text:
    National Union Fire Insurance Company v. Want.
    Opinion delivered May 26, 1930.

      McCormick S Graves, for appellant.

      D. F. Taylor, Jr., D. F. Taylor, Sr.-, James G. Cos-ton and J. T. Coston, for appellee.
   Smith, J.

On March 8,1926, the appellant fire insurance company, hereinafter referred to as the company, issued to appellee a policy of fire insurance in the sum of $3,000, for a period of three years, covering- his residence and household goods. The policy was issued in consideration of a premium, of $131.25, of which $43.75 was paid in cash and the balance evidenced by “an installment note of $87.50, due and payable as follows: $43.75 on the 1st days of March, 1927-1928.” The policy was introduced in evidence, but the note was not, and it does not appear of record whether the note bore interest, and, if so, at what rate. The policy contained the following provision:

“Payment of Notes oh Installment foe. Premium.
“It is understood and expressly agreed that this company shall not be liable for any loss or damage that may occur to the property herein mentioned while any installment of the installment note given for premium upon the policy remains past due and unpaid or while any single payment, promissory note (acknowledged as cash or otherwise), given for the whole or any portion of the premium remains past due and unpaid.”

The premium installment due March 1,1927, was paid by a check for $46.33, which included the annual installment of $43.75 and $2.58, the interest thereon for one year.

The company sent the insured a notice on February 1, -1928, calling attention to the fact that the third and final annual premium would become due March 1, 1928. This notice contained the following language:

“This note, by its terms and conditions, is due and payable at the Southwest Service Office of this company in Memphis, Tenn. Please remit by postal money order or bank draft pa}^!)^ to the order of the company.”

The insured did not remit as directed, but on March 2, 1928, handed to I). A. Fisher, Incorporated, of Memphis, Tenn., the. agent of the insurance company in that city, his personal check, on the Bank of Tyronza, for $43.75. This check was indorsed by the agent and sent to the home office of the company in Pittsburgh, Pennsylvania, and, on March 8, 1928, the home office wrote to insured the following letter:

“We have received your check in the amount of $43.75, paying your installment on policy No. 5159. However we note that you have overlooked the $5.25 interest, and we ask that you allow this amount to come forward by return mail. ’ ’

At the time the check was delivered to the Memphis office of the insurance company the insured had to his credit in the Bank of Tyronza a sum sufficient to pay the dieck, and if it had been deposited that day or within the next few days thereafter by the Memphis office for collection, instead of being* sent to Pittsburgh, Pennsylvania, it would, in due course, have been presented to the Tyronza bank while the insured had on deposit sufficient funds to pay it, and it would have been paid. The ledger sheet of the insured’s account at the Bank of Tyronza for the month of March and a part of April was introduced in evidence, and it appeared therefrom that the account fluctuated, there being days when the account exceeded the check and other days when it did not.

The insurance company deposited the check with its bank in Pittsburgh on March 9, and in due course it was presented to the Bank of Tyronza for payment, but payment was refused for want of sufficient funds.

On March 21 tlie company wrote and mailed from Pittsburgh the following’ letter:

“Tour check in, the amount of $43.75 payable to I). A. Fisher, and in turn indorsed to us, has been returned by the bank marked ‘not sufficient funds.’ In order to reinstate your policy, it will be necessary for you to forward to us cashier’s check or a post office money order in the amount of $43.75. We attach an envelope for your convenience. ’ ’

On March 24 the insured answered this letter as follows:

“In regard to your letter of March 21, 1928, which I have in hand, would like to say that the check that was tendered to I). A. Fisher, Inc., was perfectly good, and that it was returned for reasons unknown to me. I wish lhat you would kindly present same again for payment, and I am sure that it will be honored upon presentation. I also have your letter of March 8, 1928, in regard to interest on my note. This is covered'by the enclosed check.”

Upon receipt of this letter last quoted the check for $43.75 and the one for $5.25 were deposited in Pittsburgh, and the larger check was again returned unpaid by the bank upon which it was drawn on account of insufficient funds, while the smaller check was paid.

The insured property was destroyed by a fire on April 18, 1928, and the insured immediately demanded payment from the insurance company. Without offering to return the check which had been twice dishonored or the $5.25 chock which had been collected, the insurance company, on June 11, 1928, wrote the insured the following letter:

“We are interested to know if you have been successful in establishing the fact that an error was made by the bank or the National Union Fire Insurance Company in not clearing your cheek which was given for the installment premium.' We have not heard from you in sometime, and, if wo can assist you in any way, please call on us.”

Upon this testimony there was a verdict by a jury and a judgment for the face of the policy, with interest, penalty, costs and attorney’s fees, from which is this appeal.

The provision of the policy suspending liability thereunder, set out above, while the premium remained unpaid, is valid and must be given effect. Such provisions have been upheld by this court in a number of cases, three of which are very recent. Yarnell v. Mechanics’ Ins. Co., 178 Ark. 1106, 13 S. W. (2) 303; American Ins. Co. v. Austin, 178 Ark. 566, 11 S. W. (2d) 475.

It is insisted, however, that the premium has been paid, and that, if there was a forfeiture, there has also been a waiver thereof. Appellee insists that the check for $43.75 was accepted by the insurance company in payment of the premium, and not merely for collection, and that such is the effect of the letter set out above acknowledging its receipt.

We think the correspondence between the parties, set out above, shows clearly that such was not the case. It is admitted that the check has never been paid, although twice presented for payment, and upon its first dishonor the company notified the insured that his check had been dishonored by the bank, and that his policy stood suspended and could only be reinstated by sending a cashier’s check or money order. ‘Certainly, the insured had no right to assume, in view of this letter and the additional fact that the same check was dishonored a second time, that the company was holding the check as payment of the premium.

Dealing with a very similar question the Court of Appeals of Kentucky in the case of Ratliff v. St. Paul Fire & Marine Ins. Co., 207 Ky. 492, 269 S. W. 546, said: “We cannot see how the case is-any different than it would have been if appellant had paid the amount of the premium in counterfeit bills.”

The case of Veal v. Security Mutual Life Ins. Co., 6 Ga. App. 721, 65 S. E. 714, is one upon -which, appellee relies for the affirmance of the judgment upon another ground. In that case the insurance company had issued a premium receipt upon receiving a cheek, and it was contended that the acceptance of the cheek and the issuance of the receipt constituted payment, 'but the Court of Appeals olf (Georgia said: lt* * # For in the case of an existing indebtedness checks -are not payment until they themselves are paid, unless there is an agreement otherwise. * * * We would not be understood a.s saying that, if a policyholder sends a cheek in payment of his premium, and the company merely sends the check for collection, a payment of the premium results from this alone if the check is dishonored. Commercial usage is to the contrary.” This is stated, in the chapter on Payment in 21 R. C. L. page 60, to be the general rule, and the numerous annotated cases cited in the note to that text fully sustain that statement of the law.

The chief insistence for the affirmance of the judgment of the court below is that, if there was a forfeiture, there was also a waiver resulting from “the demand of the defendant, two or three weeks after the premium was due on Want, the insured, for $5.25 interest, and the retention of the check for $43.75, without offering to return it or letting him know that payment was refused the second time, or declaring a forfeiture, constituted a course of conduct amounting to a waiver of the forfeiture.”

We think there is no evidence in the record to support the finding that the insurance company had accepted this twice dishonored check as payment of the note or in satisfaction of the insurance premium. It was run through the clearing house the second time, because the insured requested that this be done and represented that an error had been made by the bank upon which it was drawn, and that otherwise the check would have been paid upon its first presentation. This representation proved to be false upon the second presentation of the check. It does not appear when the check was deposited in Pittsburgh the second time, but it conld not have been done until after the receipt of the insured’s letter dated March 24 asking that this be done. It appears, from the testimony, that about eleven days was required for the check to clear on its first remittance and deposit, and no doubt the same length of time was required on its second remittance and deposit, and the fire occurred on the 18th of April.

■ The insurance company has done nothing since the fire to mislead the insured or to waive the suspension, and it has made no effort to collect the check since the fire, and its only action has been to write the letter of June 11, 2928, set out above, after notice of the loss had been received, in which it inquired whether the insured had “been successful in establishing the fact that an error was made by the bank or1 the National Union Fire Insurance Company in not clearing your check which was given for the installment premium,” and it is not contended even yet,that such an error was made.

Appellee very strongly relies upon the case of Veal v. Security Mut. Life Ins. Co., supra, as sustaining his contention that the retention of the check was a waiver of the right to declare the policy forfeited.

The point decided in that case is indicated by the first headnote, which reads as follows : “If the holder of a policy of life insurance sends to the company on the day the premium is due a check in payment thereof, and, when the check is presented at bank, payment is refused because of lack of funds to the credit of the drawer, the company, although it has delivered the premium receipt to the insured, may, by taking the proper steps, repudiate the transaction for the legal fraud resulting from the insured’s having sent a check without having in bank the funds to meet it, and may enforce a lapse of the policy for nonpayment of premium. But if the company, in such a case, after notice that the check has been dishonored, retains it, and, instead of repudiating the transaction by returning the check and demanding hack its receipt, insisted upon the insured’s paying it after the date on which the policy would otherwise have lapsed, a waiver of the punctual payment of the premium in cash results. If the insurance company accepts and retains a note, check or other interest-hearing obligation for the premium, the policy shall not be held to be lapsed or forfeited for nonpayment of premium, even though the note or other obligation is not paid at maturity, unless there is an express provision in the policy providing that a failure to pay any such obligation at maturity shall result in a lapsing or a forfeiture of the insurance. Prima facie the liability to pay interest is regarded as the only penalty for failure to meet at maturity an ordinary indebtedness. ’ ’

It is obvious that there are two very material distinctions between that case and this. The first is that the insurance company in the instant case deposited the check the second time only because of the representation that an error had been made which had prevented its payment, when such was not the fact, and the company has since made no further effort to collect the check, and has done nothing to lead the insured to believe that it was holding the check in satisfaction of the premium. The second distinction between the cases is that the policy here sued on, unlike the one in the Veal case, contained the express provision that a failure to pay at maturity should result in a lapsing or a forfeiture of the insurance.

