author: McHaney, J.

text:
    Merchants' & Planters' Bank v. McGehee Special School District.
    Opinion delivered June 17, 1929.

      Joe S. Harris and Bridges & McGanghey, for appellant.

      Williamson & Williamson and John Baxter, for' ap-pellee.
   McHaney, J.

The facts in this case are substantially the same as in Merchants’ & Planters’ Bank v. Hammock, 178 Ark. 746, 12 S. W. (2d), 421, where they are rather fully set out, except as herein stated and supplemented. The amount of bonds sold was $105,000 instead of $150,000, as stated in the former opinion. The full resolution of the appellee school board is as follows:

“Whereas, the board of directors has sold $105,000 of five per cent, bonds to R. Gr. Helbron of Little Rock, dated March 1, 1927, to be delivered and paid for at the Bankers’ Trust Compair/, Little Rock, Arkansas, for the sum of $99,246, one-half of said funds to be deposited with the Bankers’ Trust Company of Little Rock and one-half with the Citizens’ State Bank, MeGehee; and whereas, at the request of R. Gr. Helbron, the place of delivery and deposits be changed; therefore be it resolved that the Bankers’ Trust Company of Little Rook be instructed to deliver said bonds to the Merchants’ & Planters’ Bank, Pine Bluff, Arkansas, to be delivered on payment of the amount of $99,246 to the Merchants’ & Planters’ Title & Investment Company and the Simmons National Bank, said funds to be deposited with said banks to the credit of the district as follows: One-fourth with Merchants ’ & Planters ’ Bank, Pine Bluff, Ark.; one-fourth with Simmons National Bank, Pine Bluff, Ark.; one-fourth with the Citizens’ State Bank, McGehee, Ark.; and one-fourth with the Bank of Commerce, McG-ehee, Ark.
“Said funds to be withdrawn by president and secretary of said board as needed in building and construction in practically equal amounts, leaving the balances in each bank as near the same as possible. All of said depositories to pay to said district interest on daily balances at the rate of 2 per cent, per annum. Also that the funds in each of said depositories shall be secured as required by act No. 182 of the Acts of 1927. Resolutions adopted unanimously. ’ ’

The Merchants’ & Planters’ Title & Investment Company, an affiliated company with appellant, on May 23 wrote appellee the following letter:

“Mr. O. C. Gorham, President,
McGehee School District,
McGehee, Arkansas.
“Dear sir: We have today taken up and paid for the Merchants’ & Planters’ Bank of Pine Bluff the $105,000 5 per cent, bond issue of the McGehee School District, dated March 1, 1927, the amount we paid being $99,246. This action was on behalf of ourselves and the Simmons National Bank of this city, with whom we are partners in the business. The Merchants’ & Planters’ Bank will advise you relative to the distribution of this money. ’ ’

On the same date appellant wrote appellee as follows:

“Mr. O. C. Gorham,
c/o McGehee Special School District,
McGehee, Arkansas.
“Dear Mr. Gorham: Conforming with resolutions of your board under date of May 17, we have today delivered to the Merchants ’ & Planters ’ Title & Investment Company $105,000 of 5 per cent, bonds of your school district. They have paid us the sum of $99,246 therefor, and we have deposited the proceeds as follows: With Merchants’ & Planters’ Bank, P. B., $24,811.50; with Bank of Commerce, McGehee, $24,811.50; with Simmons National Bank, P. B., $24,811.50; with Citizens’ State Bank, McGehee, $24,811.50.
“For your files I am inclosing herewith duplicate deposit slips covering each transaction. We have placed in escrow $25,000 of the above bonds to protect the deposit we have placed in our bank, for your account.
“Assuring you we are glad to handle this matter for you, I remain, “Yours very truly,
“Jim McLellan, Cashier.”

The school board took the above-mentioned duplicate deposit slip to the Bank of Commerce of McGehee, and was credited on its books with the amount thereof, $24,811.50. The above resolution of the school board was adopted at the suggestion of the Simmons National Bank of Pine Bluff, one of the two purchasers of the bonds, and the school board did not know what the provisions of act 182 of 1927 were. The real purpose of the resolution, so far as the board was concerned, as testified to by Mr. W. A. McGehee, member of the board, was to give the Citizens’ State Bank of McGehee some of this deposit, instead of seeking additional security for the funds, Mr. Thompson, who became a member of the board and is its secretary, being cashier of that bank. Other members of the school board testified that the purpose was to secure the deposit. Shortly after the deposits had been made in the four banks, the board discussed as to whether the banks had qualified under act 182, and the matter was referred to the president and secretary, who were authorized to see that the banks did give security in accordance with act 182. These gentlemen called on the Bank of Commerce to give security, shortly after the deposit was made, by depositing the kind of bonds mentioned in act 182 of 1927. Mr. Cleveland, the cashier, advised them the bank had no bond’s, but offered its bills receivable. They found out later that they could not take the notes of the bank as security for the deposit, and Mr. Cleveland said he would undertake to get appellant to lend his bank municipal bonds by a deposit of his bills receivable as security, and give the board these bonds. The board waited on him to do this, calling on him every few days about the matter, and they were encouraged to believe that he would do- so. Mr. Stone, president of the board, stated that on June 2 he talked to appellant about the matter, but did not remember what was said. He again called appellant on June 11, and was under the impression that appellant had the bonds and was going to pnt them np for the Bank of Commerce, but on June 24 he called appellant again and was advised it would not put up the bonds, and suggested they move the deposit. On June 25 the board drew a draft on the Bank of •Commerce for the balance of the account to the credit of the school district, and deposited it with the Citizens ’ Bank, who presented the draft to the drawee, and received from it a draft on appellant for the amount of the balance. Payment of this draft was refused by appellant, as it overdrew the account of the Bank of Commerce. When advised that its draft on appellant had been refused, the Bank of Commerce closed its doors, and the Bank Commissioner took charge. Prior to the closing of its doors, the Bank of Commerce had paid one check of the school district drawn on this fund for approximately $1,000. The school district presented its claim to the Bank Commissioner, which was allowed as a common creditor, and has been paid certain dividends, reducing the amount in such sums.

The court found against appellant, and entered a decree accordingly. In doing so we think the court erred. Act 182 of 1927, p. 634, provides' that improvement districts, before depositing their funds in any bank, trust company, etc., shall require of such depository a surety company bond conditioned for the prompt payment of all funds of such district. It further provides that, in lieu of the surety bond, the depository may deposit with some other bank, in escrow, the bonds mentioned in the act, to guarantee the repayment of the funds to the district or to its order. School district funds are not included in this act. In Ark. & La. Highway Imp. Dist. v. Taylor, 177 Ark. 440, 6 S. W. (2d) 538, we held that the above act did not authorize a bank to secure an improvement district deposit by a deposit of assets other than is mentioned in the act, and that a pledge of its bills receivable as security for the district’s deposits was unauthorized and void. We think this case in principle controls the case at bar in so far as the attempt to require the Bank of Commerce to pledge its assets to secure the deposit of the school district is concerned, and that, had it done so, the Bank Commissioner could, on taking charge for liquidation, have successfully maintained an action to recover the unauthorized misappropriation of such assets, just as was done in the above-mentioned case.

Furthermore, we are of the opinion that the above resolution of the school board did not constitute appellant the agent of the district to see that all depository banks put up collateral before distributing the fund in accordance with the resolution, nor direct it to do so. The resolution of the board on its face authorizes the Merchants’ & Planters’ Bank to accept from the Bankers’ Trust Company the bonds in question, and to deliver them to the Merchants’ & Planters’ Title & Investment Company and the Simmons National Bank, on the payment to it of $99,246, to be deposited in the four banks named. It does not in terms direct appellant bank to make these deposits, but it actually did make them. The last paragraph of the resolution authorizes the president and secretary of the board to withdraw the funds from the different banks “as needed in building constructions in practically equal aanounts, leaving the balances in each bank as nearly the same as possible.” That sentence is unquestionably a direction to the officers of the board, and has no reference to any duty of appellant bank. The next sentence in that paragraph provides for the depositories to pay the district interest on daily balances at 2 per cent. That unquestionably constitutes an instruction to the officers, and has no reference to appellant’s duties in connection with such deposits. The last sentence provides “that the funds in each of said depositories shall be secured as required by act No. 182 of the Acts of 1927. ’ ’ Coming in the same paragraph as the two previous instructions to the officers of the board, we think this sentence also refers to the duties of the officers of the board, and not to any duty of appellant bank. In other words, it made it the duty of the officers of the board to see that each hank gave security for its portion of the deposits, and that the resolution therefore did not authorize or direct appellant to assume this undertaking. That appellant so construed the resolution is shown in its letter of May 23 to the school district, heretofore quoted. This letter advised the school district that it had deposited the proceeds of the sale of the bond issue with its own bank and the other three banks mentioned, and inclosed duplicate deposit slips covering each deposit. It furthermore particularly advised the board that it had “placed in escrow $'25,000 of the above bonds to protect the deposit we have placed in our bank, for your account. ’ ’ If appellant had undertaken to obtain bonds from the other depositories to secure their deposits, it would undoubtedly have mentioned this fact to the hoard in this letter. The board therefore was bound to take notice from this letter that only the amount of its deposit was secured, so far as it was concerned. We think the evidence shows that the board construed the resolution just as appellant bank did. Only two or three days later it took up with the cashier of the Dank of Commerce the question of its collateral to secure this deposit, and the cashier asked for and was given time in which to do so. The Bank of Commerce then began negotiations with appellant to secure from it a loan of bonds to be deposited in escrow to secure its deposit, after it had offered and the board had refused to accept a deposit of bills receivable. The board thereafter continued negotiations with the Bank of Commerce in an effort to get the matter adjusted, while it in turn was negotiating with appellant to assist it, and not until the board’s letter to the Merchants’ & Planters’ Bank, under date of June 17, was it advised that the board was expecting it to see that the Bank of Commerce secured its deposit. Even at that time it could have withdrawn its deposit from the Bank of Commerce had it seen proper to do so, but the board waited until eiaffit davs later, June 25. to attempt to withdraw its deposit, during all of which tirrm it was still hoping that the Bank of Commerce would make arrangements with appellant for the necessary bonds. Again, the school board drew a check for $967.35 against its deposit in the Bank of Commerce, well knowing at the time that it had not secured its deposit, thereby ratifying the action of appellant in making the deposit without security.

