Window Glass Company was a bon a fide sale and for a valuable consideration. It was further alleged that appellees were estopped from attacking the sale or questioning the validity of the transfer of the stock in the Model Window Glass Company to J. R. Miller or the incorporation of the Magnolia Window Glass Company and the issuance of the stock in the Magnolia Window Glass Company to J. S. Hill, A. H. Scoggin and J. R. Miller, by their consent to the removal of the assets of the Zenor Bottling’ Company out of the State land in failing’ to object to the incorporation of the Magnolia Window Glass Company and transfer of the property of the Model Window Glass Company to it, and in collecting other claims which the Model Window Glass Company owed to the City National Bank, and the claim which was collected from Scoggin and Hill by J. B. McDonough against the Model Window Glass Company, in the collection of which he refused to take an- acceptance from tlie Magnolia Window Glass Company.
    The Zenor Bottle Company filed a cross-complaint for $23,000 against the City National Bank on account of its neglect to take out new insurance when the old policies had lapsed, which said corporation had assigned to the bank to secure debts which it owed said bank.
    The City National Bank filed an answer, denying any liability growing out of its failure to secure new insurance after the old policies lapsed, alleging that it ivas impossible to get any insurance on property in which C. P. Zenor, Sr., Was interested.
    The cause ivas submitted to the court upon the issues joined by the pleadings and the evidence adduced by the respective parties, which resulted in a judgment for the debts and a decree declaring both corporations insolvent, and the transactions bjr which the real estate, plant and capital stock of the Model Window Glass Company passed to the Magnolia Window Glass Company and to •A. H. Scoggin, J. S. Hill and J. R. Miller, without consideration, fraudulent and void as to the creditors of the Model Windoiv Glass Company and C. P. Zenor, Sr.; and subjecting the real estate, plant and capital stock of the Model Window Glass Company to the payment of the claims of creditors of said company and of C. P. Zenor, Sr.; and, for the purpose of winding up the affairs of said corporations, appointing a receiver, allowing all creditors of the Model Window Glass Company and C. P. Zenor, Sr., to present their claims for allowance to the receiver, subject to the approval of the court.

      Evans $ Evans and Cravens $ Cravens and Webb Covington, for appellant.

      James B. McDonough, for appellee.
   Humphreys, J.,

(after stating the facts). In making a statement of the case we did not attempt to set out the pleadings at length, or the substance of the testimony of each witness introduced, or the decree in extenso. Had we done so, it would have unduly lengthened the statement. We confined ourselves to la statement of the issues joined, our conclusion of facts, after a careful reading and analysis of the testimoiry, and the substance of the decree.

The issues joined did not involve the solvency or insolvency of either the Model Window Glass Company or the Magnolia Window Glass Company, nor did the evidence adduced raise that issue. The case was not tried upon the theory that the Model Window Glass Company was solvent in so far as having ample property to pay its commercial debts and to sustain the value of its capital stock. Its capital stock was $75,000, and the value of its plant ivas sufficient to obtain $135,000 insurance before it was destroyed by fire. It had been rebuilt, and was practically new at the time of this transaction, and it may be reasonably inferred from the testimony of C. P. Zenor, Sr., that he expended ia large amount of the insurance money in the reconstruction of the plant. It had $6,761 of unpledged assets, and only owed about $16,000 when absorbed by the Magnolia Window Glass Company, in addition to the amount it owed the City National Bank, which was amply secured by glass 'and accounts receivable. In fact there was a margin of $10,000 or $15,000 between the glass pledged and the debt it was. pledged to secure. With a little backing from Scoggin and Hill, the real estate and plant of the Model Window Glass Company was taken over on August 7, 1924, by the Magnolia Window Glass Company, that had no money of its own, and operated at a nice profit until the testimony was being taken in this case. We arrive at that conclusion from Scoggin’s statement that the Magnolia Window Glass Company had sold $130,000 worth of glass, including what he and Hill had redeemed from the pledge to the bank, and had on hand glass worth $50,000, material worth $4,000 and accounts receivable of the value of $6,005, and only owed $2,100 to Hill, $600 to himself and $35,000 to the Merchants’ National Bank, leaving a margin of $22,305, to say nothing of the value of the real estate and the plant.

The court’s decree dissolving the corporations and appointing a receiver to wind up their affairs on the ground that they were insolvent was outside and beyond the issues joined or raised by the testimony. It was also erroneous 'because an individual creditor of a stockholder has no right to bring a suit to dissolve a corporation and wind up its affairs upon the ground of insolvency. That is a right conferred by our statutes on creditors and stockholders of a corporation. Sections 1820 and 1821, CraAvford & Moses’ Digest. None of the creditors or stockholders of either corporation are parties plaintiff to this suit; the only parties plaintiff to this suit are creditors of C. P. Zen or, Sr. Creditors of stockholders in a corporation do not stand in the shoes of a stockholder until they obtain a judgment against the stockholder, and levy upon Ms stock and buy it in at the sale. Then, and not until then, would they have a right, under §§ 1820' and 1821, to proceed to dissolve and wind up the affairs of an insolvent corporation. It is urged by appellees that §§ 4873 and 4874 of Crawford & Moses’ Digest are authority for maintaining this suit as a creditors’ bill. We do not think other persons mentioned in § 4873 embraced individual creditors of a stockholder in a corporation, but, if it does, we think appellees are estopped by transactions they had with Scoggin and Hill from maintaining a suit to set aside the sale of the real estate and plant of the Model Window Glass Company to the Magnolia Window Glass Company.

Again, appellees are clearly estopped from complaining of the sale of the real estate and plant of the Model Window Glass Company to the Magnolia Window Glass Company. They had record notice in August, 1925, of the incorporation of the Magnolia Window Glass Company and the conveyance to it by the Model Window Glass Company of its real estate and plant for a nominal consideration of $10. The City National Bank thereafter, and prior to the institution of this suit, accepted the personal indorsement of J. S. Hill and A. H. Scoggin, two of the incorporators of the Magnolia Window Glass Company, on an indebtedness of over $33,000 which the Model Window Glass Company owed it, and released glass valued at $35,000 to $38,0*00, so that the Magnolia Window Glass Company would have glass to sell in the ordinary course of trade. The glass was moved back to the plant of the Model Window Glass Company, which had been taken over by the Magnolia Window Glass Company. J. B. McDonough collected a claim against the Model Window Glass Company on an acceptance signed by A. H. Scoggin and J. S. Hill, two of the incorporators of the Magnolia Window Glass Company. Scoggin and Hill tried to g'et him to take the acceptance of the Magnolia Window Glass Company in payment of the debt, and he refused to do so. We think the record notice and these transactions were sufficient to put appellees upon notice that the real estate and plant of the Model Window Glass Company was being taken over by the Magnolia Window Glass Company, and they are estopped, after securing these debts by obtaining the personal indorsement of A. H. Scoggin and J. S. Hill in furtherance of the transaction, to complain about the transfer of the real estate and plant. Both the City National Bank and McDonough must have known that Scoggin and Hill did not pay $37,500 into the treasury of the Magnolia Window Glass Company, and that Miller did not pg.y a like amount into the treasury of the corporation, else they would have insisted upon a payment of their debts in cash rather than obtain security for same by the indorsement of Scoggin and Hill. By inquiry they could readily have ascertained the real consideration agreed to be paid bv Scoggin and Hill for the transfer of the real estate and plant of the Model Window Glass Company to the Magnolia Window Glass Company.

