text:
    Anderson v. American State Bank.
    Opinion delivered December 10, 1928.

      R. S. Wilson, G. C. Garter and Linus A. Williams, for appellant

      A. N. Hill and T. A. Pettigrew, for appellee.
   Mehaffy, J.

The appellee filed its petition in the Franklin Circuit Court for a writ of mandamus to compel the appellant, as treasurer of Franklin County, to pay out of the highway improvement funds of said county one thousand dollars to cover a warrant held by said bank, dated April 19,1926, said warrant being as follows:

“No. 388 $1,000.00

“The Treasurer af County of Franklin, State of Arkansas:

“Pay to Central City Coal Company or'bearer one thousand and no/100 dollars, out any money in the treasury for county highway improvement fund.

“Given at Ozark this 19th day of April, A. D. 1926.

“By order of county court.

“Record Book V, page 78.

“Troy Trotter, Clerk.”

It is alleged .that the county court entered into a contract with the Central City Coal Company to purchase a five-ton Holt tractor, and agreed to pay therefor the sum of $2,675 as follows, to-wit: $675 to be paid July 19, 1926, $1,000 to be paid July 10, 1927, $1,000 to be paid July 10,1928.

It was alleged by appellee that the Central City Coal Company presented its claim in the manner required by law, and, after due examination, the court rendered its judgment that the said claim, $2,675, be allowed, and that warrants be issued therefor, payable out of the Franklin County highway fund. It was also alleged that the $2,675, together with the other contracts made during the year 1926, would not exceed the revenues of said year; that the warrants were issued, and that in due course of business the appellee became the owner and holder of warrant No. 388 for $1,000, and that the ¡appellant treasurer refused to pay said warrant when presented.

The ¡appellant answered, alleging that the contract was void because at the time of making the contract the revenues for the year 1926 had been expended, and that there were outstanding contracts and obligations created in that year which, if applied to their payment, would have exhausted the revenue for that year. Second, that the county court was without jurisdiction to enter into a contract for the purchase of road machinery in which payments were to be- taken from the highway fund for the year 1927 or the succeeding year. Third, that the county court was without authority to make a contract, because there had been no appropriation made by the quorum court. Fourth, .that act 145 of the .Acts of 1925 prohibits the expenditure of highway funds for any purpose other than building and maintaining highways within the county.

The court heard the testimony, and gave judgment for the appellee, directing the treasurer to pay the warrant.

The evidence shows that there was no appropriation made by the quorum court, and it also shows that this was to be paid out of the highway fund, and that there was sufficient funds on hand with the treasurer belonging to this fund to pay for the tractor, and sufficient funds on hand belonging to said highway fund to pay this warrant at the time it was presented to the treasurer, ¡and at the time the case was tried.

Appellant’s first contention is that the contract was void because it exceeded the 1926 revenue, and cites and quotes at length from the case of Dixie Culvert Co. v. Perry County, 174 Ark. 407, 294 S. W. 381. If this contract had been made by the county court, payable out of county funds, appellant’s contention would be correct, because, as said in the Perry 'County case: “A county cannot incur any obligation in any year exceeding the revenues of that year, and, if this is done, such obligations are void, and cannot be paid out of the revenues of a succeeding year. ’ ’

The eases involving this question decided prior to the Perry County case ¡are cited in that case, and it is useless to refer to them here. We might repeat, however, that any order of a county court, or any contract made by the county court, which exceeds the revenue for that year, is void. That, however, means a contract to be paid out of the revenues of the county; and, as this court has construed Amendment No. 11, any contract -made that is in excess of the revenue for that year, and a contract of the kind involved in this case,- if payable out of the revenues, could not be made payable out of the revenues of the succeeding years. This fund which the treasurer had on hand and out of which this warrant should have been paid was a part of the State revenue, a part of the State highway fund.

Section 6 of act 5 of the extraordinary session of the Legislature of 1923 provides:

“There is hereby created a special fund in the State Treasury, tó be known as the State highway fund, and hereafter all fees collected in the State Land Office, the State’s portion of all automobile fees, licenses and privilege taxes, gasoline tax, motor oil tax, and other moneys received by the State from owners of motor vehicles in connection with the use of public roads, shall be paid into this fund. All funds now in the treasury in the highway improvement fund and any other funds which have been derived by the 'State from fees in the State Land Office from licenses on motor vehicles and from gasoline tax shall be and the same are hereby transferred into the State Treasury and mide a part of said fund. ’ ’

Section 21 of said act, as amended by act No. 147 of the Acts of 1925, provides that the State Highway Commission shall of this fund allot each year the sum of three million dollars, or so much thereof as is available, to the respective counties on the basis that the population of each county bears to the population of the State of Arkansas, as shown by the last official census, and provides that each county’s portion thus set aside shall be paid by the Treasurer of the State in the manner and for the purpose specified for each county. Under that act 75 per cent, of that received by Franklin County was for the county highway improvement fund.

' The same section provides that, in those counties where all of the county’s apportionment is paid into the county highway fund, the quorum court shall have authority to set aside such part of the county’s apportionment as may be necessary to be applied as a part payment of bonds, etc. That section, however, has no application here, because Franklin 'County is not one of the counties where all of the county’s apportionment was paid into the county highway fund.

■Section 1 of act No. 147 also-provides, in speaking of the fund allotted to the county:

“The funds, thus paid into- the county highway improvement fund shall be by the county court expended upon the public highways of said county, and it shall be the duty -of the county court to fairly and equitably apportion the funds so paid into the county, highway improvement fund, at the option of said court, among the various road districts and road improvement districts, or road districts only, in said county, for the purpose of constructing and maintaining a road, whether hard surfaced or earth road, and such apportionment shall be made by the.county court, after taking into consideration the relative importance of the roads in said county. ’ ’

It will be seen by a reading of these acts that the fund out of which this claim was to be paid was not county revenue, but State revenue, and that the State turned this over to the county with the provision in the law tha,t! it was the duty of the county court to apportion the funds for the purpose of constructing and maintaining roads. And it expressly states that such apportionment shall be made by the county court after taking into consideration the relative importance of the roads in said county. Certainly the quorum court would have nothing to do with this. In making- contracts for constructing or maintaining- a road, or to pay for such material as was necessary to use in constructing and maintaining the road, to be paid out. of this fund derived from the State revenue, the county court alone, and not the quorum court, must make the apportionment, so that the making of the contract in this case, whether it exceeded the revenue or not, is not controlled by the case of Dixie Culvert Co. v. Perry County, supra, nor is it controlled by any of the decisions of this court construing Amend7 ment No. 11.

The warrant itself shows that this claim was to be paid out of the highway fund derived from the State revenue, and it could not be paid out of the general revenues of the county. -It was not the intention that it should be so paid, and, for that reason, the revenue of the county derived from taxation and the expenditures of the county are immaterial here. The county court would have had a rig-ht to make this contract if it required all of this fund to make the first payment, and have provided for the deferred payments to be made in the following years out of this fund. The seller, of course, would take the chance of getting it out of this fund,' the risk of whether there would be any fund on hand to pay it, but it certainly could not affect the general revenues of the county.

It is next contended that the county court was without authority to order the issuance of county warrants, or to make contracts creating obligations of the county without there first having been an appropriation properly made by the quorum court. As we have already shown, the quorum court had nothing to do with it. The appropriation was made by law. The law itself provides that 75 per cent, of the highway fund turned over to Franklin County is to be expended on the highways, and the county court is prohibited from spending said fund for any other purpose. The quorum court would have no authority to make an appropriation. The law itself provides that this revenue, derived from State taxation and turned over to the county, shall he expended on the highways. That is an appropriation made by law of the 75 per cent, of Franklin County’s apportionment,. and this warrant could not be paid out of any other fund.

This court said, in construing the act fixing a stenographer’s salary:

“That this salary was to be paid out of a fund provided by the act for its payment; that it cannot be paid out of any other fund. It follows necessarily that, where there are not sufficient funds in the treasury of a county accumulated and set apart, as provided by the act, to meet the pro rata for that county as adjusted by the presiding judge, the salary of the stenographer is lessened pro rata. In other words, the stenographer must look alone for his salary to the fund set apart for that purpose.” Franklin County v. McRaven, 67 Ark. 562, 56 S. W. 930.

So in this case the owner of the warrant must look alone to the highway fund in Franklin County for its payment. The holder of the warrant could not look to any other fund, and it could not be paid out of any other fund, and the quorum court could not appropriate the highway fund for any purpose other than the construction and maintenance of a highway.

But -it is contended by the appellant that the act itself forbids the use of the highway fund for any purpose except building and maintaining county highways, and that the purchase of machinery would be in violation of the act. The act provides that the fund is for the purpose of constructing and maintaining the roads, and that the court .shall take into consideration the relative importance of the roads in the county. It would be impossible to construct and maintain highways without machinery. And the evident purpose of the act appropriating funds to roads and highways in the county was that the roads and highways might be constructed and maintained, and this could not be done without the purchase of certain machinery. If this fund could not be used in buying machinery, it could not be used in buying material nor employing labor. It therefore appears to us that it was the intention of the Legislature to authorize the expenditure of this fund in the construction and maintenance of roads in the county, and that to do this they might purchase whatever material or machinery was necessary to accomplish the purpose.

It is next contended 'by the appellant that the proof fails to establish that the revenues had not been expended or that the contract did not exceed the revenues of the year in which the contract was made. As we have already said, this applies to county revenues, and not to the expenditure of the highway fund which comes from State revenue, and it is therefore immaterial as to who had the burden of proof. The undisputed proof shows that the treasurer had on hand, belonging’ to the highway fund, a sufficient amount to pay this warrant, and the circuit court correctly held that it should be paid out of this fund.

