text:
    Gathright v. Gathright.
    Opinion delivered January 23, 1928.
    1. Wills — jurisdiction in equity to construe. — If, under the terms of a will, it be doubtful what the rights and duties of the trustee are, he can resort to equity for proper construction and interpretation of the will.
    2. Wills — who may ask for construction of well. — Persons interested under the terms of a will in its proper definition and enforcement may resort to equity for construction and interpretation thereof.
    3. Wills — residuary devise. — A will devising “all the rest, residue, remainder of my estate” is to be understood in its usual and technical sense and covers all the remaining property of the testator, both real and personal.
    4. Wills — election op widow.- — -Where a husband’s will made an absolute gift of both real and personal property to his wife, a subsequent item1 stating that such provision was in lieu of dower, did not, in view of Crawford & Moses’ Dig., § 3538, limit the wife’s share to what she would have received as dower, it having only the effect of requiring the widow to make her election.
    5. Wills — presumption as tó devise to wife. — Under the common law, the testator will not be presumed to have intended a devise to his wife to be a substitute for dower unless the claim of dower would be inconsistent with the will or so repugnant to its provisions as to disturb and defeat the will, but such devise will be presumed to be in addition to dower.
    6. Wills — obligation of widow to pay husband’s debts. — Where ■ a widow takes dower under the law instead of a devise in the will in lieu of dower, she is under no obligation to pay the husband’s debts.
    Appeal from Little River Chancery Court; G. E. Johnson*, Chancellor;
    affirmed.
    STATEMENT OF FACTS.
    J. F. Gathright and others brought this suit in equity against Lillian M. Gathright for the purpose of construing a will and having a trust declared in their favor to certain property which they claimed fell to them under the provisions of the will of W. M. Gathright. The suit was defended on .the ground that the property claimed by the plaintiffs was devised to the defendant under the will.
    W. M. Gathright died testate in Little River County, Arkansas, and left surviving him his widow, Lillian M. Gathright, and his brothers and sisters and descendants of brothers and sisters as his sole heirs at law. Under the second clause, of his will he directed the payment of all his just debts and funeral expenses. Under the third item, he bequeathed to his sisters and brothers, who are specifically named in the item, the sum of one dollar each. The fourth item of the will reads as follows:
    “All the rest, residue, remainder of my estate, real, personal, moneys, notes, accounts and choses in action, wherever situated, of which I may die seized and possessed, or to which I may be entitled at the time of my decease, I give, bequeath and devise to my beloved wife, Lillian M. Gathright, to have and to hold the same to her absolutely and forever.”
    The fifth item of the will is as follows:
    “This provision for my wife is to be in lieu of dower in my estate.”
    Under the sixth item’ the testator authorizes his executrix to sell and dispose of all or any of his real estate on such terms as she shall deem proper and to execute deeds therefor. Item seven provides that, if any bequest shall lapse, it shall form a part of his residuary estate and be disposed of under item four of the will. Item eight nominates Lillian M. Gathright, his beloved wife, as executrix, without bond.
    The testator- died leaving an estate valued at about $150,000, consisting of real and personal property.
    The court sustained a demurrer to the complaint, and it was declared that the complaint of the plaintiffs be dismissed for want of equity. The case is here on appeal.

      W. G. Rodgers, for appellant.

      James D. Head, for appellee.
   Hart, C. J.,

(after stating the facts). It is the settled law in this State that if, under the terms of the will, it be doubtful what 'the rights and duties of the trustee are, he can resort to equity for a proper construction and interpretation of the will. For the same reason those interested under its terms in the proper definition and limitation of the trust and enforcement thereof may come to such court for like relief. Booe v. Vinson, 104 Ark. 439, 149 S. W. 524, and Gaines v. Arkansas National Bank, 170 Ark. 679, 280 S. W. 993. Hence the court was right in assuming jurisdiction of the case, and we -also think was right in the interpretation of the will.

The testator first directed the payment of all his just debts and funeral expenses. He next made nominal bequests to his brothers and sisters. Item four is copied in our statement of facts, and is called the residuary clause of the will. The language of the fourth item, “all the rest, residue, remainder of -my estate,” is to foe understood in its usual and technical sense, and covers all the remaining property of the testator, both real and personal. Galloway v. Darby, 105 Ark. 558, 151 S. W. 1014, 44 L. R. A. (N. S.) 782, Ann. Cas. 1914D, 712. Thus it will be seen that, under item four of the will, after paying his debts, funeral expenses and specific legacies, the testator gave all the remainder of his property, both real and personal, to his beloved wife, absolutely.

Under item five the provision in favor of the testator’s wife is to be in lieu of dower in his estate. It is contended by the plaintiffs that this means that the wife is to take under the will only that part of the estate that she would receive under the law as dower, and which, under our laws of descents, and distributions, would be, in this case, one-half of the real and personal property absolutely. Crawford & Moses ’ Digest, § 3536.

We do not agree with counsel in this contention. Under the common law the testator will not be presumed to have intended a devise in his will to be a substitute for dower unless the claim of dower would be inconsistent with the will, or so repugnant to its provisions as to disturb and defeat the will. In other words, at common law it is held that, where the testator’s intention was not apparent upon the will, the devise would be presumed to be in addition to dower. Page on Wills, 2 Ed., vol. 1, § 1190, page 1985, and numerous cases cited in a note to 22 A. L. R., at 501.

In the first place, it may be said that item four is not inconsistent with the view that it was the intention of the testator to only give his wife under the will what the law would give her as dower; and we do not believe that item four and item five are repugnant to each other. As we have already seen, when item four is construed with reference to the ordinary meaning of the language used in it, the testator gave his wife all his estate, charged with the payment of his debts, funeral expenses and the specific bequests to his brothers and sisters.

Then it will be asked, what was the meaning of item five ? It will be noted that, under § 3538 of Crawford & Moses’ Digest, if a husband shall devise to his wife any portion of his real estate of which he dies seized, it shall be taken in lieu of dower out of the estate of such deceased husband, unless such testator shall in his will declare otherwise. It will be noted that there is no such provision in our statutes with regard to personal property. The will under consideration bequeaths personal property and also contains a devise of real estate. It has' been held, under statutes like that just referred to above, that a legacy of personal property will not put the widow to her election, as in the case of a devise of real estate, unless expressly made in lieu of dower. Booth v. Stebbins, 47 Miss. 161; Pemberton v. Pemberton, 29 Mo. 408, and other oases cited in a note to 22 A. L. R. 50.

It mil be seen that the object of item five in the will was to require the widow to make her election just as she would be required to do under our statute in case a devise of land in lieu of dower was made in accordance with-the provision of § 3538 of Crawford & Moses’ Digest. It will also be seen that there is no repugnancy whatever between item four and item five of the will, and that the widow’s portion under item four is the remainder of the testator’s property after paying his debts, funeral expenses and the specific legacies provided for in the will. The object of item five was merely to require the widow to elect whether she would take under the will or take dower under the statute.

Another reason for putting' his wife to her election was that the testator did not know how long he mig’ht live or whether he would own much or little at the time of his death. As we have already seen, he wanted his debts to be paid first, and this his widow would be required to do if she took under the will. On the other hand, if she took dower under the law, this would be a legal right given her, and she would be under no obligation whatever to. pay his debts.

. The result of our views is that the decree of the chancellor was correct, and it will be affirmed.


source: Caselaw Access Project

author: Hart, C. J.,

license: Public Domain

text:
    First National Bank of Jonesboro v. J. H. Snyder Manufacturing Company.
    Opinion delivered January 23, 1928.
    Evidence — parol evidence rule. — Parol evidence is inadmissible to show that a note, which recited that “I, we, or either of us, promise to pay” and was signed by “J. H. Snyder Manufacturing. Co.,” and “W. H. Stayder,” was signed by Snyder as attesting officer of the company, a corporation and intended to be binding on the company only, there being no ambiguity in the note.

