text:
    Shaul v. Katzenstein.
    Opinion delivered February 14, 1927.
    1. Appeal and error — directed verdict — presumption.—When there has 'been a directed verdict, the evidence must be viewed in the light most favorable to the unsuccessful party.
    2. Descent and distribution — presumption of advancement.— Where decedent furnished the money to pay for property, and took the conveyance or title to his child or wife, in the absence of evidence to the contrary, it will be presumed that 'the purchase of the property was intended as a gift or advancement.
    3. Evidence — nature of presumption. — A presumption is merely an inference as to the existence of one fact from the known or proved existence of some other fact, founded on a rule or policy of the law.
    4. Descent and distribution — presumption of advancement.— The presumption that money furnished by a father for property, of which the title was taken to his child, was intended as a gift or advancement may be rebutted.
    5. Descent and distribution — presumption of advancement.— The contention that a gift or advancement was intended by a father in taking a deed to land to his daughter was inconsistent with a plea that the daughter had paid for the property, in an action by an executrix to recover such purchase money.
    Appeal from Lee Circuit Court; E. D. Robertson, Judge;
    reversed.

      Mann <& Mann, for appellant.

      R. D. Smith and W. G. Diming, for appellee.
   Mehaeey, J.

Plaintiffs filed complaint in the Lee Circuit Court, alleging that Mrs. Louisa Shaul was executrix of the estate of Jake Shaul, also his widow, and that the other plaintiffs were children and next of kin; that, in October, 1923, defendants became indebted to Jake Shaul for money borrowed in the sum of $4,476, evidenced by check exhibited; that, in January, 1925, defendants paid on said indebtedness the sum of $1,000, leaving a balance due of $3,476; and that Jake Shaul died testate in February, 1925.

Defendants answered, denying that they became indebted to Jake Shaul for money borrowed for sum mentioned, or any other sum, and denied that they paid $1,000 on indebtedness, but alleged that J. B. Katzenstein paid Jake Shaul a thousand dollars in complete and full satisfaction of any and all claim or indebtedness owing by either defendant herein to the said Jake Shaul, and denied they were indebted to plaintiff in any sum.

Witness Robinson testified that he was engaged in the banking business, and identified the check, and stated that it was given in payment of a note that Mr. Shaul gave to the bank; that a piece of property was purchased from Friedman, and that Shaul made the note for it, and that the note was made in December and a check given to take up the note. Witness did not know, but it was his understanding that the property that Mr. Shaul was buying, he was buying for them; that, at the time, Friedman owed them the amount, or approximately the amount, for which they held the mortgage, and that the Shaul note was given in substitution of the Friedman note; that the check was paid by the Marianna bank; that Mr. and Mrs. Katzenstein lived on the property after that, and are now residing on the property, and have been ever since the check was given (check was then introduced in evidence) ; that Mr. Friedman owed the bank, and that Katzenstein had made a deal with Friedman, and talked-to witness about it. “The only fact I know is that Shaul gave the bank a note which was accepted as part payment of indebtedness to bank by Mr. Friedman. As I recall now, Katzenstein moved into the property about the time of the transaction. Note was a lien on the property and was taken up by the check of Mr. Shaul. ’ ’

Lee Shaul testified that Katzenstein was in possession of the property; that his father paid the Lee County Bank for the Katzensteins; that he knew the check introduced was the cheek paid for the transaction; that his sister has title to the. property, and it was the same property testified about by Mr. Robinson; that the note was in his father’s vault-box, and that, after his father died, Katzenstein had the key, and the note disappeared; the note was in there, and Mr. Katzenstein had access to it later, and that he was the only one who had the keys after witness’ father took sick. “The note he speaks of was one my father gave to the Lee County 'Bank to take up the Katzenstein note, the amount my sister and Mr. Katzenstein owed the bank. The note was in the vault in the Bank of Marianna.” Witness did not have access to the vault; his father took sick at the home of Mr. Katzenstein; he had some money on him, and Mr. Katzenstein took the money and the keys. “I have a box of my own; after my father died we had to demand the keys of Mr. Katzenstein before we could get to the will.”

Mr. Lee Mixon. identified the check, and testified that it was paid. This was all the testimony, and the court then directed a verdict for the defendants.

The evidence in this case was not very strong, but the testimony of the witnesses, together with all the circumstances in the ease, were, we think, sufficient to justify the court in submitting it to the jury. This court has many times held that not only questions of fact are to be determined by jury, but, when there is a directed verdict, the evidence must be viewed in the light most favorable to the unsuccessful party.

The undisputed proof was that Shaul gave this note in payment of the indebtedness of Friedman; that Friedman’s indebtedness was a lien on the land; that Shaul afterwards paid this note with his check, and that the title was made to the Katzensteins, and that they are now living oii it. It is also uncontradicted that this note was kept in Shaul’s box in the bank; that he took sick at Katzenstein’s home, and that Katzenstein took his money and his keys to the box, and that the note disappeared.

Defendants, in their answer, denied the indebtedness sued on, but stated that they paid Shaul $1,000 and that this was payment of all claims and indebtedness. If they paid tliis $1,000, and it was in payment of indebtedness, then certainly they were indebted to Shanl,- or they would not have paid him $1,000.

From the evidence and pleadings the jury might have found that the money that Shaul paid for the place the TCatzensteins lived on was a loan of money to Katzenstein and the navment of $1,000 was a payment on this indebtedness. At anv rate, there was sufficient evidence to require the submission of the case to. the jury, and the court therefore erred in instructing the jury to render a verdict in favor of the defendant. This court has recently said:

“We must give the testimony its strongest probative force in favor of the appellant. When this is done, it occurs to us that, under the testimony, it was an issue of fact for the jury to determine as to whether or not the claim of the appellee against the appellant was disputed. If the jury found that the claim was disputed it was also an issue for the jury as to whether or not there had been an accord and satisfaction.” Davenport v. Gray, 157 Ark. 1, 247 S. W. 81.

It has been said recently by this court that, in determining the sufficiency of evidence to support a verdict against a defendant, the Supreme Court will view the testimony in the light most favorable to plaintiffs and give it such force as the .jury might have given it. St. L. S. F. R. Co. v. Whitfield, 155 Ark. 560, 245 S. W. 323.

It is contended by the appellee that, even if it were admitted that the funds in question were expended by Mr. -Shaul for the purpose of purchasing the property for his daughter, even then it must be presumed that the father intended this as a gift, or at least as an advancement. Appellee calls attention to the case of Wood v. Wood, 116 Ark. 142, 172 S. W. 868, and the case of Johnson v. Johnson, 115 Ark. 416, 171 S. W. 475. These cases and many other Arkansas cases hold that, where the father furnishes the money to pay for property, and’the conveyance or title is made to the child or wife, in the absence of evidence to the contrary, the money that he furnished at the timé for the purchase of the property will be held as intended by him as a gift or advancement.

It is stated in the 115 Arkansas case cited: “The law in such cases will not imply a promise or obligation on her part to refund the money or to divide the property purchased, or to hold the same in trust for him. His conduct will be referable to his duty and affection, rather than to a desire to cover up his property or to any intention on his part to -have her hold as trustee for him. The presumption that, when a man purchases property and takes the title in the name of his wife, he intends the same as a gift to her, is not a conclusive presumption. It may be overcome by testimony of antecedent or contemporaneous declarations or circumstances.” Johnson v. Johnson, 115 Ark. 416, 171 S. W. 475.

A presumption is merely an inference as to the existence of one fact from the known, or proved existence of some other fact, founded on a rule or policy of the law, and presumption in cases like this may always be rebutted; but this case was not tried in the court below on any theory that there was a gift or advancement. We think the pleading of the defendant itself contradicts any idea of gift or advancement.

If the defendants had answered that the father paid the money but that it was a gift or advancement, there would have been a presumption which the plaintiffs, in order to recover, would have had to overcome by evidence, but the defendants not only did not file an answer of this kind, but they admitted that there had been an indebtedness by pleading payment. A plea of payment, of course, can mean nothing else but that there was a debt to pay. They denied, of course, that they owed this indebtedness, but they answered the statement in plaintiff’s complaint as to the $1,000 by stating that they had paid to the said Jake Shaul $1,000, which was in full and complete satisfaction- of any and all claim or indebtedness owing by either defendant to the said Jake Shaul. It would be unreasonable and contradictory to say that they paid $1,000 in full and complete satisfaction ■ of all claim or indebtedness owing to the defendant, when they in fact did not owe him'anything. It may be that they owed him some other money, or because of some other transaction, but their answer certainly shows that they were indebted to him, and paid him $1,000.

We think other circumstances which were testified to in the case contradicted the idea that there was a gift or an advancement. These circumstances alone might not overcome the presumption of law, but, when you consider them together with the answer of the defendant, which admitted indebtedness and claimed payment, we think this contradicts the idea of a presumption that it was a gift or advancement.

The court therefore erred in directing a verdict for the defendants, and the case is reversed, and remanded for a new trial.


source: Caselaw Access Project

author: Mehappy, J.

license: Public Domain

text:
    Knight v. Wolpert.
    Opinion delivered February 14, 1927.
    1. Accord and satisfaction — part payment — conditional acceptance. — To constitute an accord and satisfaction, a part payment must be made in full satisfaction of the demand or claim of the creditor and be accompanied by such acts or declarations as amount to a condition that, if the money is accepted, it must be accepted in full satisfaction, and be of such character that the creditor is bound to so understand the offer.
    2. Accord and satisfaction — part payment. — Where a debtor told his creditor that the amount of a check tendered was all he was going to pay and that it was payment in full, and the creditor disputed this, stating that the debtor owed him more and that he was going to sue the debtor, the fact that the creditor accepted the check and cashed it did not constitute an accord and satisfaction.
    3. Trial — sufficiency of instructions. — The refusal of correct instructions was not error where ■ the court’s charge fairly instructed the jury on all theories of both parties.
    Appeal from Craighead Circuit Court, Jonesboro District; G. E. Keck, Judge;
    affirmed,

      Jlorace Sloan, for appellant,

      Penix & Barrett, for appellee.
   Mehappy, J.

