author: Hart, C. J.,

text:
    Sanders v. McClintock.
    Opinion delivered December 5, 1927.
    1. Courts — time and place of holding courts. — It is within the power of the Legislature to prescribe the time and place of holding courts, and to authorize courts to be in session at all times for certain purposes.
    2. Equity — power to set aside decree. — Under Acts 1925, p. 250, providing that chancery courts in certain counties should always be open for the transaction of business and to hear causes and render decrees in said counties at any time, held that, where the term of the chancery court in a certain district of a county continued from the first Monday in May until the first Monday in November, such court had the power in July to set aside a decree rendered in the previous month of May.
    3. Limitation of actions — part payment. — Though part payment is an admission of the continued existence of a debt and an implied promise to pay the balance, such promise is not implied where payment is accompanied by circumstances or declarations of the debtor showing that it was not his intention to admit by the payment the continued existence of the debt and his obligation to pay the balance.
    4. Set-off and counterclaim — effect as part payment. — Before a cross-demand or set-off can constitute a payment, it is indispensable that an agreement to that effect shall be proved.
    5. Witnesses — suit against executrix. — Testimony of defendant as to an agreement with one since deceased cannot be considered in an action against defendant by the executrix of the estate of such deceased.
    6. Limitation of actions — part payment. — Evidence held to sustain a finding that defendant’s consent to the crediting of amount owed by the payee of a note to defendant on such note which defendant had executed did not constitute an acknowledgment of the debt sufficient to form a basis of new promise, tolling the statute of limitations on the note.
    Appeal from Prairie Chancery Court, Southern District ; Johm E. Martineau, Chancellor;
    affirmed.
    STATEMENT BY THE COURT.
    Appellants brought this suit in equity against appellees to foreclose a mortgage on real estate given to secure the payment of a hote for $2,500. On the 14th, day of May, 1925, a decree was entered of record in the chancery court in favor of appellants against appellees. On July 13, 1925, the chancery court set aside its decree rendered in May and allowed appellees to file an answer pleading the statute of limitations and payment of the mortgage indebtedness.
    Upon the part of appellants, evidence was introduced tending to show that the note had not been paid, and upon the part of appellees evidence was introduced tending to show that it had ibeen paid; but the conclusions we have reached will render it unnecessary to abstract this evidence.
    Appellants introduced in evidence a promissory note dated November 18, 1916, for $2,500, payable to the order of R. H. Sanders on or before one year from that date, and signed by J. M. McClintock. On the back of it was indorsed the following: “January 24,1924, by cash $200, and interest on the above, $96.” R. H. Sanders, the mortgagee, was a member of the firm of Sanders & Frolich during the time of all the transactions in question.
    Morrow was the principal witness for appellants. He attached as an exhibit to his testimony a receipt which reads as follows:
    “R. H. Sanders Jacob Frolich
    Sanders & Frolich
    General Merchants and Cotton Buyers “DeVails Bluff, Ark., January 24, 1924.
    “Received from R. H. Sanders two hundred dollars, being the money put up with R. Ii. Sanders, solicited by Mr. Sheets, for the Prairie County Irrigation Company, which money has been credited on my note held by R. H. Sanders, this day.
    “J. M. McClintock.”
    According to the testimony of Morrow, he wrote this receipt at the request of Captain McClintock. Two hundred dollars were given as a payment on the $2,500 note above referred to. The sum of $200 was money due by Sanders to McClintock on account of an irrigation transaction. McClintock had come in andr asked for the payment of the two hundred dollars, and Sanders said that he thought that it should be credited on the note in question. When the note was presented to Captain McClintock, it dumfounded him, and he said that he did not recollect such a note. He asked Sanders why he had not presented it to him before. Sanders replied that he had talked with him about it before. Captain McClintock stated that he did not know anything about what the note was for, but that it was his signature, and he must have given it. Captain McClintock wanted the receipt so that he would have something to show Mr. Sheets about the irrigation transaction. Before the suit was brought, Morrow asked Captain McClintoek about the payment of the note. He was asked if, before the suit was brought, Captain McClintock gave him any satisfaction about when he was going to pay it, and his answer was, “He told me each time that he would have to look it up.”
    J. M. McClintock was a witness for himself. He was eighty-seven years old at the time he gave his testimony. He and R. H. Sanders had been directors in a bank that had failed at DeValls Bluff, and, in connection with other directors, had undertaken to pay off the indebtedness of the bank in order to prevent suits against themselves on account of their liability as directors to the creditors of the bank. McClintock was the cousin of the wife of R. H. Sanders, and he and Sanders were the best of friends, and had many transactions about the matters of liquidat-' ing the indebtedness of the failing -bank as well as about other transactions. R. H. Sanders died on the 26th day of November, 1924, and under his will his wife was the beneficiary of his estate, and became executrix of it. She brought this suit as such executrix. According to the testimony of McClintock, he was never more surprised in his life than when the note in question was presented to him by Sanders and Morrow. The substantial effect of his testimony is that he never recognized it as an existing indebtedness, but was so dumfounded at seeing his signature to the note that he merely acquiesced in Sanders’ crediting on the note the $200 which Sanders owed McClintock on account of the irrigation matter.

      The chancellor made a specific finding that the note was barred by the statute of limitations, and from a decree rendered in favor of appellees, appellants have prosecuted an appeal to this court.

      Cooper and John D. Thweatt, for appellant.

      Trimble é Trimble, for appellee.
   Hart, C. J.,

(after stating the facts). The first contention of appellants is that the court was without power to .set aside the decree of foreclosure which it had rendered in favor of appellants against appellees on the 14th day of May, 1925. They contend that the term of court had expired by operation of law when the decree was set aside on the 13th day of July, 1925, and that the court hiad lost control of it, except for the causes mentioned in § 6290 of Crawford & Moses’ Digest, giving courts power, after the expiration of the term, to vacate or modify their judgments for certain specified causes. It is the contention of appellees that the term of court had not ended by operation of law in July, 1925, when the decree of May, 1925, was set aside, and the chancellor evidently acted on this theory, because he set aside the decree on his own motion and not for any of the grounds mentioned for setting aside decrees after the expiration of the term.

The correctness of the ruling of the chancery court • depends upon the construction • to be given to the act creating the First Chancery District, when considered in connection with the subsequent statute enacted for the purpose of expediting the business in the chancery courts of the First Chancery District.

The Legislature of 1923 passed an act that the First Chancery District should thereafter be composed of Pulaski, White, Lonoke and Prairie counties. Under the terms of the act the chancery court was to be held in Lonoke County on the third Monday in May and November; in White County, on the. second Monday in June and December, and for the Southern District of Prairie County on the first Monday in May and November. Acts of 1923, p. 271. The Legislature of 1925, for the purpose of expediting- the business in the chancery courts of the aforesaid counties, provided that the chancery courts of said counties “shall always be open for the transaction of business, and may hear cases and render decrees in said counties at any time. ’ ’ Acts of 1925, p. 250.

Before the passag-e of the act of 1925, the term of a chancery court in the Southern District of Prairie County, where the decree in question was rendered, began on the first Monday in May and November. The decree was rendered at the May term, 1925. Before the act of 1925, the May term would have ended by the adjournment of the chancery court by the chancellor, or by operation of law when court was begun in Lonoke County on the third Monday in May, 1925. Both the above acts must be construed tog-ether, and, when so construed, we are of the opinion that the chancery courts of this chancery district still have terms. This court has held that it was within the power of the Legislature to prescribe the time and place of holding, courts and to authorize courts to be in session at all times for certain purposes. Wilmot Rd. Imp. Dist. v. De Yampert, 159 Ark. 298, 251 S. W. 880, and Miller v. Tatum, 170 Ark. 152, 279 S. W. 1002. It necessarily follows that, if the Legislature had the power to provide for courts to be kept open for certain purposes, it might also provide that they be kept open at all times for all matters within the jurisdiction of such courts. We are of the opinion that, when both acts are construed together, the act of 1925 did not albolish the terms of court, but it did change the duration of the terms. The chancellor could no longer adjourn court for the term, and the term did not end by operation of law when the time for holding court in another county in the chancery district arrived. Under the act of 1923, as amended by the act of 1925, the term of the chancery court in each county in the chancery district continued until the arrival of the day designated by the statute for the beginning of another term of the same court for the same county. The evident purpose of the act was to continue the term of court in each county from the beginning of the term until the opening- of the next term in the same county. This would enable the chancellor to hold court at any time in the county when he was not engaged in like service in another county in the chancery district, and we are of the opinion that the term of the chancery court of the Southern District of Prairie County continued from the first Monday in May until it ended by operation of law at the beginning of the succeeding term on the first Monday in November. During the entire term the court had plenary power over its decrees, and might vacate, set aside, modify, and annul them. Hence the chancellor had the power to set aside the decree rendered in May in the succeeding July.

The court held that appellants were barred of maintaining this action by the statute of limitations, and counsel for appellants insist that this was error under the ruling in the case of Gorman v. Pettus, 72 Ark. 76, 77 S. W. 907. In that case the evidence showed that Cook had borrowed a sum of money from Rolfe, which was paid him through Pettus & Buford. A part of the money so borrowed was applied to the payment of a prior incumbrance on land that Cook mortgaged to Rolfe to secure the loan. One hundred dollars of the borrowed money were applied to the credit of an account which Cook owed Pettus & Buford, and which was barred by the statute of limitations. The remainder of the borrowed money was paid Cook. The bookkeeper of Pettus & Buford gave Cook a statement showing the disposition of the money. This statement showed that $100 had been applied in part payment of the account sued on. There was other evidence to show that Cook, within four or five months of his death, admitted that he was indebted to the plaintiff. This court held that the evidence was sufficient to support the finding of the circuit court that the $100 was appropriated and paid on the account of and with the knowledge and consent of Cook, and that ihe circuit court was justified in finding that there was a part payment by Cook and a promise to pay the balance due.

