author: Humphreys, J.

text:
    Security Benefit Association v. Punch.
    Opinion delivered April 11, 1927.
    1. Appeal and error — conclusiveness of verdict. — In an action on a beneficiary certificate of insurance, where the issue was whether insured paid the annual premium when the policy was delivered to him, was submitted to the jury with proper instructions, an adverse verdict is conclusive on appeal if supported by substantial evidence.
    2. Insurance — payment of premium- — evidence.—In an action on a policy of insurance, evidence held to warrant a finding that the annual premium was paid by the insured when the policy was delivered.
    3. Payment — receipts as evidence. — Receipts for payment of money are prima facie evidence of payment thereof, though open to contradiction, and the burden of overcoming the presumption devolves upon the party giving the receipt.
    Appeal from Pulaski Circuit Court, Third Division; Marvin Harris, Judge;
    affirmed.

      T. N. Robertson, A. J. DeMers, James E. Hogue, A. W. Fulton and George R..Allen, for appellant.

      J. A. Sherrill, for appellee.
   Humphreys, J.

This appeal is from a judgment in the sum of $5,208.30, including interest to the date thereof, rendered by the circuit court of Pulaski County, Third Division, in favor of appellee against appellant, upon a beneficiary certificate of insurance issued on the 25th day of .October, 1923, by appellant, a fraternal beneficiary association, in consideration of an annual premium of $113.75, to Sainuel A. Punch, who died on the 25th day of September, 1924. Appellee was the beneficiary named in the policy.

Many issues were, joined in the pleadings, and a very lucid, edifying brief has been filed by learned counsel for appellant in presentation of the points of law growing out of the several issues joined, but, for the purposes of this appeal, we deem it necessary to discuss one issue only, as that issue is determinative of the case. The issue referred to is whether the insured paid an annual premium of $113.75 when the policy was delivered to Mm. TMs issue was submitted to the jury on proper instructions, and, under the well-established rule governing appeals to this court, appellant is bound by the adverse verdict and judgment, if supported by any substantial evidence. The policy sued upon was not found for some time after the death of the insured. When found, a receipt was attached thereto, signed by the district manager of appellant, for $113.75, dated November 9,1923, the date the policy was delivered to and accepted by the insured. This was the correct amount of the annual premium:

The district manager testified that, on October 25, 1923, pursuant to agreement, he presented the $5,000 policy with receipt attached for the annual premium of the insured, and left them for his inspection; that the insured discovered that the policy contained an error concerning the lodge to which he belonged'; that he procured the policy, left the receipt with the insured, and returned it to the home office for correction; that; after being corrected and returned, he took the policy back to the insured; that the insured had obtained other insurance in the mean time, and did not feel able to carry the $5,000 policy, but that he finally prevailed upon him to keep it; that the insured paid him $68 at the time, for which he issued a receipt; that he failed to take up the first receipt which he had left with Mm for $113.75; that he explained to the insured that, as the $68 did not cover the premium for six months, he would have to retain it and pay the premium monthly, out of same; that he delivered the policy the second time with the $68 receipt on November 9, 1923; that he paid the monthly premium out of the $68 payment until exhausted; that he was away on a vacation in June, and did not pay the premium, which resulted in the automatic suspension of the insured, under the by-laws of the appellant; that on July 1, 1923, he paid the insured’s premium out of his own money for June and July, which had the effect of automatically reinstating him; that the August dues were not paid, and insured was again suspended; that in September the local financier notified witness that she was ready to send in her report, and asked about the premiums on insured’s policy; that he told her to report him suspended and to reinstate him, and that, as soon as he came down town, he would, give her the money; that, later, he called and gave her a check for $20.50, and was informed that the insured had been reinstated on the books on September 18, 1924, but that she had not entered the payment on the cashbook; that, four or five days later, he was in the office, and the financier said that, to make the entries in the cashbook come in proper order, she had changed insured’s reinstatement date to September 28; that she had not cashed the check, so the witne>s-s took it up and gave her the money instead; that, under his contract, he received the first eleven months premiums oh policies as commissions, and that, after insured was reinstated the last time, and the head office had received the report from the local financier to that effect, he received a letter from the head office showing payment of his commissions on the insured’s certificate; that, after the death of the insured, his wife, the appellee herein, refunded the premiums he had advanced for the insured, amounting to $40.25; that he did not believe the home office would have paid him the commission if it had known the last $20.50 was paid after the insured’s death.

The financier of the local council testified that the insured was suspended in June, 1924, and reinstated the following month; that the former district manager paid the June and July assessments out of his own money; that, on the 18th day of September, the former district manager told her, over the telephone, to reinstate the insured, who had failed to pay the August dues, and that he -would bring the money in; that, acting on the former manager’s promise, she reinstated insured upon the book without receiving the money, and afterwards changed the date from the 18th to the 23d of September; that the insured died on September 25, and that the manager brought the money 1o her on the 26th day of September, after insured’s death.

The by-laws of appellant were introduced by Mr. Abrahams, which provided that assessments of members are due on the first day of the month, and must be paid on or before the last day of the month, and, if not paid, the insured shall stand suspended without notice; also, that the insured may be reinstated within sixty days by paying* up all arrearages, provided the insured is in good health at the time of making payment for reinstatement; also, that the association shall not be bound by any irregularity, neglect or illegal actions of any of its subordinate council or any of its officers.

The original certificate or policy and the receipt for $313.75 were introduced in evidence, and have been brought to this court for inspection. The certificate or policy bears date of October 25,1923, but was apparently signed by the district manager and the insured on the same date said receipt was signed. The receipt was signed on November 9, 3923, being the date on which the policy was delivered. This is inferable from the fact that the same color of ink was used by the manager and the insured in signing the policy which the manager used in signing the receipt. The insured did not leave Little Rock for California, where he was injured and died, until the 14th day of August, 1924. He was not notified bv the manager oi‘ financier that he was or had been in default in the payment of his assessments or premiums.

We think the conflict in the book entries, with the testimony of the manager and financier as to when the payments or assessments or premiums were actually made, the change of entries in the books, the failure of the manager to call upon the insured for his assessments or premiums after the $68 was exhausted, and the date of the receipt on November 9, 3923, instead of October 25, 1923, so as to correspond in date with the policy, furnish warrant to the jury in drawing the inference that the full annual premium of $133.75 was naid when the. poliev was delivered on November 9, 1.923, as indicated by the receipt. The receipt is a very strong piece of evidence itself to the effect that the amount specified therein was paid when same was executed and delivered to the insured.

In speaking of receipts for the payment of money and their effect, this court said, in the case of Continental Gin Co. v. Benton, 104 Ark. 367, 149 S. W. 528, that:

“Receipts of payment are prima facie evidence thereof; they are open to explanation and contradiction, but the burden of overcoming the presumption and prima facie case and making the explanation devolves upon the party, giving the receipt.”

And in the case of Fidelity Mutual Life Ins. Co. v. Click, 93 Ark. 162, 124 S. W. 764, said:

“The introduction of the receipt, properly signed, raised a presumption of payment within the terms of the receipt and cast the burden of overcoming the presumption by affirmative proof of nonpayment. Appellee introduced no other proof of payment, and perhaps had none, as the person shown by the face.of the receipt*to have made the payment was then dead. This presumption reached to every available mode of payment, and, in order to overcome it, the burden was on appellant to close up by affirmative proof every avenue through which the payment could have been made. ’ ’ .

In view of what has been said with reference to the testimony and the rules just quoted, we think the evidence. amply sufficient to sustain the verdict and judgment.

No error appearing, the judgment is affirmed.


source: Caselaw Access Project

author: Humphrey's, J.

license: Public Domain

text:
    Missouri & North Arkansas Railroad Company v. United Farmers of America.
    Opinion delivered April 11, 1927.
    1. Appeal and error — conclusiveness of jury’s finding. — The verdict of a jury, being based upon substantial evidence, is conclusive upon appeal.
    2. Carriers — notice of arrival of shipment. — A requirement in bill of lading that notice of arrival of a shipment should be given to the consignee is not complied with by giving such notice to the consignor.
    3. Carriers — loss of goods — a^t of god. — To exempt a carrier from liability as insurer for the safe transportation and delivery of goods on account of their destruction by act of God, the act of God must be the sole cause of the loss.
    4. Carriers — loss of goods by lightning. — A railroad company is not relieved from liability for loss of freight in a warehouse at destination, caused by fire originating from lightning, where, if the railroad company had given proper notice to the consignee, the freight would have been removed before the fire.
    3. Carriers — liability for loss of freight in warehouse. — A railroad company is not relieved from liability for the loss of cottdn consigned to shipper’s order and destroyed by fire in a warehouse at destination, on the theory that the warehouse company was the shipper’s agent, where the railroad company’s control over the freight had not.ceased.
    Appeal from White Circuit Court; E. T). Robertson, Judge;
    affirmed.

      Shouse £ Roidand and R. E. Wiley, for appellant.

      John E. Miller and J. Mitchell Cockrill, for appellee.
   Humphrey's, J.