We do not think the City National Bank is estopped to collect its claim -against C. P. Zenor,’Sr., because it allowed the maker of the notes, Zenor Bottling Company, through the solicitation of C. P. Zenor, Sr., to move its machinery out of the State after the fire. C. P. Zenor, Sr., moved it out of the State, and it certainly does not lie in his mouth to say that the favor it granted to his corporation had the effect of releasing him from making hist indorsement to the hank good. The most that appellees were entitled to, under the allegations of the complaint and the testimony introduced in support thereof, was to follow the stock of C. P. Zenor, Sr., into the Magnolia Window Glass Company, and to subject it to the payment of their claims, provided that it was a voluntary gift to Miller, or provided it is held by Miller in trust for C. P. Zenor, -Sr. The testimony has convinced us that the stock was issued to Miller without consideration and for the purpose of enabling the Magnolia Window Glass Company to get insurance on the plant; that Miller was not a bona fide purchaser thereof for a valuable consideration. The carelessness with which his note was handled indicates that its execution was' a matter of form only, and that it was issued, if issued at all, as a subterfuge to cover up Zenor’s property and stock and prevent his creditors from reaching it. Scoggin and Hill claim and insist that they held $31,500 of Miller’s stock as collateral to secure them against any loss they might sustain by reason of indorsing the notéis of the Model Window Glass Company to the City National Bank, and any loss they might sustain by reason of other indorsements made in the operation of the Magnolia Window Glass Company. The testimony reflects that.they have received ample property to protect them against loss on account of all their indorsements, except to the Merchants’ National Bank for $35,000, and that the glass on hand is more than sufficient to pay the debt the Magnolia Window Glass Company owes the Merchants’ National Bank.

The assignment of $31,500 of the Miller stock in the Magnolia Window Class. Company was properly canceled by the court. The Zenor Bottle Company is not entitled to any judgment against the City National Bank on its cross-complaint. The City National Bank made an effort to renew the old insurance policies as they expired, and was unable to do so. The record reflects that it was impossible to get insurance on property in which C. P. Zenor, Sr., Was interested.

On account of the errors indicated, the decree is reversed, in so far as it sets aside the sale of the real estate and plant of the Model Window Glalss Company to the-Magnolia Window Class Company and dissolved them and appointed a receiver to wind up their affairs; and affirmed in so far as it sets aside the assignment of $31,500 of the stock carried in Miller’s name for the Magnolia Window Class Company, and impressed same with a lien to isiecure appellees’ judgments.

The case is therefore remanded, with directions to the chancery court to order the stock sold, amounting to $31,500, carried in Miller’s name in the Magnolia Window Class Company, free from any claim of Sooggin and Hill, to satisfy appellees’ judgments.


source: Caselaw Access Project

author: Humphreys, J.

license: Public Domain

text:
    St. Louis-San Francisco Railway Company v. Francis.
    Opinion delivered November 21, 1927.
    1. Ejectment — sufficiency of deeds. — In a suit for ejectment, deeds under -which the defendant claimed title, not sufficiently-describing the premises, should have been excluded.
    2. Adverse possession — instruction as to continuous possession. —'In a suit for ejectment, where defendant claimed by adverse possession, an instruction on the issue of adverse possession should have contained the word “continuous” in describing the character of possession required.
    Appeal from Crawford Circuit Court; James Cochran, Judge;
    reversed.

      E. T. Miller and Warner, Hardin & Warner, for appellant.

      G. Hi. Wofford and Dave Partain, for appellee.
   Humphreys, J.

This is a suit in ejectment brought by appellant against appellee, in the circuit court of Crawford County, to recover possession of the following described real estate in Crawford County, Arkansas, to-wit: One lot 60 ft. x 120 ft. in the town of Schaberg, Arkansas, beginning at the southwest corner of the northwest quarter of southeast quarter section 10, township 12 north, range 30 west; thence north 235 2/3 feet to place of beginning; thence 60 feet east; thence 120 feet south, then 60 feet west; thence 120 feet north, to place of beginning. Also one lot 40 feet east and wvest and 60 feet north and south on the. northwest quarter of the southeast quarter of isection 10, township 12 north, range 30 west, in the town of Schaberg, covering the location of the J. M. Moore store building, except that it extends 10 feet further south than said store buildings, as evidenced by iron stakes and foundation ditches as they stand when this deed is made.

Appellant alleged that it acquired title to the land under a' decree of the Federal court of the Western District of Arkansals on October 3,1896, in a suit between it and M. M. Saylor, who homesteaded the land on January 27, 1890, and that appellee had taken possession thereof and refused to relinquish same upon demand.

Appellee filed an answer, denying appellant’s ownership of the lands, alleging ownership thereof in himself, through mesne conveyances from M. M. Saylor, the patentee;- alteo that he hiad acquired title thereto by adverse possession thereof for more than seven years.

The cause was submitted upon the pleadings, testimony introduced by the respective parties, and instructions of the court, resulting in a verdict in favor of appellee and a consequent judgment dismissing appellant's complaint, from which is this appeal.

The lots in controversy are part of appellant’s right-of-way, title to which was quieted in appellant by the United States Circuit Court at Fort Smith, Arkansas, in 1896, in a suit wherein appellant was plaintiff and M. M. Saylor was defendant. Appellant introduced this decree and based its right to recover thereon.

Appellee introduced, over appellant’s objection and exception, mesne conveyance® from M. M. Saylor and his heirs, claiming that said deeds described the .lots in controversy. Appellant objected to the introduction of the several deeds upon the ground that none of them sufficiently described the lands in question, or else are so indefinite and uncertain that they described no lots at all. We deem it unnecesisiary to set out these descriptions in this opinion, as to do so could serve no useful purpose. We think the court should have excluded the deeds for insufficiency in description, and should have sent the case to the jury upon the sole question of pedal possession. The issue of pedal possession for seven years was submitted to the jury, but upon instructions which did not carry the idea that such possession must haA^e been continuous to entitle appellee to acquire title by adA^erse possession — continuous in the sense that appellee had not, at any time, abandoned the possession of the particular land actually occupied by him. In other words, the instructions given declaring the laiv of pedal possession should have contained the Avord “continuous.” The issue of pedal possession Avas beclouded by the instruction given relative to appellee’s acquisition of title by deed. This issue should not havu been submitted to the jury, and may have misled them in reaching a verdict. There avrs no competent evidence upon Avhich to base the instruction relative to the acquisition of the lands by deed. The'deeds introduced by appellee did not sufficiently describe the lots in controversy, and should have been excluded.

On account of the error indicated the judgment is reversed, and the cause is remanded for a new trial.


author: Kirby, J.

text:
    Cowger v. Ellison.
    Opinion delivered November 21, 1927.
    1. Courts — county having two judicial districts — jurisdiction.— Under Acts 1875, p. 188, creating the Dardanelle and Danville districts in Yell County, vesting the Dardanelle District with jurisdiction in cases arising therein, but providing that no citizen or resident of the Danville District should be liable to be sued in the Dardanelle District, held, that the circuit court of the Dardanelle District had no jurisdiction of an election contest in which the summons was issued and served upon defendant in the Danville District.
    2. Courts — act creating separate judicial districts. — Acts 1875, p. 188, creating the Dardanelle Judicial District in Yell County, with jurisdiction over cases arising in the Dardanelle District, but providing that, as to all matters not within the provisions of the act, Yell County should be one entire undivided county, held not in violation of the Constitution conferring jurisdiction upon circuit courts.
    3. Elections — nature op contests. — Election contests do not constitute “civil actions,” within the meaning of the Code of Civil Practice.
    4. Elections — jurisdiction op contests. — A cause of action under Crawford & Moses’ Dig., § 3772, giving the right to contest a primary election for nomination to county office, does not arise in a separate judicial district of Yell County constituting only part of the county and not containing the county seat.
    Appeal from Yell Circuit Court, Dardanelle District; J. T. Bulloch, Judge;
    affirmed.

      Wilson & Wilson, Scott & Goodier and Ward & Caudle, for appellant.

      Strait é Strait, for appellee.
   Kirby, J.

This appeal challenges the jurisdiction of the circuit court of the Dardanelle District of Yell County to hear and determine a primary election contest between candidates for the office of county and probate clerk.