As to the item of $5.25 paid as interest it may be said that this was paid to and has been retained by the company. The annual installments of the premium were payable in advance, but it does not appear whether the note evidencing the annual installments bore interest or not. Such evidence as there is on the subject indicates that it did. When the insured paid the second installment of the premium he paid a year’s interest. If the note bore interest, then interest for two years was due ■when the third installment of the premium fell due, and the $5.25 check paid only this interest and paid no part of the third year’s premium. But appellee insists that the note did not bear interest, and that the $5.25 must therefore he credited on the third year’s premium,. as nothing* else was due the company, and that when so credited it suffices to pay the proportionate part of the premium to a time two' days later than the date of the fire.

We think appellee is correct in this contention if the note did not bear interest, for it is the law that, where a part payment, is made and accepted on a premium which amounts to more than the premium then earned, and a loss occurs before the whole of the premium paid has been earned, there is a waiver of any forfeiture on account of a failure to pay the whole premium. This is an application of the simple principle that it would be inequitable to permit the insurer to receive and retain the insured’s money without giving- him credit for it, and if credit is given it must be applied to extend the insurance for such proportionate time as the money received and held would pay. Such is the effect of the following cases: Continental Casualty Co. v. Baker, ante p. 156; Security Life Ins. Co. v. Matthews, 178 Ark. 775, 12 S. W. (2d) 865; Missouri State Life Ins. Co. v. Miller, 163 Ark. 480, 260 S. W. 705; Mutual Life Ins. Co. v. Henley, 125 Ark. 372, 188 S. W. 829; American Nat. Ins. Co. v. Mooney, 111 Ark. 514, 164 S. W. 276.

We conclude, therefore, that the judgment of the court below must be reversed, and upon the trial anew the cause will be dismissed for failure to pay the premium, unless it be made to appear that the premium note did not bear interest, in which event the verdict will be directed in favor of the insured, as the undisputed testimony would show in that event that the insurance company had received a sufficient portion of the premium to carry the insurance to a day beyond the date of the fire.

Humphreys and Mehappy, JJ., dissent.


source: Caselaw Access Project

author: HiimphRets, J. Smith, J.,

license: Public Domain

text:
    Connerly v. Stephenson.
    Opinion delivered May 26, 1930.

      William West, for appellant.

      W. W. Grubbs, for appellee.
   HiimphRets, J.

The sole issue presented by this appeal for determination is whether the notice given by the mayor, pursuant to an ordinance of the city of Eudora calling a special election on April 8, 1930, to vote on an $8,000 bond issue for the purpose of constructing a public hall in said town, meets the requirement for such notices provided in Amendmeiit number 36 to the Constitution of the State.

No newspaper was printed within the corporate limits of Eudora, so the notice in question was inserted in the Chicot Spectator, a weekly newspaper printed in Lake Village, Arkansas, which had a general and bona fide circulation in Eudora, and about one-lialf of which was devoted to the news of Eudora, being edited by a local reporter or editor.

The form or subject-matter of the notice is not attacked or questioned, but appellant contends that it is void and of no effect because the newspaper in which same was inserted for the required time was not printed in the corporate limits of Eudora. The provision in Amendment number 36 to the Constitution relative to the notice is as follows:

“Notice of said election shall be given by the mayor by advertisement weekly for at least four times, in some newspaper published in said municipality, and having a bona fi.de circulation therein; the last publication to be not less than ten days prior to the date of said election. ’ ’

We do not think the word “published” as used in the amendment is altogether synonymous with the word “printed.” If that meaning alone should be attributed to the word “published,” in the connection in which used, it follows that the people intended 'by the passage of the amendment to deny cities in which a weekly newspaper is not printed the privilege of voting bonds to build a public hall. Certainly it was not the intention off the people to penalize a city simply because a weekly newspaper was not printed therein. The intention was to accord to all cities the privilege, by a majority vote of the electors, of issuing bonds to build a public hall. As there is nothing in the amendment to indicate that the people intended to discriminate between cities of the State relative to voting bonds to construct a public hall, the word “published” should not be restricted in meaning- so as to result in such a discrimination. The. common and ordinary meaning of the word “published,” according to Webster’s New International Dictionary, is “to make public, to malee known to the people in general.” The newspapers might be printed but never published. It is only published when put in general circulation. The proper and correct meaning of the word ‘ ‘published,” as used in the amendment, is that the notice must be inserted for the required time in a newspaper that will make the special election and the date thereof a public matter or known to the people in the city affected. In the instant case the notice was promulgated or proclaimed in a newspaper that had five hundred subscribers in the corporate limits of Eudora, and about one-half of which was devoted to the news of said town, being edited by a local reporter or editor.

This court has adopted a liberal rule governing the sufficiency of notices of special elections. Wheat v. Smith, 50 Ark. 266, 7 S. W. 161; Hogins v. Bullock, 92 Ark. 67, 121 S. W. 1064, 19 Ann. Cas. 822. We think the liberal rule announced in the cases cited should be applied to the instant case, because in doing so the true intent of the people in the adoption of the amendment will he reflected in the construction of the word “published” in the connection used without doing’ violence to the language and context. If the word “published” should be restricted in its meaning to the meaning of its synonym “printed” then the intent of the people would not be reflected in the construction.

No error appearing, the judgment is affirmed.

Mr. Justices Smith and Mehaeey dissent.

Smith, J.,

(dissenting). The majority say that the sole question presented by this appeal is whether the notice given by the mayor af the special election meets the requirement- for such notice provided in the Amendment to the Constitution of the State referred to as Amendment No. 16. They also say that “Certainly it was not the intention of the people to penalize a city simply because a weekly newspaper was not printed therein. The intention was to accord to all cities the privilege, by a majority vote of the electors-, of issuing bonds to build a public hall.”

With the greatest deference to the majority, I dissent.

The amendment was not proposed and adopted to regulate the manner of the exercise of a power. Its purpose was to confer a power which did not previously exist, and, therefore, only such power exists in the matter of issuing bonds as the amendment confers. A proposition as elementary as this requires no citation oif authority to support it.

It does not “penalize” a municipality to say that it may not issue bonds for municipal purposes. Indeed, it is not contended that all municipalities may do so. On the contrary, only cities of the first and second class may do so. The incorporated towns, which comprise a large majority of the municipalities, may not do so, and there is a wise reason for this “penalty,” if it may he called such.

It was no doubt thought by the proponents of this amendment and by the people in adopting it that the cities of the first and second class would have newspapers published in their limits, through which publicity of a proposed bond issue might be given, which would not exist in the case of the smaller municipalities. But, whatever the reason for the discrimination, ilf such it be, between the municipalities of the State, the fact remains that -the amendment itself provides that the power there conferred, and which does not otherwise exist, may be exercised only after the publication of notice of the election by advertisement in some newspaper “published in said municipality and having a bona fide circulation therein.” There can be no question (but that this power cannot be exercised until the precedent condition of publication has 'been performed, and the majority opinion recognizes that fact. They say, however, that there was publication as required by the amendment, and this is the point of difference.

In this connection, it 'mil be observed that there must not only be publication in a newspaper jjublished in the munioipalitj'- proposing to issue bonds, but the newspaper must ibe one having a bona fide circulation therein. This last is an additional requirement, and means that the publication must be in an established paper, one of whose existence the citizens are advised, and to which they are accustomed to look (for important news, especially of a local character, and not in some publication which might be established in the community overnight for the purpose of apparently complying with the Constitution, of which the people were not advised and to which they were not accustomed to look for information concerning their local affairs.

It occurs to me that the case of Gibson v. Incorporated Town of Hoxie, 110 Ark. 544, applies with peculiar force just here. In that case an ordinance was passed by the town of Hoxie creating an improvement district, and providing for the assessment of benefits to pay for its construction: The ordinance of the town xvas passed pursuant to the authority conferred by §§ 5666 and 5685, Kirby’s Digest, which later became §§ 5650 and 5668, C. & M. Digest, respectively. These sections required publication of notice of the passage of the ordinances establishing improvement districts in some newspaper published in the city or town in which the district was established.

The notices required by these sections of the statute were published in Walnut Ridge, an adjoining but separate municipality, there being no newspaper published in Hoxie.

In holding that this publication did not comply with the statutes cited, it was there said: ‘ ‘ The Legislature had the right to prescribe the terms upon which an im-' provement district might be created, and it made the publication of these ordinances in some newspaper published in the town a prerequisite. Doubtless, the Legislature thought it unwise to permit the establishment of these districts in towns which were too small to have, or which did not have, a newspaper therein. But we need not seek the legislative reason; it is sufficient if we know the legislative will. And publication in a newspaper published in another town did not meet the requirements of the law. Jackson v. Beatty, 68 Ark. 273.”