The plaintiff brought suit in the circuit court, alleging that the defendant had agreed to pay 5 per cent, of the total cost of the proposed work for his services as an architect in preparing plans and specifications for remodeling a house in Jonesboro; that the total cost of the proposed work was $6,890.60; that the fee to appellee at 5 per cent, was $344.53, upon which there had been a payment of $200, leaving a balance of $144.53, and asked judgment for that amount.

Defendant answered, denying that he entered into the agreement as alleged by plaintiff, and alleged that he instructed the plaintiff that the plans and specifications must entail a cost of not more than $4,000, that the plans and specifications prepared would have required the expenditure of a much greater sum, and that, for that reason, they were worthless to defendant; that the $200 paid plaintiff was in full settlement and satisfaction of all amounts. due.

The testimony is conflicting, the plaintiff’s testimony tending to establish the allegations of his complaint, and that of the defendant tending to establish the allegations of the answer.

Appellant’s first contention is that the court erred in not directing the verdict for the defendant, and this, it is contended, the court should have done because appellant contends that the last payment of $50 that he made plaintiff was given in full satisfaction and settlement of all amounts due. The plaintiff, testifying on that question, said in substance that he never agreed to accept $200 in full payment; that he called Mr. Knight, and also went to his house and got the last check, and told him that he still considered that he owed him $144.

The defendant testified that .the last check he gave him was some time in March, and after he' learned that the lowest bid on the work was $6,000; that defendant was sick in bed for about á week, and, realizing that the plaintiff would want some money, called him up and stated to him that if he would send up to the house he would give him a check; that the plaintiff asked him to please make it as liberal as possible; that the defendant told him he owed him $50 and would send him $50 in full payment, and that plaintiff said, “You owe me more than that,” and defendant told him that was all he owed him and all that he was going to pay; that plaintiff came up to the house, and that he told plaintiff that that was all he was going to pay. “I told him that, when I handed him the check, that it was in full payment. He took the check and cashed it. When I handed him that last check I told him I was paying him in full; I told him that was all I- was going to pay, and he stated he was going to sue me, and I said ‘That is all you can do.’ He then. accepted the check and went out with it, but he told me at the time he was going to sue me. I told him at the time that he took the check that it was in full settlement. He went out and cashed'it.”

The above is practically all the testimony on the question of the last payment, and the real question in the case is whether or not, as a matter of law, it was such a settlement as would bar any recovery of any further sum. If that evidence showed accord and satisfaction, then the instruction should have been given; if not, it should not have been given.

“Where a claim is not a money demand, or, if so, is unliquidated, or, if liquidated, there is a bona fide dispute as to the sum actually due, or a bona fide doubt or controversy as to whether anything is due, then an accord and satisfaction may be established and held binding, though there is a payment of a less sum than that claimed by the creditor, or even a less sum than, on an actual computation, might be found due to the creditor. The adequacy of the payment is entirely immaterial, and will not be inquired into even by a court of equity. Of course there must be an acceptance by the creditor of the money offered in full discharge of the claim. This acceptance, however, may be implied as well as express. Thus, if the debtor tenders the amount he claims to be due, but upon the condition that it be accepted in discharge of the whole demand, and it is accepted, there is an accord and satisfaction, on the principle that one accepting a conditional tender assents to the condition. And the fact that the creditor protests against accepting the tender in full payment will not prevent the transaction from constituting a good accord and satisfaction when the debtor still insists that it must be accepted in full payment or not at all. * * * To constitute an accord and satisfaction in law, dependent upon the offer of the payment of money, it is necessary that the offer of money be made in full satisfaction of the demand or claim of the creditor and be accompanied by such acts or declarations as amount to a condition that,- if the money is accepted, it is to be in full satisfaction, and be of such a character that the creditor is bound to so understand the offer.” R. C. L., 194. «

In a note in 20 L. R. A., 800, is the statement from a Kansas case on this subject, which is as follows: “In St. Louis, Ft. S. & W. R. Co. v. Davis, 35 Kansas 464, when the question arose upon the claim of the appellee for services, which the appellant claimed was satisfied by an accord and satisfaction by receipt by the appellee of a smaller sum than claimed, forwhich a receipt was given ‘in full for all services rendered,’ the appellee claiming that, at the time of signing and giving the same, he protested both verbally and in writing that it was not a complete satisfaction, and that he still claimed compensation for services in other named cases, which were those involved in the present action, the court held that the part payment was no extinguishment of the debt, stating that, before the payment could operate as a satisfaction, it must not only appear that there was some new consideration for the agreement to accept a smaller sum in extinguishment, but also that there was a mutual agreement that the same should be accepted in discharge of the entire debt. ’ ’

The defendant in the case at bar made his payment with the statement, according to his testimony, that it was in full payment, but he did not state that it must be accepted in Ml payment or not accepted at all. We think that he would have to make it clear to the creditor that, if accepted, it must be accepted in full satisfaction. While he told the plaintiff that it was all he was going to pay and it was a payment in full of all he owed him, the plaintiff disputed this, stating that he owed him more, and that he was going to sue him. The defendant did not pay him on condition that he accept it in full satisfaction of the debt.

It was said in a recent, case by this court: “But appellee did not, in its letter, or in its statement of the account, or in the check, give the appellant to understand that an acceptance of the check and cashing of the same would be considered by the appellee as a recognition by the appellant of appellee’s claim for damages and an approval and settlement thereof. The burden was upon the appellee to prove the contract of accord and satisfaction. It was essential for it to show either an express agreement upon the part of the appellant of accord and satisfaction, by which the amount of appellant’s claim against the appellee was settled, or else to prove facts and circumstances by which an agreement on the part of the appellant to settle its account by allowing the claim of the appellee for damages could reasonably be inferred. There is nothing in the statement of facts to indicate a meeting of the minds of the parties upon any such terms. There is nothing to justify the conclusion that the appellant was notified by the appellee that, if the appellant cashed the check, it would do so with the understanding that appellee’s claim for damages had been allowed and that appellant’s account against the appellee had in that manner been satisfied.” Western Union Tel. Co. v. Ark. Milling Co., 156 Ark. 370.

In the case at bar the appellee not only did not receive the check, agreeing that it was a satisfaction of the claim, but he stated at the time that he was going to sue appellant for the balance, and, while appellant told appellee that it was in full settlement, he did not tell him, and, we think, did not say anything to justify appellee to think or believe that, if he accepted the check, he would accept it on that condition that it was a full satisfaction. If defendant had offered the payment on condition that it was a full settlement and appellee had accepted it with this condition, this would have been a complete settlement, and a bar to a recovery.

Appellant complains at the action of the 'court in giving instructions and in refusing instructions requested by appellant. All the objections, however, are general, and there are no specific objections, and, while some of the instructions requested by the appellant correctly stated the law, yet we do not think there was any error, for the court fairly instructed the jury oii all theories of both parties, and the question of whether there was accord and satisfaction, as well as other questions of fact, were matters for the- jury to determine, and we cannot disturb their verdict if there is any substantial evidence to sustain it. We think the evidence was sufficient to sustain the verdict, and the judgment must he affirmed.


author: Mehaffy, J.

text:
    Miller Levee District Number 2 v. Dale.
    Opinion delivered February 14, 1927.
    • 1. Parties — real party in interest. — In an -action against a levee district for damages for land taken, in which the district contended that plaintiff was not the owner of the land and therefore not the real party in interest, evidence held to show that the plaintiff was the real party in interest.
    2. Eminent domain — deduction of benefits to land taken. — The owner of land across which a levee was constructed is entitled to the damages sustained, without deductions of benefits therefrom, since the owner pays for the benefits like any other landowner.
    3. Levees — percentage assessment of benefits. — Though the benefits to lands in a levee district are arrived at by multiplying the valuation of the lands on the county tax books by 6 per cent., the assessment is on a basis of benefits, and is not .an ad valorem tax.
    Appeal from Miller Circuit Court; James S. McCollum, Judge;
    affirmed.

      Henry Moore, Jr., for appellant.

      Shaver, Shaver & Williams, for appellee.
   Mehaffy, J.

The appellee brought suit against the appellant in the circuit court of Miller County, alleging that, in 1924, on account of the caving of the banks of the Bed River, it became necessary for the levee district to build a new line of levee over and across plaintiff’s land and that the defendant built a new levee across plaintiff’s land, occupying about eight acres, and that appellant refused to pay appellee damages, and asked for judgment for the value of the land taken in the sum of $827. Defendant filed a motion to dismiss, alleging that the suit was not brought in the name of the real party in interest, and that J. R. Dale, husband of May B. Dale, was the owner of the land at the time of the taking. Defendant also filed an answer, denying that the land was the property of the plaintiff at the time the levee was built. It alleged that the property belonged to J. R. Dale, and that J. R. Dale was a member of the board of directors of the district, and, as such, he knew of and acquiesced in the taking of the land, and was estopped from claiming damages.

Appellant admitted taking about seven acres of land belonging to J. R. Dale, alleging that the land taken was only rough, hermuda land, fit only for pasture, and that the value for that purpose had been increased by the building of the levee, and claimed that it was entitled to offset any damages by the benefits that were special and peculiar to the remainder of the land owned by plaintiff, or by her husband, and alleged that such benefits to the land exceeded the damages to the land occupied by the new levee.

