author: Mehanfy, J.

text:
    Hill v. Bush.
    Opinion delivered November 18, 1929.

      Roy D. Campbell, for appellant.

      Ross Mathis, for appellee.
   Mehanfy, J.

The appellee brought this suit to recover from appellant $1,384.03, which he alleged was due him from appellant, and also to require the appellant to surrender the note executed by W. J. Loveless and indorsed by appellee.

The facts, briefly stated, are as follows: In 1922 W. J. Loveless was indebted to S.' M. Bush, appellee, in the sum of $1,384.03. Loveless at that time was indebted to F. P. Hill, appellant, in the sum of $1,285.80. Loveless was also indebted at that time to the First National Bank in the sum of $1,991.41. Appellee was indorser on the note of Loveless to appellant.

On January 3, 1922, an agreement was entered into bv Loveless, Bush, Hill and the First National Bank. This agreement of the uarties was that Loveless and his wife should execute notes to F. P. Hill, and, to secure the payment of these notes, was to execute a deed of trust to F. L. Maxwell, trustee for F. P. Hill, for the sum of $4,612.44, the amount of the three debts owing by Loveless. Lush was to be relieved as indorser on the Loveless note, and his note was. to be delivered to him. The notes and deed of trust were executed and delivered to Argo, who delivered them to Hill, and the deed of trust was thereafter recorded.

In August, 1922, suit was brought in the Woodruff Chancery Court by Loveless, and wife to cancel the deed of trust on the alleged grounds of fraud practiced by Argo and Hill. Hill was made a party, and served with summons, but failed to appear^ and a decree was entered canceling and setting aside the deed of trust. The property conveyed by the deed of trust, was the homestead of Loveless and his wife, and was worth approximately $6,000. Shortly after the decree setting aside the mortgage, Loveless and wife sold the property for $6,000. The appellee, Bush, did not know of the suit to cancel the mortgage until after the decree and after the property bad been sold. After be found out that the deed -of trust had been canceled, and that Loveless and his wife had sold the property, he began this suit to collect his debt from Hill, and to require Hill to surrender his note. Loveless was insolvent.

The object of the parties in entering into the agreement was to obtain security or a deed of trust on the home belonging to Loveless to secure the debts due them. Bush, the appellee, desired to be relieved from his liability as indorser on Loveless’ note to Hill, and to secure the payment of the $1,384.03 due him. Hill desired to get security for the $1,285.80 due him, and the bank desired to g-et security for the $1,991.41 due it. It appears that the amount due Hill was stated as $1,237, when the actual amount due him was $1,285.80, and his contention is that he never consented to accept the notes as made, and that for that reason the agreement never went into effect. The court found in favor of appellee in the sum of $1,384.03 and interest from January 3, 1922, at 10 per cent, per annum, and canceled the note on which appellee was indorser.

It is earnestly insisted that the suit brought in chancery court to cancel the deed of trust could not affect the interest of Bush because he was not made a party to that suit, as he was a holder of one of the notes, and that he therefore had his remedy against the property conveyed in said deed of trust. We cannot agree with appellant in this contention. The notes were made to F. P. Hill, and the deed of trust wasnnade to F. L. Maxwell, trustee for' F. P. Hill. Bush’s name is not mentioned in the deed of trust. The deed of trust was executed by Loveless and wife to F. L. Maxwell, trustee for F. P. Hill.

Appellant contends that, since Bush was not made a party, he was not bound, and argues that the parties necessary to a foreclosure suit should have been made parties to cancel the deed of trust.

Section 1092 of O. & M. Digest provides, among other thing’s, “that a person with whom or in whose name a contract is made for the benefit of another * * * may bring an action without joining with him the person for whose benefit it is prosecuted.” It seems clear that, under this section, to foreclose under the deed of trust, the parties plaintiff would have been Maxwell, trustee, and Hill, and the parties for whose benefit the contract was made would not have been necessary parties. In the suit to cancel the deed of trust Bush was not a necessary party. Plis name is not mentioned in the deed of trust. The deed of trust was made to Maxwell, trustee for Hill, and the suit to cancel the deed of trust was based on the alleged fraud and deceit bv Hill. He was made a party to the suit, summons was served on him, and the decree in that case recites that Maxwell and Hill, though duly served with summons, make default. No defense was made to the suit bv Maxwell or Hill. Hill was one of the largest stockholders in the bank, and it appears from the record that, as a compromise or agreement with the bank, the bank was paid $1,000 by Loveless when this deed of trust was canceled, or when the property was sold.

It is argued that the necessary parties to the suit were the same as they would be in a foreclosure suit. That is, all persons having either an equitable or legal interest and all who are entitled to the money must be before the court. .And appellant calls attention first to Smith v. Richardson, 32 Ark. 297. In that case the court held that, in a bill to foreclose a mortgage after the death of the mortgagor, the heirs were necessary parties. But that was a case where the mortgagor, after the execution of the mortg*age, had died, and the suit was against the administrator, and not against the heirs. The court said that, in a bill to foreclose, the heirs of the deceased mortgagor should ¡be made defendants, or some excuse for not making them defendants should be shown. This case has no application to the facts in the instant case, and moreover the statute above referred to authorizes a suit to foreclose by the party in whose name the contract is made.

Appellant next calls attention to Boyd v. Jones, 44 Ark. 314, in which,the court held, citing the section of the Digest which provides that every action must be prosecuted in the name of the real party in interest, except, etc., that this section was not to apply to cases where the trustee or fiduciary might have sued in his own name before the act. The court further said: “If the object of the bill were to recover the fund .with a view to its administration by the court, the parties interested must be represented. But it merely seeks to recover the trust moneys so as to enable the trustee to distribute them hereafter agreeably to the trust declared. It is therefore unnecessary to bring before the court the parties beneficially interested.”

The next case to which attention is called by the appellant is Howell v. Walker, 111 Ark. 362, 164 S. W. 746. In that case the court simply held that the trustee in a mortgage on land is a necessary party to a foreclosure proceeding. Here, in the suit to cancel the deed of trust, the trustee was made a party.

Neither of the cases referred to by the appellant is applicable here.

It is next contended by the appellant that the agreement was not consummated. This is purely a question of fact. While the appellant himself testified that the note for him was not for as great amount as it should be by approximately $60, yet the evidence shows that the notes and deed of trust were delivered to him, were recorded, and he himself says that it would have been perfectly all right if they had paid him the difference, and his contention is that he did not accept it, or, if he did at all, it was conditional upon Bush paying him the difference.

According to the testimony of appellee’s witnesses, the agreement was consummated, the deed of trust executed securing appellee, and the undisputed proof shows that Loveless was insolvent, and that the decree canceling the deed of trust was. entered, and the property actually sold by Loveless before the appellee ever knew anything about the suit.

We have not set out the evidence in detail, but we have carefully considered the entire evidence, and have reached the conclusion that the finding of the chancellor is supported by a preponderance of the evidence.

In appeals from the chancery court trials are de novo, but the findings of fact by the chancellor are allowed to stand unless they are clearly against the preponderance of the evidence. Turner v. Adams, 178 Ark. 67, 10 S. W. (2d) 11; Fort Smith v. Norris, 178 Ark. 399, 10 S. W. (2d) 861; Barton v. Hardin, 178 Ark. 432, 10 S. W. (2d) 878; First National Bank v. Tate, 178 Ark. 98, 13 S. W. (2d) 587; Lynn v. Quillen, 178 Ark. 1150, 33 S. W. (2d) 624; Henry v. Erber, 175 Ark. 641, 1 S. W. (2d) 49; Doane v. Rising Sun Mining Co., 139 Ark. 605, 213 S. W. 399; Hyner v. Bordeaux, 129 Ark. 120, 195 S. W. 3; Midyett v. Kerby, 129 Ark. 309, 195 S. W. 674; Ferguson v. Guydon, 148 Ark. 295, 230 S. W. 260.

Having reached the conclusion that the finding- of fact by the chancellor is sustained by a preponderance of the evidence, the decree is affirmed.


source: Caselaw Access Project

author: Mehaffy, J.

license: Public Domain

text:
    Missouri Pacific Railroad Company v. Berry.
    Opinion delivered November 18, 1929.

      Thomas B. Pryor and Harvey G. Combs, for appellant.

      J. H. Blade, for appellee.
   Mehaffy, J.

On October 16, 1928, tbe appellee filed suit in tbe justice court in Marion County, Arkansas, alleging that, on the second day of May, 1928, the railroad company recklessly, carelessly and negligently ran over and killed a bird dog belonging to appellee of the value of $100. It was alleged that the dog was killed about 11 o’clock in the forenoon of said day. After judgment in the justice court an appeal was taken to the circuit court.

The defendant filed a motion to require the complaint to be made more definite and certain and, among other things, requested that he he required to state the direction and character of the train which struck plaintiff’s dog. It stated that it could not prepare its defense until it knew what day the dog was killed, the time of day and the direction of the train and character of the train, whether passenger or freight. It alleged that it had several trains passing this point, and, without this information, it could not possibly be apprised of its defense.

The court overruled the motion, and appellant then filed an answer, denying all the material allegations of the complaint. •

James Smith, a witness for the plaintiff, testified that he lived about 100 yards from the railroad. He had been a locomotive engineer for 32 years, but, at the time of testifying, he lived about one-half a mile northwest of Summit, and about 100 yards from the railroad. He had in his possession the dog that belonged to appellee, and had had it for about seven months. It was killed on the railroad. Witness found it along the track in a cut about one-fourth mile from his house. The cut was 1,200 feet long, cut through stone. The dog was found about 750 feet from the south end of the cut. The back part of its body was broken, its hips skinned, and there was blood on the ties. The cut at that place is about 20 or 25 feet high. This witness saw the dog about seven or seven-thirty in the morning when he left, and when he ■came back he found the dog about two or three o ’clock in the afternoon. This witness did not know the exact date the dog was killed; did not remember whether it was May or June.