The judgment is therefore affirmed.


source: Caselaw Access Project

author: McHaney, J.

license: Public Domain

text:
    Mitchell v. State.
    Opinion delivered December 10, 1928.

      Fred M. Pickens, for appellant.

      H. W. Applegate, Attorney General, and John L. Carter, Assistant, for appellee.
   McHaney, J.

Appellant was convicted on an information charging, in the language of the statute, a violation of § 6171, C. & M. Digest, which is as follows: “It shall be unlawful for any person, firm, corporation or association to- receive for storage, distribution, or on consignment, for another, the liquors mentioned in § 6165 of this act, or any of them, or any other liquors, bitters or drinks prohibited by the laws of this State- to be sold, bartered or otherwise disposed of in this State.” He was sentenced to- pay a fine of $100.

The evidence shows that the officers found about four gallons of'liquor in appellant’s barn, in Ball Brand fruit jars, and some in a tin can. The evidence wholly fails to establish where the liquor came from, who brought it there, if anybody, or that the appellant was engaged in the liquor business. We find it necessary therefore to construe the above statute, and to determine whether, under the evidence in this case, there is sufficient proof to sustain a conviction under said act.

Counsel for appellant contends, and we agree with him in this contention, “that it must be -shown by the evidence that the liquor was received for one -or all of the purposes set forth in the above act, that is, to constitute a violation of this act the liquor must be received for storage for another, distribution for another, or on consignment for another. ’ ’

The above statute is § 7 of act 13 of the Acts of 1917, p-age 41. It will be noticed that there is a comma following the word “consignment” and a comma after the word “another,” both in the Digest and in the act as printed in the Acts of 1917. By all rules of grammar or punctuation, this phrase, “for another,” modifies and limits the three words preceding it, designating the purposes for which it is unlawful to receive the liquor, and means the same tiling as if the act had read “that it shall he unlawful for any person * * ’* to receive for storage for another, distribution for another, or on consignment for another, the liquors mentioned,” etc. In other words,, it was the purpose of this section of the act to make it unlawful to do any of these things as the agent or bailee for another. By § 5 of the same act it was made unlawful “to store, keep, possess or have in possession * * * any of the liquors” in certain places, such as fruit stands, restaurants, stores, drugstores, clubs, etc. It was not made unlawful by that section for a person to store, keep, possess or have in possession any liquor, in his barn, unless it be a livery stable or public place. Another section of the statute makes it unlawful to possess liquor for sale or to sell it, or to transport it, but the clear purpose of this statute, as we view it, was to prohibit the receiving of liquor in the capacity of bailee or agent for another for storage, distribution, or on consignment.

We do not think this court held to the contrary iu the case of Rogers v. State, 133 Ark. 85, 201 S. W. 845, or Sheridan v. State, 159 Ark. 604, 252 S. W. 579.

In the Bogers case it was contended that the indictment was void for duplicity and uncertainty, and that the evidence was insufficient, but this court held that it only charged one offense. It was there said:

“The indictment followed the language of the statute, and, inasmuch as it charged only one offense, to-wit, the unlawful receiving of the prohibited liquors, it was sufficient. Nor was the offense one that might be committed in three different wa}rs, as contended by counsel for the appellant. The offense could be committed in only one way, to-wit, by the act of unlawfully receiving the liquors. The words ‘ storage, distribution, or on consignment’ only indicated the different purposes for which the liquor might be received. The offense is complete when the liquor is received for any or all of these purposes. It was not error to charge the purpose for which the liquor was received in the disjunctive instead of the conjunctive, as the proof of any or all would not change the nature of the offense. As above stated, there is but a single offense under this indictment, and it is wholly immaterial whether the purpose be for storage, distribution or consignment; the penalty is the same, regardless of which one of the purposes the receiver of the liquor may have in mind.”

In that case, in addition to finding a quantity of liquor, they found a number of containers that had been cleaned as thoug’h they were ready to be filled, a funnel, and some empty jugs. Other witnesses testified to taking several gallons of whiskey to appellant’s house in jugs and cans. The court there held this testimony sufficient to sustain a conviction under the above statute. But the exact question now presented, was not raised in that case, that is, whether the unlawful receiving of the liquors for storage, distribution or on consignment must be for another. Hence there is a total lack of evidence that appellant received the liquor from any other person, for storage, distribution or on consignment for another. The proof, so far as this record discloses, shows only possession by the appellant, and that not in a prohibited place. There is no law in this State . against the mere possession of alcoholic liquors, except in certain prohibited places, and we therefore concur with counsel for appellant in the view that the evidence is wholly insufficient to sustain the verdict. For this reason the cause will be reversed, and remanded for a new trial.

Justices Humphreys, Kirby and Mehaffy dissent.


text:
    Willey v. State ex rel. Attorney General.
    Opinion delivered December 10, 1928.

      R. W. Wilson and J. S. Utley, for appellant. '

      H. W. Applegate, Attorney General, and Rowell & Alexander, for appellee.
   McHaney, J.

Appellants, who are partners in the farming business, entered into a contract with the State Board of Charities and Correction on February 12, 1926, to furnish appellants thirty-two convicts to be used in cultivating their land from that date until December 31, 1926, at a price of $1.75 each per day, in which appellants agreed to build a modern type stockade to house and care for said men, satisfactory to the superintendent of the penitentiary, and to furnish suitable quarters for the warden or guards, and to pay the warden a salary of $75 per month, including maintenance, the State to furnish all necessary bedding, cooking utensils and maintenance. Thereafter, on May 10, that contract was modified by reducing the contract price of each convict from $1.75 to $1.50 per day.' On October 28 the parties entered into another contract for the year 1927, by which the State agreed to furnish forty convicts to cultivate 500 acres of land for appellants on the shares, that is, for one-half the crops grown on said land. In January, 1927, a new Board of Charities and Correction supplanted the old board. This board, acting through its chairman, demanded of appellants payment for the convicts used for the year 1926, which they had failed to pay, and which, it is agreed in this record, is the sum of $4,807.26, with interest from February 1, 1927, at 6 per cent, per annum. Appellants refused to pay this amount, or any other sum, on the ground that they first wanted to determine whether the State was going to perform its contract of October 28, for the cultivation of 500 acres of land on the shares, and if not, then they would refuse to pay, and attempt to offset their damages for breach of that contract against the State’s claim for the undisputed amount.

Shortly after the first of February, 1927, the State, acting through its board, withdrew all its convicts from appellants and instituted this action to recover the above amount. Appellants defended on the ground that they had built a stockade at an expense of $3,100' and an electric light line at an expense of $500, expecting to keep the convicts two years, and had lost the rental of 350 acres of land at $10 per acre. They sought to offset these amounts against the State’s claim to the amount thereof, but sought no judgment over against the State. At the conclusion of the evidence the court directed a verdict for the State.

Under the contract above mentioned, appellants agreed to pay on the first of each month the amount due for the previous month. They did not do this, and were not required to do so by the old Board of Charities and Correction. When the new board came in and demand was made for payment, appellants had no right to withhold payment for fear that the State might breach the second contract. John A. Gauger & Co. v. Sawyer & Austin Co., 88 Ark. 422, 115 S. W. 157, and cases cited therein; Famous Store Co. v. Lund-Mauldin Co., 149 Ark. 663, 233 S. W. 767.

Moreover, tlie contract of October 28, 1926, was void for the reason that the State Board of Charities and Correction was without power to make it, as being in violation of § 1, act 152, Acts of 1925, page 446, which reads as follows:

“The Board of Charities and Correction is hereby authorized to hire any convicts in the State Penitentiary to work upon the public highways in this State or to do any other useful agricultural work; provided, that said convicts, while so employed, shall at all times be under the management and custody of said board and the regular penitentiary superintendent and wardens, and shall be humanely treated, and worked only a reasonable number of hours each day; and provided further, that said convicts shall not be leased for any definite period, but shall be worked by the day for reasonable wages, to be paid by the State Highway Commission or person for whom said work shall be done, into the State Treasury, to the credit of the penitentiary fund; provided said wages shall not be less than $1.50 a day.”

By that section of" the act it will be seen that the board was only authorized to lease the convicts to be worked by the day at not less than $1.50 per day. Therefore the board had no right to lease them to go into the share-cropping business, but only to hire them out from day to day at a price not less than that fixed by the statute.

But it is said that, if the second contract is void, the first is likewise, for the reason that it leased the convicts for a definite period of time, from February 12 to December 31, 1926, and that the act prohibits the board from leasing them for any definite period of time. "While the act prohibits the leasing of convicts for a definite period of time, we construe this provision to mean that the board is without power to bind the State for any fixed period so that they may not be withdrawn by the State for its uses and purposes whenever, in the judgment of the board, they may be required for any work of the State. Therefore any contract the board might make for the leasing of the convicts to the Highway Commission or to any other person for agricultural work must be considered amended by the terms of this act. In other words, the provisions of the act will be read into the contract, and, when this is done, appellants knew, or were bound to know, that the State might withdraw its convicts so leased to them at any time during the year 1926 they might be required by the State for other purposes. When this is done, appellants must be held to have taken the risk of having on their hands a stockade which they might not need, and they cannot therefore recoup any part of the cost thereof against the suit of the State to collect the amount due for the time the convicts worked for appellants at the rate of $1.50 per day. The court was therefore correct in instructing a verdict for the appellee, and the demurrer to the answer and cross-complaint should have been sustained, as it stated no defense to the complaint, and no ground for affirmative- relief against the State.