The testimony showed that J. R. Dale deeded to his wife, May B. Dale, about 3,000 acres of land, including that taken by the levee, the date of said deed being May 31, 1923, recorded January 15, 1925, consideration being $50,000. J. R. Dale testified, as the agent of appellee, that he was down at the river while the levee was being built; that the land had hermuda and bushes on it, that he had authorized it to be cleared, and he was to pay $20 an acre for clearing same; that he was a member of the levee board, and that one of the members, Judge Friedell, said that the land would never be paid for until they were forced to pay for same, advising him that he would have to bring suit; that he had been a member of the levee board since its organization, and knew that the levee was to be set back; did not know if he claimed that it was May B. Dale’s land before the suit was brought; did not know when the deed was recorded; there was never any special statement made to any member of the board before the deed was recorded; she had a deed to it, and he was her agent; did not remember when the deed was delivered. All of his acts since the deed was delivered and recorded have been as agent for May B. Dale, and they were prior to that time, as she had a mortgage on it all the time for $100,000.

An engineer testified that 7.2 acres were taken by the levee. Work was completed the latter part of May, 1924. It was also shown that Dr. Dale paid another witness $10 apiece for driving two pumps and $7.50 for repairing a flue on a house that was moved by the levee board.

Witness Dean testified that he was familiar with the value of the land in the neighborhood, and that the land through which the levee was built was worth between $75 and $100 per acre. Part of the land was grown up in bushes^ part had washed out, and there were ridges of sand and holes made hy previous overflows. He said he did not value the particular land taken at anything by itself, but, in connection with the other land, he would average it, and that he had offered Dr. Dale $50 per acre. It was also testified thai the loan value on the land would be 50 per cent, of $100 per acre, and that this land was covered with pecan sprouts, and fit only for pasture.

There was considerable testimony about the value of the land taken, and about the land being covered with bermuda grass and bushes. Testimony also tended to show that the land occupied by the levee could still be used for a pasture, and that the levee hoard, only took an easement, and that, if oil was found, it would belong to the owner.

Appellant offered to prove special benefits that would be received by plaintiff to the land, but was not permitted to make such proof. One witness testified that the land was rough land, covered with bushes, worth about $25 or $30 an acre; that it was worth nothing except for pasturage, and is worth more now than before the levee was built.

It is contended by appellant that appellee was not the owner of the land, and, for that reason, had no right to maintain this suit. We think the proof is ample to show that the appellee was the real party in interest and therefore had a right to maintain this suit.

It is also contended by the appellant that the measure of damages should be the difference in the value of the land of plaintiff before being occupied by the levee and the present value of such land, and contended that, because of the peculiar benefits accruing to plaintiff’s land, these benefits should have been taken into consideration in arriving at the damage sustained by plaintiff. It is contended that this is the correct rule, because appellant says that no benefits have been levied against the land in the district, but that all the lands in the district are placed on the taxbooks as they appear on the real estate books of the county, and that the amount of levee taxes is arrived at by multiplying such value by 6 per cent., and that therefore the levee taxes are collected on an acl valorem rather than a benefit basis, and that it is entirely different from the system of assessment ordinarily used in improvement districts. Appellant contends that, because of these things, no special benefits were taken into consideration in the levying of taxes for levee purposes.

If appellant was right in its contention that this was an ad valorem tax and that the benefits to the property were not taken in consideration, then it would be correct in its claim that the damages should be offset by the benefits. We do not agree with counsel for appellant in this contention. The section of the act creating this district providing for assessments is an exact copy of the section of the act of 1905 creating a levee district, and the court, in construing that act, said: “Appellantmakes an attack upon the validity of the statute in so far as it attempts to authorize a tax on the railroad, on two grounds, viz: First, that it is an attempt to impose a tax regardless of any benefit derived from the improvement; and, second, that the method authorized by the statute of assessing railroad property is invalid. We will dispose of these two questions in order in which they are presented by appellant’s counsel. * * * The act provides that the board of directors shall annually assess and levy a tax not to exceed 4 per cent, on the real estate in the district, according to the valuation of lands on the taxbooks for State and county purposes, and upon railroad track of all railway companies as appraised by the State ¡Board of Railroad Commissioners. In other words, that the assessment shall be according to value as appraised for State and county taxation. This is the method of assessment for local improvements which was approved by this court in Ahern v. Board of Improvement, supra, and Porter v. Waterman, 77 Ark. 383. * * * The fact that the assessment is made upon the whole value of the property does not imply that it is not also according to the benefits' to accrue from the improvement, for it is not an arbitrary or unreasonable method of ascertaining the amount of the benefits to assume that they will accrue in proportion to the actual value of the whole property. The Legislature acted upon this assumption in providing that the assessments should be fixed according to value, and we cannot say it is arbitrary or unreasonable.” St. L. S. W. Ry. Co. v. Board of Directors, 81 Ark. 562, 99 S. W. 843.

It follows, from the rule announced in the above case, that the land in appellant district is, in fact, assessed according to its benefits. It must be assessed annually, and, although it is provided that the annual tax must- be levied on the valuation of the lands as they appear on the assessment books of the county, still, as held by this court in the case above cited, this is an assessment on a benefit basis. This being true, appellee will have to pay annually for all the benefits received by the construction and maintenance of the levee, and it would therefore have been improper to deduct the benefits from the amount of damages to plaintiff’s land in this case. Her land is benefited by the levee, but she pays these benefits in annual installments, so that there would be no reason or justice in offsetting the damages with benefits accruing to the land. She must pay the assessments for the benefits received like any other landowner, and, if the district took or damaged her land, it necessarily follows that it would have to pay whatever amount she was damaged by reason of the taking.

Appellant’s counsel calls attention to a number of cases where land is taken for public use and the damages caused thereby are offset by the benefits to the land, but these are cases where the landowner was not paying for the benefits. Of course, where land is taken and the taking benefits the other lands of the party, whatever benefits accrue to the landowner are deducted from the amount of damages caused by the taking, but these cases have no application where the landowner pays for the benefits, as in this case. There was ample evidence to sustain the verdict, and the case is therefore affirmed.


author: Hart, C. J.,

text:
    Gibson Oil Company v. Sherry.
    Opinion delivered February 21, 1927.
    1. Explosives — duty, in use of gasoline. — One handling gasoline who fails to use a degree of care to prevent its escape proportionate to the danger therefrom is liable for any resulting injury, provided the person suffering the injury, either in person or property, is free from contributory negligence.
    2. Explosives — negligently permitting escape of gasoline. — -The negligence of employees of a filling station, allowing gasoline to run into the street, held the proximate cause of the destruction by fire of plaintiff’s automobile, caused by a match thrown into the street by plaintiff, thereby igniting the gasoline stream.
    3. Explosives — contributory n e g l i.g e n c e — jury question.— Whether plaintiff was guilty of contributory negligence in throwing a lighted match into the street, which ignited a stream of gasoline, negligently allowed to flow there, and burned plaintiff’s automobile, held under the evidence for the jury.
    4. Appeal and error — general objection to instruction.- — Where no specific objection was made to an instruction on the ground that it did not limit the jury’s consideration to acts of negligence causing the injury complained of, appellant cannot complain on that ground on appeal.
    Appeal from Pulaski Circuit Court, Second Division; Richard M. Manw, Judge;
    affirmed.
    STATEMENT OP PACTS.
    M. J. Sherry sued the Gibson Oil Company to recover the sum of $500, alleged to be the value of an automobile which was negligently destroyed by fire while at one of the filling stations of the defendant. The defendant denied negligence on its part, and pleaded contributory negligence on the part of the plaintiff as a defense to the action.
    M. J. Sherry was a witness for himself. According to his testimony, he took his car to the filling station of the defendant, at Fifteenth and Gaines Street, in the city of Little Rock, and had it filled with gasoline. He then started home, and, after .going a short distance, his car stopped. He called a mechanic, who informed him that the fluid which had been sold him was not gasoline. The mechanic towed the plaintiff’s car 'back to the filling station at Fifteenth and Gaines Streets. The defendant’s employees in charge of the filling station took off a nut underneath the gasoline tank and began draining the gasoline on the concrete floor of the filling station. The gasoline flowed on the floor into the gutter on Fifteenth Street, about twenty feet away. Sherry knew they were draining tlie gasoline out of the tank of his car, but did not know that.it would run out across the sidewalk into the gutter. While the gasoline was being drained out of the tank, Sherry walked out on the sidewalk, and lit his pipe with a match. He then threw the lighted match into the street, and it ignited the gasoline. The flame followed the track of the flowing gasoline, and burned up his car, which was worth $500.
    According to the testimony of several witnesses for the defendant, the plaintiff knew- that the gasoline was being drained out of the tank of his car on to the concrete floor of the filling station. The employees were draining the tank of his car for the purpose of refilling it with gasoline. The plaintiff told them that it was not necessary to get a container to drain the gasoline in, for the reason that it would not burn if set on fire. The plaintiff then struck a match, and ignited the gasoline which was flowing from the tank on to' the concrete floor of the filling station. The flame followed the track of the flowing gasoline, and burned up his car.
    The jury returned a verdict for the plaintiff in the sum of $500, and, from the judgment rendered, the defendant has duly prosecuted an appeal to this court.

      W. R. Bonham, for appellant.

      Robert L. Rogers and Sam Robinson, for appellee.
   Hart, C. J.,

(after stating the facts). The main reliance of counsel for the defendant for a reversal of the judgment is that the evidence is not legally sufficient to support the verdict. In making this contention counsel insists that the court should have declared as a matter of law that the plaintiff was guilty of contributory negligence, and therefore not entitled to recover. This court has held that, in view of the highly dangerous character of gas and its tendency to escape, a gas com- " pany must use a degree of care to prevent the escape of gas from its pipes proportionate to the dangers which it is its duty to avoid, and that, if it fails to exercise this degree of care and injury results therefrom, the company is liable, provided the person suffering the injury, either in person or in property, is free from contributory negligence. Pulaski Gas Light Co. v. McClintock, 97 Ark. 576, 134 S. W. 1189; and Little Rock Gas & Fuel Co. v. Coppedge, 116 Ark. 334, 172 S. W. 885. Many other cases from other States are cited in support of the rule in 25 A. L. R. 262.