The appellee testified that the dog was killed about the first of May; he did not remember the exact date, but said he had filed a claim with the railroad company after the dog was killed which showed the exact date. He knew nothing about the killing of the dog. He testified that its market value was $100.

The engineer, Reedy, testifying for the appellant, said he was running an engine on the second day of May, but lie did not remember whether he was going north or south. He did not believe that he killed any dog. He saw some kind of a dog, which he did not think was a bird dog, but he did not think the train hit him. He testified he was keeping a proper lookout, and that it would have been impossible to stop the train and prevent the killing of the dog, but said he did not kill this dog. The dog was brown color, and he did not think it was a bird dog.

Another engineer, C. H. Jenkins, testified that he was an engineer for the Missouri Pacific, and had had experience both as engineer and fireman, and had seen many dogs, and hogs too. When you pass them in a cut, often the engine gets by, they get scared and try to get away, and go under the train. Witness has seen them jump in front of the train, and has also seen the engine hit them. This witness, however, did not testify anything about running a train at that place or at that time.

There was a verdict for $50 for the appellee, and appellant filed a motion for a new trial, which was overruled, and he prosecutes this appeal to reverse the judgment. While his motion for a new trial states several grounds, appellant only argues two. One of his grounds is that the evidence is insufficient to entitle appellee to recover, and the other is that the court erred in overruling his motion to make the complaint more definite and certain.

We think the testimony that the dog was found in a cut like the one described by witnesses, with his hips skinned and his back broken, and that blood was found on the ties, was sufficient to submit the question to the jury as to whether he was killed by the running of the train. And while the defendant said it ran several trains by there, the engineer who testified as to operating a train evidently was not operating the engine that killed this dog, and there was therefore no testimony showing that, at the time this dog was killed, the railroad company was exercising any care at all. The fact is that there is no testimony from any employee operating the train at the time the dog was killed. If the dog was killed by the operation of the train, as the jury found, this made a prima facie ease, and was sufficient to take the case to the jury, unless the railroad company offered some evidence that it was at the time in the exercise of care and did not negligently lull the dog. There is no such testimony in the record.

Appellant’s next contention is that the court erred in overruling its motion to make the complaint more definite and certain. The complaint stated that it was on the second day of May, about 11 o’clock in the forenoon. This was certainly sufficient to enable the appellant to prepare for its defense. No one saw the dog killed, and it was therefore impossible for the plaintiff in his complaint to state what train killed him or what direction it was going. The appellee, however, testified that, while he was not sure of the time, he thought it was the first of May, but that, after the killing he notified the railroad company, and gave them the exact date when the dog was killed. It was true the witness Smith testified that he did not know whether it was May or June, but there was no objection to this testimony, and the testimony of the appellee himself makes it plain that it was the time alleged in the complaint, the second of May, and evidently between 7:30 in the morning and 3 in the afternoon. The railroad company had this information, and had it in time to make investigation and determine what witnesses it needed to show the operation of its train during those hours.

This is just a question of the sufficiency of the evidence, and we think the circumstances testified to are sufficient to connect the killing of the dog with the running of the train. Of course, the finding of a dog dead near the track would not of itself raise a presumption of negligence, but when the dog is found by the track with his 'back broken, his hips skinned and blood on the ties, we think this is sufficient from which the jury might conclude that the dog was killed by the operation of the train, and, since there is no evidence by the persons who operated the train that killed this dog tending to show that they were in the exercise of care, the judgment must be affirmed. It is so ordered.


author: McHaney, J.

text:
    Spencer v. Johns.
    Opinion delivered November 18, 1929.

      E. D. Chastain, for appellants.

      Dave Partain and C. M. Wofford, for appellees.
   McHaney, J.

This is an appeal from an order of the chancery court requiring each party to pay his own costs in this litigation.

It appears that appellants were about to close a public road, and, on petition of appellees, they were temporarily enjoined from so doing. An agreement was entered into by appellants granting a thirty foot right-of-way across their lands, and appellees agreed to dismiss that suit, each party to pay half the costs. Before a dismissal was actually entered, appellants built a fence up the center oif the road. Thereupon appellees filed an information for contempt. A temporary restraining order was issued. There was a hearing before' the chancellor, and it developed that, between the time of the filing of the information and the hearing, appellants had widened the road, and were not in contempt of court. On motion to tax the costs, the court entered an order requiring each party to pay his own costs.

As appellants admit, courts of equity have a wide discretion in the matter of taxing costs against litigants, and this court will not reverse unless it be shown that the court has abused its discretion or acted arbitrarily. We are unable to say from the record presented that there has been a sufficient showing made to justify us in setting aside the action df the court in taxing the costs to each of the parties which they had incurred.

Affirmed.


author: Butler, J.

text:
    Federal Land Bank of St. Louis v. Richland Farming Company.
    Opinion delivered November 18, 1929.

      W. E. B eng el, for appellant.

      Oliver S Oliver, for appellee.
   Butler, J.

G. W. King was indebted to the appellant on the first day of February, 1923, in the sum of $3,700, bearing interest at the rate of 5% per cent, per annum, evidenced by his promissory note of that day, payable in sixty-nine annual installments, and, to secure same, on the 22d day of February, 1923, executed and delivered to the appellant his mortgage, conveying to it a farm containing 240 acres of land in Clay County, Arkansas. G. "W. King was also indebted to the appellee company in the sum of $2,700, evidenced by his promissory note for that sum, and executed, on April 2, 1923, his mortgage on the same lands as that contained in his mortgage to the appellant bank to secure said note, which mortgage, however, stipulated that it was subject to the prior mortgage aforesaid.

The facts in this case are not in dispute, and such as are necessary for the determination of the questions presented may be briefly stated as follows: The semiannual payments due appellant were promptly made each year down to and including the payment due in August, 1928, which payments were made by G. W. King, the mortgagor, and by the appellee company. Just which of the payments were made by the appellee company is not shown. During the years 1924, 1925, 1926 and 1927 the appellant bank made an inspection of the records of the collector of revenue in order to ascertain if the taxes due on the lands were being regularly paid, and also (the lands being embraced in a drainage improvement district) to ascertain if the drainage assessments were being paid, there being a stipulation in the mortgage executed by King to it that, should the mortgagor fail to pay the taxes and assessments, the mortgagee might, at its option, declare the entire debt due and proceed to foreclose its mortgage.

The taxes and drainage assessments were regularly paid each year for the years 1924, 1925, 1926 and 1927. The records kept by the collector of revenue showed the taxes for all of said years were paid by the mortgagor, G. W. King, and that the drainage assessments for the years 1925 and 1926 were paid by the same party, and for the years 1924 and 1927 were paid by the appellee. The receipts issued by the collector correspond with the records. "While the records and receipts showed payment of taxes and assessments for all of said years, except the assessments for the years 1924 and 1927, were being paid by the mortgagor, King, they were in fact being paid by the appellee company, which, during that time, was collecting from the mortgagor various sums and applying same to the indebtedness due it by said mortgagor. It collected and made application as aforesaid the sum of $670' on January 1, 1924, $480' January 1, 1925, $160 July 1, 1928, and $225.58 January 1, 1929. This last credit was for rents for the year 1928 collected and appropriated by the appellee company; from what source the prior credits were obtained by appellee is not shown.

The appellant bank had no actual notice prior to December 15, 1928, that the taxes and drainage assessments had been paid by the appellee. In January, 1929, appellee brought this suit, alleging that it had paid the taxes and drainage assessments aforesaid to protect the lien in its favor; that said taxes and assessments constituted liens on the land paramount to the rights of the appellant, and prayed for subrogation, judgment, foreclosure, et cetera. To this complaint the appellant filed its answer, and afterward the appellee filed a response thereto.

Upon these pleading’s and agreed statement of facts the case was submitted to the court. The court found by its decree that the appellee was entitled to be subrogated to the State and drainage district liens for taxes and assessments, gave judgment for the amounts of said items paid by the appellee company, less $225, rents collected for the year 1928, et cetera. The total amount of general taxes paid by the appellee company for the years above mentioned was $138.94, the total amount of drainage assessments for said years $1,120, which sums, together with interest, amounted to $1,466.33, from which the court deducted the item of $225 rents collected in-1928, leaving a balance of $1,241.33, for which judgment was given and declared to be prior and paramount to the lien of the appellant. From that decree both parties prosecute this appeal.

The appellee, plaintiff below, brought his action on the theory that it was obliged, in order to protect its interest, to discharge certain general taxes and drainage assessments due on the lands included in the mortgage given to the appellant bank and to it, and is therefore entitled to be subrogated to the paramount liens of the State and drainage districts in the amounts of the taxes and assessments paid by it. Undoubtedly a junior mortgagee who in good faith pays taxes due to protect his lien may be subrogated to the State’s lien therefor and recover the amount paid, even as against the prior mortgagee. Ringo v. Woodruff, 43 Ark. 469; Lester v. Richardson, 69 Ark. 198, 62 S. W. 62. But, as the doctrine of subrogation was evolved by courts of equity for the prevention of injustice, it is administered not as a legal right, but the principle is applied to subserve the ends of justice, and to do equity in the particular case before the court. Therefore no rule can be laid down for its universal application, and whether it is applicable or not depends upon the particular facts and circumstances of each case as it arises, and is subject to that most ancient maxim, “he who seeks equity must do equity.”