So here the people, in adopting the amendment designated as No. 16, may have thought it unwise to confer the authority to issue bonds upon a municipality which did not have a newspaper published in its confines and having a bona fide circulation therein, to give publicity to the proposed bond issue. But, as was said in the Hoxie case, supra, we need not seek the legislative reason, it is sufficient to know the legislative will. So, here, we need not inquire why certain cities have been “penalized,” it suffices to know what limitations have been imposed by the 'Constitution, and we should therefore deny the right to issue bonds to any city upon which the Constitution has not conferred that power, even though, in doing' so, an apparent discrimination is made between the cities of the State.

No doubt the paper published in Walnut Ridge was largely circulated in the adjoining — but separate — municipality of Hoxie. But -circulation did not suffice. The holding in that case was that circulation was not sufficient, as the statute required publication in a newspaper published in Hoxie, and the ordinance was held invalid, because this requirement off the statute had not been complied with, although it was one which could not have been complied with for the reason that there was no newspaper published in Hoxie.

It is true that § 5650:, C. & M. Digest, was repealed by § 1 of act 64 of the Acts of 1929 (Volume 1 Acts 1929, page 24), and that § 5668, O. & M. Digest, was amended by § 13 of the above mentioned Act of 1929, SO' that notice may now be given of municipal ordinances creating improvement districts although no newspaper is published in the town affected. But there has been no amendment of the 'Constitution in respect to issuing municipal bonds after publication of notice in some newspaper published in the city affected.

I submit, with all deference to the majority, that the practical effect of their opinion is to eliminate this requirement of the Constitution. Some newspaper circulates and has a bona fide circulation in every city in the State, and it is a matter off common knowledge that these newspapers have correspondents in the cities having no newspapers, and that space is assigned in these newspapers to these correspondents, with appropriate headlines designating the sources of the correspondence, and if publication of the notice of the bond elections in such a newspaper suffices, this limitation of the Constitution has been annulled, for all practical purposes.

We had occasion to consider the place of ‘ ‘ publication” of a newspaper in the case of Drainage Dist. No. 9 of Miller County v. Merchants’ & Planters’ Bank, 176 Ark. 474. We there considered the requirements of §§ 3607 and 3615, C. & M. Digest, relating to the notice of the formation -of drainage districts, the publication of ■which notice was held to be jurisdictional. These sections of the statute required publication of notices in some newspaper published and having a general circulation in the county where the district was to be organized.

The facts in that case were as follows: “The clerk complied with the order of the court by publishing such a notice in the Texarkana Evening News, a newspaper actually printed in the State of Texas about one-half block across the 'State line from the Arkansas side, but which carried a Texarkana, Arkansas, headline and dating, and the whole issue of such newspaper, after being so printed in Texas, was actually carted to the office of the Texarkana Evening News on the Arkansas side of the .State line, and about one-half block therefrom, and there, for the first time, released and distributed to the public, both by newsboys and by mail.”

After a review of the authorities we held, under the facts stated, that the Texarkana Evening News was published in Arkansas. It was there said: “The Illinois Supreme Court, in Polzin v. Rand-McNally & Co., 250 Ill. 561, 95 N. E. 623, Ann. Cas. 1912B, 471, defined the word ‘published’ as follows: ‘By the word ‘published’ is clearly meant the place where the newspaper is first issued or printed, to be sent out by mail, or otherwise.’ See also (numerous authorities cited). And in 29 Cyc. under the head of ‘Notices,’ it said: ‘The place of publication of a newspaper is that indicated on its face, and such paper is printed in the place so designated within the meaning of a statute requiring the publication of a certain advertisement, and it matters not that part or even all of its issue is printed elsewhere, or that part of its issue is mailed elsewhere. The whole city, village or township in which a newspaper is published is its place of publication within the meaning of a statute requiring an advertisement to be published in a newspaper.’ ”

Under Üiese definitions the Chicot Spectator was published in Lake Village, and not in Endora. Certainly it was not published in both places, and as it was “for the first time released and distributed to the public” from Lake Village, and not from Endora, the former, and not the latter, was the place of its publication.

I find nothing in the cases of Wheat v. Smith, 50 Ark. 266, and of Hogins v. Bullock, 92 Ark. 67, 121 S. W. 1064, which gives any support to the conclusion which the majority has reached. It is true, as the majority say, that the court in those cases “adopted a liberal rule governing the sufficiency of notices of special elections,” hut in the Hogins case, supra, the court quoted from the Supreme Court of Indiana, as follows: “All provisions of the election law are mandatory if enforcement is sought before election in a direct proceeding for that purpose; but after election all should be held directory only, in support of the result, unless of a character to effect an obstruction to the free and intelligent casting of the vote, or to the ascertainment otf the result, or unless the provisions affect an essential element of the election, or unless it is expressly declared by the statute that the particular act is essential-'to the validity of an election, or that its omission shall render it void.” Janes v. State, 153 Ind. 440, 55 N. E. 229.

Here, it will be remembered, the election has not been held, and the citizen and taxpayer seeks to compel the giving of proper notice before holding' the election, and, as was there said, “all provisions of the election law are mandatory if enforcement is sought before election in a direct proceeding for that purpose. ” The provision for proper notice must therefore be held as mandatory, because its enforcement is sought before the election has been held.

I do not, however, rest my dissent upon this proposition alone. “The provisions (in regard to notice) affect an essential element of the election,” and for this reason is mandatory, because the power granted — that of issuing- bonds — is one which may only be exercised in the manner provided by the amendment which confers the power. Notice must be given in the manner which the amendment provides, and as this, in my opinion, has not been done, I respectfully dissent, and I am authorized by Mr. Justice Mehaeey to say that he concurs in the views here expressed.


author: Humpheeys, J.

text:
    Lindsey v. Pierce Petroleum Corporation.
    Opinion delivered May 26, 1930.

      Oliver <6 Oliver, for appellant.

      Louis M. Cohn, for appellee.
   Humpheeys, J.

Appellant brought suit in the circuit court of Clay County, Western District, against ap-pellee to recover $185 for commissions alleged to be due him on account of the sale of appellee’s commodities and products consisting of gasoline, oil, etc., in the territory of Corning under -written contract; and for $2,800 damages resulting from the alleged breach of an implied term of the contract binding appellee to promptly meet competitive prices of other major companies selling like commodities or products, or both, in the same territory.

The material allegations of the complaint were controverted, and the cause was transferred by agreement of the parties from the circuit to the chancery court for trial, ■which resulted in a decree in favor of appellant for $103.14 on account of commissions due from sales of appellee’s commodities, and against him for damages on account of the alleg’ed breach of the contract, from which is this appeal.

Testimony was introduced by appellant tending to sustain the amount of his claim for commissions for selling the commodities and products of appellee, and, over the objection and exception of appellee, tending to show that a custom prevailed in the Corning district for all major companies selling commodities and products therein, to promptly meet competitive prices, and that, on account of appellee’s failure to promptly do so, appellant sustained losses in commissions exceeding the amount sued for. Appellee introduced the written contract between appellant and itself which contained the following provision ^

“It is further understood and agreed that the “agent shall be authorized to sell commodities herein named only upon such conditions and terms as may ‘be from time to time specified to him by the corporation.”

The testimony of the custom existing between the major companies doing business in the Corning district relating to competitive prices and damages resulting to appellant on account of the failure of appellee to promptly meet competitive prices was properly excluded from consideration in the rendition of the decree by the trial court, as proof of the custom varied the terms of the written contract quoted above. Usages and customs of trade cannot be heard to contradict the terms of a written contract. This court said in the recent case of Southern Coal Co. v. Searcy Transfer Co., 152 Ark. 471, 238 S. W. 624: “ It is the settled rule of law in this State that usages and customs of trade cannot be invoked to defeat the express terms of a written contract, and that such usages and customs are only applicable where the contract is silent or where its terms are ambiguous.”

A reversal of the decree is also sought because the court deducted two items representing shortage in stock when same was checked by the auditor on February 10, 1927, from the amount due him as commissioner at the time. When the auditor checked the amount on hand, there appeared to be a shortage, and appellant acknowledged in writing- his indebtedness to appellee on account of these two items, but in the trial of the cause undertook to show that the shortage was due to leakage of appellee’s gas tanks. The proof was not definite or certain as to the amount of leakage, so we cannot say that the trial court erred in allowing these items as an offset against appellant’s claim for commissions.

No error appearing, the' decree is affirmed.


author: Mehaeey, J.

text:
    Bank of Hoxie v. Woollen.
    Opinion delivered May 26, 1930.

      George M. Gibson and Chas. D. Frierson, for appellants.

      Smith d Blackford, for appellee.
   Mehaeey, J.

