author: Wood, J.

text:
    LeFlore v. Handlin.
    Opinion delivered May 8, 1922.
    1. Wills — jurisdiction op equity. — Where a will creates a trust estate, equity has jurisdiction to construe it.
    2. Wills — rule op construction. — The first and great rule In exposition of wills, to which all other rules must hend, is that the intention of the testator, expressed in his will, shall prevail, provided it be consistent with the rules of law.
    3. Wills — mistake op pact. — A will can be corrected on account of a mistake of fact only where the mistake and its correction is shown on the face of the will.
    4. Wills — mistake—evidence.—Where a mother’s will gave a small sum to a son and to each of his children, stating that the testatrix purposely made no further provision because the son had received a larger share of his father’s estate, evidence aliunde was inadmissible to prove that she was mistaken as to the amount received by the son from his father’s estate.
    5. Wills — intention op testatrix. — Where a will gave $100 to a son and to each of his children, and provided that testatrix purposely made no further provision for them, her intention to exclude them from any further participation m the estate must prevail, unless ¿ contrary intention be expressed in some subsequent clause, in which case the subsequent clause would prevail.
    6. Wills — designation of children. — A bequest to a son of testatrix and to his children sufficiently designated such children within. Crawford & Moses’ Dig., § 10507, relative to pretermitted children.
    7. Wills — construction.—Where a will gave a son L. and each of his sons $100, and stated that the testatrix purposely made no further provision for them, and gave the residuary estate to two other sons and a named child of each of them, designated as her “grandsons,” and provided that when each of her “said grandsons” arrived at the age of 21 years -they should receive $5000, the children of L. were not included in such bequest; the word “said” referring to the last-mentioned grandsons.
    Appeal-from Sebastian Chancery Court, Fort Smith District; J. V. Bourland, Chancellor;
    affirmed.

      James B. McDonough, for appellants.
    The chancery court had jurisdiction to construe the will. 97 Ark. 588; 104 Ark. 439; 113 Ark. 404.
    The appellants were grandsons of Ida L. Foucar and were each entitled to $5,000 under the will. There was a devise to each grandson of the testatrix.
    In the construction of wills the rule is: It is the intention which the testator expressed in the will that controls, and not that which he may have had in mind. 110 Ga. 707 ; 36 S. E. 409; 50 L. R. A. 361; 107 111. App. 313; 204 111. 588; 68 N. E. 515; 110 La. 279; 34 So. 443; 66 Me. 360; 81 Md. 347; 32 Atl. 316; 126 N. Y. Supp. 277; 107 Ya. 383; 59 S. E. 384; 91 Ya. 286; 21 S. E. 464; 83 Ya. 724; 3 S. E. 387; 61 W. Ya. 262; 56 ¡S. E. 473.
    A will should be given such a construction as will dispose of the property in a just, natural and reasonable manner. 27 Conn. 134; 26 Ind. 511; 97 Me. 449 ; 54 Atl. 1068; 97 Me. 449; 200 N. Y. 159; 93 N. E. 488; 48 Am. Rep. 364.
    Where the meaning of a devise is uncertain, the law will adhere as closely as possible to the rules of inheritance. 26 Pa. Sup. Ct. 443. An heir is not to be disinherited except by express words or by necessary implication. 36 S. E. 364. The law does not give to one relative of the same degree an advantage over the other. 94 Ind. 359; 59 Atl. 731; 53 Mich. 10; 67 N. Y. Supp. 925.
    The will must be considered as a whole. 11 Ark. 54.
    In case of conflicting clauses, the last clause must control. 113 Ark. 497; 115 Ark. 400.

      Warner, Hardin & Warner, for appellees.
    The intention of the testatrix must be gathered from all parts of the will, and such construction given as best comports with the purpose and intention of the testatrix. .90 Ark. 152; 98 Ark. 553; 113 Ark. 414; 116 Ark. 332; 13 Ark. 513; 31 Ark. 580; 73 Ark. 56; 98 Ark. 561; 104 Ark. 439; 105 Ark. 448; 111 Ark. 54; Gist v. Pettus, ms. op.
    ■ A will is not affected by any mistake of law or fact which induced the testator to make it; and a court can not amend or modify it so as to conform to what the court imagines the testator would have done but for such mistake. 2 Pom. Eq. Jur. (3rd Ed.) § 871; 16 S. E. 489; 32 Ala. 551; 25 S. E. 590; Rood on Wills, § 165.
    The intention of the testator as expressed in the will must prevail if consistent with the rules of law. 31 IT. S. 68; 116 Ark. 537; 146,Ark. 193; 116 Ark. 573.
    The word “said” is a word of reference to what has already been spoken or specified, and referred to the grandsons, Edouard LeFlore and Chester Harwood LeFlore. 122 Ark. 336; 50 N. E. 135; 8 N. J. L. 182; 49 N. E. 87; 97 Ind. 497.
   Wood, J.

Mrs. Ida L. Foucar died testate at San Francisco, California, on February 1, 1920, having executed her will on the 27th day of February, 1918. The second clause of the will is as follows: “Second: I give and bequeath unto my son Louis LeFlore, of Stigler, Oklahoma, and to his children living at the time of my death, the sum of one hundred ($100) dollars each. I purposely make no further provision for my said son Louis LeFlore, nor for any of his children, because my said son Louis enjoyed a larger share of his father’s estate than either of my other two sons hereinafter mentioned and provided for, and because his present financial condition is materially better than that of either of his said two brothers.” In the third clause the testatrix states the reason for not making any provision for her husband. In the fourth and fifth clauses she bequeaths to her two sons, Frank T. LeFlore and Chester H. LeFlore, the sum of $10,000 each, and provides for the manner of succession in case of their death before her own. In the sixth clause she 'bequeaths to Frank A. Handlin, trustee, all the residue of her estate to be held by him for certain uses and trusts, which we will specify in paragraphs or items numbered from one to nine inclusive.

(1) and (2) confer upon the trustee the power to handle the property bequeathed to him; to invest the income therefrom upon such terms as he thinks advisable, and to pay the taxes, insurance, etc.

(3) In this item the trustee is directed to use the income from the estate bequeathed to him, or such portions • thereof as may be necessary, or even the corpus thereof, if required, for the maintenance and education of her grandson Edouard B. LeFlore, son of Frank T. LeFlore, and Chester Harwood LeFlore, son of Chester H. LeFlore, until they have reached their majority.

(4) This item directs that, five years after the death of the testatrix, the trust shall terminate as to one-half of the trust property and the “same shall go and belong equally to Frank T. LeFlore and Chester H. LeFlore,” her sons.

(5) This item is as follows: “When each of my said grandsons arrives at the age of twenty-one years, my said trustee shall pay to my said grandsons, out of said trust fund, the sum of five thousand ($5,000) dollars, and said trust shall end and terminate as to the sum of five thousand ($5,000) dollars when each of my said grandsons respectively reaches the age of twenty-one (21) years, and I do hereby give and bequeath unto each of my said grandsons, upon his arriving at the age of twenty-one (21) years, the sum of five thousand ($5,000) dollars.”

(6) In this item the testatrix specifies that when her grandson, Chester Harwood LeFlore, reaches twenty-five years of age, the trust terminates as to one-half of the trust property then remaining after deducting therefrom the sum of $5,000 which is to be paid to her grandson, Edouard B. LePlore, and her grandson Chester Harwood LePlore then receives the remainder of the one-half of the trust property.

(7) In this item it is provided that, when her grandson Edouard B. LeFlore reaches the age of twenty-five years, the trust shall terminate as to all the balance of the property, and she bequeaths the same at that time to him,

(8) This item contains advice and suggestions to the trustee.

(9) This item of the sixth clause of the will is substantially as follows: “Upon the death of either of the sons of the testatrix, his share shall be held by the trustee, subject to the trust, and shall be paid to the son of such decedent when said grandson reaches the age of 25 years; provided, if said grandson dies before" reaching 25 years of age, leaving issue, such issue shall take and receive said share when said grandson would havereached twenty-five; provided further that, should Edouard B. LePlore die before he is 25 without issue, his mother, if living, shall succeed to his share, and the trust shall terminate thereto; but if Chester Harwood LePl.ore should die before he is 25 without issue, his share shall be held by the trustee for the benefit of Edouard B. LeFlore and shall be paid and delivered to him subject to the trust. If either of my said grandsons should die before becoming 21 or 25 years respectively, leaving issue him surviving, such issue shall take the share the parent would otherwise be entitled to, subject to the aforesaid trust, and at the time when the parent would have taken hereunder; provided, that if my said grandson Edouard B. LeFlore should die prior to reaching the age of 21 or 25 years, respectively, without issue him surviving, his father, if living, and if his father should have theretofore died, his mother, if living, shall succeed to the share or shares of my said grandson forthwith; and said trust shall terminate and end with respect thereto; provided, further, that if my said grandson Chester Harwood LeFlore should die prior to reaching the age of 21 or 25 respectively, without issue him surviving, his father, if living, shall succeed to the share or shares of my said grandson forthwith, and said trust shall terminate and end with respect thereto; but if his father shall have predeceased him, my said trustee shall succeed to the share or shares of my said grandson, to be held by my said trustee upon the uses -and trusts aforesaid, and for the benefit of my- grandson Edouard B. LeFlore, to be paid and delivered to him at the times and in the manner in said trust provided. ”

In the seventh and eighth clauses of the will the testatrix names Handlin as her executor, and, in the event of his death, she names whoever may be the president of the First National Bank of Fort Smith to succeed him, and directs that he may serve without bond, and confers -upon him the power to handle the estate without obtaining an order of the court.

The concluding clause is a revocation of all other wills.

This action was instituted in the chancery court of Sebastian County by the appellants against the appellee as trustee and executor. The appellants contend, as shown by the allegations of their complaint, that under the mill they are each entitled to the sum of $5,000 when they become twenty-one years of age. They alleged that the trustee does not so construe the will, and they prayed that the will may be construed as they contend, and that the trustee be directed to adopt such construction.