We find no error, and the judgment is affirmed.

Mehaffy, J., dissents.


text:
    Franklin County v. Smith.
    Opinion delivered December 10, 1928.

      R. S. Wilson and Linus A. Williams, for appellant.

      J. C. Benson, for appellee.
   McHaney, J.

On October 3,1927, appellee presented his claim to the county court of Franklin County for coal furnished the courthouse and jail in the sum of $145.25. On the 17th day of October the claim was allowed by the court in the sum of $81.25, being the claim for coal furnished the courthouse, and disallowed that for the jail. Not being willing to furnish the jail free coal, and being dissatisfied with the action of the court in disallowing that part of his claim, on March 10,1928, -during a regular term of the circuit court, he took an appeal to the circuit court, by filing a transcript and affidavit for appeal with the clerk of the circuit court. The county court moved to dismiss the appeal on the grounds (1), that the affidavit for appeal was made by appellee’s attorney; (2) that no appeal bond was filed; and (3) that no notice of appeal was given. This motion was overruled, and, no defense to the claim being offered, judgment was rendered against the county for the full amount of the claim. These same grounds are urged here.

1. Section 2287, C. & M. Digest, is authority for “the party aggrieved, his agent or attorney,” to make the affidavit for appeal.

2. No appeal bond was necessary. Section 2288, C. & M. Digest, requires a bond “where an appeal is taken by any person in cases of allowance made for or against counties.” No allowance was made “for or against” Franklin County in this case. True, that part of the claim covering coal for use in the courthouse was allowed, but no appeal was taken from that part of the order.

3. No notice was necessary. The county entered its appearance by special counsel, and filed a motion to dismiss the appeal.

4. It is further argued here that no order was made either by the county court or the circuit clerk granting the appeal. This question was not raised or presented in the court below, and is raised here for the first time. This would be a sufficient answer to this argument, but another answer is that this court has held, in the recent case of Tuggle v. Tribble, 173 Ark. 392, 292 S. W. 1020,' that where an appeal from the county court to the circuit court is taken by filing with the clerk of the circuit court an affidavit and transcript of the proceedings, it is error to dismiss the appeal, as filing* the transcript with the clerk was tantamount to an order for appeal by the clerk.

5. Lastly, it is said that appellee failed to establish his claim. The judgment recites that the case was heard on the. record and on oral testimony. This testimony has not been brought into the record b}^ bill of exceptions, and in its absence there is a conclusive presumption that it was sufficient to sustain the judgment.

Affirmed.


author: Hart, C. J.,

text:
    Park v. Bank of Lockesburg.
    Opinion delivered December 17, 1928.

      Lake, Lake & Carlton, for appellant.

      Steel & Edwards, for appellee.
   Hart, C. J.,

(after stating the facts). The decree of the chancery court was wrong. It seems to have proceeded upon the theory that the note given for the certificate of stock and the certificate of stock itself were absolutely void under article 12, § 8, of our Constitution, which reads as follows:

“No private corporation shall issue stocks or bonds except for money or property actually received or labor done, and all fictitious increase of stock or indebtedness shall be void; nor shall the stock or bonded indebtedness of any private corporation be increased, except in pursuance of general laws, nor until the consent of the persons holding the larg’er amount in value of stock shall be obtained, at a meeting held after notice given for a period not less than sixty day's, in pursuance of law. ’ ’

In construing this clause of our 'Constitution, this court has held that a note given for the purchase price of corporate stock is neither money nor property actually received within the meaning of the 'Constitution, and that the note itself is void. Bank of Dermott v. Measel, 172 Ark. 193, 287 S. W. 1017. It was also held in that case that the same defenses which the maker of the note might have made to an action by the’ holder might be made on a renewal note. ’ The reason given was that the renewal note was not a payment of the original note, but was merely an extension of the time of payment of it. The court did not mean to hold, however, that the note was absolutely void.

In the later case of Bank of Manila v. Wallace, 177 Ark. 190, 5 S. W. (2d) 937, the court again held that a note given to a representative of a corporation in selling its stock, for stock in such corporation, was void under the provisions of the Constitution above referred to, and the fac,t that the note was negotiated at a bank and that the corporation received the money therefor did not ■render the note valid. The court held, however, that there could be ail innocent purchaser of such a note, and, if .that is true, it could not be said that the note was absolutely void.

This same view has been taken by the Supreme Court of Texas, under a similar section of the Constitution of. that State. Washer v. Smyer, 109 Texas 398, 211 S. W. 985, 4 A. L. R. 1320. The reason for so holding was stated in a clear and comprehensive manner as follows:

“There is no declaration in the constitutional provision that a transaction in which something other than money, property, or labor is received in payment for the corporation’s stock shall be utterly void. It prohibits such a transaction, and therefore makes it unlawful, but that is the extent to which it goes. If a security be accepted in payment for the stock, such, for instance, as a subscriber’s note, which is not property for such a purpose, the Constitution does not say either that it or the stock issued for it shall be void. The acceptance of the note in payment for the stock and the issuance of the stock are only interdicted. The word ‘void’ is used but once in the constitutional provision, and that, it is to be noted, is not in the clause which.prohibits the issuance of stock for other than money, property or labor. It is in the distinct clause which says that all fictitious increases of stock or indebtedness shall be void. While the term is found in that clause of the section, the framers of the 'Constitution avoided its use in the other. It must be assumed that they did so deliberately. There is an essential difference between prohibiting a certain form of transaction — making it unlawful — and declaring that it, with all securities issuing out of it, shall be utterly void. It is a distinction familiar in the law. In order to hold a negotiable note unenforceable in the hands of a bona fide holder, it is not enough that it be founded upon an illegal consideration. It is not sufficient that it issue from a transaction prohibited by law, or one even denounced as criminal. To avoid it in the bona fide holder’s hands there must be a constitutional or statutory provision which expressly, or by unavoidable implication, declared it or the transaction of which it is a part to be void. Such is the rule announced by Chitty, ‘Story and Daniel. It is the rule followed by this court, and generally by courts elsewhere.”

The distinction made by the learned Chief Justice in that case has been recognized by this court in the construction of article 19, § 13, of our Constitution, which provides, in effect, that all contracts for a greater rate of interest than ten per centum per annum shall be void as to principal and interest, and that the General Assembly shall prohibit the same by law. The court said that, where a statute or 'Constitution declares a contract void, it gathers no validity by its circulation in respect to .the parties executing it, but that it and the instrument evidencing it are void in the hands of every holder. German Bank v. Deshon, 41 Ark. 331.

By reference to the section of the Constitution under consideration in the case at bar, it will be seen that the contract was not declared void, as was the case under our provision relating to usury. Hence it may be said to be the law of this State that, there being no constitutional declaration to that effect, the contract under consideration in this case is not absolutely void, and the note given by T. W. Park to the Bank of Lockesburg for the forty shares of stock would be valid in the hands of an innocent purchaser for value. If the note would have been valid in the hands of an innocent purchaser for value, it would seem that this rule would likewise be applied to the holder of stock in payment for which the note was given.

In Bankers’ Trust v. McCloy, 109 Ark. 160, 159 S. W. 205, 47 L. R. A. (N. S.) 333, it was held ,tíhat the purchaser of shares of stock is chargeable with notice of liens created under statutes or charters, but not those arising under the by-laws of the corporation or under the custom of dealing between the corporation and its shareholders. It was further held that shares of stock in a corporation do not constitute negotiable paper within the law merchant, but are treated as prima facie evidence of unincumbered ownership of the holder thereof named in the certificate and upon the books of the company, and that a purchaser of stock under such circumstances is entitled to have the shares recorded upon the books of the company in his name. In discussing the question the court said:

‘ ‘ Shares of stock in a corporation do not constitute negotiable paper within the law merchant, but in some of the authorities such instruments are spoken of as possessing elements of gwasi-negotiability, and the modern authorities lay down the rule that necessities of business require the shares of stock should be treated prima facie as evidence of unincumbered ownership of the holder thereof named in the certificate and upon the books of the company.”

At the time that decision was rendered, § 1720 of Crawford & Moses’ Digest was in force. That section provides that every certificate of stock shall be deemed personal property, and shall be transferable on the books of the corporation in such form as the directors shall prescribe; and such corporation shall at all times have a lien upon the stock of its members for debts due from them to the corporation. This section of the statute, however, has been repealed as to corporations generally by act 387 of the Legislature of 1923, which was entitled “An act to regulate the transfer of corporate stock.” General Acts of 1923, p. 358. Section 15 of that act provides that there shall be no lien in favor of a corporation upon the shares represented by a certificate issued by such corporation, and that there shall be no restriction upon the transfer of shares so represented by virtue of any by-law of such corporation or otherwise, unless the right of the corporation to such lien or the restriction is stated upon the certificate. No such right was stated upon the certificate of stock in the case.at bar.

Again, § 1720 was expressly amended with regard to banks by act 627 of the same Legislature, General Acts of 1923, p. 515. Section 16 of that act expressly provides that § 1720 of the Digest shall be amended so as to read as follows: ‘ ‘ The .stock of every such corporation shall be deemed personal property, and be transferred only on the books of sneh corporation in such form as the directors may prescribe.”

Thus it will be seen that the lien given to- the corporation under § 1720 of the Digest has been repealed.