Oil June 17, 1929, appellee, M. R. Woollen, began this action in the Lawrence 'Chancery Court against the Bank of Hoxie, and afterwards filed an amendment to her complaint, making Mrs. A. E. Richardson, as administratrix, a partir defendant. She also on the 17th of June, 1929, began suit against the Lawrence County Bank, and Mrs. A. E. Richardson, as ad-ministratrix, was afterwards made a parly defendant. Appellee on June 17, 1929, filed a suit against the Bank of Portia, and later amended, mailing Mrs. A. E. Richardson, administratrix, defendant. She alleged that the defendant Bank of Hoxie claimed to hold a note purporting to be executed by her in the approximate sum of $2,200; that, if said bank in fact has such note, it was not signed by her, or b}’- her authority or consent, and that she received no benefit whatever because of the execution of said note, and it was signed without her knowledge or consent; that she is in feeble health, and desires, for the protection of her estale, to have the said bank to exhibit said note for cancellation by order of this court; that the claim of said bank against her for said sum greatly impairs her credit from a financial standpoint. The prayer was that the note be surrendered for cancellation, so far as she is concerned, and that said note and all liability of plaintiff thereunder be declared fraudulent and void and canceled. Mrs. A. E. Richardson, as administratrix of the estate of J. Gr. Richardson, deceased, was made defendant because J. Gr. Richardson appears to have signed and indorsed the note in question. The complaints in the other two cases are substantially the same as the complaint in the case against the Bank of IToxie. .Defendants filed answers and cross-complaints, the cases were consolidated, and there was a finding and decree in favor of appellee. This appeal is prosecuted to reverse said decree. The undisputed evidence shows that the appellee, Mrs. M. R. Woollen, did not sign the notes. Appellants state in their brief: “J. G-. Richardson being dead, the appellants are deprived of any evidence as to whether or not Mrs. Woollen personally signed the three notes in controversy.” J. G-. Richardson was appellee’s brother and was one of the directors of the Bank of Hoxie at the time one of the notes was executed. Mr§. Woollen testified that she did not sign the note, and that at the time she testified was the first time she had ever seen the note; that in her judgment the signature of M. R. Woollen to the note was her brother’s, (J. G-. Richardson’s) ; that he also signed his individual name below hers; that she did not authorize him to sign the note. The first she knew her name appeared on any note to the Bank of Hoxie was when Carroll MeCarroll wrote her about it when she was in Tucson; that she did not authorize Mr. Richardson or any other person to sign her name to the note, and did not know any such note existed until Mr. Richardson died. He died December 26, 1928; that her brother had transacted some business for her some years ago, but never without her authority. She did not receive any notice from the bank about the note. Mr. Bassett, who was in the bank a while, testified that Mr. Richardson was president of the Lawrence County Bank from 1915, except one year, and was on the board of directors of the Bank of Portia. Mrs. Woollen testified that her name was on the note to the Bank of Portia in her brother’s handwriting, and that his genuine signature was under her name; that she did not authorize him or any one else to sign this note or any other note. The same evidence was introduced by plaintiff as to all the notes. The evidence shows that Richardson took all the notes to the banks, and no one testified that appellee signed any of them. There was some evidence that iiotices had been sent to appellee, but no witness testifies that she ever received any notice. There was considerable testimony about when the notes were originally given and about renewals, but it is unnecessary to set it out here. Appellee’s name was on all-the notes. The evidence shows that Richardson always paid the interest, and that appellee was never called on to pay any interest. Most of the appellants’ witnesses testified as to what the record showed as to the notes. Mr. Bassett testified that he at one time showed Mrs. Woollen two notes when she came into the bank to pay a $1,300 note. She did pay this note, bnt he said he showed her the other one also; that he handed them to her, and she handed them back to him and said she would pay the $1,300 note. He does not think she made any statement about the other note. It was not discussed; did not remember but does not think that he told Mr. MoCarroll that he never showed Mrs. Woollen this note nor that he laid it down on the desk when she paid the $1,300 note, and she might have seen it. “As to whether she understood the other note, I do not know. It was not discussed.” MoCarroll testified that Bassett told him: “As to whether or not she saw the other note I could not swear, and I do not know. ’ ’ Mrs. Woollen testifies that Bassett never showed her the other note.

The only evidence in the record tending to show that Mrs.. Woollen authorized Mr. Richardson to sign her name to notes is the testimony of Mr. MeCorkle that sometime about 1911 Mr. Richardson introduced Mrs. Woollen to him in the bank, and that Mr. Richardson said to her: “'Sissie, it is perfectly all right for me to use your name in the bank here on the paper. ” Witness adds that he knew they were just laughing and talking* in a jovial way, and that was about the sum and substance of it according to his recollection. Witness was then asked if she made any statement relative to it, and he answered: “I have a faint recollection that her reply was that it was perfectly all right for Buddie to use her name in any way he wished. ’ ’ This conversation was in 1911 or 1912. This testimony was denied. .We do not think that testimony as to witness’ faint recollection of a conversation occurring nearly twenty years ago is sufficient to show authority to sign negotiable instruments.

“Authority to execute, indorse, or transfer negotiable instruments, such as a bill 'of exchange or promissory note, need not be in writing but may be conferred by parol, although the authority is not to be lightly inferred but must be clearly shown. ” 2 C. J. 451.

“And the rule as to any agent is that an agent having general authority to manage his principal’s business, has, by virtue of his employment, no implied authority to bind his principal by making, accepting or indorsing negotiable paper. Such an authority must be expressly conferred or be necessarily implied from the peculiar circumstances of each particular case. It may undoubtedly be conferred by implication, but it will not be presumed from the mere appointment as general agent.” Morris v. Friend, 116 Ark. 424, 173 S. W. 199.

There is no evidence in this case that Mr. Bichard-son was Mrs. Woollen’s general agent, but even if the evidence showed that he was her general agent, this would not authorize him to sign her name to negotiable instruments.

Agency cannot be established by the acts or declarations of the agent. The agent cannot confer authority upon himself or make himself agent merely by saying he is one. American Southern Trust Co. v. McKee, 173 Ark. 147, 293 S. W. 50. The preponderance of the evidence in this case shows that Richardson had no authority to sign Mrs. Woollen’s name to the notes in controversy. It is however, earnestly contended that Mrs. Woollen ratified the acts of Mr. Richardson in signing the notes. There is no evidence that Mrs. Woollen ever received any benefit from these transactions, and she was never called on to pay any interest when the notes were renewed. While there is some testimony that appellee saw one of the notes and some witnesses testified to conversations with her about the notes, all this testimony is denied. The evidence is in conflict about these matters. The general rule is that, in order that a ratification of an unauthorized transaction of an agent may be valid and binding, it is essential that the principal have full knowledge of all the material facts. 2 C. J. 477; Arkansas Valley Bank v. Kelley, 176 Ark. 387, 3 S. W. (2d) 53, 58 A. L. R. 808; Haines v. Rumph, 147 Ark. 425, 228 S. W. 46; DeCamp v. Graupner, 157 Ark. 578, 249 S. W. 6; Martin v. Hickman, 64 Ark. 217, 41 S. W. 852.

The evidence does not show that appellee had knowledge of the facts, and does not show any ratification. Of course, if appellee had received any benefits from the transactions, a different question would be presented, but there is no evidence that she received anything. There is some conflict in the evidence, but the chancellor’s findings are supported by the preponderance of the evidence, and the decree is affirmed.


author: McHaNey, J.

text:
    Gossett v. Fordyce Lumber Company.
    Opinion delivered May 26, 1930.

      Gctughcm, Sifford, Godwin & Gaugtum, for appellant.

      S. F. Morton, for appellees.
   McHaNey, J.

The land involved in this controversy is the north half- northeast quarter, section 27, township 10 south, range 15 west, Dallas County, Arkansas. It is located in Road Improvement District No. 1 of Dallas County, Arkansas, created by special act 56 of 1919, and ■became delinquent for the taxes due said district for the year 1922, payable in 1923, and for some prior years. The Road Improvement District defaulted in the payment- of its bonds and interest, and, in the suit of the trustee in the bond issue, was placed in the hands of a receiver by the Federal District Court for the Western Division of the Eastern District of Arkansas, on July 20, 1923. Suit was brought in said district court to foreclose the lien against this and other lands for the delinquent taxes due the road district, which resulted in a decree of foreclosure on January 28, 1925, ordering" the delinquent land sold to pay the taxes if not paid within a certain time fixed by the court. The tax on the land in controversy was. not paid, the land was sold on March 24, 1925, and, there being no purchasers, same was bid in by the receiver, who was also the commissioner making the sale, for the tax, penalty and costs in the sum of $19.79. A deed was made to the receiver and approved by said district court on April 20, 1925. The deed to the receiver contained the following recital: “-By the terms of which said order of confirmation the said purchaser takes the lands hereinafter described subject to the lien thereon respectively of tlie unpaid assessments of said Road Improvement District No. 1 of Dallas 'County, Arkansas, for any year or years other than the said respective years 1920, 1921, 1922, and subject to the lien of the unpaid assessments of any other improvement district, and subject to the rights of redemption as in said order of confirmation and hereinafter set forth, hut in all other respects the said purchaser’s title to the lands hereinafter described to be indefeasible and unassailable in either law or equity, and by the terms of which said order of confirmation any person who Would have been permitted to redeem the said lands had the sale been made by the Dallas County, Arkansas, Collector for State and county taxes, or who was in possession under color of title at the time of the said decree in said ancillary cause may redeem any of the tracts of land hereinafter described at any time within two years from said March 24, 1925, but not thereafter.”

On December 12, 1927, said road district, being then out of the receiver’s hands, conveyed said land to appellants for a consideration of $24.99.

Appellee, Fordyce Lumber Company, was the owner of the timber on said land and paid all State and county taxes thereon separately from the land, same being separately assessed. In 1924 the land was forfeited to the State for the nonpayment of general taxes, and no exception of the timber was made in extending the taxes against it, although, as alb ove stated, the timber was separately assessed and the general tax thereon fully paid. On December 23,1927, the State Land 'Commissioner conveyed all the State’s right and title to said land to appellant without excepting the timber therefrom.