After a careful consideration of all the evidence and the circumstances surrounding the transaction, we have reached the conclusion that the findings and decree of the chancery court, holding appellant liable for the balance due on this deposit, are against the preponderance of the evidence, and that the judgment must be reversed.

The judgment will therefore be reversed, and the cause dismissed here.


source: Caselaw Access Project

license: Public Domain

text:
    Steed v. Wright.
    Opinion delivered June 17, 1929.

      Reinberger & Reinberger, for appellant.

      Bridges & McGaughey, for appellee.
   McHaney, J.

Appellees sued appellant to recover damages for personal injuries sustained in an automobile accident on the night of June 2, 1928, on the Tamo pike, southeast of Pine Bluff, Arkansas. There was a verdict and judgment in favor of appellees as follows: Mrs.. Virginia M. Wright, $5,000; William P. Wright, $300; William P. Wright as next friend of William P. Wright, Jr., $1.

1. . Por a reversal of the case appellant first urges that the judgment is without sufficient evidence to support it. In this appellant is in error, as there appears to he ample testimony in the record to take the case to the jury on the question of appellant’s negligence. Taking the evidence in its most favorable light to appellees, which we must do in determining this question, the facts are that Mr. Wright, his wife and little son were driving from Pine Bluff to their home, on a dark and rainy night, at a moderate rate of speed, with the lights on their car burning, and on the right-hand side of the road; that they were met by the car of appellant, going towards Pine Bluff at a rapid and excessive rate of speed, without lights, and on the wrong side of the road; that the ditches on each side of the road were full of water from the excessive rains; that appellee, William P. Wright, saw appellant’s car approaching him on the wrong side of the road, and, in order to avoid a head-on collision, swerved his car to the left, as he could not swerve to the right without going into the ditch, three or four feet deep, full of water, in an unsuccessful attempt to avoid a collision; and that his car was struck by that of appellant as he attempted to get out of his way to the left. Also appellant admitted that it was his fault, several witnesses testifying to his admissions shortly after the accident occurred. This was sufficient evidence to take the question of appellant’s negligence to the jury.

2. It is next insisted that instruction Ño. 1, given at the request of appellees, is not supported by any evidence in the case, and was therefore erroneous. This is a lengthy instruction, and we think it would serve no useful purpose to set it out. We have examined it carefully, and find it and other instructions given more favorable to appellant than he was entitled to.

. 3. It is next said that William P. Wright, Jr., the infant son, should not have been permitted to recover, as there was no proof that he sustained any damage whatever. There was a recovery in his favor for only $1, a nominal sum. The proof shows that he and the other occupants of the car were thrown out upon the ground, and Mrs. Wright testified that she saw blood on Junior’s head, but that he was not seriously hurt. We think this sufficient to sustain a recovery for at least nominal damages.

4. It is next said that instruction No. 8 was wrong because it permitted the jury to consider Mr. Wright’s expenses for doctors’ bills and medical bills, when neither Mr. Wright nor the doctor were able to testify exactly what this amount was. Dr. Simmons testified that he had a bill against Mr. Wright for something over $400, and at least one-half of it was for treatment of this injury to Mrs. Wright. This justified a recovery of at least $200, and the testimony further showed that appellee had been out some expense for medical bills, the exact amount of which he did not know, as he kept no account of it. Furthermore, his wife was confined to her bed for a period of ten days, and more than a month about the house, which justified a recovery in Mr. Wright’s favor for loss of consortium of Ms wife. We cannot therefore say that a recovery of $300 was excessive in his favor.

5. It is next insisted that the judgment in favor of Mrs. Wright for $5,000 is excessive and appears to have been rendered as the result of passion and prejudice on the part of the jury. There is nothing in the evidence to show that the jury was swayed by passion and prejudice; but counsel say that the jury were influenced in their verdict by the very attractive and winsome ways of Mrs. Wright when she appeared on the witness stand in her own behalf. Mrs. Wright is referred to very gallantly by counsel as a very beautiful and attractive young matron in the community. Conceding this to he true, although not reflected by the record, it cannot be said to be a fault, but on the contrary a very commendable virtue, and one that should not penalize her before a jury of men who are merely human. The evidence showed that Mrs. Wright was thrown from the automobile into a ditch full of water, and .would have drowned but for the fact that her husband was able to rescue her. As heretofore stated, she was ten days in bed, and more than a month confined to her home, during which time she suffered great pain and inconvenience. She also received cuts upon her hand, her arm and her nose, leaving disfiguring scars. But the worst injury, as shown by the evidence, in addition to a permanent lateral curvature of the spine and a lowering of one shoulder two inches on account thereof, was that the injuries she received and the fright and shock she sustained caused the total cessation of the functions of the milk glands in both breasts, depriving her infant child, a babe in arms, of the source of food supply which nature had provided, thereby endangering the health and life of that infant and any others that she may bear in the future. Therefore two permanent injuries were received by Mrs. Wright,, either of which, taken in connection with the other lesser injuries, was sufficient, in our judgment, to sustain the recovery.

6. It is finally insisted that the case should be reversed because it is said that the jury arrived at its verdict by lot. One juror was -offered, whose testimony tended to show that the jury reached a quotient verdict, and not by lot. The juror offered to testify, but the court excluded it, that the jurors were all agreed that a verdict of some amount should be rendered, and that they wrote on separate slips of paper what they thought the amount of the verdict should be, which was totaled and divided by twelve. The testimony of this witness does not show that they agreed in advance- to be bound by such procedure, and were not -bound, as the result following that procedure amounted to $4,600. Thereupon, after some dispute and argument, the jury finally agreed upon a $5,000 verdict. Under § 3220, O. & M. Digest, “a juror cannot be examined to establish a ground for a new trial, except it be to establish, as a ground for a new trial, that the verdict was made by lot. ’ ’

Conceding that this statute applies to civil cases, the evidence of the juror -did not tend to establish that the verdict was determined by lot, under the rule announced in Speer v. State, 130 Ark. 357, 198 S. W. 113, and Snow v. State, 140 Ark. 7, 215 S. W. 3.

We find no error, and the judgment is affirmed.

       In Ward v. Blackwood, 48 Ark. 396, the court held that this statute did not apply to civil cases. (Reporter).


author: Butler, J. Humphreys, J.,

text:
    Fitzhugh v. Leonard.
    Opinion delivered June 17, 1929.

      Hill, Fitzhugh & Brizzolara, Coleman & Reeder, 8. M. Casey and Shields M. Goodwin, for appellant.

      Oscar Ellis, H. A. Northcutt, J. H. Carmichael and J. Paul Ward, for appellee.
   Butler, J.

This is a case where Leonard, the appel-lee, undertook to sell for the appellants a farm for the sum of $17,000, and to take in exchange other property, with the understanding that he, appellants, and one Head-stream were to dispose of the property received in exchange for the farm, and he was to receive as his compensation one-third of the amount realized in excess of $17,000. The exchange of properties was made between appellants, Fitzhugh and Goodnight, and Garner Brothers, the property received from Garner Brothers being a farm of the agreed value of $6,000, $4,732.27 in cash, and notes and a stock of merchandise at Calico Bock, which was taken over at ninety cents on the dollar, and at that figure amounted to $11,869.54, and certain fixtures of the agreed value of $3,398.19. Leonard brought suit for his commissions, and recovered, in an action in the Izard County Circuit Court, a verdict for $3,000, and the court rendered .judgment for that amount. From that verdict and judgment an appeal was prosecuted to this court, where, on the 28th day of November, 1927, the case was reversed, and remanded, because at that time it was impossible to determine what, if any, profit Fitzhugh had made on the sale of the farm, as the stock of merchandise had not then been disposed of, the court holding that, before Leonard could recover, he must show by a preponderance of the testimony that the amount realized from the property received in exchange of the farm amounted to more than $17,000. Fitzhugh v. Leonard, 175 Ark. 580, 299 S. W. 1006.