Now, the undisputed facts show that T. W. Park borrowed from S. P. Park $800 and agreed to pay him ten per cent, interest from the date of the note given for the debt until payment thereof. The forty shares issued by the Bank of Loekesburg to T. "W. Park were transferred and delivered by him to S. P. Park as collateral security for the repayment of said loan. There is nothing whatever that tends to impair the good faith of this transaction or to show that S. P. Park had any knowledge whatever that the certificate of stock had been- issued to T. "W. Park by the bank and his note taken in payment for it. The stock certificate was regular in form, and carried no notice whatever of any infirmity upon its face. There is no testimony in the record whatever to impugn the good faith of S. P. Park in making the loan and taking the transfer of the stock certificate as collateral security therefor. Therefore he was an innocent purchaser for value of the stock certificate, and was entitled to have the same sold in satisfaction of his lien.

It appears from the record that a sale had been made, and that S. P. Park'became the purchaser at the sale ordered by the chancery court. The court then should have ordered a transfer of the stock upon the records of the bank in the name of S. P. Park, instead of canceling the certificate of stock as being absolutely void. For that error the decree must be reversed, and the cause will be remanded with directions, to the chancery court to direct a transfer of the stock upon the records of the bank in the name of S. P. Park, and for such further proceedings as may be necessary according to the principles of equity and not inconsistent with this opinion. It is so ordered.


text:
    Fidelity & Deposit Company of Maryland v. Crane Company.
    Opinion delivered December 17, 1928.

      Pryor, Miles Pryor, for appellant.

      Daily <& Woods, for appellee.
   Hart, C. J.,

(after stating the facts). Appellant seeks to reverse- the judgment on the ground that it had inserted a provision in the bond expressly providing that it should not, as surety, be liable, directly or indirectly, to any one except the owner, which was the board of trustees of the University of Arkansas. The language used in the bond is plain and unambiguous. By incorporating this provision into the bond, nothing is left to interpretation. All doubt as to the intention of the parties is removed.

It is conceded that bonds of this character are contracts, and it is sought to uphold the judgment of the circuit court on the ground that our statute relating to the subject must be read into the bond as a part of the obligation of the surety. Section 6913 provides, in effect, that whenever any public officer shall, under the laws of this State, enter into a contract in any sum exceeding one hundred dollars with any person for the purpose of constructing any public building, such officer shall take from the party contracted with a bond with sureties as provided in the statute, and that the bond shall be conditioned that such contractor shall pay all indebtedness for labor and materials furnished in the construction of said, public building.

Counsel for appellant seek to reverse the judgment upon the authority of Union Indemnity Co. v. Covington, ante, p. 533. In that ease the court had under consideration the construction to be placed upon §§ 6915 and 6916, providing for similar conditions in the contracts for the construction of churches or charitable institutions, and for the giving of a bond containing a similar condition, and for the filing of the 'bond in the office of the circuit clerk. It was there contended,' as here, that any bond given by the contractor must necessarily contain the provisions of the statute and be construed as a statutory bond. In that case the bond sued on contained a condition that in no event shall the surety be liable to any other person than the obligee or for a greater sum than the penalty of the bond. The court held that the obligations contained in the bond expressly negative the claim that the bond sued on was a statutory bond. The effect of that decision was to hold that, notwithstanding the language of the statute, a surety company might limit its obligation under the bond to the oblig’ee, and that the terms of the statute should not be construed as a part of the contractual obligation of the bond. The court held that the language of the statute was not definite enough to prohibit the parties from agreeing to the execution of a bond which should not embody the provisions of the statute.

Counsel for the plaintiff recognized the force of this decision by contending that a different rule obtains in the case'of a public contractor’s bond executed pursuant to the statute. They insist that the Legislature, in passing the statute requiring a public contractor’s bond to contain certain conditions, has declared such to be the public policy of the State, and that all bonds executed shall be conclusively presumed to be statutory bonds, and any provision therein contrary to the statutory law is null and void. In support of their contention they cite Philip Carey Co. v. Maryland Casualty Co., 201 Ia. 1063, 206 N. W. 808, 47 A. L. R. 495. In filiat case the court held (quoting syllabus):

“Where the situation is such as to require a statutory-contractor’s bond, and the bond given conforms in material and essential respects to the requirements of the statute, the parties will be held to have intended to make a statutory bond, notwithstanding the omission from the bond of conditions required by statute, or the inclusion of stipulations contrary to the statute, if the statute provides that the requirements of the statute shall not be annulled by contrary provisions in the bond.” 1 : : ,

■ In that case, however, the statute provided that no contract coming within the provisions of thé act shall be of any validity until the bond required has been executed. The court held that the situation of the parties and the circumstances showed that the parties intended to execute a bond under the statute, and, for that reason, the conditions of the bond contrary to the provisions of the statute should not modify or annul the requirements of the statute, because in this way the purpose of the act would be defeated and it would fail to accomplish the end intended. . ■. (

Again, in Southern Surety Co. v. Klein (Texas), 278 S. W. 527, a similar contention was made. The court held (quoting syllabus):

“Though city refused to accept a bond containing provisions required by Vernon Sayles’ Ann. Civ. St. 1914, arts. 6394f, 6394g, and furnished bond without such provisions, the statutory provisions' making 'bond payable to, or for use and benefit of, laborers and material-men are nevertheless read into the'bond, regardless of the intention of the parties, and parol evidence is not admissible to establish intention of the parties to exclude provisions of statute.”

In that case the statute provided that in contracts for the construction of public works the contractor should be required to execute a bond with sureties before commencing the work. Hence it was held that, where the contractor commenced the work and executed a bond, he did so in obedience to the statute and with the intention of complying with its terms. It was held to be a statutory bond, and, in addition, that terms contrary to the provisions of the statute were null and void, because, if enforced, they would tend to nullify the statute.

The Supreme Court of North Carolina has adopted a construction similar to our own in the Covington case above cited. In the case of Ingold v. City of Hickory, 178 N. C. 614, 101 S. E. 521, the statute expressly provided that every county or municipal corporation which should let a contract for a public building should require the contractor, before beginning work under the contract, to execute a bond containing certain conditions. The court said the surety company had substantially incorporated the statute in the bond by reference to it, and to permit it to insert stipulations which would destroy its legal effect would put it in the power of cities and surety companies to defeat the purpose of the statute by contract. The provision was held to be contrary to the public policy of the State as declared by the Legislature.

In the later case of Ideal Brick Co. v. Gentry, 191 N. C. 636, 132 S. E. 800, the contract contained a stipulation that the contractor should pay for all materials, labor, etc., necessary for the execution of the work, but the obligation of the bond was not for the faithful performance of the contract as it related to the materialmen, but the surety agreed to indemnify the obligee, and no one else, against all loss that the obligee might sustain by reason of the principal’s failure to comply with the provisions of the contract, and all other persons were expressly excepted from the protective provisions of the bond.

Reliance was had by the plaintiffs on the Ingold case just cited. The court pointed out that the bond in that case contained a direct stipulation for the payment of laborers and materialmen and expressly referred to the requirements of the statute in explanation of its true meaning and intent. -Continuing, the court said:

“It was held in Ingold’s case, and rightly so, we think, that, where a bond was given in compliance with the requirements of the statute, the surety might not, in such case, restrict its liability to- suit contrary to the statutory provision, for this would be to uphold a -stipulation directly opposed to the public policy of the State, and thus enable the parties, -by private agreement, to set the statute at naught, in direct violation of its terms. And here, if it did not clearly appear, from the terms of the bond, that it was not given in view of the requirements of the statute for the protection of the plaintiffs and to insure the faithfui performance of the contract as it relates to them, we -should be disposed to hold the stipulation restricting the surety’s'liability to suit void, as being contrary to the public policy of the State as expressed in the statute.” See also Warner v. Halyburton, 187 N. C. 414, 21 S. E. 756.

The decision of the court in that case is in accord with our holding in the Covington case above cited. It is also in accord with the spirit of -the decision in Rieff v. Redfield School Board, 126 Ark. 474, 191 S. W. 16. In that case the court held that, in the case of a bond given by a contractor to secure school directors, who were held to be public officers, the bond was executed pursuant to the statute and in obedience to it, and with the intention of complying with its terms, it was a statutory bond, although it did not strictly- follow the provisions of the statute. If the court had meant to hold that our statute impliedly prohibits the execution of any bond by public contractors except in obedience to the terms of the statute, the court should have declared such to be the legislative public policy in that case and have rested its decision on the ground that any bond executed by public contractors should be deemed to have been executed in obedience to-the statute, and that the parties should have been conclusively presumed to have intended the bond to be a bond executed in obedience to the statute.

Section 6913 of the Digest provides that, whenever any public officer shall enter into a contract in any sum exceeding one hundred dollars, with any person, for the purpose of constructing any public building, such officer shall take from the party contracted with a bond conditioned as required by statute. It will be noted that the statute does not provide that stipulations of the bond contrary to its provisions shall not modify or annul the requirements of the statute. In other words, the statute does not contain any restrictive covenants such as were contained in the Texas, Iowa and North Carolina statutes. In all of these States the statute required the contractor to enter into a bond containing certain covenants before he commenced the construction of the public building under his contract. Here the statute simply makes it the duty of the public officers to take a bond of a certain character, and does not impuse any regulations whatever upon the contractor, and does not provide, expressly or impliedly, that the parties shall not enter into any bond except pursuant to the statute, or which would in any way modify or annul any of the provisions of the statute.