In 1927 the Legislature enacted act 112, Acts 1927, p. 312, entitled “An act to provide for the collection and disposition of taxes in road improvement districts, a redemption of land sold for taxes, and for other purposes.” Section 14 of said act reads as follows: “Lands heretofore sold for the nonpayment of road taxes, where the period for redemption lias not yet expired, may be redeemed "within three years from the date of the passage of this act by refunding to the purchaser the amount paid by him with legal interest. Lands purchased by the district, and still owned by the district, may be redeemed by paying the amount of the tax and costs of sale with legal interest without the penalties. On tender of the amount required to redeem, the holder of the legal title shall execute and deliver the necessary deed or release toi the party entitled to redeem. ’ ’

This act contained an emergency clause and was ap.-proved March 4, 1927. After the land was sold to appellants by the road district and after the period of redemption as fixed by the decree of said district court had expired, but within the period of redemption as enlarged by the above-mentioned act, appellees sought to redeem the land and timber from appellants, tendering them a sufficient sum of money to do so, but same was refused. Ap-pellees thereupon on July 21, 1928, brought this suit to redeem, deposited a sum of money -with the clerk of the court of more than enough to redeem said land as a tender thereof in said action. The court sustained appellees ’ right to redeem, found that $87.48 was the amount due appellants to redeem from the sale in the road district and from the State, and including all taxes and special assessments paid by appellants with interest.

Por a reversal of the decree appellants contend, (1) that the land was sold to the receiver for the use and benefit of the trustee in the bond issue of the read district and not to the State or a State agency; (2) that if it should be held to be wrong about that proposition, and that the land was sold to the receiver for the use and benefit of the road improvement district, § 14 of act 112 above set out is in conflict with the decree of the district court, and therefore of no force and effect.

1. Appellants’ contention as to the first proposition cannot be sustained. Appellants make the mistake of assuming that the land was sold to the receiver per-s-onally or to him for the use and benefit of the trustee. The receiver was acting for the district in the collection of taxes to pay the road district’s debts, and when the land was struck off to the receiver and deed issued to him by the commissioner, title vested in him, not individually but as receiver for the use and benefit of the district. The act creating’ the district, in § 22, provides that under certain conditions a receiver might be appointed to collect the taxes, and that the receiver “may be directed by suit to foreclose the lien of said taxes on said land; and the suits so brought by the said receiver shall be conducted in all matters as suits by the board as herein-before provided, and with like effect; and the decrees and deeds therein shall have the same presumptions in their favor.” So it will be seen that the receiver, for the time being, steps into the shoes of the hoard of commissioners and acts for them. The necessary result is that a deed executed to the receiver was for the use and' benefit of the districts the same as if the board had been acting and the deed executed to it. Therefore, the title to the land (by virtue of the sale in the federal district court, although taken in the name of the receiver, was really in Road Improvement District No. 1 of Dallas County, Arkansas.

2. The title remained in the district until December 12, 1927, when it conveyed said land to the appellants. In the meantime act 112 of the Acts of 1927 had become a law, by § 14 of which the period of redemption was extended three years from the pass-age of said act and the rule announced in Walker v. Ferguson, 176 Ark. 625, 3 S. W. (2d) 694, applies, unless said act is void by reason of being in conflict with the decree of the district court. We there said: “The principles of law applicable to cases of this sort and numerous decisions announcing them are cited and reviewed in Northern Road Imp. Dist. v. Meyerman, 169 Ark. 383, 275 S. W. 762, and no useful purpose could be served by again extensively reviewing these principles. Where lands are sold at a tax sale and are struck off to a private purchaser, the sale fox the delinquent taxes constitutes a contract between the purchaser and the State, or the instrumentality of the State, the obligation of which cannot be impaired by subsequent legislation extending the period of the right to redeem. Hence this court has held that the right to redeem in such cases from a tax sale is governed by the statute in existence at the time the sale is made, and no subsequent statute extending the period of time for the right to redeem is constitutional.

‘ ‘ The title acquired by the State, or an instrumentality thereof, at a tax sale is not the same as that vesting in a private purchaser, since the object of the purchase is not the acquisition of the property, but rather the collection of the taxes. 37 Cyc. 1355, and Commissioners v. Lucas, 93 U. S. 108, 23 L. ed. 822. Hence the rule that a statute extending the time to redeem from a tax sale is not constitutionally applicable to sales made before its enactment is subject to an exception where the State or one of its instrumental subdivisions was the purchaser.”

In the first place, we do not think the act is in conflict with the decree. By the térms of the decree interested parties were given.the right to redeem “at any time within, two- years from said March 24, 1925, but not thereafter.” The time for redemption under the decree expired March 24, 1927, but prior thereto, to-wit, on March 4, 1927, the above act became a law, the effect of § 14 thereof being to extend the period of redemption from sales in all road districts for three years from March 4, 1927. The decree of the court fixing the time to redeem was only declaratory of the period given by the act creating the district, which was made two years in § 15 thereof.

The federal court could not by its decree have shortened the period of redemption as fixed by the statute, and it did not attempt to do so. The right to redeem, as fixed by statute or as extended or enlarged by subsequent acts, is a “positive and substantial” right conferred oil the landowner by the Legislature, and, cannot he abrogated by rule or decree of court, State or Federal, unless violative of the obligations of contract. Brine v. Hartford Fire Ins. Co., 96 U. S. 627; Conn. Mut. Life Ins. Co. v. Cushman, 108 U. S. 51, 2 S. Ct. 36; Dupree v. Mansur, 214 U. S. 161, 29 S. Ct. 548; Mason v. United States, 260 U. S. 545, 43 S. Ct. 200.

By extending the period of redemption three years from the passage of said act 112, the Legislature was trying to save the landowner from the devastating burden imposed upon him in the form of taxes on better-ments in road improvement districts prior to 1927, and give him an extension of time in which to redeem his land from a sale for taxes he was wholly unable to pay. It had entirely lifted the burden for taxes accruing subsequent to January 1, 1927, in such districts, and the above section was enacted to give him the additional time to redeem from sales for prior taxes. Since; as we have already seen, the land passed to the district by reason of said foreclosure sale, and was still in the district when act 112 was enacted, the rule announced in Walker v. Ferguson, supra, applies.

The decree of the chancery court is correct, and must be affirmed. It is so ordered.


author: Smith, J.

text:
    Moline Timber Company v. Schaad.
    Opinion delivered May 19, 1930.

      Charles W. Mehaffy and Cochrill & Armistead, for appellant.

      8. L. White-, for appellees.
   Smith, J.

Appellees brought this suit to reform a fire insurance policy, and to collect the proceeds thereof after a loss had been sustained by fire, and in support of their cause- of action offered testimony to the following effect: Appellees sold some sawmill machinery to J. L. Young. Part of the purchase price was paid in cash, ■and the balance was evidenced by what was termed “title retaining notes.” The contract of sale provided that Young should carry fire insurance on the machinery until the indebtedness was fully paid, the loss, if any, being payable to appellees as their interest might appear. Young operated two sawmills before -buying the machinery above referred to, which was installed in a third mill. Young operated all these mills" in -sawing lumber for the Moline Timber Company, and represented to ap-pellees thait be had taken oult insurance as agreed, and after the fire attempted to collect the insurance for the benefit of appellees. The fire loss was adjusted on the basis of $2,140, which amount was -collected and appropriated by appellant. This amount was in excess of the balance due appellees by Young, and judgment was rendered in favor of appellees for the amount of their debt on account of the conversion of this insurance money.

The appellant timber company is a corporation under the laws of the -State of Maine, and was represented in all of the transactions out of which this litigation arose by F. M. Lay and L. L. Adair. These gentlemen testified that, representing the appellant timber company, they made advances -to- Young in his sawmill operations, and that the balance due on these advances at the time of the fire amounted to about ten thousand dollars. That, to secure this indebtedness, they had, with Young’s knowledge and at his direction, caused policies of insurance to be issued on all three of the mills and the lumber thereat, and had paid the premiums thereon, which they charged io Young, and all the policies were payable to tlie appellant timber company as its interest appeared, and that after the fire proof of loss was duly made and adjusted, and the amount thereof paid to appellant.

The court made no special finding’ of fact, but we assume the finding was made that Young represented to appellees that he had insured the property, as his contract olf purchase required him to do. Young testified that Lay and Adair knew of his purchase of the machinery, and that the title had been reserved, but he did not testify that they had told him that the insurance had been made payable to appellees, and the testimony shows this was not done.

Lay, appellant’s manager, testified that Young had never requested him to procure insurance for the benefit of appellees, and that he had never done so, but that he caused the insurance policies to be issued for the benefit of appellant, his employer, to secure the advances being made Young and for Young’s benefit after the advances had been paid.

Adair testified that he was the cashier and office manager of appellant timber company, and that for its security against the advances being made Young* he insisted that Young allow appellant to insure his mill propexdies, with loss payable to appellant; that Young agreed to this, and pursuant to this agreement the policy sued on was issued. Thait appellant company was not requested by any one to procure insurance for the benefit of appel-lees, and had not done so.

The appellant timber company was a subsidiary corporation of Deere & Company, which latter company maintained an insurance department to keep property insured in which it was interested, and the manager of this department of Deere & Company testified that he had never heard that appellees claimed any interest in the policy until after the fire, and that he procured the issuance of all the policies.

It is, no doubt., true that Young represented to appel-lees that he had insured the property for their benefit, as Ms contract of purchase required him to do, but that testimony is not sufficient to support a recovery by appellees.

The suit is in the nature of one to reform an insurance policy; in fact, that relief was prayed, and upon this alleg-ation suit was 'brought in the chancery court. Such relief is only granted upon testimony that is clear and convincing, and the testimony does not measure up to that standard; in fact, we think the preponderance of the testimony is to the effect that there was neither fraud nor mistake in procuring the issuance of the policy and that it was issued as applied for.