Gasoline becomes volatile when exposed to the air, and is easily ignited when it comes in contact with a flame. Therefore gasoline is also a highly dangerous substance, and the same rule applies to it as above stated with regard to gas. Waters-Pierce Oil Co. v. Knisel, 79 Ark. 608, 96 S. W. 342; and Magnolia Petroleum Co. v. Johnson, 149 Ark. 553, 233 S. W. 680.

When the gasoline was drained from the tank of the plaintiff’s car and was allowed to flow on the concrete floor of the filling station, it became exposed to the oxygen of the air and formed a gaseous substance which was easily ignited when a flame was applied to it. The defendant should have drained the gasoline into a container, and not have allowed it to flow across the concrete floor of the filling station into the gutter of the street. This was a highly populous neighborhood, and the defendant should have anticipated that some one passing by might throw a lighted match into the gutter, which would ignite the vapor formed by the gasoline coming in contact with the air and thereby destroy the plaintiff’s automobile. Thus it will be seen that the negligence of the defendant was the proximate cause of the destruction of the plaintiff’s property.

This brings us to the question of the plaintiff’s contributory negligence' as a bar to his right to recover. This we regard as a very close question, but, under the circumstances, we do not think the court erred in refusing to declare as a matter of law that the plaintiff was-guilty of contributory negligence. In reaching this conclusion it must be remembered that the jury were the judges of the credibility of the witnesses, and had a right to view the evidence in the light most favorable to the plaintiff, if they believed that he was telling the truth about the matter. St. Louis Southwestern Ry. Co. v. Ellenwood, 123 Ark. 428, 185 S. W. 768. The plaintiff denied that he told the employees of the defendant or the persons present that the gasoline which was drained from the tank of his automobile would not burn and that he deliberately stuck the flame of a match to it to demonstrate that it would not burn. On the other hand, he says that he walked out on the sidewalk twenty feet away from his automobile and lit his pipe and threw the lighted match into the street, not anticipating that the defendant’s employees would allow the gasoline which was being drained from the tank of his automobile to flow across the sidewalk into the street. Under these circumstances it cannot be said as a matter of law that the plaintiff was guilty of contributory negligence in throwing the lighted match into the street.

The next assignment of error is that the court erred in giving instruction No. 2, which reads as follows: “If you find that the defendant was negligent and that, by virtue of such negligence, the plaintiff’s automobile was destroyed, then you must find for the plaintiff, unless you find that the plaintiff was himself negligent and that his negligence contributed to the cause of the damage. ’ ’

At the request of the defendant the court instructed the jury that, before the plaintiff was entitled to recover, he must prove every material allegation of the complaint by a preponderance of the evidence. Under the allegations of the complaint the negligence of the defendant was substantially as established by plaintiff’s own testimony. Hence, if counsel for the defendant thought that the instruction now complained of did not limit the jury to a consideration of such acts of negligence as might have been the proximate cause of the destruction of the automobile, a specific objection should have been made to the instruction. Not having made a specific objection and pointed out wherein it was objectionable, the defendant is not now in an attitude to complain of the action of the court in giving the instruction. Pine Bluff & A. R. Ry. Co. v. Washington, 116 Ark. 179, 172 S. W. 872, and Magnolia Petroleum Co. v. Freudenberg, 168 Ark. 616, 271 S. W. 15.

It follows that the judgment was correct, and will therefore be affirmed.


text:
    Slaughter v. Cornie Stave Company.
    Opinion delivered February 21, 1927.
    1. Lost instruments — sufficiency of proof. — Parol evidence to prove the contents of a lost deed should show that the deed was . duly executed as required by law and show substantially all its contents by clear, convincing and satisfactory evidence.
    2. Lost instruments — sufficiency of proof. — In a suit to quiet title where defendant’s claim under mesne conveyances from plaintiff, a finding that the contents of an alleged lost deed from plaintiff to defendant’s predecessor were not established held not against preponderance of the evidence.
    S. Adverse possession — payment of taxes. — The title to unimproved and uninclosed lands will not be barred by the payment of taxes thereon by one claiming under color of title for a period of less than seven consecutive years, and such continuity is broken where the owner brings suit for the land within seven years from the date of the first payment.
    4. Estoppel — conduct of plaintiff. — Where plaintiff did nothing either 'by its silence or conduct to lead the defendant to believe that it would not assert its title to the land in controversy, it will not be estopped to assert its title.
    Appeal from Union Chancery Court, First Division; J. Y. Stevens, Chancellor;
    affirmed.
    STATEMENT OE EAOTS.
    The Cornie Stave Company brought this suit in equity against A. E. Slaughter and others to cancel, as a cloud on its title, certain deeds to forty acres of land in Union County, Arkansas. The suit was defended on the ground that the plaintiff had conveyed its title to the grantor of the defendant Slaughter.

      According to the evidence for the plaintiff, the forty acres of land in controversy was purchased by the Cornie Stave Company from J. L. Goodwin on the 10th day of. March, 1907, for $120. The plaintiff had larg'e tracts of timber land, and was not selling any land during 1907 and 1908. The plaintiff paid the taxes on the land from 1907 to 1914 inclusive. After that time, when the plaintiff went to pay its taxes, it was always informed by the collector that the taxes had been paid by A. E. Slaughter. The plaintiff kept a record of the lands owned by it, showing the date on which each tract was purchased and the date on which it was sold. The records did not show the sale of any land belonging to the plaintiff from 1907 to 1915. The matters above set forth were testified to by the president and two vice presidents of the plaintiff company.
    According to the testimony of the president of the' company, if any deed had'been executed between the 18th of March, 1907, and the 8th of December, 1907, the date on which R. E. L. Combs died, he would have had to sign it. He did not sign any deed during that time. He kept a minute-book showing the minutes of the meetings of the stockholders and board of directors of the Cornie Stave Company during this time. This record did not contain a recitation authorizing the sale of the tract of land in controversy. All three of the witnesses testified that, if the tract of land in controversy had been sold to R. E. L. Combs or to any one else, the records of the company would have shown the date of the sale, the person to whom sold, and the amount for which the land was sold.
    According to the testimony of Annie A. Combs, her husband died December 8, 1907. He had been in the service of the plaintiff company since that company was organized. She became the administratrix of her husband’s estate, and sold this tract of land along with other lands belonging to her husband’s estate, acting as such administratrix. Her brother became the purchaser at the sale, and, after holding the land for a year or two and paying taxes on it, he conveyed it to her. The record shows that her brother conveyed the land in question to Mrs. Annie A. Combs on August 1, 1910, and that the deed was duly filed for record. On November 10, 1913, Mrs. Annie A. Combs .conveyed the land to A. E, Slaughter. This deed was duly filed for record. The record also shows that this suit was instituted April 27, 1921, and that A. E. Slaughter paid taxes on the land in controversy for the years 1915 to 1920 inclusive. Mrs. Annie A. Combs also testified that there was a deed on record from the plaintiff to her husband to the land in controversy.
    The attorney who represented the estate of E. E. L. Combs when the lands belonging to that estate were sold at administrator’s sale testified that, according to his recollection, he made an examination into the title of this particular tract of land and found the title to be clear, and recollected that there was a deed from the Cornie Stave Company to E. E. L. Combs. At that time the plaintiff was not trying to acquire land, but timber. Combs was buying land for the plaintiff.
    Another witness for the defendants testified that E. E. L. Combs was a timber buyer for the plaintiff, and he recollected seeing a deed from J. L. Goodwin to the plaintiff for the land in controversy. The witness, at that time, was keeping the books of the company, and carried it along as belonging to the company. In 1914 he severed his connection with the company. Prior to his death Combs had a settlement with the plaintiff, and several tracts of timber were deeded to him by the plaintiff. Other facts will be stated or referred to in the opinion.
    The chancellor found the issues in favor of the plaintiff, and a decree was entered of record canceling the deeds as prayed for in the complaint, and quieting the title in the plaintiff in so far as the rights of the defendants are concerned. The case is here on appeal.

      Betts é Betts, for appellant. •

      Patterson é Rector, for appellee.
   Hart, C. J.,

(after stating the facts). A. E. Slaughter seeks to reverse the decree quieting the title in the Cornie Stave Company upon the ground that it conveyed the land in controversy to E. E. L. Combs; that, after Combs’ death, the tract was sold with other lands belonging to his estate at administrator’s sale; and that the defendant, Slaughter, acquired title by mesne conveyances from the purchaser at the administrator’s sale. It is claimed by counsel for the defendants that a deed from the plaintiff to E. E. L. Combs was executed prior to his death, and that the deed had been lost, and, for that reason, could not be produced at the trial.

It is the settled rule in this State that parol evidence to prove the contents of a lost deed should show that the deed was duly executed as required by law, and should show substantially all its contents by clear, convincing and satisfactory evidence. Hooper v. Chism, 13 Ark. 496; Nunn v. Lynch, 73 Ark. 20, 83 S. W. 316; Kennedy v. Gilkey, 81 Ark. 147, 98 S. W. 969; Queen v. Queen, 116 Ark. 370, 172 S. W. 1018; Wasson v. Walker, 158 Ark. 4, 249 S. W. 29; and Langston v. Hughes, 170 Ark. 272, 280 S. W. 374.