The appellee, in his answer, denied that the will should be construed as contended by the appellants, and admitted that he contends that it was not the intention of the testatrix to bequeath to the appellants any other sum or amount than the sum of $100 mentioned in the second clause of the will.

In addition to the will, the testimony of Louis LeFlore, the father of appellants, was heard. It was stipulated that the estate of the testatrix was of the value of $83,000; that Chester Harwood LeFlore, son of Chester H. LeFlore, was nineteen years of age on July 20, 1921, and that Edouard .B. LeFlore, son of Frank T. LeFlore, was ten years of age on July 28, 1921. The court made findings and rendered a decree adverse to appellants’ contention and dismissing their complaint for want of equity. From that decree is this appeal.

The will created a trust estate and named the appellee as the trustee to administer the same. The court of equity therefore had jurisdiction to construe the trust. In seeking a construction of this will, the practice approved in the case of Williamson v. Grider, 97 Ark. 586, 607 et seq., was followed. See also Booe v. Vinson, 104 Ark. 439-444; Heiseman v. Lowenstein, 113 Ark. 404.

‘ ‘ Over and over again we have said that the rule in the construction of wills is to give effect to what appears to be the intention of the testator in view of all the provisions of the will.” Cook v. Worthington, 116 Ark. 332. See also Eagle v. Oldham, 116 Ark. 565-573.

In the case of Eagle v. Oldham, supra, we cited and quoted Smith v. Bell, 31 U. S. 68, where Chief Justice Marshall said: ‘ ‘ The first and great rule in exposition of wills (to which all other rules must bend) is that the intention of the testator expressed in his will shall prevail, provided it be consistent with the rules of law.” Other cases to the same effect are Heiseman v. Lowenstein, supra; Union, & Mercantile Trust Co. v. Hudson, 143 Ark. 519; Moore v. Avery, 146 Ark. 193; Finch v. Hunter, 148 Ark. 482.

In Taylor v. McClintock, 87 Ark. 243-274, we said: “Every man has the untrammeled right to dispose of his property iby will as he pleases, with only such hmitations as the statute may impose. The ‘English law’, said Lord Chief Justice Cockburn, ‘leaves everything to the unfettered discretion of the testator, on the assumption that, though in some instances caprice or passion or the power of new ties may lead to the neglect of claims that ought to be attended to, yet the instincts, affections and common sentiments of mankind may be safely trusted to secure, on the whole, a better disposition of the property of the dead, and one more accurately adjusted to the requirements of each particular case, than could be obtained through a disposition prescribed by the stereotyped and inflexible rule of general law. ’ (Banks v. Goodfellow, L. R. 5 Q. B. 549).”

In the seoond clause of the will the testatrix bequeathed to her son, Louis LeFlore, and to his children the sum of only $100 each, and assigned as her reason for so doing that her son Louis enjoyed a larger share of his father’s estate than her other two sons, and that his financial condition was materially better than theirs. Louis LeFlore was permitted to testify that he only received from his father’s estate two horses which were worth about $12.50 each. This testimony shows that the testatrix was mistaken in the fact that he enjoyed a larger share of his father’s estate than either of his two brothers. There is no ambiguity in the language of this will when its various provisions are read together. The above testimony therefore was wholly incompetent, because it cannot be proved that the testatrix was mistaken in a fact which she clearly stated in the will for the purpose of showing that her intention was really different from that which her language plainly expresses. Nor is such proof competent for the purpose of showing that, but for the mistake of fact, her intention would have been different and expressed in a different manner. Where the intention is plainly expressed in the will, that intention must prevail and cannot be defeated by testimony aliunde, showing that the testator had in his mind a different intention from that expressed in his will, or that he would have expressed by his language a different intention if he had not been mistaken in some fact, financial or otherwise, connected with the beneficiaries mentioned in his will. Booe v. Vinson, 104 Ark. supra; Webb v. Webb, 111 Ark. 54; Moore v. Avery, supra.

“Equity,” says Mr. Pomeroy, “has a very narrow jurisdiction to correct mistakes in wills, but only when the error appears upon the face of the will itself, so that both the mistake and the correction can be ascertained and supplied by the context, from a plain interpretation of the terms of the instrument as it stands. A resort to extrinsic evidence is never permitted, either to show a mistake or to ascertain the correction.” 2 Pomeroy’s Equity Juris., sec. 871.

The province of courts is to construe and interpret, but not to make or modify wills either to carry out their own ideas of equity and justice or to make a disposition of the property as they imagine the testator would have done if he had not made some mistake of law or fact. Martin v. Thayer, 16 S. E. 489; Jones v. Crogan, 25 S. E. 590; Mosser v. Mosser, 32 Ala. 551; Rood on Wills, sec. 165.

Now, applying the above rules, which are without exception and of universal application, to the will under review, it is impossible to escape the conclusion that by the second clause of the will the testatrix intended to give to the children of her son, Louis LeFlore, the sum of $100 and no more. The language of this clause of the will excludes them from any further participation in her estate. Whether she meant to do so or not, her language is susceptible of no other interpretation. As we have seen, this meaning must prevail unless by the language of some subsequent clause the testatrix as plainly expresses the intention not to exclude them, but to allow them to further share in her estate. If there is a subsequent clause in the will wholly inconsistent with this second clause, then the last provision will overturn the former. Little v. McGuire, 113 Ark. 497; Gist v. Pettus, 115 Ark. 400.

The appellants contend that under the second clause of the will they are definitely included in the will under the language “unto my son, Louis LeFlore, and to his children”; that they are brought in under the designation “children” since they are the children of Louis LeFlore. Counsel is correct in this contention. Sec. 10507, C. & M. Digest; Brown v. Nelms, 86 Ark. 368-383. But, while the appellants are thus included in the will and bequeathed the sum.of $100 each, they are likewise by the same clause excluded from any further provision.

The appellants contend that, having 'been brought into the mil under the designation “the children of Louis LeFlore” in the second clause, they are not excluded by this or any subsequent clause in the will, but on the contrary are included in the 5th item of the sixth clause under the following language:

“ * * * and I do hereby give and bequeath unto each of iny said grandsons upon his arriving at the age of 21 years, the sum of $5,000.” But, when the language thus quoted is taken in connection with all the language of the sixth clause preceding it, as well as with the language following, it is perfectly manifest that the testatrix intended to designate by the words, “said.grandsons,” her grandsons, Edouard B. LeFlore, son of Frank T. LeFlore, and Chester Harwood LeFlore, son of Chester H. LeFlore. In the third item of the sixth clause of the will, the word “grandsons” appears for the first time, and there the testatrix specifically designated her grandsons, Bdonard B. and Chester Harwood LeFlore, making provision for their education and maintenance.

In the second clause of the will the testatrix had bequeathed the sum of $100 to her son Louis, and the same amount to each of his children, and the sum df $10,000 to each of her two sons, Frank T. and Chester H. LeFlore. By the sixth clause, after the above bequests are taken out, the entire corpus of the estate remaining she bequeaths to Handlin, trustee, for the use and benefit of her two sons, Frank T. and Chester H. LeFlore, and their sons, her grandsons, Edouard B. and Chester Harwood LeFlore, and their lineal descendants. Throughout this entire sixth clause many references are made by name specifically to her grandsons, Edouard B. and Chester Harwood LeFlore, but nowhere are the names of appellants specifically mentioned, and no provision in this clause is made for them in the trust estate, unless they were intended to be included by the word “said” in the clause “to each of my said grandsons.”

Appellant’s contention would be more plausible, if they had been “before mentioned” by name in the second clause of the will. But, even if appellants had been designated and brought into the will by name, in the second clause instead of under the generic term “children,” still the word ‘ ‘ said-’ ’ in the connection used in the sixth clause, could not be interpreted to mean, and to include, appelants. In Moore v. Paving Imp. Dist. No. 20, 122 Ark. 326-36 we defined the word “said” as follows: “It means aforesaid: before mentioned. It has also been defined as ‘a word of reference to what has been already spoken of or specified, and if there is a question as to which of the antecedent things or propositions specified is referred to, it is generally held to refer to the last of such antecedent propositions or things.” Citing Hinrichsen v. Hinrichsen, 172 Ill. 462-65; 50 N. E. 35, 34 Cyc. 1825. See also Webster’s New Int. Dict., Funk & Wagnall’s New Stand. ‘‘Said.’’ Church v. Mulford, 8 N. J. L. 182; Carver v. Carver, 97 Ind. 497; Words & Phrases, Vol. 4, Second Series, and Vol. 7, First Series “said.” The term “said” being a relative word is understood as relating to the next antecedent. Ellis v. Horine’s Devisees, 8 Ky. (1 A. K. Marsh) 417. The next “antecedent” of the word “said” in the clause “to each of my said grandsons” is found in the clause wherein the testatrix provides for the maintenance and education of her grandsons Edouard B. and Chester Harwood LeFlore. The word “said” unquestionably refers to them. The word “said” therefore cannot be construed to refer to appellants without ignoring its plain meaning and grammatical construction. We cannot do violence to the natural and logical use and meaning of words in order to iron out the seeming inequalities of Mrs. Foucar’s will. A further analysis of the language of the will would discover still other reasons for the conclusion we have reached. But the above suffices to show that the only possible way to harmonize the second and sixth clauses of the will is to construe the second clause as expressing the intention of the testatrix to exclude the appellants from any further participation in her estate. That such was her intention we have no doubt, since it must be held that she meant what she said.

The decree of the trial court is correct,. and it is therefore affirmed.


source: Caselaw Access Project

author: Wood, J. McCulloch, C. J.,

license: Public Domain

text:
    Stewart Oil Company v. Bryant.
    Opinion delivered May 8, 1922.
    1. Trusts — evidence to sustain finding of resulting trust.— Evidence held to sustain 'a finding that plaintiffs contributed certain sums in consideration of receiving an interest in an oil and gas lease proportioned to the agreed value of such lease; and where title thereto was taken in the name of a third person for the benefit of the plaintiffs and others, such person became a trustee for their benefit, and they in equity became the owners of the lease.
    2. Estoppel — acquiescence.—Where plaintiffs, owning an equitable interest in a certain oil and gas lease, knew that the trustee holding the legal title had conveyed the lease to a corporation formed to develop the lease, and that stock in such corporation was being sold to innocent purchasers, and that a part of the stock had been transferred to a driller who incurred large expense in reliance upon such transfer, and plaintiffs stood by in silence until their interest in the lease had been largely enhanced by such expenditures, plaintiffs were estopped to question the legality of the formation of the corporation and of the transfer of stock therein by reason of their failure to question same within a reasonable time.
    Appeal from Union Chancery Court; J. Y. Stevens, Chancellor;
    reversed.

