author: Mehaffy, J.

text:
    New Amsterdam Casualty Company v. Squires.
    4-3326
    Opinion delivered April 16, 1934.

      Buzbee, Harrison, Buzbee <& Wright, for appellant.

      A. G. Meehan, John W. Moncrief, John L. McClellan, Malcolm T. Garner and Sam T. Tom Poe, for appellees.
   Mehaffy, J.

The appellee, Frank Squires, recovered a judgment for $10,000 against H. E. Pattison, in the Saline Circuit Court, as the result of an automobile accident. Pattison had a policy of automobile liability insurance issued by the Union Indemnity Company.

After obtaining judgment, an execution was issued in favor of Squires against Pattison and the execution returned unsatisfied. Suit was then brought in the Little River Circuit Court against the Union Indemnity Company and the appellant, New Amsterdam Casualty Company.

While this suit was pending in the Little River Circuit Court against the appellant, suit was brought against the New Amsterdam Casualty Company in the Pulaski Chancery Court by the Independence Indemnity Company. The Independence Indemnity Company had also given a qualifying bond for the Union Indemnity Company. In this suit brought in the Pulaski Chancery Court the New Amsterdam Casualty Company filed answer and cross-complaint in which it made Squires, the appellee here, and others cross-defendants, and asked that they be required to interplead and file claims against the New Amsterdam Casualty Company for adjudication in the Pulaski Chancery Court, and asked that the appellee, Squires, be enjoined from further prosecuting the suit in Little River County against the appellant. The appellant admitted giving a qualifying bond in the sum of $20,000, but denied liability under said bond. A restraining order was issued prohibiting Squires from prosecuting his suit at law in Little River County against the New Amsterdam Casualty Company.

The appellee, Squires, then filed a petition in this court for a writ of prohibition, prohibiting the Pulaski Chancery Court and the special chancellor from interfering with the prosecution of the suit in Little River County. The writ prayed for was issued by this court. Squires v. New Amsterdam Casualty Co., 187 Ark. 467, 60 S. W. (2d) 185.

The New Amsterdam Casualty Company filed answer in the Little River Circuit Court denying all the material allegations in appellee’s complaint. Numerous other persons were, made parties to the suit, and the appellant filed its motion to transfer the case to equity. Response was made to this petition, and the motion to transfer to equity was overruled, but the motion to make other parties defendant was granted. We deem it unnecessary to set out the pleadings with reference to other parties to the suit.

At the trial of this case in the Little River Circuit Court the appellant submitted certain findings of fact and declarations of law, which the court overruled, and judgment was entered in favor of the appellee against the appellant for the sum of $10,447.48 with interest at the rate of 6 per cent, per annum from July 14, 1933', until paid. The appellant thereupon filed a motion for a new trial which was overruled, exceptions saved, and the case is here on appeal.

H. A. Hoover and William Snotzmeier also obtained judgments at the same time, aggregating $8,192.35. It is unnecessary to discuss these judgments and appeals separately.

Appellant’s first contention is that there is no liabilitv on its part because, while it admits filing’ the $20,000 qualifying bond on February 26, 1931, it alleges that thereafter on March 6, 1931, securities were deposited, and that under the terms of the statute these deposits were in lien of the bond executed on February 26th, and that thereafter there was no liability on the $20,000 bond.

The statute provides for the filing of the $20,000 bond, § 5980 of Crawford & Moses’ Digest. Section 5981 of Crawford & Moses’ Digest provides that, in lieu of the bond above mentioned, the insurance company may file the certificate of deposit provided for in § 2 of act 220 of the Acts of the General Assembly of 1913. Section 6 of act 493 of the Acts of 1921, provides that the insurance company shall “file a bond in the sum of $20,000 covering its casualty business with the insurance commissioner, and subject to his approval as provided in § 5980 of Crawford & Moses’ Digest, or in lieu of such $20,000 bond, shall file the certificate of deposit provided for in § 20 of act 220 of the Acts of the General Assembly of 1913'.”

The argument is made that authority under the law to file the certificate of deposit of securities in lieu of the bond, authorized the filing of the certificate of deposit after the bond had been filed, and that the filing of this certificate of deposit of securities took the place of the bond that had theretofore been filed. We do not agree with appellant in this contention. A reasonable construction of the statute is that the insurance company may file the $20,000 bond, or, if it does not do so, it may, instead of filing the $20,000 bond, file the certificate of deposit of securities. The bond is given for one year, and, when filed, it was in lieu of the certificate of deposit of securities, and, there is no authority under the law to withdraw the bond or substitute the certificate of deposit of securities. In other words, the insurance company might have filed a certificate of deposit of securities, or the $20,000 bond. It could have filed either, but, when it filed the bond, it could not thereafter relieve the sureties on the bond so filed by filing the certificate of deposit of securities.

Appellant correctly states that “in lieu of” means “instead of ” or “in place of.” Instead of filing a surety bond for $20,000, the insurance company could have filed the certificate of deposit of securities, but it did not do this; it filed the $20,000 bond.

Appellant argues that it was clearly the intention of the Legislature that only one bond or one certificate should be in effect at any one time. Assuming this to be true, when the $20,000 bond was filed, it was in effect, and by the express terms of the bond it was effective for one year ending March 1, 1932. The statute, which is written into the bond, also provides for an annual renewal of the bond.

Appellant argues that, in lieu of the certificate of deposit, the insurance company may execute a bond for $20,000 conditioned solely for use of claimants on account of policies written in the State of Arkansas. It argues that this bond may be filed in lieu of the certificate of deposit, and, when so filed, the certificate is no longer necessary or effective. That is true. "When the $20,000 bond was filed, it became effective, and it was in lieu of any certificate that might be filed or that could have been filed. There is no law authorizing the filing of certificates of deposits in lieu of a bond that has already been filed. "When either is filed, the law is complied with, and there is no provision in the law for substituting one for the other. If a bond is filed, there is no provision for substituting a certificate and releasing the bond, and, if the certificate of deposit of securities had been filed, there is no statute authorizing substituting a bond for the certificate.

It is true that filing the certificate of deposit would have authorized the Union Indemnity Company to do business in Arkansas without the filing of any bond, but the filing of the $20,000 bond was sufficient to authorize the Union Indemnity Company to do business in Arkansas, and, as stated by the appellant, either was entirely sufficient, and either could 'be filed in lieu of the other, but when one was filed there could be no substitution. There is no evidence of any intention to release the $20,000 bond, and no evidence that the certificate was filed as a substitute.

Appellant calls attention to Massachusetts Bonding & Insurance Company v. Home Life & Accident Co., 113 Ark. 576, 168 S. W. 1062, to sustain its contention that it was the intention of the Legislature that claimants could have recourse to only one bond. The bonds given in that case were for one year periods, just as the bond in this case. One of the bonds covered the period from March 1, 1911, to March 1, 1912, and the second bond covered the period from March 1,1912, to March 1,1913, and the last bond covered a period from March 1, 1913, to March 1, 1914. The court in that case stated: “The issue in this case relates to the liability on the successive bonds, the particular question being which bond is liable, whether it is the bond covering the period during which the policies were written, or the last bond, which is the one covering the period during which the liability to policyholders accrued, or both.”

In that case, three separate bonds had been given, each for a period of one year. The question decided there might have been involved here if, at the end of the period which the $20,000 bond covered, another bond had been given for another year, but we have no such question in this case. There was but one bond given, and it was not displaced or canceled, and there is no evidence that the certificate of deposit of securities was given in substitution or to take the place of this bond.

The $20,000 bond given by appellant, as we have already said, was for one year, and there is no provision for giving another 'bond until the end of that period.

The court, in the case above cited, also said: “‘But it seems to us that a fair interpretation of the legislative will is that the sureties on an annual 'bond are only liable for claims of policyholders which arise and accrue during the period covered by the bond and beyond that period, too, upon all policies issued during the lifetime of the bond until it is renewed.”

It will be observed that the court there held that the insurance company was liable for claims of policyholders, not only those which arise and accrue during the period covered by the bond, but beyond that period too, upon all policies issued during the lifetime of the bond until it is renewed.

The language in § 5980 of Crawford & Moses’ Digest is: “conditioned for the prompt payments of all claims arising and accruing to any person during the term of said bond, by virtue of any policy issued by such company,” etc. The act does not say when a cause of action accrues, but it provides for claims arising and accruing to any person during the term, of said 'bond. A claim might arise and accrue before the cause, of action accrued.

The rights of the parties became fixed at the time of the accident, although there was no cause of action against the appellant until judgment had ‘been obtained against the wrongdoer, and an execution had been returned unsatisfied.

We said in a recent case: “The rights of the parties had become fixed at a time no premium was due. While the cause of action had not accrued, yet the liability existed.” Atlas Life Ins. Co. v. Wells, 187 Ark. 979, 63 S. W. (2d) 533. 'The liability existed in this case when the accident occurred, and the accident occurred during the life of the bond.