Appellees instituted suit against appellant in the circuit court of White County to recover $343.91, the value of tivo bales of cotton' which appellee, United Fanners of America, shipped from Heber Springs to Searcy, to be sold by its agent, W. B. Cook; said cotton having been destroyed by fire in the warehouse. of the Searcy Compress Company, to whom appellees delivered same.

It was alleged, in substapce, in the complaint, that, on January 19, 1924, the United Farmers of America delivered two bales of cotton to appellant, a common carrier, at Heber Springs, to be transported to Searcy, for wliieli a bill of lading was issued; tliat, on January 25, 1924, the cotton arrived at Searcy and avrs delivered to the Searcy Compress Company, without giving notice to W. B. Cook of the arrival of the cotton; that, on February 3, the-compress burned and the cotton ivas destroyed; that the shipment ivas consigned to shipper’s order, with directions to notify W. B. Cook, agent of said appellees at Searcy, who received no notice or information that the cotton had been placed in the compress until February 4, after its destruction; that' said appellee, for a valuable consideration, prior to tffe institution of the suit, assigned all its rights, interests and title in and to said cotton to its coappellee, Hartford Insurance Company.

Appellant filed an answer, denying that it failed to give notice of the arrival of the cotton to W. B. Cook, or that W. B. Cook had no notice or knowledge of the arrival of the cotton at Searcy until February 4.

B}f way of further defense, appellant alleged that the cotton was stored with the Searcy Compress Company in accordance with the custom between appellant and appellee, United Farmers of America, without the surrender of the bill of lading, which custom constituted the Searcy Compress Company appellant’s agent to .receive the cotton; that appellant transported the cotton to Searcy 'and gave notice to W. B. Cook, who failed to move the cotton, and, after'a reasonable time, appellant delivered the cotton for storage to the Searcy Compress Company, which was a public and licensed warehouse, on January 25, 1924, and afterwards the compress was struck by lightning and the cotton burned in the resulting fire.

The following provisions of said bill of lading were pleaded as a further defense:

“Section 1. (b). No carrier shall be liable for loss or damage caused by the act of God. Carrier’s liability to he that of warehouseman only for loss by fire occurring after the expiration of the free time allowed by tariffs after notice of arrival at destination and placement of property for delivery.

“Section 4 (a). Property not removed by the party entitled to receive it within the free time allowed by tariffs after notice of arrival at destination and placement of property for delivery may be kept in vessel, cars, or depot or warehouse, subject to charges for storage and to carrier’s responsibility as warehouseman only, or, at the option of carrier, may be stored in public or licensed -warehouse at the place of delivery, at the- cost and without liability on the part of the carrier, and subject to a lien for all freight charges.”

The cause was submitted to the court for trial, sitting as a jury, upon the pleadings, testimony adduced by the respective parties and a stipulation to the effect that the Searcy compress, where the cotton was burned on February 3, 1924, was destroyed by a stroke of lightning; and that the free time allowed by the tariffs for removal of the cotton after notice of arrival"at destination and placement for delivery'was 48 hours, which trial resulted in a judgment against appellant for $384.60, from which is this appeal.

The record reflects, according to the undisputed testimony, that, on January 19, 1924, United Farmers of America, of Ileber, Arkansas, shipped two bales of cotton to Searcy, Arkansas, over appellant’s railway, consigning same to shipper’s order, with directions in the bill of lading to notify appellant’s agent, W. B. Cook, when the cotton arrived in Searcy; that the cotton arrived at its destination on January 25, 1924, and was delivered^ to the Searcy Compress Company without the produc-" tion of the bill of lading by W. B. Cook; that the bill of' lading for the two bales of cotton had been mailed to and received by V. B. Cook; that the cotton remained in the compress until February 3, 1924, at which time it was destroyed by fire resulting from a flash of lightning that struck the warehouse; that, liadW.B. Cook been notified of the arrival of the cotton when it reached its destination or -when placed in the warehouse, he would have immediately obtained -warehouse receipts for same and Ramifies of .the cotton, which would have enabled him to place it oil tlie market; that, „ without warehouse receipts and samples, he could not offer the cotton for sale; -that, had he been notified of the arrival of the cotton or that same had been placed in the compress, he could have included it in the blanket insurance policy by proper designation; that the manner of handling cotton theretofore shipped by United Fanners of America to W. B. Cook for.sale was for Cook, after receiving’ notice or weight sheets from the Searcy Compress Company of the arrival and storage of the cotton, to present the bill of lading to appellant, paying the freight, and immediately obtain warehouse receipts from the Searcy Compress Company for same; that'W. B. Cook failed to receive any notice of the arrival of the cotton at its destination from appellant; that the bill of lading contained the provisions heretofore set out as § 1 (b) and § 4 (a).

The record reflects a conflict in the testimony as to whether W. B. Cook received notice or weight sheets of the arrival of the cotton from the Searcy Compress Company immediately after the ai-rival and storage of same, lmt this conflict has been resolved against appellant and it is bound by the finding of the court, as them is substantial evidence to sustain the finding. In other words, in reviewing the case on appeal to ascertain whether the trial court committed error, the finding of the trial court to the effect that appellant failed to give notice of the arrival of the cotton to W. B. Cook, or that W. B. Cook received notice or infoimation from the Searcy Coixxpi’ess Company of the arrival of the cotton or other source, must be treated as true.

Appellant’s main conteixtion for a reversal of the .judgment is that it was exempted from liability as an insurer of the cotton under the provisions of § 3 (b) of the bill of lading set out above, because the undisputed testimony reveals that the cotton was destroyed by axi act of God. Appellant cites the ease of Mays v. Mo. & North Ark. Rd. Co., 168 Ark. 908, 271 S. W. 977, as conclusive of its contention. In the case cited liability was not claimed on account of a failure to comply with the contract. On. the contrary, it affirmatively appeared that the carrier complied with the contract in that case. In the case at bar liability was predicated upon the failure of appellant to comply with the requirements of the hill of lading and §§ 910 and 913 of Crawford & Muses’ Digest, by giving notice of the arrival of the cotton to the party designated in the bill of lading. There is substantial evidence in the record in support of the finding of the court that the notice was not given. It is true that the undisputed evidence disclosed that the Searcy Compress Company mailed the weight sheets or notices to United Farmers of America at Heber Springs as soon as the cotton was placed in the compress, but that did not meet the requirements in the bill of lading to give notice to W. B. Cook, who resided in Searcy and was engaged to sell the cotton. The United Farmers of America had a right to presume that notice of the arrival of cotton had been given to Cook, notwithstanding the notice which had been sent to it. On account of the distinction pointed out between the cases, the instant case is not ruled by the case cited. In order to exempt a common carrier from its liability as an insurer for the safe transportation and delivery of goods on account of destruction of same by an act of God, the- act of God must be both the sole and proximate cause of the injury. St. L. S. W. Ry. Co. v. Mackey, 95 Ark. 301, 129 S. W. 28.' In the instant case the direct cause of the destruction of the cotton by fire was a stroke of lightning that set fire to the warehouse. It cannot be said, however, that the cotton would have been destroyed by this act of God if appellant had given the required notice to Cook. Had Cook received notice of the arrival and storage of the cotton he could have placed it upon the market and sold-it before same was destroyed. In any event, he would have1 insured it against loss by fire. The negligent act of .appellant, then, in failing to notify Cook, was an efficient and cooperative cause in the destruction of the cotton. The lightning directly destroyed it, but it was not the sole and proximate cause of its destruction.

Appellant makes the further contention for a reversal of the judgment that delivery of the cotton to the Searcy Compress Company constituted delivery to the consignee. This contention is made upon the theory that the Searcy Compress Company was the agent of United Farmers of America, because it was customary, in handling the shipments of cotton theretofore, for appellant to turn the cotton over to the Searcy Compress Company before the freight was paid and before tlie redemption of the hill of lading. We do not understand from the record that, when appellant turned the cotton over to the Searcy Compress Company, it ceased to control the same. According to the undisputed evidence, the compress company did not issue receipts for the cotton to the consignee until the consignee paid the freight and surrendered the bill of lading which appellant had issued to it. In other words, it was not within the power of Cook, the consignee designated in the hill of lading, to secure any control over the cotton until he paid the freight thereon and surrendered the hill of lading. We think the fact that the Searcy Compress Company was in the habit of notifying, the consignee of the arrival and storage of the cotton is very strong evidence that it was acting in the capacity of agent for appellant. The cotton was not delivered to the designated consignee prior to its destruction, hence appellant was a carrier in the control of the cotton -when same was destroyed.

No error appearing, the .judgment is affirmed.


text:
    Lange v. Mayo.
    Opinion delivered April 11, 1927.
    1. Exchange op property — discrepancy in cultivated acreage.— Under a contract for exchange of a farm for city property, a discrepancy of 125 acres in the cultivated load from’that represented was a material one.
    2. Exchange of property' — false representations — False representations as to acreage of cultivated land,- though material in a contract for exchange of lands, are not sufficient grounds for avoiding the exchange, or to prevent specific performance of the contract.
    3. Specific performance — false representations. — Though, in a suit to enforce specific performance of a contract for exchange of lands, plaintiff made false representations as to the acreage of cultivated land, specific performance will not be denied, where defendant examined, the property carefully and was aware of the discrepancy as to acreage before entering into the contract.
    Appeal from Pulaski Chancery Court; Jolm E. Mar-tillean, Chancellor;
    affirmed.