The reason is that part payment is treated as an admission of the continued existence of the debt and an implied promise to pay the balance. It is equally well settled, however, that such promise is not to be implied where the part payment is accompanied toy circumstances or declarations of the debtor showing that it is hot his intention to admit, by the payment, the continued existence of the debt, and his obligation to pay the balance. Burr v. Williams, 20 Ark. 171; Chase v. Carney, 60 Ark. 491, 31 S. W. 43; and Cox v. Phelps, 65 Ark. 1, 45 S. W. 990.

In this connection it may toe .stated that the part payment in the present case was a debt which Sanders owed McOlintock, and which he wished to1 set-off against the note which he claimed McOlintock owed him. This court has held that, before a cross demand or set-off can constitute a payment, it is indispensable that an agreement to that effect shall be proved. Parker v. Carter, 91 Ark. 162, 120 S. W. 836, 134 Am. St. Rep. 60. It may also be stated here that, under the holding in Blackburn v. Thompson, 127 Ark. 438, 193 S. W. 74, we cannot consider the testimony of McOlintock on this point, because the suit was brought by the executrix of the estate of R. H. Sanders, deceased.

We are of the opinion, however, that, in the application of the principles of law above, announced, the chancellor was justified in holding that McOlintock did not admit by payment the continued existence of the debt and did not obligate himself to pay the balance. It is not enough to prove an admission of indebtedness, if it is accompanied by circumstances which repel such inference, or even leave it in doubt whether the party intended to revive the cause of action. Morrow testified that Sanders and McOlintock were the best of friends, and had had mutual transactions relative to the settlement of the affairs of an insolvent bank of which they were both directors. McOlintock appeared to be dumfounded when Sanders asked him to credit the $200 which he, Sanders, owed McOlintock, on a note for $2,500 which Sanders claimed McClintock owed Mm. McClintock, when he. was shown the note, admitted the signature to be his own, but he seemed to have no recollection about the matter, and his whole attitude was one of doubt. The chancellor was justified, under the circumstances, in holding that he only agreed to the credit being placed upon the note because of his confidence in Sanders. This view is strengthened by the fact that, when Morrow asked McClintock afterwards about the payment of the note, McClintock said that he would have to look the matter up. McClintock was a very old man, and had gone in there in the beginning to collect $200 which Sanders owed him, and, under the circumstances, we do not attach any importance whatever to the receipt which has been introduced in evidence. Morrow admits that McClintock 'asked for the receipt in order to have something to show Sheets, if he should ever ask him about the matter. The whole attitude of McClintock was one of doubt and perplexity about the matter. The chancellor was justified in holding that his consent to the credit on the note afforded no just ground to infer his intention to renew the promise of its payment. In this connection it may be stated that the note showed on its face that it was barred by the statute of limitations, and, although it had been due for several years, no attempt seems to have been made to collect it until McClintock presented his demand for the payment of the $200 which Sanders owed him. Hence we are of the opinion that the chancellor was justified in finding that the evidence offered by appellants in the present case falls short of proving an acknowledgment of the debt sued on sufficient to form the basis of a new promise.

It follows that the decree must be affirmed.


source: Caselaw Access Project

author: Hart, C. J., Hart, C. J.

license: Public Domain

text:
    Hall v. Mitchell.
    Opinion delivered December 5, 1927.
    1. Acknowledgment- — falsity.—A proper acknowledgment is an essential part of the execution of the conveyance of land, and it is competent for the grantor to show the falsity of the certificate of acknowledgment.
    2. Acknowledgment — false certificate. — Where a grantor does not acknowledge a deed, and the officer makes the certificate that the grantor did appear, the act of the officer is without authority of law, and void.
    3. Deeds — forgery.—An estate in land cannot be divested by forgery.
    4. Homestead — nonjoinder of wife. — A mortgage on a homestead is void where the wife of the mortgagor did not join in the mortgage.
    5. Homestead — nonjoinder of wife — evidence.—In a suit by a wife to set aside a mortgage on the homestead, evidence by the wife that she did not sign the mortgage, and that her husband signed both his own and her name to the mortgage, authorized a finding that she did not sign the mortgage.
    6. Mortgages — effect of curative act. — The curative act with respect to mortgages and deeds held only intended to cure defects in execution of a mortgage, and not to render valid an instrument which was absolutely void in the beginning, and hence could ■not render a mortgage effective against a person not signing same.
    Appeal from Union Chancery Court, Second Division; George M. LeCroy, Chancellor;
    affirmed.
    STATEMENT BY THE COURT.
    Appellees, who are the widow and heirs at law of Joel Mitchell, deceased, brought this suit in equity against C. R. Hall to set aside a mortgage on the homestead of said decedent as a ©loud upon their title, and also prayed that they 'be permitted to pay off the amount due upon said mortgage.
    The record shows that Joel Mitchell executed a mortgage to C. R. Hall upon a tract of land comprising 77 55/100 acres in Union County, Arkansas, to secure the sum of $512.48. The mortgage also purports to have been signed by E. L. Mitchell, as wife of Joel Mitchell, and the mortgage also purports to have been duly acknowledged by Sid' Pepper, a notary public.

      Mrs. E. L. Mitchell was a witness for appellees. According to her testimony, the-land embraced in the mortgage was the homestead of Joel Mitchell, upon which she and her husband, together with their children, resided at the time the mortgage was given. The mortgage purports to have been executed on February 25, 1922. She never signed the mortgage,, or authorized her husband or any one else to sign it for her. She never acknowledged the mortgage. Joel Mitchell died in October, 1924. The mortgage itself was introduced in evidence, and also specimens of handwriting of Mrs. E. L. Mitchell. An expert in handwriting was introduced as a witness for appellees, -and testified that he had examined the signatures to the mortgage, and that the same person signed the names “Joel Mitchell” and “E. L. Mitchell” to the mortgage. This witness also examined the signature “E. L. Mitchell” as it appeared in the mortgage, and stated that the person who wrote it was not the same person as the one wdio signed E. L. Mitchell on the papers shown to him. It was shown that Mrs. E. L. Mitchell was the one who signed the name “E. L. Mitchell” on the papers shown to this witness.
    Sid Pepper was introduced as a witness for appellant. According to his testimony, he took the acknowledgment to the mortgage, but stated that it was possible that Joel Mitchell signed both names to the mortgage. He stated further, however, that he read the mortgage over to the wife of Joel Mitchell, and thought she signed it.
    The chancellor found the issues in favor of appellees, and a decree was entered, canceling and setting aside the mortgage as a cloud upon the title of appellees. To reverse that decree appellant has duly prosecuted an appeal to this court.

      Pat McNalley and Jordrni Sellers, for appellant.

      B. M. Hutchins, for appellee.
   Hart, C. J.,

(after stating the facts). The decree of the chancery court was correct. A proper acknowledgment is an essential part of the execution of a conveyance of land, and it is competent for the grantor to show the falsity of a, certificate of acknowledgment. Where the grantor does not acknowledge the deed and the officer makes a certificate that the grantor did appear, the act of the officer is without authority of law, and void. No one can claim that an estate in land can be divested by forgery, and every one must be subject to the risk of forg’ery by officers authorized to take acknowledgments. Miles v. Jerry, 158 Ark. 314, 250 S. W. 34; and Wilson v. Biles, 171 Ark. 912, 287 S. W. 373.

A mortgage as to the homestead is void where the wife of the mortgagor did not join in the mortgage. Ferrell v. Wood, 149 Ark. 376, 232 S. W. 577, 16 A. L. R. 1033. In the present case, the wife testified in unequivocal terms that she did not sign the mortgage. The mortgage itself was introduced in evidence, and has been brought up to us for examination. It is plain from an examination of it that the same person signed both names to the mortgage. It is conceded that Joel Mitchell signed his own name to the mortgage, and an inspection of the mortgagé shows plainly that he must have signed the name of his wife to it. Then, too, admitted signatures of the wife appear in the record, and have been brought before us for examination. They show that the person who signed them did not sign the name of E. L. Mitchell to the mortgage. Under these circumstances we think the court was right in holding that Mrs. E. L. Mitchell did not sign the mortgage, and, the mortgage being on land which was the homestead of Joel Mitchell, it was void because she did not sign it.

It is next insisted by counsel for appellant that the judgment should be reversed because, after the mortgage was signed, the Legislature passed a curative act with regard to mortgages and deeds, which was held to be valid in Sanders v. Flenniken, 172 Ark. 454, 289 S. W. 485. That ease, however, does not help appellant any. A curative statute is only intended to cure defects in the execution of a mortgage, and cannot, in the very nature of things, render valid an act which was absolutely void in the beginning. In short, if a party h)ad never signed a mortgage or deed, and it should be held that a curative act which was passed afterwards could have the effect of making the. mortgage or deed effective as far as the person who did not sign it is .concerned, this would.necessarily have the effect of depriving such person of his property without due process of law. The curative act in question did not purport to cure anything except defective instruments, and does not purport to render valid and effectual an act which had never been done.

It follows that the decree must 'be affirmed.

Hart, C. J.