      Marsh & Marlin, J ones & Head and Powell S Smead, for appellants.
    Appellees having kept silent and permitted the organization of the corporation, the sale of stock to innocent parties, and the rights of others to intervene are now estopped from asserting'any claim other than that of stockholders, or the right to have their money, with interest, returned to them. 131 Ark. 77; 2 Pom. Eq. Jur. § 804; 99 Ark. 260; 16 Cyc. 679; 64 Ark. 627; 147 Ark. 555; 21 C. J. p. 1216; § 221; 91 Ark. 141; 35 Ark. 377; 76 Ark. 67; 42 Ark. 473; 97 Ark. 588; 27 Ark. 371; 38 Ark. 419; 81 Ark. 269 ; 86 Ark. 284; 106 Ark. 568; 102 Ark. 146; 98 Ark. 581; 14 C. J. 630, § 920.
    Appellees have not met the burden of proof to establish a resulting trust. 11 Ark. 82; 127 Ark. 302; 101 Ark. 451; 105 Ark. 318; 79 Ark. 425; 71 Ark. 373; 75 Ark. 451; 3 Pom. Eq. Jur. § 1040; 1 Perry on Trusts, § 139; 111 Ark. 45; 118 Ark. 146; 104 Ark. 303; 89 Ark. 182; 71 Ark. 277; 76 Ark. 14.
    The corporation was an innocent purchaser of the lease. Sec. 1504, C. & M. Dig.

      Patterson & Rector, for appellees.
    A chancellor’s findings of fact will not be disturbed upon appeal unless against the clear preponderance of the evidence. 132 Ark. 402; 136 Ark. 624; 129 Ark. 120; 138 Ark. 403.
    The established facts show that the original transaction created a resulting trust. 40 Ark. 62; 64 Ark. 155;. Tiffany on Law of Beal Estate (2nd Ed.) p. 397, 402-3; 30 Ark. 230; 89 Ark. 168; 118 Ark. 146; 137 Ark. 14; 132 Ark. 402; 147 Ark. 555; 109 Calif. 481; 17 Wall. 44; 138 IT. S. 591; 147 Mass. 326; 23 N. J. Eq. 13; 184 Mass. 145; 141 111. 604; 106 111. 384; 107 Iowa 333; 103 Tenn. 324; 103 Mass. 484; 79 Ala. 351; 132 Ind. 58; 2 A. & E. Ann. Cas. 664, and note.
    Appellant was not a bona fide purchaser for value of the lease. 79 Ark. 273; 78 Ark. 501; 77 Ark. 172; 107 Ark. 232; 118 Ark. 192; 14 C. J. 264; 14 A. C. J. 482,et seq.

    Appellant did not succeed to the rights of the plaintiffs as tenants in common in the lease, because (1) it had no subscription from plaintiffs for its stock. Fletcher Law of Corporations, vol. 6, sec. 3952; 137 Minn. 213; 1 Thompson (2nd ed.) sec. 545 et seq.) 14 C. J., sec. 920; (2) the terms of offer were not complied with, and no contract resulting in membership in a corporation ever existed; 94 Ark. 354; Cook on Corp. (6th ed.) sec. 194; 10 Cyc. 405; (3) appellees are not barred by any act amounting to an equitable estoppel or ratification of the unauthorized conversion of their property; 44 Ark. 48; 101 Ark. 398; 27 B. C. L. 730; 147 IT. S. 133; Ann. Cases 1914-A, 39; 65'A. D. 314; 120 <S. W. 1065; 87 S. W. 740.
    Appellant cannot successfully plead estoppel. 55 Ark. 423; 91 Ark. 141; 96 Ark. 609; 89 Ark. 19; 63 Ark. 289, etc.
   Wood, J.

This action was instituted by the appellees (hereafter called plaintiffs) against the appellants (hereafter called defendants) to cancel the assignment by M. Gr. Wade, trustee, to the Stewart Oil Company, of .a lease to forty acres of land in the oil and gas region near El Dorado, in Union County, Arkansas, and to cancel a certain drilling contract entered into with one J. W. Clark, and for an accounting, etc.

On the 31st day of January, 1921, W. J. Ward, party of the first part, representing himself and other owners of the lease of the land in controversy, entered into an escrow agreement with'John A. Cobb, H. F. Stewart and B. A. Hancock, parties of the second part. The agreement specified that the sum of $8,000 was to be placed in the bank together with the lease of the land in controversy and the assignment thereof. M. G. Wade was named as trustee in the lease. When the title to the lease was approved by the attorney of the parties of the second part, the escrow agent was to deliver to the party of .the first part the $8,000, and to the parties of the second part the lease and assignment.

Gill Bros, and A. G. Griffin, real estate' brokers at El Dorado, had an option on the lease. The Stewart Oil Company, a domestic corporation, (hereafter called corporation) was incorporated on the 7th of February, 1921, for the purpose of acquiring leases and royalties and drilling and maintaining wells for the production of oil and gas, etc. On the 10th of February, 1921, the owners of the land in controversy, for the consideration of $9,000, executed an oil and gas lease thereof to M. G. Wade, trustee. On the 21st of March, 1921, M. G. Wade, trustee, for the consideration of $1 executed an assignment of the lease to the corporation. On the 23rd of March, 1921, the corporation entered into a drilling contract with J. W. Clark, by which it conveyed to him a two-thirds interest in the lease in consideration that he drill at his own expense all wells necessary to properly develop the land for oil and gas production, and in case of production from any wells in excess of one hundred barrels he was to deliver one-third thereof to the corporation, and if the production was less than one hundred barrels then the corporation was to bear its proportion of the expense of operating the wells.

In their complaint against the corporation and Wade and Clark, the plaintiffs challenged the assignment of the lease from Wade to the corporation. They alleged that as trustee he had no authority to assign the lease, and that the corporation had no authority to execute the drilling contract with Clark; that the corporation and Clark knew at the time of the execution and delivery of the assignment and the drilling contract that Wade held the legal title for the benefit of the plaintiffs and others who were subscribers to a fund in tbe sum of $11,000 to be raised for the purpose of purchasing the lease and defraying such expenses as might be necessary in developing the same.

They alleged, among other things, that Stewart, who promoted the project for purchasing the lease, solicited their subscription to a fund of $11,000, which he represented would be the amount necessary to purchase the lease and pay the commission of the brokers of $1,000, and defraying such other expenses as might be necessary to take over and develop the property; that the plaintiffs subscribed to this fund with the understanding that they should have an undivided interest in the lease in proportion that the amounts subscribed by them respectively bore to the sum of $11,000, and that Wade held legal title as trustee for them. They alleged that Stewart and others who were promoting the project organized a corporation with a capitalization of $50,000; that Stewart persuaded Wade, the trustee, in fraud of the rights of plaintiffs, to execute an assignment of the lease to the corporation, and the corporation in turn executed the drilling contract to Clark, 'both of which instruments were clouds on their title.

The corporation and M. Gr. Wade in a joint answer admitted that Wade, acting as trustee for plaintiffs and other parties, procured the oil and gas lease, and assigned the same to the corporation; that Stewart and others organized the corporation as alleged, and admitted the execution and delivery of the drilling contract to Clark on March 23, as alleged. They denied all the other allegations of the complaint, and set up that the funds were necessary to purchase the lease, and were subscribed with the understanding that the title should be taken in the name of the trustee, and that as soon as the title was obtained a corporation or syndicate was to be organized based upon the acreage contained in the lease; that certificates of shares of stock in the corporation were to be sold for the purpose of developing the property; that, pursuant to this plan, Stewart and his associates approached the plaintiffs and others and explained to them fully the purpose of the promoters as above outlined in procuring the lease, and that the plaintiffs made their subscriptions with the understanding that the corporation or syndicate would be organized in which the shares of stock or certificates would be sold for the purpose of raising funds with which to develop the property for oil and gas and to defray the expense incident thereto; that, after sufficient subscriptions had been obtained to purchase the property and notice to all subscribers given, the corporation was organized pursuant to the above plan; that a majority in value of the subscribers to the original fund of $11,000 were present and took part in the organization of the corporation; that there were issued to the original subscribers to the stock of the corporation the number of shares of stock corresponding at par value to the amount of money they had actually subscribed to the original $11,000, which they 'accepted with full knowledge of all the facts and circumstances concerning the issuance thereof, and kept and retained the same; that they permitted Clark, under the contract, to expend large sums of money in developing the property, and never complained until Clark had proceeded with his drilling to a depth where he had reached pay sand and at about the time two other wells on adjoining property had been brought in as large producers. Not until then did the plaintiffs attempt to return the stock to the 'corporation and repudiate its right to hold the lease .and to make the drilling contract with Clark. The defendants alleged that this conduct on the part of the plaintiffs should estop them from obtaining the relief for which they prayed.

Clark, in a separate answer, adopted the allegations of the .answer of the corporation and Wade, and set up his drilling contract with the corporation and alleged that the same-was made in good faith, believing at the time that the corporation had the title to the lease in controversy and without any information or knowledge of an adverse claim to the property. He set up that he had, in good faith, entered into the performance of his contract and had expended large sums of money in drilling the well before he had any notice of the plaintiffs’ claims; that by reason of these facts he was an innocent purchaser for value of a two-thirds interest in the lease under his drilling contract with the corporation. He also alleged that the plaintiffs knew that he was expending large sums of money in drilling the well, and that they stood by until the well was practically completed and had reached the pay sand before asserting any claim adverse to his claim and the claim of the corporation; that by such conduct they were estopped, and therefore not entitled to the relief prayed.