An excellent statement of the rule was made by Chief Justice Marshall in Tayloe v. Riggs, 1 Pet. 591. It is as follows: “When a written contract is to be proved, not by itself but by parol testimony, no vague, uncertain recollection concerning its stipulations ought to supply the place of the written instrument itself. The substance of the agreement ought to be proved satisfactorily, and, if that cannot be done, the party is in the condition of every other suitor in court- who makes a claim which he cannot support. When parties reduce their contract to writing, the obligations and rights of each are described and limited by the instrument itself. The safety which is expected from them would be much impaired if they could be 'established upon uncertain and vague impressions made by a conversation antecedent to the reduction of the agreement.” This rule was quoted with' approval in Hooper v. Chism, 13 Ark. 496, and has been followed by the court ever since.

It is evident that, if any loose requirement was sufficient to establish a lost instrument, the very object which the statute of frauds seeks to prevent would be encouraged. Tested by this rule, the contents of the deed claimed to have been lost was not established to the satisfaction of the chancellor, and it cannot be said that his finding of fact on this point is against the clear preponderance of the evidence. Leach v. Smith, 130 Ark. 465, 197 S. W. 1160.

It is true that Mrs. Combs says there was a deed on record from the plaintiff to her husband to the tract of land in controversy. Her husband owned a good many tracts of land, and she was obviously mistaken. If the deed was upon the records in the clerk’s office, it would have been a very easy matter to have introduced a certified copy of it in evidence. It is also true that the attorney who represented Mrs. Combs in the administrator’s sale testified that, according to his recollection, there was among’ the title papers exhibited to him at the time a deed from plaintiff to Combs. It is not to be expected that a busy lawyer could definitely and certainly recollect a matter which occurred so many years ag’O, and especially where numerous other tracts were offered at the same sale. The proof on the part of the plaintiff shows that a record was kept of the lands purchased and sold by the plaintiff, and that this record does not show any sale of this particular land. The record does show the date of its purchase by the plaintiff, as well as the person from whom it was purchased and the price paid for it. The president of the company testified that he did not sign a deed to any land between the date of the purchase by the plaintiff of the tract of land in controversy and the date of the death of R. E. L. Combs. Then, too, both of the vice presidents of the company say that there was no sale of any land belonging’ to the company during the years of 1907 and 1908.

Again, it is insisted by counsel for the defendants that Slaughter has acquired title by adverse possession. We cannot agree with counsel in this contention. The present suit was instituted on April 27, 1921. Slaughter paid the taxes on the land from the year 1915 to 1920, both inclusive. The lands were wild and unoccupied, and there were not seven years from the date of the first payment of taxes by Slaughter until the institution of the present suit.

In Updegraff v. Marked Tree Lumber Co., 83 Ark. 154, 103 S. W. 606, the court said: “And we think it necessarily follows from that conclusion that there must be an unbroken possession for a period of seven years from the date of the first payment, and that the mere payment of taxes seven times is not of itself seven years’ possession, where the possession is broken by the commencement of an action within seven years after the date of the first payment. We are therefore of the opinion that the appellee failed to show title by limitation.”

To the same effect see Bradley Lumber Co. v. Langford, 109 Ark. 594, 160 S. W. 866; Fenton v. Collum, 104 Ark. 624, 150 S. W. 140; said Paragould Abst. & Real Est. Co. v. Coffman, 100 Ark. 582, 140 S. W. 730, L. R. A. 1915B 1006.

As we-have just seen, the plaintiff brought this suit within the period of time allowed by law, and he could not in any event be barred on account of laches until payment of taxes had been made for at least seven years by one making same under color of title. Fordyce v. Vickers, 99 Ark. 507, 138 S. W. 1010.

In the present case the plaintiff had the paper title to the land in controversy, and brought this suit to enforce its legal title. Mere submission to the injury for any time short of the period limited by statute' for the enforcement of the right of action cannot take away such right, although, under the name of laches, it may afford a ground for refusing relief under some peculiar circumstances. Davis v. Neal, 100 Ark. 399, 140 S. W. 278; Beattie v. McKinney, 160 Ark. 81, 254 S. W. 338; and Galloway v. Battaglia, 133 Ark. 441, 202 S. W. 836.

In the case at bar the plaintiff did nothing either by silence or conduct to lead the defendant to -believe that it would not assert its title to the land and thereby suffer the defendant to enter into obligations or incur liabilities which he would not otherwise have done. In short, the plaintiff did nothing whereby the defendant was prejudiced and which might malee it inequitable to assert title, as was the case in Avera v. Banks, 168 Ark 718, 271 S. W. 970.

On the question of estoppel, argued by counsel for the defendants, but little need be said. The record title to the land in controversy is in the plaintiff. There is no fáct in the record tending to show that the defendants were in any manner deceived by any-act or conduct on the part of the plaintiff. No grounds of equitable estoppel are proved by the defendant.. See Watson v. Murray, 54 Ark. 499, 16 S. W. 292; Waits v. Moore, 89 Ark. 19, 115 S. W. 931; Brown v. Norvell, 96 Ark. 609, 132 S. W. 922; and Davis v. Neal, 100 Ark. 399, 140 S. W. 278.

It follows that the decree must be affirmed.


author: Wood, J.

text:
    American National Insurance Company v. Hale.
    Opinion delivered February 21, 1927.
    1. Insurance — breach op conditions — waiver.-—Where the insurer, at the time of issuance of a policy, has knowledge of existing facts which, if insisted upon, would invalidate the contract from its very inception, such knowledge constitutes a waiver of conditions in the contract inconsistent with the known facts, and the insurer is estopped thereafter from asserting the breach of such conditions.
    2. . Insurance-^-agent’s knowledge imputed to insurer. — Knowledge affecting the rights of the insured, such as matters relating to the state of his health, which comes to the agent of the insurer while he is performing the duties of his agency, in receiving applications for insurance and delivering policies, becomes the knowledge of the company.
    3. Insurance — instructions approved.- — Issues in an action on a life insurance policy as to whether insured was in sound health at the date of the application and delivery of the policy and whether insured had knowledge of the state of his health, held correctly submitted to the jury.
    Appeal from Pulaski Circuit Court, Second Division; Richard M. Mann, Judge;
    affirmed.

      J. G. Marshall, for appellant.

      Downie & Schoggen, for appellee.
   Wood, J.

This is an action by Laura S. Hale against the American National Insurance Company on two policies, one dated March 24, 1924, for $240, and the other dated October 6, 1924, for $94. The insurance company defended the action on the ground that the assured was not in sound health at the time the policies were issued. It was in evidence, and not denied, that the policies had been issued and delivered by the agent who took the application for insurance, and the premiums had been paid. The appellee testified that, at the time the applications were made and the policies delivered, there was nothing the matter with the assured. Previously he had had high blood pressure. It was discussed with the agent. The insured communicated this fact to the agent at the time of the application, and the agent replied that it did not matter — that he had had high blood pressure himself. The. assured looked healthy. He was working every day, and his health was fine at the time the policies were delivered. The assured had been treated for high blood pressure between the time of the issuance of the first policy and the last. This fact was communicated to the agent when he took the application for the second policy, and the agent stated that that did not amount to anything’. The medical examiner for the insurance company testified that he made a careful examination of the physical condition of the insured in November, 1923. At that time the assured was suffering from an incurable disease — chronic nephritis, or Bright’s disease. He reported that fact to the company, and recommended that the policy he not issued. The policies sued on were issued without a medical examination. The company did not require it. The life insurance under these policies was for a small amount, and is paid weekly. Other testimony on behalf of the company tended to prove that the insured, at the time the policy t was issued, was not in sound health.

The application for the policies contained a provision to the effect that the insured warranted that the answers to the questions in the application were complete, correct and true, to the best of his knowledge and belief, and made these answers a part of the contract of insurance. The application further contained a provision that none of the officers or agents of the company were authorized to make, order, or discharge the insurance contracts; or to waive forfeitures.

The court, over the objection of the insurance company, on its own motion instructed the jury that, if they found that the deceased was not in sound health and that the agents of the defendant had knowledge of such fact, which knowledge they had obtained in the scope of their employment, then, the defense of unsound health would not be available, and their verdict should be for the plaintiff ; but, if they found that the insured was not in sound health, and the agents of the company, acting within the scope of their employment, had no knowledge of such fact, then the verdict should be in favor of the' defendant. The insurance company asked the court to instruct the jury that, if the insured was not in sound health on the day the policies were issued, their verdict should be in favor of the defendant, even though the jury should find that the agents of the company knew that he was not in sound health when the policy was issued. The company duly, excepted to the ruling of the court in refusing its prayer for instruction, and in giving instruction as above set forth on its own motion. The jury returned a verdict in favor of the plaintiff, and from a judgment rendered in her favor is this appeal.

In the.case of National Life Insurance Co. of U. S. A. v. Jackson, 161 Ark. 597, 256 S. W. 378, there was a provision in the' policy to the effect that “no liability is assumed by the company for any accident, illness or disease incurred or contracted prior to the date hereof, or any death arising therefrom.” The testimony in that case tended to show that the insured died from tuberculosis. He had been afflicted for several months prior to the date of the issuance of the policy, and there was testimony from which the jury might have found that the agent of the insurance company had knowledge of the fact that the insured was sick at the time he took the application. But there was no testimony tending to show that the agent of the insurance company knew that the insured . was afflicted with tuberculosis at the time of the issuance of the policy. On the contrary, the agent who took the application testified that he did not know that the insured had tuberculosis at the time he applied for the policy or at the time the policy was delivered to him. He further testified that, if he had known this fact, he would not have taken the application, and that there was nothing in the physical appearance of the insured to indicate that he had tuberculosis. Commenting upon the' instruction given in that case, in view of the facts disclosed, we condemned the instruction, and, in doing so, stated:

“It is true that the general rule of law imputing to a principal notice of facts learned by his agent in the discharge of his duties applies to insurers; hut this principle has no application under the terms of the policy sued on. As will he seen from our statement of facts, one of the conditions of the policy is that no liability is assumed by the company for any accident, illness or disease occurring or contracted prior to the date thereof, or any death arising therefrom.”