At the general Democratic primary election held on August 10,1926, appellant and appellee were rival candidates for the office of county and probate clerk. Appellee was declared the nominee, and, within the time prescribed by law, appellant filed in the Dardanelle District of Yell County Circuit Court his complaint, setting- out grounds for contest, duly verified, with the number of affidavits of qualified electors required. Summons was issued and served upon appellee at Danville, in the Dan-ville District of said county, as shown by the report of the sheriff.

Appellee moved to quash the service as being made in the Danville District, contrary to the statute, and because of the lack of jurisdiction of the circuit court of the Dardanelle District to hear and determine the contest, alleging that, under the special act creating said district, it was without jurisdiction to hear and determine said cause.

The question was heard as upon demurrer, and the cause abated and dismissed for want of jurisdiction, from which judgment this appeal is prosecuted.

In Walker v. State, 35 Ark. 390, this court, construing the act separating Yell County into two judicial districts, held it constitutional, saying: “The act does not reduce the area of Yell County or change its county seat from Danville; it merely divides the county into two judicial districts for the purpose of the act, and is carefully framed so as to leave the county seat proper, and for general purposes, at Danville.”

Appellant contends, however, that the division of the county into districts by said act provided for the establishment of a circuit court in the Dardanelle District, whose power to hear and determine all causes cognizable under the Constitution conferring jurisdiction upon circuit courts could not be limited, and that an attempt to prescribe or restrict its jurisdiction to hearing certain causes only brings the act into conflict with the provision of the Constitution relative thereto.

In Ex parte Jones, 27 Ark. 349, the court staid: ‘ ‘ The Constitution defines the general jurisdiction as to the subject-matter of circuit courts, but is silent as to territorial limits, and provides that this court should be held at such place in each county as might by law be directed.”

Section 3 of the act creating the district provides:

“ * * * and the authority and territorial jurisdiction of said circuit courts shall extend over the Dardanelle District tlio same and in like manner as if said district was a constitutional county of this State, and said circuit court of Yell County for the Dardanelle District shall have original and exclusive jurisdiction of all such cases as are now by law vested in the circuit courts of this State, which have or may hereafter arise in the said Dardanelle District; provided, that no citizen or resident of the Danville District shall be liable to be sued in the .said Dardanelle District in any action whatever.”

Section 5 reads:

“That, in order to ascertain in which of the respective districts in said county actions cognizable in the circuit court shall be returnable and be tried, the said districts, for all the purposes of this act, shall be considered as separate and distinct counties, and the mode and place for trying suits shall be determined by the general law applicable to different counties, except that all process, civil, criminal, original, mesne, and final, that may be issued from the circuit court of either district, shall run through the whole county, and have like effect as if the court where it issued were the only circuit court of said county. Provided, that no process except subpoenas for witnesses and executions issued by the circuit court of the Dardanelle District, shall be served on any citizen or resident of the Danville District.”

Section 16 provides that, as to all matters not within the provisions of this act, the county of Yell shall be one entire and undivided county.

Section 3372, C. & M. Digest of the Statutes, confers a right of action upon candidates to contest the nomination in primary elections, and requires the contests for county offices to be brought in the circuit court of the county.

The act providing for the establishment of the Dardanelle District gave the circuit court for that district original and exclusive jurisdiction of all such causes as are now by law vested in the circuit courts of the State, which have arisen or may hereafter arise in the said Dardanelle District.

The right of action to contest the primary election had not been conferred by law upon the candidates until long after the division of Yell County into two judicial districts, and such contests do not constitute civil actions, within the meaning of our Code of Civil Practice^ as held in Logan v. Russell, 136 Ark. 217, 206 S. W. 131; and Pierce v. Doyle, 145 Ark. 371, 224 S. W. 740.

The case last cited involved an election contest where Ihe suit was brought at the county seat, where the circuit court was held before the creation of a separate district. The defendant lived in the created district, but was served in Pulaski County, while away from home. Upon a motion to dismiss because suit was not brought in the district where defendant lived, and to quash the service, the court passed upon a provision of the act creating the separate district in that county, identical with the provisions of § 16 of the act of 1875, creating ihe Dardanelle District of Yell County, saying:

“Section 17 of the act of 1887, supra, expressly provides ‘that, as to all matters not within the provisions of this act, the county of Lawrence shall be one entire and undivided county.’ Under the primary election law supra, contests for the office of representative shall be brought in the circuit court of the county wherein any of the wrongful acts complained of occur. The Brundidge act takes no notice of the division of counties into separate judicial districts for the purpose of election contests provided therein, but for the office of representative and for county and township offices the county is considered as an entirety. The separate and independent judicial districts are not treated as separate and independent counties (in election contest cases), as appellee contends. There is nothing in the Brundidge law that repeals, either expressly or by implication, the Code of Civil Procedure which requires that actions of this kind shall be brought in ‘any county in which the defendant resides.’ The appellee, at the time of the institution of this proceeding, was a resident of Lawrence County, where it was brought, and he was duly served with process.

The cause of action, a general' contest of a primary election to the nomination for a county office, cannot well be said to have arisen in the Dardanelle District in any event, and the statute creating that district expressly provides that no citizen, or resident of the Danville District shall be liable to-be sued in the said Dardanelle District in any action whatever.

It follows that the circuit court of the Dardanelle District was without jurisdiction to hear and determine this election contest, under the provisions of the act creating the separate district, which is in no wise in conflict with the Constitution conferring 'jurisdiction upon the circuit courts.

No error was committed by the court in quashing the service and dismissing the cause, and the judgment is affirmed.


text:
    Commonwealth Life Insurance Company v. Tanner.
    Opinion delivered November 21, 1927.
    1. Trial — directed verdict. — Where both parties requested a peremptory instruction directing a verdict, without requesting other instructions, it was equivalent to an agreement that the question at issue might he decided by the court, and the court’s decision had the same effect as the jury’s verdict would have had.
    2. Appeal and error — «request for directed verdict. — Where both parties requested a directed verdict in their favor without asking any other instructions, the court was authorized to decide the issues, and its decision had the same effect as a jury’s verdict, and will not be disturbed on appeal if supported by substantial evidence.
    3. Insurance — breach of warranty of health. — In an action on a policy of life insurance, which did not require a medical examination of the insured, undisputed evidence of false warranties as to insured’s health, made in the application and warranted to he true in the policy, held to require a directed verdict for defendant.
    4. Insurance — notice of breach of warranty. — The fact that the secretary of an insurance company was informed by one of the company’s agents, who had seen insured about 6 weeks after the policy was issued, that insured appeared to be in had health, held
      not to estop the insurer from claiming that false -warranties of health in the application for the policy invalidated it.
    5. Insurance — waiver of breach of warranty. — Though one of the insurance company’s agents informed the company after the policy had been issued that insured appeared to be in bad health, insurer held not to have waived its right to rely on the truth of warranties of health in the application for the policy.
    Appeal from Faulkner Circuit Court; George W. Clark, Judge;
    reversed.

      Joe H. Thompson and Utley & Hammond, for appellant.

      R. W. Robins and George F. Ilartje, for appellee.
   Kirby, J.

Lenora Tanner, sister of Henry Simpson, the insured, brought this suit against the appellant insurance company to recover $500 alleged to be due her on the life insurance policy issued to her brother in which she was named as beneficiary. She recovered judgment for the amount of the policy, penalty and attorney’s fees', from which this appeal is prosecuted.

The company denied liability, alleging that the policy was issued without a medical examination and on the faith of the truth of certain representations as to the health of the insured, which were warranties, and false, avoiding the policy, and also that there was no liability under its terms because it was not delivered to the insured during his lifetime while he was in good health.

The policy was dated February 27, 1926, and Simpson died June 25, 1926. Appellee'made the application for the insurance for her brother, designating herself as beneficiary, land signing the name of her brother as applicant, by her.