1. The first question is whether or not the money furnished by the plaintiffs was subscribed and paid by them for the purpose of contributing, pro tanto, to the common fund of $11,000 which was to be used in purchasing the lease in controversy, the title to which was to be taken in Wade, the trustee, to be held for the benefit of the plaintiffs and others, the equitable owners, who cqntributed to the fund in the proportion as the respective amounts paid by them bore to the $11,000? This is purely a question of fact, and it could serve no useful purpose to set out in detail the testimony bearing on this issue.

The testimony of the plaintiffs, in substance, was to the effect that the parties who solicited their subscriptions represented to them that the purchase price of the lease would be $11,000; that they had no knowledge at the time that a corporation was to be organized to take over the lease; that none of them .at the time of making their subscriptions contemplated that they were subscribing to the capital stock of a corporation in the sum of $50,000, to be afterwards organized to take over the lease and develop the property. None of them had any notice of any meeting of the subscribers to the $11,000 fund of the promoters of the enterprise, for the purpose of organizing a corporation. Some of the plaintiffs testified that, after they had ascertained that a corporation had been formed and that it was the purpose of the trustee to convey the lease to the corporation, they objected to his doing so, and he promised that he would not do so, but afterwards changed his mind and conveyed the lease to the corporation without the knowledge and consent of any of the plaintiffs, and when some of them were out of town.

All of the plaintiffs testified that it was their understanding that they each would acquire an interest in the lease in the proportion that the amounts of their subscriptions respectively bore to the sum of $11,000; that is, those subscribing $1,000 would acquire a one-eleventh interest, those subscribing $500 a one-twentyseeond interest, and so on. The testimony of Stewart, who solicited the subscriptions on behalf of the defendants, was in substance to the effect that he represented to the subscribers that he was raising a fund for the purpose of purchasing the lease and developing the same. He represented to the subscribers that they were contributing to a fund which would be used by a syndicate or corporation, whichever plan was deemed best, for the purpose of taking over and developing the property. He did not represent to any of the subscribers that they were buying an interest in the lease itself. His plan from the beginning was to syndicate or incorporate as it might be deemed best; that it was ascertained that in order to sell the stock it was necessary to organize a corporation because the State bank examiner was against syndicates.

Two other parties, who were associated with Stewart in the enterprise, testified corroborating the testimony of Stewart to the effect that their first plan was to form a syndicate, but they afterwards changed to a corporation. It was understood that they were to sell shares in the syndicate or corporation as the case might be. One of these witnesses, however, after testifying as above, also testified that the promoters valued the lease for the purposes of the syndicate at the sum of $11,000.

M. G-. Wade, who is named as the trustee in the lease, testified that it' was'his understanding that a company or syndicate was to be formed, and they changed it to a corporation because it would be more difficult to pass the blue-sky law. He understood that the money paid him by the subscribers was to buy stock in the Stewart syndicate. This was evidenced by the receipt he issued, and no objection was made to the receipt by any of them. He further testified that he didn’t .assign the lease bo the corporation until he was informed that all of the plaintiffs except Center were satisfied for him to do so, and did not assign the lease until two of the promoters assured him that it would be satisfactory with Center.

The chancellor found “that the plaintiffs herein and each of them furnished a part of the money with which the lease was purchased, and that as a result thereof the equitable title in and to said lease and all rights therein, thereto, and thereunder, vested in said plaintiffs to the extent of their respective interests;” that is, in proportion as the amounts subscribed and paid by them respectively bore to the purchase price of the lease, which was the sum of $11,000.

While there is a sharp conflict in the evidence, we are convinced that a preponderance of the evidence sustains the finding of the trial court that the several amounts subscribed and paid by the plaintiffs were to purchase the lease in controversy in which they would acquire an interest in proportion as the amount subscribed and paid by them bore to the sum of $11,000. The undisputed testimony shows that the purchase price of the lease was $8,000, and that the promoters and real estate brokers who had an option on the property, agreed among themselves that an additional sum of $3,000 would be added to cover their services, and that, for the purpose of ownership to those who wished to subscribe, the lease would be valued at the sum of $11,000. While the testimony of Stewart and other witnesses on behalf of the defendants tends to show that the subscriptions were taken for shares in a syndicate or corporation that was afterwards to be organized to buy the property and develop the same, yet it occurs to us that a clear preponderance of the evidence shows that Stewart, in soliciting the subscriptions of the plaintiffs to a fund to purchase the property, gave them to understand that they would own an interest in proportion as the amount subscribed and paid by them bore to the sum of $11,000, the agreed value of the lease. In other words, whether the lease was to be purchased, owned and developed by a syndicate or corporation, the plaintiffs and others who contributed money for the purpose of purchasing the lease were to be owners in the syndicate or corporation in the proportion that their respective subscriptions bore to the purchase price of the lease, to-wit: $11,000. "We are convinced that it was not contemplated by the plaintiffs, or Stewart, who solicited their subscriptions, that they were then subscribing to shares of capital stock of a corporation which was afterwards to be organized and capitalized at the sum of $50,000, and that the amounts subscribed by them would entitle them to shares in the corporation in proportion as the amount subscribed bore to the capital stock of $50,000. As we view it, the evidence does not at all justify such conclusion of fact. When, therefore, the trustee paid over the money subscribed by the plaintiffs and others to purchase the lease and a deed was executed and delivered to him, he thereby became a trustee for them, and they in equity became the owners of the lease — the plaintiffs in proportion as their respective subscriptions bore to the entire purchase price of the lease. The court did not err in its finding of fact and conclusion of law as above set forth. See Camden v. Bennett, 64 Ark. 155; Miller v. Freeman, 40 Ark. 62; McNamara v. Garrity, 106 Ill. 384; Skeehill v. Abbott, 184 Mass. 154; Leary v. Corvin, 2 A. & E. Ann. Cas. p. 664, and note 667, and authorities of other jurisdictions cited in appellee’s brief.

2. The only other question necessary for our consideration is whether or not the plaintiffs are estopped by their conduct from challenging the deed of the trustee to the corporation and the contract of the corporation with J. W. Clark. The assignment of the lease by Wade to the corporation was executed on March 21,1921, and on the 23rd of March, 1921, the corporation executed the drilling contract to J. W. Clark by which, for the consideration therein named, the corporation transferred to Clark a two-thirds interest in the lease. The consideration for the transfer of the two-thirds interest to Clark was that he should properly develop the property and maintain the lease for oil production. He was to begin preparing for the drilling immediately and to begin actual drilling as quickly as- possible. He was to assume all liability for the expense of drilling the first well and was to drill same to a depth of 2300 feet, unless oil and gas were found at a lesser depth. The deed and drilling contract were recorded on the days respectively of their execution.

The 'corporation was organized on the 7th of February, 1921, its articles of incorporation being filed at the office of the clerk of Union County on that day. The declared purpose of the corporation, among other things, was to drill, operate, and maintain wells for the purpose of producing oil and gas and to acquire leases in real estate. A circular was issued by the corporation showing that it was capitalized at $50,000 and offering to the investing public 1,000 shares of the par value of $50 each and specifying that it was “ organized to drill on the Jeff Ward tract” — the land in controversy. It further stated: ££ The derrick is up and the well is to be drilled by H. -F. Stewart, the man who drilled the Mitchell-Busey well;” that “operations would be -started at once,” and further requesting subscribers to make all checks payable to M. G. Wade, cashier of the First National Bank and the secretary and treasurer of the corporation. The above circular -appeared in the papers at El Dorado February 14, 15, 16, 19, and 23rd. It is in evidence that the corporation sold from twenty to twenty-five thousand dollars worth of stock to about -eighty stockholders in El Dorado, Hot 'Springs, Little Rock 'and other places from the time of its organization to March 17,1921, after which time no stock was 'sold.

All of the plaintiffs testified that they had no notice that a corporation was to be organized; but all of them lived in El Dorado except Center and the Gills, and they saw the -advertisement above set forth in the newspapers. What is designated in the record as the “Keen-Wolf” well, located about three-quarters of a mile from the land in controversy, was brought in about the middle of March. Clark began drilling operations under his contract about the 25th of March and proceeded to drill the well down to the pay sand, reaching the same about the 25th of April. When pa.y sand is reached, the well is then only within a day or so of completion. During this time no complaints were made by any of the plantiffs to Stewart, the president of the corporation. Clark brought in an oil well on the 5th of May, 1921, which produced four or five thousand barrels of oil daily, worth 75 eta per barrel.

The stock was issued and delivered to the plaintiffs, Bryant, the Pyes, and Johnson, about the 2nd of March, 1921, and to the Grills about the 21st of March, 1921. According to the testimony of the secretary and treasurer of the corporation, after the Keen-Wolf well came in, J. L. Center inquired of him to know if he could obtain $500 additional stock to the $500 he had already subscribed, and witness informed Center that he could. They discussed the drilling contract, .and Center stated that he would let the witness know in a day or two whether he wanted the additional stock. Center went away and never came back. He refused to accept the tender of the stock or a tender of the money which he had subscribed and paid.

None of the stock that was issued and delivered to the plaintiffs was returned to the corporation until about the 10th or 11th of May. At the time of entering into the drilling contract with the corporation, Clark had no knowledge that any other parties were claiming to own the lease. He had not fully complied with the contract with the corporation, but h'ad gone as far as he could.

It was shown on behalf of the defendants that, before the stock book was received, E. W. Bryant, one of the plaintiffs, was in the office of the secretary and treasurer of the corporation from February 25th, at different times until the stock was issued to him on the 2nd of March, 1921, wanting to know when he could get his stock. It was shown by three witnesses who testified on behalf of the defendants that after the organization of the corporation there was a meeting of the stockholders in the office of the secretary and treasurer of the corporation at which M. B. Grill, one of the plaintiffs, proposed to sell'stock for.the corporation on a commisssion of 30%. M. B. Grill, in explanation of this conversation, stated that he said at this meeting if they wanted to give 30% he knew of two parties who could sell the stock. He was asked if he knew whom they could get to sell tiffs stock. He did not know at the time what his interest would he — did not know at that time, if they increased the capital stock, whether his interest would he increased or not. He understood they were trying to sell stock to drill a well.