Counsel for appellant earnestly insist that in our original opinion we misinterpreted the effect of the decision in Sanders v. Flenniken, 172 Ark. 454, 289 S. W. 485, and that our decision in this case is opposed to the principles therein decided. We do not think so.

In that case the .court had under consideration the effect of a curative statute as applied to the grantors of a deed. The Legislature, when enacting our homestead statute, could have dispensed with any requirement as to the wife signing it, and, this being so, it had the authority, where no vested rights are affected, to do the same by subsequent legislation. The right which a curative statute or healing’ act takes away in such a case is the right in the party to avoid his contract. Such legislative acts are sustainable only because they are supposed not to operate upon the deed or contract by changing it, but upon the mode of proof. Green v. Abraham, 43 Ark. 420, and Johnson v. Richardson, 44 Ark. 365.

In the Sanders case the grantors in the deed signed it, and intended to be bound by their act in doing so'. Hence it is said the curative act applied in so far as. their rights were concerned. There is a wide difference, however, between that case and the present one. Here the wife of the grantor did not sign the deed at all, and did not intend to be bound by its provisions. Here the signature to the deed was a forgery, and no subsequent act of the Legislature could malte valid aud binding an act which she had never done or attempted to do. This would render the act unconstitutional, if it should be so construed.

The petition for rehearing will be denied.


text:
    State v. Haynes, Shick and Austeel.
    Opinion delivered December 5, 1927.
    1. Carriers — regulation of motor vehicles. — Under Acts 1927, p. 257, placing motor vehicles under the ¡control of the Arkansas Railroad Commission when operating a service between cities or towns, the term “between cities or towns” is used to designate the' termini of the line or route, and it makes no difference whether the station at which passengers or freight are loaded and unloaded is within the corporate limits or just outside the corporate limits of the cities or towns which are the termini of the route.
    2. Carriers — regulation of motor vehicles between cities and towns. — Under Acts U)27, p. 257, regulating motor transportation between cities and towns, the word “town” as used in its popular sense means an aggregation of houses so near one another that the inhabitants may fairly be said to dwell together; and a “city” means a large town, which is a municipal corporation charged with specified duties of government within its limits.
    3. Carriers — operation of taxicab. — One operating a taxicab in a city who occasionally goes outside of the city to deliver passengers was not within the provisions of Acts 1927, p. 257, placing commercial motor transportation under the Railroad Commission.
    4. Carriers — operator of sight-seeing bus. — The operator of a sight-seeing bus commencing its journey in the city of Hot Springs, and going to Remmel Dam and certain springs near, and returning to Hot Springs, but going- through no cities or towns in making the trip, did not come within the provisions of Acts 1927, p. 257, placing commercial motor transportation under the Arkansas Railroad Commission.
    5. Carriers — operator of taxicab service. — One • operating a taxicab service from hotels and the city of Hot Springs to the Hot Springs Country Club or golf course about three miles from the city limits, where he did not go through any cities or towns, was not within the provisions of Acts 1927, p. 257, placing commercial motor transportation under control of the Arkansas Railroad Commission.

      Appeal from Garland Circuit Court; Earl Wilt, Judge;
    affirmed.
    STATEMENT BY THE COURT.
    Separate indictments were returned against John W. Haynes, Jr., Alf Shick and Porter W. Austeel, charging them with a violation of the provisions of an act passed by the Legislature of 1927, placing commercial motor transportation under the Arkansas Railroad Commission, under certain conditions.
    Under the agreed statement of facts, John W. Haynes, Jr., is the owner of a motor vehicle commonly called a taxicab, and occupies a stand on one of the streets in the city of Hot Springs, Garland County, Arkansas, under an ordinance passed by the city council. He has paid the State Highway Department for a license for his car, as required by statute, and has paid to the city of Hot Springs the license fee provided by ordinance for operating a taxicab upon the streets of said city. Haynes does a general taxicab business in said city, and also accepts passengers for hire, to be delivered to points outside of the city limits of Hot Springs, but he does not operate his taxicab over a fixed route between different towns or points.
    According to the agreed statement of facts, Alfred Shick is the owner of a motor-propelled vehicle, commonly known as a sight-seeing bus, and maintains a stand on one of the streets of the city of Hot Springs under the provisions of a city ordinance'. He has paid the license fee to the State Highway Department required by statute, and has paid to the city of Hot Springs the license fee required by ordinance for operating said sightseeing bus in said city. He carries passengers in his sight-seeing bus to points in and outside of said city, including Remmel Dam and certain springs, which axe specifically named. None of these places, however, are cities or towns, and, in making the sight-seeing trip, the defendant does not pass through any city or town. He operates his bus over no regular circuit on the highways of the State.

      According to the agreed'statement of facts, Porter W. Ansteel is the owner of a motor-propelled .vehicle commonly known as a taxicab, and maintains a stand on one of the streets of the city of Hot Springs under an ordinance of said city. He has paid to the State Highway Department the license fee required by statute, and also has paid the license fee required under the ordinance of the city of Hot Springs for operating his taxicab in said city. He does a general taxicab business in said city, and also operates a taxicab between the hotels of the city of Hot Springs and the Hot Springs Country Club, which is a distance of about three miles from said city. In going to and from the city of Hot Springs to the golf course at said country club, he traverses no town or city, and the Hot Springs Country Club is not a town or city.
    In each case the circuit court was of the opinion that the provision of the statute under which the indictments were returned had not been violated, and judgment was rendered accordingly. Prom the judgments rendered an appeal to this court has been duly prosecuted in each case by the State.

      H. W. Applegate, Attorney General, and Hal L. Nor-wood, Assistant, for appellant.

      A. T. Davies, for appellee.
   Hart, C. J.,

(after stating the facts). The three cases have been consolidated for the purposes of appeal, and involve the construction of act 99, approved March 4,1927. Acts of 1927, p. 257. Under § 1 of the act there is a proviso that the term “motor vehicles” or “motor-propelled vehicles” as used in the act shall only include a motor vehicle operating a service between cities or towns. The section also provides that the term “improved public highway,” wherever used in the act, means every improved public highway in the State which is or may hereafter be declared to be a part of the State highway system, or a county highway system, or the streets of any city or town. The act contains fourteen sections, and provides that every corporation or person operating motor vehicles within the terms of the act shall procure a license therefor from the Arkansas Railroad Commission, and comply with the reasonable rules and regulations prescribed by said commission. Section 8 makes it a misdemeanor to operate a motor vehicle as provided in the act without first securing a permit from said commission. Section 10 provides that no city or town shall impose any tax or license, upon a motor-vehicle carrier licensed under the provisions of the act. Other provisions of the act show that it was the intention'of the framers of it to apply it to motor vehicles being operated over fixed routes and as a common carrier of passengers or of freight.

It will be noted-that subdivision D of § 1 contains the'following: “Provided, the terms ‘motor vehicles’ or ‘motor-propelled vehicles’ as used in this act shall only include a motor vehicle operating a service between cities or towns.”

Other provisions of the act show that the motor vehicles coming within its terms are common carriers which operate over a fixed route.

We are of the opinion that the term “between cities or towns” is used to designate the termini of the line or -route, and it would not make any -difference whether the station at which passengers or freight are loaded and unloaded were within' the corporate limits or just outside the corporate limits of the cities or towns which are the termini of the route.

In Murray v. Menefee, 20 Ark. 561, the court had under consideration a statute relative to locating ferries in or near cities or towns where the public convenience may require it. The court said that in this country there seems to be no precise legal definition of the term town, and that it was used in the statute in its popular sense. In that ease the place claimed to be a town had a business house, dwelling houses for two families, and the population of the two families embraced six persons. The court said to call the place a town in any sense would be an obvious misapplication of the term. Again, in Clements v. Crawford County Bank, 64 Ark. 7, 40 S. W. 132, 62 Am. St. Rep. 149, the court had under consideration what constituted a town or village within the meaning of our Constitution relating to homesteads, and again approved the definition of the word as used in its popular sense in the first case cited. Hence it may be said that the word “town,” as used in the statute, is to-be considered in its popular sense as an aggregation of houses so near one another that the inhabitants may fairly be said to dwell together. 38 Cyc. 596.

The word “city” in the United States denotes a large town, and is a municipal corporation charged with certain specified- duties of government within its territorial limits. 11 C. J. 787, and Ford v. Delta & Pine Land Co., 164 U. S. 662, 17 S. Ct. 230, 41 L. ed. 590.

We think that the framers of the statute in question used the words “city” and “town” in the popular sense, as above stated, and only meant to place within the jurisdiction of the Arkansas Railroad Commission common carriers operating motor vehicles over a fixed route between cities and towns. The cities or towns are required to be the termini of the route. Stations might be established within, or reasonable distances without, the limits of said cities or towns for the purpose of receiving and discharging passengers or loading and unloading freight.

Under the agreed statement of facts, none of the defendants came under the provisions. of the act.

Haynes was operating a taxicab in the city of Hot Springs, and the mere fact that he went outside of the city on certain occasions to deliver passengers did not bring him within the provisions of the act in question.

The agreed statement of facts shows that Shick operated a sight-seeing bus, commencing its journey in the city -of Hot Springs and going to Re-mmel Dam and certain springs near, and returning to the city of Hot . Springs. In making the sight-seeing trip the bus did not go through any city or town. Consequently the operator did not come within the provisions of the statute.