The application contains the following question and answer:

“No. 3. I have not at this time, nor have I’had during the past two years, any disease or ailment of the brain, nervous system, blood vessel, lungs, stomach, liver, kidneys, gall bladder, intestinas (bowels), heart or limbs except as follows: Stomach trouble, September, 1925. ’ ’

It was also stated that the applicant had not had during the two years immediately before, “diabetes, rheumatism, scrofula, cancer, pellagra, malaria, typhoid fever, syphilis or gonorrhea, pneumonia, asthma, spitting' of blood, tuberculosis, colitis, diarrhea, peritonitis, appendicitis, hemorrhoids, hernia, paralysis, general debility, influenza, or any other contagious or infectious disease.” That each answer was unqualifiedly true; that all answers were complete, and agreed that the policy should not be in force and effect until and unless delivered to the applicant while he was alive and in good health.

The agent who took the application stated that, when the applicant, in answering question No. 3, said “Stomach trouble, September, 1925,” he asked “Is he all right now?” and she replied, “Ye® sir.” This was not denied by the appellee.

The testimony showed that the insured had been away in Illinois; that he had been in continued poor health from September, 1925, to the time of his death, and was not in g’ood health when the policy was turned over to his sister, who stated that he was only in fair health then. To the question, “There -wasn’t anything wrong with your brother aside from that stated in the application, when the policj^ was delivered?” she replied, “No.”

The proof of death submitted by her showed that the cause of death was “acute pneumonic phthisis,” the contributory ailment “chronic dyspepsia.” The physician also stated that he had treated insured for chronic dyspepsia January 18, 1926, and acute pneumonic phthisis April 5, 1926.

The policy of insurance showed the application signed, “Henry Simpson, b3)r Lenora Tanner, applicant”; that they knew his insurability would be determined by the answers made, no medical examination being required; that all the answers or statements had been read to applicant and stated “that each of such is unqualifiedly true — I therefore warrant that each answer and statement reflects an existing fact, and that the company ma3^ rely upon them to such extent. And further, for nryself and all beneficiaries under the policy which may be issued upon this application, I agree that, in the event any such answer may be discovered to be erroneous or false, or in the event any such statement be discovered to be erroneous or false, even though such be deemed immaterial by me or the beneficiary, then, in either event, this policy shall stand canceled as of the date of issuance, and this reg'ardless of the date of discovery of such breach.

“I further warrant that the statements and answers above set forth are complete, and that I have made no statement or answer touching upon any of the above questions or statements, to any agent of the company, except as set forth above, and I hereby bind myself and beneficiary to the truthfulness of this warranty, and further, I agree that the policy to be issued on this application shall not be in force or effect until and unless it be delivered to me while I am in good health and alive. * * * I understand and agree that provisions of this application and the policy to be issued thereon can only be waived or modified by indorsement written thereon by the president or secretary of thé company.”

There was other testimony relative to the falsity of the answers to the question whether applicant had ever applied for insurance without getting a policy.

Each of the parties asked for an instructed verdict, without asking for any other instructions, and the court directed a verdict for the appellee, and from the judg-' ment thereon this appeal comes.

This court has uniformly held, since deciding St. L. S. W. Ry. Co. v. Mulkey, 100 Ark. 71, 139 S. W. 643, Ann. Cas. 1913C 1639, that, where each party asks for a peremptory instruction directing a verdict in his favor, without requesting any other instructions, it is tantamount to an' agreement that the question at issue may be decided by the court, and the court’s decision has the same effect as the verdict of a jury would have had, and will not be disturbed or set aside on appeal if there is any substantial evidence to support it. See also Hall v. Barrel, 136 Ark. 329, 206 S. W. 435; National Benevolent Society v. Barker, 155 Ark. 506, 244 S. W. 720; Head v. Winship (Ark.), 297 S. W. 841.

The evidence is virtually undisputed that the insured had suffered from chronic dyspepsia from September, 1925, before the policy of insurance was issued in February, 1926; that he had been treated for this ailment in January before the issuance of it, as stated by the physician, who certified to the proof of death; that he was suffering from it when the application for insurance was made, and was not in good health on account of it when the policy was delivered, as stated by the beneficiary, and was frail, thin and emaciated, vomiting his food and spitting up blood from the time he returned from Illinois in January, and unable to do any substantial work to the time of his death.

The physician stated that acute pneumonic phthisis is an acute type of tuberculosis that malíes rapid destruction of the lung tissues, usually terminating in death in between three and four months.

Another physician, Dr. Benefield, stated that acute gastritis and chronic ■ dyspepsia are an indication of tuberculosis, and are sometimes a sure and the only symptoms of that disease.

The warranties as to the health and physical condition of the insured, both at the time of the application for the insurance, and certainly at the time of the delivery of the policy, were false, relieving the insurance company from any liability under the policy on that account, in accordance with its terms. The testimony is not sufficient to support the verdict, and the court erred in not instructing a verdict in its behalf.

Neither was there any estoppel of the company or waiver of' its right to rely upon the truth of the warranties, because of the statement to its agent that he had seen the insured about six weeks after the policy was issued and told the secretary of the company of the insured’s apparent bad health. No premiums were due or accepted on this policy thereafter. This constituted no knowledge of existing facts at the time of the issu anee and delivery of the policy which would have invalidated the contract from, its inception, and it cannot be said that the policy of insurance was issued and delivered with full knowledge of all the facts affecting its validity, or constituted known grounds of invalidity amounting to waiver of the conditions in the contract inconsistent with such facts.

For the errors designated the judgment is reversed, and the cause dismissed.


author: Mehaeey, J.

text:
    St. Louis-San Francisco Railway Company v. Young.
    Opinion delivered November 21, 1927.
    1. Railroads — negligence in frightening horse. — In an action against a railroad company by one injured when thrown from a horse, the question whether the negligent and careless letting off of steam by the engineer or fireman caused the horse to become frightened, and whether the horse’s becoming frightened resulted in the plaintiff's injury, held for the jury.
    2. Appeal and error — conclusivbness of verdict. — The Supreme Court will not disturb a verdict of the trial court, where there is substantial evidence to support it, although the evidence introduced is conflicting.
    3. Railroads — -contributory negligence. — In an action against a railroad company by one claiming to have received injury by reason of the horse which he was riding becoming frightened by the letting off of steam by the railroad engine, whether it was proper for plaintiff to sit'on his horse near the standing engine was a question for the jury.
    4. Trial — assuming disputed facts in instruction. — In an action against a railroad company by one injured by'being thrown from a horse frightened when the engine let off steam, an instruction assuming that the injury was not caused by the running of the train held properly refused.
    5. Railroads — act in running trains. — An engineer’s or fireman’s letting steam escape while starting or preparing to start a train, resulting in injury, is an act of running the train *within the meaning of Crawford & Moses’ Dig., §§ 8562 and 8575, relating to the railroad’s liability for injuries caused from running a train.
    6. Railroads — acts done in running train. — Acts done-by persons • in charge of an engine in either stopping or starting a train, held
      to be acts done in running- the train, within the meaning oí Crawford & Moses’ Dig., §§ 8562 and 8575, relating to a railroad’s liability for injuries caused by acts in running trains.
    Appeal if rom Craighead Circuit Court, Jonesboro District; G. E. Keck, Judge;
    affirmed.

      E. T. Miller, E. L. Westbrooke, Jr., and E. L. Westbrooke, for appellant.

      J. F. Gautney, B. II. Dudley and Denver L. Dudley, for appellee.
   Mehaeey, J.

Appellee brought this suit in the Craighead Circuit Court against appellant, alleging that, in July, 1923, he approached the defendant’s track nearNettleton on horseback, intending to cross the track, but a passenger train had stopped at the station, and the engine and part of the train obstructed the crossing. He remained on his horse about sixty-five feet from the engine, and he alleges that the servants of appellant, while he was sitting- on his horse, carelessly opened the valves on the engine and negligently permitted large quantities of steam to escape in the direction of and on the horse, causing it to take fright, resulting- in his being-thrown and the breaking of his ankle, and for the injuries thus received he brought this suit. There was a jury trial, a verdict for the plaintiff, and the defendant has appealed.