A consideration of the nature and purposes of this benevolent creation of the courts of equity and a comparison of its principles with the inferences implied in the facts of the instant case make it apparent that it can have no application here. Flowers v. Bricker, 178 Ark. 764, 12 S. W. (2d) 394. In all the cases cited by the appellee there was no element of mala fides, but this cannot be said of the case now before us. While the appellee, perhaps, was not motivated by a conscious intention to deceive the senior mortgagee and thereby gain an advantage, yet such was the necessary result of its conduct. There was a concealment, whether intentional or not, of an important fact, namely, that the mortgagor was not in fact the person who was discharging the taxes and drainage assessments, and the appellant was, because of this, lulled into a sense of security, and prevented from exercising its judgment as to what procedure it would take to protect its own interests. On account of its lack of knowledge of the default, and, further, by reason of the semi-annual payments made by King and the appellee, it was deceived into the belief that' its security was unimpaired except from natural causes, and that it had no right to ask for a foreclosure of its mortgage if it so desired. During this time, and while the appellant was unaware of the true situation, appellee was making use of its superior opportunities and collecting yearly sums materially lessening its debt, and, judging by its subsequent conduct, was attempting’ to secure by a lien superior to that of the appellant the sums it was yearly paying in taxes and drainage assessments, while all the time the security was depreciating in value — so much so that, while at the date of the giving of the two mortgages to the appellant and the appellee, it is probable it was thought ample security for both, it now is worth less than the appellant’s debt and the taxes and assessments for the years for which appellee has made payment. Appellee knew the mortgagor was not discharging the general taxes and assessment liens, and the appellant did not; if it thought appellant, as senior mortgagor in that state of the case, was obligated to pay the taxes, it certainly ought to have notified it of the delinquency and given it the opportunity to do so. Instead of this, it voluntarily assumed the burden.

Appellee argues that the appellant bank was not misled, because an examination of the record of the collection of drainage assessments for 1924 and 1927 would have disclosed the fact that the payments of the assess-merits for those years were made by it, and not by the mortgagor, King. A sufficient answer to this contention is that in the year 1924 appellee secured from some source and by some means a payment of $670, and the regular tax records showed the payment off the general taxes by King, and, as the assessments for the following years, 192'5 and 1926, were shown by the records to have been paid by King, appellant might have reasonably concluded that there had been some understanding between appellee and King for this payment; especially as the semi-annual payments of its accrued interest and principal were paid by King- and the president of the appellee company, and because no complaint was made of the mortgagor’s failure to make the assessment payment for that year. What is said of the 1924 payment of the drainage assessment applies to that of the year 1927, for, from all of the information available, the appellant might have naturally assumed that, if the appellee was paying these two assessments in an honest effort to protect its lien, it would have given notice of some kind to the appellant bank. When the appellant made examination of the tax records and found the general taxes for each year paid by the mortgagor, it must have assumed that the drainage assessments were also paid by him, as it had no actual knowledge otherwise until December 15, 1928.

The appellee also contends that the falsity of the records was the act of the collector of revenue, for which it ought not to be held respbnsible. While the actual notation was the act of the collecting officer, still the appellee must have known of this, as the receipts issued and delivered to it contained the false statement of the record, viz., that the taxes and assessments were paid by King. It is also reasonable to presume that the appellee not only knew, but directed the receipts to be made in the name of King; for one does not usually accept payment by one person and issue the receipt to another without some authority for so doing.

The decree is reversed, and cause remanded, with directions to enter a decree conforming to this opinion.


text:
    Cush v. State.
    Opinion delivered November 18, 1929.

      Jime B. Morrell, for appellant.

      Ral L. Norwood, Attorney General, and Pat Mehaffy, Assistant, for appellee.
   Butler, J.

Appellant was tried and convicted on a charge of larceny, and the testimony adduced by the State tended to establish the following facts:

On an afternoon in the cotton picking Reason, a wagon containing about 1,000 pounds of cotton in the seed was left standing in the field of the owner, and early in the morning of the day following it was discovered that the wagon had 'been emptied, during the night, and its contents carried away. There were a number of horse tracks at the wagon, which, on being followed, led to the house of one Martin Roberts, some distance away. On the porch of this house a large pile of cotton was found, which had been placed there by several persons during the preceding night, without Roberts, who was in bed, knowing who they were. During the night several persons were seen with horses loaded with sacks of cotton about a mile and a half from Martin Roberts’ and going from the direction where the cotton had been in the wagon and toward Roberts’ house. On the same day an officer, having obtained information that appellant was one olf the persons who had stolen the cotton, arrested appellant at his house, which was in the neighborhood of Roberts’ house, and of that where the cotton had been carried away.

The officer making the arrest testified, without objection, that at the time of the arrest, or shortly after, appellant stated that he had gone horseback on the second trip with others, and that he had brought back 169 pounds of seed cotton which was weighed by Roley Roberts, Martin’s son. Appellant further said that he hated to be in trouble, but it looked like he was. This statement was made at or shortly after appellant was arrested, and either at his house or just after he got into the officer’s car.

One witness testified that seed cotton at the time was worth “6, 6 or 7 cents” per pound.

Several grounds for reversal are presented by appellant, which will be stated and discussed in the order presented by appellant in his brief.

That there is no testimony to show that the cotton on the porch of Martin Roberts is the cotton that was missing, and that the testimony regarding appellant’s confession was incompetent because it was not shown that the confession was free and voluntary; that, as there is no other evidence tending to connect the appellant with the commission of the crime, the court erred in submitting the case to the jury.

The evidence was sufficient to lead to the reasonable inference that the crime was committed, and that the cotton found on the porch of Martin Roberts was the cotton which had been stolen; the wagon was found emptied of its contents; the tracks of horses were found leading from there to the house of Roberts; persons were seen on the night of the larceny with horses loaded with sacks of cotton going from the direction of the wagon towards the home of Roberts, and when Roberts went to bed he had between 75 and 150' pounds of cotton on his porch, which grew during the night to 1,031 pounds. As stated, this evidence, while wholly circumstantial, was amply sufficient to warrant the inference that it was the identical cotton taken from the wagon found on the porch of Martin Roberts, and that the crime had been committed by some one. This, with the appellant’s confession, ilf competent, was sufficient to support the verdict. Crawford & Moses’ Digest, § 3182; Melton v. State, 43 Ark. 367; Johnson v. State, 135 Ark. 377, 205 S. W. 646; Standridge v. State, 169 Ark. 294, 275 S. W. 336.

An examination of the record discloses that appellant did not object to the testimony of the officer to whom the confession was made, but cross-examined him relative to the time and place and substance of the confession. If the question of the voluntary nature of appellant’s confession had been raised, undoubtedly the burden to show its free and voluntary character would have rested upon the State. Hall v. State, 125 Ark. 263, 188 S. W. 801; Fenn v. State, 127 Ark. 204, 191 S. W. 899. But the appellant permitted the testimony to go unchallenged either by objection or motion to exclude it from the .jury’s consideration, and is not now in position to complain because of it. Harding v. State, 94 Ark. 65, 126 S. W. 90; Warren v. State, 103 Ark. 165, 146 S. W. 477 Ann. Cas. 1914B, 698; Howell v. State, ante p. ............

Moreover, the circumstances surrounding the confession were such as to have justified the jury in the conclusion that the statement of appellant connecting himself with the larceny was the free and spontaneous disclosure of the facts, which he doubtless felt were already known to the officer. This question was fairly presented to the jury in an instruction by which it was told that it must find, before it could consider the alleged conifession, that same was in fact made, and was the one repeated by the witness, and was in fact the truth; that the confession was made voluntarily, and that, in order to be so, it must have been made without hope of reward and without fear of punishment. In the same instruction the jury was told that the burden was upon the State to show that such confession was voluntarily made.

In view of this instruction, the presumption is that the jury must have found from the circumstances surrounding appellant’s conifession that it was free and voluntary. Logan v. State, 150 Ark. 489, 234 S. W. 493.

Appellant insists that, even though the evidence might be sufficient to warrant a verdict of guilty, the crime proved was petit larceny only, because the value of the cotton stolen did not exceed $10. Appellant is mistaken. First, the evidence was to the effect that cotton was worth from 5 to 7 cents; the jury was at liberty to accept any figure between the minimum and maximum value, and was justified in its finding of more than $10 in value. Besides, it is manifest that, on the trip appellant confesses he made, he was criminally responsible, not only for the cotton actually carried away by himself, but also for that asported by his fellow thieves, which was largely in excess of the minimum for grand larceny.

Appellant complains of the variance between the indictment and the evidence, in that there was no evidence to show one of the persons, L. B. Anderson, in whom joint ownership of the cotton was laid, had any interest in it further than a landlord’s lien for rent; and that instruction No. 2, given by the court, in which the jury was told, if it found defendant stole cotton, the property of L. B. Anderson and others named in the indictment, was erroneous and prejudicial. Again appellant is mistaken. The proof is positive that Anderson and the others each had an undivided one-fourth interest in the cotton, and each were to have one-fourth of the proceeds when sold.

Lastly, appellant assigns as error the giving by the court of a part of instruction No. 7, which is as follows: “You are instructed that it is competent to convict upon circumstantial evidence as upon positive testimony. Positive testimony is that of eye-witnesses, witnesses who -testify as to the transaction that show the guilt or innocence of the defendant. Circumstantial evidence is evidence of circumstances by which guilt or innocence is proved or disproved.” The portion of the instruction which follows is the part olf which complaint is made. “In so far as the evidence is circumstantial in this case, to convict the defendant it is necessary that the circumstances not only point to- and be consistent with the guilt of the defendant, but should be inconsistent with his innocence.” It is said by appellant: “This part of the instruction, in effect, told the .jury that there was circumstantial evidence in the case, for it says ‘in so far as the evidence is circumstantial in this case, ’ it is necessary that the circumstances not only point to his guilt * * *. It was a matter solely for the jury'to determine as to whether there had been any evidence of a circumstantial nature introduced, but the court told them there is circumstantial evidence.”

'While not approving the phraseology of the instruction as a whole, we are of the opinion that a fair consideration of the phrase, “in so far as the evidence is circumstantial,” does not justify the construction placed upon it by the appellant, namely, that by it the court told the jury that “there is circumstantial evidence.” The introductory words, “in so far,” implies a conditional statement, which may or may not be true. And the court by the expression only meant to say, whatever circumstances are proved, these should be considered and weighed by the rules announced. The court did not say there were circumstances proved, but that, whatever were shown, they must point to his guilt and be inconsistent with his innocence. The court had already told the jury the burqLen was upon the State to prove the defendant guilty beyond a reasonable doubt, and no prejudice could have resulted. Carr v. State, 81 Ark. 589, 99 S. W. 831.