This court said: “The question first presented is, when did the claim arise and accrue, within the meaning of the statute and terms of the bond, so as to create liability on the part of sureties on the bond of the company? Did that contingency occur when the property was destroyed, or when the amount of the loss became payable according to the terms of the policy?

“A consideration of the language of the statute leads to the conclusion that the liability of the sureties is fixed when the loss by fire occurs, and not from the date when the amount becomes payable. The happening of that contingency fixes the liability of the principal in the bond upon its policy, and nothing remains to be done but to ascertain and adjust the amount of the loss. The liability is fixed when the loss occurs, though payment does not become due until sixty days later. It follows that the liability of the sureties becomes fixed with that of the principal, and ripens into a mature cause of action when default is made by the principal in the payment according to the terms of the policy.” U. S. Fidelity & Guar. Co. v. Fultz, 76 Ark. 410, 89 S. W. 93.

The happening of the accident in the instant case fixes the liability of the principal in the bond upon its policy, and the claim then arises. It is conceded that the accident and injuries to the three persons, appellees here, occurred during- the life of the bond. The appellees, however, could not maintain a suit against the insurance company until they had obtained judgment against the wrongdoer, and until execution had been issued and returned unsatisfied. We think any other construction of the statute would be unreasonable, and we think the plain meaning of the statute is that for all claims where accidents happened while the bond was effective, there is liability against the insurance company if the wrongdoer is insolvent, although suit is not brought until after the expiration of the bond. The happening of the accident fixes the liability, and the claim accrues at that time. It is immaterial when the cause of action arose if the claim arose while the bond was in effect.

The bond of the appellant provides: “If the said Union Indemnity Company shall promptly pay all claims arising and accruing to any person or persons during said term of one year, by virtue of any policy issued by the said company upon thé life or person of any citizen of the State of Arkansas, or upon any property situated in the State of Arkansas when the same shall become due, etc.”

It will be observed that the bond provides for prompt payment of all claims that arise and accrue during said term of one year. We have already said that the claim arose and accrued at the time of the accident, but it was not due and payable until judgment was had against the wrongdoer and execution returned unsatisfied.

It is next contended by the appellant that the motion to transfer to equity should have been granted. However, the appellant did not raise this question in its motion for a new trial. It made this same contention in the suit in the Pulaski Chancery Court, and this court said: “In the first place, liability under the bond was not admitted; but, on the contrary, was specifically denied. An admission of liability was essential and necessary before the cross-complaint could be treated as a bill of interpleader or a bill in the nature of a bill of interpleader.” Squires v. New Amsterdam Casualty Co., 187 Ark. 467, 60 S. W. (2d) 185.

In the instant case liability under the bond was not admitted, but on the contrary was specifically denied. If appellant had admitted its liability in the sum of $20,000, the amount of its bond, and offered to pay, then its suit in the Pulaski Chancery Court would have been proper, and all the parties interested would have been brought in; but when a defendant is sued and says that it does not owe any one on the bond, then it has no right to bring in all parties who assert claims against it, but it can only do this when it admits liability.

We find no error, and judgment is affirmed.


source: Caselaw Access Project

author: McHaney, J.

license: Public Domain

text:
    Henderson Company v. Murphy.
    4-3422
    Opinion delivered April 16, 1934.

      Jeff Davis and Pace iffi Davis, for appellant.

      McNalley $ Sellers, for appellee.
   McHaney, J.

Certain parties known in this record as the Cates heirs, in October, 1921, executed and delivered to one Stover, trustee, an oil and gas lease on the southwest northeast, the northwest southeast and the southeast southeast section 32, township 18 south, range 15 west, for a substantial cash consideration and a deferred consideration of $60,000 payable out of one-half of the first oil produced from the 120-acre lease. In fact, three leases were executed by said heirs, all in like form covering’ the said land, and all were, on the ordinary form of oil and gas lease generally in use in the El Dorado oil field. These leases provided that they might be assigned, but, if so, the assignee took same burdened with all the duties and obligations assumed by the lessee. On December 8, 1921, Stover, trustee, for a cash consideration, assigned his leases to J. R-. Gardner, who, two days later, assigned same to W. D. Ball for a cash consideration of $66,000 and a deferred oil payment of $12,000, to be paid out of one-half of the first oil produced from the lease after the oil payment due the lessors had been paid. On the same day, December 10, Ball assigned the same leases, except the south quarter of southeast southeast, to F. C. Henderson for a cash consideration of $66,500 and a deferred oil payment consideration of $90,000, to be paid from one-half the first oil produced from the same leases, $60,000 of which was first to be paid the Cates heirs. Henderson thereafter conveyed to the Henderson Company, appellant, his purchase being for the company of which he is the president and principal owner.

On December 16, 1921, W. D. Ball sold and assigned $15,000 of the oil payment due him under his assignment of leases to Henderson to appellee, and on September 30, 1926, J. R. Gardner assigned $9,000 of the oil payment due him under his assignment to Ball to appellee. Appellee then owned $24,000 oil payment, but not due to be paid except out of one-half the first oil produced, and then only after the $60,000 oil payment due the Cates heirs had been paid.

Immediately after acquiring these leases in the manner above stated, appellant began the development of the properties for oil and gas, and, during the first half of 1922, had drilled four wells upon the leased premises, as follows: One in the northeast corner and one in the northwest corner of the southeast southeast; one in the northeast corner of the northwest southeast, indicated on the plat hereafter shown as No. 6, and one in the northeast corner of the southwest northeast, indicated as No. 8. The plat follows:

Section 32, Township 18, Range 15
Gulf Refining Co. No. 5, 200 feet north and 112 feet west of southeast corner of NE14 of section 32-18-15.
Gulf Refining Co. No. 8, 1,500 feet south and 1,120 feet west of northeast corner of section 32-18-15.

During the same time appellant was drilling said wells, other operators were developing their properties in this (the south) field. The Gulf Refining Company drilled four wells on its Cates lease in the southeast northeast. Montgomery drilled four wells on his Cates lease in the northeast southeast. Clark & Greer drilled two wells on their Burns lease, off-setting the north forty of the Henderson lease.

The four wells drilled by appellant were small producers of oil. In 1925 a string of tubing was accidentally dropped in well No. 6, at a time it was making only 15 barrels of oil per day, and the well was abandoned. In March, 1927, appellant’s only producing well was No. 8, off-setting the Gulf lease, and some time prior to March 15,1927, the derrick and pumping equipment, of this well were destroyed by fire. It was decided by appellant not to reconstruct the derrick and equipment, and this well was abandoned. Thereafter, on April 22, 1927, after advice from its attorney that the old lease was no longer effective by reason of abandonment, a new lease was taken from the Cates heirs in the name of J. O. Huffman, as trustee for appellant. This lease was procured through J. E. Gardner, husband of one of the Cates heirs.

On July 18, 1928, this suit was filed by appellee, against F. C. Henderson and appellant, charging that they had failed to drill wells on the Cates lease which should have been drilled; had failed to protect it from drainage by off-set wells, and had failed to operate the wells drilled with proper diligence. It was further charged that Henderson and appellant had conspired with the Cates heirs to take a new lease to Huffman in 1927 and thereby deprive him of his rights under his oil payments mentioned in the assignments above set out in the sum of $24,000, for which amount he prayed judgment against appellant, Henderson, each of the Cates heirs, Huffman and Gardner. The defendants answered, denying the charges of breach of duty and conspiracy, or that they were so indebted. A large volume of testimony was taken, upon consideration of which the conrt found that appellant was in default by its failure to drill well No. 9, shown on the plat, off-setting wells 2 and 3 on the Clark and Greer lease, and that it should have removed the tubing from well No. 6 in 1925, and operated it until the lease was abandoned in 1927. The court further found that appellant owed no duty to appellee to drill wells in addition to the four drilled, except No. 9, and that there was no fraud in the procurement of the new lease in 1927. All parties defendant were dismissed except appellant, against whom judgment was rendered in the sum of $17,592.50 damages, with interest at 6 per cent, from the date suit was filed. This money judgraent against appellant appears to be based upon the testimony of the witness, Hess, to the effect that, given the number of barrels of oil produced on the southeast of the northeast of section 32, he can, within a differential of 3 per cent, to 5 per cent., estimate the exact number of barrels of oil that should have been produced on the southwest of the northeast of said section.