Therefore we think it is more in accord with our previous decisions on the subject to hold that the statute does not prohibit the surety from executing a bond expressly restricting its liability to the obligee of the bond, where, as in this case, the bond does not contain any covenant showing that it was intended to be executed in obedience to the provisions of the statute, but, on the other hand, expressly negatives that idea.

The result of our views is that the judgment will be reversed, and the cause of action will .be dismissed here. It is so ordered.


author: Smith, J.

text:
    Continental Casualty Company v. Bruden.
    Opinion delivered December 17, 1928.

      J. Mitchell Cockrill, for appellant.

      Wm. J. Houghney, Sam T. Poe, Tom Poe and McDonald Poe, for appellee.
   Smith, J.

This is a suit by appellee, as administrator of the estate of Columbus Joel, deceased, to recover under an accident policy issued by appellant insurance company for the accidental death of Joel, the insured, which was alleged to have been caused by heat prostration.

The policy provides that “the insurance given by this policy is against loss of life (suicide or self-destruction while sane or insane not included), limb, limbs, sight or time resulting from a personal bodily injury which is effected solely and independently of all other causes by the happening of an external, violent and purely accidental event * * V’

The testimony on the part of appellee was to the effect that, while Joel was engaged in the performance of his duties as a machinist helper in putting grease in a cellar of an engine, while in a pit under the engine, he became overheated, and died about ten minutes after coming out from under the engine. The testimony was conflicting on this question.

On this issue the court charged the jury as follows:

.“You are instructed that, before plaintiff is entitled to recover in this case, he must show by a preponderance or greater weight of the evidence that death resulted solely from heat prostration as alleged, and independently of any other cause. If he has failed to show by a preponderance of the evidence that death resulted solely from such injury, and independently of any other cause, then he cannot recover, and your verdict will be for defendant.”

■ As the jury returned a verdict in favor of the plaintiff, we must assume that the finding was made that the insured died from heat prostration, and, without setting out the conflicting testimony on this question of fact, we announce our conclusion to be that the testimony was amply sufficient to support this finding.

It is earnestly insisted, however, that, even though the insured came to his death as a result of heat prostration, or sunstroke, this was not a risk covered by the policy under the language quoted above, and the correctness of this contention is the real and the difficult question in the case.

The authorities are united in treating heat prostration and sunstroke as meaning the same thing, but they are in direct conflict as to whether death therefrom is an accidental death.

The case of Caldwell v. Travelers’ Ins. Co., 305 Mo. 619, 267 S. W. 907, 39 A. L. R. 56, decided by the Supreme Court of Missouri, November 25, 1924, reviews all the cases on the subject np to that time, and reference is made to it for a citation to these cases, and we will not again review them. The learned justice who wrote the opinion above referred to there said:

‘ ‘ There are two clearly defined lines of cases on this question. One holds that, where an unusual or unexpected result occurs by reason of the doing by insured of an intentional act, where no mischance, slip, or mishap occurs in doing the act itself, the ensuing injury or death is not caused through accidental means; that it must appear that the means used was accidental, and it is not enough that the result may be unusual, unexpected, or unforeseen. The other line of cases holds that, where injury or death is the unusual, unexpected, or unforeseen result of an intentional act, such injury or death is by accidental means, even though there is no proof of mishap, mischance, slip, or anything out of the ordinary in the act or event which caused such injury or death.”

Among the numerous cases there reviewed is that of Standard Life & Acc. Ins. Co. v. Schmaltz, 66 Ark. 588, 53 S. W. 49, 74 Am. St. Rep. 1121, in which the faqt's were that a railroad machinist, who held an accident policy in the appellant insurance company, was engaged in removing the cylinder head of an engine. The deceased was a strong man, and had frequently removed cylinder heads without injury. On the occasion when his fatal injuries were received the cylinder head sjluck, and the insured picked up a steel bar and removed it, and, as he did so, he dropped the bar and caught the cylinder head to prevent it from falling. Insured was immediately taken sick, and began vomiting blood, and continued to do so until his death. The attending physician testified that the insured had ruptured a blood vessel, and the court held that this evidence was sufficient to sustain the finding by the jury that the death of the insured was accidental, and that the injury was caused solely by external, violent and accidental means, against which the policy sued on had insured the deceased.

The case of Ætna Life Ins. Co. v. Little, 146 Ark. 70, 225 S. W. 298, was a suit on an accident policy very similar to the one here sued on. The insured in that case was killed by a man who mistook him for a burglar, and we held that this testimony warranted the jury in finding that the death of the insured was accidental. We there said:

“This court has had frequent occasion to define the words ‘accidental injury’ and ‘accidental death.’ In the case of Standard Life & Accident Ins. Co. v. Schmaltz, 66 Ark. 595, 53 S. W. 49, the court approved an instruction given by the trial court, in a suit on an accident policy, that the term ‘accidental’ was used in the policy in its ordinary, popular sense, as meaning ‘happening by chance; unexpectedly taking place; not according to the usual course of things; or not as expected:’ that, if a result is such as follows from ordinary means, voluntarily employed, in a not unusual or unexpected way, it cannot be called a result effected by accidental means; but that if, in the act which precedes the injury, something’ unforeseen, unexpected, unusual, occurs, which produces the injury, then the injury has resulted through accidental means. ’ ’ (Citing cases).

The case of Richards v. Standard Acc. Ins. Co., 58 Utah 622, 200 Pac. 1017, 17 A. L. R. 1183, was a suit on a policy insuring against “bodily injuries effected directly, exclusively, and independently of all other causes, through accidental means.” Insured sustained sunstroke, and died therefrom, and the court considered the question whether sunstroke was a bodily injury, and, after an extended review of the authorities, both medical and legal, held that it was.

Many cases are cited in the note to this case by the annotator, who says in his note that “it is held ¡by the weight of authority, and apparently the better reasoned cases, that a sunstroke, suffered by one unexpectedly, is within the protection of an accident policy insuring against bodily injuries sustained through external, violent, and accidental means.” After a consideration of many of these cases, we have accepted and adopted that view.

The policy here sued on provided, as a condition precedent to the assertion of liability under it, that proof of loss under it be made within ninety days after the appointment of the administrator, and it is insisted that this proof was not made as required, and the court charged the jury that, if this proof was not furnished as required by the policy, there could be no recovery, and it is earnestly insisted that the undisputed testimony shows that the proof was not made.

Upon this question appellee testified that, a few days after burying the insured, he qualified as his administrator, and wrote the appellant company to furnish papers for proof of death, and, when they were .furnished him, he sent the papers to the undertaker in Yan Burén, where the insured had died, and that the undertaker turned the papers over to the doctor who was called to the insured when he was stricken, but who did not arrive until after the insured was dead. The doctor filled in the blanks and returned them to witness, who gave them to an agent of the company in Little Bock, who promised to forward the papers to the home- office of the insurance company. Witness himself sent to the home office of the company his letters of administration, as he had been requested to do in a letter from the home office.

The officers of the insurance company having in charge for the company the matter of passing upon the' claim, testified that they had not received the proof of death from the local agent in Little Bock, or from any one else, and that the local agent in Little Bock, to whom the plaintiff administrator delivered the papers for transmission to the company, was an ordinary soliciting agent for the industrial department of the company, and had nothing whatever to do with the railroad department, under which Joel’s claim came. The local agent did not testify, but one of the company’s officers testified that he was a vice president in charge of the accident and health claims, and he made the following answer to one of the interrogatories propounded to him: “I might state that absolutely no proof of accident has been received by the company in regard to the death of Columbus Joel. On the contrary, we did receive a death certificate stating that the death was due to heart disease, which was not covered by the policy.”

In view of the testimony above stated, and this admission, we- think the jury was warranted in finding that proof of the death was made and furnished to the insurance company.

As we have said, the testimony was conflicting as to whether deceased was ever under the engine, and, over the objection of appellant, Oscar Coleman was permitted to testify that Joel said, as he emerged from under the engine, “Brother Coley, I got it.” It is insisted that this testimony was hearsay, and was not a part of the res gestae, because it was too remote, and was simply a narrative of a past event, to-wit, that Joel had got something from under the engine.

The important issue of fact was whether Joel had been in a pit under the engine in proximity to the firebox, and the witness Coleman was introduced to show that Joel had been under the engine, in the pit. 'Coleman testified that he was a coppersmith helper and an extra cellar packer, and that Joel was also a cellar packer, and was put to work on a rush job, that is, an engine which had just come in and was to be sent out at once, and that witness .and Joel worked on the engine at the same time, and that Joel, in packing the driving cellar, had his head within a few inches of the firebox, which was very hot, and, as he came from under the engine, he made the remark, “Brother Coley, I got it,” and wiped his face, and, as Joel walked over to a work-bench, he threw up his hands, and fell dead.

There is some dispute as to what was meant by the remark, “I got it,” but we think it was competent as tending to show that Joel had been under the engine, and it was admitted for that purpose. The remark was not a narrative of a past event, but was an exclamation or statement forming- a part of the deceased’s conduct in coming out from under the engine, and we think was admissible as such. Payne v. Thurston, 148 Ark. 456, 230 S. W. 561.

Objection was made to the instructions given, but the essence of these objections appears to be that there was no case for the jury, and that a verdict should have been directed in appellant’s favor; but, as appears from what has been said, we do not concur in this view.

Upon a consideration of the whole record we find no error, and the judgment must be affirmed. It is so ordered.


text:
    Franklin County v. Jackson.
    Opinion delivered December 17, 1928.