Under the agreed statement of facts, Austeel operated a taxicab service from the hotels in the city of Hot Springs to the Hot Springs Country Club, or golf course, which was about three miles from the city limits. In going to and from the city to the golf 'course he did not go through any city or town. He only went to and from the hotels in the city to the golf course, when passengers desired such service.

The defendants all complied with the ordinance of the city of Hot Springs regulating the operation of taxicabs, and we are of the opinion- that, under the. facts stated, the defendants were not operating motor vehicles as prescribed in the act, and that the circuit court properly held that the Arkansas Railroad Commission had no jurisdiction over* them. It follows that the judgment in each case will be affirmed.


text:
    Duncan v. Jonesboro.
    Opinion delivered December 5, 1927.
    1. Municipal corporations — motor vehicle license. — A taxicab operator, operating a motor vehicle as a common carrier between the city of Jonesboro and the town of Nettleton, under the provisions of Acts 1927, p. 257, and having secured a permit from the Railroad Commission, was not required to have in addition a license from the city of Jonesboro, though most of his revenue was derived from passengers within the corporate limits of the city of Jonesboro.
    2. Carriers — taxicab service between city and town. — A taxicab operator operating as a common carrier between the city of . Jonesboro and the town of Nettleton, having complied with the terms of Acts 1927, p. 257, and having obtained a permit from the Railroad Commission to operate between such city and town', had a right to receive passengers at stations along the line of his route or to accept and receive passengers and discharge them on signal.
    Appeal from Craighead Circuit Court, Jonesboro District; G. E. Keck, Judge j
    reversed.

      STATEMENT OE THE COURT.
    The city attorney of the city of Jonesboro filed an information against Hillie Duncan, charging that he was operating his taxicab in said city without having paid the license required hy an ordinance of the city.
    Under the agreed statement of facts, Hillie Duncan is a common carrier, with his headquarters and place of business in the city of Jonesboro, Craighead County, Arkansas. As such common carrier he operates a motor-propelled vehicle between the city of Jonesboro and the town of Nettleton, both in the State of Arkansas. In operating his motor vehicle between the city of Jonesboro and the town of Nettleton he meets most of the passenger trains arriving and departing from the station of the Missouri Pacific Railroad in the town of Nettleton. He also stops his motor vehicle to take up and discharge passengers at different points within the city of Jonesboro, and stops on signal at points in the country between the city of Jonesboro and the town of Nettleton for the purpose of receiving and discharging passengers. Most of the revenue from operating his motor-propelled vehicle is derived from passengers within the corporate limits of the city of Jonesboro and at various points in the country between the city of Jonesboro and the town of Nettleton.
    A judge of the municipal court of the city of Jonesboro found the defendant guilty, and an appeal was duly prosecuted to the circuit court. The case was tried in the circuit court on the facts that are stated above, and the circuit court found the defendant guilty, and fixed his punishment at a fine of $25 and costs. The defendant has duly prosecuted an appeal to this court.

      Dudley S Dudley and A. U. Tadlock, for appellant.

      Penix S Barrett, for appellee.
   Hart, C. J.,

(after stating the facts). The ruling of the .circuit court was wrong. Under the agreed statement of facts the defendant was operating a motor vehicle under the provisions of act 99 of the Legislature of 1927, placing commercial motor transportation under the Arkansas Railroad Commission in. certain cases. Acts of 1927, p. 257. The defendant operated a motor vehicle between the city of Jonesboro and the town of Nettleton. It was operated over a fixed route, and had fixed termini. It did not 'make any difference that most of the money made by the carrier was in transporting passengers within the city of Jonesboro and to various places along the line in the country. He had complied with the terms of the statute, and the Arkansas Railroad Commission had granted him a permit to operate a motor vehicle between the city of Jonesboro and the town of Nettleton.. He had a right to receive passengers at stations along the line of his route, or to accept and receive passengers and discharge them on signal. This is the business carried on by him, and he was subject to regulation under the act in question, and was not subject to regulation by the city of Jonesboro as a person or company operating taxicabs within the city limits, as defined in the case of State of Arkansas v. Haynes, ante p. 645, this day decided.

It follows. that the judgment of the circuit court should be reversed, and, .inasmuch as the case was tried upon an agreed statement of facts, the prosecution will be dismissed here. It is so ordered.


text:
    Arkansas State Highway Commission v. Kerby.
    Opinion delivered December 5, 1927.
    1. Highways — assumption op indebtedness op road improvement districts. — Acts 1927, p. 17, §§ 1, 3, providing for assumption by the State Highway Commission of the bond issues of road improvement districts and for payment of such bonds as they become due, requires the payment of certificates of indebtedness given by district commissioners under the Alexander Road Law (Acts 1915, p. 1400), and Acts Sp. Sess. 1920, § 3; the term “bond,” used in the act of 1927, covering all written obligations for payment of money legally issued by commissioners for the purpose of constructing improved roads.

      2. Statutes — meaning of words previously construed. — It is presumed that the Legislature in framing a particular act used the word “bond” in the sense that this court had previously interpreted the word to mean, in statutes heretofore enacted covering the same subject.
    Appeal from Saline Circuit Court; Thomas E. Toler, Judge;
    affirmed.
    STATEMENT OF FACTS.
    This appeal is prosecuted by the Arkansas State Highway Commission to reverse la judgment of the circuit court ordering the Arkansas State Highway Commission to take over and pay certain certificates of indebtedness issued by the commissioners of Road Improvement District No. 4 of Saline County, Arkansas.
    The record shows that Road Improvement District No. 4 of Saline County, Arkansas, was organized in 1919 under what is commonly known as the Alexander Road Law, and a contract was entered into- between the commissioners of the district -and J. P. Ker-by for the construction of the improved road. It was subsequently ascertained that the improvement could >not be completed within the thirty per cent, -assessment as provided by the Alexander Road Law. At a special session of the Legislature in 1920 a special act was passed. Hnder § 3 of this act the board of commissioners was directed to carry out the plans as they then 'Stood, or to revise them; and, in order to carry out the work of improvement, said commissioners were authorized to borrow money in a sum not exceeding $50,000, and to issue therefor negotiable bonds of the district, payable at such time and place as the board might determine, bearing interest at the rate of six per cent, per annum. The commissioners issued and sold bonds in the sum of $50,000, and the improvement was completed -according to the plans, but it cost considerably more than the amount of the bond issue.
    J. P. Kerby brought suit in equity against the district for the balance due, and recovered judgment in the sum of $14,353.05, which 'sum and the accrued interest, together with a master’s fee, amounted to $16,000.

      A more complete history of the matter appears in Road Improvement District v. Ball, 170 Ark. 522, 281 S. W. 5. In that dase the court said that the special act of 1920, above referred to, approved the plan for the improvement and directed the commissioners to carry out the plans. It was further stated that this necessarily implied the authority to levy a tax upon benefits sufficient to pay the cost of the improvement, and operated as a repeal of the inconsistent limitation in the general statute, in so far as it applied to this particular district. The court held, in effect, that the specific direction to the commissioners in the special act to construct the improvement according to the plans removed the limitation upon the cost of the improvement. The court said that the express authority to issue bonds did not operate as a limitation of the authority to construct the improvement. Hence the complaint of Ball, which sought to set aside the-decree of the chancery court in favor of Kerby against the road district, was ordered dismissed. This left the decree -of the- chancery court in favor of Kerby against the road district in full force, and, pursuant to its terms, the commissioners issued certificates of indebtedness in favor of J. P. Kerby and his associates in the sum of $16,000. These certificates of indebtedness bore interest from date until paid at the rate of six per cent, per annum. Each certificate recited that Road Improvement District No. 4 of Saline County, Arkansas, was due the person named in the certificate the -amount of money recited in it, but the certificates were made payable at different times. Each certificate was signed by the commissioners of the district. The circuit court was of the opinon thiat these certificates fell within the provisions of the Martineau act, plas-sed by the Legislature of 1927; that they are bonds within the meaning of the act; and that the Arkansas State Highway Commission, having taken over the improved road in question, under the terms of the act, it became its duty to'pay all of the said certificates of indebtedness involved in this ease which became due after January 1, 1927. Judgment was rendered accordingly; and, as above stated, the case is here on appeal.

      II. W. Applegate, Attorney General, for appellant.

      Arthur G. Thomas, Browse & McDaniel and Carmichael (& Hendricks, for appellee.
   Hart, C. J.,

(after stating the facts). The correctness of the holding of the circuit court depends upon the interpretation to be placed upon the provisions of act 11, approved February 4, 19'27, Acts of 1927, p. 17. Under § 1 it is declared to be the policy of the State to take over, construct, repair, maintain and control all the public roads in the. State comprising the State highways as defined in the act. Section 3 provides for the amount of outstanding bonds to be determined, and for payment each year as they become due. Section 3 reads, in part, as follows:

“The commission shall, as soon as possible, ascertain the amount of the outstanding valid bonds issued by road improvement districts in this State, the date of the maturities thereof, and the annual interest due thereon, and it shall be the duty of the' circuit clerk of each county to furnish the commission with such information. The commission shall, each year, beginning with the year 1927, allot to each road district in the State having outstanding bond issues an amount equal to its bonds maturing during the year, together with the interest payable by such districts during the year, plus a paying charge of one-eighth of one per cent, of bonds to be paid and one-fourth of one per cent, of interest to be paid, and shall certify to the State Auditor the amount allotted to each road district. ’ ’

The second paragraph of the section is as follows:

“In case the appropriation of six and á half million dollars allotted to the road improvement districts is insufficient to pay in. full the maturing bonds and interest for the year, the commission shall allot to each district its pro rata of such appropriation.”