Bryant and Center both testified in rebuttal that when they were making inquiries about the stock they thought they were to have stock issued in the proportion that the amount paid by them bore to $11,000. Center stated that he never agreed to accept any stock from the secretary and treasurer except the stock representing a one-twentysecond interest. They proposed to give him $500 stock in a $50,000 corporation, and he refused to accept it.

This suit was instituted by the plaintiffs on the 22nd day of April, 1921.

We have reached the conclusion that under the facts as above set forth the plaintiffs are estopped by their conduct from maintaining this action. Stewart, who was an experienced driller of oil wells, was the leading promoter in the enterprise to acquire the lease in controversy and to develop the same. Plaintiffs and others who subscribed to the common fund to purchase the' lease looked to him as the moving spirit in the project. It was shown that the circular above mentioned was widely distributed, and the plaintiffs at le'ast certainly had notice as early as February 14th, when this circular was published in the papers at El Dorado, that the corporation had been organized, with Stewart as its president, to drill on the lease in controversy, and that the corooration was offering to sell 1,000 shares of stock for that purpose. The corporate entity in this litigation stands for all of its eighty or more shareholders who purchased stock in the corporation. These shareholders had no knowledge of plaintiffs’ adverse claim to the lease. The assignment of the lease to the land in controversy showing title in the corporation was duly recorded on March 21,1921. Clark entered into a drilling contract with the corporation on March 23rd, 1921, and on that day had his contract recorded. He had no knowledge, as the proof shows, of any adverse claim of the plaintiffs to the lease. The plaintiffs were notified by the circular that “the rig was up on the ground,” and that drilling would proceed. Clark entered upon the performance of his contract two days after the same was executed and continued drilling operations until he had reached the pay sand and was about to bring in his well when the plaintiffs instituted this action. In the meantime other wells in proximity to the land in controversy were being brought in. Stock in the corporation was issued and delivered to some of the plaintiffs as early as March 2,1921, and to others by March 21,1921, and would have been delivered to Center if, according to the secretary and treasurer of the corporation, he had not asked that the issuance and delivery be postponed for further investigation on his part. All of the plaintiffs received and retained the stock that had been delivered to them until after the well had been brought in.

Now, it occurs to us that, in justice to the corporation, the promoters and other shareholders, and in justice to Clark, who was necessarily expending large sums of money in the perf ormance of his contract, the plaintiffs, if they intended to challenge the title of Clark and the corporation, could have acted more promptly. With a knowledge that others were buying stock up to March 17th, and that Clark, after March 23d, was expending large sums of money in the belief that the title to the lease was in the corporation, plaintiffs could not stand by in silence until their interest in the lease by these expenditures had been largely enhanced in value. The plaintiffs are not estopped by what they actually did. but rather by what they failed to do, in view of the situation confronting them. Cognizant of the circumstances under which the stock was being sold, and that Clark was spending his money, the plaintiffs speculated on the chance of having the corporation, through its contract with Clark, greatly enhance the value of plaintiffs’ interests before they elected to choose whether they would remain as stockholders in the corporation or would assert their rights as adverse claimants of the lease. The plaintiffs made no protests to the president or any officers or promoters of the corporation. We are convinced that a preponderance of the evidence shows that the trustee, Wade, acted in good faith in assigning the lease to the corporation. Certain it is that the plaintiffs knew that Stewart and those associated with him in the organization of the corporation and the furtherance of the enterprise, were acting upon the assumption that the corporation owned the lease. The plaintiffs, knowing that they and others were the owners, and that Clark, who had entered into a drilling contract with the corporation, would necessarily have to expend large sums of money in the performance of the contract, should have proceeded, at least, in a reasonable time to assert their adverse claim. What is a reasonable time must be determined by all the facts and circumstances surrounding the parties.

It is a matter of common 'knowledge that fortunes are made and lost in oil fields over night, so to speak. A month’s delay on the part of the plaintiffs to institute their action may have meant financial disaster to Clark, who was making large investments under his contract, should he fail to discover oil. While on the other hand, the plaintiffs, without any further investment on their part, had the chance of having their fortunes increased by the expenditures made by Clark. The plaintiffs waited an unreasonable length of time. Under the circumstances they were called upon to speak, and by their silence and non-action they must be held to have acquiesced in what was done by Wade, Stewart, the corporation, and Clark. The plaintiffs had no title' of record. When Wade, the trustee, assigned the lease to the corporation and this assignment was recorded, the corporation had the record title. Inquiry by prospective purchasers of stock and 'by one entering into a drilling contract with the corporation would have discovered that the corporation had the record title. Therefore, the plaintiffs, after they had knowledge that the corporation had been formed, and certainly after they knew that Wade, the trustee, had transferred the lease to the corporation and that the corporation had entered into a drilling contract with Clark, were called upon to act, and prompt action upon their part was imperative. Because, while they were hesitating as to what course -they would pursue with reference to the corporation, people were purchasing stock and Clark, after he had entered into the drilling contract, was consuming his substance in drilling on the property. If he failed, plaintiffs could not lose anything, but if he succeeded plaintiffs would be made much richer at his expense. The plaintiffs were on the ground, and had full knowledge of what was being done. They had an unrecorded title in the lands of which purchasers of stock and those dealing with the corporation could not know until they had asserted the same. See Gregg v. Von Pheel, 1 Wall. 274, 17 L. E. 536; also Veile v. Hudson, 82 N. Y. 32, 40, cited in Wiser v. Lawler, 189 U. S. 260.

-The facts of this case differentiate it from all those cases in which it is held that “mere silence or inactivity” does not constitute an estoppel. See Bramble v. Kingsbury, 39 Ark. 131; Fox v. Drewry, 62 Ark. 316; Simpson v. Biffle, 63 Ark. 289; Waits v. Moore, 89 Ark. 19; Davis v. Neal, 100 Ark. 399. It would have been a simple matter for the plaintiffs, after they found the corporation had been organized, at once to have notified its officers and also Clark after he entered upon the contract. They could have instituted just such an action as they did institute within a few days after they discovered that Wade had assigned the lease to the corporation and that Clark was drilling on their property. Their failure to do these things constitutes a “misleading retí cence, and an apparent acquiescence” in, and ratification of, what the corporation, Wade and Clark had done. Their conduct places them in the attitude of saying, “We will wait and see whether the oil comes in before we disturb Clark and the corporation in their drilling operations.”

This court, in the case of Ford v. Abbott, 35 Ark. 365-77, in commenting upon the doctrine of equitable estoppel, after giving certain examples of that doctrine, said: “These are but illustrations of an all-prevailing principle, extending through every branch of equity jurisprudence, which holds it fraudulent in any one to mislead another by acts, words, or silence when good faith and fair dealing require him to speak, to do acts, or invest money, and then assert rights with regard to the subject-matter which would be injurious to the person misled and leave him in a worse position than if he had never acted.” And, in the case of Brownfield v. Bookout, 147 Ark. 555, speaking of estoppel by conduct, we said: ‘ ‘ This doctrine rests upon the principle that if one maintains silence when in conscience he ought to speak, equity will debar him from speaking when in conscience he ought to remain silent.” See other authorities cited in the above cases, and Baker-McGrew Co. v. Union S. & F. Co., 125 Ark. 146, 150. See also 10 R. C. L. p. 694, par. 22, and Wiser v. Lawler, supra.

Applying this doctrine to the facts above stated, we have reached the conclusion that the plaintiffs are not entitled to the relief for which they prayed. But, of course, it follows from what we have said that they must be treated as 'stockholders in the corporation, and have their rights protected as such. The decree is therefore reversed, and the cause is remanded, with directions to dismiss the complaint for want of equity.

McCulloch, C. J.,

(dissenting). All of us agree in the conclusion that the evidence is sufficient to support the findings of the chancellor to the effect that the purchase of the oil lease by appellees and others, and the placing of the title in the name of Wade, as trustee, was for the purpose of holding the lease for their benefit, that Wade had no authority to transfer the lease without the consent of the beneficiaries, and that his assignment of the lease was wrongful and in violation of the trust.

It is clear that the rights of Clark are not involved in this controversy, and no act or conduct of appellees should be held to bar their right to seek, as against the appellants, a cancellation of the assignment of the lease because of the fact that Clark was an innocent purchaser in accepting a drilling contract from the corporation. The contract with Clark was wrongful, so far as the corporation itself is concerned, and the corporation should not be permitted to shield itself behind the rights of Clark as an innocent contractor.

The extent of the interest of appellees in the original lease is about twenty-four per centum of the whole, which leaves an interest in excess of a sufficiency to protect the interest of Clark, and since the corporation was a participant in the wrongdoing, the interests of appellants ought not to be affected by the rights of Clark, who, as before stated, can be protected out of the other interests.

This leaves for consideration only the question of estoppel. The majority have concluded, in the first place, that appellees are estopped to object to the assignment of the lease for the reason that they failed to protest against the organization of the corporation and the sale of stock therein for the purpose of purchasing and developing this lease.

It is not shown that any of the appellees did any affirmative act towards encouraging the sale or purchase of stock in the corporation. All that is shown is that the corporation was organized, and that its plan for the purchase and development of this lease was advertised and stock was sold on the faith of it. The mere failure of appellees to hunt up and make protest to prospective purchasers of stock, or to publicly advertise their objections to the organization of the corporation for the purchase of the lease, did not constitute such silence or acquiescence as would amount to an estoppel.

I understand the established principles of equity to be merely that silence where one is called on to speak may work an estoppel, but before one is called on to speak there must be something done in his immediate presence which calls for action. Surely it cannot be within the principles of equity that a person is bound to run down and .protest against every assertion of claim to his property made by persons not in his immediate presence. A person is not called on to speak unless he is confronted by the assertion of an adverse claim in the presence of some one who is misled by his silence in the acquisition of such claim.