      Will G. Akers, for appellant.

      Coleman £ Riddick, for appellee.
   Humphreys, J.

This suit was instituted by- appel-lees against appellants in the chancery court of Pulaski County, to enforce the specific performance of a contract for the exchange of their farm in Lonoke County, Arkansas, for an apartment house belonging to appellant in Capitol View Addition to the city of Little Rock, Arkansas.

Appellants interposed the defense that they were induced to enter into the contract through the false and fraudulent representation of appellees that 500 acres of the land were in a high state of cultivation, and, on account of the alleged misrepresentation, sought by cross-bill to cancel the contract.

The cause was submitted to the court upon the pleadings and testimony adduced by the respective parties,’ which resulted in a finding that appellees were entitled to a specific performance of the contract, and decreed accordingly, from which is this appeal.

In October, .1925, appellees advertised tlie farm for sale or exchange, describing it, as to acreage, as comprising’ 594 acres of land, 500 acres of 'which were in cultivation.. David 0. Lange, one of the appellants, answered the advertisement by letter with a view to exchanging his apartment house for the land. Appellees replied by letter, particularly describing the farm and stating that there were 500 acres in a high state of cultivation. David 0. Lange made no response to the letter. Later .R. W. Mayo called upon him and offered to show him the farm. Lange accepted the invitation, and they visited it and went all over the farm on Sunday, November 1. While there, Lange asked Mayo as to the acreage in cultivation. According to the testimony of Lange, Mayo said 500 acres. According to the testimony of Mayo, he made the following reply to the question: “Mr. Lange, I do not know just how many acres of it are in cultivation, but we bought the place for 594 acres, 514 in cultivation. T think there is approximately 500 acres in cultivation.” The parties were unable to agree upon a trade, so the deal was stopped. On November 4 Lange wrote to Mayo as follows: “I was sorry that we could not get together on a trading proposition, but thought you might be interested in the cash proposition I made of $15,000 for my equity.” After receiving this letter, appellees concluded they could trade the apartment house for a rice farm, so negotiations were resumed. R». W. Mayo testified that, in the course of the negotiations, he said: “Mr. Lange, I told you about this trade. Now, I tell you what to do. T want you to be thoroughly satisfied in what you are doing. Ton go down to the farm — go down in Lonoke County, talk to the different tenants that are on the farm, the different neighbors, find out what cotton they are making, and about the value of different lands around there, and, when you are thoroughly satisfied, come back and make me a proposition, and I think T can handle it.” This statement was not contradicted by Lange.

According to tlie testimony of A. (J. Brummitt, Lange came with W. D. Mayo the first Sunday in November and looked over the farm; and came alone the three following Sundays, the 8th, the 15th, and the 22d, arriving each time at about 11 o’clock a. m. and leaving late in the afternoon, after looking over and inspecting the farm. The witness stated that the first two Sundays he met and became acquainted with Lange, but had no conversation with him concerning the farm; that, on the third Sunday, the 15th of November, he had a conversation with Lange relative to renting- the farm if he purchased same; that he offered to pay him $6 per acre for the land he was cultivating; that Lange was not pleased with the offer, slating that he could not make 6 per cent, on the investment at that price, as he had been told by N. A. Marshall, another tenant on the place, that there weren’t more than 375 acres in cultivation. Lange then proposed that, if he got the land, to let witness have it for one-fourth of the crop on the cotton land, $6 an acre on the corn land, and $8 an acre on the land planted to other crops. Witness refused this proposition, and they came to no agreement.

According to the testimony of N. A. Marshall, Lange asked him how many acres there were on the farm in cultivation, and that he told him about 375 acres inside the fence lines.

Lange admitted having the conversations with Brummitt and Marshall relative to the acreage of cultivated lands in the tract, but claimed they were subsequent to the execution of the contract, which ivas signed by the parties on the 18th day of November. He stated that he received his first information as to the shortage of cultivated lands in the tract from Marshall, and that, after making further investigation and ascertaining that Marshall’s statement was about correct, he declined to proceed further with the contract. He also stated that he signed the contract in reliance upon Mayo’s representation that the tract contained 500 acres of cultivated land, and would not have signed it unless he had believed tliat there was that much laud in cultivation. After the parties came to an understanding relative to the terms of the exchange of lands, they consulted their respective attorneys and had them prepare the contract. No reference was made in the contract to the amount of cultivated land in the. tract.

Appellees employed-Smith to survey, out the cultivated lands, and, according to his survey, there were 468 acres of cleared land in the tract, including 30 acres of buckshot land used as pasture.

Lange employed J. 0. Jones to survey out the cultivated lands, and, according’ to his survey, excluding the pasture, the tract contained 385 acres of land actually in cultivation.

Other witnesses who were familiar with the lands testified as to the amount of lands actually in cultivation on the tract, who varied in their estimates from 350 to 450 acres.

We are convinced, after a careful reading of the record in the case, that appellees misrepresented the amount of lands in cultivation on the tract in the advertisement'for the sale and exchange of the land, in the letter they wrote in response to Lange’s letter of inquiry, and in their conversations and consultations with him prior to the time the deal was stopped. After negotiations were resumed, however, appellees requested Lange to make a thorough investigation'of the farm by going upon it, talking to the tenants and neighbors around about, and, after satisfying himself, to make them a proposition. Lange made a rather thorough investigation of the farm, and, according to the testimony of two witnesses, became aware of the discrepancy in the acreage of cultivated lands on the tract three days before he entered into the contract for the exchange of the properties. The shortage in acreage in cultivated lands was about 125 acres, and a material discrepancy. False and fraudulent misrepresentations as to the acreage, which is material, in a land deal, unless relied upon, are not sufficient grounds to avoid a sale or trade or to prevent the specific performance of tfie contract. In view of tfie inspection of tfie farm made by Lange, tfie request of appellees for fiim to make fiis own investigation, and tfie testimony of Brummitt and Marsfiall, it cannot fie said tfiat tfie finding of tfie chancellor, to tfie effect that the discrepancy in tfie acreage of cultivated lands did not induce the trade, is contrary to a clear preponderance of tfie evidence. With tfie opportunity afforded Lange to investigate and inspect tfie farm, it must be presumed that fie exercised and relied upon his own judgment in making the contract. We think tfie rule announced by this court in tfie case of Carwell v. Dennis, 101 Ark. 608, 143 S. W. 137, is applicable to tfie facts in tfie instant case. Tfie rule referred to is as follows:

“A misrepresentation, in order to affect the validity of a contract, must relate to some matter of inducement to tfie making of tfie contract, in which, from the relative position of the parties and their means of information, tfie one must necessarily be presumed to contract upon tfie faith and trust which he reposes in the representations of tfie subject of tfie contract. For, if tfie means of information are alike accessible to both, so that, with ordinary prudence or diligence, tfie parties might respectively rely upon their own judgment, they must be presumed to have done so. Or, if they have not so informed themselves, must abide by tfie consequences of their own inattention and carelessness. ’’

No error appearing, tfie decree is affirmed.


author: Kxrbv, J.,

text:
    Norvell v. McFadden.
    Opinion delivered April 11, 1927.
    1. Guardian and ward — conversion of assets — jurisdiction.—A ward, in becoming of age, may bring suit in equity against a person receiving money from the guardian and wrongfully converting it, without first going to the probate court for settlement of the guardian’s account.
    2. Pleading — indefiniteness.—Indefiniteness or uncertainty in a pleading should be reached by motion to make more definite and certain, and not by demurrer.
    3. Trial — wrong forum — remedy.—Where a complaint in chancery states a cause of action triable only at law, the remedy is a motion to transfer to the proper forum, and not a demurrer.
    Appeal from Arkansas Chancery Court, Northern District; TI. B: Lucas, Chancellor;
    reversed.
    STATEMENT BY THE COTJBT.
    Appellant instituted this suit in the chancery court against H. F. McFadden and the Exchange Bank & Trust Company. Complaint alleges that Mrs. Fannie McFadden (formerly Norvell) was the duly appointed guardian of the person and estate of plaintiff by the probate court of Arkansas County, where she and the plaintiff lived, and came into the possession, as such guardian, of $1,250 of his estate on the 20th day of August, 1923, and on that' day wrongfully’delivered said money to defendant, IT. F. McFadden, and said McFadden wrongfully converted said money to his own use, and has never accounted for same.
    The defendant, McFadden, is indebted to the plaintiff in the additional sum of $352 for rents collected by him during the year 1925 from tenants of certain property of the plaintiff’s, located in the city of Stuttgart, having collected from the said tenants therein the rent for eight and one-half months at $40 per month. The defendant collected said rents and converted same to his own use, hut had delivered or caused to he delivered to plaintiff the sum of $115 and a ring of the value of $60, for which he was entitled to credit on amount of the rents collected.