      Appeal from Craighead Circuit Court, Jonesboro District; W. W. Bandy, Judge;
    reversed.
    STATEMENT OE EAOTS.
    This suit was commenced before a justice of the peace by the First National Bank of Jonesboro against W. H. Snyder to. recover the balance of $187.50 and the accrued interest on a promissory note. There was a judgment in favor of the defendant in the .justice court, and the plaintiff appealed to the circuit court. The case was tried there upon a statement of facts substantially as follows:
    The note was introduced in evidence and reads as follows:
    "$395.63. Jonesboro, Ark., 1-19, 1924.
    No.........................$....................................
    "March 15,1924, after date, for value received, I, we, or either of us promise to pay to the order of First National Bank, Jonesboro, Arkansas, three hundred ninety-five and 63/100 dollars, at the First National Bank, in Jonesboro, Arkansas, with interest at 10 per cent, per annum from date until paid. If the interest be not paid when due, to become as principal, and the sum thereof to bear interest at the rate of ten per cent, per annum. The makers and indorsers of this note hereby severally waive presentment for payment, notice of nonpayment, protest, and consent that the time of payment may be extended without notice thereof.
    "J. H. Snyder Mfg. Co.
    "W. H. Snyder. ”
    The proof showed that there was a balance due on the note of $187.40 principal and interest amounting to $57.17, making a total of $244.67.
    According to the testimony of the cashier of the bank, he would not have made the loan unless W. H. Snyder had signed the note personally. On the part of the defendant it was shown that the J. TI. Snyder Manufacturing Company was a corporation, and W. H. Snyder was the president and manager of it. He signed the note as an officer .of the company, and borrowed the money for the company. It was not his intention to bind himself personally. He signed the note for the purpose of attesting the signature of J. H. Snyder Manufacturing Company.
    The jury returned a verdict in favor of the defendant, and from the judgment rendered -the plaintiff has duly prosecuted an appeal to this court.

      Cooley, Adams Fnhr, for appellant.
   Hart, C. J.,

(after stating the facts). The sole ground relied upon for a reversal of the judgment is that the circuit court erred in admitting parol evidence to show that W. II. Snyder signed the note -as an attesting officer of the J. H. Snyder Manufacturing Company, a corporation of which he was president, and that there was an understanding between him and the ‘bank that the corporation alone was to be liable on the note. In admitting this testimony the court evidently relied upon a decision of this court to the effect that, where the name of the corporation itself is signed and followed by the names of officers giving their official titles, indicating that they are signing in their official capacity for the purpose of attesting the signature of the corporation, the instrument constitutes the obligation of the corporation alone. Bank of Corning v. Nimnich, 122 Ark. 316, 182 S. W. 756, Ann. Cas. 1917D 566.

In that case the first signature to the note was “Farmers’ Union Gin & W. H. Co., per Henry Brown, Sec. and Treas.” There was no ambiguity in that signature. The fact that Henry Brown signed as secretary and treasurer under the name of his principal, prefixing “per” before his name, indicates that his principal was a corporation and that he was attesting its name as the signer of the note as secretary and treasurer of the corporation. Hence the court held that there was no ambiguity as to' the other signers of the note, although they added the word “director” to their signatures. The court said that the word “director” was merely descriptive of the person who signed.

This court has often decided that parol evidence cannot he admitted to vary the terms of a written contract or to show a contrary intention than that disclosed by the instrument, unless there is an ambiguity. This rule had been applied in the case of promissory notes. Lawrence County Bank v. Arndt, 69 Ark. 406, 65 S. W. 1052. In that case the only evidence on the face of the promissory note that the persons signing it did not intend to bind themselves personally was the affixing to their signatures of some designation of agency, as by signing themselves, respectively, as president, vice president, secretary and treasurer, without stating for whom or for what company they were acting. Under these circumstances they were liable personally, and could not, as a defense, show by parol evidence that they intended to bind a certain corporation for which they were acting.

We think the holding in that case is conclusive here.

In the case at bar the language in the body of the note is “I, we, or either of us promise to pay to the order of the First National Bank,” etc. The language thus used in the body of the note indicates that more than one person would sign it. The signatures are “J. H. Snyder Mfg. Co., W. H. Snyder.” The signatures do not indicate whether J. H. Snyder Mfg. Co. was a trade name, partnership, or corporation. There is no designation by W. H. Snyder that he signed as an officer or agent by any word.

We are of the opinion that there was no ambiguity in the note, and that the circuit court erred in admitting parol evidence to show that W. H. Snyder signed the note as attesting officer of J. H. Snyder Manufacturing Company, a corporation, of which he was president, and that there was an understanding between him and the bank that the corporation alone was to be liable on the note. For this error the judgment must be reversed, and the cause will be remanded for a new trial.


author: Smith, J.

text:
    Black v. Burrell.
    Opinion delivered January 23, 1928.
    1." Judgment — collateral attack. — A judgment may ¡be collaterally attacked only where, by the record, it is shown that there is a want of jurisdiction in the court rendering it, either of the subject-matter or of the person of defendant.
    2. Judgment — collateral attack — death of party. — A decree is not subject to collateral attack because the plaintiff therein was dead at the time the decision was rendered on appeal, where there was no suggestion of the party’s death, and the fact does not appear from the record of the case.
    Appeal from Pulaski Circuit Court, Second Division; Richard'M. Maim, Judge;
    affirmed.

      L. €. Maloney, for appellant.

      W. A. Smg'field, for appellee.
   Smith, J.

Appellees, who were plaintiffs helow, brought suit in ejectment against appellant to recover possession of a certain lot in the city of Little B-ock. For their cause of action they -alleged that Hattie Battle, who was lawfully seized as owner of the fee-simple title to said lot, died testate on the ...........day of February, 1918, and by her last will and testament devised the lot to them as trustees for Mount Pleasant Baptist Church, subject to the life estate of her husband, Aaron Battle, who died on the.....:............day of........................................, 1924. A copy of the will was made an exhibit to the complaint. It was further alleged that Hattie Battle obtained title to the lot by warranty deed from Mrs. F. M. Fulk, dated February 14, 1911, and that defendant occupied the lot September 22, 1923, under a deed from the life tenant, Aaron Battle, and has unlawfully retained possession since the death of the said life tenant.

After a demurrer had been sustained to the original complaint an amended complaint was filed, in which the title from the United States* through mesne conveyances to Mrs. Fulk, was deraigned.

Appellant filed an answer, in which he denied that Hattie Battle had at any time been seized of the fee • title, or that she acquired the same by deed from Mrs. Fulk.

Appellant admitted his entry under a deed from Aaron Battle, but denied that his grantor had only a life estate. He alleged the fact to be that, on the................. day of....................................................., 19............, in a cause then pending in the chancery court, in which Aaron Battle and the trustees of the church were opposing parties, it was adjudged that the trustees were not the owners of the property, 'but that the title was in Aaron Battle, and thereafter appellant, for a valuable consideration, purchased the lot from Aaron Battle, and the same was conveyed to him by a warranty deed. At the time of this conveyance no appeal had been prayed or granted to the Supreme Court from the decree of the chancery court, and there was no record that the trustees of the church contemplated an appeal.

After the deeds mentioned and the decree of the chancery court had been offered in evidence, the clerk of the chancery court was called, and produced a record of that court, and was asked to read therefrom the decree of the chancery court on the mandate of the Supreme Court reversing the decree of the chancery court above referred to, wherein it had been adjudged that Aaron Battle was the fee owner of the lot in question. Objection was made to the introduction of this decree, upon the ground that it was void for the reason that, at the time of the submission of the appeal in the Supreme Court and the decision of the cause by the Supreme Court, the said Aaron Battle was dead, and the cause was never at any time revived against his heirs-at-law. The court overruled the objection to the introduction of the last mentioned decree of the chancery court, for the reason that it did not appear from the record in' that cause that Aaron Battle was dead.