      R. S. Wilson and Linus A. Williams, for appellant.

      G. C. Carter, for appellee.
   Smith, J.

Appellees presented a' claim to the county court of Franklin County for allowance against the county, based upon §§ 9838, 9839, 9840 and 9840A, C. & M. Digest, as amended by act 219 of the Acts of 1925, page 617. The claim was disallowed by the county court, but was allowed by the circuit court on appeal. The cause was tried in the circuit court on an agreed statement of facts as follows:

Appellees owned four mules, of the value of $125 each, which were, on or about May 1, 1926, bitten by the dog of an unknown owner. The dog was affected with rabies or hydrophobia, and its bite communicated this disease to each of these mules, and caused their death about two or three weeks later. On February 15, 1927, appellees made an affidavit of loss before a justice of the peace of the township in which the mules died. The justice appointed three appraisers, who, on the same day,' appraised the mules at $150 each.

The sections of the statute referred to and the amendatory act of 1925 were intended to provide a fund “to indemnify losses sustained from'killing or injuring of sheep or other live stock by dogs, where the owner thereof is unknown * *

(Section 9810, C. & M. Digest, provides for the appraisement of the stock, and reads in part as follows: “Whenever any sheep or any other live stock are killed or injured by dogs, the owner or person having custody of same shall, within forty-eight hours after such killing or injury is made known to him, notify the justice of the peace in whose township the sheep or other live stock are, or were, and make affidavit setting forth the number of sheep or other live stock killed or injured, the kind, grade or quality thereof, and the amount and nature of injury thereto, and that he does not know whose dog caused the damages, if such be the fact * *'

It thus appears that the statute does not require the owner to make the affidavit within forty-eight hours after the stock are killed or injured by a dog, but to do so “within forty-eight hours after such killing or injury is made known to him, ’ ’ and, according to the agreed statement of facts, the affidavit was not made until more than nine months after the death of the animals. Appellees admit therefore that the affidavit was not filed within the time required 'by the statute; but they say this requirement was merely directory, and it was upon this theory that the judgment was rendered from which this appeal comes.

We do not concur in this view. Appellees’ right to compensation for the damage done by the dog of an unknown owner is of statutory creation, and the statute which creates the right prescribes the time and manner within which one must proceed to obtain its benefits. It is a general rule that, where a cause of action does not exist at common law, but is created by statute, the right conferred by the statute must be enforced within the time and in the manner and form prescribed by the statute which created it. Earnest v. St. Louis, M. & S. E. Ry. Co., 87 Ark. 69, 112 S. W. 141; Smith v. Mo. Pac. Ry. Co., 175 Ark. 626, 1 S. W. (2d) 48.

The forty-eight hours given the owner after he is apprised of the killing or injury of his stock to notify the justice of the peace is in the nature of a statute of limitations, and, while it does appear to be unusually short, this was a question which was addressed to and was decided by the Legislature. We might surmise why the time was made so short, but we are neither required nor permitted to do so, as the Legislature, in creating the cause of action, had the right and power to prescribe the time and manner within which it should be enforced. This it did, and, as appellees failed to comply with this statute in the creation of their cause of action, they have no cause of action under the statute.

The judgment of the court below must therefore be reversed, and, as the case has been fully developed, it will be dismissed.


text:
    State v. Davis.
    Opinion delivered December 17, 1928.

      John L. McClellan and Isaac McClellan, for appellant.

      T. Nathan Nall and Rowell & Alexander, for appellee.
   Smith, J.

Opal Woolems made complaint on October 22, 1927, to the county court of Grant County, that Vernon Davis was tbe father of her 'bastard child, and she prayed judgment against him for the statutory allowances. There was an appeal to the circuit court from the judgment of the county court, and, upon the appeal, ■a jury found that Davis was the father of the child. Upon this verdict the court rendered judgment requiring Davis to pay the mother of the child the sum of $25 as lying-in expenses and the sum of $10 per month from the date of the birth of the child until it arrived at the age of fourteen years.

At a later day of the same term the court made an order reciting that act No. Ill of-the 1927 session of the General Assembly (Acts 1927, page 310), was not in force at the time the child was born, and that the judgment was for that reason reduced to conform to § 777, C. & M. Digest, which section was amended the 1927 act, and the plaintiff has appealed from that judgment.

.The act of 1927, which increased the allowances lo the mother of a bastard child over those allowed by § 777, C. & M. Digest, was approved by the Governor March 4, 1927, and, as there was no emergency clause to the act, it became effective and operative as a law ninety days after March 10, 1927, the date of the adjournment of the General Assembly. Gaster v. Dermott-Collins Road Imp. Dist., 156 Ark. 507, 248 S. W. 2.

The child was born April 17, 1927, which was after the passage of the act of 1927, but before it became a law, and appellee insists that his liability for the support of the child cannot be increased beyond the amount provided by law at the time the child was born, as he has a vested right in the law declaring his liability. -The circuit court accepted this view, and, on appellee’s motion, reduced his liability to conform to the original law.

We think the court was in error, and that judgment should have been rendered in accordance with the law as it existed at the time of the trial, which was the act of 1927.

Although a bastardy proceeding is in the name of the State, it is of a civil nature (Scott v. State, 173 Ark. 625, 292 S. W. 979), and, as was said in this Scott case: “Section 772 et seq., C. & M. Digest, gives the mother of such a child the right to require the father to contribute to its support, and implies an obligation and a promise on his part to help support it, and this court has held that she can enforce such a promise, based upon moral obligations and a legal liability. ’ ’

The act of 1927 is not therefore an ex post facto law, for the reason that it is not a criminal statute. It was held in the Scott case, supra, that “a bastardy proceeding is a civil action, and a petition for a change of venue in such a case would come under the provisions of law applicable to changes of venue in civil cases.”

In the case of Willetts v. Jeffries, 5 Kan. 470. the contention was made by the father of a bastard child, as it is here, that he had the vested right to have his liability for begetting the child determined by the law as it existed when the child was born. This argument wias answered very effectively by Justice Valentine for the Supreme Court of Kansas, who, after saying that the bastardy law of that State was not an ex post facto law, for the reason that such laws relate to criminal, and not to civil, proceedings, said also that no one has a vested right to do wrong, and that no case could be found giving one a vested right to ignore the fundamental principles of morality and natural justice. The learned justice proceeded to say that the purpose of the bastardy laws was not to punish the father for his illicit intercourse with the mother of the bastard child, but that the object of the laws was to enforce, by a stringent remedy, that moral obligation resting upon every father to support his own offspring.

In support of the argument that a parent has no vested right to have his obligation to his offspring determined by the law as it existed at the time the child was born, the’ learned justice said that, if this were sound doctrine, the law that was in force at the time the child is begotten must forever remain the law that shall govern the relations between that child and its parents, and that a parent might sustain a very different relation towards his own children dependent on ,tihe state of the law at the time o*f their birth. It was pointed out that, if this were the law, courts could not administer the same equity and justice to all fathers alike and to all children alike, but that it would be necessary to know the state of the law at the time of the birth of the children to determine the mutual duties and liabilities of parent and child. •

In upholding a statute making the father of an illegitimate child “liable to all the penalties and all the orders for the support for the child provided in the case of a parent who is found guilty of unreasonably neglecting to provide for the support and maintenance of a minor child,” which was passed after the birth of a child, the Supreme Judicial Court of Massachusetts, in the case of Commonwealth v. Callaghan, 111 N. E. 773, 223 Mass. 150, said:

“If it is ex post facto legislation to compel the father to provide for the support of a child not horn in wedlock, because born before the statute was enacted, it might be argued that it is contrary to the Constitution to punish a husband, under 'St. 1911, c. 456, for refusing to support his wife and children, because he was married and the children born before the statute took effect, or to insist on a son of sufficient means supporting his parents under St. 1915, c. 163. We are of opinion that St. 1913, e. 563, is not ex post facto legislation.”

See also Wamsley v. People, 64 Colo. 521, 173 Pac. 425; McLain v. Meadows, 44 Cal. App. 402, 186 Pac. 411; Bradfield v. State, 92 Atl. 988; 7 C. J., chapter “Bastards,” § 38, page 957; 12 C. J., chapter “Constitutional Law,” § 803, page 1098, note 5.

We conclude therefore that the circuit court was in error in setting aside the original judgment rendered in this cause and modifying it to conform to § 777, C. & M. Digest, and the cause will be remanded, with directions to re-enter the original judgment conforming to the act of 1927. i ■


text:
    Commercial Investment Trust v. Forman.
    Opinion delivered December 17, 1928.

      Saxon, Wade & Warren, for appellant.
   Smith, J.

Appellee, Forman, bought from O’Con-nor an automobile, and the sale was evidenced by a note and contract, which provided that the title to the car should not pass to the purchaser until the full purchase price had -been paid in cash', and that the balance of $771 due as purchase money should be paid in monthly installments of $64.25 each* and that, upon default in payment of any installment when due, the full amount, at the option of the seller, should immediately become due and payable, and that the seller might repossess the property without demand, and sell the same at public or private sale, with or without notice to the purchaser, and that the assignee of the contract should have all the rights of the seller. O’Connor sold the note and contract to the appellant, Commercial. Investment Trust. Forman made default in a payment, and, refusing to surrender the car, this, a suit in replevin, was brought to recover its possession under the contract of sale.

Forman filed an answer, in which he alleged that the purchase price of the car was $1,271, on which he had made certain payments, and that he owed a balance of $449.75. He alleged that the car was then worth much more than the balance due on it, and that he was entitled in equity to have the balance due the plaintiff declared to be a lien, and to have the car sold to protect his equity. He alleged other set-offs, and prayed that the cause be transferred to the chancery court in order that he might have equitable relief. On appellee’s motion the cause was transferred to equity.