On the second trial, from which this appeal is prosecuted, Leonard filed an amendment to his complaint, alleging, in substance, that, under the agreement, he was to assist appellants in disposing of the merchandise, and that appellants took complete and exclusive charge of same, and refused to allow appellee to take any part in the disposition of the merchandise or in the expense attached to the disposition of the same, which made it difficult for him to ascertain the amount received, and that the entire stock of goods had been disposed of at or before that time. He also alleged that the goods were improvidently disposed of, and that, had the appellant used ordinary business care and judgment in the disposition of the merchandise, a greater amount would have been realized therefrom, and that the total amount which had been or should have been realized from the merchandise and other property was greatly in excess of $17,000. The trial resulted in a verdict and judgment for appellee in the sum of $1,993.

While numerous assignments of error are made by appellants in tbeir motion for a new trial, we will pass upon only such as are called to our attention in their argument and brief.

The appellants contend that the court erred in permitting testimony to he introduced to the jury relative to the value of the G-arner stock of goods and what it should have brought, on the theory that, according to the decision of this court on the first appeal, this evidence was not material, and tended to confuse the jury as to the real issue. As we view this case, the appellants’ position on this question is unsound. The issue was, what was the amount received by appellants for the G-arner stock of goods? This evidence was material as circumstances tending to shed light upon that question.

Complaint is made that the court declined to permit Mr. Fitzhugh to testify as to the value of the fixtures. The fixtures had been sold to Jeffery by Fitzhugh at an agreed price, which appears to have been the same value as fixed between G-arner and Fitzhugh in their trade; this evidence would therefore have been immaterial, as there is no dispute as to the fixtures having been sold at a fair price. If Fitzhugh had got more for them than they were worth, he is certainly in no position to complain.

Appellants’ contention that prejudicial error was committed by the court in refusing to permit witness Marsh to state how much money was paid out for the purchase of new stock, is untenable, because this was testified to by Mr. Fitzhugh without objection, he having stated that, between the time he bought from Garner and sold to Jeffery, he bought $4,300 of new goods.

It is evident that Mr. Fitzhugh had no first-hand knowledge of how the stock of merchandise was disposed of, except in a general way and as reported to him by his agents, and therefore was in no position to state that the goods were sold for as good a price as could be obtained, for, in his testimony, in answer to the question: “What did you do towards getting rid of that stock of goods?” lie said, “I could not handle it. I told Dock Headstream, ‘If you -will go run the business and employ the hands’ 1 would trade, and would loan him a clerk, Mr. Chaney, to run up once in a while and look it over.” The court therefore properly refused to permit him to testify that the goods were sold for as good a price as they could get for them, as this conclusion would have been necessarily founded on hearsay. And Headstream testified for appellant that the goods were sold for the best price obtainable.

We think that whatever error the court might have made in the refusal to permit a witness to testify to any fact was cured by the .admission of other testimony of equal probative value.

The exclusion of competent evidence, while error, is not prejudicial where other evidence of equal probative value, tending to establish the same fact, is admitted. Harris v. Ashdown Potato Curing Assn., 171 Ark. 399, 284 S. W. 755; Payne v. Thurston, 148 Ark. 456, 230 S. W. 561.

The appellants also insist' that instruction No. 8, requested by the appellee and given by the court, was error, the instruction being as follows: “If you believe that the defendant did not use reasonable business judgment and acumen in disposing of the G-amer merchandise and fixtures, then plaintiff is not bound by the amount which defendant actually received, but you may find what amount should have been received, if handled in a reasonable and business-like way.”, The reason given by the appellants in contending that this instruction was reversible. error was “there is not one scintilla of evidence to support it.” The court is of the opinion that there was some evidence to support this instruction, and that its giving was not error.

Appellants also contend that the court should have given a peremptory instruction to the jury directing a verdict for the defendants. This seems to be the real ground upon which the appellants stand for reversal of this case, as they and the appellee are practically agreed that the determination of this case rests upon this question of fact, as stated by the appellants in their brief at page 43: “What did appellants receive in money and property for their Mason Bend farm? If they received more than $17,000, then the appellee is entitled to one-third of the excess; if they received less than $17,000, appellee is entitled to nothing.” Appellants insist that the uncontradicted evidence shows that less than $17,000 in money and property was actually received by the appellants, and the court erred in refusing to direct a verdict for appellants. This question was submitted to a .jury under proper instructions, and the question now presents itself to this court whether there was any testimony tending to sustain the- appel-lee’s claim. This has given the court much concern, but, after a careful examination and analysis of the record, we have concluded that there was sufficient evidence, direct and circumstantial, to warrant the trial court in submitting the case to the jury. This case has been twice presented to a jury, which each time has found the issues in favor of the appellee, and we feel that it would serve no useful purpose to set out the evidence adduced at the trial of the case. The judgment must be affirmed because of the well-settled rule of this court that "he verdict of the jury will not be disturbed if there is any substantial evidence at all for their consideration.

Humphreys, J.,

(dissenting). Mr. Justice Kirby joins me in dissenting from the majority opinion upon the ground that no substantial evidence appears in the record tending to show that appellee received more than $17,000 for the stock of goods and other property received in exchange for the farm.


author: Butler, J.

text:
    Consolidated School Distinct No. 2 v. Special School Distinct No. 19.
    Opinion delivered June 17, 1929.

      Jeff Bratton, for appellant.

      Bloch & Kirsch, for appellee.
   Butler, J.

This cause was tried in the court below upon the following agreed statement of facts:

Plaintiff, Rural Special School District No. 19 (hereinafter referred to as District No. 19) is a rural special school district of Greene County, Arkansas, and the defendant, Consolidated School District No. 2 (hereinafter referred to as District No. 2) is a consolidated school district of Greene County, Arkansas, and said districts lie adjacent to each other; that the petition herein presented and forming the basis of the action by the county board of education of Greene County, Arkansas, was presented to said 'board on said day; that the proceedings initiated by said petition were meant to be taken pursuant to the provisions of act No. 156 of the 1927 Acts of the General Assembly, being an act. to amend § 8823 of Crawford & Moses’ Digest of the Statutes of the State of Arkansas,' and for other purposes; that no notices, as provided for in § 8821 of Crawford & Moses’ Digest, were given or posted in either District No. 19. or District No. 2, and that the petition upon which the board acted, while signed by a majority of the qualified electors of the territory sought to be and ordered detached by the county board of education from District No. 19 and attached to District No. 2, was not signed by a majority of the electors in District No. 19 or District No. 2, nor by a majority of the two districts combined; that the affidavit for appeal from the order of the county board of education is made by E. L. Owen, who is a member of the board of directors of District No. 19, and is made in behalf of himself and the remaining electors, landowners and patrons in said school district, and that the petition filed with the county board on October 13, 1928, the order of said board made pursuant to said petition on the said 13th day of October, 1928, and now of record in board of education record No. 1, page 154, of the board of education records of Greene County, Arkansas, the ¡affidavit of E. L. Owen, filed on the 2d day of November, 1928, the bond filed on the same day and approved by the county board of education on the 10th day of November, 1928, and the order ¡of the-county board of education granting the appeal, made on the 10th day of November, 1928, and now of record in board of education record No. 1, pages 158 and 159 of the records of the county board of education of Greene County, Arkansas, are to be considered and treated as part of this agreed statement of facts the same as if set out in-full herein.

A judgment was rendered by it, setting aside the order of the county board of education detaching a portion of the. territory of District No. 19 and attaching it to District No. 2, and the court made the following declarations of law:

“First. The court declares the law to be that, in proceedings to change the boundaries of school districts by transferring territory from one school district to another, brought under act No. 156 of the Acts of 1927, which act is amendatory of § 8823- of Crawford & Moses ’ Digest, notice must be given by the parties proposing the change by posting handbills in four or more conspicuous places in each district to be affected, one of said notices to be placed on the public school building in each affected district, and that all of said notices must be posted thirty days before the meeting of the county board of education at which the petition is to be presented, as is required by § 8821 of Crawford & Moses’ Digest; that by reason of the failure of the petitioners to post any notice in either Special School District No. 19 or Consolidated School District No. 2, as required by said § 8821 of Crawford & Moses’ Digest, the county board of education of Greene County, Arkansas, was without jurisdiction to hear said petition, and its order made pursuant thereto is therefore null and void.
“Second. The court declares the law to be that, in proceedings brought to change the boundary lines of school districts by transferring, territory from one district to another adjacent district, the petition upon which the county board of education may act is insufficient if signed only by a majority of the qualified electors in the territory actually to be transferred, but that said petition must be signed by a majority of the combined electors of the district from which the territory is to be taken and to which the territory is to be added; that, since the petition in the proceedings before the court is signed only by a majority of the electors in the territory to be transferred from Rural Special School District No. 19 to Consolidated School District No. 2, and not by a majority of the combined electors of both Rural Special School District Ño. 19 and Consolidated School District No. 2, nor by either a majority of the electors in District No. 19 nor a majority in Consolidated School District No.. 2, the court finds that said petition was insufficient to form a basis for action by the county board of education, and that therefore its order made thereon is null and void, and should be set aside.
‘ ‘ Third. The court declares the law to be that E. L. Owen, as a member of the board of directors of Special School District No. 19 and a citizen and taxpayer in said district, although not a resident of that part of said district which was detached and transferred to Consolidated School District No. 2, had a right to appeal in behalf of himself and the other taxpayers and patrons in said school district, and that therefore the motion of the defendant to dismiss the appeal is denied.”