      Plaint iiT was out it led to recover from tlie defendant the sum of $1,602, with interest’ thereon until paid, less the sum of $194.50. Plaintiff is entitled to recover interest at the rate of 10 per cent, per annum on the said $1,250 from the 20th day of August, 1928, and to recover interest from the clay of filing of the suit on the sum of $352 rent collected, less the amount of the credit.thereon.
    The complaint further alleges that Mrs. Fannie McFadden is the wife of the defendant, H. F. McFadden, and both are nonresidents of the State of Arkansas and' are citizens and residents of the State of Texas.- Plaintiff has arrived at legal age, and has never received anything in payment of the aforesaid sums, and that defendant is entitled to have deducted $194.50 only from the amount received and converted by him.
    It was further alleged that defendant might contend that he had granted or given to plaintiff an interest in certain property in his possession in the State of Texas, which should compensate for the monev claimed by plaintiff and sued for, that it had been intimated to plaintiff that defendant desired to adjust or settle the controversy by handling said Texas property in partnership with plaintiff, but that he had not done so, and that he refused to make any adjustment thereof, and denies that the plaintiff was given any interest in said property.
    It further alleges that the defendant and garnishee, the Exchange Bank & Trust Company, has in its .hands various properties, effects, notes, accounts, assets and moneys belonging to the defendant, McFadden, and in which he owns an interest, and said defendant and garnishee, Exchange Bank & Trust Company, is indebted fo defendant, McFadden; that the said properties, effects, notes, accounts, assets and moneys may be carried in the name of Mrs. Fannie McFadden, and the indebtedness for moneys on deposit may be carried in her name, but the. defendant, II. F. McFadden, owns and has an interest in said property; and that, even if Mrs. Fannie Webb McFadden claims an interest in said property, effects; notes, accounts, assets, moneys, debts and deposits, such interest, if any, is subject to the rights of the plaintiff because of' the acts of Mrs. Fannie McFadden, former guardian of plaintiff, in wrongfully delivering the aforesaid $1,250 to H. F. McFadden, and because of her acts in allowing and consenting to the said McFadden. receiving the aforesaid rents, and because of her acts in allowing the said H. F. McFadden to convert the said money to his own use, and because of her acts in consenting to such conversion of such trust moneys.
    That said moneys or properties may be carried in the namu of McFadden Jewelry Company, defendant’s trade name. Plaintiff is entitled to writ of garnishment to impound all the aforesaid effects,- credits, notes, bills, accounts, chóses in action, money or deposits in the hands of defendant and garnishee.^
    Propounded interrogatories to the defendant and garnishee relating to said property alleged to be in its hands, it alleges that the garnishee is a domestic corporation doing a general banking business in the city of Stuttgart, and plaintiff is entitled to an attachment and garnishment for seizure and impounding of all the property in possession of defendant and garnishee, and to have defendant and garnishee answer the allegations and interrogatories, and to subject all the said property and things to the payment and satisfaction of the aforesaid indebtedness and the decree of the court. Prayed judgment against defendant in the sum of $1,250, with interest thereon from the 20th day of .August, 1923, until paid, at the rate of 10 per cent, per annum; and the further sum of $157.50, with legal interest from date, and an attachment and garnishment for impounding the property in the possession of the garnishee; that, upon final judgment, the attachment and garnishment be sustained and all the property of the defendant in the hands of the garnishee be subjected to the satisfaction of the decree rendered, and that any interest Mrs. Fannie McFadden may claim, if any, of said property be held and 'declared subject to the rights of the plaintiff to recover herein.

      Affidavit for attacliment and garnishment and warning order was made and bond filed' and approved, and a writ of attachment and garnishment issued and served.
    Defendant garnishee’s answer admitted an indebtedness, and that it held certain other properties belonging to defendant, if he.had not assigned or transferred them.
    Defendant filed a general demurrer to the complaint, alleging it did not state, facts sufficient to constitute a cause of action within the jurisdiction of the court nor facts sufficient to constitute a cause of action.
    The court held the demurrer to the complaint well taken, saying the complaint herein does not allege facts sufficient to constitute a cause of action and should he dismissed for want of equity, and dismissed same for want of equity, and from the judgment this appeal is prosecuted.

      A. G. Machan and John W. Moncrief, for appellant.
   Kxrbv, J.,

(after stating the facts).. The court erred in sustaining the demurrer. The complaint alleged that appellant had come of age, that defendant, McFadden, had received from his legally appointed guardian moneys, $1,250, belonging to him, and wrongfully converted same to his-own use; that he had collected rents from tenants of plaintiff’s property amounting to $352 and failed or refused to account for or pay over same to him, and that he was entitled to recover said amounts, less a small credit allowed. He was entitled to bring this suit without going first to the probate court for settlement of the accounts of the guardian. Blanton v. First National Bank, 136 Ark. 441, 206 S. W. 745; s. c. 142 Ark. 404, 219 S. W. 305; American Assurance Co. v. Vann, 135 Ark. 295, 205 S. W. 646.

If the complaint was regarded as too indefinite and uncertain in its allegations, the defect should have been corrected by a motion to make-more definite and certain, and not by a demurrer.

The allegations of the complaint relating to the rents collected by the defendant, McFadden, from plaintiff’s-tenants, and not accounted for or paid over to him, constituted, in any event, an action for moneys had and received, and, if the entire complaint could only be considered as stating* a cause of action at law, the error should have been.remedied by a motion to transfer to the proper forum, and could not be reached by demurrer. Columbia Compress Co. v. Reid, 160 Ark. 436, 254 S. W. 825.

It follows that the chancellor erred in sustaining the demurrer and dismissing the complaint for want of equity, and the decree is reversed, and the cause remanded for further proceedings according to law and not inconsistent with this opinion.


author: Kirby, J.,

text:
    McCoy v. Holman.
    Opinion delivered April 11, 1927.
    1. Improvement district — several improvements. — Under Acts 1923, p. 538, § 1, amending Acts 1923, p. 87, § 1,. providing for creation of improvement districts for -building street car lines, waterworks, gas- and electric lines, the county court is empowered to organize a district to construct several such improvements without regard to the connection or relation of the improvements to each other.
    2. Improvement districts — single improvement. — Where the county court creates an improvement district for the purpose of constructing lines connecting with water, gas and electric light systems within an adjoining city, the three improvements, though distinct in character, are to be treated as one improvement for the purpose of including them in one district.
    3. Improvement districts — several improvements with single assessment. — Where an improvement district is organized to connect an outlying district with the waterworks system and the gas and electric lines within an adjoining city, each improvement is part of an entire improvement, which can be provided without necessity for a separate assessment of* benefits for each part of the improvement, though distinct parts confer benefits of different kinds on property.
    Appeal from Pulaski Chancery Court; Frank Ji. Dodge, Chancellor;
    affirmed.

      STATEMENT BY THE COURT.
    This suit brought by appellant challenges the validity of an improvement district created by the Pulaski County Court out of territory adjacent to the city of Little Bock; under the provisions of act 126 of the Acts of 1923, as amended by act No. 645 of the 1923 session of the General Assembly.
    Appellant, an owner of real property and a taxpayer within the district, instituted this action in the chancery court against the board of improvement to restrain and enjoin it from proceeding with the construction of the improvement authorized. The complaint alleges that the district was created by order of the Pulaski County Court September 7,1926, for the purpose of “laying a complete system of main and lateral water-pipes connecting with the waterworks system serving the city of Little Bock, and for the purpose of laying a complete system of gas-pipes connecting with the gas system of the city of Little Bock, and for the purpose of building a system of electric lines for -light and power connecting with the, lines or systems serving the city of Little Bock. Said water, gas, electric light and power systems to be so located in said district, built in such manner and with such materials as the commissioners of the district may deem for the best interest of the property owners, and to extend beyond the borders of the district, if desirable or necessary. ” That this order creating said district combined three improvements, separate and distinct in type, and that the property owners cannot ascertain from the assessment of benefits the amount assessed for each separate improvement. That the county court was authorized to only create a district for making one improvement, was without authority to make the order complained of, and ‘ alleged it to be invalid on that account. -
    It alleged further that the board had made plans for the construction of said improvements, and that there had been made and filed by the assessors an assessment of benefits on the real property located within the bounds of the district,'which, it was alleged, was void because it makes but a single assessment upon the property for the construction of the three distinct improvements.
    It alleged also that the assessment of benefits constituted a cloud upon appellant’s title to the property in the district, and prayed that the district be declared invalid, the assessment of benefits against the property therein null and Amid, and that the board be perpetually enjoined from issuing bonds and proceeding Avith the construction of the improvement.
    Appellees admitted the allegations in paragraphs 1 and 2 of the complaint, that the order of the county court combined three types of improvements, which are distinct, and that the property owners cannot ascertain from the assessment of benefits the amount of benefits assessed for each separate improvement, and denied that, only one unit of improvement or separate improvement should ■have been included in the court order, that the county court was without authority to make the order, and that the district A?as invalid.
    The. answer alleged further that the three types of improvements set out in the order of the county coui’t covered identically the same -territory. That the district created b}r the said order is composed of lots and blocks joining one to the other, and is a complete unit, and that the three improvements provided for in the order can be made as fully and effectively in the same manner and Avithout prejudice to any of the property owners of the one district as could have been done bj7- the organization of three separate districts.
    General demurrers Avere interposed to the complaint and answer, and the court sustained the demurrer to the complaint, overruled the demurrer to the answer, and plaintiff, electing to stand upon his complaint, declined to plead further, and the complaint was dismissed for want of equity, from Avhich judgment this appeal is prosecuted.