The judgment is affirmed.


author: Hart, C. J.,

text:
    Missouri Pacific Railroad Company v. Williams.
    Opinion delivered November 25, 1929.

      Thos. B. Pryor and H. L. Ponder, for appellant.

      G. E. Tingling, for appellee.
   Hart, C. J.,

(after stating the facts). It is first earnestly insisted that a verdict should have been directed in favor of appellant. The suit was brought under the provisions of section 8568 of Crawford & Moses’ Digest, commonly called the lookout statute. It was the contention of appellee that the appellant was negligent in failing to keep an efficient lookout as required fay the statute, and in failing- to give the statutory warnings for the approach of the train to the public crossing. Under Crawford & Moses’ Digest, section 8668, providing that, if any person or property shall be lulled or injured by the neglect of any employee of any railroad to keep a lookout, the company shall be responsible, notwithstanding the contributory negligence of the person injured, where, if such lookout had been kept, the employee could have discovered the peril of the person injured in time to have prevented the injury, it was held that the protection applies to property damage as well as to personal injury, and that, in the case of an injury to property, the contributory negligence of the owner is not a bar to a recovery. Huff v. Mo. Pac. Rd. Co., 170 Ark. 665, 280 S. W. 684; Blytheville, Leachville & Arkansas Southern Ry. Co. v. Gessell, 158 Ark. 569, 260 S. W. 881; and Kelly v. DeQueen & Eastern Rd. Co., 174 Ark. 1000, 298 S. W. 347.

Under the evidence, viewed in the light most favorable to appellee, the latter was traveling south along a public highway parallel with the railroad, and started to cross at a grade crossing in the town of McBae from west to east. On the west side olf the track, some distance north of the crossing, there were two toilets on the right-of-way of the railroad. Weeds extended from these toilets nearly up to the rails of the track of the railroad company. The weeds were six or eight feet in height, and, together with the toilets, obstructed the view of an approaching train from the north so that he could not see an approaching* train until he was nearly on the track. According to the testimony of appellee, he looked up and down the track for an approaching train before attempting to go on the crossing*. His sense of hearing and his sense of sight were both normal. He was traveling at a very low rate of speed, of from three to five miles an hour, and did not see or hear any approaching train. There was a cut about one-half mile north of the crossing which would prevent him seeing an approaching train until after it had run out of the cut on its way south. Appellee and two witnesses for him all testified that it was a clear, bright day, and that the statutory signals for the public crossing were not given. Two of the witnesses were looking at the approaching train, and said that the bell was not ringing, and that the whistle was not blown for the crossing until the train was within fifty or sixty yards of if- If is true that their testimony is contradicted by that of the engineer and that of the fireman, but it was within the province of the jury to find these disputed questions of fact in favor of the appellee. The jury might have found that the fireman and engineer were negligent in not giving- the proper statutory signals for the crossing, and that, if they had been keeping- an efficient lookout, they could have seen appellee in time to check the train, and thereby avoid demolishing- the automobile.

It is next insisted that the court erred in giving- instruction No. 2, which reads as follows:

“You are instructed that it is the duty of all persons running trains in this State, upon any railroad, to keep a constant lookout for persons or property upon the track of any and all railroads; and if' any property shall be injured by the negligence of any employee of any railroad to keep such lookout, the company owning or operating- any such railroad shall be liable and responsible for all damages resulting from negligence to keep such lookout, notwithstanding the contributory negligence of the person injured, where, if such lookout had been kept, the employee or employees in charge of such train of such company could have discovered the peril of the person injured in time to have prevented the injury, by the exercise of reasonable care after the discovery of such peril, and the burden of proof shall devolve upon such railroad to establish the fact that this duty to .keep such lookout has been performed,”

It is claimed that the instruction was misleading and prejudicial in the use off the phrase, “notwithstanding the contributory negligence of the person injured,” since appellee was not at all injured in his person. It is the settled rule of this court not to reverse a judgment except for errors prejudicial .to the rights of the appellant. This suit was not brought to recover compensation for injuries to the person of appellee. It was founded entirely upon the destruction of his automobile. The whole instruction is to be read together, and it is perfectly plain that the use of the words just quoted refer to the contributory negligence off the person injured in his property. Under the statute the railroad may be liable for injury to persons or property, notwithstanding the contributory negligence of the person receiving bodily injury or being injured in his property. We do not think that this assignment of error is well taken, and cannot perceive how appellant could have been in any sense prejudiced by the giving' of the instruction.

Other errors are assigned, both as to the giving of instructions at the request of appellee and the refusing of others asked by appellant. We do not deem it necessary to set out any of these instructions. The court fully and fairly submitted the issues arising from the conflict of evidence under the principles of law decided in the cases above cited and many others which might be cited. The instructions asked by appellant and refused by the court were either covered by other instructions requested by appellant or the instructions were misleading on account of the language used in them.

We have carefully considered the assignments of errors set out, and find nothing therein prejudicial to the rights of appellant. The judgment is therefore affirmed.


text:
    Stroud v. Henderson
    Opinion delivered November 25, 1929.

      Duty ■& Duty and McGill & McGill, for appellant.

      Paul Anderson and John W. Nance, for appellee.
   Hart, C. J.,

(after stating the facts). Under our view of the law, the issues raised by the appeal have been settled by the construction already placed by this court under § 1716 of Crawford & Moses’ Digest, which reads as follows:

‘■‘Whenever any stockholder shall transfer his stock in any such corporation, a certificate of such transfer shall forthwith be deposited with the county clerk aforesaid, who shall note the time of said deposit, and record it at full length in a book to be by him kept for that purpose; and no transfer of stock shall be valid as against any creditor of such stockholder until such certificate shall have been deposited.”

This court has several times held that the transfer of stock referred to in this section is the absolute transfer of the legal and equitable title to the stock, and not pledges or liens by way of collateral security. Bates-ville Telephone Co. v. Myer-Schmidt Grocer Co., 68 Ark. 115, 56 S. W. 784, and Hudson v. Bank of Pine Bluff, 75 Ark. 493, 87 S. W. 1177. In the latter case the court was asked to overrule its holding in the case first cited, and declined to do so. The court said that the prior case was well briefed on both sides, and all authorities bearing on the question had been cited and considered. Therefore the court adhered to the construction given the statute in the Batesville Telephone Company case.

Again, in the case of Loeb v. German National Bank, 88 Ark. 108, 113 S. W. 1017, the court said that the section of the statute providing for the recording oif the transfers of corporate stock with the county clerk does not apply to transfers for collateral security, but only to absolute sales.

In the case at bar the record shows an absolute transfer of stock by H. L. Stroud to his wife, Sallie B. Stroud, and there was no attempt to comply with the provisions of § 1716 of the Digest.

In Scott v. Houpt, 73 Ark. 78, 83 S. W. 1057, this identical question came before the court for consideration and determination. It was held by a divided court that a transferee of corporate stock, the transfer of which had not been deposited with the county clerk, as required by the statute, could not hold the stock as against attaching creditors of his transferrer, although such creditors had notice of the transfer prior to the completion of their levies, and prior to a sale under judgment rendered in the attachment suit. Judge Battle wrote a dissenting opinion, in which he wanted to apply the same rule that had been applied with regard to pledges of stock as collateral security in the opinion prepared by him for the court in the Batesville Telephone Company case.

Before the opinion of the Supreme Court was delivered in Scott v. Houpt, 73 Ark. 78, 83 S. W. 1057, the question came before Judge Rogers in a case arising in a circuit court of Arkansas. The learned Judge, said that, after most careful consideration, he had readied the conclusion that the language of the statute was so certain as to prohibit the court to place any interpretation upon it than to hold that a shareholder could not, by absolute sale, transfer any stock so as to affect the rights of his creditors without complying with the terms, of the statute. Judge Rogers pointed out that the statute was out of harmony with most of the statutory law on the subject in the various states, but said that, while this was true, it was the province of the court, not to amend the statute, but to interpret and enforce it. Fahrney v. Kelly (C. C.), 102 Fed. 403.

The opinion in the case of Scott v. Houpt, 73 Ark. 78, 83 S. W. 1057, which was delivered on November 19, 1904, has been' generally recognized by the bench and bar as the existing law on the subject until the passage of the Uniform Stock Transfer Act by the Legislature of 1923. See Acts of 1923, p. 358, and Castle’s Supplement to Crawford & Moses’ Digest, 716a et seq. Therefore the decision of the chancery court was correct.

Under the authority of the cases above cited, the transfer of the stock of H. L. Stroud in the Rogers Wholesale Grocery Company to his wife, Sallie R. Stroud, did not become effective as to his creditors because the terms of § 1716 of the Digest had not been complied with. We are not concerned with the reason of the statute. It has been said that the section was passed in aid of the creditors of shareholders because only the stockholders and the corporation itself have access to the books of the corporation, and the creditors of stockholders could not know who owned the shares of stock unless all transfers should be deposited with the county clerk as required by statute.

It follows that the decree must be affirmed.


author: Smith, J.

text:
    Merchants’ National Bank v. Home Building & Savings Association.
    Opinion delivered November 25, 1929.

      Daily <& Woods .and Henry Moore, Jr., if or appellant.

      John D. Arbuchle, for appellee'.
   Smith, J.

The Home Building & Savings Association is a domestic corporation, having its principal place of business at Fort Smith, and is engaged as a building and loan company in making loans on real estate, to be repaid by maturing building and loan stock sold to the borrower for that purpose. The details of its method of operating are set out in the opinions in the cases of Midland Savings & Loan Co. v. Home Building & Savings Assn., 177 Ark. 236, 6 S. W. (2d) 5; Gate City Building & Loan Assn. v. Crowell, 177 Ark. 539, 7 S. W. (2d) 329; and Lavender v. Buhrman-Pharr Hdw. Co., 177 Ark. 656, 7 S. W. (2d) 755. The facts stated in these opinions are explanatory of those out of which this litigation arises.