For a reversal of this judgment, appellant makes a number of contentions. First, that it had no obligation as to appellee to drill any wells on said lease, either to develop it, to protect it from drainage by offset wells, or to operate any of the wells that were drilled upon it. We think this contention is sound. Appellee is neither a lessee nor an assignee of the lease. He is simply a purchaser from assignees of the leases of an interest in an overriding royalty or oil payment to become due and payable only if and when a sufficient quantity of oil were produced to pay out of the first one-half thereof his and prior obligations. The written instrument passing title to him of oil payments from Gardner provides: “Do hereby bargain, sell, transfer, assign, set over and deliver unto P. E. Murphy all my rights, title and interest in and to $12,000 (twelve thousand dollars) of the consideration payable out of oil under the terms of a certain assignment executed by me to W. D. Ball,” etc. There was no assignment or sale of an interest in the lease. Appellee’s rights must depend, as said in Murdock v. Sure Oil Corporation, 171 Ark. 61, 283 S. W. 4, “on the protection paragraph of the written assignment,” and, there being no right such as is here asserted, his action must fail. Kile v. Amerada Petroleum Corporation, 118 Okla. 176, 247 Pac. 681; Matthews v. Ramsey-Lloyd Oil Co., 121 Kan. 75, 245 Pac. 1064; Simms Oil Co. v. Colquitt, Tex. Civ. App. 289 S. W. 980.

This court is committed to the rule that, where a portion-of the consideration for an oil and gas lease is payable out of the oil produced, if no oil is produced then there is no payment due. As we said in Gilbert v. Patterson, 174 Ark. 61, 295 S. W. 386: “And the obligation, we think, was to pay out of the first oil produced, and, if no oil was produced, there would be no obligation to pay.” See also Hirsch v. Cadrin & Staten, 178 Ark. 209, 10 S. W. (2d) 2.

The undisputed facts show that appellant paid $66,-500 cash for 110-acre lease; that it drilled four wells thereon at an expense of approximately $60,000; that these wells were not profitable, even on a 7/8’s working interest basis; and that the wells were abandoned because they would not pay operating expenses. It was vitally interested in the development of this property as it had a large sum of money invested. It had the right to exercise its own judgment, in the absence of fraud, and none is shown, in the further development of this property, and, in such situations, the courts will not substitute their judgment for its.

Moreover, the testimony of the witness Hess as to the number of barrels of oil this lease should have made, based on the production of wells on the adjacent 40 acres to the east, is too fantastic, too speculative, conjectural and unreliable to furnish the basis for the judgment rendered. It is simply his guess as to what the lease should produce, and has no substantial foundation in fact.

Reversed and dismissed.


text:
    Conine v. Mize.
    4-3482
    Opinion delivered April 16, 1934.

      8. M. Casey, for appellants.

      J. J. MeCaleb, for appellee.
   McHaney, J.

Appellee brought this action against appellants to cancel an alleged transfer of a certain wholesale grocery and feed business, which, it is alleged, belonged to the bankrupt, B. B. Conine, Jr., located in the city of Batesville and which in some manner was transferred by him to appellants, his father and sister. It was alleged the transfer was fraudulent and made with the intent to hinder, delay and defraud creditors of the bankrupt. Also that the conveyance was void in that the Bulk Sales Law had not been complied with. Appellants defended on the ground that the bankrupt was not and never had been the owner of said business, but that it was their property; that the bankrupt had not transferred it to them, as it had always been their property, except for a few dollars invested in it by the bankrupt, which had been repaid to him, and that he operated the business for them on a salary basis; that they had permitted him to operate the business for a timedn the name of B. B. Co-nine, Jr., Company, knowing that he was indebted in a considerable sum, but did not think such old indebtedness would involve said business until about June, 1933, when a judgment was taken against Conine, Jr.; that on the advice of counsel, and to save possible complications, they changed the name of said business to B. B. Conine, Sr., Company.

Just when Conine, Jr., was adjudicated a bankrupt is not shown, but in October and November, 1933, on hearings before the referee in bankruptcy to obtain authority for the trustee to bring this action, certain testimony was taken and transcribed relating to the ownership of the bankrupt of the property here involved. On the trial of this case, this transcript of testimony taken before the referee was offered in evidence and excluded by the court, but a decree was entered awarding judgment against appellants in the sum of $2,500, or that they turn over goods and merchandise of that value to the trustee.

We agree with, the trial court that the testimony taken before the referee was incompetent, no showing being made that the witnesses who there testified were not available as witnesses in this proceeding. Appellants were not parties to the hearing before the referee, had no opportunity to cross-examine the witnesses, and were not bound by such testimony. It has long been the rule in this State that testimony of a witness at a former trial between the same parties in the same case may be admitted if such witness is dead, or out of the jurisdiction without the procurement of the offering party, and if the address of the absent witness could not be obtained by reasonable diligence in time to take his deposition, provided the adverse party had an opportunity to cross-examine such witness when his original evidence was given. Clinton v. Estes, 20 Ark. 216; Pine Bluff Co. v. Bobbitt, 174 Ark. 41, 294 S. W. 1002. It will readily be seen that the offered testimony was not competent under the above rule.

The only evidence left in the case touching the ownership of the business is that of the bankrupt, Conine, Jr., and he testified that at fifst he put $115 in the business and that appellants put all the other money that was invested in it; that he withdrew all he had in it shortly thereafter, and that appellants at all times owned it; that it was for a time operated in his name, but, when it appeared that complications might arise because of his old indebtedness, the name Avas changed to B. B. Conine, Sr., & Company; that there was no sale or transfer of the business to appellants; and that it at all times belonged to them. This testimony was offered by appellee, and it is not contradicted by any other evidence. We are therefore of the opinion that the judgment of the court is without evidence to support it. No fraudulent conveyance is established. Indeed no conveyance of any kind is estab-. lished. The creditors complaining are all prior creditors and must prove fraud to prevail. We said in the recent case of Stuttgart Rice Mill Co. v. Lockridge, 185 Ark. 349, 47 S. W. (2d) 596: “Fraud is never presumed, but must be proved, and the burden of proving it is upon the party alleging it. It need not be shown by direct or positive evidence, but may be proved by circumstances. ‘Slight circumstances or circumstances of an equivocal tendency, or circumstances of mere suspicion, leading to no certain results ’ are not sufficient evidence. ‘ They must not be, when taken together and aggregated, when interlinked and put in proper relation to each other, consistent with an honest intent. If they are, the proof of fraud is wanting.’ They may be sufficient to excite suspicion, but suspicion is not the equivalent of proof. Circumstances necessary to prove fraud must be such as naturally, logically and clearly indicate its existence. ’ ’

The burden of proving a fraudulent conveyance was on appellee. Not having met the burden, the decree of the trial court must be reversed, and the cause dismissed at the cost of appellee.


author: Butler, J.

text:
    Arkansas Power & Light Company v. Kennedy.
    4-3439
    Opinion delivered April 16, 1934.

      Bose, Hemingway, Cantrell d Loughborough and J. W. Barron, for appellant.

      Tom J. Terral, for appellee.
   Butler, J.

Gr. Gr. Kennedy brought this action to recover for injuries sustained by reason of a street car belonging to the appellant company coming in contact with his automobile at or near the intersection of 23d and State streets in Little Rock, Arkansas. A trial of the case resulted in a verdict and judgment in his favor, from which is this appeal.

The principal claim made for reversal is that the undisputed evidence establishes negligence on the part of the plaintiff which directly contributed to his injury, and that the trial court should have, at defendant’s request, directed a verdict in its favor.

To make his case-, plaintiff testified in his own behalf and was corroborated by one Bell, who professed to have been an eyewitness to the collision and who described the circumstances attendant thereon. The street car motorman, and some passengers on the car testified on behalf of the defendant, and this testimony is in sharp conflict with the evidence adduced on the part of the plaintiff.

In discussing the plaintiff’s testimony, certain discrepancies in the account he gave of the occurrence are suggested which tend to discredit his testimony, and circumstances are argued which, it is claimed, cast doubt on the testimony of the witness Bell. The matters argued are not properly for our consideration, but were for the jury, and doubtless were presented to, and considered by it. The jury having resolved these questions in favor of the plaintiff, under settled rules we must accept its conclusion as final. The question then is, does the evidence on the part of the plaintiff, viewed in a light most favorable to him, justify us in declaring as a matter of law that it presents no question for the jury, but conclusively shows the failure of the plaintiff under the then existing circumstances to act as an ordinarily prudent person would similarly situated?

To sustain its contention, appellee calls to our attention the cases of Chicago, R. I. & P. Ry. Co. v. Abel, 182 Ark. 651, 32 S. W. (2d) 1059; Fair Oaks Stave Co. v. Shue, 184 Ark. 1041, 44 S. W. (2d) 670; Missouri Pac. Rd. Co. v. Trotter, 184 Ark. 790, 43 S. W. (2d) 762; St. Louis, S. F. R. Co. v. Tidmore, 185 Ark. 177, 47 S. W. (2d) 16, — and insists that the facts of the instant case are so nearly like those of the cases cited as to make it necessary for us to reach an identical conclusion.