      S. L. White, for appellant.

      L. P. Biggs, for appellee.
   Kirby, J.,

(after stating the facts). Appellant contends that a local improvement must consist of a single unit and that the county court was without power to organize a district" for the construction of three separate and distinct improvements. The statute under which the district was organized provides: “Upon the petition of a majority in value of the owners of real property in any territory adjacent to a city having a population of more than ten thousand inhabitants, as shown by the last Federal census, it shall be the duty of the county court to lay off into an improvement district the territory described in the petition, for the purpose of building street-car lines, waterworks or water pipes, systems of gas-pipe lines, electric lines for light and' power, or sewers, * * * or for more than one of said purposes,” etc. Section 1, act 645, Acts of 1923.

The court’s order establishing the district reads:

“Laying a complete system of main and lateral water-pipes connecting with the Avaterworks system serving the city of Little Rock; and for the purpose of laying a complete system of gas-pipes connecting Avith the gas system of the city of Little Rock; and for the purpose of building a system of electric lines for light and poAver connecting Avith the lines or systems serving the city of Little Rock. Said Avater, gas, electric light and poAver systems to be so located in said district,” etc.

It Avas the evident purpose, as plainly expressed in the statute, to empower the county court to lay off and organize such improvement districts for the purpose of constructing any one or more of the improvements designated. This might include the construction of seA^eral of said improvements, any three or more of them, and Avith-out regard to the connection or relation of either improvement to the other, so far as the poAver of the county court to establish the district is concerned.

In Wilson v. Blanks, 95 Ark. 496, 130 S. W. 517, the court held, under statutes authorizing the creation of districts for construction of improvements in cities and toAvns, that one district could be created for the purpose of making two local improvements, waterworks and electric light-systems. Answering the question, Can one dis-. trict he created for both purposes? the court said: “The statutes do not expressly prohibit the creation of one district for the purpose of making two local improvements. Their object is to secure the improvements upon the terms 'and conditions proscribed by the statutes. If the two improvements cover the sanie territory, and can be made as fully and effectually and in the same manner, and without prejudice to the rights of any ef the property OAvners under the statutes by one as they can be by two districts, we see.no valid reason why they should not be combined and made in such manner.”

The tw'o improvements must be treated as one, of course, for the purpose of including them in one district, a single improvement or construction,-and made in the manner indicated and under the requirements of the statute as to the limiting of cost. Bateman v. Bd. of Commissioner, 102 Ark. 307, 143 S. W. 1062.

In Bank of Commerce v. Huddleston, 172 Ark. 999, 291 S. W. 422, the court held that improvement districts embracing the entire area of the city or town may be created for the purpose of constructing waterworks and electric lights, and could accept contributions from the city in order to enable it to construct the improvements within the limit of cost provided for by statute.

In the instant case each of these separate improvements are but a combination and parts of an entire improvement which can be provided in the organization of one district and without necessity for or regard to a separate assessment of benefits for eac-h one of the parts of said improvements, even though the distinct parts of the .improvement confer benefits of different kinds upon the property of the district. They each alike confer similar and identical benefits on the property in the district, and there is no good reason why they might not be constructed more economically and to the advantage of the property owners of the district by one board as a combined and single improvement, than by three boards of commissioners constructing .one sucli improvement for the same territory under three separate improvement districts.

There are no other contentions made as to the invalidity of the district, which is presumed to be lawfully created. No error'was committed by the chancery court, and its decree is affirmed.


text:
    St. Louis-San Francisco Railway Company v. Miller.
    Opinion delivered April 11, 1927.
    1. Master and servant — jury question. — In an action under theFederal Employers’ Liability Act (U. S. Comp. St., §§ 8657-8665) by a section foreman against a railroad to recover for injuries alleged to have resulted from negligence of helpers while replacing a tie in defendant’s track, the question of the negligence of fellow servants was for the jury.
    2. Trial — instruction directing verdict.- — In an action by a section foreman against a railroad for injuries alleged to have resulted from negligence of helpers while replacing a tie in defendant’s track, an instruction authorizing a recovery if it was the duty of fellow servants to wait until plaintiff had put his pick into the tie, and they failed to do so, and thereby caused plaintiff’s injuries, held not tantamount to directing a verdict.
    3. Appeal and error — indefiniteness of instruction — objection. —If defendant regarded an instruction on negligence as insufficient in failing to define negligence, it should point it out with a specific objection, in order to have a valid ground for complaint on appeal.
    4. Master and servant — contributory negligence — instruction. —Where a railroad, in an -action under Wie Federal Employers’ the railroad alleged that the injuries complained ,of were due to plaintiff’s negligence, an instruction on contributory negligence did not constitute prejudicial error, although the plea was not one of contributory negligence.
    5. Master and servant — employers’ liability act — instructions. —Where, a railroad, in an action under the Federal Employers’ Liability Act by a section foreman for injuries, alleged that the injuries were due to his own negligence, instructions as to assumed risk and comparative negligence were properly given.
    6. Master and servant — burden of proof of negligence. — A railroad company is not liable for unavoidable accident, but only for negligence, and the burden of proving such negligence and that the injury was caused thereby rests on the plaintiff suing for injury.

      1. Master and servant — effect of contributory negligence.— Under the Federal Employers’ Liability Act, an employee may recover for the master’s negligence, though his negligence contributed to the injury, since such negligence only causes a diminution of damages.
    8. Appeal and error — harmless error.. — In an action, under the Federal Employers’ Liability Act, by a .section foreman for injuries alleged to have resulted from negligence of helpers in replacing ties, permitting plaintiff to .testify that he would have given the signal to move the tie if the helpers had waited, held not prejudicial where the jury found that it was negligence to move the tie without a signal.
    9. Master and servant — assumed risk. — A section foreman suing under the Federal Employers’ Liability Act held not to have assumed the risk from the master’s negligence or from the negligence of fellow servants.
    Appeal from Lawrence Circuit Court, Eastern District; Dene II. Coleman, Judge;
    affirmed.
    STATEMENT OF FACTS.
    This suit was instituted by appellee to recover damages alleged to have been sustained by him on account of the negligence of the workmen engaged with him in replacing ties under the railroad track in the place of old ties taken out.
    He was foreman, working with two helpers engaged in replacing switch-ties, when the injury occurred. The method employed jvas to first place one end of the tie on the railroad dump, which was about four feet high at this place, and one man lift the other end to a level, when plaintiff and the other helper stuck their picks into the tie and pulled ■while the end man shoved the tie towards the rails. They acted in concert, the foreman, if he was present, giving the signal to move it, otherwise the last man to stick his pick into the tie gave the signal. The particular tie by the moving of which the injury was caused was of green white oak timber, 7" x 9" x 10' long, weighing about 400 pounds.

      The complaint alleged tliat plaintiff stuck his pick in the tie, and the helpers, their hacks to him, without waiting for the signal from plaintiff, pulled and shoved the tie, throwing the plaintiff backward, catching his foot between the end of the tie and the west'rail of the track, bending his foot double, and breaking some of the bones thereof.
    The complaint also alleges: “The said act of the two employees of the defendant, in pulling against said tie before plaintiff had time to-take his position to pull on the .pick and before waiting for signal from the plaintiff, was negligent and careless, and done without due regard to this plaintiff’s safety, and plaintiff’s sole injury was caused solely by the said negligent act of the two employees of the defendant.”
    The answer denies the material allegations of the complaint, alleged that plaintiff was foreman of the gang when injured, and the men -working with him were under his control, and that any injuries he may have received were due to his own negligence and failure to take proper precautions for his own safety. -
    The evidence shows that plaintiff was section foreman with a four-man crew, and, when injured, was working with two of the men, putting new crossties under the rails and replacing old ties being taken out. The spikes were drawn from the old ties, the rails jacked up, the old ties taken out, and the new ones were being put in as above stated. Plaintiff, Hurst and Bonner, according to his statement, wore handling the particular tie which had been brought, up the dump from the east side until one end was'almost at the east rail. Bonner was at the far end of the tie, raising it to the level of the end lying on the dump. Plaintiff and ITurst, standing at'the cast rail, stuck their picks in the tie and pulled, with Bonner shoving, until the end of the tie was within 18 inches of the west rail.
    Plaintiff further states: “When we- made that pull, T turned around and Avalked outside the west rail and turned around and stuck my pick in — just reached over as far as I could, with my left foot on the rail and my heel against the bottom of the rail, on the outside of the west rail. The minute my pick hit the tie- they gave a pull, and I, not being in balance, got my left foot (-aught between the end of the tie and the ball of the rail on the east side of the west rail, between the end of the tie and the rail. ’ ’
    The unexpected pull, without signal and before plaintiff was ready, unbalanced him, causing his foot to slip off the rail and be caught between it and the end of the tie, and be crushed.
    A written statement made by plaintiff to the railroad company, descriptive of the occurrence, indicated that signals were no't being given on this occasion before the pushing and pulling to move the tie after the picks were stuck into it. That the three men could work together by watching, without giving signals, and, that Bonner and Hurst moved the tie before he was ready to pull. That nothing was the matter with the roadbed or the picks. That, previous to this time, this gang had been instructed that they should not pull the tie until they got their picks set, and he supposed that the others heard him set his pick, and moved the tie before he got set to pull.
    The testimony tended to show that the injury was painful, and plaintiff hád not recovered from it entirely at 'the time of the trial, and could not work long at any employment requiring him to stand or move about on his feet.
    The court instructed the jury, giving for plaintiff, over defendant’s objection, the requested instructions Nos.-l and 2, relating to contributory negligence, and refused to give defendant’s instruction No. 4, as requested. The jury returned a verdict for $1,200, and from the- judgment thereon this appeal is prosecuted.