Appellee gave a retaining bond, under which he retained possession of the car for sixteen months. He then brought the car to O’Connor’s garage, and left it there. The car could not then run under its own power, but was hauled in, and the highest estimate of its then or present value was $100.

The court found that a written contract evidenced the sale of the car, and that one of the conditions of the sale was that, upon default by the purchaser, the seller, or his assigns, had the right to take possession of the car and sell it, and that at the time of the institution of this suit there was a balance due on the contract, and that the plaintiff was entitled to the possession of the car, and was so entitled at the time of the institution of this suit, and that the car had been returned to 0 ’Connor.

The court .thereupon decreed “that the plaintiff is entitled to the possession of said automobile, and that he retain the possession of the same, to be dealt with according to the terms of said contract of sale,” and this appeal is from that decree. The cross-complaint filed by defendant was dismissed as being without equity, and there is no appeal from that part of the decree.

The present litigation arises out of a contract very similar to and in some respects identical with the contract out of which the case of Passwater-Chevrolet Co. v. Whitten, ante, p. 136, arose. "Whitten, the purchaser of the car in that case, made default in his payments, and voluntarily surrendered the car. The seller then resold the car, and, a few days later, Whitten tendered to the seller the balance due on the car and demanded its possession, and, when told that the car had been sold, Whit-ten brought replevin to recover its possession. Whitten contended that he had the right to maintain the replevin suit under § 8654-a, C. & M. Digest, which reads as follows:

“In any action in a justice court or circuit court of this -State, where it is attempted to foreclose any mortgage, deed of trust, or to replevy, under such mortgage, deed of trust or other instrument, any personal property, the defendant or defendants in said action shall have the right to prove or show any payment or payments or set-off under such said mortgage, deed of trust or other instrument, and judgment shall he rendered for. the property or the balance due thereon, and the defendant may pay the judgment for the balance due and costs within ten days, and satisfy the judgment and retain the property.”

In response to the contention of Whitten it was there said: “Clearly this section (§ 8654a, C. & M. Digest) has no application to this controversy. The plaintiff in the court below was not attempting ‘to foreclose any mortgage, deed of trust, or to replevy, under such mortgage, deed of trust or other instrument, any personal property. ’ He brought replevin, it is true, but not under ‘any mortgage, deed of trust or other instrument. ’ He brought it on a complaint and affidavit alleging that he was the owner of the car and entitled to the immediate possession thereof under a conditional sales contract, which he admits he had breached, and had voluntarily surrendered the possession of the car to the rightful owner. Had he kept possession of the car and refused to surrender it to appellant company, and it had brought replevin, then this section would be applicable. (Citing cases).”

In the instant case the purchaser did what Whitten did not do. He kept possession of the car, and refused to surrender it, and the replevin suit was brought against the purchaser, and not by him. Section 8654a, C. & M. Digest, is therefore applicable in the instant case.

The answer and cross-complaint of appellee, For-man, was clearly an election to claim the benefit of § 8654a, C. & M. Digest, by having the balance due on the car adjudged, with the privilege of paying that balance within ten days, or of receiving the excess over the debt upon the sale of the car under the judgment, and his bond in the replevin suit gave him the additional right to retain the car while the litigation progressed to its conclusion. Having made this election, appellee is bound by it. But for the retaining bond, the-car would have been sold when its value exceeded the balance due on it. Through the bond appellee retained the car until it was worn out, when he voluntarily abandoned it by hauling it into O’Connor’s garage.

The case of Trice v. People’s Loan & Inv. Co., 173 Ark. 1160, 293 S. W. 1037, is applicable here, as it was there held (to quote a syllabus) that: “Where plaintiff, in a replevin action, obtained possession of property sold under a conditional sales contract on which defendant had defaulted, judgment, under Crawford & Moses’ Digest, § 8654, should !be rendered against defendant and bondsmen for the total amount due, to be credited with the amount received on sale of the property.”

Appellant is therefore entitled to judgment against the sureties on the bond as well as against appellee himself for the balance due on the sales contract, against which the present value of the car should be credited. The testimony shows this value does not now exceed $100, and the judgment will be credited with that amount, unless appellee and the sureties on his bond shall, within ten days after the decree of this court becomes final, pay the entire balance due on the car, in which event they may retake possession of it.


author: Humphreys, J.

text:
    Bartel v. Ingram.
    Opinion delivered December 17, 1928.

      Arnold •& Arnold, for appellant.

      Patterson & Rector and Powell, Smead & Knox, for appellee.
   Humphreys, J.

Appellant brought this suit on February 10, 1926, against appellees, in the chancery court of Union County, seeking to foreclose a trust deed executed on the 16th day of February, 1916, to secure an $8,000 note of even date, upon the following described real estate, to-wit: “One hundred and sixty-four and 94/100, more or less, acres, and being further described as the twenty-six, more or less, acres of fractional southwest quarter of the southwest quarter of section 19, township 17, range 15, and the 138.94, more or less, acres of fractional northwest quarter of section 30, township 17, range 15, known as the O. A. Ingram Farm, in Union County, Arkansas.”

The note was executed by Finis S. Ingram to his own order, due five years after date, and bearing interest from date until paid at the rate- of 7 per cent, per annum. The deed of trust was executed to Frank D. Ayers, as trustee, to secure the payment of the note. Upon a trial of the cause the court found that there was due upon the note $13,600, including interest, after allowing credit for the payments which had been made, and rendered a judgment against Finis S. Ingram for the amount, with interest thereon at 7 per cent, per annum until paid, from and after February 16, 1928; and also found that, at the time of the execution of the deed of trust, Finis S. Ingram had no title to the land described therein, but that he subsequently^ acquired by inheritance from his mother an undivided one-seventh interest, which had been conveyed by him to third parties, some of whom had not .been made parties to the foreclosure suit, and against whom, on that account, a decree of foreclosure could not be rendered; and also found that the Standard Oil Company, C. H. Murphy, Mrs. Anna Cordell, A. O. Steere, George W. James, James Kinnebrough and Andrew McAnsh, some of whom had acquired fee rights and other mineral rights in Finis' S>. Ingram’s one-seventh interest in said land, had not been served with process in accordance with law. Based upon these findings, the court rendered a decree of foreclosure and order of sale of the J. It. Ingram one-fourth interest in fee and the I. Felsenthal 1/32 interest in the oil, gas and mineral rights in the Finis S. Ingram one-seventh interest in said land, on the ground that John R. Ingram and I. Felsenthal were the only persons claiming ian interest therein who had been brought into court on legal process. In short, a 1/28 interest in the fee and 1/224 in the oil, gas and mineral rights owned by I. Felsenthal in the land described in the deed of trust were foreclosed and ordered sold to satisfy the amount of $13,600 adjudged to be due appellant by Finis S. Ingram.

Appellant has appealed, and contends for a reversal of the decree because the trial court refused to foreclose and order a sale of the entire fee interest in the real estate described in the deed of trust to satisfy the amount due him by Finis 6. Ingram.

Appellees, John R. Ingram and I. Felsenthal, have procured ia cross.-appeal, and contend for a reversal of the decree on the grounds that the indebtedness was fictitious and the deed of trust executed as a cover against the creditors of Finis S. Ingram; that the purchase of the land under the tax forfeiture of 1912 by Finis S. Ingram, under which he claimed title to the land described in the mortgage, was in effect a redemption thereof for his mother, who was the owner at the time of the forfeiture, else ineffective to vest title in him, as he was at the time a mortgagee and assignee of a $4,000 note and deed of trust executed for the benefit of his brother and himself by his mother; that the tax deed obtained by him under the forfeiture was void on account of the insufficiency of the description of the land, and that the deed of trust was void for the same reason, and for the further reason that it was not given for a present consideration, and did not provide for future advances.

Appellant’s main contention for a reversal of the decree is that the court erred in refusing to foreclose the entire fee simple title to the lands described in the deed of trust, instead of foreclosing limited portions of a one-seventh interest therein owned by those personally served with process. This contention is based upon the alleged erroneous finding of the trial court that the tax deed to the land procured by Finis S. Ingram, which constituted his only title thereto at the time he executed the trust deed to .Ayers for $8,000, was void on account of defects in description, or on account of him being a mortgagee in the $4,000 deed of trust executed by his mother in trust for the benefit of himself and his brother in 1909, and which was assigned to C. D. Bosbury in 1910, and 'by Bosbury to Kuhlmey in 1918, and which has never been paid.

The land in question wias owned by the mother of Finis S. Ingram, Mrs. 'Carrie Ingram, in 1904. It was wild land at that time. She sold the land to Finis S. Ingram, in the year 1904, for $................., the consideration for same to be paid in- monthly installments. Finis was her main support, and, after paying her for the land, he conveyed it back to her in 1907 as a gift. The $4,000 deed of trust was executed by her for the benefit of her two sons, in 1909, from whom she obtained money with which to make improvements and establish a home. Her son Fred paid her $1,000 and Finis advanced the balance from time to time to build the house and make other improvements. Mrs. 'Carrie Ingram owned other property adjoining and near this land, a part of which she sold to other parties, and a part she kept. The land in question forfeited for taxes in 1912, and was bought in at the tax sale by J. D. Faulkner, and on the 20th day of June, 1913, he assigned his certificate of purchase to Finis S. Ingram, who presented same to the county clerk two years after the sale of delinquent lands, and procured a tax deed to each tract on November 8, 1915. The twenty-six-acre tract was described in the tax deed as “fractional southwest quarter of the southwest quarter section 19, township 17, range 15 — 26 acres.” The 138.94-acre tract was described in the tax deed as “fractional northwest quarter section 30, township 17, range 16 — 138.94 acres.”