In the case first cited, the plaintiff was an employee of the railway company and engaged in interstate commerce. His work, at the time he was injured, required him to be near the line of the railway over which trains were passing to and fro, and it was his duty to watch for the trains and get out of their way. The. work in which he was engaged made a great deal of noise so as to interfere with his hearing the approach of trains. While engaged in work and at a place where, his view was unobstructed for half a mile, he stepped upon the track without looking for the approach of trains and was struck by one passing at that time and was injured. On this state of facts it was held that according to appellee’s own statement he assumed the risk incident upon the performance of his duties without relying upon his own watchfulness to keep “in the clear,” as the rules of the company required, and therefore he was responsible, himself, for his injury.

In the Shue case, next cited, plaintiff and his wife procured a hand car to go on a mission for their own business and pleasure, and were operating the car at night on the log road of the defendant company. They were advised that a tractor with two cars attached to it •was being operated on the road by the company that night and were warned to look out for it. They proceeded on their journey without keeping any lookout for the tractor. The court said: “Although advised to look out for this equipment, neither did so, but blindly proceeded into a.collision, which resulted in her (the wife’s) death. ’ ’

In the Trotter case, suprat the injury to Trotter was caused by a passing railroad train as he stepped upon a railroad crossing. It was at night, the headlight of the locomotive was burning, casting a brilliant light down the track, the brightest point being about 700 feet ahead of the engine where it illuminated the track and entire right-of-way with a beam of light approximately 100 feet wide. The plaintiff admitted that he walked upon the track without looking or listening for an approaching train with his vision obscured by a sack which he was carrying upon his shoulder. He failed to observe the light of the approaching' train until it was so near that he could not spring aside and save himself from injury.

In the Tidmore case, supra, the person injured was an experienced workman of the railway company and, at the time of his injury, was engaged in interstate commerce. He admitted that at the place of his work, which was near the track of the railroad company, he was required by the rules of the company to look out for his own safety, and that he was injured because he carelessly got in the way of a moving train. In that case it was held that there was no evidence of any negligence on the part of the crew of the engine, but that the accident-occurred by reason of appellee’s inattention in taking a position sufficiently near the track to cause him to be struck by a moving car, which position it was unnecessary for him to occup} in the performance of his duty.

In the ease at bar the evidence accepted by the jury distinguishes it from the cases above cited, and tends to show that when Kennedy was attempting to turn into 23d Street from State in an automobile driven by himself, a car parked near the corner made it necessary for him to describe a greater arc than usual, which put him upon the track of the street railway; and because of some holes in the pavement he applied his brakes in an effort to lessen the speed of his car and inadvertently “stalled” Ms engine wMle still upon the track. At this time the street car was approaching, and was then about 150 feet away. Kennedy did not attempt to get out of his car, but tried to get it in motion, knowing at the time that he was in some danger. He succeeded in starting his engine, but before he could clear the track the street car struck him. Before this happened and while he was attempting to start his car, observing the inattention of the motorman, he sounded his horn to attract his notice to his predicament.

Invoking the rule that a duty rests upon the driver of an automobile to exercise ordinary care in its operation for his own and the safety of others (Northwestern Cas. & Surety Co. v. Rose, 185 Ark. 263, 46 S. W. (2d) 796), appellant argues that such care would require that appellee should have abandoned his car when he saw the street car 150 feet away approaching, and that the motorman was not keeping a constant lookout ahead; that, therefore, he should not have assumed that the motorman would stop before hitting him. Ark. P. & L. Co. v. Boyd, 188 Ark. 254. In support of this argument we are cited to a number of cases where an occupant of a stalled automobile was held negligent as a matter of law for failure to g*et out of it and reach a place of safety. We do not review these cases, but the general rule which governs them is stated in Va. & S. W. Ry. Co. v. Skinner, 119 Va. 843, 89 S. E. 887, cited in one of these cases; Dick v. Va. E. & P. Co., 158 Va. 77, 163 S. E. 75: “No one can be allowed to shut his eyes to danger in blind reliance upon the unaided care of another without assuming the consequences of the omission of such care.” We do not dissent from this doctrine, but under the facts of the case at bar we think it a question for the jury as to whether or not the plaintiff did this. For we cannot say that the minds of all reasonable persons would agree that appellee failed to act as a man of ordinary prudence under the circumstances. It develops that Kennedy used poor judgment in remaining in his car, but the jury might have justly inferred that he did not rely solely upon the motorman to stop the street car, and that he might reasonably have expected to be able to extricate both himself and the car from the place of danger before the street car reached him; and also that, if he were unable to do this, the motonnan would see his situation in time to keep from running him down.

The general rule by which the conduct of Kennedy is to be measured is stated in Berry on Automobiles, vol. 1 (6th Ed.) p. 165, approved by this court in Ark. P. & L. Co. v. Crooks, 188 Ark. 513, where it is said: “The driver of an automobile or other vehicle stopped for any temporary cause in front of a street car cannot be held guilty of contributory negligence as a matter of law if he does not desert his vehicle, at least until it is reasonably certain that an impact is unavoidable. He has a right to assume that those in charge of the operation of the approaching street car, seeing his predicament, will not recklessly run him down. He has a right to make a reasonable effort to start his vehicle, if it is susceptible of being started, and so save it and its occupants from injury. Whether his acts in so doing or attempting to do were unreasonable and negligent would be a question of fact, which it would be the province of the jury to determine, in view of all of the circumstances of the particular case. ’ ’

As a further ground for reversal, it is argued that the court erred in giving certain instructions to the jury at the request of the plaintiff. We do not deem it necessary to set out these instructions, since it is our opinion that they are clear declarations of well-settled principles supported by the evidence in the case. We do not think that the objections made to these instructions are sound, and there was no error in giving them.

On the whole case we find no reversible error, and the judgment of the trial court is therefore affirmed.


author: Johnson, C. J. Butler, J.,

text:
    Equitable Life Assurance Society of United States v. Pool.
    4-3421
    Opinion delivered April 23, 1934.

      McKay & McKay, for appellant.

      J. F. Quillm and T. B. Vance, for appellee.
   Johnson, C. J.

This action was instituted by appellee against appellant in the circuit court of Miller County, seeking recovery upon a certain policy of insurance of .date December 27, 1926. Appellee alleged that, during the effectiveness of said policy, he was totally and permanently disabled prior to attaining the age of 60 years, and that appellant was due him under said contract the sum of $10 per month for the balance of his life; he further alleged that, by the terms of said contract of insurance, appellant agreed to waive all future premiums after total and permanent disability suffered; that appellant had breached its contract by failing and refusing to pay monthly installments on and after April 10, 1933; and by then and there demanding payment of the June, 1933, premium and by thereafter, on July 27, 1933, asserting and declaring a forfeiture of said policy for nonpayment of the June, 1933, premium.

Appellant answered the complaint and denied liability because of total and permanent disability, and its prayer was that the complaint be dismissed and that it have judgment for its costs.

The testimony introduced upon trial tended to establish the following facts:

That appellee suffered total and permanent disability prior to January 1, 1932, which was recognized by appellant by making monthly payments according to the terms of the policy up to and until April, 1933; that on the 10th day of April, 1933, appellant notified appellee that on and after that date it would discontinue payments upon the total and permanent disability clause of said policy of insurance and that it would not waive the payment of premium on said policy which would mature June 27, 1933. Appellee refused to pay the June, 1933, premium on said policy, and thereafter, on July 27, 1933, appellant notified appellee that his policy of insurance had lapsed because of nonpayment of the June, 1933, premium, and thereafter this suit was instituted.

But two contentions are urged upon us by appellant ,for reversal: first, that, under the facts and circumstances here presented, appellant did not renounce or repudiate its contract, therefore its liability is limited to monthly payments as they accrue according to the terms of the policy; secondly, that the verdict of the jury and judgment of the court are excessive.

Adverting to the first contention, it may be said that, according to the uncontradicted evidence, appellant, through its local agent, on July 27,1933, notified appellee that his policy of insurance had lapsed for nonpayment of premium on or prior to that date. This assumed position by appellant was an unequivocal renunciation and repudiation of its contract of insurance. This exact question was so decided by us in Ætna Life Ins. Co. v. Phifer, 160 Ark. 98, 254 S. W. 335. In the Phifer case, just cited, the insurance company wrote Phifer a letter in which it stated:

“It also appears from our records that this insurance lapsed by reason of the nonpayment of the November 17, 1921, premium, and is being continued on the extension feature. By referring to the permanent disability clause, it will be noted that, in order for it to be effective, all premiums should have been paid. ’ ’

In disposing of the contention there made as here, we said: “This evinced an intention on the part of appellant not to be bound by the terms of the contract, and was equivalent to a renunciation thereof. It stated in express words that the policy had lapsed. This denial of liability justified appellee, who was not in default, in treating the contract as breached and suing for gross damages, which he did.”

It therefore certainly appears that the facts of the instant case come squarely within the rule as announced in the Phifer case and must be governed by it.