      E. T. Miller, E. L. Westbrooke, Jr,, and E. L. West-brooke, for appellant.

      Walter L. Pope, and T. W. Campbell, for appellee-.
   Kirby, J.,

(after staling’ the facts). It is earnestly insisted that the court erred in not directing a verdict for defendant, and that there is not sufficient, testimony to sustain the judgment.

Plaintiff was foreman, of the section gang, and helping and directing the men in the work of replacing the ties. The evidence is undisputed as to the manner in which the injury occurred. Appellee was a vice-principal, ail'd the suit was brought under the Federal Employers’ Liability Act, which is copied in our act 88 of 1911. Appellant relies upon our opinion in St. L. I. M. & S. Ry. Co. v. Cobb, 126 Ark. 225, 190 S. W. 107, and Kansas City & Memphis Ry. Co. v. Huff, 116 Ark, 461, 173 S. W. 419, in its insistence upon plaintiff’s failure to show a right to recover.

In the first case it was said: “Under the statute it matters not whether the injured employee stands in the relation of vice-principal to the employee injuring him, provided the injury is caused through the negligence of such employee. But, if the relation of vice-principal and subordinate exists between the two servants at the time of the injury, and the injury is caused while the subordinate is acting, without negligence, under the orders and directions of his superior, then there would be no negligence for which the company would be liable, because, in such cases, the negligence would be that of the vice-principal himself.”

There was some testimony tending to show that the helpers, fellow-servants of plaintiff, were not acting without negligence under the orders and directions of plaintiff, the vice-principal, when the injury occurred. That they were negligent in failing to give the signal for beginning to move the tie, or waiting for him to give it before doing so, while plaintiff was unprepared for this action, hut jfor which, being unexpectedly made, the injury would not have resulted. The testimony is sufficient to sustain the verdict, and no error was committed in the court’s refusing to direct a verdict for appellant.

Wo do not agree with appellant’s contention that instruction No. 1 was tantamount to a directed verdict for plaintiff. The instruction told the .jury to return a verdict for plaintiff only if it found fropa a preponderance of testimony “that it was the duty of the other employees to wait until plaintiff had put his pick into the tie that was to be put under the rails of said track and prepared himself to pull said tie,” and only if the jury further found “that plaintiff’s said helpers failed to wait until plaintiff had prepared himself for pulling said tie, but immediately pulled said tie after plaintiff had stuck his pick into it, and thereby caused plaintiff’s foot to bo injured;” and only on a further finding* by the jury “that plaintiff’s said helpers thereby failed to exercise ordinary care for plaintiff’s safety, and that plaintiff had not assumed the risk.”-

If appellant regarded the instruction as so indefinite as not to furnish a guide to the jury as to what would be negligence on account of it not stating that the failure of plaintiff’s helpers to wait for the signal to move the tie, and moving it without the giving of said signal, it should have pointed this out with a specific objection.

It is next contended that the court erred in giving instruction No. 2, contributory negligence not being-pleaded as a defense. The answer “alleges the fact to be that the plaintiff was, at the time he was injured, foreman of the men working with him, and each of them was under his control, and whatever injuries he received were due-to his own negligence and failure to take any precautions for his own safety.”

It is true this is not a plea of contributory negligence, but the jury could have found that the railroad company was guilty of negligence and, under the allegations that plaintiff’s injuries were due to his own negligence, the question arose necessarily whether his negligence contributed to the injury, and no prejudicial error was committed in giving the instruction a correct declaration of the law on the subject. , St. L. S. W. Ry. Co. v. Rogers, 166 Ark. 389, 286 S. W. 281. Neither was error Committed in giving instructions on assumed, risk and comparative negligence. K. C. So. Ry. Co. v. Sparks, 144 Ark. 227, 222 S. W. 724. Nor does the instruction complained of relative to recovery of damages appear to have been erroneous or prejudicial under the circum-si anees of this case. K. C. So. Ry. Co. v. Sparks, supra.

Appellant’s next contention is that the court erred in amending its instruction No. 4 by striking out the last sentence and giving only the first one. The part given told the .jury that, the railroad company was not liable for unavoidable accidents, was only liable for negligence, and that the burden of proving that the company was negligent and that such negligence caused' the injury to plaintiff, rests on the plaintiff, which is, of course, a correct declaration of the law. This precluded-a recovery by the plaintiff unless'the proof showed that the injury was caused by the company’s negligence, and he would have been entitled to recover, even though his own negligence contributed to his injury, under the Federal Employers’ Liability Act, such negligence only causing a diminution of damages.

Another instruction allowed the jury to hold the defendant liable only upon a finding that plaintiff’s helpers were negligent and that the injury or damage was caused'by or resulted from such negligence.

There xvas no testimony showing the accident or occurrence was caused on account of the failure of the plaintiff to have .the work performed in a reasonably safe manner.

The last assignment, that the court erroneously permitted the plaintiff to testify that he'would have given the signal to move the tie if they had -waited a little bit, was not prejudicial, under, the circumstances. The negligence alleged was in the helpers or the other employees suddenly moving the tie without giving warning or waiting for a signal from plaintiff to move it, and the jury found that it was negligence to move it without such signal being given, and a statement that the signal would have been given by plaintiff, had it not been so suddenly done, could not have been prejudicial, under the circumstances.

Certainly appellee did not assume the risks of an injury arising from the master’s negligence nor the risk of danger or peril arising from the negligence of a fellow-servant of this railroad corporation. St. L. S. W. Ry Co. v. Smith, 102 Ark. 565, 145 S. W. 218.

We find no prejudicial error in the record, and the judgment is affirmed.


author: Meiiawv, J.

text:
    Rural Special School District No. 50 v. First National Bank.
    Opinion delivered April 11, 1927.
    1. Schools and school districts — notes issued without authority. — -Holders of notes executed by a school board, not authorized to borrow money by a majority of the electors of the district, as required by Crawford & Moses’ Dig'., §§ 8837, 8840, acquired no rights._
    2. Schools and school districts — powers op directors. — One who deals with the board of directors of a rural 'special school district is bound to know what contracts the board is authorized to make.
    3. Schools and school districts — powers op directors. — A school district is a quasi public corporation and its directors can exercise no powers beyond those expressly conferred by statute or arising therefrom by necessary implication.
    4. Schools and school districts — powers op‘directors. — The powers and duties of school directors are derived only from legislative authority, and a contract entered into by them beyond the powers conferred on them by statute is null and void.
    5. Schools and school districts — unauthorized contract of directors. — Notes executed *by the board of directors of a rural special school district for money borrowed to erect a school building are void if not authorized by a majority of the electors at an annual school meeting, as required by Crawford & Moses’ Dig., §§ 8837, 8840.
    6. Schools and school districts — void contract — ratification.-— A rural special school district is not liable on notes executed by its board of directors for money borrowed without authority, though the money was used to erect a school building', which was used by the district.
    7. Schools and school districts — money loaned to build'school house — lien.'—Holders of notes executed by the directors of a school district without authority have no lien on the district’s schoolhouse, in the construction of which the money was spent.
    S. Schools and school districts — void contract — ratification.— The board of directors of a rural special school district cannot ratify an unauthorized contract made by them.
    9. Schools and school districts — void contract — liability of directors. — Directors of a rural special school district held not personally liable on notes executed by them without authority from the electors of the district, since the payees had equal opportunity to know the law.
    Appeal from Yell Chancery Court, Dardaneile District; W. E. Athiuson, Chancellor;
    reversed.
    A. S. Hays and J. B. Ward, for school district.

      Herbert C. Scott for bank, and Clem P. Gallaus, J. W. Wilson and J. E. Chambers, for fl. M. Mitchell and other directors.
   Meiiawv, J.

The appellant is a special school district in .Yell County, formed by the consolidation of District No. 48 and District No. 50, common school districts. A petition was presented to the county court and the election ordered and the district created under the provisions’ of the statute. After its creation the directors who were elected qualified and acquired lands and erected a school building on the said- lands.

The district entered into a contract with Clem P. Callana for the erection of the building- for the price of ‡3,800. The directors sold the buildings belonging to the common school districts 48 and 50, using, the funds .derived therefrom, and also, during the course of the construction of the buildings, used all of the funds belonging to the two common school districts at the time of the consolidation.