The decision of this court referred to is found reported under the style of Dillard v. Battle, 166 Ark, 241, 266 S. W. 80. It was there recited that Aaron Battle sought to have a resulting trust declared in the lot which lie had purchased but which, through fraud or mistake, - had been conveyed to his wife alone. The chancery court had granted the relief prayed after finding that Aaron Battle was the surviving tenant of an estate by the entirety, but that decree was reversed by this court, for the reason that, in the opinion of the court, the testimony did not support the finding that Aaron Battle had furnished the money to purchase the lot, and that no mistake was made or fraud committed when the deed from Mrs. Fulk was taken in the sole name of Hattie Battle, and the cause was remanded with directions to dismiss the complaint of Aaron Battle for want of equity.

Appellant does not claim to have been an innocent purchaser, if, indeed, he could have been, as it was shown that, before purchasing from Aaron Battle, he required an indemnifying bond from him, for the reason that the time within which an appeal might be prosecuted had not then expired.

The appeal should not have been submitted, nor should the cause have been decided by this court until there had been a revivor against the heirs of Aaron Battle, if he were not then alive. But there was no suggestion of this fact, nor does the fact appear from the record in that case, although one of the attorneys who represented appellant in the trial from which this appeal comes was the attorney for Battle on the former appeal, nor was the death of Battle suggested or made to appear upon the rendition of the decree of the chancery court on the mandate from this court. The court below was correct therefore in refusing to permit appellant to collaterally attack the decree of the chancery court on the mandate. •

In the case of St. Louis-San Francisco Ry. Co. v. Wardell-Whitton Road Imp. Dist., 157 Ark. 557, 249 S. W. 17, it was said: “It is well settled in this State that a judgment may only be attacked collaterally where, by the record, it is shown that there is a want of jurisdiction in the court rendering it, either of the subject-matter or of the person of the defendant” (Citing cases).

The objection made to the jurisdiction of the Supreme Court on the former appeal is that Aaron Battle was dead at the time of the decision in that cause and of the rendition of the decree on the mandate in the chancery court; but, as we have said, that fact did not appear from the record, and was not suggested either in this court or in the chancery court, and the decree of the chancery- court is now impervious to the collateral attack here made upon it.

No other defense to the action of the plaintiffs being alleged or shown, the court properly directed a verdict in their favor, and the judgment pronounced on this verdict will therefore be affirmed.


author: Humphreys, J.

text:
    Schichtl v. S. F. Bowser & Company.
    Opinion delivered January 23, 1928.
    Sales — waiver of defects in machinery. — The buyer of machinery is liable for the purchase price, notwithstanding defects, where he waived the right to rely on -such defects under the seller’s guaranty in his letter to seller’s attorney in which he made an absolute promise to pay the balance, regardless of defects of which he had previously complained.
    Appeal from Pulaski Circuit Court, Third Division; Marvin Harris, Judge;
    affirmed.

      JohnD. Shackleford, for appellant.

      Rogers, Barber & Henry, for appellee.
   Humphreys, J.

This is an appeal from a judgment for $281.13 with six per cent, interest per annum from May 20, 1926, in favor of appellee against appellant for the balance of the purchase money due on a gasoline pump, tank and other equipment, which appellee sold appellant on July 15,1924, for $350, under a written contract containing a vendor’s lien, and containing the following guaranty: “We guarantee all our products to be and remain free from defects in material and workmanship for the period of one year from date of shipment.”

Appellant filed an answer, denying liability, on the ground that the outfit was defective in material and workmanship, and, for that reason, worthless.

The pumping outfit was used by appellant for about eight months, but it did not give entire satisfaction. There were defects in it which could not be remedied, and appellant finally quit using it and refused to malte farther payments on it, according to his evidence, because appellee did not fix'it. According to the testimony of appellee’s attorney, appellant promised to pay the deferred payments from time to time, but failed to do so.

According- to the undisputed facts, the outfit was sold to appellant by appellee on a credit for $462.80, in the year 1922. Appellant used it for about six months without having paid anything except the freight. He. then went into bankruptcy, and appellee intervened in the bankruptcy proceeding- and recovered same. After appellant was discharged in the bankruptcy proceeding he repurchased the outfit at a reduction of $H2.80 from the original price, under the written contract containing the guaranty clause heretofore referred to. On July 15, 1924, the day he repurchased the outfit, he paid $25 on the purchase price, and in September following paid $25 additional, and in October following $25 more. Appellant testified that he made payments in expectation that appellee would repair the outfit so that it could be used.

The claim for the balance of the purchase money was put in the hands of attorneys for collection. They corresponded with appellant in an effort to collect same, and on April 26,1926, received the following letter from appellant:

“In reply to y.our letter, I am sorry that I can’t send you the money at once. Our collections are simply rotten. The farmers have nothing to sell, therefore we get nothing, but the first or the second we will send this to you. That is railroad pay-day, and I think I will be able to settle this matter. ’ ’

The court instructed a verdict for appellee,- and properly so, because appellant waived his right to rely upon the defects in the outfit under his guaranty by writing the letter to appellee’s attorney of date April 26, 19-26, in which he made an absolute promise to pay the balance of the purchase money, irrespective of any defects he had complained of prior to that time.

No error appearing, the judgment is affirmed.


text:
    Austell v. Union Central Life Insurance Company.
    Opinion delivered January 23, 1928.
    1. Evidence — judicial notice. — A court will take judicial notice of a charter of a life insurance company on file in the State Department of Insurance and Revenues, where such company had become entitled to do insurance business within the State through compliance with Crawford & Moses’ Dig., §§ 6050-6065 inclusive.
    2. Insurance — authority to lend money. — An insurance company authorized to do a life insurance business within the State, under its charter and by-laws, authorizing an executive committee to invest funds, make loans, and do such other business as the board of directors may direct, held authorized to loan money and foreclose the deed of trust without qualifying under Crawford & Moses’ Dig., § 1826, to do "a loan business within the State.
    Appeal from Cross Chancery Court; A. L. Hutchins, Chancellor;
    affirmed.
    J. G. Brookfield, for appellant.

      Thomas E. Lines, for appellee.
   Humphreys, J.

Appellee brought suit in the chancery court of Cross County against appellants to foreclose a deed of trust describing 1006 acres of land on St. Francis River, in said -county, which was executed to Louis Breitling, trustee for the Union Central Life Insurance Company, one of the appellees, to secure an indebtedness of $20,000 for borrowed money, evidenced by notes dated April 3, 1922. Appellant filed an answer denying appellees’ right to recover on the contract, because the appellee corporation had failed to file its charter, or articles of incorporation or association, in the office of the Secretary of State, as required and provided by § 1826 of Crawford & Moses’ Digest, and invoking the penalty imposed by the last paragraph of § 1832 of Crawford & Moses’ Digest, which is as follows:

“Any foreign corporation which shall fail or refuse to file its articles of incorporation or certificates as aforesaid cannot make any contract in this State which can be enforced by it, either in law or in equity, and the complying with the provisions of this act after the date of any such contract, or after any suit is instituted thereon, shall in no way validate such contract.”

The cause was submitted to the court upon the pleadings and testimony, which resulted in a decree in favor of appellees for the amount alleged to be due, and of foreclosure of the mortgage lien, and an order of sale of the lands to satisfy same, from which is this appeal.

The only question necessary to be determined on the appeal is whether appellee- corporation had a right to make the contract and enforce same in Arkansas.

Appellee corporation did not qualify under § 1826 of Crawford & Moses’ Digest to do a loan business in the State before entering into the contract in question, but it had complied with the statutes of the State covering foreign life insurance companies in order to do business in the State, which requirements will be found in §§ 6059‘ to 6065, inclusive, of Crawford & Moses ’ Digest.