It is contended by the appellant that the court erred in its declaration of law because act No. 156 of the Acts of 1927, by reason of its peculiar language, repealed §§ 8821 and 8823 of Crawford & Moses’ Digest, and that by the use of this language — “a majority of the qualified electors in the territory to be affected” — it was intended that only those who actually resided within the territory to be detached were qualified or necessary on the petition to give the board of education jurisdiction to make the change, and that the inhabitants of the territory remaining would be excluded from joining in the petition.

Section 8821 of Crawford & Moses’ Digest is as follows:

“When a change is proposed in any school district, notice shall be given by the parties proposing the change by putting up handbills in four or more conspicuous places in each district to be affected, one of said notices to be placed on the public school building in each affected district. All of said notices to be posted thirty days before the convening of the court to which they propose to present their petition; said notices shall give a geographical description of the proposed change.”

Section 8823 of Crawford & Moses’ Digest is as follows:

“The comity board of education shall have the right to form new school districts or change the boundaries thereof upon a petition of a majority of all the electors residing upon the territory of the districts to be divided. ’ ’

Section 1 of act No. 156 of the Acts of 19'27 reads as follows:

“That § 8823 of Crawford & Moses’ Digest of the Statutes of the State of Arkansas be amended to read as follows: ‘Section 8823. Upon a petition being filed with the county board of education, signed by a majority of the qualified electors in the territory to be affected, said county board of education of any county within the State of Arkansas shall have the right to form new school districts and to change the. boundary lines between any school district heretofore formed, where, in the judgment of such board of education, it would be for the best interest of all parties affected; provided, however, that no change shall be made that would impair any outstanding indebtedness of any school district now formed.’ ”

Section 2 of Act 156 is as follows:

“This act shall not repeal or affect act No. 247 of the Acts of the General Assembly of 1915, and is cumulative to all other laws and parts of laws defining the powers and prescribing the duties of county boards of education and of school districts, boards of directors thereof, and all other officers and persons mentioned in this act; and, except in cases of irreconcilable conflict herewith, it shall .not be so construed as to repeal any other law or part of a law; and any and all acts and proceedings heretofore done and had by county boards of education are hereby ratified and declared valid.”

We think that the' language of act No. 156 of the Acts of 1927 does not justify the appellant in its contention, for, by the language of § 2 of that act, it is expressly stipulated that it should not be construed so as to repeal any law or part of law except in cases where there would be an irreconcilable conflict with its terms. As we see it, tlie language of act No. 156 is broader in its terms than § 8823, supra, which it amends, and requires, where the change is made in the boundary lines between any school districts formed, that a majority, not only of the territory actually-to be detached from one and added to the other, but also a majority of the qualified electors in the territory affected by the change, is required. That, to our mind, is the clear meaning of the words used. Certainly, in this case, District No. 19 would be affected, for, by the change of the territory, its revenue would be diminished; District No. 2 would be affected, because it would be burdened with an additional number of children to be educated, which might be entirely out of proportion with the additional revenue accruing to it. It was the intention of the Legislature that no change of this hind should be made, except with the consent of all parties concerned.

Section 8823 gave the county board of education the right to change the boundaries of any school district upon petition of a majority of all the electors residing upon the territory of the districts to be divided. That section was construed and special reference made to that part of it providing for a majority of the electors in the district to be divided in the case of School District No. 45 v. School District No. 8, 119 Ark. 149, 177 S. W. 892. In that case a part of the territory of District No. 45 was sought to be added to District No. 8. There was no change in the boundaries of District No. 8 except by the addition of territory, while District No. 45 was divided, a part of its territory being detached and added to District No. 8. The court below, in that case, ordered the change on a petition which contained a majority of the aggregate number of electors of both districts, but all of the petitioners save one resided in District No. 8. This court reversed the order of the court below, holding that, inasmuch as District No. 45 was the one divided, it was necessary for a majority of the qualified electors residing in that district to have signed the petition. Counsel for the appellee, School District No. 8, contended that the meaning of the language of the statute was that a petition of the majority of each of the districts to be affected was required, but this court held that such an interpretation called for the substitution of the word “affected” for the word used in the statute, which had an altogether different meaning, and was broader than the words used in the statute, and that, although the electors of District No. 8 might be affected by the change, they could not be counted on the petition, and that there^fore the petition in that case did not comply with the requirements of the statute.

As we have stated, the inhabitants of the strip of territory actually detached from one district and added to the other were not the only ones affected by the prayer of the petition and order of the court, but also the inhabitants of District No. 19 and District No. 2, so that, under the plain meaning of the statute and the authority of School District No. 14 v. County Board of Education, 177 Ark. 734, 7 S. W. (2d) 798, and Manley v. Moon, 177 Ark. 260, 6 S. W. (2d) 281, we hold that a petition of a majority of the electors in the territory affected was required. We are o'f the opinion also that the position of counsel for the appellant, that § 8821, supra, was repealed by act No. 156 of the Acts of 1927, is untenable,, and that that section remains unchanged, because there is no conflict between its terms and the act of 1927. It follows that District No. 19, being affected by the judgment of the court, it was a party in interest, and entitled to prosecute an appeal from the ruling of the county board of education.

The trial court correctly declared the law, and its judgment is in all things affirmed.


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

text:
    H. G. Pugh & Company v. Ahrens.
    Opinion delivered June 24, 1929.
   Hart, C. J.

PI. G. Pugh & Company, a corporation, brought this suit in equity against J. D. Ahrens to enjoin him from enforcing- a judgment in the circuit court, on the ground that it was procured by fraud. The facts on which the relief is based may be briefly stated as follows:

J. D. Ahrens sued H. G. Pugh & Company, a corporation, of which H. G. Pugh is president, to recover an amount alleged to be due for premiums on two policies of insurance upon the life of its president. Ahrens recovered judgment in the circuit court, which was affirmed on appeal. H. G. Pugh & Co. v. Ahrens, 178 Ark. 230, 10 S. W. (2d) 873. Ahrens was a witness in his own behalf, and testified as to the contract of insurance and the circumstances attending the same. This court held that, in an action by an insurance agent to recover from the insured for premiums advanced by the agent, the insured having been in possession of the policies for several months before their cancellation, by retaining possession of the policies for so long a time after their delivery to him, must be held, as a matter of law, to have accepted the policies. It was alleged in the complaint in the present case that said J. D. Ahrens had sworn falsely in the case in the circuit court, and the particulars in reference to said false testimony are fully set forth.

The chancery icourt overruled a motion of the plaintiff to transfer the case to the circuit court, and sustained a plea treated by the court as a demurrer to the complaint. It was therefore decreed that the complaint should be dismissed for want of equity, and the plaintiff has appealed.

Walter M. Purvis, 'for appellant.

Fred A. Isgrig and Philip McNemer, for appellee.

Hart, C. J.,

(after stating the facts). The opinion' of the chancery court was correct. The complaint in the case at bar asks that a judgment between the parties in the circuit court be enjoined as having been procured by fraud. Ahrens sued Pugh & Company to recover judgment for an amount alleged to be due for premiums on two insurance policies, and recovered judgment. He was a witness for himself, and his testimony sustained his right to recover. In the present case it is alleged that his testimony was false, and the falsity of his testimony in the circuit court is made the 'basis of plaintiff’s cause of action in the case at bar.

It is the settled law of this State that the fraud which will justify the setting aside of a judgment or decree of a court must be such as prevented the unsuccessful party from, fully presenting his case, or which operated as a fraud or imposition upon the jurisdiction of the court. Mere false testimony is not enough, if the disputed matter was an issue in the case in which it is claimed that it was given. The truth or falsity of the testimony of Ahrens was a material issue in the circuit court case.

It has been well said that the mischief of retrying every case in which the judgment or decree rendered on false testimony, given by perjured witnesses, would be greater, by reason of the endless nature of the strife, than any compensation from doing justice in individual oases. United States v. Throckmorton, 98 U. S. 61; Bank of Pine Bluff v. Levi, 90 Ark. 166, 118 S. W. 250; Johnson v. Johnson, 169 Ark. 1151, 277 S. W. 535; Gassady v. Norris, 118 Ark. 449, 177 S. W. 10; Lambie v. W. T. Raivleigh Co., 178 Ark. 1019, 14 S. W. (2d) 245; Gipson v. No Fence District No. 2 Lincoln County, 178 Ark. 604, 12 S. W. (2d) 14.

It follows that the decree must be affirmed.


author: Hart, C. J.

text:
    Browne-Brun Wholesale Grocery Company v. Hinton.
    Opinion delivered June 24, 1929.

      Joseph R. Brown, for appellant.

      Cravens S Cravens, for appellee.
   Hart, C. J.