The Home Building & Savings Association, hereinafter referred to as the association, had a resident agent at Texarkana named Dewberry, who was clothed with full authority to act for the association in all matters relating to applications for loans and in closing them up, and it was usual, in the discharge of the duties of his agency, for him to disburse money loaned to borrowers in satisfying existing liens upon the property offered as security for the loans; in fact, this duty was intrusted to Dewberry and to no one else, and it is not questioned that, in the discharge of this duty, he was acting as the agent of the association.

After an application for a loan had been approved by the association, the custom was to make a check for the amount of the loan payable to the joint order of Dewberry and the borrower, and the instructions to Dewberry were to procure the indorsement of the check by the borrower and to indorse it himself, and, after cashing the check and discharging any existing liens with the proceeds thereof, to pay the excess, if any, to the borrower. These checks were always sent to Dewberry.

The secretary of the association, whose office is in Fort Smith, admitted in his testimony that he knew that Dewberry’s practice was to have the mortgagors indorse the checks, and to deposit them to his agency account, after indorsing them himself, at a bank in Texarkana, and to.then issue his personal checks against this account in satisfaction of prior liens, and, if there was any excess, the amount thereof was paid to the borrower by a check drawn by Dewberry on this agency account.

The association carried a commercial account with the Merchants’ National Bank of Fort Smith, hereinafter referred to as the bank, and the checks to the joint order of Dewberry and the borrower heretofore referred to were drawn against this account.

Applications in proper form were forwarded by Dewberry to the association which apparently had been made by H. C. McDaniel and S. E. Green, and when, in due course, the applications had been approved, checks were forwarded for the loans applied for. One of these checks was payable to the order of Dewberry and McDaniel, and the other to the order of Dewberry and Green, and both were sent direct to Dewberry.

It was a part of Dewberry’s duty, as agent for the association, to receive the monthly payments on the stock issued to the borrowers for the purpose of maturing the loans, and to forward the payments to the association. After the ostensible loans had been made to McDaniel and Green, Dewberry made monthly remittances on account thereof to the association as the loan agreements contemplated, and it was assumed by the association that these remittances covered payments made by McDaniel and Green.

The entire transaction proved to be a fraud and a part of Dewberry’s general scheme to swindle, and, when he realized that his peculations could not longer be concealed, he absconded and left for parts unknown, and the officers of the law have been unable to serve a warrant which was issued for his arrest. Dewberry left no property behind him. The date of Dewberry’s flight was about April 1,1927.

After Dewberry’s flight, suits were brought to foreclose the mortgages purported to have been given the association by McDaniel and Green, but the defense was successfully interposed in those suits that the transactions were fraudulent, and that McDaniel and Green had not received any money from Dewberry, and that the indorsement of their names on the checks payable to their joint order with that of Dewberry were forgeries. The bank knew nothing of these defenses until after decrees favorable to McDaniel and Green had been rendered in the foreclosure proceeding’s, and the association itself appears to have been ignorant of these defenses until about two months before the suits were tried.

In the meantime the bank at Texarkana, where Dewberry carried his agency account, and where he had cashed the checks above referred to, had liquidated its affairs and had gone out of business.

Suits were then brought against the bank by the association for having cashed the checks upon forged indorsements. The eases were tried by the court sitting as a jury, and numerous findings of fact were made and others were refused, to all of which exceptions were saved by the party adversely affected. The court found the fact to be that the indorsement of the check in the McDaniel case was a forgery, while that in the Green case was genuine, and upon this finding rendered judgment against the bank in the McDaniel case, and in its favor in the Green ease, and both parties have appealed.

The finding of fact in the Green case would, of course, be conclusive of it if there is sufficient testimony to support that finding, but we do not review the testimony as to the genuineness of these signatures, as, in our opinion, it is unnecessary to do, as we think the bank is not liable in either case under the undisputed facts developed at the trial from which this appeal comes herein stated.

Dewberry was the agent of the association, and no loss would have been sustained but for his rascality practiced in the discharge of his agency. McDaniel and Green were named as payees in the checks, but the checks were not sent to them. The proceeds of these checks reached Dewberry’s hands and were credited to his agency account, and this is exactly what would have happened had the cheeks, been properly indorsed. The loss was sustained through Dewberry’s improper use of the money after it came to his hands. It is true the money did not reach his hands in the manner the association expected, but it is nevertheless true that it did reach him and was credited to his agency account, and was thereafter misused, and thus the loss was caused.

The case is sufficiently similar to that of Cureton v. Farmers’ State Bank, 147 Ark. 312, 227 S. W. 423, to be controlled by it. The facts in that case were that Cure-ton took a mortgage, as he supposed, from A. J. Carmon to secure advances uf money to be subsequently made. But the mortgage was executed by H. V. Carmon, who falsely represented that he was A. J. Carmon, and, upon the security of this mortgage, checks were delivered to H. V. Carmon, payable to the order of A. J. Carmon, which were cashed upon presentation by H. Y. Cannon at the bank upon which they were drawn. These checks were charged by the bank against the account upon which they were drawn, and, when Cureton discovered the deception which had been practiced upon him, he brought suit against the bank for the amount of these checks. In denying Cureton’s right to recover we said:

“This court, in O. J. Lewis Mercantile Co. v. Harris, 101 Ark. 4-7 [140 S. W. 981], announced the well-established doctrine that ‘the holder of commercial paper, payable to order, must trace his title through a genuine indorsement, and that the drawee of a draft, payable to order, who pays upon a forged or unauthorized indorsement, does so at his peril.’ See also Koen v. Miller, 105 Ark. 152, 150 S. W. 411. But, as is said, in Land Title & Trust Co. v. Northwestern National Bank, 196 Pa. 230, 46 A. 420, 79 Am. St. Rep. 717:, ‘This doctrine is confined to cases in which the depositor has done nothing to increase the risk of the bank. It should not apply when the check is issued to one whom the drawer intends to designate as the payee: First, because in such a case the risk is not the ordinary -risk assumed by the bank in its implied contract with its depositor, but a largely increased risk, as it follows that a cheek thus fraudulently obtained will be fraudulently used. The bank is deprived of the protection afforded by the fact that a bona fide holder of a check will exercise care to preserve it from loss or theft, which are the ordinary risks. There is thrown upon the bank the risk of antecedent fraud practiced upon the drawer of the check, of which it has neither knowledge nor means .of knowledge ; secondly, because in such a case the intention with which the drawer issued the check has been carried out. The person has been paid to whom he intended payment should be made; there has been no mistake of fact, except the mistake which he made when he issued the check, and the loss is due, not to the bank’s error in failing to carry out his intention, 'but primarily to his own error into which he was led by the deception previously practiced upon him.’ McHenry v. Old Citizens’ National Bank, 85 Ohio St. 203, 97 N. E. 395, 38 L. R. A. (N. S.) 1111; Meridian National Bank v. First National Bank, 7 Ind. App. 322, 33 N. E. 247; Robertson v. Coleman, 141 Mass. 231, 4 N. E. 619. If it be conceded that the appellant was guilty of no negligence in delivering the checks to H. V. Cannon, and that appellee bank and the appellant were both innocent in the transaction, which must result in financial loss to one or-the other of them, then the case under the facts would come clearly within that principle of natural justice and equity which requires that, as between two innocent parties, the loss must fall upon that one whose acts contributed most to produce it. See Stout v. Bemoist, 39 Mo. 277, 90 Am. Dec. 466, and cases there cited.”

So here, the checks were not sent to McDaniel and Green, and they were not advised by the association that checks had been issued and sent to Dewberry, in which they were named as payees along with Dewberry, and the proceeds, of the checks were credited to Dewberry’s agency account, as was intended, although not in the manner intended. One of two innocent persons must suffer, and it is our opinion that the loss should fall upon the association, because its acts contributed most to produce it.

The judgment on the appeal of the bank will be reversed, and on the cross-appeal of the association will be affirmed, and judgment will be entered here in accordance with this view.


text:
    Vance v. White.
    Opinion delivered November 25, 1929.

      G. W. Norton, for appellant.

      G. B. Knott 'and J. M. Prew-ett, for appellee.
   Smith, J.

On September 30, 1920, W. P. Brandon, who was the senior member of the copartnership of Brandon & Baugh, sold a tract of land to Jeff White, and in part payment thereof took three notes, each for the sum of $544.33, due respectively November 15, 1921, 1922 and 1923, and to secure their payment a vendor’s lien was reserved in the deed.

In the fall oif 1922 Mrs. Addie Vance commenced working- for Brandon & Baugh in the capacity of a saleswoman, and, having $8,000 in cash, she loaned it to her employers and took their note therefor. Payments were made on the note which reduced it to $6,700, and a new note for this amount was taken, which fell due in November, 1925, and at the time of its execution there was delivered to Mrs. Vance certain notes as collateral, and among the number was the last note to mature which White had executed to Brandon.

White died February 16,1922, and his son, J eff, took charge of the land for the benefit of himself and the other heirs, and paid one of the notes, which was surrendered to him, and he made payments on the third and last note, and on October '23, 1924, paid the balance then due. His father had paid the first note. At the time of this payment young White demanded the surrender of the note, and was told by Mr. 'Baugh, of the firm of Brandon & Baugh, to get it from the bookkeeper, but, after searching, the bookkeeper advised that he could not find the note, but proper credit of the payment was made on the books of Brandon & Baugh. Later White again demanded surrender of the note, but was told that it was probably in the bank, but it was not found, and Baugh thereafter went with White to the office of the circuit clerk and recorder and entered upon the margin of the record where the deed had been recorded the following indorsement: “The lien retained in this deed is satisfied in full and canceled, this. 6th day of January, 1925. (Signed) W. P. Brandon, by J. D. Baugh.” This indorsement was attested by the clerk and recorder. No indorsement had been made upon the record showing the transfer of any of the notes secured by the vendor’s lien there reserved.