Appellee corporation introduced Eobert Eoudebush, its financial agent, who testified that it was authorized to do business- in the State of Arkansas for the entire year of 1922 and at all times since. .He attached the last certificate of compliance, in form and substance like the others, to his testimony as Exhibit A, which is as follows:

“State of Arkansas
Department of Insurance and Revenues Little Rock.
Certificate of Compliance.
“I, W. E. Floyd, Commissioner of Insurance and Revenues, do hereby certify that the Union Central Life Insurance Company of Cincinnati, Ohio, is duly authorized under the laws of this State, with a paid-up capital of $2,500,000, and the records of our office show that the company was authorized to transact business in Arkansas for the year 1922,....................................($........................) and is authorized for the year ending March, 1927, to transact the business of life insurance, insurance as specified in, its charter on file in this department, and provided for by the insurance laws.
“In testimony whereof I have hereto subscribed my name and affixed my official seal at the city of Little Rock, this 7th day of June, 1926.
“W. E. Floyd,
(Seal) ‘ ‘ Commissioner of Insurance and Revenue
“By Claud Duty,
“Deputy Commissioner of Insurance and Revenue.”

It will be observed that this certificate authorizes appellee corporation to do life insurance business in Arkansas in accordance with the provisions of its charter on file in said department. Under the rule that courts will take judicial notice of documents of this nature, we have examined the charter and by-laws filed by appellee corporation in the Insurance Department, and we find that article 6 of its by-laws authorizes its executive committee, under the direction of its board of directors, to invest the funds of the corporation, make all loans, and do such other business as the board may direct.

The decree is therefore affirmed.

Smith, J., concurs in judgment.


text:
    Hamilton Coal & Coke Company v. Johns.
    Opinion delivered January 23, 1928.
    Landlord and tenant — when relation established. — In an administrator’s suit to recover the royalty on coal lands oí intestate leased for five years to defendant, who claimed the lease was void under Crawford & Moses’ Dig*., § § 67, 120, because the lands were not assets in the administrator’s hands, and could not be leased by the administrator without a court order, held that, since defendant had possession of' the land for three years under the lease and had paid royalties for two years, the relation of landlord and tenant was established, and the lease was enforceable.
    Appeal from Logan Circuit Court, Northern District; J. 0. Kincavmon, Judge;
    affirmed.

      Anthony Hall and Cochran $ Arnett, for appellant.

      White ■<& White, for appellee.
   Humphreys, J.

This suit was brought to recover a minimum annual royalty of $2 per acre under a five-year coal lease of an eighty-acre tract of land in Logan County, which was entered into by and between appellant and appellee on the 20th day of April, 1923. This land was owned by Ben Johns, when he died intestate, and the lessor, the appellee herein, administered upon the estate. The complaint alleged that appellant entered into possession of said land under the lease and paid the minimum royalty for two calendar years, but that, on April 1, 1926, it refused to pay the royalty under claim that the lease was void, although it retained possession of the land during the time.

Appellant interposed the defense to the action that the lease was void and not binding upon it because the lands were not assets in the hands of said administrator for the purpose of paying debts of the estate, under the provisions of § 67 of Crawford & Moses’ Digest, and that the administrator had no right, under § 120 of Crawford & Moses’ Digest, to lease same without first filing a petition with and obtaining an order from the probate court to do so. The two sections of the statute referred to are as follows:

‘ ‘ Section 67. Lands shall he assets in the hands of the executor or administrator, and shall he deemed in their possession and subject to their control for the payment of debts.”
“Section 120. Before the judge shall authorize the renting .of real estate it shall be the duty of such administrator or executor to present his petition in writing, verified by affidavit, showing the condition of such real estate and the reason why such application was not made in term time, and if, upon reading such petition, the said judge shall be satisfied that it shall be to the interest of the estate to rent out the real estate, he shall indorse an order upon such petition authorizing the renting out of the real estate for a time not exceeding one year, and such petition so indorsed shall be filed by the said judge in the office of the clerk of the proper county.”

A demurrer was filed and sustained to the answer, and, appellant electing to stand thereon, judgment was rendered against it in favor of appellee for $176 and interest at the rate of six per cent, per annum upon said sum from the first day of April, 1923, until paid, from which is this appeal. The court sustained the demurrer to the answer and rendered judgment against appellant upon the theory that a tenant has no right to question the validity of a lease under which he holds possession of the land and for which he pays rent to his landlord.

If it be conceded that the lease was void, and subject to rescission or cancellation at the will of either party, yet, according to the admitted facts, under the pleadings, appellant held possession of the land for three years, and paid royalties according to the contract for the first two years. By these acts the relationship of landlord and tenant was established between them, and the law will recognize and enforce the lease contract as if valid in all respects. The court said in the case of State v. Robinson, 143 Ark. 456, that:

“The briefs discuss at length the question of the validity of Mauldin’s contract, and the right- to maintain this action, if it is in fact invalid. But, if it were •conceded that Mauldin’s contract was void ah initio, * * * that fact could make no difference, for a tenancy existed under a contract which the parties mutually treated as valid. ’ ’

No error appearing, the judgment is affirmed.


author: McHaney, J.

text:
    Plunkett-Jarrell Grocer Company v. Huie.
    Opinion delivered January 23, 1928.
    1. Appeal and error — harmless error. — Where a plaintiff brought suit and caused attachment to be levied upon defendant’s property, but shortly thereafter the defendant was adjudicated a bankrupt, and, upon the intervention of the trustee in bankruptcy, the attachment was dissolved, the court’s failure to give plaintiff a judgment against the defendant, if error, was harmless, since the plaintiff could submit his open account to the trustee in bankruptcy as well as the judgment could have been submitted.
    2. Bankruptcy — burden of proof. — A trustee in bankruptcy, seeking to set aside an attachment obtained against the bankrupt before his adjudication as such, has the burden of proving that the debtor was insolvent when the attachment was obtained.
    S. Bankruptcy — question of fact. — In a proceeding by the trustee of a bankrupt to set aside an attachment levied upon property of the bankrupt shortly before the bankruptcy adjudication, on the ground that the bankrupt was insolvent when the attachment was secured, held that insolvency was a question of fact for the jury, or for the court sitting as a jury where a jury was waived.
    4. Appeal and error — conclusiveness of verdict. — A verdict of the jury or findings of the trial court sitting as a jury will not be set aside for insufficiency of evidence, if there is any substantial evidence to support the verdict or findings.
    5. Appeal and. error — conclusiveness of verdict. — In testing the sufficiency of evidence to sustain a verdict, the highest probative value of which it is susceptible, together with all inferences reasonably deducible therefrom will be given.
    6. Bankruptcy — evidence of insolvency. — In a proceeding by a trustee of a bankrupt estate to set aside an attachment levied against the bankrupt before his adjudication as such, the fact that the attachment was obtained two months before the bankruptcy adjudication, is a circumstance tending to prove insolvency at the time of the attachment.

      7. Bankruptcy — evidence op insolvency. — In a prosecution by the trustee of a bankrupt to set aside an attachment obtained on the bankrupt property before adjudication, on the ground that the attachment was obtained while the defendant was insolvent, evidence held sufficient to support a finding of insolvency at such time.
    Appeal from Conway Circuit Court; J. T. Bullock, Judge;
    affirmed.

      Moore, Gray Burroio and Frank E. Ghowning, for appellant.

      Strait & Strait, for appellee.
   McHaney, J.