Appellant sued appellee for $584.55. The particulars upon which the suit is based will appear from our statement of facts.

Appellee denied owing appellant anything, and, by way of cross-complaint, sought to recover $1,000 from appellant for salary due him. According to the evidence for appellant, it is a corporation engaged in the wholesale grocery business at Fort Smith, Arkansas. Fred Browne was its president and general manager, and Walter L. Hinton was a director, and also assisted Browne in conducting the affairs of the company. On the 18th day of December, 1926, Hinton sold his stock in the company to Frank Bran, and quit its employment. As a part of the transaction Fred Browne, as president, signed a written instrument in which he released W. L. Hinton from any liability whatever on account of the company. When Hinton sold out to Bran he had already collected his salary for the month of December, and owed the company $90 for overdrawn salary. Browne demanded payment of this sum, and Hinton refused to pay him. Hinton also collected $50 rebate on milk bought by the company, and converted this sum to his own use. He also collected brokerage on coffee sold by appellant for a New Orleans firm in the sum of $444.55, and converted the same to his own use.

Browne denied that the company owed Hinton any sum whatever for back salary.

W. L. Hinton was a witness in his own behalf. According’ to his testimony, he offered to continue in the service of appellant for the balance of the month of December after he sold his stock to Brun, and Browne refused to let him icontinue in its employment. He stated that the $50 claimed as a rebate was given him by the milk company to be paid to the salesmen eng’aged in selling the milk, and that the money was used for that purpose, and no part of it was kept by him. He admitted collecting and retaining the commission for the sale of the coffee, but státed that this was a personal transaction of his own, and that appellant had no part in it. Browne refused to take out Federal brokerage license for appellant to sell the coffee, and told appellee that he might act on his own personal account in doing so.

The jury returned a verdict for appellee on the complaint and for appellant on the cross-complaint. From the judgment rendered appellant has duly prosecuted an appeal to this court.

The first assignment of error is that the court erred in instructing- the jury that, if the representative of the milk company paid appellee $50 for advertising purposes, and that this sum was expended for those purposes, appellant could not recover upon this item-. There was no error in giving this instruction. It merely presented to the jury the theory of appellee on that point. He testified positively that the $50 was paid him by the milk company and was expended by him through the salesmen in selling the milk. This was done to advertise the milk, and no part of the $50 was used or kept by appellee. Appel-lee was an assistant manager of appellant, and expended this money for its benefit in the discharge of his duties.

It is next insisted that this instruction is in conflict with an instruction given ’by the court on the same phase of the case at the request of appellant. We do not deem it necessary to set out the instruction. It is sufficient to say that appellant claims that the instruction told the jury that appellee could not keep the $50 even if he received it for advertising purposes. Conceding that the instruction is susceptible of this construction, it was not prejudicial to appellant. It was more favorable to appellant than it was entitled to. It is plain that, if appellee received the $50 from the.milk company for advertising purposes and used it in advertising the milk which was sold by appellant, this was done for the benefit of appellant, and the instruction given at the request of appellant on this point was not correct. It is well settled that an appellant cannot complain because the jury ignored an instruction given at his request that was more favorable than he was entitled to. Henderson v. State, 91 Ark. 224, 120 S. W. 966; Sibeck v. McTiernam, 94 Ark. 1, 125 S. W. 136.

It is next insisted that the court erred in instructing the jury that, if appellant, through its president, was aware that appellee was receiving the brokerage on coffee, and thereafter executed the release in evidence, then appellant could not recover. It is claimed that this instruction is inherently wrong because the president was not authorized to make contracts for the corporation unless given such power under the by-laws. We do not agree with appellant in this contention. Browne was president and general manager of appellant. This gave him authority to execute contracts which were necessary to the conduct of the business of appellant. The release was a contract which was necessary to carry on the business, and Browne had the authority to execute it. Wales-Riggs Plantations v. Caston, 105 Ark. 641, 152 S. W. 282; C. L. Kraft Co. v. Grubbs, 116 Ark. 520, 174 S. W. 245; and Southern Bauxite Co. v. Brown-Pearson Cash Feed Store, 172 Ark. 117, 288 S. W. 377.

Finally it is insisted that the court erred in refusing to sustain appellant’s iplea of limitation to appellee’s cross-complaint. The verdict of the jury was in favor of appellant on this phase of the case. Hence no prejudice resulted to appellant. It is well settled that a reversal will not 'be granted for errors which are not prejudicial to the rights of the complaining party. Thos. Cox & Son Machinery Co. v. Forshee, 96 Ark. 156, 131 S. W. 454.

We find no prejudicial error in the record, and the judgment will therefore be affirmed.


author: Smith, J.

text:
    First National Bank of Corning v. Wells River Savings Bank.
    Opinion delivered June 24, 1929.

      F. G. Taylor, for appellant.

      John L. Bledsoe, for appellee.
   Smith, J.

The Western Clay Drainage District was created by a special- act of the 1907 General Assembly, and, pursuant thereto, assessments of benefits’were made and the roll thereof was filed, as provided by the act, with the recorder of deeds of Clay County, on December 24, 1912. A pledge of the betterments was made as authorized hy the act to secure the payment of a bond issue by the improvement district, and, as was said in the case of Hopson v. Oliver, 174 Ark. 659, 298 S. W. 489, the pledge was in the nature of a first mortgage lien inuring to the benefit and protection of the holders of the bonds of the improvement district.

G. W. Transue owned a tract of land in the improvement district, upon which he obtained a loan on February 8, 1923, from the New England Securities Company. This loan was evidenced and secured by two deeds of trust. The first was executed to T. C. Alexander, trustee, to secure the principal loan, and the other, which was made junior to the first, was. given to secure the commission of the agent in negotiating the loan, and it was also executed to Alexander as trustee.

Default was made in the payment of the indebtedness secured by the second deed of trust, and suit was brought to foree lose it. The First National Bank of Corning intervened in this suit, and was made a party to it. The bank alleged that it had paid the drainage taxes on the land for the years 1924 and 1925, and had also paid the State and county taxes in 1925 for the year 1924, amount-' ing to $21.38, and it was prayed that it be adjudged and decreed that the bank, by paying these taxes, had acquired the right to be subrogated to the prior lien of the improvement district to the extent of the taxes paid, and also that the bank be decreed a lien, under § 10053, C. & M. Digest, for the State and county taxes.

The chancellor denied- the relief prayed, except that a lien was decreed for the amount of the State and county taxes, and there was an appeal and cross-appeal from that decree.

Upon the appeal we held that the court had properly refused to grant the hank relief by subrogation, hut it was held on the cross-appeal that the court had erroneously decreed the hank a lien for the amount of the State and county taxes paid by it. The opinion is found reported under the style of First National Bank v. New England Securities Co., 176 Ark. 1181, 6 S. W. (2d) 12, where the facts out of which the litigation arose are fully stated and the reasons for the decision is given.

The first deed of trust above referred to was duly assigned by the New England Securities Company to the Wells River Savings Bank, and, default having been made in the payment of the indebtedness there secured, this suit was brought to foreclose that deed of trust. The First National Bank was made a party to this suit, under the allegation that it had some claim to the land adverse to the owner of the deed of trust, and the bank filed an answer in which it set up practically the same claim to the right of subrogation which it had attempted to assert in its intervention filed upon the foreclosure of the second deed of trust. There are some differences in the facts, but these differences are not of controlling importance. It appears therefore that we are virtually asked to try again a question decided on the former appeal; but, as we are convinced of the correctness of the decision in that case, we adhere to it, and it is controlling' here.

The chancellor denied the right of subrogation as prayed, and, as that decree accords with the view expressed on the former appeal, it must be affirmed, and it is so ordered.


author: Smith, J. Humphreys, J.,

text:
    Jumper v. McCollum.
    Opinion delivered June 24, 1929.

      J. Wendell Henry, for appellant.

      R. W. Robins, J. G. & Wm. J. Clark, for appellee.
   Smith, J.

An act, No. 64, was passed at the 1929 session of the General Assembly which effected substantial changes in the law governing the organization and administration of local improvement districts in cities and towns.

A street improvement district was organized in the city of Conway, under the terms of this act, within less than ninety days after adjournment of the General Assembly which passed it, and the validity of the district depends upon the question whether act 64-was in force at the time the district was organized, as the proceedings for tha-t purpose did not conform to the statute which act 64 amends. No other question is involved on this appeal.

The act contains the following emergency clause:

“Section 23. It is ascertained and hereby declared that, by reason of the inability, under present laws, to extend water mains and repair water plants, there is great danger of conflagration, that, by reason of the inability to extend electric light plants, there is great danger to the public peace and safety, owing to the darkness of the streets, and that, by reason of the inability to extend and repair sewers, there is great danger to the public health, and that, for these reasons, it is immediately necessary that this act should go into operation, and it is therefore declared that an emergency exists, and this act shall be in force and effect from and after its passage.”

Appellant, as a property owner in the district, insists (a) that the language used in the emergency clause of act 64 is not sufficient to state an emergency within the meaning of the Constitution, and (b) that there is, in fact, no such emergency as that stated.