In a similar case where it was sought to charge certain persons with estoppel by conduct similar to the circumstances in the present case, the Supreme Court of the United States said:

“Before holding that defendants are liable by reason of their silence, it ought to be made to appear what action they could have taken to prevent the perpetration of the fraud embodied in the prospectus and maps. If they had actually participated in it by circulating these documents, or representing them to be true, the case would have been different; but if they be held at all it must be by reason of their silence and inaction, when it is not even shown that they were cognizant of the statements contained in them. * * * But, conceding that they were fully apprised of their contents, what action were they hound to have taken? They could not give notice to the hundreds of thousands to whom the prospectuses were sent, since they were not even apprised of their names or addresses. A notice to the company not to send out these propectuses- would have been equally futile, in case the directors chose to disregard it, since they could not control their action, nor could they have sustained a bill for injunction, since they could have shown no personal injury to themselves by reason of the action of the promoters.” Wiser v. Lawler, 189 U. S. 260.

In discussing the same principle this court, in the case of Bramble v. Kingsbury, 39 Ark. 131, said:

“If not already estopped, it would, perhaps, not have been required of appellant, upon being informed of the negotiations with Crapp, that he should seek him out and advise him of the encroachment. All that equity requires is, that a person shall do no act, nor be guilty of any misleading reticence, or apparent acquiescence, by. which another may be entrapped into a transaction which he would have entered upon, if he had been advised of the objection. For instance, if one stands by, when he should assert his claim, and by that induces a purchaser to believe he has none, he will be estopped. But a mere knowledge that a third person is about to purchase does not of itself impose upon the owner of an equity the duty of seeking him out, and advising him against it.”

The same rule has been announced in other decisions of this court. Waits v. Moore, 89 Ark. 19; Westmoreland v. Plant, 89 Ark. 147; Davis v. Neal, 100 Ark. 399; Brownfield v. Brookout, 147 Ark. 555; Imboden v. Talley, 150 Ark. 567.

Appellants had a right to organize a corporation for the purpose of taking over this particular lease or any other property, and to sell stock in the corporation upon representation of the intention to do so, but the mere fact that it advertised the intention of acquiring the lease does not estop appellees from disputing the authority of Wade to assign the lease merely because they failed to take any action to prevent the consummation of this plan. They had no notice that Wade intended to assign the lease without obtaining their consent, and were given no opportunity to assent or dissent.

It is nest insisted that appellees were estopped by accepting stock in the corporation. The answer to this is that they refused to accept the stock.

The majority conclude, finally, that appellees were also estopped by remaining inactive too long after the assignment of the lease by Wade before instituting the present action. It is remembered that the lease was transferred by Wade to the corporation on March 21, 1921, and two days later the corporation entered into the drilling contract with Clark. Some of the appellees were absent from El Dorado at that time, and one of them, Center, did not reside there at all. It was several days thereafter before they ascertained, or could have ascertained, that the lease had been wrongfully assigned by Wade to the corporation, and they at once began negotiations with the officers of the corporation looking to an adjustment of the controversy. The suit was instituted on April 22, 1921, so there was a delay of about three weeks in the commencement of the the action after it could have been commenced. In the meantime, the proof shows that there were negotiations pending between the parties for an adjustment of the controversy. There was not the slightest change in the attitude of any party to this controversy between the time of the assignment of the lease by Wade and the commencement of this action. There is no proof that a single dollar’s worth of stock was- sold during that time, nor did any of. the appellees change their attitude in any respect whatever.

Mere delay in the assertion of a right never operates as an estoppel, but it is only unreasonable delay which works a disadvantage to some other person that can be pleaded in bar of the assertion of a right. This principle has been announced here so often that it is scarcely necessary to cite authorities in support of it, and only a few of the cases on that subject need be mentioned. Fox v. Drewry, 62 Ark. 316; Rhodes v. Cissel, 82 Ark. 367; Jett v. Crittenden, 89 Ark. 349; Frazer v. State Bank of Decatur, 101 Ark. 135; Cook v. St. L. I. M. & So. Ry. Co., 103 Ark. 326.

It must be conceded that the business of prospecting for oil is highly speculative, and that things move very rapidly in the oil game, but it seems to me that it is carrying the doctrine of estoppel too far to say that a. group of individuals against whom a wrongful act has been committed in the unauthorized assignment of an oil lease should be estopped by a delay of three weeks from the assertion of a remedy against such wrongful act, there being no change whatever in the attitude of any of the parties during the period of the delay, and there being negotiations, or, at least, efforts, pending for the adjustment of the controversy without a lawsuit.

It seems to me that the court has made a misapplication in the present case of the just and wholesome doctrine of estoppel, and my conclusion is that the decision of the chancellor is correct and that it ought to be affirmed.

I am authorized to say that Mr. Justice Humphreys concurs in the views which I have expressed.


text:
    Missouri Valley Bridge & Iron Company v. Malone.
    Opinion delivered May 8, 1922.
    1. Admiralty — injury on vessel engaged in commerce. — Under Federal Judicial Code, § 256, giving exclusive jurisdiction to the Federal courts' in all civil causes of admiralty and maritime jurisdiction, to give such courts jurisdiction of an injury .to an employee on a barge, it must be shown to be a vessel engaged in commerce and navigation, and hence such courts have no jurisdiction of an action for injuries on a barge in course of construction.
    2. Seamen — fellow servants. — In a foreman’s action for injury on a barge engaged in commerce and navigation, caused by a maul slipping from a workman’s hand, the fellow-servant rule would not apply under U. S. Comp. Stat., § 8337a, providing that a seaman having command shall not be a fellow servant of those under his authority.
    3. Admiralty — common-law remedy. — Under Federal Judicial ■Code, § 256, vesting in United States courts exclusive jurisdiction in admiralty and maritime causes, but in all cases “saving to suitors the right of a common-law remedy where the common law is competent to give it,” an employee injured on a barge on the Arkansas River had a remedy in an Arkansas common-law court.
    4. Master and servant — negligence op servant. — Under Crawford & Moses’ Dig., § 7137, a corporation engaged in constructing a barge is liable for an injury to its foreman caused by the negligence of a workman in allowing a maul to slip from his hand.
    5. Master and servant — negligence op fellow servant — instruction. — In an action against a corporation for injury to a servant struck by a maul held by a fellow servant, an instruction permitting the jury to find defendant liable if the fellow servant let the maul lip from his hand was erroneous as authorizing a recovery whether the fellow servant was negligent or not.
    6. Trial — general objection to instruction. — Where instructions were inherently erroneous, a general objection to them was sufficient.
    Appealed from Perry Circuit Court; JohnW. Wade, Judge;
    reversed.

      E. G. Shoffner, E. H. Homing and Mehaffy, JDonham <& Mehaffy, for appellant.
    Both the pleadings and proof fix the place of the work on a barge or vessel on the1 Arkansas River, a navigable- stream. The plaintiff, therefore, might have brought his -suit under the general maritime law; otherwise, he is bound to sue under the common law. Judicial Code, § 256. Jurisdiction depends upon whether the tort was committed on navigable waters. 1 R. C. L. 409-410; Id. 413, 414, 415; Id. 417,118 II. S. 610, 30 L. Ed. 274; 119 IT. S. 388, 30 L. Ed. 477; 195 U. S. 364, 49 L. Ed. 236; 221 Fed. 105; 223 Fed. 242; 259 Fed. 304; 244 IT. S. 205; 1 Corpus Juris 1253; Id. 1256, 1257, 1264, 1265,1285; 134 Fed. 749, 752; 141 Id. 270; 190 Id. 229; 71 Id. 712; 70 U. S. 20; 18 L. Ed. 125; 62 L. Ed. 1171; 63 L. Ed. 261.

      Troy W. Lewis, J. H. Bowen and Pace, Campbell é Davis, for appellee.
    Appellee’s right to a recovery is not affected by the Federal statute with respect to jurisdiction. To allege that a barge was being constructed on the Arkansas ■River does not mean that it was on the waters of the river. 137 Ark. 6; 60 Id. 409; 134 Id. 273. But, aside from that, these maritime laws were not involved because the barge was not a vessel engaged in commerce and navigation. 38 Fed. 158; 34 Cal. 679; 1 Corpus Juris 1251, § 16.
    If the barge be held to be such a vessel as is contemplated by the maritime law, then § 8337-A, IT. S. Comp. Statutes, would apply.
    The Federal statute in respect to maritime matters leave the victims of maritime torts free to bring and prosecute their causes of action in the State courts where the tort was -committed, in -accordance with the law existing in the State at the time it was committed, whether that law was the original common law or as amended by statute. 135 S. W. 425; 9 E. I. 419; 11 Am. Rep. 274; 83 U. S. 522, 21 L. Ed. 369; 56 N. Y. 1; 74 Ga. 18; 1 Corpus Juris, 1253, § 23; 77 N. Y. 546.
   Wood, J.

This action was instituted by the appellee against the appellant, the Missouri Valley Bridge & Iron Company, a Kansas corporation. The appellee alleged that on the 13th day of January, 1921, the corporation was constructing a barge on the Arkansas River at the foot of North Commerce Street in the city of Little Rock, Arkansas; that the appellee was an employee of the corporation as foreman in charge of a crew of workmen upon said barge; that while so employed the appellee, on account of the carelessness and negligence of the corporation and one of its employees, a, member of the crew, was struck on the right leg with a sledge-hammer and painfully and permanently injured; that the corporation’s employees were engaged in constructing a deck or floor upon the corporation’s barge out of heavy timbers or planks, which were being fastened down with spikes; that while appellee was directing the work one of the workmen, named Winkler, carelessly and negligently allowed the sledge-hammer to slip and fly from his hand and strike appellee on his right leg with great force. The appellee then alleges the nature of the injury and its effect upon him, and by reason thereof he alleges that he was damaged in the sum of $25,000, for which he prayed judgment.

The corporation answered, denying all the material allegations of the complaint, and set up the affirmative defenses of contributory negligence and assumed risk, and further alleged “that, if the plaintiff was injured at the time and in the manner alleged in his complaint, he was injured while working on the Arkansas River, a navigable stream, and doing work and labor on a barge in said stream, as was also Winkler, and this defendant says that it was in no way liable for an injury resulting as alleged in plaintiff’s complaint.”