The last paragraph of the section is as follows:

“All of the road districts referred to in this section are hereby taken over by the State, but only such portions of such roads which are now or may hereafter he embraced in the State highway -system .shall be maintained by the State.”

The term ‘ ‘bond, ’ ’ as used in the act as labove quoted, evidently refers to the term “bond” as used in acts' creating road improvement districts, and authorizing the commission to borrow money to construct the improved roads, and to' issue negotiable -interest-bearing bonds therefor.

In Davenport v. Dodge County, 105 U. S. 237, 26 L. ed. 1018, a county bond was defined to be an instrument that implies that an obligur is bound to do what it is agreed shall be done. This is substantially what this court has held bridge land highway improvement district bonds to be.

In Arkansas Foundry Co. v. Stanley, 150 Ark. 127, 233 S. W. 922, it was held that, under the special act creating a bridge district and authorizing the commissioners to sell bonds at not less than par, and to pay interest at not more than six per cent., and to pledge the assessments, as security, such commissioners are authorized to- borrow money from banks at the prescribed rate and pledge the 'assessments therefor.

Section 9 of the act provided that, in order to- do the work, the bolard might borrow money at a rate -of interest not exceeding six per cent, per -annum, might issue- negotiable bonds therefor, signed by the chairman and secretary -of the board, and -pledge and mortgage all assessments for the repayment thereof. The .section further provided that the bonds.should not be disposed of at less than par.

It was contended by an owner of real property within -the bridge district, who brought suit, that the act only authorized the commissioners to issue negotiable -bonds, and that the commissioners were about to borrow money from the banks -of the city of Little Rock and to pledge the assessments for the security -of the said loans, in violation of the provisions of the act. The court s-aid the issuance -and sale of the bonds -of the district was nothing. more than borrowing money by the commissioners for the purpose of constructing the improvement. The court further said that the bonds of the district would be nothing more than evidence of indebtedness of the district, and it would make no difference whether the commissioners borrowed the money in the city of Little Rock or from banks or other persons elsewhere. Consequently, it was held that the chancery court rightly sustained a demurrer to this paragraph of the complaint. This was tantamount to holding a bond and a certificate of indebtedness such as was issued in the case at bar were substantially one and the same thing, and that to hold otherwise would be to put form above substance.

In the later case of Road Improvement District No. 4 v. Southern Trust Co., 152 Ark. 422, 239 S. W. 8, it was held that, under a statute authorizing the board of commissioners of a road improvement district to borrow money iat a fate of interest not exceeding six per cent., and to issue negotiable bonds therefor, and to pledge, assign and mortgage all assessments for the repayment thereof, the board was. authorized to issue a negotiable note for borrowed money. It was contended that the district was not authorized to execute a negotiable note under the provisions of the act creating it. The court said:

“While the act does specify that the. board may ‘borrow money’ and may issue ‘negotiable bonds,’ yet the fact that the resolution designated the instrument to be executed for the money borrowed as a ‘note’ instead of a negotiable ‘bond,’ and the fact that the instrument took the form of a ‘note’ instead of a ‘bond,’ can make no difference. Where the indebtedness which the instrument represents is for money bofrowed, a technical compliance with the law as to the form of the instrument evidencing the debt, whether by negotiable note or negotiable bond, is wholly immaterial. Either would be evidence of indebtedness of the district, and, in the eyes of the statute, ‘note’ and ‘bond’ would be but convertible terms.”

Our earlier case of Arkansas Foundry Co. v. Stanley, 150 Ark. 127, 233 S. W. 922, was cited in support of the holding. We must presume that the framers of the act under consideration had these oases before them, and used the word “bond” in the sense this court had interpreted it to mean in the acts creating the road districts and authorizing the commissioners thereof to issue bonds for the purpose of securing money with which to construct the improvement. The evident and avowed purpose of the act under consideration was to aid road districts, which had become overburdened with debt, in the construction of the improved roads, and we are of the opinion that the word “bond” as used in the act wias meant to include promissory notes and certificates of indebtedness issued by the district for the purpose of constructing the improved roads;- and that the words “bond,” “note” or “certificate of indebtedness” are but convertible terms. In short, we are of the opinion that the expression “bond,” as used in the act under consideration, was intended to cpver all written obligations for the payment of money legally issued by the commissioners for the purpose of constructing the improved roads under the original acts creating the road districts.

Acts 112 (Acts 1927, p. 312) is supplementary to act 11 (Acts of 1927, p. 17), and there is nothing in its language or within the scope of its purpose to indicate that the Legislature meant to change the meaning of the word “bond.” Hence the meaning of the -word “bond” as used in act 11 is not changed by act 112. Neither do we think that, when the object and purpose of act 112 are considered in connection with act 11, the term “bond” was used in it in any different sense than it wra-s used in act 11. It is agreed that the road in the district under consideration was taken over by the Arkansas State Highway'Commission, and that it is a part of the highway system.

It follows that the judgment of the circuit court was correct, and it will he affirmed.


author: Wood, J.

text:
    Galloway v. Russ.
    Opinion delivered December 5, 1927.
    1. Sales — fraud in procuring contract. — ■'Where a ¡buyer signed a contract for the purchase of a refrigerating machine under a mistaken impression that the agent represented a different company, and was selling him a different machine from that which he actually purchased, the buyer was entitled to have the sales contract set aside for fraud of the sellers’ agent, who, though aware of the buyer’s mistake, failed to explain the true situation.
    2. Evidence — hearsay testimony. — Statement of a witness as to what a person told him is hearsay, and will not be considered in determining whether such person’s testimony is contradicted.
    3. . Contracts — effect of fraud and mistake. — Where there has been a mistake of one party as to a matter of fact accompanied by fraud or inequitable conduct of others knowing of such mistake, the contract may be reformed or canceled to conform to the intention of the parties, or may be rescinded in tolo, where there has been no meeting of the minds.
    4. Contracts — signature obtained by fraud. — The rule that one who signs a contract after opportunity to examine it, cannot be heard to say that he did not know what it contained, does not apply where the signature of a party was obtained through fraud,. trickery, or inequitable conduct upon the part of the other party to the contract.
    5. Sales — fraud in procuring contract. — Where the agent for the sale of a refrigerating machine knew that the prospective buyer was under a mistake of fact as to what machine he was selling, but failed to inform the buyer of his mistake before he signed the contract, the buyer was not precluded from subsequently denying knowledge of its contents, though he had opportunity to examine the contract.
    6. Sales — rescission—tender of condition precedent. — Where a buyer of a refrigerating machine notified the sellers that they did not accept the machine, and the sellers informed them that they thought they could hold them under the contract, the buyers were not required to tender a return of the machine as a condition precedent to maintaining an action under the sales contract.
    7. Cancellation of instrument — necessity of tender. — Where it is evident that a tender will not be accepted, no tender- need be made as condition precedent to cancellation.
    Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor;
    affirmed.

      Carmichael & Hendricks, for appellant.

      Owens & Ehrman, for appellee.
   Wood, J.

This is an action by J. T. Buss áncl C. L. Buss, under the name of Buss Market, against David Galloway, Jr., and Walter E. Woodward, trading under the firm name of Galloway & Woodward Company, to cancel a certain contract. The plaintiff set up the contract, alleged that it was obtained through fraud and-misrepresentation, and alleged that he had paid the sum of $63 on the contract. He prayed that the contract -be canceled and that he have judgment for the -amount which he had plaid thereon-. The defendants admitted the contract, but denied that it was obtained through fraudulent misrepresentation, and denied all the other material allegations of the complaint. They set up, by way of cross-complaint, the contract, and. prayed that they have judgment for the balance due thereunder, and that the same be declared a lien upon the Liipman machine, and, if the judgment be not paid, that the same be sold to satisfy the judgment.