Mr. Baugh, of the firm of Brandon & Baugh, frequently discussed the note with Mrs. Yance, and assured her that it would be paid, and payments were made on it from time to time, but, before the note fell due, Brandon & Baugh made a voluntary assignment of all of their assets to two receivers, who took charge of the assets and proceeded to administer them, pursuant to the terms of the assignment, for the benefit of the creditors. These assets consisted of a large mercantile business, and about $200,000- in accounts, and large planting interests. Brandon & Baugh had done a furnishing business, and liad advanced large sums of money and supplies to numerous customers, and liad many accounts on their books. This assignment was made at a date subsequent to the maturity of the $6,700 note, but thereafter Mrs. Vance was given assurance by Mr. Baugh that the note would be paid, and there appears to be no reason to doubt that all parties expected this would be done.

Mrs. Vance made collections on account of the collateral notes given her, but they did not suffice to pay the principal note. On one occasion she spoke to one of the receivers about the White note, and was told by him that the note was without value, as it had been paid. This statement was based upon the fact that the books of Brandon & Baugh showed the note had been paid, and, without further inquiry as to the facts concerning the note, Mrs. Vance proceeded to make what she could out of the collateral notes, and, when it appeared that they would not suffice to pay her note, she filed it with the receivers, and consulted an attorney, who advised her that she could enforce the vendor’s lien reserved in the deed to White, and this suit was brought for that purpose. The suit was filed May 22, 1928.

An answer was filed, in which it was alleged that plaintiff was barred from prosecuting the suit on account of her laches in bringing it. It was also alleged that Mrs. Vance was estopped from prosecuting the suit for the reason that she knew payments were being made on the White note to Brandon & Baugh at the time she held the note, and that she made no objection to these payments.

The.defense of estoppel does not appear to be now insisted upon, and it is certainly not sustained by the testimony, as it very clearly shows that Mrs. Vance did not have this information. She was employed by Brandon & Baugh at the time the payments on the White note were made, but her employment was as a saleswoman only, and she had no information as to what was going on in the office.

Upon final submission the court found for the defendants, “for the reason of the delay on the part of the plaintiff in making presentment for payment of the note of Jeff White either to the maker or, after his death, to his heirs — the defendants herein.” The testimony supports the finding- that no demand was made on the heirs prior to the institution of this suit.

We think the court erred in denying the relief upon the ground of laches. It is not contended that plaintiff’s cause of action was barred by any statute of limitations. It was not, as fully appears from the facts already stated, and we perceive no reason why she should be charged with laches for delaying for a time which did not exceed the statute of limitations before bringing the suit. Unlike the statute of limitations, no fixed time is required to establish the defense of laches, but it has been held that: “In the absence of some supervening equity calling- for the application of the doctrine of laches, a court of chancery should and will by analogy follow the law, and not divest the owner of title by lapse of time shorter than the statutory period of limitations.” Earle Imp. Co. v. Chatfield, 84 Ark. 296, 90 S. W. 84. And it has also been held that the supervening equities mean some element of estoppel aside from the mere lapse of time. Updegraff v. Marked Tree Lumber Co., 83 Ark. 161, 103 S. W. 606.

There are no elements of estoppel in this case. Mrs. Vance was not aware that the payments were being made on the note to Brandon & Baug’h, and she did nothing to induce such payments, except only to delay bringing suit. Mrs. Vance was not required to notify the maker of the note or his heirs that she was the legal holder of the note. On the contrary it was their duty to make payments to the legal holder, and payments otherwise made were made at their peril.

The judgment in the case of Hamilton National Bank v. Emigh, 127 Ark. 545, 192 S. W. 913, was reversed because of the refusal of the court to give an instruction reading as follows:

“4. A maker of a promissory note is charged with the knowledge that the note is negotiable and may be transferred and indorsed by the person or firm to which it is payable to some third party or indorsee; and when such maker pays the person to whom said note was originally payable the amount of the said note, or any part thereof, without the production olf the original note, such payment is made at the maker’s peril, and such payments so made are of no effect as against the third party or indorsee thereof who had possession of the note at the time the payments were made.”

This is an elementary principle in the law of commercial paper, and further citation of cases is not required, although many might be made, some quite recent.

Section 7399, C. & M. Digest, and the case of Kinney v. North Memphis Savings Bank, 178 Ark. 716, 11 S. W. (2d) 486, which construed it, are invoked to sustain the decree of the court below. This section of .the statute provides that satisfaction oif any lien on the ¡margin of the record, where the instrument creating it or securing it is recorded by the owner of record of the indebtedness secured, shall be full and complete protection for any subsequent purchaser, mortgagee, or judgment creditor of the mortgagor or grantor, where there has been no marginal indorsement on the record showing that the indebtedness secured had been transferred or assigned. But the persons thus protected by the failure to indorse the transfer of the indebtedness on the margin of the record are subsequent purchasers, mortgagees, or judgment creditors. The defendants are the heirs of the maker of the note, and, as the,statute does not apply to him, it cannot be applied to them. They are not subsequent purchasers, mortgagees, or judgment creditors, but stand in the stead of their ancestor, with the same rights and obligations that he had.

It was said in the Kinney case, supra, that “in other words, unless and until the statute (§ 7399, C. & M. Digest) is complied with, one may deal with the person who, from the face of the record, is the owner of the lien, as if he were the owner, and will he protected in so doing.” But this opinion is not to be interpreted in the light of this detached sentence alone. It must be read in connection with the opinion in its entirety and considered in connection with the facts there under consideration. In that case the right of the bank to enforce the vendor’s lien securing- the note was denied because the rights of a subsequent purchaser had intervened, and subsequent purchasers, as well as subsequent mortgagees and judgment creditors, are protected by the statute. The words, “any one,” as there used, must therefore be construed to mean any one belonging to any of these three classes.

The rights of no such person have intervened here. If the original grantee in the deed reserving the vendor’s lien were living, he would not be heard to say that he had paid the amount of his note to a person who did not own it, and was not in possession of it when he made the payment, and had thereby discharged the lien which secured the note. Nor can his heirs. He, as well as they, could and would have been protected had they made the payments on the note to the person entitled to receive them.

The briefs discuss the question of the insolvency of the estate of Brandon & Baugh as administered by the receivers; but we do not consider this question, as we are of the opinion that Mrs. Vance is entitled to enforce the vendor’s lien regardless of that fact.

The relief prayed should therefore have been granted, and the decree of the court below will be reversed, and the cause remanded, with directions to enforce the vendor’s lien.


author: Humphreys, J.

text:
    Federal Compress & Warehouse Company v. Jones.
    Opinion delivered November 25, 1929.

      Buebee, Pugh & Harrison and G. A. Cwmmngham, for appellant.

      W. R. Bonham, for appellee.
   Humphreys, J.

The only question presented by this appeal is whether there is any substantial evidence in the record tending to show that appellee received an injury through the negligence of appellant’s employee while acting in the scope olf his employment. Appellee recovered a judgment of $1,500 against appellant, upon the theory that appellant’s employee was sent to the Board of Commerce Building', in Little Bock, to get sacks of cotton belonging to. Bandolph Scott & Company, for the purpose of transporting same to its compress in North Little Bock to be baled, and, while in the discharge of such duty, negligently failed to give a signal to the employee of Randolph Scott & Company, who was dropping the cotton out of a third-story window to the sidewalk on the side of said building, to be loaded on appellant’s truck, that appellee was approaching, or to warn appellee of the danger in walking on the sidewalk immediately under the window.

Appellant contends (for a reversal of the judgment because the record reflects, according to the alleged undisputed evidence, that its employee got the cotton in a different manner from the way instructions were given to obtain it, and that, even though its employee was not violating instructions in the way he was obtaining the cotton, he was not giving signals to the employee of Randolph Scott & Company, or warning pedestrians of the danger at the time of the injury, but that, instead, a third party, not in its employ, was performing such duties as a volunteer at the time appellee received his injury. The evidence with reference to instructions given to the employee of appellant to receive the cotton is found in the testimony of its general superintendent, E. Wade, to the effect that he instructed the drivers of trucks' to accept loose cotton from the cotton offices at their doors opening on the sidewalk, and that he 'forbade them going into the building for it; that he remarked many times that it was dangerous to throw cotton out of windows onto the sidewalk, and directed the drivers to have nothing to do with it.

According- to the undisputed testimony in the record, on February 16, 1928, in response to a telephone call from Randolph Scott & Company, appellant sent its truck by Fred Harris to the Board of Commerce Building in Little Rock for sacks of cotton. Harris stopped the truck on the sidewalk on the side of the building to receive the cotton, which had been put in sacks, and was being dropped from the third-story window onto the sidewalk by Harvey Burke, an employee of Randolph Scott & Company. Burke was unable to see pedestrians passing along the sidewalk, and was dropping the sacks in accordance with signals from Fred Harris. Harris allowed a boy by the name of James McQueen, who wanted to ride across the river with him, to get on the truck and give signals to Burke while he was in the truck loading cotton. As appellee passed along- the sidewalk under the window, Burke released a sack olf cotton, weighing about forty pounds, which struck and injured him. James McQueen did not warn appellee of the danger before he walked under the window, and the testimony is in dispute as to whether he signaled ¡Burke not to drop the sack of cotton which fell upon and injured appellee.