Appellant contends, however, that the rule as announced in the Phifer case has been modified or impaired by the doctrine as announced in the more recent case of Mutual Life Ins. Co. v. Marsh, 186 Ark. 861, 52 S. W. (2d) 433, and that the facts and circumstances of the instant case fall within the rule as announced in the Marsh case. To this we cannot agree. The disposition of the Marsh case was bottomed upon Richards’ Law of Insurance, 4th Edition, and we quoted from § 342 thereof in part as follows: “And if with knowledge of the facts (referring to facts in reference to the breach of contract by the insurer) the insured elects to continue with the contract, he cannot subsequently exercise a second and inconsistent election to treat it as abrogated. ’ ’ In application of the rule of law thus stated to the facts as they appeared in the Marsh case, we stated: “In the instant case there was not a refusal to carry out the contract and a renunciation of the agreement, but,' in the course of the correspondence between the parties, when default was first made in the payment] there was simply the contention that, under the existing facts, the insured for the time being was no longer entitled to the monthly benefits. Recognizing that there had been no repudiation of the contract, appellee paid the premium January 25, 1932, and testified that the policy was still in effect, and in his complaint alleged that the contract had been put in force in January, 1922, and had remained in full force and effect thereafter, and was in full force and effect at the time of the filing of the suit. The appellant, in its answer, expressly disavowed any repudiation, but affirmed the contract, and merely contended that under its terms the appellee was not entitled to the monthly benefits. This makes this case unlike that of Ætna Life Ins. Co. v. Phifer, 160 Ark. 98, 254 S. W. 335, relied upon by appellee. In that case the plaintiff was allowed to recover the present value of the future benefit installments because the court found that there had been a total repudiation of the contract in that the insurer, by letter, had in express words denied liability on the claim that the policy had lapsed. The court said: ‘This letter evinced an intention on the part of the appellant not to be bound by the terms of the contract, and was equivalent to a renunciation thereof.’ ”

Thus it appears that the Marsh case was decided and disposed of upon the principle of estoppel. Marsh paid the January, 1932, premium upon his policy at a time when he had full knowledge that the insurer was denying liability for monthly installments. Marsh, by voluntarily paying the January, 1932, premium on his policy of insurance, thereby elected to waive the insurance company’s breach of the insurance contract in failing to pay the monthly installments. As thus construed, the Marsh case is sound in principle and does not conflict with the rule as announced in the Phifer case and the many other cases decided by us upon this subject.

It is not necessary to undertake a defense of the doctrine as announced in the Phifer case, but in passing it may be said that it is supported by the great weight of American authority. Richards’ Law of Insurance, expressly so states, and this authority was cited with approval by us in the Marsh case. Not only is a renunciation or repudiation of the contract inferred from the unlawful or unwarranted lapse of the policy, but the refusal of the insurance company to accept a premium thereon when due is a renunciation of the contract. Richards’ Law of Insurance states the principle as follows:

“Especially is the rule clear where the insurer not only repudiates the contract by his declaration that he will not pay in the future, but also violates a present obligation under the contract by refusing to accept a premium when due.”

Sometime subsequent to the Marsh case we again reviewed the authorities on this question, and expressly held that, where the insurer denies liability for disability benefits on the ground that the policy lapsed for default in payment of premiums, such renunciation of the contract authorized the insured to sue for gross damages and recover the present value of future installments. This holding gave full effect to the doctrine as announced in the Phifer case and other cases on the subject and clearly evinces the intentions of the court to adhere to its pre-’ vious holding. Ætna Life Ins. Co. v. Davis, 187 Ark. 398, 60 S. W. (2d) 912. The unlawful and unwarranted demand for payment of premiums when none is due. in fact and the lapse of the policy on refusal to pay such demand is equally as reprehensible as the refusal to accept a premium when due and lapse, the policy because thereof.

Appellant’s second contention, that the verdict of the jury and the judgment of the court are excessive, is bottomed upon the argument that appellee, having been determined totally and permanently disabled, cannot be presumed to live the full expected time as measured by the American Experience Table of Mortality. This experience table of mortality was introduced in evidence along with other facts and circumstances as tending to show appellee’s expectancy of life, and we have many times held this table competent testimony. In addition to this table, Dr. Tyson, a witness for appellee, testified that appellee’s injuries would not necessarily shorten his life, and this evidence was corroborated by Dr. Kitchens. From the testimony thus adduced, the jury determined that appellee would live out the usual expectancy of life, and this finding of fact is supported by the evidence. Under long established rules of this court, we cannot substitute our judgment for that of the jury.

No error appearing, the judgment is affirmed.

Smith, McHaney and Butler, JJ., dissent.

Butler, J.,

(dissenting). The dissenting opinion filed by Mr. Justice Smith in No. 3127, Metropolitan Life Ins. Co. v. Harper, post p. 170, in which Mr. Justice McHaney and I fully concur, in many essential particulars states the reason which governs the dissent in the instant case. But, in order that our views may be fully understood, it is necessary to state certain undisputed facts which appear in the record and which are not stated in the opinion of the majority.

The policy of insurance involved in this action is an ordinary life policy by which the sum of $1,000 is to be paid to a named beneficiary in the event of the death of the insured, included in which is a clause for the pay-ment of certain monthly sums upon the insured’s becoming totally and permanently disabled at a time when the policy is in full force and effect. It was upon this clause that this action is based. In 1932 a claim was made by the insured for monthly payments because of total disability. This claim was accepted by the insurance company and payments were made beginning with the month of January, 1932, and continuing to April, 1933. The clause relating’ to disability contained a provision by which the insurance company reserved the right to reexamine into the condition of the insured at stated intervals to determine whether the disability for which it was making payments still existed. Acting under this provision, in March, 1932, the company requested the insured to be examined by the company’s physician, Dr. You-mans, in the town of Lewisville, Ark. The insured complied with this request, the examination was accordingly made, and the physician reported to the company that at that time the. insured was normal and suffering from no disability. Thereupon, on April 18, 1932, the company addressed a letter to the insured, effective as of April 10, in which he was notified that it then appeared that he was no longer totally and permanently disabled, and that therefore no further premiums would be waived, and no further disability installments paid; it advised that the next premium would be due on June 27, 1933, and that this would have to be paid. On May 2, 1933, J. P. Quillin, as attorney for the insured, wrote the company acknowledging the receipt of its letter of April 18, advising that, under the Arkansas 'decisions, “a breach of this kind of contract entitled the insured to immediately recover from the insurer the present value of future installments based upon his life expectancy. Mr. Pool’s expectancy is now 28.18 years and the present value of the future installments commuted at 6 per cent, per annum is $1,620. The purpose of this letter is to make formal demand upon you for the payment of the amount of $1,620 as the sum now due under the contract following the 'breach by you as evidenced by your notice,. and to inform you that, in the event of your failure or refusal to honor this demand, suit will be filed in the circuit court of Miller County, Arkansas, for recovery.”

The company answered this letter on May 8, 1933, acknowledging receipt of the letter of May 2, taking issue with the attorney as to the effect of the Arkansas decisions and concluding with this paragraph: “There has been no breach of the contract as stated in the second paragraph of your letter, and, of course, the demand by you in your third paragraph is absolutely refused.” The attorney for the insured answered this letter, stating that, in view of the expression contained in it to the effect that the contract had not been repudiated, formal demand was made for the monthly benefits since April 10, 1933, and inclosed a statement of Dr. J. E. Tyson to substantiate the claim that there had been no break in the disability of the insured, and that his payments had been wrongfully discontinued. The letter stated also that if it was desired that regular, forms be filled out the insured would immediately have them completed by physicians who were disinterested, upon receipt of same.

On July 1, 1933, the insured’s attorney addressed another letter to the company enclosing report of Dr. Tyson and again demanding immediate payment of the disability benefit. That letter was answered by the company on July 8, acknowledging receipt of the letter of July 1, and advising that the claim was receiving the attention of the company. On July 13 the cashier of the company wrote the insured calling* attention to a letter written on June 22 asking’ him to again call upon Dr. Youmans of Lewisville for an examination in connection with his disability claim, and asking that he do so at his earliest convenience.

It was agreed at the trial of the case that the plaintiff was examined by Dr. Tyson of Texarkana and reports of the finding on said examination furnished to the defendant company, together with demand for the payment of the benefits which had accrued; that the defendant requested the plaintiff to call at the office of Dr. Kittrell of Texarkana for an examination; that plaintiff did not find Dr. Kittrell at his office; that later on the defendant requested the plaintiff to return to Dr. You-man’s office at Lewisville for further examination, which the plaintiff did not do on account of the reasons set out in his letter, as follows:

“Your letter of July 14 was received.
“In regard to my examination I was required to go to Dr. Kittrell at Texarkana. I went there last month but Dr. Kittrell was not in town. Dr. Youmans is at Lewisville. That is in another county. I do not feel able to make another trip over there. I have submitted statements from Dr. Beck’s Clinic to the Home Office stating my condition. I do not feel it necessary for me to make another long trip to Lewisville before Dr. Youmans. If the company wants to do the right thing about my cáse they already have statements enough to carry out their contract. ’ ’

It was further agreed that the defendant company thereafter requested the insured to call at the office of Dr. Kittrell, which he did on September 12, 1933, for further examination. It was also agreed that, upon the proof submitted to the defendant company by reason of the examination referred to by Drs. Youmans and Kittrell, the defendant company denied liability on the ground that the plaintiff was not totally and permanently disabled within the terms of the policy, and that it thereafter gave notice that the plaintiff, to keep the policy in force, must pay the premiums as provided therein; that the plaintiff did not pay the premiums, and that thereafter and subsequent to July 27, 1933, the company notified its agent, Gr. M. McKnight, at Lewisville, that the policy had lapsed for the failure to pay the premium of June 27, and that McKnight advised the insured of the receipt of the notice and that he secure a re-instatement of the policy, and that he write the company what would be necessary to secure the same.