The testimony o<f C. L. Buss is substantially as follows : C. L. Buss and J. T. Buss operate a meat market in the city of Little Bock. G. L. Buss is a silent partner in the firm, and was also secretary o-f a retail grocers ’ and butchers ’ association. • This association maintained an office, where O. L. Buss stayed and put in his time looking after the affairs of the association, which association paid him a salary. This office was separate and distinct from his business, which was carried on at a different place by his brother, J. T. Buss. A Frigidaire electrical refrigerating machine was installed in the office of the witness for the purpose of demonstrating, by the W. P. Galloway Company, of Little Bock, Arkansas, which company was the distributing agent of the Frigidaire Company for this territory. The Buss Market had decided to install at its place of business a Frigidaire machine. -C. L. Buss called the Galloway Company, and requested it to send its representative to his office. A couple of days thereafter Marshall Purvis -and David Galloway, Jr., came to his office. Purvis had formerly been the representative of the W. P. Galloway Company as salesman of the Frigidair© machine. He it was that 'arranged with C. L. Buss for the installation of the Frigidaire machine in Buss’ office. Purvis, it appears, had left the W. P. Galloway Company, and was engaged in .selling Lipman refrigerating machines for the Galloway & Woodward Company. C. L. Buss had not been inf ormed that Purvis had quit the employ of the W. P. Galloway Company. When Purvis and David Galloway, Jr., came to his office they informed C. L. Buss that his brother, J. T. Buss, had refused to buy a refrigerating machine unless he, C. L. Buss, signed the contract. C. L. Buss, previous to that time, had been trying to persuade his brother to put in a refrigerating machine, so, when Purvis and David Galloway, Jr., who he supposed were representing the Frigidaire people, informed him that his brother was willing to buy if he would sign the 'contract, he replied, “Why, you bet your life, I will sign it.” He took them over to the machine which had been installed at his office for demonstration purposes, and showed them points that he had found in it which he did not know before. They were ready to sign the contract, and asked C. L. Buss to sign, and he told them thiat he preferred for his brother to sign, and they replied, “He will not do so unless you sign it.” Thereupon C. L. Buss signed the contract, and told them that he preferred for the Buss Market to give the check because he, C. L. Buss, was the silent «partner, but he stated that he would give the check if. his brother was not at the market. He signed the contract, and they went down to the Buss Market for the check, and, while one of them was down there waiting for the check, Marshall Purvis came back and «said to 0. L. Buss, “Now, listen: you were under the impression you were buying a Frigidaire, weren’t you?” and Buss said, “You bet I was.”Purvis said, “I am representing the Lipman Company.” C. L. Buss replied, in substance, that he didn’t want the Lipman at all, and he and Purvis and David Galloway, Jr., began to argue about the comparative merits of the Lipman and the Frigidaire, C. L. Buss insisting that he preferred the Frigidaire and Purvis and Galloway insisting that he take the Lipman. He finally told them he would wait and see if the Frigidaire was satisfactory, and, if not, he would- take the Li-pman. Purvis said, “They have got a Frigidaire on demonstration in the office- here — we will put one -on demonstration in your brother’s -place in the -store -down there.” After further conversation as to the respective merits of the two machines and the prices thereof, C. L. Buss finally consented that the Lipman Company put one in at the market, saying, ‘ ‘ You -can put it in for demonstration, but it is the understanding that I am not going to buy it. ’ ’ At that time Buss had signed the contract, but had not signed -the notes, and informed them that he was not going to sign the notes and that he would not purchase the Lipman unless it was a better machine at the same price. A few day-s thereafter 'Mr. W. P. Galloway went to O. L. Bu-s-s’ office and said to him, “Buss, I understand you thought you were buying a Frigidaire?” and Buss -said, “I -sure did.” Mr. Galloway said, “I regret that; I do not appreciate any salesman of -ours -attempting to get business that way,” and further said, “We are going to discharge him for that.” C. L. Buss replied, “I hate to have that happen, but that’s his business; he knew that I thought I was buying a Frigidaire. ” C. L. Buss made no deal with anybody except Purvis. He went down to the Galloway & Woodward Company land looked at -a Lipman machine. They told him all about it. He told them that somebody was an awful liar about the Lipman, and the only way to show was by demonstration. When the Lipman machine came, they sent C. L. Buss the freight bill, and he refused to pay it. They wanted bi<m to furnish the plumber, but he refused to do that, on the theory that it was not his -duty to furnish a plumber when they were putting- in the machine for demonstration, when the Frigidaire -Company had put in its machine for demonstration without -any expense. Buss concludes his testimony on examination in chief by saying there was not to be any sale until after thirty days and the machine proved to be just what witness wanted, then they would malte the sale. Witness thought Purvis was the Frigidaire man, because he came to witness ’ office and arranged for the demonstration of the Frigidaire there. On cross-examination the witness stated that the first signature on the contract was his and the other was his brother’s. Witness did not look at any part of the contract, nor read it when he signed it. There was no effort made to keep him from reading it, but witness was in a hurry to •go down and get the check before his brother left the market. The only way witness was misled about the contract was that he thought he was dealing with a Frigidaire man. The notes were not to be signed until after the machine was demonstrated, and Purvis stated that witness Avas under no obligation until he signed the notes, and that he would not have to sign the notes until the machine had run thirty days. Witness then told him he could put the machine in on demonstration. The machine was put down'at the market, but had never been installed. Witness h,ad no interest in the siale of the Frigidaire machine. When the Galloway & Woodward Company told Avitness they expected him to pay for the installation of the Lipman, he decided that it Avas a fraud all the way through, and refused to do so.

The testimony of J. T. Buss substantially corroborated the testimony of C. L. Buss.

David GalloAvay, Jr., testified that he was the Galloway & Woodward Company. The contract Avas'turned in by his representative, Purvis. It was accepted !by the witness, and forwarded to the company he represented. When the Lipman machine came, Avitness paid the freight on the shipment. The contract was never canceled by the plaintiffs. After the machine had been delivered, Buss called witness over the ’phone and said he Avanted to cancel the contract. The morning C. L. Buss signed the contract he was in Avitness’ office, laughing over the whole thing as if it were a joke. He said he didn’t know AAffiat the Frigidaire people would say, as he kept one of their machines on display in his office, land thought they Avould get mad. Witness stated that neither of the plaintiffs said anything to witness- about putting a machine on display. The -amount due under the contract was $630, and the -plaintiffs had paid $63. Purvi-s was witness’ salesman on commission. .All contracts he entered into for the sale of the Lipman machine were subject to witness’ approval. Purvis was not discharged from witness’ employ, but left about two weeks -after this machine arrived. Witness knew of mo agreement that Purvis had with the plaintiffs to cancel the contract. The contract was not binding until it was approved by the witness. Purvis had no authority to cancel the contract, and said nothing to witness about it. Witness did not tell Russ that Purvis ’ authority was limited -by the contract. Witness paid Purvis $70.50, his commission on the sale. Witness talked with Russ at his office 'same time after tho contract had been made — probably two or three weeks afterwards. Russ complained that Purvis had led him to believe he was buying a Prigidaire. Witness told Russ that witness did not approve -of that, and did not believe in misrepresenting anything.

Woodward testified that the first he knew of the transaction was when Purvis brought the order into the office. The next day O. L. Russ came to the office and talked with ‘Terry and the Galloways. About two days later he came back, and said he wished to cancel the order because a lot of things had been told him that were not true. Witness and Mr. Galloway, 'Sr., went to see C. L. Russ, and Galloway -said he wanted to talk with C. L. Russ’ brother also, but C. L. Russ replied, “That is not necessary.” In this conversation he said he thought he had bought a Prigidaire, -and that Purvis had misrepresented things to him, hut he made the -statement also that he was glad he had bought a L-ipmlan. Witness then told Russ that they would-put in the machine-on thirty days’ trial, and, if it did not do what they said it would, they would take it back and give him his money back. Russ seemed very well pleased,, and .shook hands with them, and 'they left. Witness testified that, after the machine came and was delivered at the Russ Mjarket, they asked J. T. Russ about the location. A controversy then arose about the plumbers’ work for installation. The contract provided that the plaintiffs would pay for the plumbing. They did not agree to put the machine in on demonstration,-but the agreement was to go on through with the contract and to refund the money if the machine did not make good.

Terry testified, in substance, that he was employed by the defendants as refrigerating engineer. C. L. Russ came to his desk one morning, wanting to know something about the construction and cost of operating á Lip-man machine. Witness explained to him the relative merits of the Lipman and the Frigidaire, and Russ went away apparently satisfied, and .said nothing about canceling the contract. After the machine was delivered at the Russ Market he selected the place for the installation of the machine, but a controversy arose about the cost of installing same, and Russ said he would call witness next morning, but did not do so.

David Galloway, Jr., recalled, further testified that he went with Purvis to C. L. Russ’ office to sell him a Lip-man machine. Witness noticed that he had a Frigidaire in there. Purvis showed witness some adjustments on the Frigidaire. Russ did not sign the contract while they were there. After they left, witness remarked.to Purvis that Russ had the impression that he (Purvis) was representing the Frigidaire, and witness told Purvis that lie should not make a contract under such conditions. Witness waited in the car, and Purvis went 'back in and talked with Russ. When Purvis came back to' the car he said that he had explained to Russ that he was not buying a Frigidaire. When they afterwards went to the Russ Market, Purvis told Mr. J. T. Russ that his brother thought he was buying a Frigidaire, and, when he found out he was not, he said, “Oh, my God, what will W. P. Galloway Company say?” J. T. Russ took it in a laughing way, went in, signed the contract, and gave a check for $63. The contract was then turned in and accepted and mailed back to Russ. It was three or four days after the contract was signed that witness wrote Russ, sending him a copy of the contract. Witness never heard anything aibont the machine being put in for demonstration, but witness’ firm did guarantee them. Witness stated that he-was not present when the contract was signed, but had the impression that C. L. Russ thought at first, that witness and Purvis were representing the Frigidaire.

-0. L. Russ testified, in rebuttal, that he did not sign the contract after it was explained that they were selling Lipmans instead of Frigidaires. The contract was complete when brought to witness, except for his signature. They told witness, after that, that they were selling Lip-mans. They decided to put in the-Lipman machine on demonstration, and witness was asked. to pay for the installation, which he declined to do. Witness did not remember whether he received a copy of the original contract or not. He did not pay any attention to it after he had canceled it and they had agreed to put in the Lip-man on demonstration. It did not make any difference to witness how they handled it. After they had refused to pay for the installation, witness told them 'they -could not put it in at all. Witness had not, at that time, given any order for the Frigidaire, but did afterwards buy a Frigidaire, which the Frigidaire people agreed to put in on a-turn-key .job, just as they had already stated.

J-. T. Russ, on being recalled, denied that he had promised to have the plumbing done for the installation of the Lipmian. He stated that he asked their engineer who would puit it in, and he said that they did not do it. Then he told the engineer that he would call him the next morning.