On December 23,1926, appellant instituted an action against R. B. McCracken in the Conway Circuit Court for $984.16 on open account, and caused a writ oif attachment to be levied upon his stock of merchandise and fixtures in Morrilton, Arkansas. Thereafter, on January 3,1927, other of McCracken’s creditors filed an involuntary petition in bankruptcy against him, and appellee was appointed receiver of said estate. As receiver, appellee intervened in the action of appellant against McCracken, and filed a motion to quash the attachment and have the property attached turned over to the jurisdiction of the district court and the intervener as receiver, on the ground that McCracken was insolvent at the time of the levy of the attachment, and that the Federal court had aequiréd jurisdiction thereof by virtue of the petition in bankruptcy. Appellant filed a response to this motion, and, upon a hearing, the court found that an involuntary petition in bankruptcy was pending against McCracken, upon which there had been no adjudication, and directed that the attached property be held in statu quo pending adjudication on said petition, and directed that the receiver be permitted access to the property for the purpose of taking an inventory. On February 28, 1927, McCracken was adjudicated a bankrupt by the Federal District Court, and appellee was elected trustee of said estate, and, as such trustee, he thereupon filed a motion and intervention in the Conway ^Circuit Court in the case of appellant against McCracken, alleging said facts, and praying that the attachment be quashed, and that he be delivered the possession of said property as trustee in bankruptcy. Appellant filed a response to this motion, and, after a hearing, the court rendered judgment, finding that McCracken was insolvent at and prior to the time plaintiff’s attachment was levied, ordered the attachment dissolved, and authorized appellee, as trustee in bankruptcy, to take charge of the attached property.* The court further held that appellant was not entitled to a judgment against McCracken for the amount of his debt, and from the judgment against it appellant has appealed to this court.

It is first insisted that appellant was entitled to a default judgment against McCracken, since he was served with a summons, and made no appearance at the trial, either in person or by attorney. We do not see how a personal judgment against McCracken would or could have put appellant in any better shape to prove his claim in the bankruptcy court. If appellant had a personal .judgment against McCracken, since McCracken has been adjudicated a bankrupt and his affairs taken over to be administered by the court of bankruptcy, appellant would have been required to file its judgment as a claim against the bankrupt to have participated in the distribution of his assets. It could have done the same with its open account, and we conclude that appellant was not prejudiced by the failure of the circuit court to give it a personal judgment against him.

Appellant concedes that the real issue in the case is, whether the circuit court erred in quashing the attachment, and says that “the lien of appellant’s attachment must be sustained unless the intervener, by a fair preponderance of the evidence, has shown that R. B. McCracken was insolvent at the time the appellant’s attachment was levied.” If McCracken was insolvent at the time of the levying of the attachment, we understand the appellant to concede that the action of the court in quashing the attachment was correct. The burden of proof was on the intervener to prove MicCriacken’s insolvency at the time the attachment was levied. Lester v. Thomas, 174 Ark. 351, 295 S. W. 717. And this was a question for the jury, under proper instructions from the court, but a jury was waived in this case, and the matter .submitted to the court sitting as a jury. Therefore, under the settled rules of this court, if there is any substantial evidence tending to establish the insolvency of the bankrupt, McCracken, then this court will not set aside the verdict of the jury or the findings of the court sitting as a jury on account of the insufficiency of the evidence. It is the settled rule of this court that it will not do .so, even though, this court may be of the opinion that the preponderance of the evidence is against the finding of the jury or the court. In the case of Karr v. Bowen, 128 Ark. 307, 194 S. W. 498, we held that, in testing the sufficiency of the evidence to sustain the verdict, the highest probative value of which it is susceptible will be given to that end, together with all inferences reasonably dedueible therefrom, and the verdict will not be set aside because the preponderance thereof is against it.

The findings of the court, sitting as a jury, have the same binding effect on this court as the verdict of a jury. Appellant concedes this rule, but says there is no competent substantial evidence to support the findings and judgment of the circuit court.

It is conceded that McCracken’s indebtedness at the time of the attachment, exclusive of his mortgage indebtedness, was $4,087.15, and, including his mortgage indebtedness of $2,790, his total debts amounted to $6,877.15. We think there is substantial evidence showing McCracken’s insolvency, outside of the evidence claimed by appellant to be incompetent. McCracken repeatedly admitted his insolvency and incapacity to pay his debts. He told Ed Cordon, his attorney, that he was insolvent and unable to meet his obligations, and would go into voluntary bankruptcy, but was unable to pay the advance costs. McCracken also signed a written admission of insolvency, which was introduced and identified by Mr. Woodward, and he also admitted his insolvency to other witnesses. Appellant contends that these admissions of insolvency were incompetent in a suit between appellant and the trustee. Conceding, but not deciding, that this evidence is incompetent, still Mr. Gordon testified that McCracken’s total assets were slightly in excess of $3,000, exclusive of his equity in real estate and the small amount of collateral notes in the First National Bank. The face value of these collateral notes was only $225, but Mr. Tom Davis, vice president of the bank, testified that they were practically worthless. McCracken had been owing the bank for a long time, and, although the bank was demanding payment of him during this time, had been unable to collect, and had to renew his paper. Other witnesses testified to his inability to pay his current debts, or their inability to' collect them, and his frequent admission of his inability to pay. Appellee made an inventory and appraisement of the bankrupt’s assets shortly after the attachment suit was filed, and found he had only $3,086.02, according to the invoice and appraisement, and that the inventory was made on a basis of the original value of the goods, without depreciation, but that depreciation was figured on the fixtures. He was adjudged a bankrupt a little more than two months after the levying of the attachment, and this is a very strong circumstance of his insolvency at the time of the attachment.

We think the evidence amply sufficient to support a finding of insolvency at the time the attachment was levied, and the judgment is accordingly affirmed.


author: Kirby, J.

text:
    Lake v. Anderson.
    Opinion delivered January 23, 1928.
    1. Appeal and error — necessity of plea of res judicata. — The question whether the dismissal of a prior appeal rendered the matters in dispute res judicata cannot be considered by the Supreme Court where there was no plea of res judicata.

      2. Pleading — admission by demurrer. — A -demurrer to a complaint admits the truth of its allegations.
    3. Pleading — indefiniteness.—Objections that the allegations of a complaint were indefinite, or that they stated a cause of action defectively, should be made by motion to make the complaint more definite and certain, rather than by a demurrer.
    4. Mortgages — right to redeem. — A complaint for the redemption of land on a mortgage foreclosure sale, alleging that an offer was made to redeem and to pay the amount due within the time allowed by law, that the offer was accompanied by a check for the amount for which the property sold, to which no objection was made, that the check was withdrawn by agreement, and that defendants surreptitiously procured a sale and a deed in disregard of the pending petition to redeem and agreement of the parties, held sufficient to state a cause of action.
    Appeal from Sebastian Chancery Court, Greenwood District; J. V. Bourlcmd, Chancellor;
    reversed.

      Evans & Evans, for appellant.

      Webb Covington, for appellee.
   Kirby, J.

Appellants brought this suit to set aside or vacate a decree or order of sale and to be permitted to redeem the lands from the sale. A general demurrer to the complaint was interposed, with five other grounds of special demurrer or specifications, showing the particular allegations of the complaint that rendered it insufficient; and the sixth specification is as follows:

' “6. That said petition shows that defendants did not comply with the law in the matter of their alleged attempt to redeem- said property, in that it shows that they deposited only $500 with the clerk of -the court, and this sum was deposited more than one year from the date of sale of said property, and that it was withdrawn. ’ ’

The complaint is voluminous, with its exhibits of other pleadings in other proceedings and suits between the parties, but it alleges that the offer to redeem was made within the time allowed by law, and to pay any amount that might be found to be due under the mortgage, as well as the amount for which the property sold; that it was accompanied by a check for $500, the amount for which the property sold under the mortgage, and that no objection was made to the check, it being after-wards withdrawn under an agreement of all the parties at interest that the rents of the property should be applied first in payment of an indebtedness of the mortgagors to the Huntington State Bank, which was secured by a prior lien or mortgage to the one sought to be foreclosed in this suit and recognized in the decree of foreclosure; and the further agreement between all parties at interest that the net proceeds of the mine of L. E. Lake should ¡be applied in the reduction of the amounts covered by the decree of foreclosure, except an amount ■specified, due to Ted Kirkland, which had never been recognized as valid by defendants in the foreclosure suit, etc. It was further alleged that the appellees had surreptitiously procured a sale of the property and deed thereto, in disregard of the pending petitions for redemption and the agreement about the disposition of the rents in payment of the mortgage indebtedness, and that they were about to take possession of the foreclosed mortgaged property, notwithstanding such agreement and right of redemption by appellants, and would do so unless enjoined, etc.