The original Initiative and Referendum Amendment provided that: “The second power (reserved to the people) is a referendum, and it may be ordered (except as to laws necessary for the immediate preservation of the public peace, health or safety) either by the petition, signed by five per cent, of the legal voters, or by the legislative assembly as other bills are enacted.”

In construing this constitutional amendment in the case of Hanson v. Hodges, 109 Ark. 479, 160 S. W. 392, it was held that all acts of the General Assembly are subject to the referendum except such laws as are necessary for the immediate preservation of the public peace, health and safety, but that it was a question exclusively for legislative determination whether a statute was necessary for the immediate preservation of the public peace, health or safety. It was also held in the case cited that, while the existence of an emergency must be declared by the Legislature so as to exclude the referendum, it was not essential that this declaration be made in the exact words of the amendment, as other words of similar import unmistakably showing the intention to declare that an emergency existed, were sufficient.

At the 1918 general election a new Initiative and Referendum! Amendment was adopted. Brickhouse v. Hill, 167 Ark. 513, 268 S. W. 865. Section 4 of this amendment contains the following provisions in regard to emergency legislation:

“If it shall be necessary for the preservation of the public peace, health or safety, that a measure shall become effective -without delay, such necessity shall, be stated in one section, and if, upon a yea and nay vote, two-thirds of all the members elected to each house, or two-thirds of all the members elected to the city or town councils, shall vote upon separate roll-call in favor of the measure going into immediate operation, such emergency measure shall become effective without delay. It shall be necessary, however, to state the fact which constitutes such emergency. Provided, however, that an emergency shall not be declared on any franchise or special privilege or act creating any vested right or interest or alienating any property of the State. If a referendum is filed against any emergency measure, such measure shall be a law until it is voted upon by the people, and if it is then rejected by a majority of the electors voting thereon, it shall be thereby repealed. The provision of this subsection shall apply to city or town councils.”

It is not sufficient, under this last amendment, for the legislation merely to declare that an emergency exists, but it is necessary to state the fact which constitutes such emergency. If therefore an act is passed which does not contain an emergency clause in which the fact is stated constituting the emergency, the act does not become effective until ninety days after the adjournment of the session of the General Assembly at which it was enacted. Gaster v. Dermott-Collins Road, Imp. Dist., 156 Ark. 507, 348 S. W. 2. But does this last amendment change the rule announced in the Hanson case, supra, that the existence and sufficiency of the emergency to withdraw an act from the referendum clause of the Constitution is a legislative, and not a judicial, question? We think not.

1't was, no doubt, the intention of the last amendment to terminate the practice, into which the General Assembly had fallen, of placing the emergency clause indiscriminately on much of the legislation, and, as a means to this end, two requirements were imposed to withdraw legislation from the operation of the referendum power of the people. One was that it was made necessary for the bill to state the fact which constituted the emergency. The other was to require a separate and two-thirds vote' of all the members elected to each house of the G-eneral Assembly in favor of the measure becoming effective without delay. In this manner the members of the General Assembly were permitted and required to vote, first, whether the bill should become a law, and then to determine whether it should become effective without delay. Both these questions are, we think, legislative and not judicial.

It will not be denied that it is a legislative question solely to determine whether a bill shall become a law. If the Legislature has any function at all, it has this one; and, this being true, it must also be true that it is the province and function of the Legislature to determine when the legislation shall become effective.

If there is an emergency, the General Assembly must state the fact which constitutes it, and must evidence the fact that they have found there was an emergency by a vote taken separate and apart from that taken on the passage of the bill itself. In this manner there is insured, theoretically, at least, the finding -by two-thirds of the General Assembly that the fact recited exists and is true, and that it constitutes a sufficient reason for making the act effective without delay.

Of course, an emergency clause which did not state the fact constituting the emergency would not suffice; nor would a recited fact which was so obviously and demonstrably inefficacious to constitute an emergency that all fair-minded and reasonably intelligent men would say to the contraiy. But the converse of this proposition is equally true. If the fact which constitutes the emergency is recited, and if fair-minded and intelligent men might reasonably differ as to the sufficiency and truth of the fact assigned for placing the act in effect immediately upon its passage, the courts are concluded by the finding. See the many cases under the subhead, “Encroachment on Legislature, ” § 15 of the chapter on Constitutional Law, volumes 1 and 5, Crawford’s Digest of the Decisions of the Supreme Court, and the same section and subhead of Crawford’s Supplement.

We conclude therefore that the emergency clause to act 64 sufficed to put the act into immediate effect, and, as the decree appealed from accords with this view, it must be affirmed, and it is so ordered.

Humphreys, J.,

(dissenting). I think the purpose of the new Initiative and Referendum Amendment adopted at the general election in 1918 not only terminated the practice, into which the General Assembly had fallen, of placing the emergency clauses indiscriminately on much of the legislation, but also had the effect of changing the rule announced in the case of Hanson v. Hodges, 109. Ark. 479, 160 S. W. 392, so as to make the sufficiency of the facts stated in an emergency clause a judicial and not a legislative question. Dissenting opinion of Chief Justice Hart in Cumnock v. Little Rock, 168 Ark. 777, 271 S. W. 476; Payne v. Graham, 118 Me. 251, 107 Atl. 709, 7 A. L. R. 516. The language in the amendment is very plain and emphatic, and it was never intended by the people, in voting for the amendment, that facts might be stated in an emergency clause which are insufficient to support the declared emergency. .The lang'uag'e in the amendment is as follows: “It shall be necessary, however, to state the fact which constitutes such emergency.” To place any other construction upon this language than I have placed upon it will not remedy the evil which the people intended to correct. The people intended to say by the amendment that, unless an emergency for the immediate operation of a law really existed, they did not intend to be deprived of referring the law to themselves for approval or disapproval before' same- is put in force or effect. I think the facts -set forth in this emergency clause to support the emergency are insufficient.

For the reasons stated I take this opportunity of registering my dissent from the majority opinion in this case. '


author: Humphreys, J.

text:
    Gaugh v. Southern Life Insurance Company.
    Opinion delivered June 24, 1929.

      W. H. Dunblazier and Joseph R. Brown, for appellant.

      Holland & Holland, for appellee.
   Humphreys, J.

Appellant instituted suit against appellee in the circuit court of Sebastian County, Fort Smith District, to recover $500 as beneficiary in a policy of insurance issued by said appellee upon the life of Ben Gaugh, the husband of appellant.

Appellee filed an answer to the complaint, denying liability under the policy, on the ground that same had lapsed for nonpayment of premiums.

The cause was submitted upon the pleadings, testimony and instructions of the court, which resulted in a verdict and judgment in favor of appellee, from which is this appeal.

At the conclusion of the testimony appellant requested the court to instruct a verdict in her favor, which the court refused to do, over her objection and exception. The trial court erred in refusing to peremptorily instruct a verdict for her. According to the undisputed testimony, the policy was not delivered to the insured until March, 1927, although dated February 17, 1927. It contained a clause stating that it should not become effective until delivered. It also contained the two following clauses:

“In the case of monthly premiums. — All premiums shall be due on the .first day of each calendar month, and must be received by the company on or before the last day of each month. ’ ’
“Payment of premium under this policy will be due on the first day of April, 1927, and on the first day of each and every month thereafter. ’ ’

The undisputed testimony showed that nine monthly premiums were paid by the insured to appellee. The receipts for these payments show on their face that the payments were made for the'months of March to November, 1927, inclusive. The March receipt, dated February, 1927, has a notation on the margin “3-26.” Appellant testified, without contradiction, that S. H. Gregory, the local agent of appellee, brought the policy in question to their home the latter part of February, 1927, and requested payment of the first premium; that she told him her husband did not get his pay until March 26, and that Mr. Gregory made a notation on the margin of the receipt, “3-26 ;” that he kept the receipt and policy, saying that he would return on that day and deliver the policy and collect the first premium; that he did not return until the 28th day of March, at which time she paid Mr. Gregory $1.75 in settlement of the first premium; that he handed her the receipt on which he had made the notation “3-26,” and at the same time delivered the policy to her for her husband. It is true that S. H. Gregory testified, by reference to the policy and receipts, that the policy took effect from its date, February 17, 1927, and that payment of the premium in March was for the month of March, and not for April. ¡But this could not have been true unless the policy was delivered the last of February or the first of March. Gregory did not gainsay the testimony of appellant to the effect that he delivered the policy on March 28, 1927. Her testimony to this effect is corroborated by the notation, “3-26,” on the margin of the receipt, dated February 17, 1927. It is also corroborated by the clause quoted above with reference to the payment of the premium. This clause necessarily referred to the payment of the first premium. It is true that the insured paid the premium two days before the same was due, but he had a right to pay it in advance. In view of this corroboration of appellant’s testimony, it may be said that her evidence as to the date of the delivery of the policy was undisputed, even though a party to the suit. The rule is that the uncorroborated testimony of a party to a suit cannot be regarded or treated as undisputed testimony in the case. The law is that, where a policy contains a clause stating that it shall not become effective until delivered, no liability arises thereon or thereunder until a delivery thereof. This policy contained such a provision, and, since the undisputed evidence showed that it was not delivered until March 28, 1927, the payment on that date necessarily paid the premium for the following month of April. Kirk v. Sovereign Camp of Woodmen, 169 Mo. App. 449, 155 S. W. 39.