The evidence is substantially as follows: Appellee is sixty-one years old, lived at Nettleton, and had been plowing, and was on his way home at 11:30 in the morning on July 11,1923. He rode towards the crossing, and stopped about sixty-five feet from the main line. He was riding a mare that was gentle, and about nine years old, and he was in the habit of crossing* the railroad four times a day. The train stopped on the crossing, and the engineer was looking at appellee, and pulled something and the steam came' out, and the mare threw appellee and broke his ankle. Appellee had been sitting there only a minute when the steam came out and frightened the mare. According to appellee’s testimony, the steam came clear out to where he was and covered the mare. He was in plain view of those in charge of the engine.

There is no controversy about the amount of the verdict, and it is unnecessary to make any statement with reference to the extent of the injury.

The engineer, who had had 35 years’ experience as a locomotive engineer, stated that the only place the steam could come out on the right side of the engine is at the right cylinder cocks, and on the left side, the fireman’s side, is the blow-valve, but, to open it, á man would have to get on the running-board. Neither the engineer nor the fireman got out of the locomotive at Nettleton. No steam was let out of the engine. To open the valve to cover one with steam and make a loud noise one would have to get out on the front end of the engine and open the mud-valve. That was not done. The engineer testified that, when he started from Nettleton, he put the reverse lever in full stroke and opened the throttle. The train was headed towards Jonesboro. When the train started he looked back to see if trespassers were on the tender or mail-car, and he saw a horse wheel and some one fall off. On a hot sunshining day steam makes no clouds. It cannot be seen. When the cylinder cocks are opened there is just a little noise, and the steam cannot be seen. . He said on a day like that the steam could not be seen, and no steam was blown out.

The fireman testified substantially the same as the engineer, ;and also said that it is only after a long stop that it is necessary to open the cylinder cooks, and that the cylinders were 40 feet from the crossing and 18 inches from the ground.

Defendant’s witnesses did not know what frightened the horse.

There was other' testimony about the accident, and as to the manner in which the steam escaped, and the conduct of the agents and servants of the appellant, and that of the plaintiff also. There is a conflict, and we deem it unnecessary to set out the testimony, further than to show the issues submitted to the jury.

Appellant urges, first, that the evidence is not legally sufficient to support the verdict. Appellee testified that' lie was riding a gentle animal; that he had been plowing, and left the field about eleven-thirty, and approached.the railroad crossing, saw the train approaching, and stopped his horse. That the animal he was riding was about eight or nine years old, and very gentle. Any member of the family could drive her. She had been around trains frequently. That appellee crossed the tracks with her, going'to and from work, two or three times daily. Never was frightened before. The train stopped with the engine on the highway crossing. The engineer was looking around and was looking at appellee, when he pulled something, and the steam came out and scared the mare, and she threw him over her head. ' A good deal of steam came out and covered the mare. Carn'e clean out where we were. Appellee was in plain view of the men on the engine, and they saw him. The steam came out in a way that he couldn’t see anything. The engineer was half laughing and looking at appellee, and when he did that he did it out of a pure spirit of devilishness or hellishness. Cinders hit the mare. The noise was loud enough to be heard 1250 feet away.

Although some portions of this testimony of the appellee was denied by witness for appellant, it was sufficient evidence upon which to base a verdict. In other words, the evidence on the part of appellee tended to show that the servants of thé appellant negligently and carelessly frightened his horse, and that this was the cause of his injury. This court has many times held that where there was any substantial evidence to support the verdict, this court will not disturb it. That is thu settled rule of this court, and it .is unnecessary to call attention to the authorities. When the evidence is. conflicting, the verdict of the jury will not be disturbed by this court.

Appellant’s next contention is that the court should have given the instructions requested by the defendant. Appellant’s first instruction is as follows:

“No. 1. It is the duty of railroads to exercise reasonable and ordinary, care to observe travelers near crossings,' and'it should refrain from doing any heedless or unnecessary act calculated to frighten horses bearing travelers rightfully near crossings. But it is also the duty of ihe traveler not to' unnecessarily or negligently place his horse i.n a position where the horse may become frightened by the escape of steam, or other noises which engines necessarily make, even when they are operated with due care, nor to sit on his horse in a position where he cannot protect himself from falling off should the horse take fright at such escape of steam or other noises.” ■ .

It was, of course, improper to tell the jury that it was the duty of the travelers “not to unnecessarily or negligently place his horse in a position where the horse may become frightened by the escape of steam or other noises which engines necessarily make, even when they are operated with due care, nor to sit on his horse in a position where he could not protect himself from falling off should the horse become frightened at such escape of steam or other noises.” It would have been improper for the court to tell the jury whether it was proper or improper for a person to sit on his horse as plaintiff did, but he should have submitted these questions to the jury, and it was the jury’s duty to determine whether the conduct of the appellee at the time was negligent or not, and to determine also whether defendant’s servants were guilty of negligence. The instructions requested by appellant were covered by instructions given by the court.

Instruction No. 2, requested by the defendant, was properly refused. The injury in this case was caused by the running of a train, and instruction No. 2 assumed that the injury was not caused by the running of a train.

Appellant complains at the refusal to give its instruction No. 3 as requested, and to the court’s giving it as modified. The modification consisted in adding the following words: “in a degree equal to or greater than that of the employees in charge of the said train, if you find they were negligent.”

“In all suits against railroads for personal injury or death caused by the running of trains in this State, contributory negligence shall not prevent a recovery where the negligence of the person so injured or killed is of a less degree than the negligence of the officers, agents or employees of the railroad causing the damage complained of; provided that, where such contributory negligence is shown on the part of the person injured or killed, the amount of recovery shall be diminished in proportion to such contributory negligence.” C. & M. Digest, § 8575.

As to whether this was a proper modification of the instruction and as to whether it was proper to give it as modified, depends upon the meaning of the words “running of a train.” ' It was said by the Supreme Court of Georgia:

“It is urged that, if the injury occurred as alleged and proved by the plaintiff, this is not a case in which the statutory presumption of negligence arises. Section 2321 of the Code declares a railroad company shall be liable for any damage done to persons, stock or other property by the running of the locomotives or cars or through the machinery of such company, or for damage done by any person in the employment and service of such company, unless the company shall make-it appear that their agents have exercised all ordinary and reasonable care and diligence, the presumption in all cases being against the company. The argument in that case, was inasmuch as the car was standing still when the passengers were directed to leave it and go to another car, the injury was not done by the running of the car or by any person in the employment and service of the company. This argument would be sound if made in regard to an injury which was entirely disconnected from the running of a car, or which whs not produced by some direct act of a person in the employment of the company. * * * 'But it would be too narrow and restricted a view to hold that if, while passengers are in transit upon a car, it was stopped for one or more of them to alight, or to be transferred to another ear, and the injury resulted to one of them by reason of turning out the lights in the ear or causing it to jerlc while the passenger Avas alighting, this Av-as not done by the running of the car, or by a person in the service of the company, if .such person put out the light or caused the jerk. Such lan occurrence would be a part of the actual transit. The running of the oar, as used in the section of the Code above quoted, -is not confined to 'a mere collision Avith a person on the track. An unnecessary jerk, causing an injury to a passenger while alighting, is a part of the running, within the reason and spirit of the statute.” Georgia Railway & Electric Co. v. Reeves, 123 Ga. 697, 51 S. E. 610.