The testimony on behalf of the appellee tended to prove that in January, 1921, the appellee was the foreman of a barge crew of six or eight men who were at work on a barge for the corporation in the Arkansas River. The appellee directed Winkler, one of the crew, to drive a plank end-ways in order to make the joint a little tighter. Winkler, while doing this, let the maul slip from his hand, which struck the appellee, and he went off of the barge limping and said he was hurt. In order to drive np the plank, it was necessary for Winkler to strike pretty hard blows. Winkler, at the time, was standing astride the plank striking the end of the same between his legs. The appellee was standing at the other end of the plank right over the joint which he was having dosed.

The appellee himself testified substantially to the same effect as the above. He stated that he was standing over the joint watching that all the time, and his attention for the moment was directed to another man of the crew to whom he had given some directions, and all of a sudden the hammer flew out of Winkler’s hand and struck the appellee. He described where the hammer struck him and the nature of the injuries which it produced, and which it is unnecessary to detail.

Winkler testified on behalf of the appellant to the effect that he was employed by the appellant and working with the barge crew under the direction of the appellee. He hit the end of the plank to drive the same up. It was a cold morning and frosty, and the handle was slick, and witness’ hands were numb. Witness did not have any gloves on, and the hammer slipped out of his hands. He was doing the work in the usual way except he was standing straddle of the maul striking with the same between his legs. Witness had been a carpenter for five years and was exercising the same care that he was in the habit of exercising in that sort of work — was trying to hit the plank, and missed it. He didn’t intend to turn it loose. It was about noon, and the day was cloudy. It was an ordinary hammer in common everyday use — an eight-pound maul.

Among other instructions given at the request of the appellee the court gave the following:

“No. 1. If the plaintiff, L. V. Malone, was in the employ of the Missouri Valley Bridge S¿ Iron Company, at work in the construction of a barge for the defendant, in the performance of his duty, and was using due care for Ms own safety, and had not assumed the risk and was injured by want of ordinary care of the defendant, then the plaintiff is entitled to recover. It is for you to say, from all of the evidence in the case, whether plaintiff was injured by any failure on his part to perform his duty while at work on said barge, and whether he was exercising due care for his own safety or had assumed the risk at the time of the injury, also whether the defendant or its agents and servants failed to exercise ordinary care to protect Mm iron, danger alleged in the complaint while in the performance of his duty, and whether such want of ordinary care, if so shown, was the proximate cause of the injury.”

“No. 2. While the servant assumes all the ordinary risks incident to his employment, yet a duty rests upon the company to commit no act of negligence whereby he may suffer injury and to exercise ordinary care to protect him from danger, and in this case, if you find from a preponderance of the evidence that the plaintiff was engaged in the performance of his duties at work in the construction of a barge for the defendant, and that one of the defendant’s agents and servants, who was at work upon the floor of said barge, while driving a piece of the decking in place with a top maul, let the mául slip- from Ms hand, and that said maul struck the plaintiff and injured him, and that the defendant thereby failed to exercise ordinary care to protect plaintiff from danger alleged-•in the complaint, and that the act of the said agent and servant of the defendant in letting said maul slip from his hand was the proximate cause of the injury, and that plaintiff at the time was exercising ordinary care for his own safety and had not assumed the risk, you will be authorized to find for the plaintiff and assess his damages at such a sum as will, from the evidence, fully compensate him for the injuries received. ’ ’

The court gave the above and other instructions at the instance of the appellee, which authorized the appellee to recover if the jury found that the alleged injury was caused by the negligence of a fellow-servant.

At the instance of appellant the court granted, among others, the following prayer for instruction:

“No. 12. You are instructed that the master is not an insurer of the safety of the servant, and the mere fact that there was an accident, and that plaintiff was injured thereby, is not sufficient to justify a recovery, but, before you could find a verdict against the defendant, the plaintiff would have to -show by a fair preponderance of the evidence not only that plaintiff was in the employ of defendant, and that he was injured by the act of another servant of defendant, but he must also show by a fair preponderance of the evidence that the injury was caused by the negligence of the fellow-servant ; and if he fails to show any of these facts by a fair preponderance of the evidence, your verdict must be for the defendant.”

The appellant asked the court to instruct the jury to the effect that if the appellee and Winkler were fellow-servants appellee could not recover for an injury to him causfed by the alleged negligence of Winkler. The jury returned a verdict in favor of the appellee in the sum of $8,000. Judgment was rendered in favor of the appellee for that sum, from which is this appeal.

1. Section 256 of the Federal Judicial Code provides in part as follows: “The jurisdiction vested in the courts of the United States in the eases and proceedings hereinafter mentioned shall be exclusive of the courts of the several States * * * * of all civil causes of admiralty and maritime jurisdiction, saving to suitors in all cases the right of a common-law remedy where the common law is-competent to give it.”

The appellant contends that under the above section appellee cannot maintain this suit because the injury occurred on a barge in the Arkansas River, a navigable stream, and because, under the rules of the common law, one servant cannot recover damages from the master for injuries done through the negligence of a fellow-servant.This contention cannot be sustained for several reasons. First, the above section has no application. The barge on which the alleged injury occurred is not alleged and proved to be a vessel engaged in commerce and navigation. This was essential to bring the appellee’s cause within the admiralty and maritime jurisdiction. See Peoples v. Steamer America, 34 Cal. 679; 1 C. J. p. 1251, § 16.

In the second place, if the appellant had alleged and proved that the barge, at the time of appellee’s injury, was engaged in commerce and navigation on the waters of the United States, then sec. 8337 (a) of the United States Compiled Statutes, 1916, would apply. That section provides that “in any suit to recover damages for any injury sustained on board vessel or in its service, seamen having command shall not be fellow-servants with those under their authority.”

In the third place, if the Federal court had jurisdiction of appellee’s alleged cause of action under the above section, then under the same section the State court exercising common-law jurisdiction .would also have jurisdiction of the cause, and such court should try the cause according to the rules of the State law applicable to such a tort at the time of its commission. The Judicial Code saves “to suitors in all cases the right of a common-law remedy.” 'Suitors under this statute have a remedy for their rights in a common-law court of the State under the rules of law existing when those rights accrue. Johnson v. Westfield, 135 S. W. (Ky.) 425; Walter v. Kierstead, 74 Ga. 18; Dougan v. Champlin Transportation Co., 56 N. Y. 1; Chase v. Amer. Steamboat Co., 9 R. I. 419, 11 Am. Rep. 274. See also Amer. Steamboat Co. v. Chase, 83 U. S. 522, 21 L. Ed. 369; McDonald v. Mallory, 77 N. Y. 546; 1 C. J. p. 1253. There was no error in the rulings of the court on the above question.

2. The appellant contends that the court erred in giving appellee’s prayers for instructions Nos. 1 and 2 set out above. Taken together, these instructions tell the jury that the duty rested upon the company to commit no act of negligence whereby a servant may be injured and to exercise ordinary care to protect him from danger. No issue of negligence predicated upon the failure of the appellant, its agents or servants, to exercise ordinary care to protect the appellee from dangers incident to his employment, is raised in the pleadings. It is, of course, hornbrook law that the master owes his servants the duty of exercising ordinary care to furnish him a safe place in which to work and safe implements with which to perform his duties, and the further duty of exercising ordinary care in engaging the services of those who are reasonably fit and competent for the performance of their respective duties in the common service. Nowhere is it alleged in the complaint that the appellant was negligent because it had failed to perform any of these duties. The only negligence alleged in the complaint is that “one of the defendant’s employees named Winkler carelessly and negligently allowed the sledge-hammer or top maul which he was using to slip and fly from his hand and strike plaintiff on his right leg with great force,” etc. If the servant was negligent in the manner alleged, to be sure the appellant would be liable for such negligence. Sec. 7137. Ozan Lbr. Co. v. Biddie, 87 Ark. 587; Aluminum Co. v. Ramsey, 89 Ark. 522; Missouri & N. A. R. Co. v. Van Zandt, 100 Ark. 462; Board of Imp. v. Moreland, 94 Ark. 380.

But the instructions broadly tell the jury that it was the duty of the appellant “to commit no act of negligence whereby he (appellee) may suffer injury and to exercise ordinary care to protect him from danger,” and that, if appellant failed to exercise ordinary care to protect the appellee from the danger alleged in the complaint, appellant would be liable. Instruction No. 2 above also tells the jury that if “one of the defendant’s servants * * * * let the maul slip from his hand and that said maul struck the plaintiff and injured him, and that the defendant thereby failed to exercise ordinary care to protect plaintiff from danger, to find for the plaintiff, ’ ’ etc. This part of the instruction permitted the jury to find that the appellant had not exercised ordinary care to protect the appellee from danger if his fellow-servant, Winkler, let the maul slip from his hand, whether Winkler’s act in so doing was a negligent act or not. In other words, under this part of the instruction the jury could return a verdict in favor of the appellee although it may have found that Winkler let the maul slip accidentally and without any negligence whatever. Such is not the law.

The instructions in the manner drawn were abstract, argumentative and misleading. These instructions were inherently erroneous, and a general objection to them was sufficient. However, if a specific objection were necessary, then instruction No. 12, supra, given at the instance of appellant, was tantamount to such objection. Instruction No. 12 is in conflict with instructions Nos. 1 and 2, and the charge as a whole was not consistent.

We find no other errors prejudicial to the appellant in the giving and refusing of prayers for instructions. In view of a new trial we deem it improper to set out and comment upon the testimony bearing upon the assignment that the verdict was excessive. For the error in granting appellee’s prayers for instructions Nos. 1 and 2 the judgment is reversed, and the cause is remanded for a new trial.


author: Hart, J.

text:
    Maloney v. Hale.
    Opinion delivered May 8, 1922.
    Husband and wife — wife permitting husband to use her property. —Where a wife permitted her husband to use her money and personal property as an apparent basis of credit, .she is estopped from claiming the property as against one who extended credit to her husband on the faith thereof.
    Appeal from Monroe Chancery Court; John M. ElUott, Chancellor;
    reversed.