The contract was in evidence. We deem it unnecessary to set it forth in detail. It is a contract signed by Russ Market, purchaser, by O'. L. Russ, J. T. Russ, and by M. Purvis as salesman, with the notation, “'Contract accepted,” signed by Galloway & Woodward Company, by................................................. By the terms of the contract the defendants proposed to furnish the Russ Market, at Little Rock, Arkansas, f. o. b. Beloit, Wisconsin, a Lip-man refrigerating machine. The machine was to be installed by the seller, and the water and electrical connections were to be installed by the purchaser. The contract contained certain guaranties on the part of the seller and certain promises on the part of the purchaser. The contract was not to be valid or binding on either party until accepted by the seller. The contract specified the terms upon which the payments were to be made, and, in much detail, set forth the agreements of the respective parties for the sale and purchase of the Lipman machine.

The trial court made a general finding in favor of the plaintiff against the defendants, and rendered a decree canceling the contract and for the plaintiffs in the sum of $63, from which is this appeal.

1. We have set forth above the substance -of the testimony, and it appears that the negotiations resulting in the written contract, which the appellee by this action seeks to cancel, were conducted on the part -of the appellant by its agent, M. Purvis, whose name is signed to the contract as salesman. The testimony of Purvis is not in the record, -and no explanation of his failure to testify is given by appellant.

C. L. Russ, who first signed the contract for the appellees, testified unequivocally that, when he signed the contract, he thought Purvis was the -agent of the Frigidaire, and he thought that he was purchasing a Frigidaire machine. He explained why he thought Purvis represented the Frigidaire people by saying that he had been representing that company, and -on Saturday he called the Frigidaire Company and told it to send its representative to see him, that he was' ready to buy, and, on Monday thereafter, Purvis and another man came to see him, and represented that they had seen his brother, who had refused to buy a machine unless he ('C. L. Russ) would sign the contract. He had been trying to persuade his brother to buy a refrigerating machine, and therefore, when the salesman called on him and gave him this information, they talked over the Frigidaire machine in his presence, and induced him to sign the contract by stating that his brother would not sign it unless he signed it. He further stated thiat he did not know at the time he signed the contract that Purvis was no longer representing the Frigidaire Company.

David Galloway, Jr., who went with Purvis to see C. L. Russ, testified that he was present when they were discussing refrigerating machines. He does not testify that he or Purvis represented to C. L. Russ that they were attempting to sell him a Lipman instead of a Frigidaire. He corroborates Russ ’ testimony to the effect that Purvis showed Russ certain adjustments on the Frigidaire which had been installed in Russ’ office; and, while David Galloway, Jr., testified that Russ did not sign the contract while the three of them were talking about refrigerating machines, nevertheless he .states that, after they had left, he (Galloway) remarked to Purvis that Russ had the impression that Purvis was representing the Frigidaire, and 'that he should not make a contract under such conditions; thiat Purvis thereupon went back and tallced with Russ, and returned with the contract, and stated that he had explained to Russ that he was not buying a Frigidaire. But this statement as to what Pnrvis told him when he returned to the car was mere hearsay, and leaves the testimony of C. L. Russ undisputed that, when he signed the contract, he thought he was purchasing a Frigidaire machine and that Purvis was representing that company.

The testimony of David Galloway, Jr., corroborates the testimony of C. L. Russ to the effect that, while witness and Russ and Purvis were talking about the purchase of a refrigerating machine, C. L. Russ was left under the- impression that Purvis was representing the Frigidaire Company, and not the Lipman Company. He. was not present when Purvis went back, as he says, to correct that impression, and therefore he could not know whether Purvis did correct that impression or not. Therefore, according to the only competent testimony on this issue, it must be taken as proved that, at the time C. L. Russ signed the contract under review, he was under the impression that Purvis represented the Frigidaire Company and was selling him a Frigidaire machine, and that Purvis and David Galloway, Jr., knew that C. L. Russ was under that impression. Although C. L. Russ was one of the appellees,' his testimony explaining why he did not read the contract before signing same is perfectly reasonable and consistent. He had a Frigidaire on demonstration in his office, was familiar with it, and wishe’d to purchase same, and thought he was doing so, as Purvis had been representing the Frigidaire Company, and did not inform him that he was no longer representing'that company, but, on the contrary, left him under the impression that he was still representing the Frigidaire Company. The explanation of why. he did not read the contract under the circumstances is clear, convincing and decisive.

The case, under the facts, comes squarely within the doctrine announced by the authorities generally, and by our own court, that, where there has been a mistake of one party accompanied by fraud or other inequitable conduct of the remaining parties to a contract, the same may be reformed or canceled to conform to the intention of the parties, where there is an agreement; or rescinded or canceled in toto' where there has been no meeting of thé minds. See Welch v. Welch, 132 Ark. 227, 234, 200 S. W. 139, and cases there cited. The rule is well expressed by.Mr. Black, in his work on Rescission and Cancellation, vol. 1, page 366, § 130, as follows:

“Where one of the parties to a contract is laboring under a material mistake as to a matter of fact, and the other party is aware of the mistake, and seeks to take advantage of it, knowing that the enforcement of the contract as made will result in an unwarrantable advantage to himself, with corresponding loss to the other party, his conduct is so unconscionable as to jusr tify the interference of a court of equity to rescind the contract or prevent its enforcement.” See cases cited in nóte; also C. H. Younger & Co. v. Springer, 113 Minn. 382, 129 N. W. 773, syl. No. 2.

In 13 O. J., at page 374, §§ 257, 258, it is said: “If a mistake on the part of one of the parties to. an agreement is caxisod by the other, it may entitle him to avoid the contract. One is not permitted to accept a promise which he knows that the other party understands in a different sense from that.in which he understands it. In such ¡a case there is no agreement.” See oases cited in note.

Learned counsel for appellants invoke the doctrine which has always been, and still is, adhered to by this court, that one who signs a contract, after opportunity to examine it, cannot be heard to say that he .did not know what it contained. See Colonial & U. S. Mortgage Co. v. Jeter, 71 Ark. 185, 71 S. W. 945; Mitchell Mfg. Co. v. Kempner, 84 Ark. 349, 105 S. W. 880; Stone v. Special School Dist., 119 Ark. 553, 178 S. W. 399; 6 R. C. L. 624. But in these cases there was no circumstance tending to show that the signature of one of the parties to the contract was procured through fraud, or trickery, or inequitable conduct upon the part of the other party to the contract. These cases are clearly differentiated from the case at bar by the facts, because here there were circumstances of fraud, trickery, or inequitable conduct on the part of one of the parties to the contract which caused the other party to sign the same under a mistake of fact, without reading the contract. Purvis and David Galloway, Jr., both knew that C. L. Russ thought that he was negotiating with them for the purchase of a Frigidaire machine. Under the circumstances it was incumbent on them to tell him, before he signed the contract, that he was mistaken. Candor and fair dealing demanded this much at their hands. Here the testimony of C. L. Russ convincingly proves that there was inequitable conduct on the part of Purvis, which amounted to fraud, if the appellants are allowed to reap the benefits of the written contract. Russ’ testimony clearly shows circumstances which excuse his failure to read the contract before signing it. Therefore the contract must fall. The trial court did not err in so holding.

2. The above issue involves the crux of this lawsuit. It was not necessary for the appellees to tender to the appellants the Lipman machine as a condition precedent to their right to maintain this action. The appellees were asserting no right or title to that machine under the written contract; they contended, and the preponderance of the evidence showed, that they made no claim whatever to the Lipman machine. 0. L. Russ and J. T. Russ contend that the Lipman machine was delivered at the Russ Market, not under the written contract, but under an oral agreement, to be installed for the purpose of demonstration, and that the appellants were to pay for the installation, which the appellants refused to do, and that the appellees thereupon notified the appellants that they would not accept the Lipman machine, and were informed by appellants that they thought they could hold the appellees under the written contract. Under these circumstances the appellees were» not required to tender to appellants the Lipman machine before the appellees could maintain their action for rescission and cancellation of the written contract. A tender is not required where it is evident that it will not be accepted. Dickinson v. Atkins, 132 Ark. 84-94, 200 S. W. 817, and cases there cited. See also Black on Rescission and Cancellation, vol. 2, § 625.

3. The trial court, under its general finding, must, have found against the appellants on the issues of fact upon which they bottom their contention that appellees have waived their right to cancellation, and are estopped by their conduct from maintaining the action.

After a careful consideration of the record we cannot say that the finding of the trial court on these issues is clearly against the preponderance of the evidence. The decree of the trial court is therefore correct, and it is affirmed.


author: Smith, J.

text:
    Fine v. Dyke Brothers.
    Opinion delivered December 5, 1927.
    1. Mechanics’ lien — estoppel.—No estoppel arose against an unpaid vendor, who did no affirmative act to induce a lien claimant, furnishing building materials to a purchaser, to advance the credit upon which the lien was claimed.
    2. Mechanics’ lien — furnishing materials to purchaser in possession. — Where plaintiffs furnished building material to a purchaser .in possession under a contract to purchase land, and later, upon purchaser’s default, the vendor declared the contract canceled, the plaintiffs had no right to an absolute and paramount lien against the building repaired with materials and land itself as against the vendor, who was in position of holder of an equitable mortgage..
    3. Mechanics’ lien — burden of proof. — In suit by parties furnishing building materials to a purchaser in possession under a contract to purchase land to foreclose their mechanics’ lien, where the vendor had declared the contract of sale to the purchaser canceled, the burden was on plaintiffs to prove that the material went into a new building, which could be removed from the land, since they bad the burden of proving facts entitling .them to a lien.
    4. Mechanics’ lien — subjecting cash deposit. — Where plaintiffs furnished building materials to a purchaser in possession under a contract to purchase land, and the vendor later declared the contract canceled and sold the land to another who made application for a loan, and the vendor furnished cash bond to lender to indemnify it against the plaintiffs for a lien, the court, properly refusing to declare a lien on the land or building, erred in subjecting a cash deposit, since the purpose of the cash bond was to indemnify the lender, the money belonging to the vendor, who was not liable for the debt.
    Appeal from Sebastian Chancery Conrt, Fort Smith District; J. V. Bourlcmd, Chancellor;
    reversed on appeal, affirmed on cross-appeal.