The court erred in submitting* the issue of whether the insured had paid the premium on the policy for the month of December, 1927. As the undisputed testimony showed that the'first premium paid by him was for the month of April and that nine payments were made, it necessarily covered the month of December. The insured died on January 16, 1928, during the life of the policy, as under its terms the insured had until the 30th day of January, 1928, to pay the January premium.

The court should have instructed a verdict for appellant. On account of the failure to do so, the judgment is reversed, and a judgment is directed to be entered here for appellant.


author: Kirby, J.

text:
    Hawkins v. Wood.
    Opinion delivered June 24, 1929.

      W. A. Singfield, for appellant.

      Tom F. Digby, for appellee.
   Kirby, J.

This appeal comes from a decree refusing confirmation of a sale of real estate by the court’s commissioner in a suit for partition.

Appellee, one of the defendants in the suit, objected to the confirmation of the sale, alleging that it was agreed that he should be notified of the time and place of sale, which was not done, and he was thereby prevented from attending it; that no other person was present and bidding on the property except Ike Hawkins, to whom it was sold for the sum of $200, which was a grossly inadequate price for the property, and submitted a bid of $250, 25 per cent, more than the price for which the property was sold.

The court refused to confirm the sale, which it ordered set aside, and directed the icommissioner to re-advertise and sell the land again as provided in the original decree.

The rule, as stated in Wells v. Lenox, 108 Ark. 366, 159 S. W. 1099, Ann. Cas. 1914B, 11, in reference to judicial sales, “is that, in the absence of fraud and unfairness, mere inadequacy of price, however gross, does not invalidate the sale. But the court has and may exercise discretion in either confirming or rejecting judicial sales, which discretion must be exercised according to fixed rules, and not arbitrarily, and the bidder has the right to insist upon its exercise in such maimer only. George v. Norwood, 77 Ark. 216, 91 S. W. 557, 113 Am. St. Rep. 143, 7 Am. Cas. 171; Chapin v. Quisenberry, 138 Ark. 68, 210 S. W. 341.

The sale was not only for a grossly inadequate price, but appellee ivas misled and prevented from attending it by the failure of the other parties in interest or the commissioner to notify him of the time and place of the sale, as was agreed to be done, thus permitting appellant to attend the sale and bid without competition for the property, working a hardship against the owners of the property, and the court did not err in refusing to confirm the sale. Chapin v. Quisenberry, supra; Moore v. McJudkins, 136 Ark. 293, 206 S. W. 445; Stevenson v. Gault, 131 Ark. 398, 199 S. W. 112, Ann. Cas. 1918E, 433; Hawkins v. Jones, 131 Ark. 478, 199 S. W. 549.

The decree is affirmed.


author: Kirby, J.,

text:
    Price v. Hemingway.
    Opinion delivered June 24, 1929.

      Peyton B. Moncrief, A. G. Meehan and John W. Moncrief, for appellant.

      T. J. Moher and Carmichael & Hendrichs, for appel-lee.
   Kirby, J.,

(after stating the facts). Appellants concede the right of appellees, whose judgment survived against them, to revive the cause against the heirs of J. A. Price, deceased, and contend correctly that the court erred in setting aside the decree of foreclosure in making such order of revival. Sections 1062-65, 6311, C. & M. Digest ; Thompson v. Lee, 174 Ark. 868, 296 S. W. 706; Hill v. Brittain, 178 Ark. 784, 12 S. W. (2d) 869.

The decree erroneously vacated had been entered at a former term of the court against J. A. Price, foreclosing the lien against his lands only, and there was no giround alleged or existing for its vacation, but only proper allegations for the revival of the cause against his heirs, who succeeded to his interest, necessary to be had for execution of their judgment, which survived to appellees 'against said heirs. Section 6311, C. & M. Digest; DeYampert v. Manley, 127 Ark. 153, 191 S. W. 905.

It was necessary that the parties in interest be before the court for execution of the decree, since the foreclosure could not be effected without a sale of the lands and confirmation thereof, and the action had to be revived in the name of the successors to the title to give them an opportunity to be heard relative thereto. The heirs only succeeded by inheritance to the rights of the decedent, J. A. Price, and the valid decree of foreclosure of the 'mortgage against these lands only survived to appellees. None of the parties, the heirs or the judgment creditors, had any right tó the vacation of the decree, and the court erred in making any such order.

The said decree vacating the judgment is reversed, and the cause will he remanded, with directions to proceed regularly to its execution and the foreclosure against the lands after proper revival of the cause has been completed. It is so ordered.


author: Mehaffy, J. McHaNey, J.,

text:
    State ex rel. Attorney General v. Arkansas Fuel Oil Company.
    Opinion delivered June 24, 1929.

      Hal L. Norwood, Attorney General, and George Vaughan, for appellant.

      Trieber & Lasley, for appellee.
   Mehaffy, J.

The appellant filed its complaint in the Pulaski Chancery Court against the appellee and others, alleging- that defendant acquired oil and gas leasehold estates on the property described; that said leasehold interest was taxable property under the provisions of the laws of Arkansas, and that, notwithstanding this, the owners had each failed, omitted and neglected to return said property for taxation, and no assessment thereof was made for the years 1924, 1925, 1926 and 1927, and made other allegations necessary in a suit to collect back taxes, and asked that the defendants each he required to plead, and that upon a final hearing the amount of overdue taxes owing- to the State and her subdivisions be determined, and for judgment for same, and that said judgment be declared a lien upon the property of defendants, and that, if said judgments were not paid, said property be sold to satisfy the judgment.

Answer was filed, admitting that none of the leases and rights thereunder described in the complaint was assessed for taxation separate from the fee in the land for either of the years 1924, 1925 and 1926, and admits that no taxes were paid upon any of said leases or rights separate from the fee in said land for either of said years.

It is alleged that the leases and rights thereunder were not subject to taxation separate from the fee in said lands for either of said years, and alleged that all o'f said leases and rights were assessed and taxed for each of said years as a part and parcel of and as entered into the value of the fee in the lands covered thereby. Defendants further stated that no property right or interest in or to the oil and gas in situ in the lands covered thereby passed to the lessee and that there was no such separation of the title to the mineral rights in the fee simple as to authorize a separate assessment. The only rights under the leases constituted incorporeal heredita-ments taxable alone in the State of West Virginia, the domicile of defendant.

It is further stated in the answer that the taxing authorities acquiesced in and never opposed or corrected the assessments made !by the county and township assessing officers, and they refused to assess separately from ihe fee the leasehold interests; that the Attorney General of Arkansas had given an opinion to the effect that the leases were not taxable separately from the land, and that, following the opinion of the Attorney General and the instructions of the taxing authorities, and acting in pursuance thereof, the respective county and township officers intentionally and systematically failed and neglected and refused to list, value and return, separately from the fee in the lands for the purpose of taxation, any of said leases or rights thereunder.

The appellant filed a demurrer to the answer, and especially to paragraphs one, three, six, seven and eight. The pleadings are quite lengthy, and we do not think it would serve any useful purpose to set them out .more fully.

The appellee states that by this appeal two questions are squarely raised. The determination of the second one is necessary only in case the court returns an affirmative answer to the first. (1) Were oil and gas leases in the usual form subject to taxation separately from the fee in the lands for the four years 1924-1927, inclusive, preceding the filing of the State’s complaint in this case? (2) Is the enforcement of the back-tax law in violation of § 5, article 16, of the Constitution of Arkansas and the Fourteenth Amendment to the Constitution of the United States, when such enforcement results, not haphazardly, but intentionally, in a classification of and discrimination against corporately owned oil and gas leases, and in the exemption of many such leases of great value not corporately owned?

Appellee contends that the oil and gas leases were not subject to taxation separately from the fee in the lands.

A copy of the lease is attached to the pleadings, and recites that, for a good and valuable consideration, receipt of which is acknowledged, and of the covenants and agreements contained on the part of the lessee to- be paid, kept and performed, the lessor has granted, demised, leased and let and by these presents does grant, demise, lease and let unto the said lessee, for the sole and only purpose of mining and operating for oil and gas, and laying pipe lines, and building tanks, power stations and structures thereon to produce, save and take care of said products, all that certain tract of land situated in the county of. And then follows a description of the land. It then recites that it is agreed that this lease shall remain in force for a term of. years from this date, and as long thereafter as oil or gas, or either of them, is produced from said land by the lessee. The lease then contains the covenants of the lessee, and provides that, if no well be commenced by a certain time, the lease shall terminate, unless the lessee pay or tender to the lessor, or to the lessor’s credit in the bank, the sum of.dollars, which shall operate as a rental and cover the privilege of deferring the commencement of a well for.months from said date. It also provides that, in like manner and upon like payments or tenders, the commencement of a well may be further deferred, etc. It recites that the down-payment covers not only the privilege granted to the date when said, first rental is payable, but also the lessee’s option of extending that period, and any and all other rights conferred.