See also Smith v. Atlantic Coast Line Railway Co., 5 Ga. App. 219, 62 S. E. 1020, and Seaboard Air Line Ry. Co. v. Bishop, 132 Ga. 71, 63 S. E. 1103.

In the last case the court said:

“The expression ‘by the running of the locomotives or cars,’ will not be given a narrow and contracted meaning, but Avill be reasonably construed in the light of the legislative purpose and intention as evidenced by the entire statute. -To illustrate: A train pulls up to a station, and stops. A passenger in alighting is injured because the step of the car is broken or wanting. Technically speaking, the train is not ‘running’ in the sense of being in actual motion, at the instant the passenger is alighting. But he is injured by the running of the train in the sense that it is being operated, and that, as a part of such operation, the company must allow passengers proper opportunities for alighting.”

The court then gives numerous illustrations of injuries occurring while the train is not in 'actual motion, but the injury occurs by something that is really a part of the operation, something the company must do in order to operate the train.

We hold here that the running of a train should be given a reasonable construction. In the case at bar the letting steam eiscape, as it is said was done in this instance, Avas done, according to the contention of the appellant itself, if done at all, in starting of the train, and, if true, then avc hold that this Avas done in the running of the train.

Section 8562, C. & M. Digest, provides: “All railroads which are now or may be hereafter bnilt and operated in whole or in part in this State shall be responsible for all damages to persons and property done or caused by the running of trains in this State. ’ ’

This court, in construing the statute last quoted, said, among other things, that the damages referred to meant those produced by moving trains. There is no reason for supposing the. Legislature used the word “running” in any other than its narrow and restricted sense of causing trains to be moved or propelled. St. L. S. F. Ry. Co. v. Cooksey, 70 Ark. 481, 69 S. W. 259. The court there had under consideration a question very different from the one in this case. The train was not in motion, and the engineér or fireman or persons who run and operate the engine and train were not the ones whose acts were complained of, but the negligence alleged in that case was that an employee was wetting the coal on the tender while the train was standing still, and carelessly turned the hose so as to throw a stream of hot water on the plaintiff, whereby he was severely burned. That act on the part of the employee was in no way connected with the running of the train. But in this case it was the engineer or fireman — persons who were running the train- — in the act of starting or preparing- to start the train, letting the steam escape, and it is alleged that this was negligence or carelessness. The court further said, in the case last referred to, that the rule had its origin in the inability of the plaintiff to prove his injuries to have been the result of negligence in cases where the -facts lie peculiarly within the knowledge of those who produce the injury. That may be said to be the ease where the injury is caused by the actual running of the train. Those intrusted with the work of propulsion alone can know, as a general thing, what they have or have not done in that regard, while the injured party or others can only surmise or infer as to what the trainmen actually did by the circumstances and resultant conditions in any given case. * * This work is in the hands of experts, who alone are peculiarly cognizant of the facts connected with such work. The statute is not applicable to cases of the kind under consideration, and the instruction should not have been given. ’ ’

It will be observed in the case of St. L. & S. F. Ry. Co. v. Cooksey, supra, that the act complained of was in no way connected with the running of the train. If the train was actually moving at the time the steam escaped it would not be contended that this was not caused by the running of the train. Certainly, when the parties in charge of the engine are either starting or stopping the train, anything done by them is done in running the train. It is done by those intrusted with the work of propulsion. It was done in this case in the act of starting the train, and we hold that the statute applies to any act of this kind, and it is distinguished from the case in the 70 Arkansas in that in that case it had no connection with the running of the train, and the act complained of was by an employee who had no connection himself with the operation of the train.

The only question in this case is the construction of the statute, the meaning of the words “running of a train,” and the court’s instructions, as a whole, properly directed the jury, and there was conflict in the evidence, and, since there was some substantial evidence to support the verdict, it will not be disturbed by this court. The judgment is therefore affirmed.


author: Mehaffy, J.

text:
    Arkansas Light & Power Company v. State ex rel. Attorney General.
    Opinion delivered November 21, 1927.
    1*. Licenses — limitation to recovery op franchise.tax. — Crawford & Moses' Dig., § 10213, requiring an appeal from a decree in a suit thereunder within 30 days, is part of an act for the collection of back property taxes from corporations, and does ' not apply in a suit to recover a franchise tax.
    2. Licenses — period covered by franchise tax. — Under Crawford & Moses! Dig., §§ 9818,'9821, a corporation- paying a franchise tax is authorized to do business in the State during the year .beginning with the date of the certificate issued to it or the date mentioned therein.
    3. Licenses — effect of surrender of corporate charter. — Where a corporation filed its report in May, and paid its franchise tax on August 15, 1918, it did not owe such tax at the time of surrendering its charter and ceasing to do business in June, 1919, so that the purchaser of its property was not liable therefor.
    4. Licenses — act imposing franchise tax — prospective operation. —Statutes imposing franchise taxes on corporations operate only in the future, unless the Legislature manifests an intention that they shall operate in the past.
    Appeal from. Jefferson'Chancery Court; H. R. Lucas, Chancellor;
    reversed.

      Raymond Roddy, W. H. Holmes, Harry E. Meek and Robinson, House $ Moses, for appellant.
    ■ H. W. Applegate, Attorney. General, Rowell & Alexander and Sam M. Wassell, for appellee.
   Mehaffy, J.

This suit was brought to collect from the Arkansas Power & Light Company a franchise tax. It is alleged that, during the year 1917, the Arkansas Public Service Company was organized and owned and operated utility properties in the territory of Stuttgart, Arkansas. On June, 1917, it filed the annual franchise tax return, and on the 8th day of August, 1917, paid its annual franchise tax in the sum of $1,200, at which time the said company was issued a certificate stating that it had páid the franchise tax for the year 1917, and it was authorized to do business in the State for a period of five years from August 8,1917, upon condition that it pay annually the franchise tax prescribed for such corporation. In May, 1918, the corporation filed its franchise tax return, and on August 15, 1918, paid its franchise tax of $1,200. On the 26th day of June, 1919, the Arkansas Public Service Company, after having sold all of its property to the appellant, surrendered its charter and ceased to transact business. This suit is for the purpose of collecting a tax that it is alleged the Arkansas Public Service Company owed, on the theory that the tax was a lien on the property purchased by the Arkansas Power & Light Company, and that the Arkansas Power & Light Company purchased all of the property of the Arkansas Public Service Company.

Appellee’s first contention is that the appeal should be dismissed because it alleges that, under § 10213 of Cravdord & Moses ’ Digest, the appeal should have been taken within 30 days, and, since it was not taken within that time, it should be dismissed.

Section 10213 of Crawford & Moses’ Digest reads as follows:

‘ ‘ Suits brought under this act shall have precedence of all other suits in the courts in which they may be pending, and shall be disposed of without unnecessary delay, and no appeal from any decree rendered in any suit brought under this act shall be taken after thirty dayis from the date of such decree.”

That section is a part of the act passed by the Legislature for collecting back taxes from corporations, and is a property tax, and has no application in suits brought to recover franchise tax. The appeal was taken within the time allowed by law.

The important question, however, in this case is whether the Arkansas Public Service Company owed a franchise tax at the time it surrendered its charter. As to whether it owed a tax at the time depends upon the construction of the law providing for taxing corporations, or what is called the State privilege taxes of corporations.

Section 9799 of Crawford & Moses’ Digest is as follows:

“Each corporation organized and doing business under the laws of this State, for profit, shall make a report in writing to the Arkansas Tax Commission, annually, on or before June 1, on such forms as the Commission may prescribe. The report shall be signed and sworn to before an officer authorized to administer oaths by the president, vice president, secretary or general manager of the corporation.”

The statute then provides the form of the report and what it shall contain.