The machinery, to which appellees had reserved the title, was not the only property covered by the policy sued on; but, even as to this property, Young had an insurable interest, which he might have insured for his own benefit or for that of a creditor. Hartford Fire Ins. Co. v. Enoch, 79 Ark. 475, 96 S. W. 393; Ponder v. Gibson-Homans Co., 166 Ark. 591, 266 S. W. 682; Crouthers v. State, 154 Ark. 375, 242 S. W. 815.

For the reasons stated, the decree appealed from must be reversed, and as the cause appears to be without equity it is dismissed.


author: Kirby, J.

text:
    Mitchell v. Fowler.
    Opinion delivered May 26, 1930.

      Oscar Barnett, for appellant.
   Kirby, J.

This is a partition suit for division of the estate of Sam Mitchell, Sr., deceased, among the parties and his heirs' entitled thereto, the north half southwest quarter and north half southeast quarter, section 13, township' 4 south, range 17 west. The case was submitted to the chancellor on the pleadings and testimony and decree rendered on March 15, 1928, adjudging the interest of the parties, and decreeing a partition of the lands in accordance therewith.

■On September 12, 19:29, Si Bayliss Mitchell and others filed a .motion and intervention to set aside the decree of March 15, 1928, and have the lands sold because no part of same was allotted to them by the commissioner and the decree of the court. None of the grounds specified in the statute, §§ 6290-93, O. & M. Digest was alleged in the motion to modify or vacate the judgment.

The decree of March 15, 1928, ascertaining- and adjudging the interest of the several parties in the lands in controversy and directing a division thereon in accordance with their rights, became final and binding upon all the parties thereto upon the lapse of the term of court at which it was entered, the term necessarily expiring on the first Monday in June thereafter, the day fixed by law for the beginning of the next term of the chancery court.

No appeal was taken from this decree which could not be vacated or modified after the expiration of the term at which it was rendered, except upon allegation and proof of some one of the grounds for such action specified in the statute § 6290, C. & M. Digest. None of the grounds as specified therein was contained or included in the motion and intervention to vacate or modify the decree, and the court erred in attempting to vacate said decree and modifying it to adjudge an interest in the lands in controversy to appellees, to which they had not been held entitled or Avhich had not been adjudged to them in the original and final decree of March 15,1928, it being ■without authority to do so. Ingram v. Wood, 172 Ark. 226.

The decree is accordingly reversed, and the cause remanded with directions to cancel the commissioner’s deed to the lands execute!! under said erroneous decree and to reinstate said decree of March 15, 1928, partitioning the said lands in accordance with the interest of the parties as adjudged therein, and for all other necessary proceedings in accordance with the principles of equity and not inconsistent with this opinion.


author: Butler, J.

text:
    Ashby v. Patrick.
    Opinion delivered May 26, 1930.

      Boss Mathis, for appellants.
   Butler, J.

Hunter Special School District of Woodruff 'County, Arkansas, is a special school district in the town of Hunter, and at the May election for directors of said district in 1928 the two persons elected failed to qualify by taking and filing the oath of office within the time prescribed by statute, and for that reason there was a vacancy in the hoard. School District v. Bennett, 52 Ark. 511, 13 S. W. 132; Boyett v. Cowling, 78 Ark. 494, 94 S. W. 682. At the May election following there were five directors to be elected. Just -why the other vacancy occurred in the hoard is not shown. Two directors were to be elected for a three-year term, two for a two-year term, and one for a one-year term. There were rival sets of candidates.

On the face of the returns appellants were elected, and a contest was filed with the county board of education by the appellees contesting the election on the ground, among oihers, that a majority of the qualified electors had voted for the appellees. This contest was heard by the board, the votes were recounted and the ballot purged, resulting in the elimination of twenty-two votes cast for the appellants and eight for the appellees, and, after the elimination of these votes, it was found that the appellants still had a majority of the votes cast at the election, and they were declared duly elected. Prom this order an appeal was taken to the circuit court, which court, at the conclusion of the evidence, held that the election was void because of the form of the ballot, and judgment -was rendered declaring neither the appellants nor the appellees elected. Prom that judgment is this appeal.

As the school district was a special school district within an incorporated town, the election is governed by §§ 8963 to 8971 of Crawford & Moses’ Digest, inclusive, and there is no form of ballot prescribed therein. Therefore, if the ballot voted on was such as not to mislead the electors but to give them an opportunity to express their will, it was sufficient. The ballot in question was so prepared that the names of the rival sets of candidates were placed thereon as follows:

FoR Scnoon Directors

Por 3-Year Term (Vote for Two)

<T. I. Ashby

J. W. Burns

Por 2-Year Term (Yote for Two)

TI. 0. Penrose

W. P. Dawson

Por 1-Year Term (Yote for One)

Garvin Melvin

Por 3-Year Term (Yote for Two)

Mrs. Jas. Patrick

Mr. H. F. Suhr

For 2-Year Term (Vote for Two)

Mr. J. F. Acton

Mrs. Elmer Brinneman

For 1-Year Term (Yote for One)

Chas. Forth

By this it is apparent that the candidates of the rival factions were grouped together, the candidates of one faction being two each for the three and two-year terms and one for the one-year term occupying the first part of the ballot and immediately following this on the same ticket and immediately below the candidates of one faction appeared the names of the candidates of the other faction in the same order and same directions. We see nothing in this that would have been likely to confuse the voters. It is perfectly apparent that the candidates were purposely grouped so as to give the electors the most convenient method of registering their will, and that they were not in any way deceived. The real inquiry is as to whether or not the appellants or the appellees received the highest number of votes casi. All legal votes should be counted that -were cast, and, if any elector was deceived or confused by the form of the ballot so that he did not vote as he intended, this might have been shown, but there was no evidence offered to this effect, and we conclude that none were in fact deceived. As we have seen, there was no form of ballot prescribed by the statute, and therefore any form might be used, and the election conducted in any manner which would not deprive the legal voters of their right to participate in the election or to create such an uncertainty that there would be no means of ascertaining which of the candidates the voters meant to favor with their ballot. Stafford v. Cook, 159 Ark. 438, 252 S. W. 597; Rhodes v. Driver, 69 Ark. 501, 64 S. W. 272; Cain v. CarlLee, 169 Ark. 887, 277 S. W. 551; 9 R. C. L. 1092.

It seems that the oidy question about which witnesses were called to testify or which was made an issue in the court was that there was no vacancy on the board by reason of two electors, elected at the May, 1928, election, failing to qualify. The regularity of the election was not challenged by any evidence in the circuit court or any contention made that the board excluded legal votes or included illegal votes in their recount, and at the conclusion of the trial, when it was announced that the reason of any production of the proof was to show that the directors did not qualify (those elected at the May, 1928, election) the court said: “I am going to decide the case upon the ballot and refuse to decide on the director matter. After hearing the evidence the court holds the election void because of the form of the ■ballot. ’ ’ Thereupon judgment was rendered accordingly.

For the error of the trial court in declaring* the election void because of the form of the ballot, the judgment is reversed and the cause remanded for further proceedings according to law and not inconsistent with this opinion.


author: Kirby, J.,

text:
    Missouri Pacific Railroad Company v. Fish.
    Opinion delivered June 2, 1930.

      R. E. Wiley and Ilenry Donham, for appellant.

      J. T. Wimberley and Eric M. Ross, for appellee.
   Kirby, J.,

(after stating the facts). The three-mill levy of tax complained of was regularly made against the property of appellant under the authority of amendment No. 1.1. to the Constitution of the State of Arkansas and § 4, of act 210 of the Acts of the General Assembly of 1925, the enabling act for its enforcement.

The amendment provides: “To secure funds to pay indebtedness outstanding at the adoption of this amendment, counties, cities and incorporated towns may issue interest-bearing certificates of indebtedness or bonds with interest coupons for the payment of which a county or city tax, in addition to that now authorized, not ex-feeding three mills, may be levied for the time as provided by law until such indebtedness is paid. ’ ’

Section 4 of the enabling act provides that the quorum court of the county, before or after the issue of said bonds, “shall levy a tax, which on the existing assessed value of the property of such county * * * will suffice to retire said bonds as they mature with five per cent, added for unforeseen contingencies, provided that said tax shall not exceed three mills on the dollar of such assessed value. If said taxes proves insufficient to meet the maturities of the bonds with interest, it shall be the duty of the quorum court of such county * * * to increase such levy of taxes, but not beyond three mills upon the dollar of the then assessed valuation, and if, by reason of the increase in the assessed value of the property of such county, * * * a lower rate of tax will prove sufficient to meet the bonds and coupons as they mature, the amount of the tax may be lowered accordingly, but no tax shall be levied 'which will produce less than the sum required to meet the maturing of the bonds with five per cent, added for unforeseen contingencies, nor shall any tax in excess of three mills on the assessed value existing at the time of such levy ever be levied in any year. * * #”

This court, construing the amendment and the enabling act,.has held the word “may” in the amendment to mean “shall” and to compel the levy of the tax to pay the maturing bonds issued for paying the county indebtedness under the authority of said amendment. Stranahan, Harris & Oatis, Inc., v. Van Buren County, 175 Ark. 678, 300 S. W. 382.

Appellant insists that the word “may,” as used in said section 4 of the enabling act, should likewise be construed to mean “shall” in authorizing the quorum court to lower the rate of taxation when a lower rate would produce sufficient revenue to pay the maturing bonds and interest. We do not agree with this contention.