Finis ¡S. Ingriam testified that he never told his mother that he purchased the land at' tax sale, or that he had taken a tax deed to it; that she was residing upon it at the time of the forfeiture, and continued to reside upon it until her death, on the 16th day of March, 1916; that she told him that she wanted him to have the place, in conversation and by letter, after he purchased the tax certificate; that he was residing in 'Chicago, and went to El Dorado, near which the land was located, in September, 1915, and, after procuring the tax deed, remained upon the land until December, 1915; that during the time he was there he made extensive improvements upon the property, preparatory to marrying and returning with his wife to make his home upon It; that he 'built several tenant houses, and left them occupied by his employees and tenants when he returned to Chicago; that he returned to El Dorado the March following, to attend his mother’s funeral, and that, after her death, he put his brother John in possession of the place, to look after it for him.

John testified that he went into possession of the place as representative of all his mother’s heirs, and under an agreement with them to that effect. There is a sharp Conflict in the testimony as to whether John was in possession of the property for himself and the other heirs, or as the agent of Finis S. Ingram, and there are many circumstances appearing in the record corroborating the statement of each.

The record is voluminous, and it would extend this opinion to an unusual length to set out the substance of the testimony of each witness. There is one circumstance in the record, however, tending so strongly to support the theory that Finis S. Ingram was acting as the agent of his mother when he purchased the tax certificate, that special mention should be made of it. In March, 1919, Finis 'S. Ingram joined in a trust deed with his brothers and sisters conveying this particular land and other lands to W. ;S. Sloan, with power to sell same to pay the $4,000 deed of trust held by Kuhlmey, amounting at that time to $4,980, in which the grantors recited that they were the sole heirs of Mrs. Carrie Ingram, and which trust deed also recited that Finis S. Ingram, for $500, should reconvey by quitclaim deed to the other heirs all of his right, title and interest held by him in any of said lands above their respective one-sevénth interest, owned as heir of Mrs. Carrie Ingram, land reserving only an undivided one-seventh interest, in order that the title to said lands should be altogether in all the heirs alike. This act on his part harks back and reflects that, at the time of purchasing the tax certificate, his intention wias to redeem the land for his mother and for the benefit of his father-in-law, who had acquired the $4,000 note from Bosbury, to whom Finis S. Ingram had transferred it. We have read the testimony carefully, and have concluded that the weight thereof supports the finding of the trial court to the effect that Finis S. Ingram acquired nothing under the tax deed, but was acting as agent for his mother when he purchased the tax certificate. We think a fair ■ interpretation of the testimony is that he was her main support, and was looking after her interest at the time he purchased the tax certificate, and had no intention whatever of acquiring her fee simple title to the land by the purchase thereof.

Again, he was not in a position to acquire a tax title to the land adversely to his mother, because she had executed a deed of trust thereof to a trustee for the benefit of Finis S. Ingram and his brother for $4,000. It is true that in 1910 he transferred the $4,000 note to 'Bosbury. It must be presumed that he did this in the usual course of business by an assignment of the note. If he did, he w¡as a guarantor of the payment thereof. The rule in Arkansas - is that, although a mortgagee may pay the taxes on mortgaged land and claim reimbursement therefor, he cannot acquire title thereto under a tax forfeiture. Ross v. Frick Co., 73 Ark. 45, 83 S. W. 343. But if he had assigned the note to Bosbury, which carried an assignment -of the deed of trust, at the time he purchased the outstanding tax title, he comes within the rule that a mortgagee who assigns his note to another, if he guarantees the payment thereof by indorsement, is still under a duty to pay the taxes to protect his interest, and a purchase by him at the tax sale would merely amount to a redemption of the land. Howard Investment Co. v. Benton Lands Co., 5 Kans. App. 761, 46 Pac. 989; Concordia Loan & Trust Co. v. Parrote, 62 Neb. 629, 87 N. W. 348; Manley v. Debenture B. Liquidation Co., 64 Kan. 573, 68 Pac. 31; Beecham v. Gurney, 91 Ia. 621, 60 N. W. 187; Newton v. Marshall, 62 Wis. 8, 21 N. W. 803.

As stated above, it must be presumed that he indorsed the note, as that would be the usual course, and the burden rested upon him to disprove that fact, if same Avas indorsed by him without recourse.-

Appellees also insist that the tax deed was void because the description of the land therein Avas insufficient to identify it. 'The land in the 26-acre tract was described as “fractional southwest quarter of the southwest quarter, section 19, toAAmship 17, range 15 — 26 acres,” and in the 138.94-acre tract as “fractional northwest quarter section 30, township 17, range 16 — 138.94 acres.” This court ruled, in the case of Turner v. Rice, ante, p. 300', that, “where a deed conveys land by government call, the-grantee takes the whole of the call, without reference to the number of acres following the description, ’ ’ and we see no reason why the grantee Avould not take the whole of a fractional call just as he would a call that was not fractional. In other words, we are of opinion that the description in the tax deed was sufficient to identify the land.

Appellant also contends that the trial court committed reversible error in limiting the foreclosure and sale to that portion of the one-seventh interest of Finis S. Ingram in the land AAdiich he acquired by inheritance from his mother, to the interest of those personally served with process. Appellant argues that -the claimants to the remainder of said one-seventh interest were properly served and brought into court pursuant to the unknoAvn owner statute, being § 1161 of OraAvf ord . & Moses ’ Digest, which is as follows:

“Where, in an action against the heirs of a deceased person as unknoAvn heirs, or against other persons made defendants as unknown owners of any property to be divided or disposed of in an action, it appears by the complaint that the names of such heirs, or any of them, or such other persons, are unknown to the plaintiff, a warning order as directed in the last section shall be made by the clerk against such unknown heirs or owners.”

The statute was not intended to apply to parties whose names and the interest they claimed in the land in question appeared in the records of the county, and whose names and the interest they claim might be ascertained from an inspection thereof, and their whereabouts ascertained. The names of the persons claiming an interest in the land and the extent of the interest claimed by them might have been ascertained in the instant case from an inspection of the public records in the county, and their whereabouts ascertained by inquiring, so they should have been served by personal process.

This disposes of the questions presented for determination by the direct appeal, and several of the questions presented by the cross-appeal. We will now proceed to determine .the other' questions presented by the cross-appeal.

First, it is insisted that, the debt secured by the $8,000 deed of trust was fictitious, and that it was executed as a cover to prevent the creditors of Finis S. Ingram from reaching his assets. There is nothing of consequence in the way of testimony in the record tending to prove either contention. Finis S. Ingram testified that he made the $8,000 note payable to his own order for the purpose of selling it in the market, and that he secured it by the trust deed to enable him to do so; that he sold and transferred the note in two or three weeks to Frank D. Ayres, the trustee in the deed of trust, for value, who afterwards assigned it to appellant. .Appellant testified that he bought the note and trust deed from Frank D. Ayres, and paid full value' therefor. This testimony is practically undisputed, and fully sustains the finding of the trial court to the effect that both instruments were executed and negotiated in good faith.

Appellees next contend that the $8,000 deed of trust was void because the land therein was not described in such way as to identify it. The land as described in the mortgage has heretofore been set out verbatim. The description in the mortgage would be insufficient to identify the land if it were not for the clause referring to it as the 'C. A. Ingram Farm. Without this identifying clause there would be no key or guide to determine the particular part of the fractional calls the mortgage intended to convey. If, however, the O. A. Ingram Farm, in said section 19, contained 26 acres, and in said section 30 contained 138.94 acres, and contained no other lands in said sections, the description, when read together, would furnish a means by which the land might be definitely located. The undisputed proof showed that at the time of the execution of the deed the Ingram Farm in said section 19 contained only 26 acres and that the Ingram Farm in said section 30 contained 139.11 acres, or only .17 acres more than was called for in the deed of trust. This slight variance In the acreage is too small to be taken into account. Mrs. Carrie Ingram had disposed of all the land she owned in said sections, except the 26-acre tract in said section 19 and the 138.94-acre tract in said section 30, at the time the deed of trust was executed.

Appellees next contend that the $8,000 deed of trust was void because not given for a present consideration, and did not provide for future advances. The deed of trust did not purport to secure future advances; it only purported to secure a note of even date, which the testimony showed was intended to be sold in the market and transferred for a consideration. When the note and deed of trust were sold for value, the consideration was received as a present consideration. At the time they were transferred for value, the note became a valid subsisting obligation and the deed of trust a valid subsisting security for the payment of the note.

It is suggested by appellees that the note was not sufficiently described in the deed of trust to identify it as the note intended to ;be secured. The note is described in the deed of trust as follows: “Whereas, the said Finis S. Ingram, grantor herein named, is justly indebted upon one promissory note 'bearing even date herewith, payable to the order of himself, and by himself indorsed, same being dated at Chicago, Illinois, for the sum of $8,000, with interest at the rate of seven per cent, per annum, payable annually, said principal note to become due and payable at 505 Chamber of Commerce Building, Chicago, Illinois, five years from the date hereof.” !

We do not see how the note could be more perfectly described. The description sufficiently identified it as the note intended to be secured.

No error appearing, the decree is affirmed.

Mr. Justice Kirby dissents.