A temporary injunction was granted, which the court refused to make perpetual, and the demurrer sustained, and, the petitioners declining to plead further, the complaint was dismissed for want of equity, from which decree this appeal is prosecuted.

Appellees insist in their brief that every question presented by this record except one — the alleged offer to redeem — was involved in a former appeal of this case, No. 9150, and filed in the Supreme Court April 20, 1925, and dismissed for failure to comply with Rule 9, and included a copy of the order of dismissal in their brief. This court, however, can take no notice of the questions involved on that appeal, since there was no plea of res judicata to the petition to- redeem herein, even if they were entitled to rely upon any subh plea. Bolton v. Mo. Pac. Ry. Co., 148 Ark. 319, 229 S. W. 1025.

The truth of the allegations of the complaint are admitted by the demurrer, and, if such allegations were regarded as indefinite or as stating a cause of action defectively only, the objection should have been made by a motion to make more definite and certain, rather than by demurrer.

The court erred in sustaining the demurrer to the petitions to redeem, and the decree is reversed, and the cause remanded with directions to overrule the demurrer and for further proceedings in accordance with the principles of equity and not inconsistent with this opinion.


text:
    People’s Savings Bank v. Raines.
    Opinion delivered January 23, 1928.
    1. Bills and notes — insurance premium notes — innocent purchaser. — Since Crawford & Moses’ Dig., § 7960, providing that no note for insurance premiums shall be negotiable until the policy for which the note was given as payment for a premium thereon shall have been issued and delivered, does not declare such a note void, such note may be acquired by innocent holders in due course after they have become negotiable by issuance of the policy.
    2. Insurance — delivery op policy. — Where insured kept the policy, for which he gave his note, in his possession without refusing to accept it for nearly three months after its delivery, he could not claim, in an action on the note, which was not negotiable under Crawford & Moses’ Dig., § 7960, until after delivery of the policy, that it was not issued and delivered.
    3. Insurance — duty of insured to examine folicy. — It is the duty of the insured to examine his policy within a reasonable time after delivery to him and reject it, if it did not comply with his contract, and upon failure to do so, he will be deemed to have accepted it, and cannot avoid liability on the premium note.
    4. Bills and notes — life insurance premium note — innocent purchaser. — Where a bank became the innocent purchaser for value of a note for a life insurance premium, made negotiable, under Crawford & Moses’ Dig., § 7960, after the policy was delivered to the maker, it took the note free from defects therein or defenses existing in favor of the maker.

      Appeal from Pulaski Circuit Court, Third Division; Marvin Harris, Judge;
    reversed.
    STATEMENT OE EACTS.
    The bank' brought this suit upon a promissory note for $189.50 alleged to have been executed by appellee, John R. Raines, on January 12, 1926, to one E. W. Tillman, and by him sold and transferred to the bank on January 14, 1926, in due course of business and for a valuable consideration and without any notice of any defects in or defenses thereto. An affidavit of merit was made to the complaint, in accordance with § 1233, C. & M. Digest of the Statutes.
    The appellee answered, denying the material allegations of the complaint and any liability on the note, alleging that it was given for a premium on an insurance policy; that it was -only pledged as collateral by the payee, Tillman, to the appellant bank to secure his own note given for the loan before the insurance policy for which it was given was issued and delivered to appellee; that the note at the time was non-negotdable and void; that the insurance policy- for which it was given was not issued as applied for, and never accepted by appellee, and was canceled by the insurance company. No affidavit of merit, as prescribed by § 1233, C. & M. Digest, was made to the answer.
    Appellant filed a reply, denying that the note sued on was non-negotiable and void at the time of its transfer to it and that any policy of insurance for which it might have been given as a premium thereon was not issued a-s applied for nor accepted by appellee.
    The testimony shows that the note was purchased in due course of business for value before maturity by appellant bank from Tillman, the payee, without notice of any defects therein or defenses thereto, and is in form an ordinary negotiable promissory note for $189.50, dated January 12, 1926, payable June 15, 1926, to the order of E-. W. Tillman, and duly indorsed by him.

      The note was given for the premium on an insurance policy, and executed at the time the application for the policy was made, on January 12, 1926. The bank had no notice that the note had been given for an insurance premium until they notified appellee, in May before it became due in June, that the bank was the holder of the note and would expect payment when it became due.
    Appellee admitted the execution of the note, and stated it was given for a premium on an insurance policy at the time the application for the policy was made. That the policy was delivered to him about the first of February thereafter, but was not issued in the form applied for, and that, some time in April thereafter, Tillman, the payee of the note, who had solicited the insurance, came over and took the policy up, stating, at the time, that he had quit the insurance company, and wanted to make a settlement with them, and would return appellee’s note in a few days. He gave him a receipt for the policy as follows:
    “Received from Jno. R. Raines policy No. 168488, for which policy is this day canceled, on January 12, 1926, a note for $189.50, payable June 15,1926, was given for the above numbered policy, for which said note is null and void and to be returned to John R. Raines.
    (Signed) “E. W. Tillman,
    “Agent American Nat. Ins. Co., G-alveston, Texas.”
    Appellee said: “I asked him for the note. He told me that the insurance company had the note, and that he would deliver it to me in a couple of days. After the policy was delivered to Mr. Tillman and he failed to deliver my note, he, Tillman, executed his note to me to indemnify me. That note is in my possession. I kept pressing him’ for my note, and I thought I had better take that or take nothing. Tillman did not tell me that he had sold the note to the bank until after I got a notice from the company, some time in the latter part of May.” Said he had paid nothing to the People’s Bank on the note, and did not know where Tillman was. Claimed the policy was not issued as applied for because Tillman represented that, under the policy, in case of permanent disability $20 per month would be paid, and the policy did not call for that.
    The court refused to give plaintiff’s requested instruction for a directed verdict and also its requested instruction No. 2. It also refused appellee’s request for a directed verdict, and gave, over appellant’s objection, his requested instruction No. 4.
    The jury returned a verdict in appellee’s favor, and from the judgment thereon this appeal is prosecuted.

      Raymond Jones, for appellant.

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

Appellant insists that the court erred in refusing to direct a verdict in its favor.

This appeal involves the construction of § 7960, C. & M. Digest, which provides:

“Section 7960. No note hereafter given for premiums on insurance in this State shall ¡be negotiable until the policy for which said note was given as payment for premium thereon shall have been issued and delivered to the maker of said note, and all note's so given shall state for what purpose the noté was given; provided that, if a policy shall be issued in the form applied for, and the maker of any such note shall refuse to take same, when same shall be presented to him for acceptance, then and in that case such note shall be negotiable. Nothing in this act shall be construed to in any way invalidate such notes as between the payee and payor, and such notes, when they become negotiable, shall be in all respects as other negotiable papers. Any person violating the provisions of this act shall be deemed guilty of a misdemeanor, and upon conviction shall be fined in any sum not less than $50 and not more than $200. ’ ’ Act March 29, 1913, p. 1070.

Appellant insists that, since the statute does not declare void a note given for the premium on an insurance policy, that art action thereupon by a bona fide holder of such note, acquired in due course of business, would not be subject to any defenses by the maker under the terms of the statute.

It is true this court has uniformly held that usurious notes are void in the hands of an innocent purchaser in due course of business, and also that there can be no innocent purchaser of negotiable paper in due course of business given in payment for any patented machine, in violation of the statute, because such notes are declared void, the ones for usury under article 19, § 13, of the Constitution, repeated as § 7362 of C. & M. Digest, and the other under § 7956, C. & M. Digest. German Bank v. DeShon, 41 Ark. 341. See also Woods v. Carl, 75 Ark. 328, 87 S. W. 621, 5 Ann. Cas. 423; Tilson v. Gatling, 60 Ark. 114, 29 S. W. 35; Ozan Lbr. Co. v. Union County Bank, 207 U. S. 254, 28 S. Ct. 89, 52 L. ed. 195; Jonesboro Trust Co. v. Nutt, 118 Ark. 368, 176 S. W. 322.