On August 8 this suit was brought, the complaint alleging that, while the plaintiff was totally and permanently disabled, the insurer, on April Ii8, 1933, without cause ceased the payment of the monthly disability and on that date notified the plaintiff that on June 27, 1933, a premium would become due on said policy, which must be paid to prevent a lapse of said policy; that, immediately after the receipt of said notice, plaintiff made proof that his said disability continued to exist, and since then has continued to make proof thereof and has made repeated demands for the payment of the monthly disability; “and that the defendant, without authority and in violation of the terms of said contract, cancelled, repudiated and breached said contract of insurance, denied all liability thereunder for such disability, and notified the plaintiff that said policy w^is after said date no longer in force. ’ ’ In its answer the company denied that the plaintiff was totally and permanently disabled within the meaning of the policy in the year 1931, or thereafter, or that he was then totally and permanently disabled. It denied that it had without cause and without authority ceased payment of the monthly disability payments, alleging as a reason for the discontinuance of same the examination of Dr. Youmans and his report and denying that it had repudiated the contract, but, on the contrary, alleged that it had recognized that the policy was in full force at the time demand was made upon it for payment of the monthly benefits accruing’ after April 10, and admitted that if the plaintiff was totally and permanently disabled on April 10, 1933, at the time it served notice on the plaintiff as alleged in the complaint, said policy was then, and still is, in full force and effect. “It denies liability to the plaintiff solety on the. ground that he was on April 18, 1933, and still is, able to engage in an occupation and perform work for compensation of financial value. ’ ’

Prom these undisputed facts it is clear that the insured based his claim that the contract had been breached on the ground of the failure and refusal of the insurer on and after April 18,1933, to pay the monthly disability benefit at a time when his total and permanent disability continued. It is also manifest that this is the identical position taken by the insurer, both in its letters and in its answer.

The majority have improperly based the decision of this case on the letter of July 27 notifying the agent of the lapse of the policy for the nonpayment of the June premium. This was not the ground upon which the monthly payments were, discontinued, but on the belief and contention that there was no longer any disability entitling the insured to further payments within the meaning of the policy. The rights of the parties are properly to be determined by this contention and were fixed when it was made. It was a question, (if the terms of the contract are not to be brushed aside as unimportant), which the insurer had a right to raise and to have a reasonable time in which to investigate. If the insurer was wrong in its assumption, then it would owe whatever payment might be in arrears, the premiums would not be due as claimed and there would be no lapse of the policy. In the event of suit to settle that question, if the jury should determine adversely to the contention of the insurer, it would be liable for the monthly payments in arrears and to a penalty and a reasonable attorney’s fee. This I conceive to be the true and just measure of the liability of the insurer.

When the insured, without giving the insurer a reasonable opportunity to investigate his claim of continuing disability, filed this suit alleging a renunciation and breach of the contract, the insured answered expressly disavowing any renunciation, but interposed as a defense the same reasons it assigned to the insured in its letters and submitted that question for decision to the court. The retroactive effect assigned by the majority to the letter of July 27 advising of the lapse for nonpayment of the June 27 premium is not to be justified by any logical process of reasoning, nor is it supported by authority. This court, in the recent case of Missouri State Life Insurance Company v. Foster, 188 Ark. 1116, 69 S. W. (2d) 869, said: “We are irrevocably committed to the doctrine that when liability attaches no subsequent act of the parties will effect a forfeiture of the policy unless the contract of insurance in definite and explicit terms so provides.”

The doctrine announced in the case of Ætna Life Ins. Co. v. Phifer, 160 Ark. 98, 254 S. W. 335, cited in the majority opinion, has no application to the case at bar. In that case there was a distinct renunciation of the contract of insurance because of nonpayment of premium occurring before the existence of the disability of the insured for which payment was demanded. This ground for refusal-to make payments was reaffirmed in the answer of the insurer and pleaded as one of its defenses to the insured’s action. This was identically the situation in the case of Ætna Life Ins. Co. v. Davis, 187 Ark. 388, 60 S. W. (2d) 912, cited and relied upon in the majority opinion. The issue tendered in those cases was to the effect that there was no contract of insurance in existence at the time the insured became disabled, and therefore there was not only a disavowal of liability but an absolute and explicit renunciation of the contract, which was held to bring the cases within the rule announced in Roehm v. Horst, 178 U. S. 1, 20 S. Ct. 780, and our own cases which follow and cite that case.

I submit that, in the discussion by the majority of the late case of Mutual Life Ins. Co. v. Marsh, 186 Ark. 861, 56 S. W. (2d) 433, both its letter and spirit are misunderstood and misinterpreted. As we understand the contention of the appellant, there is no contention that this case modifies the rule announced in the Phifer and Davis cases. Indeed, it does not, but is in harmony with and complements that rule. The majority opinion incorrectly assumes that the decision in the Marsh case was bottomed on the excerpt from Richards on the Law of Insurance set out in the opinion. It also erroneously states that it (the Marsh case) was “decided and disposed of upon the principle of estoppel.” These errors on the part of the majority will clearly appear from a casual inspection of the opinion in the Marsh case. The rule upon which the decision was based is found in the first paragraph of § 342 of Richards on Insurance as follows:

“By the weight of authority, if the insurer renounces the continuing contract of insurance, upon his part, and unequivocal^ refuses in advance of its maturity to perform it, the insured may at his option take the insurer at his word. The insured is then relieved of the duty of further performance on his part, and may maintain an action at law for damages, before the specified date of expiration.” The remainder of that section, which is set out, and from which the excerpt quoted b}r the majority is taken, is merely explanatory and illustrative of the rule.

For the application of that rule reference was made to Kirschman v. Tuffli Bros., 92 Ark. 111, 122 S. W. 239, approving the rule as announced in Roehm v. Horst, supra. The rule laid down in Richards on Insurance, supra, approved and applied in the cases cited, is identical to that applied in the Phifer and Davis cases, supra, and in many decisions of this court cited in the Marsh and Davis cases.

In Mutual Life Insurance Company v. Marsh, supra, the decision of the court was not based upon the doctrine of estoppel, as is perfectly apparent from an investigation of that case; it was placed upon the ground that there had been no repudiation of the contract but rather a reliance upon its terms, and that the conduct of the insured was not such as to estop him from pleading a renunciation, but, on the contrary, was a recognition that there had been no repudiation by the insurer of the contract.

The practical effect of the decision in the instant case and in the very recent case of Metropolitan Life Ins. Co. v. Harper, supra, is that an insurance company cannot question the claim made by an insured to the effect that he is totally and permanently disabled and have a reasonable time to investigate the same on pain of being deemed to have renounced the contract and thereby subject itself to a judgment for a gross sum for anticipatory damages. On the facts of these cases, as I interpret them, that is just what this court is holding, and, to be consistent, it should overrule both cases cited and relied on in its opinion and all our other decisions dealing with anticipatory damages and restate the law on that subject.

Justices Smith and McHaney authorize me to say that they concur in the views I have expressed and join in the dissent.


author: Johnson, C. J.

text:
    Kaufman v. Citizens’ Bank.
    4-3426
    Opinion delivered April 23, 1934.

      Claude V. Holloway, for appellants.

      Trimble, Trimble $ MoCrary, for appellees.
   Johnson, C. J.

This proceeding is an attack by a creditor upon a deed conveying a 40-acre tract of land situated in Lonoke County and a certain transfer of 48 shares of common stock in a cotton gin plant. The conveyance and stock transfer were made by appellant, A. H. Kaufman, to Ms wife, Irvey Shifflett Kaufman. The evidence on behalf of appellee tended to establish the following facts:

That on and prior to March 30, 1932, A. H. Kaufman was indebted to appellee in a sum in excess of $9,000 and was otherwise indebted in a very large sum of money. On this date A. H. Kaufman appeared to be the owner of the 40-acre tract of land, same being in his name upon the records of the county, and the 48 shares of gin stock were also possessed and controlled by him. On December 23, 1932, there was filed for record in Lonoke County a deed from A. H. Kaufman to his wife, conveying this 40-acre tract. This deed purported upon its face to be executed April 15,1928. On July 3,1932, A. H. Kaufman caused to be transferred and assigned to his wife the 48 shares of gin stock. These conveyances denuded A. H. Kaufman of all his visible property. The testimony on behalf of appellants tended to establish that the deed dated April 15,1928, from A. H. Kaufman to his wife was a valid gift, made and executed at a time when A. H. Kaufman was solvent; that the transfer of the gin stock on July 3, 1932, by Kaufman to his wife was the consummation of the previous intentions of the parties in that Mrs. Kaufman had furnished the purchase price of the gin stock and had always been the equitable owner thereof.