The main contention of appellant for a reversal of the judgment, that its employee was violating instructions, and thereby exceeding- his authority in receiving the cotton in the manner he did at the time appellee was injured, cannot avail to relieve it from liability. It must be remembered that the business in hand was to get the cotton. That is what appellant sent its employee to do, so, in receiving the cotton, the employee did not step aside to attend to business of his own wholly disconnected from his duties to appellant. The undisputed facts do not bring the case within the rule announced in the cases of Wells Fargo Express Co. v. Alexander, 146 Ark. 104, 225 S. W. 597; American Railway Express Co. v. Mackley, 148 Ark. 227, 230 S. W. 598; and Healey v. Cockrill, 133 Ark. 327, 202 S. W. 229, L. R. A. 1918D, 115, relied upon by appellant for a reversal of the judgment. In the telegraph and automobile cases cited, the employees had stepped aside from their employer’s business to perform independent acts, of their own, disconnected from that of their employer.

The rule governing the instant case was correctly announced in the case of Little Rock & Fort Smith Ry. v. Miles, 40 Ark. 298. 48 Am. Rep. 10, and reaffirmed in the case of Pine Bluff Water & Light Co. v. Schneider, 62 Ark. 109, 34 S. W. 547, 33 L. R. A. 366; Robinson v. St. L. I. M. & S. Ry. Co., 111 Ark, 208, 163 S. W. 500; and Campbell Baking Co. v. Clark, 175 Ark. 899, 1 S. W. (2d) 35. This court said in the Miles case: “The rule is firmly established that the master is civilly liable for the tortious acts of his servant, whether of omission or commission, and whether negligent, fraudulent or deceitful, when done in the line of his employment, even though the master did not authorize or know of such acts, or may have disapproved or forbidden them.”

In the application of this rule in the Clark case this court, in summing up the rule which had been announced in the Miles case and reaffirmed in the other cases mentioned above, took occasion to say: “As we understand the law applicable to cases of this character, although an agent may exceed his authority to the extent even of violating instructions, if, at the time, he is engaged in the business he was employed to perform by his employer, his employer would be responsible for injuries from his torts.”

Neither can appellant’s further contention, that its employee allowed a third party, a volunteer, to give signals to the employee of Randolph Scott & Company when to drop cotton from the third-story window and to warn pedestrians passing by against the danger, relieve it from liability in this case. It was negligence on the part of appellant’s employee to substitute another to give the signals and warn the public. Tchula Cooperative Store v. Quattlebaum, 176 Ark. 780, 4 S. W. (2d). 919.

No error appearing, the judgment is affirmed.


text:
    First National Bank of Stuttgart v. People’s National Bank.
    Opinion delivered November 25, 1929.

      J olm L. Ingram, If or appellant.

      John W. Moncrief and A. G. Meehan, for appellee.
   Humphreys, J.

This is an appeal from a decree of the chancery court of Arkansas County, Northern District, awarding rents in the sum of $791.39 out,of the proceeds of a rice crop grown and harvested in the year 1927 by George Carlson, on a farm in said county owned by his wife and himself, half and half, upon petition of appellant for a distribution of said rent in a foreclosure proceeding, wherein the appellee ííerein, People’s National Bank, was plaintiff, and appellant herein and George and Ramona Carlson were defendants. Appellant’s petition for a distribution of the rent was heard by the trial court upon an agreed statement of facts, in substance, as follows:

On January 16, 1925, George and Ramona Carlson borrowed $12,000 from the People’s National Bank of Stuttgart, and secured same by a mortgage on the^ south half of section 17, township 3 south, range 4 west, in said county. They defaulted in payment of same at maturity, whereupon appellee herein instituted a foreclosure proceeding against the Carlsons, in which appellant herein, mortgagee of the 1927 rice crop grown on said land, was made a party defendant. The rice crop of 1927 had been planted after the foreclosure suit was instituted, and before or about the time the decree therein was rendered. The foreclosure decree, rendered on the 6th day of June, 1927, recited that the sale of the land should not take place prior to September 14, 1927. It also recited: “that one-fifth of the rice grown on said land shall be treated as rent for the year 1927, and it, or the proceeds derived “from the sale of it, shall be delivered to Floyd A. Wingo and A. Gr. Meehan, and, in the event the plaintiff (appellee herein) becomes the purchaser of this land at said foreclosure sale by the commissioner for debt, interest and costs, or less, then it shall be entitled to the rent above mentioned, and the above Floyd Wingo and A. Gr. Meehan shall pay over to the said plaintiff (appellee herein) the said amount received as rent for the year 1927; but, in the event some third party shall become the purchaser of said land for a sum in excess of the debt, interest and cost at the time of said sale, then the one-fifth rent from said land for the year 1927 shall be paid into the registry of the court, and distributed according to the priorities declared by the court; that said sale or foreclosure of said land shall not affect the lien of the mortgage in favor of the First National Bank of Stuttgart, Arkansas, upon four-fifths of the rice crop raised during the year 1927, but said mortgage shall be alien upon said crop to said extent, and shall be superior to the rights of any parties hereto or superior to the rights of any purchaser at the sale hereunder, the mortgage referred to being one executed by George Carlson in favor of the First National Bank.” On or about the 14th day of September, 1927, the land was sold under said decree; at which sale the appellee herein made a first bid of $10,000, and the defendant, George Carlson, made a second bid of the debt, interest and costs and one dollar, which became the purchasing bid. Immediately after the purchase the defendant, George Carlson, executed a bond with approved security to pay the amount he bid. The sale was not reported to and approved by the court. Ninety days after the sale the commissioner demanded the purchase money upon the sale from George Carlson, which he was unable to pay, and from the bondsmen, who refused to pay same. Shortly thereafter said commissioner, at the instance and request of appellee herein, and without the former sale having been set aside, readvertised and again sold said land at public sale, at which the appellee here became the purchaser for its debt, interest and costs, including" the costs of the first and prior sale. Defendant, George Carlson, was present at the sale, and made no protest of the resale by the commissioner. Neither Ramona Carlson nor the First National Bank, appellant herein, was present at the sale. The sale was reported to the court on the 5th day of March, 1928, and was approved and confirmed by the court without any objection on the part of the Carlsons or the appellant herein.

Appellant first contends for a reversal of the decree awarding the rents to appellee because the recital in the original foreclosure decree set out in full above was unwarranted by the pleadings, and without consideration. It is true that the complaint made no allegation concerning the rice crop which had been planted a short time before the rendition of the decree. At the time of the rendition o!f the decree appellant was the holder of a mortgage on the unmatured crop of rice. An immediate foreclosure and sale of the land would have prevented George 'Carlson from maturing the crop, and appellant from recovering anything on its mortgage. Neither the Carlsons nor appellant herein interposed any defense to the foreclosure proceeding. They were made parties, appeared, and approved a decree which the court rendered on June 6, 1927. It is apparent that the sale was postponed until September 14,1927, in order that George Carlson might .mature the crop, and the appellant receive something out of the crop to apply upon its crop mortgage. The decree, having been approved by all parties to the suit, was necessarily a consent decree, and a postponement of the sale was a sufficient consideration to support the recital in the decree.

Appellant next contends for a reversal of the decree awarding the rents to appellee because the first sale, at which George Carlson purchased, was never set aside, and ifor that reason the second sale, at which appellee purchased the property, was void. George Carlson and his bondsmen did not carry out the first sale, and he assented to the second sale by failing to enter a protest thereto. The second sale was reported to the court and confirmed without any objection or exception by either of the Carlsons or appellant. All rights of appellant and Carlson were waived by their acquiescence in the second sale.

The next and last contention of appellant for a reversal of the decree awarding the rents to appellee is that, under the bid of appellee at the second sale, its debt, interest and costs were satisfied, and that it had no right to the rents in addition thereto. Under the terms of the original decree, appellant agreed that, in case appellee should buy the property at the sale on bid of its debt, interest and costs, it should have, in addition thereto, one-fifth of the rice crop, designating said one-filfth as rent for same. Appellee became entitled to this, by virtue of the extension granted to George Carlson, which enabled Mm to mature the crop, and which gave him further time to procure money with which to pay off the mortgage in case he should decide to do so. This extension redounded to the benefit of appellant, who was the mortgagee of the crop, because, without' the extension, it would have received nothing under its mortgage out of the rice crop.

No error appearing, the decree is affirmed.


author: Mehaeey, J.

text:
    Loewer v. Arkansas Rice Growers' Co-Operative Association.
    Opinion delivered November 25, 1929.

      B. J. Williams and Joseph Morrison, for appellant.

      W. A. Leach and G. W. Norton, for appellee.
   Mehaeey, J.

The Arkansas Bice Growers’ Cooperative Association brought this action against the appellant to recover the sum of $500, basing the suit on the following statute:

Any person or persons or any corporation whose officers or employees knowingly induces or attempts to induce any member or stockholder of an association organized hereunder to breach his marketing contract with the association, or who maliciously and knowingly spreads false reports about the finances or management thereof, shall be guilty of a misdemeanor and subject to a fine of not less than $100 and not more than $1,000 for such offense, and shall be liable to the association aggrieved in a civil suit in the penal sum of $500 for each such offense.” Section 24 of act 116, Acts 1921, p. 153.

The association in this suit seeks to recover the $500, and. alleges that Loewer, the appellant, purchased rice from one Melvin, and that said Melvin was the grower of the rice, was a member of the association, and a party to the marketing agreement; and that Loewer and others aided, assisted and induced Melvin to breach his marketing agreement by withholding said rice crop from delivery to plaintiff association, and by the unlawful and wrongful sale and delivery of it to or through the codefendant, Brinneman. It appears that Melvin raised the rice, and had mortgaged it to Brinneman. It is also alleged that Brinneman was a member of the association, and was required by the marketing agreement to deliver rice to the plaintiff. The complaint sets out paragraphs of the marketing agreement, and alleges that Brinneman, Loewer and the Standard Rice Company, knowing of the contract between plaintiff and Melvin, and knowing off his membership, collusively and jointly conspired to induce, and did so induce, Melvin to breach his contract.

■Service was quashed as to the rice company and Melvin, and the suit proceeded against Loewer alone.