The question of erecting a school building was not submitted to the legal voters at an annuál school election, and, without any authority from the legal voters, the district borrowed from the First National Bank of Dardanelle $2,500 and executed note for that amount in tlie name of Rural Special School District No. 50, and this note was indorsed by the directors for said special school district.

After the completion of the school building the district executed note to C. P. Callans for $1,000, money which it borrowed from him. There was no authority from the leg'al voters to make either of these contracts, that is, no election authorized the district to borrow money.

Suit was brought on the notes by the First National Bank and O. P. Callans in the circuit court of Tell Couirty, but was afterwards transferred to the chancery court, where it was tried. Suit was also brought by the sanie parties against members of the board of directors, ' and the two suits were consolidated and tried together. The chancery court found as follows:

“The court further finds that the $2,500 represented by the note to the First National Bank of Dardanelle was used by the directors in paying the said Callans on the contract price for said building, and the $1,000 note to Clem P. Callans was the balance due to him on the cost of erecting said building. The court further finds that the directors, at the time of making the contract and executing the notes sued on, were under the belief that they were authorized to make such contracts and to -borrow said mone.y, and that the house was economically built, and was worth the amount to be paid, and further finds that, after the completion of said building, the said school district used said building upon the said lands. The premises considered, the court holds that the note excepted by and on behalf of the school district to the First. National Bank in the sum of $2,500, of date of January 27, 2921, is null and void both as to the school district and as to each of the individual defendants whose names are indorsed thereon; and further holds that the note for $1,000 given to the plaintiff, Clem P. Callans, on January 20, 1920, is null arid void both as to Special School District No. 50 and the individuals who signed tlioir names to said noto as indorsers. And t-lio court further holds that the plaintiff, Clem P. Oallans, having done the work on said building to the amount of $1,000 for which he had not been paid, and the plaintiff, First National Bank of Dardanelle, had furnished, money to the amount of $2,500 to jmy for material and labor in said building; that the plaintiff, Clem P. Callans, and the plaintiff, First National Bank of Dardanelle, have liens upon said building which are superior and paramount to the claims of the district to said building, and that they shall have judgment for said amounts, together with 10 per cent, interest thereon from the date of their notes. It is therefore by the court considered, ordered, adjudged and decreed that the plaintiff, Clem P. Callans, have a lien upon said building in the sum of $1,512.33, being the principal and interest on the note of $1,000, date of January 20, 1920; and.that the First National Bank of Dardanelle have a lien on said building-for the sum of $3,477.28, being the principál and interest of their note of January 17, 1921, and that, unless the said special school district shall pay and discharge said lien within 90 days from this day, then the plaintiff may sell the building so erected by the said Clem P. Callans, and erected upon the land deeded to the said Special School District No. 50, and, if said building does not bring sufficient to pay both debts in full, then the price for which said building is sold shall be divided between the two plaintiffs in proportion to their respective debts; and the clerk of this court is hereby appointed commissioner to execute the decree of this court, and he shall sell said building upon a credit of three months, after giving-notice for the time, place and terms of said sale by publication in a newspaper published in the Danville District of Yell County, for at least four insertions, and that the purchaser may remove said building from said ground within thirty days after said purchase; it is further by the court considered, ordered and decreed that the plaintiffs take nothing by reason of their suit against the individual defendants, JT. M. Mitchell, J. A. Meeks,' Jolm F. Foster, A. J. Gray, Jr., and JR. S. McConnell, ancl that the defendant, Rural Special School District No. 50, pay the cost in this suit. To which finding* ancl decree of the court in declaring the plaintiffs, Clem P. Callans and the First National Bank of Dardanelle, to have a lien on the school building erected upon the lands belonging to said special school district superior and paramount to the interest of said school district'in said building, the, said Rural Special School District No. 50 at the time objected and prayed an appeal from said decree to the Supreme Court of the State of Arkansas, and which was by the court granted; thereupon the court ordered and directed the commissioner to make sale; that he shall take no action in carrying out the decree of the court during the pendency of said appeal, provided said school district shall have, said building fully insured and preserve said building in a good state of repair, which the directors of said Rural Special School District. No. 50 then and there, agreed to do.

‘ ‘ To the finding and decree of the court, in finding* the defendants, H. M. Mitchell, J. A. Meeks, John F. Foster, -A. J. Gray and R. S. McConnell, to be not liable upon i?aid notes and discharging them thereon, each of the plaintiffs excepted and prayed an appeal to the Supreme Court of the State of Arkansas, which is by the court granted.”

It is first contended by the school district that the notes executed by the school district are void. This is a rural special school district, and is composed of territory of two former common school districts, each of which seems to "have had a schoolhouse. These school buildings were afterwards sold and this money, together with the funds of the district on hand at the time of the creation of appellant school district, was a part of the funds that went into the construction of the new building*.

With reference to rural special school districts borrowing money, the law provides: “All school districts created under this act shall have the power to borrow money as anv special or single district in cities or incorporated towns,1 -when a majority of the legal, electors authorize it -by a A'ote at any annual school election.” C. & M. Digest, § 8837.

Section 8840 of CD & M. Digest, among other things, provides for borrowing money for building purposes if authorized by vote of a majority of electors of the district- at any annual election. Every person dealing with a school board is bound to know what the law is and is bound by its provisions. When these notes were executed the parties to whom they were made were bound to know that the notes would be void unless the board of directors was authorized by a vote of the majority of the electors of the district at an annual election.

“A person contracting with a board of education is presumed to know the limitations of its powers, and can acquire no rights by a contract which such board is not clearly authorized to make.” State v. Free, 3 Ohio Decisions, 314.

If there was no election held, or, rather, unless the board of directors was authorized by a majority of the electors of the district at an annual meeting, then the holders of the notes acquired no rights, because the board of directors Avas not authorized to make the contract.- And a person contracting with a school district is bound to knoAv what contract the' board is authorized to make.

“The trustee of a school corporation is a special agent of limited poAvers, and it is incumbent upon those who deal with him to ascertain whether he is acting within his authority.*’ Union School District v. First National Bank, 102 Ind. 464, 2 N. E. 194.

“A .person contracting with a school trustee is bound to lake notice of his official character, and that he can only bind his township on contracts authorized by Irav.” Bloomington School Township v. National Furnishing Co., 107 Ind. 4, 43 N. E. 760.

It seems that the courts universally hold that, when one deals with an agency like the board of directors of a rural special. school district, he is bound to know the powers and limitations of such agency. Such is not only the law as announced by courts generally, but this court lias passed directly on this question.

“All parties dealing with public officials must take notice of limitations or restrictions upon their power. In this sense directors of a school district are public officials. * * * The reference appears in § 1 of said act 180, and is as follows: ‘Provided further, that this act shhll not be construed as authorizing any board of directors of any rural special or consolidated school district to issue bonds unless authorized to do so by the vote of the legal electors at the annual school election, as provided in act 321 of the Acts of 1909 of the General Assembly of the State of Arkansas.’ * * * The court erroneously ruled that the bonds and mortgages were valid subsisting obligations in the hands of appellee against appellant, district.” Rural Special School Dist. v. Pine Bluff, 142 Ark. 279, 218 S. W. 661.

“The bonds were sold on the 1.5th day of October, 1916. This was before another annual school meeting could have been held. Therefore the record affirmatively shows that the school district was organized and the bonds sold during the year 1916, after the time provided by statute for holding the annual school meeting and before another annual election could have been held. This shows conclusively that no vote of the electors of the district was had to authorize the issuance of the bonds, and it follows that the bonds and deed of trust are void because they were issued by the board of directors of said school district without authoritv.” Robertson v. Rural Special School Dist. No. 9, 155 Ark. 161, 244 S. W. 15.

This court again said: “Appellants cite tjic cases of Robertson v. Rural Special School Dist. No. 9, 155 Ark. 161, 244 S. W. 15, and Rural Special School District No. 30 v. Pine Bluff, 142 Ark. 279, 218 S. W. 661, in which oases it was held that the school district bonds issued by the rural special school district, -without the consent of the majority of the legal voters granted at the annual school meeting, and in accordance with ^ 8837, ,C. & M. Digest, are void, even in the hands of an innocent purchaser. It was so held in those cases as lo such districts, because, under the statute conferring this authority on rural special school districts, it was provided that the power to issue bonds might lie exercised only upon the vote of the legal electors at an annual school meeting. But Mammoth Spring-Special School Dist. No. 2 is not a rural special school district, and did not derive its authority to issue bonds from § 8837, C. & M. Digest. Section 8984, C. & M. Digest, is the section of the statute uuder which appellee school district proceeded, and this section does not require, as a condition precedent to the issuance of boncls, the consent of the electors. * * * In other words, the affirmative vote of the electors is not required to confer this authority on the urban special school districts of the State, which derive their authority to issue bonds under ^ 8984, (\ & M. Digest.” Davis v. White, 371 Ark. 385, 284 S. W. 764.