The enabling act provides that the quorum court of the county “shall levy a tax, which, on the existing assessed value of the property of such county, * * * will suffice to retire said bonds as they mature with five per cent, added for unforeseen contingencies, * * * said tax shall not exceed three mills on the dollar of such assessed value.” If the tax proves insufficient, “it shall be the duty of the quorum court of such county * * * to increase such levy of taxes, but not beyond three mills upon the dollar of the then assessed valuation, and if, by reason of the increase in the assessed value of the property of such county, * * * a lower rate of tax will prove sufficient to meet the bonds and coupons as they mature, the amount of the tax may be lowered accordingly, but no tax shall be levied which will produce less than the sum required to meet the maturing of the bonds, etc.”

The money derived from the tax must be preserved as a separate fund for the retirement of the bonds, and its misuse by any officer is made a felony.

■ It is obvious, from the language used, that it was the intention of the Legislature to leave the matter of reduction of the amount of the levy to the discretion of the quorum court in its determination of the amount necessary to be levied and collected for the retirement of the maturing bonds and interest. This court cannot say that the refusal to reduce the amount of the tax levy for the year 1930 was an abuse of discretion or but an arbitrary exercise of power in the absence of a showing that there was sufficient money already on hand in the separate fund for the redemption and retirement of such bonds to- pay the amount of all maturing with interest in the particular year without the levy of any tax for the purpose. The levy of this tax was regularly made by the quorum court within the authority granted by the Constitution and enabling act, and the chancellor was without power to enjoin its collection, it not being an illegal exaction or an unauthorized tax within the meaning of the statute § 5786, O. & M. Digest, and Constitution, article 16, § 13, complaint being made only that it was excessive.

Appellant company could have objected to the amount of the tax levy before the county court at the time of the levy of the tax and shown by testimony the lack of necessity for the amount of the levy under the statute (§§ 9867-9870, C. & M. Digest), but elected to attempt to enjoin the levy as illegal and unauthorized, and the court correctly held it could not be done.

The decree is accordingly affirmed.


author: McHaney, J.

text:
    Street Improvement District No. 130 of Hot Springs v. Crockett.
    Opinion delivered June 2, 1930.

      G. T. Gotham, Murphy é Wood and A. T. Davies, for appellant.

      George P. Whittington, for appellee.
   McHaney, J.

Appellees, property owners in Street Improvement District No. 130 of the city of Hot Springs, Arkansas, hereafter called the district, brought this suit to enjoin the district, its board of commissioners and the contractor, Besler, from performing the contract entered into between the district and Besler for the paving- of the street and other improvements contemplated by the district. The complaint alleged that the commissioners advertised for bids to do the work according to the plans and specifications prepared by the city engineer, and that same would be let to the lowest bidder; that the three lowest bidders and the amounts of their bids were, Besler $44,251, Connelly $42,100, and Mooney $40,908; that, although two bids were lower than that of Besler, two of the commissioners, over the objections of the third, awarded the contract to Besler; that the result would be that the property owners would be required to pay more taxes to the extent of the excess of his bid over the lowest; and that this action was without authority in law, and was a fraud on the district. Appellants answered denying all the material allegations of the complaint r-elative to illegality, unfairness or fraudulent conduct. They denied that they advertised that the contract would be let to the lowest bidder, but that the}'' reserved the right to reject any and all bids; that, in awarding the contract to Besler, they took into consideration a number of factors and elements to be considered in connection with the qualification of bidders, in addition to the amount of the bids, as follows: That Besler’s lump sum bid of $44,251.64 was accompanied by a bid on a unit basis with the agreement that, if, on the final estimate of the completed job as measured and determined by the engineer, computed at the unit prices set out in his proposal, the amount thereof should be less than his lump sum bid, the district should have the benefit of the difference. In other words, the lump sum bid was the maximum amount the district would ever have to pay, but, if the amount based on his unit prices should be less, the district would benefit to the extent thereof; that the bid of Besler relieved the district of all liability for extras on account of possible errors of the engineer, which, based on experience in other districts, was a considerable item; that no other contractor made such a bid, though all had the opportunity to do so; that Besler agreed to give a five-year maintenance bond and his personal bond for an additional five years maintenance; that Mooney failed to include in his bid any agreement to give a maintenance bond whatever, and that Connelly only agreed to maintain the street for five years after completion; and that this guaranty of Besler more than offset the excess amount of his bid over the others. It is alleged that other matters were taken into consideration in awarding the contract to Besler.

On a trial the court entered a decree enjoining the enforcement, of the contract for the reason that it was not let to the lowest bidder, was not let on a competitive basis, was not submitted on an equal and full understanding of the kind of bids desired, and that Besler’s bid was not in accordance with plans and specifications made by the city engineer, and was therefore void and unenforcible.

We are of the opinion that the trial court erred in so holding. The applicable statute, § 5710, C. & M. Digest, provides that the board “may” advertise for bids for doing any work by contract and may accept or reject any or all such bids. Whether the word “may” as first used in the statute should be construed to mean “shall,” and, therefore, mandatory and not directory, we do not decide, as it appears unnecessary. The commissioners did advertise for bids, and the court, found that eight persons submitted bids on the proposed work, three of which have already been mentioned. However, we might 'say in passing, that this court construed this section, which was § 870- of Mansfield’s Digest, in connection with § 871 Ib., to be directory merely, and that the board, after rejecting all bids, might let the contract without read-vertisement. Fitzgerald v. Walker, 55 Ark. 148, 17 S. W. 7012. Section 871 of Mansfield’s Digest, considered in that case, appears to have been repealed and does not now appear in the statutes. Them is no provision in the statute that the contract shall be let to the person whose bid is lowest in terms of money. The language is that the board “may accept or reject any proposals.” It is the duty of the board to act at all times for the best interests of the district, but the statute, by giving it the power to accept or reject any proposals, necessarily conferred oh the board the discretion to determine which of the bidders, if either, would best accomplish their purpose, taking everything into consideration, including the amount of his bid. Everything else being equal, we are of the opinon that the spirit, if not the letter, of the law, would require the board to let the contract to the lowest bidder. But when, as here, everything else is not equal, when there are other important elements to be considered in connection with the amount of the bid, we think the statute vests in the board the power as well as the duty of determining which of the bidders will best accomplish the purposes of the district. This necessarily involves judgment and discretion, and the courts will not substitute their judgment for that of the board when a mere matter of discretion is involved. As said by this court in McCrory v. Richland Township Road Imp. Dist., 171 Ark. 462-4, 284 S. W. 727, “The courts will not undertake to review mere questions of discretion, for the power of the commissioners to act is fully recognized, and the courts will not therefore substitute their judgment for that of the commissioners of the district, when there is involved merely a question of judgment. But when it is made to appear that there was a conscious or reckless indifference to the interests of the district, which the commissioners are supposed to represent, the courts have the right to interfere upon the ground that the commissioners have exceeded the power conferred upon them by law. ’ ’ The inquiry of the court generally “is to determine whether the contract is so improvident as to demonstrate its unreasonableness,” as said in Bowman Eng. Co. v. Ark. & Mo. Highway Dist., 151 Ark. 47, 235 S. W. 390. Here we think the evidence wholly fails to show that the board was guilty of “a conscious or reckless indifference to the interests of the district,” or that the contract made with Besler was “bo improvident as to demonstrate its unreasonableness,” and the chancery court did not so find.

We are also of the opinion that the court misconceived the evidence in holding’ that the bids were not on a competitive basis in that Besler bid on a turnkey .job, and the other bidders were not requested to bid on that basis. Commissioner Goslee, testifying for appellees, stated to the contrary. He testified that they were all given an opportunity of checking the work to be done against the engineer’s estimates either by themselves or by an engineer of their own choosing for the purpose of making a lump sum bid. 'Both Connelly and Mooney made such bids, but their lump sum amounts were conditioned on the correctness of the figures furnished by the city engineer.

We also think the court was clearly wrong in holding that Besler’s bid was not based on the plans and specifications furnished by the district’s engineer. There were no other plans. The fact that Besler employed another firm of engineers to make a check of the work against the engineer’s estimates was for the purpose of enabling him to make an accurate lump sum bid without any strings tied to it.

We have carefully reviewed all the evidence in the ease, and find that the decree is not supported by a preponderance thereof. Same will therefore be reversed, and the cause climissed. It is so ordered.

Hart, C. J., Humphreys, and Kirby, JJ., dissent.


author: Humphreys, J.

text:
    Smalley v. Bushmiaer.
    Opinion delivered May 19, 1930.

      G. M. W off or d, for appellant.

      Part-ain S' Agee, for appellee.
   Humphreys, J.

This is an appeal from a judgment rendered by the circuit court of Crawford County dismissing a petition for mandamus to compel appellee, the sheriff of said county, to allow the county cleric to inspect his jail record to ascertain the number of prisoners fed by him, so that he could audit the accounts of said sheriff in feeding the prisoners. The writ of mandamus was sought to enforce the provisions of act 367 of the Acts of the Legislature of 1929, which is as follows:

“Be it Enacted by the General Assembly of the State of Arkansas:
“Section 1. That, from and after the passage of this act, the sheriff of Crawford County, Arkansas, shall he allowed seventy-five cents (75c) per day for the feeding’ of each prisoner confined in the Crawford County jail; and provided, further, that it shall be the duty of the county clerk of Crawford County, Arkansas, to keep a jail record of the names and number of all prisoners confined in said jail on file in his office, and shall file a certified list of the names and number of said prisoners confined in said jail daring the previous month with the county and probate judg'e, said list to be filed on the first day of each month in each year.
“Section 2. All laws and parts of laws in conflict herewith are hereby repealed.”

The trial court ruled that the act was void ¡because the enactment thereof was prohibited by Amendment Number 17 to the Constitution of the State of Arkansas, which is as follows:

“The General Assembly shall not pass any local or special act. This amendment shall not prohibit the repeal of any local .or special act.”