The said statute does not declare notes given for premiums for insurance void, but that “no note hereafter given for premiums # * * shall be negotiable until the policy for which said note was given as payment for premium thereon shall have been issued and delivered to the maker of said note, and all notes so given shall state for what purpose the note was given.”

If the note is not negotiable unless made in the form prescribed and under the conditions designated in the statute, then there could be, of course, no bona fide holder of such note in due course, within the meaning of our statutes and decisions on commercial paper — the Uniform Negotiable Instruments Law; ¡but this statute provides that such note shall be negotiable after the policy shall have been issued and delivered to the maker of the note, and “that, if a policy shall be issued in the form applied for,” and refused when presented to the insured for acceptance, “such note shall be negotiable”; and further, “such notes, when they become negotiable, shall be in all respects as other negotiable papers.” Nothing in the act is to be construed to in any way invalidate such notes as between the payee and payor; the purpose of the statute evidently ’being to prevent irresponsible insurance companies and their agents from realizing on the obligation given by applicants for insurance before delivery of the policies and -without giving them the protection contracted for.

It is also true that the statute does not denounce a penalty against the purchaser of any such note, and, since it does not declare such notes void and does declare that they shall be negotiable under the circumstances designated, they could, of course, fbe acquired by innocent holders in due course after they became negotiable.

' The undisputed testimony shows that this policy for the premium upon which the note sued on was given was issued and delivered by the insurance company to the maker of the note; that he kept it in his possession, without refusing to accept it, for nearly three months after it was delivered, and then turned it over to the agent who had solicited his insurance upon his statement that he had quit the company and wanted to make a settlement with it. Such being- the case, he cannot claim that the policy was not issued and delivered to him.

It was the duty of the insured to examine the policy in a reasonable time after its delivery to him — that is, in such a time as he could have done so — and to reject it, if it was not what he contracted for, and, if he failed to do this, he will be deemed to have accepted it, and cannot avoid liability for payment of the premium note. Remmel v. Griffin, 81 Ark. 269, 99 S. W. 70; Smith v. Smith, 86 Ark. 284, 110 S. W. 1038; Gray v. Stone, 102 Ark. 146, 143 S. W. 114; Carrigan v. Nichols, 148 Ark. 336, 230 S. W. 9.

Here the insured admitted having kept the policy after its delivery to him, about the first of February, until some time in April, when he turned it over, upon his request, to him who had been the agent of the insurance company when it was issued and delivered, upon his statement that he had quit the insurance company and wanted to make a settlement with it, and his agreement that the premium note would be returned within a few days. This constituted an unreasonable delay in the attempted rejection of the policy (Carrigan v. Nichols, supra), and the insured must be held to have accepted it, and that the policy for which the premium, note was given was issued and delivered within the meaning of the statute, removing all restrictions as to the negotiability of the note.

The bank, having become the innocent purchaser for value of the note, which was negotiable after the policy was delivered to the maker, in due course and before its maturity, took it free from any defects therein or any defenses thereto that had heretofore existed in favor of the maker.

These facts having been shown by the undisputed testimony, the court erred in not directing a verdict in appellant’s favor, and the judgment is accordingly reversed, and judgment will be entered here for the amount of the note. It is so ordered.


author: Mehaffy, J.

text:
    Inter-Southern Life Insurance Company v. Shutt.
    Opinion delivered January 23, 1928.
    1. Vendor and purchaser — construction of contract. — Where the purchaser of land was given the privilege under a written contract of selling any part of the east half of the tract at not less than the named price per acre,'and the west half at not less than the named price per acre, such purchaser could sell any part of the east half of the tract hut not any part of the west half without selling it all.
    2. Contracts — intention of parties. — In construing contracts the most important thing is to ascertain the intention of the parties.
    3. Contracts — construction.'—Courts may acquaint themselves with persons and circumstances that are the subjects of the statements in the written agreement, and are entitled to place themselves in the same situation as the parties who made the contract so as to view the circumstances as they view them, and to judge of the meaning of the words and of the correct application of the language to the) things described.
    4. Contracts — ambiguity.—Where there is ambiguity in any part of an instrument, it is the court’s duty to place itself in the situation of the parties and ascertain, if possible, from the language used, what the parties meant, and when the intention of the parties is ascertained, it controls the construction of the contract.

      Appeal from Arkansas Chancery Court, Northern District; H, R. Lucas, Chancellor;
    reversed.

      John, L. Ingram, for appellant.
   Mehaffy, J.

On December 5, 1916, G. H. Getty, as receiver, sold to J. E. Shutt, under a written contract, 80 acres of land, the same being the south half of southwest quarter of section 27, township 2 south, range 5 west, for $4,800. The contract was quite lengthy, but there is no dispute about any part of it except the following section:

“Party of the first part agrees to give to the party of the second part the option and privilege of selling any part of the east half of said tract of land at not less than $60 per acre, and said west half of said tract at not less than $80 per acre, the entire proceeds to be applied toward the purchase price as herein mentioned.”

Notes were executed and delivered to the seller for $500 each, due on or before January 1,1919, and January 1 each year thereafter until all were paid. Said contract also provided that, if- any note or interest should not be paid when due or within 30 days thereafter, all of said notes should become due and collectable at once.

Katie I. Shutt, who was the daughter of J. E. Shutt, purchased fifteen acres of said land by agreement, and the money was paid to and received by appellant.

On April 22, 1922, after the appellant had written to J. E. Shutt, calling his attention to notes that were past due, Shutt wrote to the insurance company and, among other things, said: “As to the other, wish to advise that I am about to effect the sale of five acres at $100 per acre, and for which purpose I am now asking that you execute the inclosed deed, and forward same to the Arkansas County Bank of this city, same to be held in escrow until the sum of $500 is paid to them, then to be delivered to the purchaser. ’ ’

The insurance company acknowledged the receipt of this letter on April 25, and inquired of Shutt whether or not the buildings were on this five acres. They stated: “If this is the case, we hardly believe we would be justified in making the deed upon the payment of only $500.”

In reply to this letter, appellee wrote that there were two dwellings on the place, and that one of them was located on the five acres.

Then, on May 12, the insurance company wrote Mr. Shutt, stating: “We are taking up your proposition with reference to deeding the five acres of land to your daughter, and will advise you in about a week what our decision will be.”

So far as the record shows, the above is all of the correspondence with reference to this matter.

Katie I. Shutt testified that she put up the $100 per acre in the First National Bank, and that the bulk of it had remained there on deposit all the time, hut that there had been one withdrawal, that there was only $400 on deposit there now.

It appears that the parties never did reach an agreement as to the sale of this land, although Katie I. Shutt testifies that she bought this, hut she describes the manner and identifies the letters which passed between the parties, she having written the letters for her father herself.

The chancellor entered a decree in favor of the appellant for the sale of all of the land except the five acres, and found that Katie Í. Shutt was entitled to that five acres upon the payment of $400. The cburt held that, ■under the contract, the defendant bad the right to sell any part of the west half of the land described in said contract.

The contract provides, or rather the parties agree to give Shutt the option and privilege to sell any part of the east half of said tract of land for not less than $60 per acre and said west half of said tract at not less than $80 per acre.

The contention of appellant is that he had the option to sell any part of the east half and had the option to sell the whole of the west half, hut that he did not have the option to sell any part of the west half without selling it all. In other words, that the option was given him to sell the west half and not a part of the west half.

The appellees contend that Shutt had a right to sell any part of the west half.