This court correctly condemned the instruction in the case of National Life Insurance Co. of U. S. A. v. Jackson, supra, because there was no testimony to sustain it, and further correctly held that there was no liability under the contract of insurance in that suit because of the particular language of the contract, and because the undisputed evidence showed that the insured had tuberculosis at the time.the policy was applied for and was issued, and that he died from that disease. But we did not mean to hold in the above case that the provisions in a policy such as we now have under review could not be waived. There was nothing in the facts of the above case to warrant this court in announcing a doctrine contrary to the rule recognized by this court in the above case and many other cases and by the authorities generally. That rule is as follows:

“Where an insurer, at the time of the issuance of a policy, has knowledge of existing facts which, if insisted upon, would invalidate the contract from its inception, such knowledge constitutes a waiver of conditions in the contract inconsistent with such facts, and the insured is estopped thereafter from asserting the breach of such conditions.” Life & Cas. Ins. Co. v. King, 137 Tenn. 885, 195 S. W. 585.

The cases of Garland v. General Accident, Fire & Life Assurance Corp., 122 Ark. 468, 183 S. W. 965, and American National Insurance Co. v. Otis, 122 Ark. 219, 183 S. W. 183, were both cases where there was no waiver or estoppel by acts and conduct of agents of the insurer, and it is expressly so stated in the opinions. In the other case of Metropolitan Life Ins. Co. v. Fitzerald, 137 Ark. 366, 209 S. W. 77, cited in National Life Insurance Company of U. S. A. v. Jackson, supra, the question of waiver and estoppel by conduct on the part óf the agents of the insurance company was not involved; and these cases were not cited in the National Insurance Co. v. Jackson, above, on the question of waiver and estoppel. Counsel for appellant also cite the cases of Insurance Co. v. Howle, 62 Ohio, St. 204, 56 N. E. 508; Murphy v. Ins. Co., 106 Minn. 112, 118 N. W. 355; Ins. Co. v. King, 137 Tenn. supra; Gallant v. Ins. Co., 167 Mass. 79, 44 N. E. 1075; and Packard v. Ins. Co., 72 New Hamp. 1, 54 A. 287, as sustaining their contention that the provision of the policy under review as to sound health, at the time of the issuance of the policy cannot be waived; but these authorities, as we read them, do not sustain this contention. On the contrary, they recognize the general rule of waiver and estoppel as above set forth.

The above doctrine of waiver and estoppel, quoted from the syllabus of the case of Ins. Co. v. King, supra, has been too firmly imbedded in our law and is too well grounded in reason and justice to be overruled, modified or impaired by announcing any doctrine to the contrary. Since the language quoted from National Life Ins. Co. v. Jackson, supra, can be construed to have that effect on policies like that under consideration, we hereby disapprove the same. In the early case of Ins. Co. v. Brodie, 52 Ark. 11, 11 S. W. 1016, this court, speaking through Mr. Justice Battle, said:

“The issue of a policy by an insurance company, with a full knowledge or notice of all the facts affecting its validity, is tantamount to an assertion that the policy is valid at the time of its delivery, and is a waiver of the known ground of invalidity. From such conduct the insured might fairly infer that he is protected.”

In American National Ins. Co. v. Otis, supra, we said:

“This court has often held that the doctrine of waiver and estoppel applies to insurance contracts, and that these principles will be liberally applied when it is necessary to prevent injustice and fraud being perpetrated by insurance companies upon their policyholders, when the latter have been misled or imposed upon by such companies. ’ ’

We have held that the general rule above stated of waiver and estoppel applies to knowledge acquired by soliciting agents. In Blacknall v. Mutual Aid Union, 129 Ark. 450-456, 196 S. W. 792, we quoted from 14 R. C. L. § 340, p. 1159, as follows: insurance company while he is performing the duties of his agency in receiving applications for insurance and delivering policies, becomes the knowledge of the company.” See numerous cases there cited, and also Ins. Co. v. Rideout, 147 Ark. 563, 228 S. W. 55; Walker v. Ill. Bankers’ Life Asso., 140 Ark. 192, 215 S. W. 598; Amer. Ins. Co. v. Mordic, 168 Ark. 795, 271 S. W. 460.

“It is usually held that, in the absence of policy provisions to the contrary, knowledge affecting the rights of the insured, which comes to an agent of an

It follows from the doctrine of these cases that the court did not err in giving the instructions on its own motion and in overruling appellant’s prayer for instruction. The issue as to whether or not the insured was in sound health at the date of the application and delivery of the policy was correctly submitted to the jury. The jury was also correctly instructed to the effect that, if they found that the insured was not in sound health at the time of the application and delivery of the policy, and the appellant had knowledge of that fact, the verdict should be in favor of the appellee.

We find no error in the rulings of the trial court, and its judgment is therefore affirmed.

Smith and Kirby, JJ., dissent.


author: "Wood, J.

text:
    New England Securities Company v. Afflick.
    Opinion delivered February 21, 1927.
    1. Appeal and error — right of intervener to appeal after withdrawal. — Where a mortgagee of land, which had intervened in a receivership proceeding and had a right to appeal from an order approving a bid for the sale of such land, withdrew from the proceeding on the day the order was made, it cannot appeal from a subsequent order of the chancery court confirming such sale, made pursuant to the mandate of the Supreme Court on appeal by another from the prior order of confirmation.
    2. Appeal and error — effect of remand for further proceedings. —A direction to a trial court, upon reversal and remand of a chancery case for further proceedings according to law and not inconsistent with the opinion of the Supreme Court, means nothing more than to render a decree in accordance with the record made, and the court had no power to reopen the case and allow new parties to be made and new questions litigated.

      Appeal from Phillips Chancery Court; A. L. Hutchins, Chancellor;
    affirmed.
    P. R. Andrews and Roy D. Campbell, for appellant.

      W. R. Satterfield and J. G. Burhe, for appellee.
   "Wood, J.

The facts are substantially as follows: The West Helena Consolidated Company was placed in the hands of a receiver on or about the 20th day of November, 1921, by orders of the Phillips Chancery Court. A. G-. Burke was appointed receiver. The assets of the company passing into the hands of the receiver consisted .of a street railway, waterworks system, approximately 1,751 acres of farmlands, 549 lots and 20 houses in the city of West Helena, Arkansas. The receiver was directed by the court to operate said company for the purpose of ascertaining whether or not the •indebtedness of the company could be liquidated without sale of its properties.

Several years prior to the appointment of a receiver to take charge of the affairs of the West Helena Consolidated Company, the company had mortgaged the farm lands in controversy to the appellant, New England Securities Company, to secure an indebtedness of approximately $50,000, said mortgage indebtedness being evidenced by notes made by the company and secured by four or more separate mortgages on different tracts of land owned by the company. At the time of the receivership proceedings the company was in default in its payment ivith the appellant.

On December 16, 1922, the appellant, New England Securities Company, obtained permission from the chancery court to file its intervention, and did become a party to said proceedings for the purpose of foreclosing its mortgages. This intervention was filed, and the receiver Avas made a party defendant. A decree of foreclosure was taken on the 24th day of January, 1923, foreclosing all of said mortgages and subjecting the farm lands to the payment of the mortgage indebtedness due the appellant. On. April 9, 1923, the receiver filed his petition to vacate the decree of foreclosure rendered on the 24th day of January, 1923. On July 24, 1923, the court sustained the motion to vacate the decree of foreclosure, and did enter of record an order vacating and setting aside said decree. On July 25,- 1923, the New England Securities Company, in order to clear the record, filed its four separate amended interventions. These amended interventions were pending in said court in this case when the sale of the properties was ordered and the receiver directed to make the sale. The decree ordering the sale of the property was entered August 29,1923, and the sale was had November 1, 1923. At this sale the following parties were the highest bidders for certain property belonging to the company, as shown by the receiver’s report of sale, to-wit:

(1). Edwin Bevens was the highest bidder for the waterworks system.

■ (2). Home Mutual Building & Loan Association was the highest bidder for the street railway system.

(3). The farm lands (the property now in controversy) were offered for sale, and, no person having bid at said sale, the property remained unsold.

(4). Fannie M. Hornor was the highest bidder for certain lots in Bichmond Hill.

(5). J. T. Hornor was the highest bidder for blocks 29 and 30 in West Helena, Arkansas.

(6). E. M. Polk was the highest bidder for lot 5, block 94.

(7). E. M. Polk was the highest bidder for city property.

The report of sale held on November 1, 1923, was duly filed on the 26th of November, 1923. The receiver’s report discloses that there were bidders at the receiver’s sale for all of the properties of the West Helena Consolidated Company, except the lands now in controversy..

On the 20th of December, 1923, C. W. Afflick filed in open court his bid offering to purchase, and did bid the sum of $5,000 for all right, title and interest of the West Helena Consolidated 'Company in all real and personal property, except the street railway and waterworks property, book accounts and notes, and tbe cash funds on hand belonging to the company in the hands of the receiver. These items were omitted from the bid of C. W. Afflick. In other words, .Afflick’s bid covered and included only the right, title and interest to certain real estate belonging to the West Helena Consolidated Company, which bid included the lands now in controversy.

The bid of Afflick also included the city property offered by the receiver at the receiver’s sale held bn November 1, 1923, for which E. M. Polk was the highest bidder, and on the 12th of January, 1924, Polk filed a protest against the acceptance of the bid of Afflick in so far as Afflick’s bid related to the property for which he was the highest bidder.