In construing the statute providing for transferring-pupils to and from school, this court held that a contract made to transfer children of one district to the schools of another district was not only invalid but was not ratified by its performance. The court said: “But it is quite obvious that the legislative purpose was to provide means for the transportation of the children of any particular district to'the schools of that district. The act says nothing about transporting the children of one district to the schools of another district, nor is any authority conferred to use the school funds to pay tuition in the schools of another district. No authority was conferred bv the act of 1919 to make such a contract as was'made with Free, nor does such authority otherwise exist, and, as the. directors were w:thmp authority to make the contract. it has not been ratified bv its pei-formance.” Bd. Dir. Gould Spec. Sch. Dist. v. Holdtorff, 171 Ark. 668, 285 S. W. 857.

“A school dist riel is, by the statutes of this State, made a body corporate: but it is intended as an agenc.v in the administration of -public functions. Tt is a quasi public corporation, and can exercise no powers beyond those expressly conferred by statute, or which arise therefrom by necessary implication. The powers and duties of the directors of a school district are derived only from legislative authority, and they can exercise no power that is not granted by statute. A contract entered into by the directors therefore, which is beyond the powers conferred on them by the statute to make, is null and void.” First Nat. Bank of Waldron v. Whisenhunt, 94 Ark. 583, 127 S. W. 968.

The chancellor was therefore correct in holding that the notes were void.

The school district’s ' next contention is that the school district cannot be held liable because of the fact that they have used the school building- since the time of erection up to the present time. We think that the 'appellant is correct, in this contention. As was said in the case of First National Bank of Waldron v. Whisenhunt, 94 Ark. 583, 127 S. W. 968, all persons who deal with school officials are presumed to have full knowledge of the extent of the powers of these officials to make the particular contract, and, in the case last mentioned, the court further said: “Neither the use of the maps in the school nor the failure to object would amount to ratification. * * * The payee of warrants and the appellant liad all the means of knowledge as to the authority of the directors to make the contract that was .possessed by the directors. Neither was deceived or misled into the making of the contract or the purchase of warrants.”

It will therefore be seen that the parties contracting with the rural special school district in this case had all the-means of knowledge as to the authority of the directors that the directors themselves had. Both of them were bound to take notice of the limitations of the authority of the board to contract. They were bound to take notice that a valid contract could not be made unless authorized by the legal voters at an annual election. Thev were bound to know that their contract was void.

It has been held by some courts that, where a contract is entered into by which a school district secures money and purchases property, the property, if of such character or nature as to be capable of removal without injuring the other property, they may remove the property. Especially is this held to be true in some courts, Avhere the district purchased the property without authority and still has the property, and the property is such that it can be removed without injury to other property of the district.

It is not necessary, however, for ns to decide that question in this case, because it is claimed here that the money went into the construction of the schoolhouse, and no lieu is authorized by the Legislature under the facts in this case. It has also been held that, where bonds are issued'by a school district in violation of law, or where the bonds were not authorized by law, the sureties on the bond are net liable, and no lien exists against the schoolhouse, since it belongs to the State. Cooper v. H. H. Harder & Co. (Tex. Civ. App.), 219 S. W. 550.

This court has said: ‘ ‘ The directors have charge of the school affairs and educational interests in their district, and the care and custody of the sch'oolhouses, groxmds and other personal property belonging to the district. But they have no power to purchase or lease in the corporate name a schoolhouse site, or to hire, purchase or build a schoolhouse with funds provided or to be provided by the district, unless thereunto authorized by a majority vote at the district meeting. * * * This want of power or authority cannot be supplied by the unauthorized acts of the directors or by any attempted ratification afterwards. It is apparent that, if the directors had no power to make the contract in the first instance, they could hot subsequently pass a resolution ratifying their act. In other words, under the record in this case there could be no ratification bv the directors, for they had no power to contract to build the schoolhouse by ratification or otherwise. It has been well said that the law never implies an obligation to do that which it forbids the party to agree to do. * . In the first place, it may be said that the land on which the schoolhouse was built belonged to the school district, and the use of the schoolhouse was inseparable from the enjoyment of the land.

“Again, it may be said that, if the taxpayers of the district could be made liable by the fact that the money was used in the building of a schoolhouse, the statutoi’y prohibition, making it unlawful for a district to raise money for building á schoolhouse unless due notice had been previously given in the manner prescribed by the statute, would be useless. The limitation or restriction imposed by the statute would he practically of no avail if it could be brought to naught by the unauthorized act of the directors, acquiesced in by the electors of the district. The public, by such a doctrine, would be exposed to the very abuse which the Legislature intended to prevent. The statute in question was passed as an act of public polic}7' by the Legislature, and it would be a very unsafe rule to establish to hold that school officers might borrow money without complying with the statute and bind the district because it was used in constructing a schoolhouse and the house was afterwards used for school purposes.” Ark. Nat. Bk. v. School Dist. No. 99, 152 Ark. 507, 238 R. W. 630.

The above case, we think, settles the law on this particular question. As stated by the court in the last case cited, the limitations or restrictions would be of no avail if it could be brought to naught by the unauthorized acts of the directors acquiesced in by the electors of the district. The above case is stronger than the present, because there is no question here of ratification by the voters of the district, and thev are the only ones who could ratify it if it could be ratified at all. To hold otherwise would be to make the statute of no effect, because a board of directors could make a contract without submitting the question to the legal voters, with the knowledge that it would not be authorized by the legal voters, and make, the district liable to the same extent that it would be if the directors complied with the law. It would certainly be a very unsafe rule to hold that the statute might be violated by the board of directors doing' the very thing that the statute says that they shall not do, and then enforce the contract as if there had been no violation of the statute. If this could be done the statute would be perfectly useless.

“It is well settled that those who'deal with municipalities are bound to take notice and be bound by these constitutional restrictions. Accordingly it must be recognized that, in applying equitable relief in the present form of action, equity must not accomplish by indirection what the law has prescribed must not be done directly.

“In accordance with the stipulated facts, it is impossible to restore to the plaintiff the building erected without destroying property of the municipality. It is likewise impractical to segregate or detach that portion of the building which .represents the excess moneys therein owing to the plaintiff. It is likewise clear that the imposition of a judgment to pay such amount, or the requirement that a rental be paid for that portion of the building represented by plaintiff’s moneys unpaid, would impose a burden upon the school district in excess of the constitutional restrictions. * * * Although, in equity, recovery may be permitted in such case's, where no additional burden is thereby placed upon the municipality in excess of the constitutional debt limit, or where the property itself can be identified, segregated, and restored to the parties -without injuring the municipality or its property by so doing, nevertheless, in upholding the constitutional restrictions absolutely imposed, relief upon equitable principles cannot be granted where this cannot be accomplished.” Bartelson v. International Sch. Dist., 43 N. D. 253, 174 N. W. 78.

“If-the material furnished had been supplies which had been used, or had been property which had become so mingled with other property as to be not subject to identification, or have been so affixed as to be irremovable, that result might necessarily follow, because the plaintiff would be without remedy. * * * The only question therefore is: To what extent shall plaintiff be permitted to remove his property? In our judgment, he should only be permitted to remove so much thereof in value as has not been paid for, and no more. Under the evidence as it now stands, however, we cannot say just what part of the property can be removed and what part cannot. Nor can we say what part of the property the plaintiff: should be permitted to remove in order to prevent injustice. * * * In case, however, the parties cannot agree, as herein suggested, then to enter judgment permitting the plaintiff to remove so much of the property which can be removed without substantial injury to the building as may be necessary to compensate him for the unpaid purchase price, with legal interest, specifying the particular articles that may be so removed and fixing their value, as hereinbefore suggested.” Moe v. Millard County School Dist., 179 Pacific 980.

It will bo observed, however, that our court, in construing the statute, has held that to permit parties to do indirectly what the law prohibits them from doing would make the statute wholly ineffective. We therefore conclude that there can be no lien had on the schoolhouse, and that it cannot be sold to pay the debt.

The only other question in the case, and that is in the case against the directors, is whether they are personally liable, since the contract they undertook to make for the district is void. Some of .the authorities already referred to decide this question. We think this question has been settled by this court in First Nat. Bank of Waldron v. Whisenhunt, 94 Ark. 583, 127 S. W. 968, in which the court said: “The directors were only acting therefore as public agents, and, according* to the intent of all the parties to the contract, with the purpose of expressly binding* the district. They did not incur personal, liability by signing their names thereto as directors. Nor are the directors personally liable because the contract was beyond their authority. * * An officer who, in good faith and under misapprehension, makes a contract in behalf of the municipality -which is invalid for want of authority to make it, will not be held personally liable on the contract where the other contracting party has equal means of knowledge as to his authority.”

We have already stated that the payees in the notes had equal opportunity to know the law with the directors, and it follows from what we have said in the case of Rural'-Special School Dist. No. 50 v. the First National Bank of Dardanelle and Clem P. Callans,' the chancery court erred in holding that a lien could be enforced against the school building, and for this error the case must be reversed and remanded, with directions to dismiss the complaint. And the case of First National Bank of Dardanelle and Clem P. Callans v. H. M. Mitchell, J. A. Meeks, R. S.. McConnell, John F. Foster and A. J. Gray, Jr., must be affirmed, and it is so ordered.