Section 9801 of Crawford & Moses’ Digest provides that, after the report is made, the Commission shall, on or before July 1, report to the Auditor of State, who shall charge and certify to the Treasurer of State for collection, as herein provided for, from such corporation, a tax of one-tenth of one per cent, upon that part of its subscribed and issued and outstanding capital stock employed in this State, except as hereinafter provided.

It will be observed that the Commission must report to the Auditor on or before July 1, and that thereafter the Auditor shall charge and certify the fax for collection to the Treasurer.

Section 9810 of Crawford & Moses’ Digest, among other things, provides that the taxes shall be due and payable on or before August 10 of each year. And it is provided in § 9812 that the taxes and penalties shall be a first lien on the property of the corporation.

Section 9818 provides as follows:

“When any corporation shall have paid the franchise tax prescribed by this act, the State Tax Commission shall issue to it ¡a certificate authorizing it to do business in this State for the term of five years from the date thereof, upon condition that it pay annually the franchise tax prescribed by law, and such certificate shall be evidence in all the courts of this State of the right- of such corporation to do business in this State during the term o>f isuch certificate. ’ ’

Any corporation doing’ business in Arkansas at the time this act was passed, March 23,1911, was required to make' the report and to pay the tax as above provided. And when a corporation paid the tax, it received the certificate authorizing it to do business in Arkansas for a period of five'years after the date of the certificate, which was -in August.

Section 9821 provides that “all foreign and domestic corporations qualifying under the laws of this State or organizing under the laws of this State, as the case may be, prior to August 1 of each year, shall be liable for the franchise tax by this act prescribed for the year in which said corporation qualified or organized, and each such corporation so qualifying or organizingbe.tweenMay 1 and August 1 shall make and file with the Tax Commission the proper form at the same time it qualifies or organizes.”

Under the provisions of the sections above quoted the corporation paying the tax was authorized to do business during that year, and that year meant the year beginning with the date of the certificate or the date mentioned in the certificate.

The Arkansas Public Service Company was organized in 1917, and its tax became due and payable on or before August 10, 1917, and, the payment of that tax authorized such corporation to do business in Arkansais until August 10, 1918.

In May, 1918, the Arkansas Public Service Company filed its report, and on August 15, 1918, paid its franchise tax o<f $1,200. The certificate that it held entitled the company to transact business until the franchise tax became due in 1919, but in June, 1919, the Arkansas Public Service Company was dissolved and ceased to do business, and this was before the time expired for which it had paid its tax. It therefore did not owe any franchise tax a.t the time it surrendered its charter and ceased to do business.

It has been generally held that a tax like the one for which this suit is; brought is in the nature of a license fee, and payable in advance. And it is uniformly held that an act -of this kind, providing for a tax, operates in the future only, unless the Legislature passing the act manifests an intention that it shall operate in the past. In passing the law in Arkansas with reference to franchise tax it appears plain that the intention of -the Legislature was that the tax should be paid for the future. In fact, the act expressly states that, upon payment of the tax, the corporation shall be given a certificate authorizing it to do business in the State thereafter for a period of five years, on the condition that it pay the tax annually. We think it clear that the Legislature intended that the tax should he for the privilege of doing business in the State after the payment of the tax.

It is said in Cooley on Taxation, vol. '2, § 154:

“In caise of doubt, statutes will be construed as prospective only. This applies to tax statutes and ordinances precisely the same as to other statutes and ordinances. The courts, it is said, always construe statutes as prospective and not retrospective, unless constrained to the contrary course by the rigor of the phraseology. There is commonly a presumption that any new tax law was not intended to rendí back and take for its standard of apportionment a state of things that may no longer be in existence.- ‘New burdens,’ it is very justly said, ‘ought always to be prospective.’ And it is reasonable to suppose that the Legislature has intended that they should be. This rule applies also to constitutional provisions, and it 'obtains not only as a construction of the grant of power, but also as to all the incidents, though a remedial provision may well be presumed to have been intended to reach back for the purposes of justice.”

■ In Arkansas many corporations were doing business lawfully when the act was passed, and they are still doing business lawfully until the time mentioned in the act for filing their reports. And if they complied with the act -and paid the tax, they were permitted to thereafter do business In the State for one year from the date of the payment of the tax.

It was said by the New Jersey court:

“The year for which the- annual tax was thereby for the first time imposed could not begin until the tax was imposed by the approval of the act in April, and the tax wais made payable in June; that is, as soon as the necessary returns could be had and the calculations made. The Court of Errors and Appeals did not question this view in the case cited. It results that the year for which the tax is to be paid cannot be the calendar year beginning ■January 1. The act imposing this tax on corporations like the prosecutor was passed February 19, 1901. If the annual license fee or franchise tax, ais the act calls it, were imposed for a calendar year, that year could not have begun until January 1, 1902, unless the act were expressly made retroactive. * * * If we held that the license fee or franchise tax is for a calendar year, we should either have the absurdity that the first annual tax under the act became payable six months before the year for which it was levied had begun, or we should have the injustice of construing a tax to be retroactive when the Legislature had not made it so.!’ Old Dominion Copper Mining & Smelting Co. v. State Board of Taxes and Assessments, 90 N. J. Law 361, 103 Atlantic 690.

"We do not deem it necessary to call attention to numerous authorities, for the reason that the Legislature has made it perfectly plain that the authority to do business extends from the time of the certificate granted to the corporation until the date named for it to expire. We have reached the conclusion that, under the statutes providing for franchise tax, a corporation, after the payment of the tax, may lawfully do business within the State for one year thereafter, and that, since the Arkansas Public Service Company paid its taxes in August, 1918, it had the right to do business in Arkansas until August, 1919. It surrendered its charter and ceased to do business and sold all of its property before that time, and therefore did not owe any franchise tax.

Since we hold that the Arkansas Public Service Company did not owe any franchise tax at the time it ceased to do business, it becomes unnecessary to decide the other questions discussed by counsel. Of course, if the Arkansas Public Service Company did not owe any tax, then the Arkansas Power & Light Company did not owe any because of having purchased the property of the Arkansas Public Service Company. Having reached the conclusion that there was no tax due from the Arkansas Power ■& Light Company because of having purchased the property of the Arkansas Public Service Company, this case is reversed and dismissed.