On the 24th day of January, 1924, the Phillips Chancery Court approved the bid of O. W. Afflick, and from this decree of the court E. M. Polk, who was the highest bidder for the city property at the receiver’s sale, prosecuted an appeal to this court. This appeal resulted in the decision of the case of Polk v. Afflick, 168 Ark. 904, 271 S. W. 962. The New England Securities Company was, at the time of said sale, and for several years prior thereto, a party to this proceeding, and did not bid at this receiver’s sale, nor did the appellant, New England Securities Company, appeal from the court’s decree accepting the bid of C. W. Afflick. E. M. Polk was the only party to this proceeding that prosecuted an appeal from the orders of the chancery court rendered on the 24th day of January, 1924. But, on the same day, the court entered a decree allowing appellant to withdraw its interventions and "to institute separate foreclosure proceedings. «

The decision in the case of Polk v. Afflick, supra, was rendered by the court on May 18, 1925, and in that case the court held that Polk, being the highest and best bidder at the receiver’s sale, acquired rights which could not be divested because some other party had offered to advance the bids, and further held that the chancellor erred in rejecting the bid of Polk and accepting the bid of C. W. Afflick. The case was reversed, and the cause remanded for further proceedings in accordance with the decision as rendered by this court.

On the 27th day of July, 1925, the case was again submitted to the lower court upon the decision and mandate of the Supreme Court rendered in the case of Polk v. Afflick, and, in pursuance to the mandate of the Supreme Court, the lower court declared E. M. Polk to be the purchaser of all of the city property embraced in the bid of E. M. Polk at the receiver’s sale held on November 1, 1923, and the receiver was directed to make a deed to E. M. Polk for said property. The court, in this same decree as to the farm lands now in controversy, made the following order: '

“That the former order and decree of this court approving- the bid and confirming the purchase of C. W. Afflick of certain real estate, equities of redemption or choses in action, formerly belonging to the West Helena Consolidated Company, be hereby modified so far as the same covers the above described real estate herein decreed to have been purchased by E. M. Polk, but that in all other respects the said original bid and purchase by C. W. Afflick and said original order and decree of this court approving said bid and confirming said purchase are hereby renewed, approved, ratified and confirmed for all the remaining part of said estate, assets, equities of redemption and choses in action.”

And the receiver was directed to convey to C. W. Afflick the property purchased by his bid, including the lands now in controversy on this appeal. The court, in this same decree,, made final disposition of all rents that had been collected, and made adjustments as to the bid of C. W. Afflick, in so far as the same was in conflict with the bid of E. M. Polk. The appellant, New England Securities Company, asked and was granted permission to intervene. It excepted to the decree as rendered by the court on the 27th day of July, 1925, and prosecutes this appeal.

1. The appellant has no standing in this court, on the facts as above stated, for two reasons. First, the appellant was a party to the action in which the receiver was appointed to take charge of the West Helena Consolidated Company from the time of the filing of its intervention on December 16, 1922, until January 24, 1924, the day of the final decree, when the bid of the appellee was approved. While the appellant, on July 23, 1923, filed amended interventions, asking to he permitted to withdraw from the proceedings and to institute separate and independent actions of foreclosure against the West Helena Consolidated Company, these interventions were pending when the receiver’s sale was had on November 1, 1923, and when the appellee’s bid was made for the property in controversy on the 20th day of December, 1923, and without any protest whatever being filed by the appellant against such bid. The chancery court had jurisdiction to order the sale of the property in controversy by its receiver and to direct its receiver to accept the bid of the appellee and to make deeds to him for the property. The appellant was therefore in the attitude of being a party to the proceedings until the very day that appellee’s bid was approved by the court. On that day the appellee elected to withdraw, and was by the court permitted to do so without having registered any objection, as we have already stated, to the approval by the court of the appellee’s bid. Under these circumstances, it occurs to us that the appellant should be held as a party to the receiver proceedings in which the appellee’s bid was made and approved. If we are correct in this conclusion, it was the duty of appellant, if it wished to challenge in any manner the bid of the appellees, to make its objections in that proceeding and to appeal from the decree of January 24, 1924, which it now claims was adverse to its interests. If the appellant was a party to that proceeding, then it should have taken the same course to protect its rights as was taken by Polk, another party to the proceeding, by appealing from that decree to this court. By failing to do so, the appellant lost its right to appeal from that decree and to have the alleged error of the court in receiving and approving appellee’s bid in the receivership proceeding reviewed by this court.

2. But, second, if we are mistaken in this conclusion, and if the decree of the chancery court of January 24, 1924, should be construed as having been entered prior to the decree of the same day approving appellee’s bid, then appellant, by the decree permitting it to withdraw as a party to the receivership proceeding, was no longer a party thereto and not bound thereby, nor did the appellant thereafter have any right to further intervene therein. Such being the case, appellant had no right to intervene further in that branch of the cause still pending in the chancery court between the appellee and Polk, to be finally determined between them on the mandate from this court.

In the case of Polk v. Afflick, supra, the decree was reversed, and the cause remanded for further proceedings in accordance with the principles of equity and not inconsistent with the opinion. That was a final determination of that litigation, and the appellant certainly had no right to intervene therein, and the chancery court erred in permitting him to do so and in allowing him to prosecute an appeal-to this court from the decision in that cause. It will be observed that the mandate did not reopen the case for a new trial, but only for further proceedings not inconsistent with the opinion.

In Deason & Keith v. Rock, 149 Ark. 401-405, 232 S. W. 583, we said: “We think a direction to a trial court, upon reversal and remand of a chancery decree for further proceedings- according to law and not inconsistent with the opinion, means nothing’ more than to render a decree in accordance -with the record made.” See also Gaither v. Campbell, 94 Ark. 329, 126 S. W. 1061; Rushing v. Honor, 130 Ark. 201, 204 S. W. 1145.

In the case of Polk v. Frierson, 113 Ark. 582, 168 S. W. 1082, we said: ‘ ‘ The chancery court had no power, after mandate of this court was filed directing it to enter a decree canceling and annulling the deed in question, to reopen the canse and allow new parties to be made and the question relitigated as far as the Stephenses were concerned. ’ ’

While the court erred in allowing the appellant to intervene and to prosecute this appeal, the error does not and cannot avail appellant to the prejudice of the appellee. It follows that the appellant has no right to call in question the decree of the trial court in favor of the appellee. The decree is therefore affirmed.


text:
    Hartford Fire Insurance Company v. Ferguson.
    Opinion delivered February 21, 1927.
    1. Insurance — waiver of proof of loss. — The insured may prove by parol testimony that proof of loss by fire was waived by the conduct of the insurer, notwithstanding the insured signed an agreement that any action by insurer in investigating the cause of the fire and in ascertaining the amount of the loss should not waive rights of either party.
    2. Insurance — waiver of proof of loss — jury question__Whether the proof of loss required by the terms of a fire insurance policy was waived by the conduct of the insurer’s agent held under the evidence for the jury.
    Appeal from Monroe Circuit Court; George W. Clark, Judge;
    affirmed.

      J. A. Watkins, for appellant.

      Bogle & Sharp, for appellee.
   Wood, J.

This is an action by the appellees against the appellant to recover damages for the loss by fire of a stock of merchandise, furniture and fixtures on a policy issued by the appellant to appellee, S. W. Ferguson.

The only issue here is whether or not the appellant waived the provision of the policy concerning proof of loss. The policy contained the following provision:

“If fire occurs, the insured shall, within sixty days after the fire, unless such time is extended in writing by the company, render a statement to this company, signed. and sworn to by the assured, stating the knowledge and belief of the insured as to the origin of the fire; the interest of the assured and all others in the property; the cash value of each item thereof and the amount of loss thereon; all incumbrances thereon; all other insurance, whether valid or not, covering any of said property; and a copy of all the descriptions and schedules in all policies; any chang’e of title, use, occupation, location, possession or exposures of said property since the issuing of this policy, by whom and for what purpose any building herein described and the several parts thereof were occupied at the time of the fire. ’ ’

Appellee, Ferguson, testified substantially as follows: He notified the insurance company of the fire, and in a day or two the adjuster came over. He and the witness were in the building where the fire had been for possibly two hours, cheeking over -the stuff. Witness took an inventory in October before the fire in November. This inventory was introduced in evidence, and showed a total valuation of merchandise of over $3,000, and the value of witness’ fixtures destroyed by fire- was over $2,000. The adjuster examined the stock of goods that had been partially destroyed by the fire. Witness asked the adjuster, after handing him the’inventory and telling him of the loss of the fixtures, if there were anything else witness could do. The adjuster stated that he would be back in ten days or two weeks. Witness waited two or three weeks, and did not hear from the adjuster. Witness then took the matter up with the appellant’s agent in Little Eock, trying to get the adjuster to come back. He did not come back. The appellee made purchases of something like $500 between the time of taking the inventory until the fire. He gave the inventories of these purchases to the agent of the insurance company, and they were afterwards sent back to the appellee. When the adjuster came he went over everything carefully, took the inventory, and the appellee gave him the list of creditors that he owed and those he had bought goods from. He thought the adjuster got everything that was necessary. Witness did not think that he had to furnish the company anything after he furnished the inventories to the adjuster and asked him if there were anything else he could do to help settle the matter, when he said that he would be back in two weeks'. The witness signed a non-waiver agreement to the effect that any action taken by the insurance company in investigating the cause of the fire and ascertaining the- amount of the loss and damage to the property shall not waive or invalidate any rights of either party, the intent of the agreement being to preserve the rights of all parties and to provide for an investigation of the fire and the amount of the loss or damage, without regard to the liability of the insurance company. Witness did not make up any additional list or proof of loss and did not do anything more with reference thereto than as above set forth.

The adjuster testified, on behalf of the appellant, that he did not make Ferguson any promise to come back and settle up his insurance. The appellant asked the court to give the following instruction, which is a copy of the provision of the policy as to proof of loss, and concludes as follows:

“If the plaintiff failed to furnish to the defendant company a. statement like the foregoing within sixty days after the fire, then your verdict will be for the defendant.”