There are a great number of other provisions in the lease, but we do not think it necessary to copy them here, but, if necessary to refer to any other portion of the lease, it will be done hereafter.

The appellee’s first contention is that the leases did not work an actual severance of title in the land, and calls attention to a number of cases, among which are three-Arkansas eases. The first one to which attention is called is Mansfield Gas Co. v. Alexander, 97 Ark. 167, 133 S. W. 837. The Mansfield case was an action brought to cancel a mineral lease; and the question of taxation was not involved, nor was the question of whether the lease conveyed an interest in land. It was stated in the opinion;

“In deciding whether-or not the lower court was right in entering a decree canceling said lease, we think it only necessary to determine whether or not the appellant and those from whom it obtained the lease have failed and refused to perform the covenants imposed upon them by the lease under such circumstances as to work a forfeiture thereof; for equity may enforce a forfeiture of a contract of lease giving the exclusive right to explore for minerals upon a tract of land where it would be inequitable to permit the lessee longer to assert such right by reason of his continued default. The respective rights of the parties must be determined by the respective obligations which they assumed by virtue- of the contract of lease and 'by the manner in which they have performed or failed to perform those oblig'ations. What, then, were the mutual obligations. entered into by the execution of this lease? The contract was made for the mutual benefit of the parties. The purpose of the lease was not to make a grant of the land or to transfer any estate therein. It only gave a right to the lessee to search for minerals and an interest in the minerals when so found and taken out.”

The next case to which appellee calls attention is Osborn v. Ark. Ter. Oil & Gas Co., 103 Ark. 175, 146 S. W. 122. This was not a tax suit, and the questions involved in the instant case were not involved in the Osborn case. It is true, the court stated that the gas lease involved in that case was not a present sale- of or transfer of title to the gas, but the court -also said in that ease: “The contending parties therefore have each a legal right to the rentals 'for the gas which they respectively own by reason of their ownership of the respective tracts,” and this was the question really determined in the case. There was a contention by the claimants as to the part of the rentals 'belonging to each.

Appellee next calls attention to the case of Blair v. Clear Creek Oil & Gas Co., 148 Ark. 301, 230 S. W. 286, 19 A. L. R. 430. This was also a suit in equity against appellee to cancel a gas lease on the ground that appellees were drawing off the gas from appellant’s lands by means of wells drilled on adjacent lands near appellant’s boundary lines, and for damages resulting therefrom. Appel-lee defended the suit on the ground that there was no liability under the terms of the lease upon which the suit was based. In the Blair case the court said:

“The contract is a lease of the land for the purpose of drilling for oil and gas for the period of time designated therein, and the lessee has a vested right to the possession of the land to the extent reasonably necessary to perform the terms of the agreement on his part.”

We do not think there is anything in either of the eases referred to that supports the contention of the ap-pellee. It will not be contended that the mining right conveyed by the lease is not property. The contention, however, is that there is no- severance of title, and that it must be taxed, if at all, with the land as a part of it.

'Section 9856 of 'Crawford & Moses’ Digest provides that when mineral rights in any land shall, by conveyance or otherwise, be held by one or more persons, and the fee simple in the land by one or more other persons, it shall be the duty of the assessor, when advised of the fact, either by personal notice- or by recording of the deeds in the office of the recorder of the county, to assess the mineral rights in said lands separate from the general property therein. And in such case a sale of the mineral rights for nonpayment of taxes shall not affect the title to the land itself, nor shall a sale of the land for nonpayment of taxes affect the title to the mineral rig’hts.

We construe this statute to mean that the property conveyed to the lessee in mining lease is taxable separately from the land.

This court has recently held that the rights granted to the lessee are not a license, hut an interest and easement in the land itself.

“The rights granted to the lessee and which passed by mesne conveyances to the Standard Company were not a license, hut an interest and easement in the land itself.” Standard Oil Co. of La. v. Oil Well Salvage Co., 170 Ark. 729, 281 S. W. 360; Swert v. Robinson, 289 Fed. 689; Smith v. MaCulloch, 285 Fed. 689; Rich v. Donaghey, 71 Okla. 204, 177 Pac. 86, 3 A. L. R. 352; Barnsdall v. Gas Co., 225 Pa. 238, 74 Atl. 207, 26 L. R. A. (N. S.) 614; Blair v. Clear Creek Oil & Gas Co., 148 Ark. 310, 230 S. W. 286, 19 A. L. R. 430.

In the Standard Oil Company case the court also said: ‘ ‘ The instrument nnder which the Standard Company was operating being a lease and conveying an interest and easement in the leased premises to the lessee, the lessor had no right by a subsequent lease to convey any interest that would be in conflict with such prior lease, and those holding under the subsequent instrument could not enter upon the premises and exercise alleged rights in conflict with the rights o'f those claiming under the prior lease without the knowledge, consent or acquiescence, and over the protest, of those holding under the prior lease.”

“A tenant under a lease of lands for the purpose of growing crops has no ownership or interest in the land itself on which the crops are grown. Therefore; from a sale of such lease under execution the tenant has no right to redeem under the above statute. To be sure, those leases which convey to the lessee an interest and easement in the land itself, such as gas and oil, and other mineral leases, and leases for the purposes of cutting and removing timber and other natural products which are a part of the land itself, would fall under a different rule; an.d we do not mean to bold that tbe statute under review would not be applicable to such leases.” Munson v. Wade, 174 Ark. 880, 208 S. W. 95.

We have also held that an oil and gas lease conveys not merely a license, but an interest and easement in tbe land itself, and that in a suit to impose a lien upon tbe lease tbe action is local, and not transitory. Clark v. Dennis, 172 Ark. 1096, 291 S. W. 807.

We deem it unnecessary to refer to authorities of other States, for tbe reason that we think tbe question is settled by tbe decisions of this court.

It is next contended, however, that tbe statute is unconstitutional because it permits the collection of back taxes on corporately owned oil and gas leases and intentionally exempts property owned by individuals. As to tbe statute authorizing tbe levy and collection of taxes from oil and gas leases, there is no discrimination.

The statute provides that when the mineral rights of any land shall, by conveyance or otherwise, be held by one or more persons and tbe fee simple in tbe land by one or more other persons, it shall be tbe duty of tbe assessor, when this is brought to bis attention, to assess the mineral rights separate 'from tbe general property therein. Section 9856, Crawford & Moses’ Digest.

It will readily be seen that there is no discrimination; that tbe statute authorizes tbe assessment and collection of taxes on leases whether owned by individuals or corporations. But it is contended that tbe statute violates § 5 of article 16 of tbe Constitution of tbe State of Arkansas and tbe equal protection clause of the 14th Amendment to tbe Constitution of the United States. We cannot agree with appellee in this contention. The statute authorizing tbe assessment and levy of tbe taxes applies to corporations and individuals alike. And as to tbe statute authorizing suits for back taxes, we call attention to tbe following cases which settle tbe question against appellee’s contention: White River Lumber Co. v. State, 175 Ark. 956, 2 S. W. (2d) 25; State ex rel. Atty. Gen. v. Fort Smith Lbr. Co., 131 Ark. 40, 198 S. W. 702, 2 S. W. (2d) 25. In the White River Lumber Co. case the court said:

“In upholding the right of the State to sue for these hack taxes, it was stated 'by Mr. Justice Holmes, speaking for the court, that it was within the power of the State, so far as the Constitution of the United States is concerned, to. tax its own corporations in respect of the stock held ¡by them in other domestic corporations, although unincorporated stockholders are exempt from such tax, and that a discrimination between corporations and individuals in regard to such a tax could not be pronounced arbitrary, although the precise ground of policy which led to the distinction did not appear.”

It was there further said: ‘ ‘ The same is true with regard to' confining' the recovery of back taxes to those due from corporations. It is to be presumed, until the contrary appears, that there were reasons for more strenuous efforts to collect admitted dues from corporations than in other cases, and we cannot pronounce, it an unlawful policy on the part of the State.” . -

The only question involved in this case is the question of the right to tax gas and oil leases separately from the land. We are of the opinion that the question is settled by the statute above quoted and the decisions of this court against the contention of appellee. The decree is therefore reversed, and the case remanded, with directions to sustain the demurrer, and take such further proceedings as necessary to a determination of the issues in the case, not inconsistent with this opinion.

McHaNey, J.,

(dissenting). I do not agree that the construction placed on the statute, § 9856, C. & M. Digest, is correct, nor that this statute authorizes the assessment of such mineral rights as are granted by the lease in question. The mineral rights can be assessed separate from the fee under this statute only when there has been a severance of the fee in the mineral rights from the fee in the land by ‘ ‘ conveyance or otherwise. ’ ’ For instance, if A conveyed the minerals in Ms land to B by deed, there would be such a severance as the- statute contemplates, or if A conveyed his land to B, retaining the minerals, this would be such a severance as is covered by the word “otherwise,” as used in the statute. The lease in question does not convey the mineral rights, but only grants the right for a limited time to go upon the land and prospect or mine for minerals. When captured, they become personal property and subject to assessment. Before discovery and capture they remain a part of the fee in the land, and not subject to separate assessment.

Mr. Chief Justice Hart agrees with this dissent.