      Warner, Hardin & Warner, for appellant.

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

On March 1, 1920, J. H. Fine owned a five-acre tract of land, which he contracted to sell to C. H. Law for the sum of $1,500, of which $35 was cash in hand paid and the balance was to be paid in monthly installments of $35 each, all evidenced by the notes of Law to the order of Fine, and hearing interest at the rate of eight per cent, per annum. The contract of sale provided that the title should remain in Fine until the consideration had been fully paid, and that, if Law should default in his payments, or any of them, Fine should have the option of declaring the contract void, and that “all sums paid thereon shall be forfeited to the said party of the first part as rent for said property, and as liquidated damages by reason of his possession of the same, and the said party of the first part shall be entitled to immediate possession of the said property, which the said party of the second part hereby agrees peaceably to yield.” It was further provided in the contract of sale that if and when Law had made all the payments as, agreed, Fine should convey the land to him by warranty deed.

Upon the execution of this contract and the payment of the $35 as there recited, Law took possession of the land, and he soon thereafter contracted with Dyke Brothers for certain material to be used in repairing an old building on the land which could not be occupied without the repairs. Dyke Brothers furnished building material to the value of $169.42, which Law used in repairing the building. Fine was aware of the fact, but was not a party to that contract. Law made two of the deferred monthly payments, and then defaulted, and failed thereafter to make any other payment. The building material was not paid for, and Dyke Brothers brought this suit, and alleged that they are entitled to a lien upon the said building and upon one acre of land surrounding it, and prayed that this lien be declared and foreclosed.

After Law made default, Fine elected to declare the sale contract void, and took possession of the land. After doing so, he sold the land to O. W. Dameron, who made application for a loan on the security of the land to a building and loan association. The building and loan association declined to make the loan unless and until Fine had indemnified it against the claim of Dyke Brothers for a lien. This Fine did iby making a cash bond in the snm of $175. Service was had upon Law by the publication of a warning' order, and he made no appearance in the case. Fine answered, and set up the contract of sale above referred to, and alleged default thereunder, and denied that Law had authority to create a lien for any material used in the repairs or for other purposes.

The court denied the claim for a lien against the land, but adjudged that the plaintiffs were entitled to a lien on the $175 in the hands of the building.and loan association, and directed the association to pay the money into the registry of the court in satisfaction of the plaintiffs’ claim. Fine excepted to that order, and has appealed, and Dyke Brothers have perfected a cross-appeal from the order refusing to declare a lien in their favor on the improvement and the adjacent ground.

The facts in the ease of Gunter v. Ludlam, 155 Ark. 201, 244 S. W. 348, are very similar to those of the instant case. Gunter and Pate owned a lot in the city of Fort Smith, which they contracted to sell to Ludlam for a payment in cash and other payments to be made monthly. A clause of the contract provided for the acceleration of the maturity of all installments in the event of default in the payment of any installment. Ludlam erected a house on the land with material purchased from parties to the litigation, who claimed liens on the property for the value of their material. Suit was begun by Pate and Gunter to foreclose their lien as vendors for the unpaid purchase price, and Gunter also claimed a mechanic’s lien by way of subrogation to the rig'hts of the person who had built the foundation for the house. The court rendered a decree against Ludlam in favor of Pate and Gunter for the amounts claimed by them, and also a decree in favor of each of the parties asserting liens for labor and material, and declared the liens of those claimants superior to that of the vendors. This court, on the appeal from that decree, held that it was error to subordinate the lien of the vendors to that of the materialmen, as the vendors, having placed Ludlam in possession under a contract of sale, were in the attitude of vendors who had conveyed the property and had accepted a mortgage iback as security for the debt.

What was there said on the question of estoppel is also applicable here. It was there said that mere knowledge on the part of the vendors that labor and material were furnished for the construction of the building, or even their consent thereto, in the absence of some affirmative act which indicated a willingness to subordinate their claim to that of the subsequent lienors, was not sufficient to operate as an estoppel. It was there further said:

“Ludlam was in possession of the property as a mortgagor, and had an alienable interest upon which he could create a lien, therefore his construction of the building and the creation of a lien for labor and material was referable to his own interest in the property, and acquiescence on the part of appellants las mortgagees did not constitute such an affirmative act as would operate as an estoppel to the claim of a superior lien. ’ ’

The doctrine of that case was reaffirmed in the casé of Judd v. Rieff, 174 Ark. 362, 295 S. W. 370, which is also similar to the instant case under the facts. It was there said:

“The effect of the sales and purchase contract under review, in equity, was to create a mortgage in favor of the vendor, Mrs. Judd, to secure the purchase money. Wicker, in effect, became the vendee and equitable owner and mortgagor and Mrs. Judd the mortgagee. Fairbairn v. Pofahl, 144 Ark. 313, 222 S. W. 16; Gunter v. Ludlam, 155 Ark. 201, 244 S. W. 348. Section 6933 of C. & M. Digest provides that every person for whose immediate use, enjoyment or benefit a building, erection or other improvement shall be made shall be concluded by • the words ‘owner or proprietor thereof.’ The above language is sufficiently comprehensive to include, and does include, the vendee in possession under a contract of purchase such as that under review. Wicker was the equitable owner or proprietor, and in possession of the lot in controversy at the time he purchased the materials from Rieff which were used in the building of a garage. The purchase and use by Wicker of the materials in the building of a garage on the lot in controversy gave to Rieff the right to perfect a lien under the statute on the lot to the extent of Wicker’s interest therein. See Gunter v. Ludlam, supra; 27 Cyc. 29, 18 R. C. L. 885.”

Dyke Brothers do not ask that their right to a lien be perfected to the extent of Law’s interest in the land; on the contrary, the relief asked is that it be adjudged that they are entitled to a lien on the building* into the repair of which their material entered and upon an acre of land surrounding the building. The court properly denied this relief.

Dyke Brothers insist, on their cross-appeal, that there was no vendor’s lien in favor of Fine, as opposed to their claim for a lien as materialmen, for the reason that Fine has declared the contract void, and did not do this until after the material had been furnished. In reply to this argument it may be said, first, that Fine could not declare the contract void until Law had defaulted in his payments. The cases of Gunter v. Ludlam and Judd v. Rieff, supra, hold that no estoppel arises against the vendor who does no affirmative act to induce the lien claimant to advance the credit upon which the lien is claimed, and Fine did no affirmative act.

It is true, as cross-complainants insist, that Fine has declared the contract of sale canceled, but Law’s rights are derived from the contract, and these rights were only those of a vendee in possession who had given a mortgage back as security for the debt, and, as was decided in the cases cited, the holder of this equitable mortgage has a lien superior to that of a lien claimant whose rights are derived from a contract with the equitable mortgagor, and, as we have also herein said, Dyke Brothers are not asking relief against Law’s interest, but claim an absolute and paramount lien against the improvement and the land itself, but this, under the cases herein cited, they do not have.

In the case of Judd v. Rieff, supra, it was said that “In Imboden v. Citizens’ Bank, 163 Ark. 615, 260 S. W. 734, we held that, under § 6909, supra, a mechanic’s or materialman’s lien is superior to a prior mortgage only on a separate building constructed with the labor and material furnished or such addition as is separable from the original building without injury thereto.”

Cross-appellants insist a lien should be declared in their favor on the building, for the reason that the testimony does not show that the improvement into which their material went is not separable from the original building without injury thereto. In answer to this contention it may be said, first, that we do not so understand the testimony. The material did not go into a new building separable from another which could be removed without injury to the existing building. On the contrary, we understand that the material was used in the repair of an old building, and was not a separable improvement. But, if the testimony does not establish this fact one way or the other, as cross-appellants insist it fails to do, they have to that extent failed to make the proof required, for the burden is on them to prove facts entitling them to a lien. St. L. I. M. & S. Ry. Co. v. Love, 74 Ark. 528, 86 S. W. 395; Royal Theater Co. v. Collins, 102 Ark. 539, 144 S. W. 919; Langston v. Matthews & Lawton, 117 Ark. 626, 173 S. W. 397; Hoffman v. McFadden, 56 Ark. 217, 19 S. W. 753, 35 Am. St. Rep. 91; Buckley v. Taylor, 51 Ark. 302, 11 S. W. 281.

While the court was correct in refusing to declare a lien on the land or the building, we think it was error to declare the cash deposited with the building and loan association as a bond subject to the demand of the lien claimants. The purpose of the cash bond was to indemnify the building and loan association. The bond was not executed for the benefit of Dyke Brothers, and they were not parties to it. The money belonged to and was deposited by Fine, and it is certain the statute gives no lien on money. To subject money belonging to Fine to the payment of the debt the court has, in effect, held Fine liable for the debt, and there is no authority for so holding.

It follows therefore that the decree denying a lien against the land and the improvement should be affirmed, and the portion thereof subjecting the cash bond to the payment of the debt should be reversed, and it is so ordered.