The court modified the instruction by adding thereto the following words:

“Unless you further find that such proof of loss was waived by the • defendant company, through its adjuster’s representations claimed by the plaintiff to have been made to him on the occasion of the visit of the adjuster Overstreet shortly after the fire occurred.”

The appellant excepted to the ruling of the court in refusing the above instruction as asked and in modifying the same and giving it as modified.

This court, in a long line of cases, has held that, notwithstanding the written non-waiver agreement signed by the assured and the insurer, the assured may prove by parol testimony that the proof of loss was waived by the conduct of the insurer. Burlington Fire Ins. Co. v. Kennerly, 60 Ark. 532, 31 S. W. 155; Burlington Fire Ins. Co. v. Lowry, 61 Ark. 108, 32 S. W. 383; German Amer. Ins. Co. v. Humphrey, 62 Ark. 348, 35 S. W. 428; Arkansas Mutual Fire Ins. Co. v. Witham, 82 Ark. 226, 101 S. W. 721; Queen of Ark. Ins. Co. v. Malone, 111 Ark. 230, 163 S. W. 771. The court ruled correctly in submitting to the jury the issue as to whether or not the proof of loss had been waived by the conduct of the appellant through its agent, the adjuster. The conduct of this agent justified the jury in finding that the appellant had waived the provisions of the policy requiring the formal proof of loss therein stipulated. The jury might have found, that the conduct of the adjuster was tantamount to saying to the appellee that he had done all that was necessary and all that he could do to prove his loss. The appellee furnished the adjuster, who had the authority to adjust losses for the appellant, an inventory of the goods which had been damaged and lost, and asked the adjuster if there were any other information that he could furnish him in order to enable the company to settle. The adjuster led the appellee to believe that there was nothing further he could do at that time, and that he (the adjuster) would return in ten days or two weeks, which' he never did, although the appellee requested him to do so.

As was said in the case of Minneapolis Fire, etc., Ins. Co. v. Fultz, 72 Ark. 365, 80 S. W. 576:

“The evidence tended to prove that appellant, through its adjuster, .accepted the- statement or inventory of the personal property destroyed by fire that was furnished to the adjuster at Bearden, and waived all other proof of loss thereof, and that it is estopped from denying its sufficiency.”

See also the recent case of National Union Fire Ins. Co. v. Whitted, 157 Ark. 515, 248 S. W. 560, where we said:

“In reference to the personal property, appellee had done what he intended and thought was a satisfactory compliance with the requirements of his policy in respect to the proof of loss, and the adjuster should have notified him of any objection thereto. Silence on his part, under the circumstances, was calculated to mislead appellee to his disadvantage, and constituted a waiver of additional proof of loss.”

In that case the assured had furnished a complete list of the personal property destroyed by fire, and no objection was made to the form and manner in which it was presented.

The record presents no error in the rulings of the trial court, and its judgment is therefore affirmed.


author: Smith, J.

text:
    Bolen v. Farmers' Bonded Warehouse.
    Opinion delivered February 21, 1927.
    1. Warehousemen — period of liability under bond. — Where the personal surety .bond of a warehouse company, executed under Crawford & Moses’ Dig., § 10411, specified no particular term, it will be conclusively presumed that it was limited to the year for which the certificate of qualification of its manager was issued, under § 10420, Id., and the sureties were not liable for the value of cotton lost or misappropriated from the warehouse after such year had expired.
    2. Warehousemen — liability of sureties. — Personal sureties of a warehouse corporation, under Crawford & Moses’ Digest, § 10411, are liable for any loss covered by the bond during the period when the bond is in force, regardless of the time when the goods were placed in the warehouse, but are not liable beyond such period.
    3. Appeal and error — issues not raised below. — Issues not raised by the pleadings nor by requested instructions will not be considered on appeal.
    Appeal from Polk Circuit Court; B. E. Isbell, Judge; affirmed.

      Pipkin & Frederick, for appellant.

      Norwood & Alley, for appellee.
   Smith, J.

Pursuant to chapter 182, C. & M. Digest, (§ § 10404 et seq.) known as the Warehouse and Marketing Bureau Act, a bonded warehouse was organized at Mena under the corporate name of the “The Farmers’ Bonded Warehouse of Mena.” It is provided in the act that when its provisions have been complied with by the applicants for a charter thereunder, a charter shall issue, but, before the charter is delivered to the corporation and before the certificate of authority which the incorporators must have is furnished, the corporation shall execute,’ by its proper officers, a bond payable to the State of Arkansas in such amount as the board of supervisors of warehouses may direct. Concerning this bond the statute provides that:

“The bond shall be that of a bonding and indemnity company authorized to do business in Arkansas, or may be a personal surety bond, and, in the event of a personal surety bond, shall be approved by the board 'of supervisors of warehouses, and shall be renewed each year. ’ ’

Among other conditions of the bond is that the corporation will exercise ordinary care in the storing- or sale, or both, t>f the commodities placed in the warehouse by the patrons thereof. Section 10411, C. & M. Digest. A bond conditioned as required by this act was executed and filed on the 4th day of December, 1920, by the warehouse company, which will hereinafter be referred to as the warehouse, and thereafter certain farmers stored cotton therein. Certain bales of this cotton were either lost or wrongfully disposed of by the warehouseman in charge, and the owners of the cotton brought suits, which were consolidated for trial, to recover the value thereof from the' warehouse, and the sureties on its bond were made defendants and judgments against them were prayed. The undisputed testimony showed that the cotton was lost or misappropriated by the warehouseman more than a year after the execution of the bond by the warehouse. A verdict was directed agaijist the warehouse, hut in favor of its sureties, and judgment was rendered accordingly, from which is.this appeal.

Before the institution of these suits the warehouse itself had brought suit against its warehouseman and the sureties on his bond for the loss of this cotton, and it recovered judgment for the value thereof against both the warehouseman and the sureties on his bond. An appeal was duly prosecuted from that judgment to this court, where the judgment of the lower court was affirmed against the warehouseman, but was reversed and dismissed as to the sureties on his bond. McMillan v. Farmers’ Bonded Warehouse Co., 169 Ark. 7, 272 S. W. 867.

Section 10420, C. & M. Digest, provides that, before the corporation shall open for business, the officer or employee in active management of its warehouse must have a certificate from the board of supervisors of warehouses as a certified warehouseman, and that, in order to receive such certificate, such person must present satisfactory evidence to the board of his competency to discharge the duties of his position, and, “upon satisfactory evidence, the board shall issue a certificate showing that such applicant is a certified warehouseman. Provided, however, that the life of any such certificate shall be one year, at the expiration of which time the applicant must obtain a new certificate.”

The cotton lost by the negligence or misconduct of the managing officer was lost more than a year after the execution of his bond, and we held that the sureties on his bond were not liable thereunder for this cotton. It was pointed out in the opinion in that case that the statute did not require the warehouseman to give a bond, but did require the corporation to do so, and that, as it was unlawful for the warehouse to do business without having a certified warehouseman in charge, it must be conclusively presumed that the bond was given to cover a valid period of service. It was there said:

“Of course, in the absence of a statute expressly providing for a bond and its terms and conditions, the parties could have made a common-law bond which would bind the sureties for any term or period or length of time specified • therein with reasonable certainty. But here we have a bond which contains no specific provision with reference to time, and therefore it must be conclusively presumed that the parties intended to contract for a valid period of service, which was merely during’ the lifetime of the certificate. Learned counsel for appellee invoke the doctrine that, -ordinarily, sureties on a bond can make no defense which could not be made by their principal. 21 B-. C. L. 991. This principle is sometimes applicable, but not so to a case where the question is as to the period covered by the terms of the bond. The surety is only bound by the conditions which apply while the bond is in effect. ’ ’

The reasoning of that case is applicable here. There the warehouse soug’ht to recover from the warehouseman and his sureties the value of cotton which had been lost through the negligence or misconduct of the warehouseman. Here the owners of the cotton are seeking to recover from the warehouse and its sureties the value of the same cotton. In this case, as in that, the bond contains no specific provision with reference to time, and it must therefore be presumed in this case, as it was in that, that the parties intended to contract for the period of time contemplated by the statute before a new bond would be required, which was one year. The statute, as we have seen, specifically requires an annual bond, when it is not executed by a bonding or indemnity company, and the bond was executed pursuant to the statute.

In the ease of Crawford v. Ozark Ins. Co., 97 Ark. 549, 134 S. W. 951, it was said that statutory bonds executed.in the form provided by the statute must be construed as though the statute were written in them as respects the rights and liabilities of principal and surety. In the case last cited suit was brought on a bond obligating an assessment fire insurance company to pay “all claims arising and accruing to any person by virtue of any policy issued by said company during the term of the bond,” and it was held that the bond was liable for all claims accruing during the term of the bond, whether the policies on which the liabilities arose were issued during such term or not.

So here, the sureties on the bond of the warehouse were liable for any loss covered by the bond during the period when the bond was in force, regardless of the time when the cotton was placed in the warehouse, but the sureties were not liable beyond that time, and, as it is an undisputed fact that the loss of plaintiffs ’ cotton occurred more than a year after the execution of the bond, the court below was correct in holding that the sureties on the bond were not liable.

This view accords with the construction of a similar bond given by the Supreme Court of North Dakota in the case of State v. Farmers’ Cooperative Elevator Co., reported and' annotated in L. R. A. 1918E, page 233.

It is insisted that, if the sureties on the bond are not liable as such, they are liable as directors for their failure to comply with the law by renewing the bond. A sufficient answer to this contention is that the pleadings raised no such issue, and there was no request to so amend the pleadings as to raise it, and the instructions requested by the plaintiff did not ask the submission of that question to the jury.

The judgment of the court below is correct, and it is therefore affirmed.