It could serve no useful purpose to set out the evidence in full or the instructions given by the court. It is sufficient to say, as to the evidence, that Melvin testified positively that he did not sell to Loewer, and he testified also that Loewer would not buy it from him. Brinneman, on the other hand, testified that Melvin sold the rice to Loewer. But all of them testified that Loewer did not induce either Melvin or Brinneman to sell the rice. But whether it was sold by Brinneman or Melvin we think in this case is immaterial. Both of them were members of the association and parties to the marketing agreement. Brinneman, if he got the rice under the mortgage, might have sold it to Loewer, and Loewer would not have been liable for the penalty. But the testimony is conflicting somewhat about the manner in which it was sold, but we think the testimony fails to show that Loewer induced either of them to sell the rice.

The court instructed the jury, in the latter part of instruction No. 1, that: “The inducement may be by offering or agreeing to pay a price which induces the member to sell in violation of his marketing agreement, and the offer or agreement to pay such a price may be without any persuasion upon the part of the purchaser.”

This is, in effect, telling the jury that any person who purchases rice from a member of the association, who is also a party to the marketing agreement, is liable for this penalty. The statute evidently does not mean this. If the Legislature had intended that any person should be liable for this penalty who merely offered a price which was accepted by the member, then it would have said, “any person who knowingly purchases or attempts to purchase,” etc., instead of saying*, “any person who knowingly induces or attempts to induce,” etc.

The Illinois court held that the words “inducing” and “persuading” are practically synonymous. People v. DeJoy, 198 Ill. App. 361.

The Missouri Court of Appeals held: “It is apparent that the word ‘influence’ is not a stronger word than the word ‘induce’ or ‘procure.’ 22 Cyc. 714. Webster’s International Dictionary uses the verbs ‘to induce’ and ‘to influence’ as synonymous. * * * The addition of the word ‘influence’ would require no greater finding on the part of the jury for the reason that, if anything, the word ‘influence’ is weaker than the words ‘procure’ or ‘induce.’ If a broker does not influence the sale, he certainly could not be the procuring* and inducing cause of it.” Schwabe v. Estes, 202 Mo. App. 372, 218 S. W. 908.

“ ‘Induce,’ as used in a pleading stating that the respondent was induced to withdraw the distress on assurance that the debt was settled, means influenced, persuaded, and not to introduce; to bring into view.” Wollaston v. Stafford, 29 Eng. Law & Eq. 263, 265.

“In an indictment for obtaining goods under false pretenses, alleging that defendant induced prosecutor to sell certain goods to them, ‘induced’ means moved, urged, or instigated, but cannot be held to be an averment that prosecutor did sell to defendant. State v. Phelan, 60 S. W. 71, 159 Mo. 122.” Vol. 4 Words & Phrases, p. 3568.

“To ‘induce’ means to persuade, to coax, to prevail on, to move by persuasion or influence. Rahke v. State, 81 N. E. 584, 586, 168 Ind. 615.” Vol. 2 Words & Phrases, 2d Series, p. 1054.

The word “induce” therefore, we take it, in the statute means the same as “influence”; and “influence” means the use of a party’s endeavors; to put some external constraint; to procure.

In order to make a person liable who purchases rice from a member o'f the association and a party to the marketing agreement, the evidence must show that the party charged did something to influence or induce other than simply purchasing the rice. If purchasing from a member was all that was necessary, then the use of the word “induce” would be meaningless. The Legislature might, and would, have said, if that was its intention, that whoever knowingly purchased should be liable for the penalty.

It is unnecessary to set out the instructions here. Some of them were conflicting, but there will be no difficulty in giving* proper instructions at another trial. The only question involved in this case is whether or not the appellant knowingly induced a member of the association and a party to the marketing agreement to sell rice which the association had the right to purchase. Therefore all testimony with reference to the old association, and all testimony about appellant’s knowledge, except that which tended to show the knowledge of the party that the seller of the rice was a member of the association and a party to the marketing* agreement, is immaterial and improper. It is immaterial whether the appellant knew the terms of the agreement or not. If he knowingly induced a member to sell in violation of the above statute, lie would be liable; if he did not induce the member to sell, he would not be liable, although he purchased the rice. If a member has rice that he is not prohibited from selling under the marketing agreement, it would, of course, not make one liable if he purchased it; and a member might have rice that he was not prohibited by the marketing agreement from selling, and might, at the same time, have rice that he was prohibited from selling; and if the purchaser knew that he was a member of the association and a party to the marketing agreement, and purchased the rice that the member had the right to sell, he would not be liable.' If he purchased rice that the member had no right to sell, he would be liable if he knowingly induced the member to sell.

While we have not set out the evidence nor the instructions in this case, we have stated the principles of law governing same, so that there will be no difficulty in the trial court admitting competent testimony only and properly instructing the jury.

From what we have said it follows that the judgment must be reversed, and the cause remanded for a new trial. It is so ordered.


author: Mehaeey, J.'

text:
    Fencing District No. 6 of Woodruff County v. Missouri Pacific Railroad Company.
    Opinion delivered November 25, 1929.

      W. J. Dung an, for appellant.

      Thomas B. Pryor and Daggett <& Daggett, for appellee.
   Mehaeey, J.'

The appellant brought suit in the Woodruff Chancery Court against the St. Louis, Iron Mountain & Southern Railway Company, seeking to enforce a lien on property for delinquent fencing district taxes. The complaint named the St. Louis, Iron Mountain & 'Southern Railway Company as defendant, and the summons was issued against the St. Louis, Iron Mountain & Southern Railway Company, and the sheriff’s return on the summons recited that he had served the summons by delivering a copy to the agent of the St. Louis, Iron Mountain & Southern Railway Company at McCrory, Arkansas.

When court met, the plaintiff, appellant here, asked permission to amend its complaint, stating that there was a misnomer of the party defendant, and that the defendant should be designated as the Missouri Pacific Railroad Company instead of the St. Louis, Iron Mountain & Southern Railway Company, and stated that the property described in the complaint is the property of the Missouri Pacific Railroad Company.

The amendment further stated that the Missouri Pacific Railroad Company was- formerly the St. Louis, Iron Mountain & Southern Railway Company, and that the service of summons was actually upon the agent of the Missouri "Pacific Railroad Company, and that the designation in the pleadings and summons was merely a misnomer. Thereupon the Missouri Pacific Railroad Company filed a motion to quash the service and dismiss the complaint.

The decree of the chancellor recites that it denies the plaintiff the right to file the amendment and sustains the motion to quash; that the court finds that the complaint was filed and summons issued and service had on Chappis, as agent of the St. Louis, Iron Mountain & Southern Railway Company, on the 13th day of March, 1929; that thereafter, on the 19th day of March, 1929, the Missouri Pacific Railroad Company filed suit against Fencing District No. 6 of Woodruff County, in the United States District Court for the Eastern Division of the Eastern District of Arkansas, at Helena, and that the said United States District Court thereby acquired jurisdiction, and sustained the motion to quash and dismiss.

An appeal was prosecuted by the fencing district, and it now insists upon reversal, and quotes from Burk v. Snell, 42 Ark. 57,'as follows: “The primary object of the Code is the trial of causes upon their merits, and that the rights of suitors shall not be sacrificed to technical mistakes, omissions or inaccuracies. To this end the provisions for amendments are exceedingly broad and liberal.” The appellant cites from other authorities with reference to the law permitting amendments.

The Code is very liberal, but it is the well-established rule that courts will not allow amendments to" be. made which change the parties to the action, unless there is something in the record to authorize the amendment. Lake v. Morse, 11 Ill. 587; Biggs v. Wilman, 82 Ala. 391, 2 Sou. 877; Tuller v. Ginsberg, 99 Mich. 137, 57 N. W. 1099; Herman v. Bailey, 45 N. Y. Sup. 88; Railway Co. v. Small, 70 Ala. 499; Smith v. Central Plank Road Co., 30 Ala. 650.

“Under a statutory provision permitting the adding or correction of the name of a party, an entire change in parties plaintiff or defendant cannot be permitted. A statute permitting amendments as to form will not permit an amendment making new parties plaintiff in order to sustain an action that was originally brought without authority.” 31 Cyc. 475.

“It was determined by the circuit court that Lula M. Coleman was not a 'party in interest in the matter or proceeding — in effect that she had no cause of action or right to appeal from the judgment of the probate court. The appellants, with different and independent rights, sought to amend the proceeding by displacing Lula M. Coleman and substituting themselves and their own cause of action. This could not be done. If Lula M. Coleman, the sole party to the appeal, and in effect the sole plaintiff, had no cause of action, then no amendment of the cause of action could be made by substituting other parties who did have a cause of action. * * * The demurrer to the complaint was properly sustained, as it showed that plaintiff was not, and that the State was, the party entitled to prosecute the action. Leave to amend by striking out the sole plaintiff and substituting another could not have been granted. The right of amendment is broad, but it does not warrant the substitution of a stranger for the sole plaintiff in the cause.” Coleman v. Floyd, 105 Ark. 300, 150 S. W. 703.

This court again said, in construing the Code: “This provision of the Code assumes that the plaintiff has a cause of action, and does not authorize the court in any case, where the plaintiff has failed to show any cause of action, to amend by adding the name of a party in whose favor a cause of action is shown by the complaint to exist, because such a proceeding would be practically instituting a new action and forcing a party, at the instance of one who has no right to demand it, to commence an action when he does not wish to do so. Broad and liberal as the provisions of the statute of amendments are, we see no authority in them for such a proceeding.” State use Oliver v. Rottaken, 34 Ark. 144.

In the instant case there was nothing to amend. There was no proper party defendant, and, liberal as the court is, it does not permit amendment by entire change of parties. You cannot sue one party and amend by making another party defendant — that is, by striking out the name of the sole defendant and substituting some other defendant. The Missouri Pacific Railroad Company and the St. Louis, Iron Mountain & Southern Railway Company are separate corporations, and in a suit against one of them the pleadings cannot be amended so as to substitute the other.

The lower court was correct, and the decree is affirmed.