We think the trial court correctly adjudged that the act in question was in contravention of Amendment No. 17 inhibiting the passage of local or special legislation. In the case of Webb v. Adams, 180 Ark. 713, this court said: “A law is special in a constitutional sense when, by force of an inherent limitation, it arbitrarily separates some person, place or thing from those upon which, but for such separation, it would Operate.” Citing the following authorities: 58 Atl. 571, 572; L. R. & Ft. Smith Ry. Co. v. Hanniford, 49 Ark. 291, 5 S. W. 294; Little Rock v. North Little Rock, 72 Ark. 195, 79 S. W. 785.

In 25 R. C. L. p. 834, paragraph 81, it is said: “And where a statute fixes the compensation of an officer in a particular locality upon a basis entirely different from that of all other persons filling like offices in the Sítate, it has been held not to be a general law, but within the constitutional prohibition against special legislation.”

The effect of the act was to arbitrarily separate the clerk and sheriff of Crawford County, and legislate with reference to their duties and fees upon a basis different from that of other clerks and sheriffs in the State.

The judgment is therefore affirmed.

Smith and MoHaney, JJ., dissent.


author: Hart, O. J.,

text:
    Held v. Mansur.
    Opinion delivered May 19, 1930.

      • II. M. Barney and W. II. Arnold, for appellant.

      O. Q. Pope and Shaver, Shaver & Williams, for appellee.
   Hart, O. J.,

(after stating the facts). A person rvho has been induced to enter into a contract for the purchase of property by the false representations of the vendor concerning its quantity or quality may, at his election, pursue one of three remedies. First, he may cancel the contract and, by returning or offering to return the property purchased -within a reasonable time, entitle himself to recover whatever he had paid upon the contract. In the second place, he may elect to retain the property and sue for the damages he has sustained by reason of the false representations of the vendor as to the land; and in this event the measure of the damages would be the difference between the real value of the property in its true condition and the price at which he purchased it. In the third place, to avoid a circuity of actions and a multiplicity of suits, he may plead such damages in an action for the purchase money, and is entitled to have the same recouped against the sum he had paid for the land. Matlock v. Reppy, 47 Ark. 148, 14 S. W. 546; and Danielson v. Skidmore, 125 Ark. 572, 189 S. W. 57.

In the present case, the purchaser of the real estate mortgage elected to pursue the second of these remedies. He might have sued for damages at law; but, under the authorities above cited, no objection having been made to the jurisdiction 'of a court of equity, none can be raised on appeal. Besides this, the plaintiff also asked for a foreclosure of the mortgage; and, in order to avoid a multiplicity of suits, it is settled in this State that when equity takes jurisdiction of a case for a matter cognizable only in equity, it retains the case to administer the legal after the equitable relief. Short v. Thompson, 170 Ark. 931, 282 S. W. 14.

"While the general rule is that the statement of the value of the property is a mere matter of opinion and cannot be made the basis of an action for fraud, still there are exceptions to the general rule. The rule established in this State is that false statements of fact, intentionally made, to one who is ignorant of the quality or value of the property under consideration under such circumstances as indicate a purpose that such statements are to be relied upon, where the purchaser has no opportunity to examine the property, may be treated as an affirmation of fact and fraudulent. Where the vendor knows that the purchaser is wholly ignorant of the value of the property, and knows that he is relying' upon his representations, the representations do not take the form of a mere expression of opinion, but are in the nature of a statement of fact. The reason is that the vendor knows that the statements he has made are untrue or are made in reckless disregard of the truth, and it cannot be doubted that he knows and believes that such statements will have a material influence upon the purchaser. Carwell v. Dennis, 101 Ark. 603, 143 S. W. 135; Hunt v. Davis, 98 Ark. 44, 135 S. W. 458; Bell v. Fritts, 161 Ark. 371, 256 S. W. 53; Cleveland v. Biggers, 163 Ark. 377, 260 S. W. 432; Laney-Payne Farm Loan Co. v. Greenhaw, 177 Ark. 589, 9 S. W. (2d) 19.

Under all these cases, and under many more which might be cited, this court is committed to the rule that if the vendor, having actual knowledge of the matter or in reckless disregard of the truth, induces the buyer to rely on Ms false statements, he will not be heard to say that the purchaser could have ascertained the truth. In the first place, the false representations relied upon may have caused the purchaser to forbear from making further inquiry; and in the second place, as is true in the present case, the purchaser may have lived in a distant State, and it was not practical for him to come to the county in which the land was situated and make an examination of it. There was nothing to put a person on notice that the representations were false. These cases all hold that, while ordinary statements of value of property are mere expressions of opinion on which the purchaser is not entitled to rely, yet statements of fact which affect the value of property, if false, and made for the purpose of inducing the purchaser to rely thereon, are false representations which will constitute fraud in law. The false representations may be established by positive and direct testimony, or by circumstantial evidence, or by both.

In the present case, we think the false representations were established by a preponderance of the evidence, and that there can be no doubt about the fact that the purchaser of the note and mortgage involved in this case relied upon the representations. Mansur admits in his testimony that he was a mere figurehead in the transaction, and that he acted for the Dorsey Company. The Dorsey Company and the security company which made the loan had offices in the city of Texarkana, Arkansas, and during much of the time covered by this transaction had offices in the same building. The security company was in the business of making .farm loans, and in aid thereof had a set of abstract books. Mansur was introduced to the president of the security company by the president of the Dorsey Company. The money borrowed was paid to the Dorsey Company. The security company paid the recording fees for the deed from the Dorsey Company to Mansur, and for the mortgage from Mansur io the security company. The attendant circumstances and the relationship of the officers of these two companies all point to the fact that the officers of the security company knew that the representations as to the value of the land were false, or that they were made in utter disregard of the truth. The land was situated in Miller County, and, according to a clear preponderance of the evidence, was subject to overflow and has never been susceptible of cultivation. They were cut-over lands, and half of the tract was cleared and a small house was built on it for the purpose of securing the loan. The land was represented by the borrower to be worth $9,700, and the inspector sent out by the security company reported it to be worth $8,000. The inspector was an officer of the company. While there is a dispute over this point, we think a clear preponderance of the evidence shows that the lands were practically worthless because they were subject to overflow, and could not be drained except at a prohibitive cost. It is fairly inferable that the officers of the security company knew that Mansur was a mere figurehead, and had no property whatever. They must have known that his representation in his application that he had 1,000 acres of land and $1|8,000 worth of personal property unincumbered was false.

It is true that the officers of the security company testified that they transferred the loan to Rosentiel and thereafter had no connection with it. In this respect, however, they are contradicted by the attendant circumstances. Rosentiel was a stockholder in the security company, and had been acquainted with its officers for a good many years. He was accustomed to buying these farm loan mortgages at a small discount and transferring them to other parties. By arrangement between the security company and Rosentiel, the former collected the interest, paid the taxes, and generally looked after the loans. In 1925, when the Dorsey Company ceased to pay the interest on the loan, and was about to be placed in the hands of a receiver, the Security Mortgage Company employed a lawyer to foreclose the mortgage. When all these facts and circumstances are considered together, we think that the assignment and transfer of the note and mortgage by the security company to Rosentiel was colorable merely, and that Rosentiel acted for the security company in selling and transferring the note and mortgage to Held. Rosentiel and Held were intimate friends, and Held did not discover the fraud which had been practiced upon him until the latter part of 1927, or the first part of 1928. Therefore, we are of the opinion that he had a right to sue for damages for false representations, which induced him to buy the note and mortgage in question, and that the chancery court erred in not so holding.

It is contended, however, by counsel for appellees, that the decree of foreclosure had in 1925 should not be set aside because no fraud was practiced upon the court in the foreclosure proceeding. We do not agree with counsel in this contention. It is true that it was held in H. G. Pugh & Co. v. Ahrens, 179 Ark. 829, 19 S. W. (2d) 1030, and the cases cited therein, that the fraud which will justify the setting aside of a judgment or decree •must be such as prevented the unsuccessful party from presenting his case fully, or which operated as a fraud or imposition upon the jurisdiction of the court, and that mere false testimony is not enough if the disputed matter was in issue in the case in which it was given. Held did not know anything whatever about the foreclosure proceeding which was had in 1925. The secuiity company procured an attorney to institute the foreclosure proceedings, and Held was left in ignorance of the whole matter. The attorney presented a copy of the mortgage and note in question, and procured the court to grant the decree upon the reliance that he had authority to bring the suit, and the custody of the note and mortgage sued upon. No-matter whether the attorney knew of the fraud practiced on Held by the Security Mortgage Company or not, he acted for the security company, and will be deemed in law to have participated in the fraud practiced by that company upon the court. It cannot be doubted that the chancery court would have refused a decree of foreclosure, if it had been informed of the fact that Held, the holder of the note and mortgage, was in ignorance of the whole proceeding, and had no part in it. Therefore, we are of the opinion that the foreclosure proceeding in the chancery court in 1925 was obtained by fraud, and that the decree should be set aside on that account.

The result of our views is that the chancery court erred in not awarding damages to appellant for false representations in selling him the loan and mortgage, and in refusing to set aside the decree of foreclosure oif the mortgage. From the authorities above cited, the measure of damages will be the difference between the price for which the land may be sold under the foreclosure proceedings, and the amount which Held paid for the note and mortgage, together with the accrued interest and the taxes due on the land. Therefore, the decree will be reversed, and the cause will be remanded for further proceedings in accordance with this opinion, and not inconsistent with the principles of equity. It is so ordered.