We think that the contract means' what it says: that .Shutt could sell any part of the east half for not less than $60 per acre, and that he could sell the west half, but that he was not given the option or privilege of selling a part of the west half. We think this construction is borne out by the conduct and acts of the parties themselves. It appears from the correspondence that the five-acre tract had one of the buildings on it, and that, the appellees had contracted to sell this land at $100 per acre, and that the insurance company inquired whether the five acres did contain the buildings, were informed that it did contain one of them, and that the insurance company then wrote Shutt that they would investigate it, and there was no answer to this, so far as the record shows; the appellee did not contend that they had a right to sell, did not make any response, so far as the record shows, to the statement of the appellant that they would investigate and let him know whether they would agree to the sale of the five acres. The fact that the clause in the contract does not state that Shutt has the option to sell part of the west half, the fact that the correspondence indicates that it was not so understood, and the fact "that the buildings were on the west half, convince us that the proper interpretation of the contract is that Shutt had the option to sell any portion of the east half but did not have the option to sell a portion of the west half.

In order to construe a contract, the first and most important thing is to ascertain the intention of the parties. This may be ascertained in this case by the contract itself, by the acts of the parties under the contract, and by the situation of -the improvements or buildings on the property. And this court has said:

“Courts may acquaint themselves with the persons and circumstances that are the subjects of the statements in the written agreement, and are entitled to place themselves in the same situation as the parties who made the contract, so' as to view the circumstances as they view them and so as to judge of the meaning of the words and of the correct application of the language to the' things described.” Wood v. Kelsey, 90 Ark. 272, 119 S. W. 258; Lowdenbeck Fertilizer Co. v. Tenn. Phosphate Co., (C. C. A.) 121 F. 298, 61 L. R. A. 402; Hoffman v. Moffioli, 104 Wis. 630, 80 N. W. 1032, 47 L. R. A. 431; Rockfellow v. Merritt, (C. C. A.) 76 Fed. 909, 35 L. R. A. 633; Minn. Milling Co. v. Goodnow, 40 Minn. 497, 42 N. W. 356, 4 L. R. A. 202.

To reach the construction of the contract which we have reached does not require the addition of any word or the changing of any word, and is, we think, in conformity with the intention of the parties as expressed by the contract.

To put the construction on the contract contended for by appellee,- it would be necessary to hold that the option of selling said west one-half of said tract meant any part of said west one-half. In other words, we would have to hold that the parties intended that the words “any part” should be understood as applying to the west one-half of said tract, although these words are not used except with reference to the east one-half.

This court has said: ‘ ‘ Where there is ambiguity in any part, word or words of an instrument, it is the court’s duty to place itself in the situation of the parties and ascertain, if possible, from the language used, what the parties meant.” Wells v. Moore, 163 Ark. 542, 260 S. W. 411.

“And when the intention of the parties is ascertained, this intention must control the construction.” Roach v. Board of Directors St. Francis Levee Dist., 168 Ark. 364, 269 S. W. 986.

The case will therefore be reversed, and remanded with directions to dismiss the petition of the intervener and render a decree in accordance with the complaint.


text:
    Harris v. State.
    Opinion delivered January 23, 1928.
    Homicide — impeachment op accused. — In a prosecution for murder, in which the accused claimed that he killed deceased in self-defense, and testified that ill feeling existed between him and deceased after deceased’s sale of the merchandise business to him, testimony that deceased went to wholesalers with accused to introduce accused and help him buy goods, contradicting accused’s testimony that deceased went to wholesalers to buy goods for himself, held admissible, both as -contradicting accused’s testimony regarding ill feeling and as showing who was the probable aggressor.
    . Appeal from Hot Spring Circuit Court; Thomas E. Toler, Judge;
    affirmed.

      Robert L. Rogers, R. R. Means and Sam Robinson, for appellant.

      R. W. Applegate, Attorney General, and Darden Moose, Assistant, for appellee.
   McHaney, J.

Appellant was indicted on a charge of murder in the first degree for the killing of Ellis Naoklie. He was convicted of murder in the second degree, and sentenced to twenty-one years in the penitentiary. By this appeal he seeks to reverse this case on the following assignment of error only:

“The court erred in allowing the witness, Mrs. Ellis Nacklie, to testify on rebuttal, in regard to deceased taking the defendant to St. Louis with him after the sale of said stock of goods, introducing him to the trade and trying to establish a credit for the defendant in St. Louis, and helping buy goods and merchandise for the store at Malvern. ’ ’

The record reflects that appellant had testified, on direct examination, that deceased had beat him out of about $1,500 in the sale of a merchandise 'business to him; that he misrepresented everything regarding the sale, and charged him twice for the same goods, did not give him any invoices, and that they fell out about that. On cross-examination he testified that there had been ill feeling between him and deceased ever since he purchased the business and store of deceased, and was asked, on cross-examination, if the deceased did not go with him to St. Louis, after the sale, and introduce him to some of the wholesale houses, and assist him to get a line of credit with them, which he answered in the negative. After the defendant had closed his case, the State was allowed, over objection of appellant, to ask Mrs. Nacklie the following question, and permit her to give the following answer:

“Q. You heard the statement of Harris that, when your husband was selling’, or after he sold out to Gust, he went to St. Louis, and your husband bought goods to send to Florida? A. No; he went to St. Louis to introduce him to the wholesale stores up there and to help him buy goods; we did not buy any goods for Florida; he was in the real estate business in Florida; we didn’t go in any business in Florida, and he didn’t buy any goods for himself.”

Appellant contends that this was error, in that it permitted the impeachment of appellant by contradicting him on an immaterial collateral matter, which was brought out by the State from appellant on cross-examination. If this were an immaterial collateral matter, appellant would be right in this contention, but, as we view it, it is neither immaterial nor collateral, as it tended to contradict appellant in his statement that bad feeling had existed between them on account of the sale of the store ever since it was consummated, and tended to clarify the question as to who was the probable aggressor in the fatal encounter.

In the case of Prewitt v. State, 150 Ark. 279, 234 S. W. 35, Prewitt was indicted, charged with the murder of one Hastings. -They had theretofore been good friends, but the trouble arose over an alleged remark that Prewitt had made about Mrs. Hastings, mother of the deceased, which he construed as reflecting on his mother, and which had been repeated to Mrs. Hastings by Mrs. Prewitt in the presence of Mrs. Harding. The defendant offered to prove by Mrs. Harding that she was present and heard the conversation between Mrs. Prewitt and Mrs. Hastings, and that it was to the effect that Mr. Prewitt had remarked about how often he saw Mrs. Hastings on the street, and how spry and youthful she appeared to be, and that the remark was a facetious compliment on Mrs. Hastings’ youthful appearance, and nothing in it susceptible of a construction derogatory to Mrs. Hastings’ character. The lower court refused to permit Mrs. Harding to so testify. Prewitt was permitted to testify that he told deceased that he had made no remark reflecting on his mother, and that he would be glad to explain and apologize, if deceased desired an apology. Prewitt was convicted, and, on appeal to this court, the case was reversed because of the refusal of the court to permit Mrs. Harding to testify, and this court said:

“In the very recent case of Avey v. State, 149 Ark. 642, 233 S. W. 765, we held that proof of a motive for the killing was not a collateral matter. We there said: 'This court has many times held that the State is not required to prove a motive to establish the guilt of one accused of homicide; but the court has also held that, as the absence of a motive is a circumstance tending to show innocence, the State may show the existence of a motive for taking the life of a decedent, to be considered with other facts and circumstances in determining the guilt or innocence of the accused.’ ”

So here the testimony of Mrs. Nacklie was not collateral, but was in contradiction of appellant’s statement that bad feeling had existed between them since the sale of the stock of goods. Moreover, appellant contends that he killed deceased in self-defense. He admits the killing of deceased, and the sole question then at issue was as to who was the probable aggressor, and this testimony of Mrs. Nacklie tended to throw light on this important point at issue.

We find no error in the admission of this testimony, and the judgment is accordingly affirmed.