author: Hart, C. J.,

text:
    Outlaw v. Finney.
    Opinion delivered November 28, 1927.
    1. Descent and distribution — family settlement — fraud.—"Where there is a confidential relation between relatives dealing in respect to inheritance or distributive shares of an estate, equity will relieve the party yielding to the coercive influence of the other, the parties being required to deal with the utmost good faith toward each other.
    2. Descent and distribution — relief against fraudulent settlement. — The evidence held to require that a family settlement he set aside as a legal fraud on an ignorant widow, who was induced by false representations to convey property to the brother and sister of her deceased husband, thereby depriving herself of dower interest and homestead rights.
    Appeal from Bradley Chancery Court; E. G. Hammock, Chancellor;
    reversed.
    STATEMENT OE EAOTS.
    On March 3, 1926, Mrs. Ida Outlaw brought this suit in equity against Mrs. F. E: Finney and William Snow, to set aside a deed and mortgage which she had executed to them in a family settlement of her husband’s estate.
    The plaintiff was a witness for herself. According to her testimony, she married T. R. Snow on the 13th day of November, 1924, in Bradley County, Arkansas, and he died intestate in that county on the 27th day of December, 1924. He left surviving him as his widow, Ida Snow, who subsequently married Cal Outlaw. At the time of their marriage, T. R. Snow resided on a tract of land comprising 4 15/16 acres of land about half a mile west of Wárren, Bradley County, Arkansas. At the time of his death T. R. Snow owned this tract of land on which they resided, and also another tract of land in the town of Warren. T. R. Snow bought the 4 15/16-acre tract from John W. Adams on the 14th day of October, 1924, and the consideration in the deed was $1,200. Eight hundred dollars of this amount was paid in cash and $400 in deferred payments, payable one and two years after date, evidenced by two promissory notes of $200 each. Twelve hundred dollars was all the place was worth at the time the family settlement was had between the parties in this lawsuit, in April, 1925. The town property owned by T. R. Snow at the time of his death was worth $1,900,' and there was a balance on a mortgage of $1,000 on it from a building and loan association in the sum of $800. At the time T. R. Snow died he left surviving him his widow, the plaintiff, and a brother and a sister, who are the defendants, as his sole heirs at law. When T. R. Snow married the plaintiff he had a stock of goods, which he-told her inventoried about $450. He sold this stock of goods at retail on credit, before he died, and had collected very little of the purchase money. The plaintiff collected an insurance policy on his life, of which she was the beneficiary, in the sum of $1,000, and paid out of it $679 on his funeral expenses and family debts. The plaintiff continued to reside at the home place, and, in April, 1925, the defendants came to her and proposed a family settlement of the affairs of her deceased husband. The sister told her that a settlement would be better than a lawsuit. The sister told her that she and her brother would let her have the home place, if she would take it as her part of the estate and assume the mortgage on it, and would convey to them the town property. They agreed to assume the mortgage on it. According to the understanding of the plaintiff, this was to be a full settlement of their rights in the property of her deceased husband. - They carried her to a lawyer’s office in the town of Warren, and they executed mutual deeds to each other, as she understood it; that is she executed a deed to them to the town property, and they executed a deed to her to the home place. The home place had four little tenant houses on it, which rented for eight dollars per month each. The plaintiff had erected these houses with her own money. In February, 1926, the plaintiff ascertained that she had signed a mortgage on the home place to secure a note of $800, payable to the .defendants, which purported to ‘have been signed by herself. On February 9,1926, the plaintiff wrote to the defendant, William Snow, «stating that -she had just learned of the fraud that had been practiced on her. She first found out about the mortgage purporting to have been signed by her on the home place when she sought to have an abstract made of the property. The $800 note was payable on demand, and bore interest at the rate of five per cent, per annum from date until paid. There is also written in the note the following:
    “This note is payable $20 per month, beginning June 1, 1925, and so payable until principal and interest are paid. Failure to make three monthly payments, or $60 in arrears, 'brings the whole amount due.”
    Mrs. F. E. Finney was not a witness in the case.
    According to the testimony of William ’Snow, he had nothing to do with making* the agreement. It was made between his sister and the widow of the deceased. Twenty dollars was paid on the mortgage indebtedness.
    The plaintiff denied having paid twenty dollars on the mortgage indebtedness, or that she knew that there was a mortgage on the land until she sought to have an abstract of title made.
    The chancellor found that the evidence fails to sustain the allegation of the plaintiff’s complaint, and it was decreed that it should be dismissed for want of equity. The case is here on appeal.

      Wilson & Martin, for appellant.

      J. F. Wallace, for appellee.
   Hart, C. J.,

(after stating the facts). Counsel for the defendants seeks to uphold the decree under the decision of Martin v. Martin, 98 Ark. 93,135 S. W. 348, to the effect that family settlements are encouraged, and will not be disturbed unless strong reasons exist to warrant interference on the part of a court of equity. On the other.hand, counsel for the plaintiff seeks to reverse the decree upon the authority of Caldcleugh v. Caldcleugh, 158 Ark. 224, 250 S. W. 324; where it was held that, in determining whether undue influence had been exerted upon a person, all the surrounding circumstances which might make the person susceptible and yielding are to He considered, as undue influence reaches every case where influence is acquired and abused or where confidence is reposed and betrayed.

In the Martin case it was said that courts of equity have uniformly upheld and sustained family arrangements in reference to property where no fraud or imposition was practiced. Equity is anxious to encourage and enforce these settlements, in order to preserve the peace and harmony of families. This doctrine is recognized in the Caldcleugh case, but it was also recognized that, where fraud or undue influence is practiced, the family settlement will be set aside. This is in application of the well-established rule that, where there is a confidential relation between relatives dealing in respect to an inheritance or distributive shares of an estate, equity will readily relieve the party who has yielded to the coercive influence of the other. In such cases, the parties are required to deal with the utmost good faith towards each other, and equity will readily seize upon any fraud or unconscionable practice by one towards the other to induce the settlement.

In the present case it is.a significant fact that Mrs. Finney, the sister, and the attorney employed by the brother and sister to draw up the deed and mortgage, were not called as witnesses in the case. No reason is given for the failure to introduce them as witnesses. The plaintiff testified in her own behalf, and, in the course of her testimony, stated that she desired to tell the matter just as it happened. She testified that the home place, which consisted of 4 15/16 acres, was not worth more than $1,200. She is corroborated in this statement by the fact that her husband purchased the property for that sum a short time before his death, and paid for it partly in cash and partly on credit. The plaintiff said that the town property which she deeded to the defendants was worth $1,900. She is corroborated in this statement by the fact that her husband had obtained a mortgage from a building and loan company in the sum of $1,000 on the property, a*ud $800 of this amount was due and unpaid. As we have already seen, no attempt whatever was made by the defendants to dispute as to the relative values of these two pieces of property. It is true that the husband liad a small stock of goods, which be had purchased in the fall before his death, but the plaintiff testifies that he had sold nearly all the goods at retail, on credit, and that she had not been able to collect anything on the accounts. It is also true that she received $1,000- life insurance on her husband’s life. She was the beneficiary named in the policy, and might have kept the whole of it, but the record shows that she paid out $679 of this amount on the funeral expenses and debts of her deceased husband. According to her own testimony, she was an ignorant woman, and could scarcely read and write. No attempt was made to dispute her testimony on this point. It is true that she waited nearly a year before she attempted to rescind the settlement, but she explains this by saying that she did not [mow that she had given a mortgage to the defendants until she sought to have an abstract of title made on her place. She supposed that she had only executed a deed to the defendants to the town property, and that they had executed a deed to her to the home place. It will be remembered that she was an ignorant woman, and unaccustomed to signing deeds or to executing any kind of papers. She is corroborated, to some extent, on thiisi point by the fact that no attempt had been made by the defendants to collect the mortgage debt. The note first stated that it was payable on demand. Then there was written in it a clause to the effect that it was payable monthly at the rate of $20 per month, beginning on June 1, 1925, and that the failure to make three payments made the whole note due. Notwithstanding the clause and the failure to make payments, no attempt had been made by the defendants to collect any interest on the note, even though it purported to draw interest at five per cent, per annum from date until paid. The surrounding circumstances all corroborate the testimony of the plaintiff, and, as we have already seen, no attempt whatever was made by the defendants to contradict the testimony of the plaintiff.

Therefore we are of the opinion that the testimony brings the case squarely within the principles of law announced in the Oaldcleugh case. The plaintiff was air ignorant woman, and considered, when the defendant, Mrs. Finney, told her that it was best for all parties to have a family settlement instead of resorting to legal procedure, that they were threatening her with legal action unless she yielded to their demands. In this connection it may he stated that T. R. Snow .died without children, and his widow was entitled to one-half of his real estate. If the settlement as made should he allowed to stand, the result would bo that the plaintiff would not receive anything whatever; for the $800 mortgage would absorb all her equity in the home place, and she has conveyed to the defendants her interest in the town property. Nothing would be left her except some worthless notes, and she would, by the terms of the settlement, have given to the defendants, under the guise of a family settlement, all her interest as widow in her deceased husband’s estate. It will be remembered that, in addition to her dower interest, she would be entitled to the homestead for her life.

We are of the opinion that the chancellor should have set aside the family settlement as a legal fraud upon the rights of the plaintiff, or as having been procured by coercion or undue influence, in view of the fiduciary relation between the parties, and the decree will be reversed, and the cause remanded, with directions to the chancery court to set aside the family settlement and to allow to the plaintiff her rights of dower and of homestead under our statute. It. is so ordered.