      John Maloney brought this suit in equity against J. W. Hale and M. E. Hale, his wife, to subject certain property claimed by the wife to a judgment against her husband. On the 26th day of May, 1914, John Maloney obtained judgment before a justice of the peace against J. W. Hale for the sum of $100 and the accrued interest.
    According to the testimony of C. F. Greenlee, he has been engaged in the practice of law in Brinkley, Ark., since August 21, 1891. He is well acquainted with J. W. Hale and M. E. Hale, his wife. J. W. Hale has been engaged in the grocery, furniture and hardware, business in Brinkley, Ark., for the past twenty-eight years. Sometimes he has done business in the name of M. E. Hale & Co., and sometimes in the name of Hale & Co. J. ~W. Hale has given his entire time and attention to the business, and M. E. Hale has never even assisted in conducting the business. During this time J. W. Hale has acquired valuable real estate and has purchased and erected a brick store in which he now conducts the mercantile business. This building adjoins the office building of the witness. The stock of goods which J. W. Hale manages is worth at least $5,000, and the real estate which he controls is worth about $10,000. On December 15, 1917, J. W. Hale leased a store-room belonging to Jas. Gunn and C. F. Greenlee and directed Greenlee to make the lease in Hale’s own name. Greenlee had made out the lease in Hale’s wife’s name because he understood that he was doing business in her name. Hale objected to the lease being in this form and directed Greenlee to change it to Hale himself. J. W. Hale has no property whatever in his own name, but the property in his wife’s name has been accumulated entirely through his management and energy. Mrs. Hale has given no time or attention whatever to the business.
    John Maloney was a witness for himself. According to his testimony he had been in the store of Hale & Co. uid J. W. Hale was the only one conducting the business. He had never been paid anything on the judgment which he obtained against J. W. Hale.
    Two other witnesses testified that they had known J. W. Hale and his wife, M. E. Hale, for over twenty years, and that J. W. Hale had charge of the business and gave all of his time and attention to it. The witnesses were well acquainted with the parties, but never saw Mrs. Hale looking after the business in any way. They did business with Mr. Hale and the bills were always entered in the name of Hale & Co.
    •According to the testimony of J. W. Hale, he failed in business in Brinkley in the year 1892 or 1893. Since then he has not accumulated any property in his own right. His wife engaged in mercantile business about a year after his failure and he became the manager of her business. His wife’s brother-in-law gave her the money with which she commenced the business. He gave the dates and amounts of these gifts. They ranged in amounts from $20 to $200 each, and amounted to about $1,950.
    According to the testimony of M. E. Hale, she engaged in business with money furnished by her brother-in-law, and her husband conducted the business for her. All the property she now owns was acquired prior to the year 1909, while her husband managed her business. During the year 1909 her husband became mentally incompetent and was confined in a sanitarium for a while. Since then he has not superintended her business exclusively, and is not now mentally competent to conduct it. Her sons conduct her business for the most part. Her husband went back in the store when he returned from the sanitarium,' and has been there ever since. Mrs. Hale further stated that she went to market sometimes and did part of the buying herself. Her testimony with regard to her husband’s being confined in a sanitarium for mental unsoundness was corroborated.
    The chancellor found the issue for the defendants, and it was decreed that the complaint of the plaintiff should be dismissed for want of equity. To reverse that decree the plaintiff has duly prosecuted this appeal.

      C. F. Greenlee, for appellant.
    Where a married woman permits her husband to use her property as an apparent basis of credit, she will be estopped from claiming the property as against creditors who extend the credit to her husband. 84 Ark. 227; 126 Ark. 591; 136 Ark. 604; 147 Ark. 174.
    Where, however, through the husband’s skill in the management of a business, the capital being furnished by the wife, profits are made and invested in real estate in the name of the wife, the real estate has been held to be the property of the husband, and liable for his debts. 21 Cyc. 1392; 20 Cyc. 360; 56 L. R. A. 938; 85 Ky. 168; 35 S. W. 106; 12 Bush. 303; 53 S. W. 528.

      Bogle & Sharp, for appellees.
    Although the husband gives his time and attention the management of his wife’s estate, the rents and profits arising therefrom cannot be subjected to the payment of his debts. 75 Ark. 562; 89 Ark. 77.
    The husband had the right to give his personal service to the*management of his wife’s property. The result of his labor is not subject to his debts. 3.23 Mo. 450; 107 la. 649; 154 Mo. 415; 55 S. W. 441. His control was only that of agent, and did not affect her rights. 7 Vroom (N. J. Eq.) 481; 83 Mo. App. 151; 21 Ind. 115; 21 111. App. 282; 10 Mich. 333.
   Hart, J.

(after stating the facts). Counsel for the plaintiff seeks to reverse the judgment upon the doctrine laid down in Roberts v. Bodman-Pettit Lumber Co., 84 Ark. 227; McClintock v. Skinner Co., 126 Ark. 591, and Talley v. Davis, 136 Ark. 604. In those cases, as well as other cases, this court has held that where a married woman permits her husband to hold her personal property out as his own and to use it as an apparent basis of credit, she will be estopped as against her husband’s creditors to claim it as her own.

On the other hand, counsel for the defendants seek to uphold the decree on the doctrine of Sharp v. Fitzhugh, 75 Ark. 562. In that case it was held that the wife’s property is not liable to her husband’s creditors for its increase or enhancement in value on account of any reasonable contribution of his time, labor, or skill in the management of it. The reason is that creditors cannot compel the husband to work for them, and cannot command Ms skill or labor. The wife has the right to control the profits of her own property, and her husband may manage it for her. There is a marked distinction, however, between the wife’s entrusting the entire management and control of her separate property or business to her husband when the business is openly conducted as her own, and in suffering her own money to be .used in a business by her husband, and blended with his earnings so that it cannot be separated. Equity looks to the substance of a transaction and not its form. It disregards all matters of form and is governed by the facts. The substance of the present transaction is that the wife permitted her money to be used by her husband in carrying on a business under the name of Hale & Co. Her money and the business skill and industry of her husband cannot be separated. He used her money in building up the business and gained credit on the faith ■ of it. A preponderance of the evidence shows that the husband devoted his whole time, energy and skill to the management and conduct of the mercantile business. The bills were sent out in the name of Hale & Co. The wife never gave any attention whatever to the business. Her husband obtained credit on the faith of its being his own business. Husband and wife occupy the most confidential relation in life, and it is well settled that the wife cannot give her money to her husband and permit him to use it for a long series of years in obtaining credit and then claim that the profit derived from the use by her husband is exempt from the claims of his creditors.

We are of the opinion that the course of conduct of Mr s. Hale in permitting her husband to use her money and property as an apparent basis of credit estops her from claiming the property against.the plaintiff, who extended credit to her husband on the faith thereof.

Therefore the chancery court erred in dismissing the complaint of the plaintiff for want of equity, and for that error the decree will he reversed and the cause remanded, with directions to grant the prayer of the plaintiff’s complaint, and for further proceedings in accordance with the principles of equity.


text:
    Nichols v. State.
    Opinion delivered May 8, 1922.
    1. Criminal law — evidence of attempt to steal. — Under an indictment for stealing a cow, testimony of a witness that he and defendant with others had made an unsuccessful attempt to steal a yearling the night before the cow was stolen was admissible to show a plan or scheme, where the evidence showed that defendant and witness belonged to a band organized for theft.
    2. Larceny — participation in act. — Defendant cannot be convicted of larceny unless he was present and assisted in its commission, even though the theft was in furtherance of a conspiracy into which he had entered.
    Appeal from Polk 'Circuit Court; James 8. Steel, Judge;
    reversed.

      Norwood & Alley, for appellant.

      J. 8. Utley, Attorney General; Elbert Godwin and W. T. Hammock, Assistants, for appellee.
   Hart, J.

Charlie Nichols prosecutes this appeal to reverse a judgment of conviction against him for grand larceny charged to have been committed ¡by stealing a cow from Ira McOown in Polk County, Ark.

The first assignment of error is that the court erred in allowing Jim Murray to testify that he and the defendant with others had tried to steal a yearling the night before tbe cow was stolen, but could not catch her. This assignment of error is not well taken.

On the part of the State it was shown that the defendant, Nichols, and Jim Murray belonged to a band organized for the purpose of stealing and committing other crimes and shielding each other from prosecution therefor. Under these circumstances the evidence was admissible for the purpose of showing a plan or scheme for stealing cows and other property and disposing of them. Murphy v. State, 130 Ark. 353.

The next assignment of error is that the court erred in giving instruction No. 3 at the request of the State. The instruction is as follows: “If you find from the testimony, beyond a reasonable doubt, that the defendant, Jim Murray, and others entered into a conspiracy to commit larceny and other crimes, and that in furtherance of such agreement or understanding, Jim Murray stole the McCown cow, you will convict the defendant, although you may further find that the defendant did not actually participate in the larceny.”

The defendant was indicted for stealing a cow. On the part of the State it was shown that the cow was first placed in the defendant’s lot, and that the defendant subsequently assisted Ms brother and Jim Murray in driving the cow out of the lot. The cow was driven out of the lot for the purpose of stealing her. She was carried to another place and killed and the meat divided between the defendant Nichols, Jim Murray and others.

• On the part of the defendant it was shown that he was not at home the day that' Ms brother and Murray placed the cow in his lot and did not know anytMng about it. He had nothing to do with stealing the cow or receiving a part of the meat after she was butchered. The defendant could not be convicted upon an indictment for larceny if he was not present aiding, abetting, and assisting in stealing the cow. He could not be convicted of the larceny of a cow by showing that he 'had entered into a conspiracy with other parties to commit larceny and other crimes, and that the other parties had stolen a cow in furtherance of such crime. If he was not present, aiding and assisting in the taking and carrying away the cow, the defendant was not guilty of larceny and could not be convicted of the crime because he had entered into a conspiracy previously to commit that and other crimes. Hughes v. State, 109 Ark. 403.

Therefore the court erred in giving the instruction complained of, and for that error the judgment must be reversed and the cause remanded for a new trial.