Upon the evidence thus adduced, the trial court rendered judgment in favor of appellee and against A. H. Kaufman for the sum of $10,441.72; determined that the deed from A. H. Kaufman to his wife of April 15, 1928, to the 40-acre tract of land was fraudulent and void and should be canceled in so far as it affects appellees’ right as a creditor; and further adjudged that the transfer of the 48 shares of gin stock by Mr. Kaufman to his wife was fraudulent, but that the wife had in good faith advanced to her husband, as a loan, $450, which was used by Mr. Kaufman in the purchase of said gin stock and decreed a lien, in favor of Mrs. Kaufman against the gin stock for this sum. No cross-appeal has been prosecuted from this branch of the case. The chancellor was fully warranted in finding that the deed from A. H. Kanfman to his wife conveying the 40-acre tract of land was fraudulent. The validity of this deed, the intentions of the parties in reference to its execution and the facts and circumstances surrounding its execution and the parties thereto should be ascertained and determined as of date the deed was filed for record, and not of its purported date of execution. It is practically admitted by Mr. Kaufman that on December 23,1932, the date on which this deed was filed for record in Lonoke County, he was notoriously insolvent, and all the testimony adduced tends to establish this fact. The rule of law, in reference to conveyances under the facts and circumstances here presented is well settled in this State, and is to the following effect:

“Conveyances made to members of one’s household and to near relatives of an embarrassed debtor are looked upon with suspicion and scrutinized with care; when voluntary they are presumed fraudulent, and when the embarrassment of the debtor proceeds to financial wreck such conveyances are conclusively presumed to be fraudulent as to existing creditors.” Wilkes v. Vaughan, 73 Ark. 174, 83 S. W. 913; Papan v. Nahay, 106 Ark. 230, 152 S. W. 107; Brady v. Irby, 101 Ark. 573, 142 S. W. 1124; Fluke v. Sharom, 118 Ark. 229, 176 S. W. 684.

Moreover, viewing this deed from the standpoint of the date of its purported execution — that is to say April 15, 1928 — Mrs. Kaufman cannot succeed in this action. We have many times held that, where a wife permits her husband to possess and control her separate property as his own and creditors rely upon such apparent ownership in the husband and lend credit thereon, the wife is estopped to assert her superior rights. Haffke v. Hempstead County Bank & Trust Co., 165 Ark. 158, 263 S. W. 395; First Nat. Bank v. Herring, 159 Ark. 317, 252 S. W. 37; Bunch v. Empire Cotton Oil Co., 158 Ark. 462, 250 S. W. 530.

The doctrine just announced has full application to the transfer of the gin stock. Conceding that Mrs. Kaufman furnished the money for the purchase of this stock in 1925, she thereafter permitted her husband to possess and control it as his own until July 3, 1932, and by these affirmative acts led creditors to believe that A. H. Kaufman was the true and lawful owner thereof. She will not now be heard to say otherwise.

The decree is correct, and must be affirmed.


author: Humphreys, J.

text:
    Wells v. Costello.
    4-3434
    Opinion delivered April 23, 1934.

      Harper E. Harb, for appellants.

      John L. Sullivan,, for appellee.
   Humphreys, J.

This is an appeal from a judgment of the circuit court of Pulaski County, Second Division, upon a subscription contract hied as a claim in the probate court of said county against the estate of Ed Monahan, Jr., deceased, and allowed, from which allowance ah appeal was duly prosecuted.

The subscription contract is as follows:

“Date, Nov. 18th, ’31.
“Name, Ed Monahan, Sr.
“Address, 412 W. Markham.
“I promise to contribute for the erection of the memorial organ at St. Andrew’s Cathedral the sum of $250, to he paid in annual installments of $50.
“It is understood that this donation is to be exclusive of my regular contribution for the support of my church.
“The Monahan Family “(Signed) Ed Monahan, Jr.
“Witness: Thomas A. Costello.
“In memory of Ed Monahan, Sr.”

The defenses interposed to the allowance of the claim were: First, that the contract on its face was for a gift, and that oral evidence was inadmissible to show that it was a subscription contract for a consideration; and, second, that Father Costello was not the proper person to make the affidavit to the claim.

(1) The contract, upon its face, shows that it was a contribution toward the erection of an organ at St. Andrew’s Cathedral, and not a promise to give an organ. The mutual undertaking of the several contributors furnished the consideration for the contract and rendered it binding upon the estate of Ed Monahan, Jr. Stone v. Prescott Special School District, 119 Ark. 553, 178 S. W. 399; David v. Chambers, 123 Ark. 293, 185 S. W. 443; Byington v. Little Rock Chamber of Commerce, 132 Ark. 361, 201 S. W. 122. It appears by the undisputed testimony that St. Andrew’s Cathedral accepted the subscription contract and erected the organ before the claim was filed.

(2) According to the undisputed evidence, Father Costello was duly appointed and authorized to take and collect subscriptions for the purpose of erecting an organ at St. Andrew’s Cathedral, so he was the proper party to make the affidavit in proof of the claim filed with the probate court. It is provided by statute that the justice of the claim against an estate may be made by the claimant, an agent, attorney, or other person. In the presentation of the claim, §§ 100 and 101 of Crawford & Moses’ Digest were fully complied with.

No error appearing, the judgment is affirmed.


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    Moore v. Price.
    4-3450
    Opinion delivered April 23, 1934.

      A. J. Johnson and Clary Ball, for appellant.

      R. W. Wilson, for appellees.
   Mehaffy, J.

On April 11, 1932, the appellant, I. E. Moore, filed suit in the Lincoln Chancery Court, alleging that the appellees, J. P. Price, Lonie Price and A. J. Price were indebted to appellant in the sum of $13,111.67, evidenced by two promissory notes, one dated January 9, 1930, for $9,251.79, payable'on November 1, 1931, bearing interest at 10 per cent, from date until paid and the other note dated May 22, 1931, due November 1, 1931, for the sum of $439.26 with interest at 10 per cent, from maturity, this last note being executed by J. P. Price; and a verified account for merchandise for the balance of the $13,111.67. To secure the payment of the indebtedness, J. P. Price and Lonie Price executed a mortgage on real estate and personal property.

Appellees had delivered to appellant 93 bales of cotton, worth approximately $3,000, to be credited on the indebtedness.

It was also allegue! that practically all the personal property mentioned in appellant’s complaint and covered by the mortgage sued on had been moved off the premises, and that the crops were being disposed of by appellees, and that all of the security was insufficient to pay the indebtedness.

It was also alleged that the appellees were insolvent and had no other property with which to meet their obligation; that they were fast exhausting their resources, making it entirely impossible for the appellant to collect his indebtedness. Appellant prayed judgment for the amount due him. for a foreclosure of his mortgage, and that a receiver be appointed to take charge of the property covered in the mortgage.

Appellant also, on April 11, gave notice to the appellees that he would, on April 14th at 10 o’clock a. m., apply to the Lincoln Chancery Court for the appointment of a receiver. On April 14th the appellees filed a demurrer to that part of the complaint asking for the appointment of a receiver. The chancellor heard the application for the appointment of a receiver, and denied the petition, and refused to appoint a receiver, under the authority of act 253 of the Acts of the General Assembly of 1931.

Thereafter, on April 18th, while the suit to foreclose the mortgage on the property was pending in the chancery court, appellant brought a suit in replevin in the circuit court of Lincoln 'County, for the same personal property. A demurrer and answer were filed to the complaint in the circuit court. In the answer appellees moved that the cause in the circuit court be transferred to the chancery court and consolidated with the foreclosure suit. This motion of appellees was granted, and the cause transferred to the chancery court.

When the suit was brought in the circuit court, appellant gave bond, and an order of delivery was issued and served. The appellees executed a bond and retained possession of the property.

There is no dispute about the indebtedness, and it is unnecessary to set out the evidence. After a hearing, the chancery court gave judgment in favor of the appellant against the appellees for $10,787.18. This was the amount found by the court to be due after giving appellees credit for the 93 bales of cotton, and said judgment was declared by the court to be a first lien on the real and personal property described in the mortgage. The lands were ordered sold, and the personal property, at the value fixed by the court, was delivered to the appellant.

The appellant claimed that he was entitled to the usable value of the personal property or rent on the personal property during the time it was kept by appellees after the replevin suit was begun. A petition was filed by' appellant, alleging that appellees had refused to deliver the following personal property: “First: 1 disc harrow and disc plows valued at $200. Second: Corn valued at $100. ThirdCotton seed valued at $20. Fourth: Hay valued at $30. ’ ’

The chancellor then rendered a final decree, holding that at the time the property was rebonded there were 100 bushels of corn of the value of $50 and no cotton seed, and $30 worth of hay, making $80, and gave judgment for that amount. The chancellor also found that the disc harrow and plows were tendered to appellant, and that he declined to accept them.

The case is here on appeal, and the appellees prosecute a cross-appeal as to that part of the decree giving judgment for $80 for the corn and hay.

Appellant first contends that he had a right under §§ 7403, 7410 and 8654A of Crawford & Moses’ Digest to prosecute his suit in replevin. He contends also that the mortgagee is the holder of the legal title and can maintain replevin on default. He cites and relies on Perry County Bank v. Rankin, 73 Ark. 589, 84 S. W. 725, 86 S. W. 279, and Van Pelt v. Russell, 134 Ark. 236, 203 S. W. 267. The statute itself settles this question. It reads as follows: “In the absence of stipulations to the contrary, the mortgagee of personal property shall have the legal title thereto and the right of possession.”

The mortgagee has the legal title, and, because of that, may bring a suit in replevin, but that is not for the purpose of getting possession of and keeping the personal property, but it is only to get possession for the purpose of selling under the power in the mortgage. The mortgage contains a power of sale, and the mortgagee could, under that mortgage, have brought replevin, obtained possession of the property for the purpose of selling it under the power in the mortgage. He could have sold both the real property and the personal property under the power of sale in the mortgage.

Where a mortgagee brings replevin for personal property on which he has a mortgage, the only purpose of the replevin suit is to obtain possession for the purpose of selling it. This might have been done; the mortgagee might have pursued this remedy, but he elected to bring liis suit to foreclose not only on the real property, but tlie personal property also. When this suit to foreclose was brought, the chancery court acquired jurisdiction as to both the real and personal property. The appellant realized that the chancery court had jurisdiction as to all the property, and made application to the chancery* court for the appointment of a receiver. If his petition for the appointment of a receiver had been granted, he, of course, would not contend that he could then go into circuit court and bring replevin for the property; and he could not do so when the chancery court denied his petition for a receiver.

A mortgagee has three remedies, either one of which he may pursue. He may bring a suit at law on the notes or accounts, or he may advertise and sell under the power of sale in the mortgage, or he may bring a suit to foreclose in chancery court. But when chancery court acquires jurisdiction, it has the right to conduct the matter to an end, and decide all matters involved in the chancery suit.

We recently said: “Circuit courts and chancery courts are of equal dignity; and in cases where there is concurrent jurisdiction, the court that first acquires jurisdiction has the right and jurisdiction to conduct the matter to an end without interference of another court of equal dignity.” Wright v. LeCroy, 184 Ark. 837, 44 S. W. (2d) 355.

The rule is stated in Corpus Juris as follows: “Where two actions between the same parties on the same subject and to test the same rights are brought in different courts having concurrent jurisdiction, the court which first acquires jurisdiction, its power being adequate to the administration of complete justice, retains its jurisdiction and may dispose of the whole controversy, and no court of co-ordinate power is at liberty to interfere with its action. This rule rests upon comity and the necessity of avoiding conflict in the execution of judgments by independent courts, and is a necessary one because any other rule would unavoidably lead to perpetual collision and be productive of most calamitous results.” 15 C. J. 1134.

Bailey on Jurisdiction, page 61, states: “In the distribution of powers among’ courts it frequently happens that jurisdiction of the same subject-matter is given to different courts. Conflict and confusion would inevitably result unless some rule was adopted to prevent or avoid it. Therefore it has been wisely and uniformly determined that whichever court, of those having such jurisdiction, first obtains jurisdiction, or, as is sometimes said, possession of the cause, will retain it throughout to the exclusion of another.” The same rule is announced in “Courts and Their Jurisdiction” by Works, pages 68 and 69.

There, is no question here about the power of the chancery court being adequate to administer complete justice. If the chancery court had appointed a receiver, it would have been entirely satisfactory to the. appellant. It had the power to do this, the power to give adequate and complete justice, and its jurisdiction was invoked for that purpose, but the chancery court decided that a receiver should not be appointed. It had ample means to protect the property, and appellant finally did get all the property through the order of the chancery court.

There is no dispute about the indebtedness and the mortgage. The appellant, however, contends that he is entitled to $25 for each of the mules retained by the appellees when they gave the bond to retain the property. This question of the right to the possession of the property, and the right to have a receiver appointed, were both questions properly before the chancery court, and decided by that court on the facts introduced in evidence, and we think the chancellor’s finding is supported by the evidence.

Appellees prosecute a cross-appeal in which they urge that the judgment for $80, for corn and hay, be reversed. We think, however, that the finding’ of the chancellor on this question is also supported by the evidence.

It follows from what we have said that the judgments must be affirmed both on appeal and cross-appeal. It is so ordered.


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    City National Bank v. Riggs.
    4-3451
    Opinion delivered April 23, 1934.

      James B. McDonough, for appellants.

      Hill, Fibzhugh \& Brizzolara, Watts <$ Wall, Daily & Woods and G. L. Grant, for appellees.
   McHaney, J.

This is the second appeal of this case-For the former opinion see City National Bank v. Riggs, 188 Ark. 420, 66 S. W. (2d) 293. On the former appeal we held that the appellants had wrongfully satisfied the record as to certain property covered by a mortgage to it as agent to secure an indebtedness to appellees and others represented by notes which had been assigned by it, and that appellants became liable to the noteholders for their pro rata share of the sale price of the property so released from the record of said mortgage; that the inclusion of the homestead of appellee, Jessie M. Johnson, in the new mortgage was induced by fraud, and that appellants became liable to her for whatever loss she might sustain in the foreclosure and sale thereof; and that the decree, of the chancery court should be affirmed.

This proceeding involves the foreclosure of the new mortgage. The court entered a decree in accordance with the prayer of the complaint.

For a reversal of this decree it is first argued by appellants that the court should have granted a continuance on their motion. There are several answers to this suggestion. One is that the makers of the notes and mortgage have not requested a continuance. Another is that matters of continuance rest in the sound discretion of the court which will not be disturbed by this court unless an abuse of discretion is shown. The record discloses that one continuance was granted, from the April to the October term, 1933, and no abuse of discretion is shown.

It is next argued that, since the City National Bank, hereinafter called the Bank, purchased the two notes held by E. N. King, the Bank should be subrogated to all the rights .of King as against Mrs. Johnson’s homestead, which we held, on the former appeal, was included in the new mortgage through misrepresentation and fraud of the officers of the Bank. The court gave the Bank a judgment against the Johnsons on the King notes, but refused to permit it to participate in the security as to said homestead. This was manifestly correct. The general rule is that subrogation will not “be- allowed where to do so would relieve a party from the consequences of his own wrongful or unlawful act.” 60 C. J. 709. As said by Judge Cockrill in Tribble v. Nichols, 53 Ark. 271, 13 S. W. 796: “One who seeks protection under the equitable doctrine of subrogation must come into court with clean hands. It is not applied to relieve one of the consequences of his own wrongful or illegal act.” See also Roe v. Kiser, 62 Ark. 92, 34 S. W. 534; Hill v. Kavanaugh, 118 Ark. 34, 176 S. W. 336; Troyer v. Bank of DeQueen, 170 Ark. 703, 281 S. W. 14; Bank of Mulberry v. Frazier, 178 Ark. 28, 9 S. W. (2d) 793. So here, the Bank having induced Mrs. Johnson to include her homestead in the mortgage on the representation that it was a mere matter of form and that it would protect her from loss in event of foreclosure, it would necessarily follow that the Bank could not take advantage of its own wrong and be subrogated to the rights of an innocent noteholder whose note it purchased.

The only other argument appellant makes which we think necessary to consider in this opinion is the contention that the Bank should be subrogated to the rights of the Biggs and Mrs. Taylor, it having paid them the amount heretofore adjudged against it for the unlawful diversion of the $12,300 sale price of the property wrongfully released from the record of the mortgage. What we have heretofore said in answer to the contention for the right of subrogation on the King notes applies with equal force to this. We do not understand that the court refused to give the Bank a judgment against the John-sons for the amount it paid to the Biggs and Mrs. Taylor. The decree did provide that, if the Bank paid said judgments to the Biggs and Taylor, such payments shall be credited fro rata on their notes, and the Bank was subrogated to the rights of the Johnsons in any surplus that remained from a sale of the mortgaged property after paying. the noteholders, except as to the proceeds of Mrs. Johnson’s homestead. Certainly the Bank is entitled to a judgment against the Johnsons for the amount-of their indebtedness it is required to pay. The Johnsons owe $25,000 and interest which they do not deny. It cannot have satisfaction out of said homestead.

No error appearing, the decree is affirmed.